MTCT Mtc Technologies (MM)

The Plan provides a select group of management or highly compensated employees (“Eligible Employees”) of the Registrant and certain affiliates with the opportunity to defer the receipt of certain pre-tax cash compensation. The obligations of the Registrant under the Plan (the “Deferred Compensation Obligations”) will be general unsecured obligations of the Registrant to pay deferred compensation in the future to participating Eligible Employees (“Participants”) in accordance with the terms of the Plan from the general assets of the Registrant and will rank pari passu with other unsecured and unsubordinated indebtedness of the Registrant from time to time outstanding. The Deferred Compensation Obligations include compensation deferred by Participants, contributions made to Participants’ Plan accounts by the Registrant and investment earnings (or losses) thereon. Such obligations will be denominated and payable in United States dollars.

Subject to certain limits set forth in the Plan, each Participant may elect to defer a fixed dollar amount or a percentage up to 100% of his or her salary payable with respect to a particular calendar year and/or up to 100% of his or her bonus, if any, with respect to a particular fiscal year of the Registrant; provided, that the maximum amount that may deferred by any one Participant with respect to a fiscal year is $75,000. The Registrant may make a discretionary contribution in any amount on behalf of one or more Participants.

Under the Original Plan, Participants’ deferrals and Registrant contributions benefited from a guaranteed investment return based on a publicly available bond interest rate index, which for the 2007 calendar year was 6.5%. Under the Plan, there will be no guaranteed investment return. Participants will be able to invest their deferrals and Registrant contributions among a selection of mutual fund investments substantially similar to those made available under the Registrant’s Master Savings Plan, which is known as the Registrant’s 401(k) plan. The Registrant has also entered into a rabbi trust arrangement regarding the Plan.

The Registrant maintains bookkeeping accounts to which Participants’ deferrals and Registrant contributions are credited. A Participant is 100% vested in his or her compensation deferrals at all times. While the Participant is employed by the Registrant or its affiliates, he or she becomes vested in any amounts contributed by the Registrant after three and one-half years of service with the Company. The Participant becomes fully vested in all amounts contributed by the Registrant due to the Participant’s death or disability or a change of control of the Registrant.

Deferred compensation and vested Registrant contributions (adjusted for deemed investment returns) are generally distributed upon termination of employment. Participants may also request an early distribution of deferred compensation in the event of an unforeseeable emergency.

Participants may elect that their Plan benefits be distributed in a lump sum or in annual installments for periods up to fifteen years.

No amount payable or deliverable under the Plan will be subject to anticipation, assignment, transfer, sale, mortgage, pledge or hypothecation. The Plan administrator will not recognize any attempt by a third party to attach, garnish or levy upon any benefit under the Plan except as may be required by law. There is no trading market for the Deferred Compensation Obligations.

The Deferred Compensation Obligations are not subject to redemption, in whole or in part, prior to the individual payment dates specified by each Participant, at the option of the Registrant or through operation of a mandatory or optional sinking fund or analogous provision. However, the Registrant reserves the right to amend or terminate the Plan at any time, except that no such amendment or

termination shall adversely affect the right of the Participant to the balance of his or her deferred account as of the date of such amendment or termination.

The total amount of the Deferred Compensation Obligations is not determinable because the amount will vary depending upon the level of participation by Eligible Employees and the amounts of their salaries and bonuses. The duration of the Plan is indefinite.

The Deferred Compensation Obligations are not convertible into another security of the Registrant. The Deferred Compensation Obligations will not have the benefit of a negative pledge or any other affirmative or negative covenant on the part of the Registrant. Each Participant will be responsible for acting independently with respect to, among other things, the giving of notices, responding to any requests for consents, waivers or amendments pertaining to the Deferred Compensation Obligations, enforcing covenants and taking action upon a default by the Registrant.

The foregoing description of the Deferred Compensation Obligations is qualified in its entirety by reference to both the full text of the Plan, a copy of which is incorporated by reference as Exhibit 4.1 to this Post-Effective Amendment No. 1, and by reference to the full text of The Executive Nonqualified “Excess” Plan Adoption Agreement, a copy of which is incorporated by reference as Exhibit 4.2 to this Post-Effective Amendment No. 1. The foregoing description of the rabbi trust arrangement is qualified in its entirety by reference to the full text of the Trust Agreement, by and between MTC Technologies, Inc. and Delaware Charter Guarantee & Trust Company, conducting business as Principal Trust Company, a copy of which is incorporated by reference as Exhibit 4.3 to this Post-Effective Amendment No. 1.