AEROFLEX INCORPORATED
                       1999 STOCK OPTION PLAN, AS AMENDED


SECTION 1.  GENERAL PROVISIONS

1.1. Name and General Purpose

     The name of this plan is the Aeroflex  Incorporated  1999 Stock Option Plan
(hereinafter  called the  "Plan").  The Plan is intended  to be a  broadly-based
incentive  plan which enables  Aeroflex  Incorporated  (the  "Company")  and its
subsidiaries  and  affiliates to foster and promote the interests of the Company
by  attracting  and  retaining   directors,   officers  and  employees  of,  and
consultants  to, the Company who  contribute to the  Company's  success by their
ability, ingenuity and industry, to enable such directors,  officers,  employees
and  consultants  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.   "Affiliate"  means any person or entity  controlled by or under common
          control  with the  Company,  by  virtue  of the  ownership  of  voting
          securities, by contract or otherwise.

     b.   "Board" means the Board of Directors of the Company.

     c.   "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.

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

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

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

     g.   "Fair Market Value" means the closing market price of the Common Stock
          on the New York Stock Exchange  consolidated  reporting  system 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  New  York  Stock  Exchange  consolidated
          reporting  system on such date,  Fair Market Value shall be determined
          by the Committee.

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

     i.   "Option" means any option to purchase  Common Stock under Section 2 of
          the Plan.
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     j.   "Option Agreement" means the option agreement described in Section 2.4
          of the Plan.

     k.   "Participant" means any director,  officer,  employee or consultant of
          the  Company,  a  Subsidiary  or an  Affiliate  who is selected by the
          Committee to participate in the Plan.

     l.   "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.

     m.   "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 directors,  officers, employees of, or
consultants  to, the Company or a Subsidiary  or  Affiliate.  Subject to Section
1.5,  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  900,000  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  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 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.
<PAGE>
     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  or Affiliate 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  or
Affiliate, the amount of any taxes required to be withheld, or, in lieu thereof,
at the option of the Company,  the Company or such  Subsidiary  or Affiliate 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,  and  irrespective  of the  provisions  of Section  2.3(c)
          below,  to accelerate  the date or dates as of which an installment of
          an Option becomes exercisable;  provided, that the Committee shall not
          have the right to reprice any outstanding Options,  either by lowering
          the  exercise  price or by  cancelling  and  regranting,  without  the
          affirmative  vote of a majority  of the  stockholders  of the  Company
          voting on the repricing proposal.

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

     d.   Nothing in the Plan shall be deemed to limit, in any way, the right of
          the  Company  or  any   Subsidiary   or   Affiliate   to  terminate  a
          Participant's  employment  with the  Company  (or such  Subsidiary  or
          Affiliate) 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.
<PAGE>
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 11,  1999,  subject to approval
by the  stockholders  of the  Company.  The Plan  was  amended  by the  Board on
November 18, 1999. The Plan shall terminate on August 10, 2009.

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
Section 2 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 price of stock purchased upon the exercise of Options granted  pursuant
to the Plan  shall be not less than the Fair  Market  Value  thereof 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

     (i) By an Employee:

     Unless  otherwise  provided  by the  Committee  and  except  in the  manner
     described below upon the death of the optionee,  an Option may be exercised
     only in  installments  as follows:  up to one-half of the subject shares on
     and  after  the first  anniversary  of the date of grant,  up to all of the
     subject shares on and after the second such  anniversary of the date of the
     grant of such Option but in no event later than the  expiration of the term
     of the Option.

     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, any parent corporation of
     the Company or any Subsidiary or Affiliate,  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
<PAGE>
     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.

     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, any parent corporation of the Company or
     any Subsidiary or Affiliate,  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.

     (ii) By Persons other than Employees:

     If the optionee is not an employee of the Company or the parent corporation
     of the  Company  or any  Subsidiary  or  Affiliate,  the  vesting  of  such
     optionee's   right  to  exercise  his  Options  shall  be  established  and
     determined  by the Committee in the Option  Agreement  covering the Options
     granted to such optionee.

     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,  or to the extent permitted
by the Board or the  Committee  to (i) a member  or  members  of the  optionee's
family,  (ii) a trust,  (iii) a family  limited  partnership  or (iv) a  similar
estate planning vehicle primarily for members of the optionee's family.

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.