Key Employee Deferred Compensation Plan

Exhibit 10.19


July 30, 2001


AEROFLEX INCORPORATED


KEY EMPLOYEE DEFERRED COMPENSATION PLAN


Section 1. General Provisions


1.1 Name, General Purpose and Effective Date


The name of this plan is the Aeroflex Incorporated Key Employee Deferred Compensation Plan (the "Plan"). The Plan is intended to enable Aeroflex Incorporated and its subsidiaries (collectively the "Company") to defer payment of a portion of the compensation of key employees of the Company who are designated to participate in the Plan. As of its effective date, which is July 1, 2001, the Plan will serve as the vehicle (a) for making deferrals under deferral plans or arrangements for key employees of the Company then or thereafter in effect and (b) for continuing deferral of amounts theretofore deferred under any deferral plans or arrangements in effect on or before said date.


1.2 Definitions


a. "Beneficiary" means any person or entity, or any combination thereof,
designated by a Participant in a form acceptable to the Committee, to
receive benefits under the Plan in the event of the Participant's
death or, in the absence of any such designation, his or her estate.


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


c. "Change in Control" means the occurrence of any of the following
events:


i. the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934 as amended (the "Exchange Act") (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of voting securities of Aeroflex when such
acquisition causes such Person to own 20 percent or more of the
combined voting power of the then outstanding voting securities of
Aeroflex entitled to vote generally in the election of directors (the
"Outstanding Aeroflex Voting Securities"); provided, however, that
for purposes of this subsection (i), the following acquisitions shall
not be deemed to result in a Change in Control: (A) any acquisition
directly from Aeroflex, (B) any acquisition by Aeroflex, (C) any
acquisition by any employee benefit plan (or related trust) sponsored
or maintained by Aeroflex or any corporation controlled by Aeroflex
or (D) any acquisition pursuant to a transaction that complies with
clauses (A), (B) and (C) of subsection (iii) below; and provided,
further, that if any Person's beneficial ownership of the Oustanding
Aeroflex Voting Securities reaches or exceeds 20 percent as a result
of a transaction described in clause (A) or (B) above, and such
Person subsequently acquires beneficial ownership of additional
voting securities of Aeroflex, such subsequent acquisition shall be
treated as an acquisition that causes such Person to own 20 percent
or more of the Oustanding Aeroflex Voting Securities; or


ii. individuals who, as of the Effective Date, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual
becoming a director subsequent to the


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Effective Date whose election, or nomination for election by
Aeroflex's stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall
be considered as though such individual were a member of the
Incumbent Board, but excluding for this purpose any such individual
whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal
of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or


iii. consummation of a reorganization, merger or consolidation or sale
or other disposition of all or substantially all of the assets of
Aeroflex or the acquisition of assets of another entity ("Business
Combination"); excluding, however, such a Business Combination
pursuant to which (A) all or substantially all of the individuals and
entities who were the beneficial owners of the Outstanding Aeroflex
Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 60 percent of,
respectively, the then outstanding shares of common stock or the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation that as a result of
such transaction owns Aeroflex or all or substantially all of
Aeroflex's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the
Outstanding Aeroflex Voting Securities, (B) no Person (excluding any
employee


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benefit plan (or related trust) of Aeroflex or such
corporation resulting from such Business Combination) beneficially
owns, directly or indirectly, 20 percent or more of, respectively,
the then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power
of the then outstanding voting securities of such corporation except
to the extent that such ownership existed prior to the Business
Combination and (C) at least a majority of the members of the board
of directors or the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or


iv. approval by the stockholders of Aeroflex of a complete liquidation
or dissolution of the Company.


d. "Code" means the Internal Revenue Code of 1986, as in effect at any
applicable time.


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


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


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


h. "Compensation" means, for any applicable Year, salary and bonus
earned by a Participant for such Year for services rendered to the
Company.


i. "Deferral Election Form" means the form provided by the Company
pursuant to which a Participant elects deferral of a portion of his
or her Compensation for any Year.


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j. "Deferred Compensation Account" means the account established in the
name of a Participant, as provided in Section 2.2 below.


k. "Early Distribution" means withdrawal by a Participant of amounts
from his or her Deferred Compensation Account before he or she would
otherwise be entitled to such amounts, as provided in Section 3.8
below.


l. "Earnings" means the amount credited to a Participant's Deferred
Compensation Account, as provided in Section 2.3 below.


m. "ERISA" means the Employee Retirement Income Security Act of 1974, as
in effect at any applicable time.


n. "Fair Market Value" means the closing market price of the Common
Stock on the Nasdaq Stock Market on the trading day prior to any 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.


o. "Hardship" means a severe financial stringency to a Participant
resulting from a sudden and unexpected illness or accident of the
Participant or his or her dependent (as defined in Code Section
154(a)), loss of his or her property due to casualty, or other
similar or extraordinary and unforeseeable circumstance arising as a
result of events beyond the control of the Participant.


p. "Investment Designation" means the designation made by a Participant,
pursuant to a Deferral Election Form, for the actual or putative
investment of the Compensation that he or she has elected to defer
under the Plan.


q. "Participant" means any key employee of the Company who is designated
by the Committee to participate in the Plan.


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r. "Retirement" means termination of a Participant's employment with the
Company other than by reason of death or Total Disability.


s. "Total Disability" means bodily injury or sickness that wholly and
continuously disables a Participant. The Committee shall make any
determination of Total Disability, which shall be final, based on the
finding of an independent physician selected by the Board.


t. "Trust" means the Aeroflex Incorporated Key Employee Deferred
Compen ...