Exhibit 4.1

                              Aeroflex Incorporated
                         Key Employee Stock Option Plan
                         ------------------------------

SECTION 1.  GENERAL PROVISIONS
            ------------------
1.1  Name and General Purpose
     ------------------------
     The name of this  plan is the  Aeroflex  Incorporated  Key  Employee  Stock
Option  Plan  (hereinafter  called the  "Plan").  The Plan is intended to enable
Aeroflex Incorporated (the "Company") and its subsidiaries to foster and promote
the  interests  of the Company by  attracting  and  retaining  key  officers and
employees  of the  Company  who  contribute  to the  Company's  success by their
ability,  ingenuity  and  industry,  to enable such  officers  and  employees to
participate in the long-term  success and growth of the Company by giving them a
proprietary  interest  in the  Company  and to  provide  incentive  compensation
opportunities competitive with those of competing corporations.

1.2  Definitions
     ------------
     a.   "Board" means the Board of Directors of the Company.

     b.   "Change in Control"  means a change of control of the  Company,  or in
          any person directly or indirectly controlling the Company, which shall
          mean:

          (a) a  change  in  control  as  such  term  is  presently  defined  in
          Regulation  240.12b-(2) under the Securities  Exchange Act of 1934, as
          amended (the "Exchange Act"); or

          (b) if any "person"  (as such term is used in Section  13(d) and 14(d)
          of the Exchange Act) other than the Company or any "person" who on the
          date of this  Agreement  is a  director  or  officer  of the  Company,
          becomes the  "beneficial  owner" (as defined in Rule 13(d)-3 under the
          Exchange  Act)  directly or  indirectly,  of securities of the Company
          representing  twenty  percent (20%) or more of the voting power of the
          Company's then outstanding securities; or

          (c) if during any period of two (2) consecutive  years during the term
          of  this  Plan,  individuals  who  at the  beginning  of  such  period
          constitute the Board of Directors,  cease for any reason to constitute
          at least a majority thereof.

     c.   "Committee"  means the  Committee  referred  to in Section  1.3 of the
          Plan.

     d.   "Common  Stock" means shares of the Common  Stock,  par value $.10 per
          share, of the Company.

     e.   "Company" means Aeroflex  Incorporated,  a corporation organized under
          the laws of the State of Delaware (or any successor corporation).

     f.   "Fair Market Value" means the closing market price of the Common Stock
          on the Nasdaq Stock Market on the trading day prior to the date of the
          grant or on any other date on which the  Common  Stock is to be valued
          hereunder.  If no sale shall have been  reported  on the Nasdaq  Stock
          Market on such date,  Fair  Market  Value shall be  determined  by the
          Committee.

     g.   "Non-Employee Director" shall have the meaning set forth in Rule 16(b)
          promulgated by the Securities and Exchange Commission ("Commission").

     h.   "Option" means any option to purchase  Common Stock under Section 2 of
          the Plan.

     i.   "Option Agreement" means the option agreement described in Section 2.4
          of the Plan.

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     j.   "Participant"  means any  officer  or  employee  of the  Company  or a
          Subsidiary  on the date of grant who is selected by the  Committee  to
          participate in the Plan.

     k.   "Subsidiary"  means any  corporation  in which the Company  possesses,
          directly or  indirectly,  50% or more of the combined  voting power of
          all classes of stock of such corporation.

     l.   "Total  Disability"  means accidental  bodily injury or sickness which
          wholly and  continuously  disabled an optionee.  The Committee,  whose
          decisions  shall  be  final,  shall  make  a  determination  of  Total
          Disability.

1.3  Administration of the Plan
     --------------------------
     The Plan shall be administered  by the Board or by the Committee  appointed
by the Board consisting of two or more members of the Board all of whom shall be
Non-Employee  Directors.  The Committee shall serve at the pleasure of the Board
and shall have such powers as the Board may, from time to time, confer upon it.

     Subject to this  Section 1.3,  the  Committee  shall have sole and complete
authority to adopt, alter, amend or revoke such administrative rules, guidelines
and  practices  governing  the  operation of the Plan as it shall,  from time to
time, deem advisable, and to interpret the terms and provisions of the Plan.

     The Committee  shall keep minutes of its meetings and of action taken by it
without a meeting.  A majority of the Committee shall  constitute a quorum,  and
the acts of a majority of the  members  present at any meeting at which a quorum
is present,  or acts  approved in writing by all of the members of the Committee
without a meeting, shall constitute the acts of the Committee.

1.4  Eligibility
     -----------
     Stock  Options may be granted  only to officers or employees of the Company
or a  Subsidiary.  All employees are eligible to receive Stock Options under the
Plan.  Any  person  who has been  granted  any Option  may,  if he is  otherwise
eligible, be granted an additional Option or Options.

1.5  Shares
     ------
     The aggregate  number of shares reserved for issuance  pursuant to the Plan
shall be 4,000,000  shares* of Common Stock, or the number and kind of shares of
stock or other securities which shall be substituted for such shares or to which
such shares shall be adjusted as provided in Section 1.6. No  individual  may be
granted  options to purchase  more than an  aggregate  of  1,500,000  shares* of
Common Stock pursuant to the Plan.

     Such number of shares may be set aside out of the  authorized  but unissued
shares of Common Stock or out of issued shares of Common Stock  acquired for and
held in the Treasury of the Company, not reserved for any other purpose.  Shares
subject to, but not sold or issued under, any Option terminating or expiring for
any reason  prior to its  exercise in full will again be  available  for Options
thereafter granted during the balance of the term of the Plan.

1.6  Adjustments Due to Stock Splits,  Mergers, Consolidation, Etc.
     -------------------------------------------------------------
     If, at any time,  the  Company  shall  take any  action,  whether  by stock
dividend,  stock split,  combination of shares or otherwise,  which results in a
proportionate  increase  or  decrease  in the  number of shares of Common  Stock
theretofore issued and outstanding,  the number of shares which are reserved for
issuance  under the Plan and the  number  of shares  which,  at such  time,  are
subject to Options shall, to the extent deemed appropriate by the Committee,  be
increased or  decreased  in the same  proportion,  provided,  however,  that the
Company shall not be obligated to issue fractional shares.

     Likewise,  in the event of any change in the  outstanding  shares of Common
Stock by reason of any recapitalization, merger, consolidation,  reorganization,
combination or exchange of shares or other corporate change, the Committee shall
make such substitution or adjustments, if any, as it deems to be appropriate, as
to the number or


_________________
* as  adjusted  to give effect to a 2-for-1 stock split in November 2000.


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kind of shares of  Common  Stock or other  securities  which  are  reserved  for
issuance under the Plan and the number of shares or other  securities  which, at
such time are subject to Options.

     In the  event  of a  Change  in  Control,  at the  option  of the  Board or
Committee,  (a) all  Options  outstanding  on the date of such Change in Control
shall become  immediately  and fully  exercisable,  and (b) an optionee  will be
permitted to surrender for cancellation within sixty (60) days after such Change
in Control any Option or portion of an Option  which was  granted  more than six
(6) months prior to the date of such surrender, to the extent not yet exercised,
and to receive a cash payment in an amount  equal to the excess,  if any, of the
Fair  Market  Value (on the date of  surrender)  of the  shares of Common  Stock
subject  to the  Option  or  portion  thereof  surrendered,  over the  aggregate
purchase price for such Shares under the Option.

1.7  Non-Alienation of Benefits
     --------------------------
     Except as herein  specifically  provided,  no right or unpaid benefit under
the Plan shall be subject to  alienation,  assignment,  pledge or charge and any
attempt to  alienate,  assign,  pledge or charge the same shall be void.  If any
Participant  or other person  entitled to benefits  hereunder  should attempt to
alienate,  assign,  pledge or charge any benefit  hereunder,  then such  benefit
shall, in the discretion of the Committee, cease.

1.8  Withholding or Deduction for Taxes
     ----------------------------------
     If,  at  any  time,  the  Company  or any  Subsidiary  is  required,  under
applicable laws and regulations,  to withhold,  or to make any deduction for any
taxes,  or take any other action in  connection  with any Option  exercise,  the
Participant  shall be  required  to pay to the  Company or such  Subsidiary  the
amount of any taxes required to be withheld,  or, in lieu thereof, at the option
of the Company, the Company or such Subsidiary may accept a sufficient number of
shares of Common Stock to cover the amount required to be withheld.

1.9  Administrative Expenses
     -----------------------
     The entire expense of administering the Plan shall be borne by the Company.

1.10 General Conditions
     ------------------
     a.   The Board or the Committee may, from time to time,  amend,  suspend or
          terminate  any or all of the  provisions of the Plan,  provided  that,
          without the Participant's  approval, no change may be made which would
          alter or impair any right theretofore granted to any Participant.

     b.   With the consent of the Participant  affected  thereby,  the Committee
          may  amend  or  modify  any  outstanding  Option  in  any  manner  not
          inconsistent   with  the  terms  of  the  Plan,   including,   without
          limitation, to accelerate the date or dates as of which an installment
          of  an  Option  becomes  exercisable;   provided,   that  without  the
          affirmative  vote of a majority of the stockholders of the Company the
          Committee shall not have the right to reprice any outstanding Options.

     c.   Nothing  contained  in the Plan  shall  prohibit  the  Company  or any
          Subsidiary from establishing other additional  incentive  compensation
          arrangements for employees of the Company or such Subsidiary.

     d.   Nothing in the Plan shall be deemed to limit, in any way, the right of
          the Company or any Subsidiary to terminate a Participant's  employment
          or service with the Company or such Subsidiary at any time.

     e.   Any decision or action taken by the Board or the Committee arising out
          of  or  in   connection   with   the   construction,   administration,
          interpretation  and effect of the Plan shall be conclusive and binding
          upon all  Participants  and any person  claiming  under or through any
          Participant.

     f.   No member of the Board or of the Committee shall be liable for any act
          or action,  whether of  commission  or  omission,  (i) by such  member
          except in  circumstances  involving  actual bad faith, nor (ii) by any
          other member or by any officer, agent or employee.

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1.11 Compliance with Applicable Law
     ------------------------------
     Notwithstanding  any other  provision of the Plan, the Company shall not be
obligated to issue any shares of Common Stock,  or grant any Option with respect
thereto,  unless it is advised by  counsel  of its  selection  that it may do so
without  violation of the  applicable  Federal and State laws  pertaining to the
issuance of  securities  and the Company  may require any stock  certificate  so
issued to bear a legend, may give its transfer agent  instructions  limiting the
transfer  thereof,  and may  take  such  other  steps,  as in its  judgment  are
reasonably required to prevent any such violation.

1.12 Effective Dates
     ---------------
     The Plan was  adopted  by the  Board on August  16,  2000.  The Plan  shall
terminate on August 16, 2010.

Section 2.  OPTION GRANTS
            -------------
2.1  Authority of Committee
     ----------------------
     Subject to the  provisions of the Plan,  the Committee  shall have the sole
and complete  authority to determine (i) the  Participants to whom Options shall
be granted;  (ii) the number of shares to be covered by each  Option;  and (iii)
the  conditions  and  limitations,  if any,  in  addition  to those set forth in
Sections 2 and 3 hereof,  applicable  to the  exercise  of an Option,  including
without limitation,  the nature and duration of the restrictions,  if any, to be
imposed upon the sale or other  disposition of shares  acquired upon exercise of
an Option.

     Stock Options granted under the Plan shall be non-qualified stock options.

     The Committee shall have the authority to grant Options.

2.2  Option Exercise Price
     ---------------------
     The exercise  price set forth in the Option  Agreement at the time of grant
shall not be less than the Fair  Market  Value of the  Common  Stock at the time
that the Option is granted.

     The  purchase  price  is to be  paid in full  in  cash,  certified  or bank
cashier's  check or, at the option of the  Company,  Common  Stock valued at its
Fair Market Value on the date of exercise,  or a combination  thereof,  when the
Option is exercised and stock  certificates  will be delivered only against such
payment.

2.3  Option Grants
     -------------
     Each Option will be subject to the following provisions:

     a.   Term of Option

          An Option  will be for a term of not more than ten years from the date
          of grant.

     b.   Exercise

          Options shall become exercisable in one or more  installments,  in the
          manner  and at the time or times  specified  by the  Committee  in the
          Option Agreement covering the options granted.

          An Option shall be exercisable during the optionee's  lifetime only by
          the optionee and shall not be exercisable by the optionee  unless,  at
          all times  since the date of grant and at the time of  exercise,  such
          optionee is an employee of or providing services to the Company or any
          Subsidiary,  except that,  upon  termination of all such employment or
          provision of services (other than by death,  Total  Disability,  or by
          Total  Disability  followed  by  death in the  circumstances  provided
          below),  the  optionee  may  exercise an Option at any time within two
          years  thereafter but only to the extent such Option is exercisable on
          the date of such termination.

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          Upon  termination  of all such  employment  by Total  Disability,  the
          optionee  may  exercise  such  Options at any time  within  five years
          thereafter,  but only to the extent such Option is  exercisable on the
          date of such termination.

          In the event of the death of an  optionee  (i) while an employee of or
          providing  services to the Company or any  Subsidiary,  or (ii) within
          two years after  termination  of all such  employment  or provision of
          services (other than for Total  Disability) or (iii) within five years
          after   termination  on  account  of  Total  Disability  of  all  such
          employment  or provision of services,  such  optionee's  estate or any
          person who  acquires  the right to exercise  such option by bequest or
          inheritance  or by reason of the death of the  optionee  may  exercise
          such  optionee's  Option at any time  within  the period of five years
          from the date of death.  In the case of clauses  (i) and (iii)  above,
          such Option shall be exercisable in full for all the remaining  shares
          covered  thereby,  but in the case of clause (ii) such Option shall be
          exercisable  only to the extent it was exercisable on the date of such
          termination of employment or service.

          Notwithstanding the foregoing  provisions regarding the exercise of an
          Option in the event of death,  Total Disability,  other termination of
          employment or provision of services or otherwise, in no event shall an
          Option be exercisable in whole or in part after the  termination  date
          provided in the Option Agreement.

     c.   Transferability

          An Option granted under the Plan shall not be  transferable  otherwise
          than by will or by the laws of descent and distribution, except as may
          be permitted by the Board or the Committee.

2.4  Agreements
     ----------
     In  consideration  of any Options granted to a Participant  under the Plan,
each such  Participant  shall  enter into an Option  Agreement  with the Company
providing,  consistent  with the  Plan,  such  terms as the  Committee  may deem
advisable.

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