EXHIBIT 10.2

                        1988 INCENTIVE COMPENSATION PLAN
                                       OF
                              DIALOGIC CORPORATION

                       (as amended through March 28, 1997)


          Section 1. Definitions.

          As used in this Incentive  Compensation  Plan the following terms have
the meanings stated.  The singular includes the plural, and the masculine gender
includes  the  feminine  and neuter  genders,  and vice  versa,  as the  context
requires.  The word "person"  includes any natural  person and any  corporation,
firm, partnership or other form of association.

          "Award  Date"  means  the date on which an  Incentive  is  awarded  as
specified by the Board.

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

          "Cash Award" means a cash payment by the Company to a  Participant  as
additional compensation for that Participant's services to the Group.

          "Code" means the Internal  Revenue Code of 1986,  as it may be amended
from time to time.

          "Committee"  means a committee of two or more members of the Board, to
which the Board has delegated the authority to administer the Plan under Section
3.

          "Common Stock" means the Common Stock, no par value, of the Company.

          "Company" means Dialogic Corporation.

          "Director" means a member of the Board.

          "Disability"  means a  permanent  and total  disability  as defined in
Section 22 of the Code.

          "Disinterested  Person"  means a person  who has not been  granted  or
awarded Incentives under the Plan nor any substantially similar incentives under
any other  plan of the  Company or any member of the Group for at least one year
before serving on the  Committee,  except that  participation  in a formula plan
meeting the  conditions  set forth in Securities  and Exchange  Commission  Rule
16b-3(c)(2)(ii)  shall not  disqualify  a Director  from  being a  Disinterested
Person.

          "Election" has the meaning stated in Section 13.08(a).

          "Exercise Date" means the date on which the Company  receives a notice
of the exercise of an  Incentive,  which notice meets the  requirements  of this
Plan.

          "Fair Market Value" has the meaning stated in Section 13.12.

          "Group" means the Company, each parent corporation to the Company, and
each of the  Company's  subsidiaries,  as these  terms are  defined in  Sections
424(e) and 424(f) of the Code.

          "In Tandem" means that two  Incentives  are related to each other such
that,  the  number of shares  subject to the first  Incentive  is reduced by the
number of shares for which the second Incentive is exercised,  and the number of
shares  subject to the second  Incentive  is reduced by the number of shares for
which the first Incentive is exercised.

          "Incentive  Stock Option" means a stock option  intended to qualify as
an incentive stock option under Section 422 of the Code.

          "Incentives" mean the economic incentives listed in Section 5 that may
be awarded under this Plan.

          "Non-Statutory  Stock  Option"  means any Stock  Option  other than an
Incentive Stock Option.

          "Participant" means an employee or director of any member of the Group
to whom an Incentive has been awarded.

          "Performance  Stock Right" means a contingent  right to receive Shares
upon the achievement of certain performance objectives.

          "Plan" means this 1988 Incentive Compensation Plan of the Company.

          "Qualified  Person"  means a  Participant's  legal  guardian  or legal
representative or a deceased Participant's heir or legatee who has a legal right
to or in respect of an Incentive of that Participant.

          "Restricted  Stock  Award" means the award of Shares by the Company to
the  Participant  at a price that may be below  Fair  Market  Value,  or without
payment to the Company, but these Shares are subject to restrictions on sale and
other transfer and are subject to forfeiture.

          "Retirement"  means (i) the voluntary  termination  of employment by a
Participant who is 59-1/2 years old or older  unless, prior to such termination,
such  Participant  advises  the  Company  that he  intends to be  employed  on a
full-time  basis by an  employer  that is not a member  of the Group or (ii) the
voluntary  termination of employment by any Participant if the Board determines,
prior  to such  termination,  that  such  termination  shall be  deemed  to be a
"Retirement" for purposes of the Plan.

          "SAR" means a stock  appreciation  right  relating to the Common Stock
and is a right to receive Shares,  cash or a combination thereof without payment
to the Company.

          "Securities  Exchange Act" means the Securities  Exchange Act of 1934,
as it may be amended from time to time.

          "Share" means a share of Common Stock.

          "Stock  Award"  means  the  award  of  Shares  by  the  Company  to  a
Participant as additional compensation and without payment to the Company.

          "Stock  Option"  means an Incentive  Stock  Option or a  Non-Statutory
Stock Option.

          "Tax Date" has the meaning stated in Section 13.08(a).

          "Unit of Phantom Stock" means a right to receive,  without  payment to
the Company, cash, dividends or a combination thereof.

                  Section 2.  Purpose.

          The purpose of this Plan is to advance the  interests  of the Group by
furnishing  Incentives  designed  to  attract,  retain and  motivate  employees.
Incentives  may consist of  opportunities  to acquire Shares or cash or both, as
provided by this Plan.

                  Section 3.  Administration.

          3.01.  Administrative body. Subject to Section 3.02, the Plan shall be
administered  by the  Board  or  the  Committee.  The  Board  may  in  its  sole
discretion,  but subject to Section  3.02,  delegate the authority to administer
the Plan to the Committee.  If the Committee has been delegated the authority to
administer  the Plan,  all  references to the Board in this Plan (except in this
Section  3.01,  Section 3.02,  Section  13.07 and Section  13.11) shall mean and
refer to the Committee.

          3.02.  Public  company.  If any  member  of the  Group  has any  stock
registered  under Section 12 of the  Securities  Exchange Act, this Section 3.02
shall apply.  Unless all of the members of the Board are Disinterested  Persons,
the Board shall  delegate the authority to administer the Plan to a Committee of
two or more Directors each of whom is a Disinterested Person.

          3.03. Authority.  Subject to applicable law and the terms of the Plan,
the Board shall have plenary  authority to (a) award  Incentives under the Plan,
(b) set the terms, conditions and restrictions of the Incentives, their exercise
and all related  rights,  (c) accelerate the date on which a previously  granted
Incentive  may be exercised,  (d) prescribe the form of agreements  awarding and
governing the  Incentives,  (e)  interpret the Plan,  (f) establish any rules or
regulations  relating to the Plan and (g) make all other  determinations for the
proper  administration  of the  Plan.  Terms,  conditions  and  restrictions  of
Incentives may vary from Participant to Participant and from award to award. The
Board's  decisions on matters relating to the Plan shall be final and conclusive
on the Group and the  Participants  and their  respective  successors,  assigns,
transferees, heirs and representatives.

                  Section 4.  Eligibility.

          4.01.  Designation  of  employees.  All employees of any member of the
Group,  including  officers and  directors  who are  employees,  are eligible to
receive Incentives under the Plan.  Directors and officers who are not employees
of any member of the Group may not receive Incentives under the Plan.

          4.02.  Participants.  The Board may  consider  any factor in selecting
Participants  and in  determining  the type  and  amount  of  their  Incentives,
including,  but  not  limited  to,  (a) the  current  or  anticipated  financial
condition of the Group,  (b) the  contributions  by the Participant to the Group
and (c) the other compensation provided to the Participant. The Board's award of
an  Incentive  to a person in any year shall not  require the Board to award any
Incentive to that person in any other year.

                  Section 5.  Types of Incentive.

          Incentives  may be  granted  in any  one  or  any  combination  of the
following  forms:  (a)  Non-Statutory  Stock Options  (Section 7); (b) Incentive
Stock  Options  (Section 7); (c) SARs  (Section  8); (d) Units of Phantom  Stock
(Section 9); (e) Stock Awards (Section 10); (f) Restricted Stock Awards (Section
10); (g)  Performance  Stock Rights  (Section 11); and (h) Cash Awards  (Section
12).

                  Section 6.  Shares Subject to the Plan.

          6.01. Number of Shares. Subject to Section 13.07, the aggregate number
of Shares which may be issued under the Plan shall not exceed 3,025,000  Shares.
For purposes of this Section 6.01, each Unit of Phantom Stock shall constitute a
single Share.  Notwithstanding  any provision of this Plan to the contrary,  the
aggregate  consideration  (including cash and property) paid to the Company upon
the purchase of all Shares on which "Pre-Public Incentives" are issued shall not
(unless and until the shares issuable  pursuant to this Plan are registered with
the Securities and Exchange  Commission) exceed $5,000,000 or such lesser amount
from  time to time  permitted  under  Rule 701 of the  Securities  and  Exchange
Commission or any successor  rule.  For purposes of this Section 6.01,  the term
"Pre-Public Incentives" means Incentives issued prior to the first date on which
the Company becomes subject to the reporting requirements of Section 13 or 15(d)
of the Securities Exchange Act.

          6.02.  Expiration and cancellation.  If an Incentive granted under the
Plan expires,  is terminated or is otherwise  cancelled  before  exercise,  that
Incentive and the related  shares of Common  Stock,  SARs or phantom stock shall
not apply toward the limits  provided in Section 6.01. If Shares,  SARs or Units
of Phantom  Stock issued or awarded  under this Plan are  forfeited,  cancelled,
terminated or reacquired by the Company, those forfeited,  cancelled, terminated
or reacquired  Shares,  SARs,  and Units of Phantom Stock shall not apply toward
the limits  provided in Section 6.01 and shall be available  again for the grant
of Incentives.

          6.03.  Maintenance  of stock.  Shares  issued  under the Plan shall be
authorized and unissued  shares or shares of treasury  stock.  The Company shall
always  maintain  the number of such Shares at least equal to a number of Shares
for which Incentives have been granted and remain outstanding and unexercised.

                  Section 7.  Stock Options.

          Each  Stock  Option  granted  under  this Plan shall be subject to the
following terms and conditions:

          7.01.  Price.  The option price per share shall be  determined  by the
Board;  provided,  however,  that the option price shall not be less than 75% of
the Fair  Market  Value on the Award  Date of the  Common  Stock  subject to the
option.

          7.02.  Number.  The number of Shares subject to the Stock Option shall
be determined by the Board.

          7.03. Duration and time for exercise. The Award Date of a Stock Option
shall be the date  specified by the Board,  provided that that date shall not be
before the date on which the Stock Option is actually awarded.  The term of each
Stock Option shall be determined by the Board but shall not exceed 10 years from
the date of grant.  Each Stock Option shall become  exercisable  at such time or
times and in such amount or amounts  during its term as shall be  determined  by
the Board at the time of grant.  If Section 3.02 then  applies,  no Stock Option
may be  exercised  during  the  first  six  months  of its  term.  The Board may
accelerate the exercisability of any Stock Option. Unless otherwise specified by
the Board, once a Stock Option becomes exercisable,  whether in full or in part,
it shall remain so exercisable until its expiration,  forfeiture, termination or
cancellation.

          7.03A Limitation.  Any Stock Option granted subsequent to February 27,
1997 at an exercise price that is less than 100% of the Fair Market Value on the
Award Date of the Common Stock subject to the Stock Option shall not vest sooner
than three years from the Award Date (and shall not have its vesting accelerated
to a date that is less than three years from the Award Date unless  acceleration
occurs  pursuant to Section 14 hereof) unless such vesting arises as a result of
the optionee's satisfying performance criteria approved by the Board.

          7.04. Exercise. A Stock Option may be exercised,  in whole or in part,
by giving written notice to the Company (Attention:  Chief Financial Officer) at
its principal office or to such transfer agent as the Company may designate. The
notice shall identify the Incentive being exercised and shall contain such other
information and terms as the Board may require.  The notice shall be accompanied
by full  payment  of the  purchase  price for the  Shares  (a) in United  States
dollars in cash or by check,  (b) at the discretion of the Board, by delivery of
previously  acquired  Shares  having a Fair  Market  Value  equal on the date of
exercise  to  the  cash  exercise  price  of  the  Stock  Option,  or (c) at the
discretion  of the Board,  by a  combination  of (a) and (b)  above.  As soon as
practicable  after receipt of the written  notice,  the Company shall deliver to
the person  exercising  the Stock  Option the one or more  certificates  for the
Shares.

          7.05. Incentive Stock Options.  Notwithstanding  anything in this Plan
to the contrary, the following additional provisions shall apply to the grant of
Incentive Stock Options:

          (a) The  aggregate  Fair Market  Value on the Award Date of the Shares
with respect to which Incentive Stock Options are exercisable for the first time
by any Participant during any calendar year (under all plans of the Group) shall
not exceed $100,000;

          (b) All Incentive  Stock Options must be granted  within 10 years from
the date on which the Plan was adopted by the Board;

          (c) Unless exercised sooner,  each Incentive Stock Option shall expire
no later than 10 years after the Award Date for that Incentive Stock Option;

          (d) The option price for each Incentive Stock Option shall be not less
than 100% of the Fair  Market  Value of the Shares  subject to the option on the
Award Date of that Incentive Stock Option;

          (e) No Incentive Stock Option shall be granted to any Participant who,
at the time that option is granted,  owns  (within the meaning of Section 422 of
the Code) stock having more than 10% of the total  combined  voting power of all
classes of stock of the  Company  or any member of the Group,  unless the option
price is equal to at least 110% of the Fair Market  Value of the Shares  subject
to the  option on the Award Date and the  option is not  exercisable  later than
five years from the Award Date;

          (f)  Incentive  Stock  Options  may be  issued  alone  or  with  other
Incentives  (including  Non-Statutory  Stock  Options)  but may not be issued In
Tandem with Non-Statutory Stock Options; and

          (g) Each Incentive Stock Option agreement referred to in Section 13.05
shall  contain  or be deemed to  contain  all  provisions  required  in order to
qualify those Stock Options as incentive  stock options under Section 422 of the
Code,  and the  provisions  of this Plan shall be  interpreted  and construed to
effect such treatment under that Section.

          Section 8. Stock Appreciation Rights.

          An SAR may be granted (i) together with any Stock Option granted under
this Plan in which case it shall be  exercisable  with and in  addition  to that
Stock  Option,  (ii) In Tandem  with any Stock  Option  granted  under this Plan
(except with respect to an Incentive  Stock Option if the grant of the SAR would
cause the Incentive Stock Option not to qualify as such under Section 422 of the
Code) or (iii) alone,  without  reference to any Stock Option.  Each SAR granted
under this Plan shall be subject to the following terms and conditions:

          8.01. Number.  Each SAR shall relate to the number of Shares as may be
determined by the Board.

          8.02. Duration.  The term of each SAR shall be determined by the Board
but shall not exceed 10 years from the Award  Date of the SAR.  If Section  3.02
then applies,  no SAR may be exercised  during the first six months of its term.
Except as provided  in the  preceding  sentence,  the Board may  accelerate  the
exercisability of any SAR.

          8.03.  Exercise.  An SAR may be  exercised,  in whole  or in part,  by
giving written notice to the Company (Attention: Chief Financial Officer) at its
principal office or to such transfer agent as the Company shall  designate.  The
notice shall identify the Incentive being exercised and shall contain such other
information  and terms as the Board may require.  As soon as  practicable  after
receipt  of the  written  notice,  the  Company  shall  deliver  to  the  person
exercising the SAR certificates for the Shares, cash or a combination thereof to
which that person is entitled under Section 8.04.

          8.04. Payment.  When the Board awards an SAR, it shall specify whether
the SAR is  exercisable  (a) for cash  only,  (b) for Shares  only,  (c) for any
combination thereof as specified by the person exercising the SAR at the time of
the exercise of the SAR or (d) for any  combination  thereof as specified by the
Board at the time of the exercise of the SAR.

          (a) If an SAR is exercisable for Shares, the number of Shares issuable
upon the exercise of the SAR shall be determined by dividing:

                    (i) the  number  of Shares  for  which the SAR is  exercised
     multiplied  by the amount of the  appreciation  per Share (for this purpose
     the  "appreciation  per Share" shall be the amount by which the Fair Market
     Value of a Share on the  Exercise  Date  exceeds  (A) in the case of an SAR
     granted In Tandem with a Stock Option,  the option price or (B) in the case
     of an SAR granted  alone  without  reference  to a Stock  Option,  the Fair
     Market Value of a Share on the Award Date of the SAR); by

                    (ii) the Fair Market Value of a Share on the Exercise Date.

          (b) If an SAR is exercisable for cash, the amount of cash payable upon
exercise  shall be equal to the Fair Market Value on the Exercise Date of any or
all of the Shares that would be issuable if the SAR were exercised for Shares.

          (c) No fractional  Shares shall be issued upon the exercise of an SAR.
Instead,  the holder of the SAR shall  receive a cash payment  equal to the Fair
Market Value of the fractional share.  Notwithstanding the foregoing,  the Board
may decide to pay cash to  Participants  covered by Section 16 of the Securities
Exchange Act only if the Company,  the Board and the Participant comply with all
applicable provisions of that Section 16 and the related regulations.

          Section 9. Phantom Stock.

          Each Unit of Phantom Stock granted under this Plan shall be subject to
the following terms and conditions:

          9.01. Number. Each Unit of Phantom Stock shall relate to one Share.

          9.02.  Duration.  The  term of each  Unit of  Phantom  Stock  shall be
determined  by the Board but shall not  exceed 10 years  from the Award Date for
that Unit of Phantom  Stock.  If Section 3.02 then  applies,  no Unit of Phantom
Stock  may be  exercised  during  the first  six  months of its term.  Except as
provided in the preceding  sentence,  the Board my accelerate the exercisability
of any Unit of Phantom Stock.

          9.03. Exercise. A Unit of Phantom Stock may be exercised,  in whole or
in part, by giving written  notice to the Company  (Attention:  Chief  Financial
Officer) at its principal  office or to such transfer agent as the Company shall
designate.  The notice shall  identify the Incentive  being  exercised and shall
contain such other information and terms as the Board shall require.  As soon as
practicable  after receipt of the written  notice,  the Company shall deliver to
the person exercising the Unit of Phantom Stock the amount of cash to which that
person is entitled under Section 9.04.

          9.04. Payment.

          (a) When the Board awards a Unit of Phantom  Stock,  it shall  specify
whether  that unit is entitled to the  dividends  that would  accrue to a single
Share.  If any Unit of Phantom Stock is so entitled,  dividends shall be paid on
the unit as if the unit were a Share.

          (b) The  amount of cash  payable  upon  exercise  of a Unit of Phantom
Stock shall be the excess of Fair Market Value of one Share on the Exercise Date
over the Fair Market Value of one Share on the Award Date.

          Section 10. Stock Awards and Restricted Stock.

          Stock  Awards  and  Restricted  Stock  Awards  shall be subject to the
following terms and conditions:

          10.01.  Number  of  Shares.  The  number of Shares to be issued by the
Company to a Participant  under a Stock Award or a Restricted  Stock Award shall
be determined by the Board; provided,  however, that no more than 100,000 Shares
may be  issued  under all Stock  Awards  and  Restricted  Stock  Awards  granted
pursuant to the Plan  subsequent to February 27, 1997.  10.02.  Sale price.  The
Board  shall  determine  the  prices,  if any, at which  Shares  issued  under a
Restricted  Stock Award shall be sold to a  Participant,  which  prices may vary
from time to time and among  Participants and which may be below the Fair Market
Value of Shares at the date of sale. The Shares of restricted stock awarded at a
price must be paid for (a) in United States Dollars in cash or by check,  (b) at
the  discretion  of the Board,  by delivery of Shares having a Fair Market Value
equal on the purchase date to the purchase price or (c) at the discretion of the
Board, by a combination of (a) and (b) above.

          10.03. Duration. Shares of restricted stock that are to be sold to the
Participant must be fully paid for by the Participant  within the time specified
by the Board.  If payment is not timely  made,  the  Incentive  shall  lapse and
terminate.

          10.04.  Delivery. As soon as practicable after granting a Stock Award,
the Company shall deliver to the  Participant one or more  certificates  for the
Shares awarded.  As soon as practicable  after granting a Restricted Stock Award
and, if the restricted stock is to be sold to the Participant,  after payment of
the full purchase price, the Company shall deliver one or more  certificates for
the Shares as provided in Section 10.06.

          10.05. Restrictions.  All Shares issued under a Restricted Stock Award
shall be subject to such restrictions as the Board may determine, including, but
not limited to, any or all of the following:

          (a) a prohibition against the sale, transfer,  pledge,  encumbrance or
other  disposition of the Shares.  Such a prohibition shall lapse at the time or
times  that  the  Board  may  determine  (whether  in  annual  or more  frequent
installments,  at the  time  of  the  death,  disability  or  retirement  of the
Participant, or otherwise); and

          (b) a  requirement  that the  Participant  forfeit  (or in the case of
Shares sold to a  Participant,  resell to the Company at the same price at which
the  Participant  purchased  the Shares) all or any part of those  Shares if the
Participant's  employment is terminated  during any period in which those Shares
are subject to restrictions.

          10.05A Limitation.  Notwithstanding the foregoing, all Shares issuable
pursuant  to a  Restricted  Stock  Award shall be subject to at least one of the
following conditions:

          (a) the  Participant  shall be  required  to forfeit the Shares if the
Participant  ceases to be employed by a member of the Group  within  three years
after the date of grant; or

          (b) the  Participant  shall be  required  to forfeit the Shares if the
Participant fails to satisfy performance criteria approved by the Board.


          10.06.  Escrow.  Shares issued under a Restricted Stock Award shall be
registered in the name of the Participant  and deposited,  together with a stock
power endorsed in blank, in escrow with the Company.  Each certificate for those
Shares shall bear a legend in substantially the following form:

     The transfer of this certificate and the shares of Common Stock represented
     by it is  subject  to  the  terms  and  conditions (including conditions of
     forfeiture) contained in the 1988 Incentive  Compensation Plan of  Dialogic
     Corporation  (the  "Company")  and an  agreement  entered  into between the
     registered  owner and the Company.  Copies of the Plan and agreement are on
     file in the office of the Secretary of the Company.

          10.07.  End of  restrictions.  After the  restrictions  have  expired,
certificates evidencing the Shares shall be delivered to the Participant free of
the legend. The Shares,  however, shall remain subject to all other restrictions
stated in this Plan or in the agreement providing for that Incentive.

          10.08.  Stockholder.  Subject to the terms and  conditions of the Plan
and  any  other  restrictions  determined  by the  Board  and set  forth  in the
agreement for the Restricted  Stock Award,  each Participant who receives Shares
under a  Restricted  Stock Award  shall have all of the rights of a  stockholder
during any period in which the Shares are  subject to  restrictions,  including,
but not limited to, the right to vote the Shares.  Dividends  on the Shares paid
in cash or  property  shall be paid to the  Participant.  Dividends  payable  in
Shares or other stock,  however,  shall be paid in restricted  Shares subject to
all provisions of this Section 10.

          Section 11. Performance Stock Rights.

          The award of  Performance  Stock Rights shall be subject to such terms
and conditions as the Board considers  appropriate.  Each award of a Performance
Stock Right shall include the performance objectives to be achieved by the Group
or the  Participant.  The  number of Shares  to be  issued by the  Company  to a
Participant  under a  Performance  Stock Right shall be determined by the Board;
provided,  however,  that no more than  100,000  Shares may be issued  under all
Performance Stock Rights granted pursuant to the Plan subsequent to February 27,
1997. If the  performance  objectives  are achieved,  the  Participant  shall be
issued a number  of  Shares  equal to the  number of  Performance  Stock  Rights
granted to that Participant.  In the event that the performance objectives for a
particular Performance Stock Right relate solely to continued employment,  three
years  from the  date of grant of such  Right  shall be the  minimum  period  of
continued employment required in order to satisfy such performance objectives.

          Section 12. Cash Awards.

          The amount of any Cash Award shall be  determined  by the Board.  Cash
Awards  shall  be  subject  to other  terms  and  conditions  as the  Board  may
determine.

          Section 13. General.

          13.01.  Effective date. This Plan was adopted by the Board on December
5, 1988.

          13.02. Duration. Unless the Plan is terminated earlier, the Plan shall
terminate  10 years from the date on which the Plan is adopted by the Board.  No
Incentive or other rights under the Plan shall be granted thereafter. The Board,
without further approval of the Company's  stockholders,  may at any time before
that date  terminate  the  Plan.  After  termination  of the  Plan,  no  further
Incentives  may be  granted  under  the  Plan.  Incentives  granted  before  any
termination shall continue to be exercisable in accordance with the terms of the
Incentive.

          13.03.  Non-transferability of Incentives; exercise by Participant. No
Incentive  (except  Cash  Awards) may be sold,  pledged,  assigned,  encumbered,
disposed of or otherwise  transferred  other than by will or the laws of descent
and  distribution.  The Company shall not be required to recognize any attempted
disposition  by any  Participant  or Qualified  Person.  During a  Participant's
lifetime,   such   Participant's   Incentives  are  only   exercisable  by  such
Participant.

          13.04.  Effects of termination of employment or death.  Each agreement
providing  for an  Incentive  shall  include  such  provisions  as the Board may
determine  for  the  exercise  and  termination  of the  Incentive,  the  rights
thereunder,  the forfeiture  thereof and the rights of the Company to repurchase
or convert into  non-voting  or other Shares the Shares  acquired  thereunder in
each case if the  Participant  ceases to be an  employee  of the  Company or any
member of the Group for any reason; provided,  however, that notwithstanding any
provision to the contrary herein or in any Incentive  Agreement,  the provisions
of Section 13.04A shall govern in the event that the employment of a holder of a
Stock Option terminates as a result of death, Disability or Retirement or in the
event  that the  employment  of a holder  of a Stock  Option is  terminated  for
reasons  other than  death,  Disability  or  Retirement  that do not  constitute
"cause" (any determination of cause to be made by the Committee).  An employee's
employment  shall be  deemed  to have  terminated  when the  Company  gives  the
employee  notice of  termination  or receives a notice of  termination  from the
employee,  irrespective of the subsequent payment of salary,  wages or severance
or other  benefits.  The Board's  determination  as to whether  leave of absence
(whether  or  not by  approval  of the  Company  or by  reason  of  military  or
governmental service) constitutes  termination of employment for purposes of the
Plan shall be binding and conclusive.

          13.04A  Termination of Employment as a Result of Death,  Disability or
Retirement.  Notwithstanding  any  provision  to the  contrary  herein or in any
Incentive Agreement,  the following provisions shall apply with respect to Stock
Options  held  by  a  Participant  at  the  termination  of  such  Participant's
employment  with  members  of the  Group in the event  that  such  Participant's
employment  terminates as a result of death,  Disability or Retirement or in the
event that such  Participant's  employment is terminated  for reasons other than
death,   Disability  or  Retirement   that  do  not   constitute   "cause"  (any
determination of "cause" to be made be the Committee):

                   (a) If such employment  terminates  as a result of death, the
                    Participant's  estate shall have the right to exercise the  
                    Participant's  Stock  Options  for a period ending  on  the 
                    earlier of the expiration dates of such Stock Options or one
                    year from the date of termination  of  employment,  provided
                    that such  Stock  Options  shall  be  exercisable  by such  
                    estate  only  to  the extent exercisable  on  the  date  of 
                    termination of employment.

               (b)  If such employment terminates as a result of Disability, the
                    Participant  shall  have the  right to  exercise  his  Stock
                    Options for a period ending on the earlier of the expiration
                    dates of such  Stock  Options or one year from the date that
                    the  Participant  is  notified  that he will not  longer  be
                    employed  by any  members  of the Group  (the  "Notification
                    Date"),   provided   that  such  Stock   Options   shall  be
                    exercisable  by  the   Participant   after   termination  of
                    employment   only   to  the   extent   exercisable   on  the
                    Notification Date.

               (c)  If such employment terminates as a result of Retirement, the
                    Participant  shall  have the  right to  exercise  his  Stock
                    Options for a period ending on the earlier of the expiration
                    dates of such  Stock  Options  or one year  from the date of
                    termination of employment,  provided that such Stock Options
                    shall be exercisable  by the  Participant  after  Retirement
                    only to the extent exercisable on the date of termination of
                    employment.

               (d)  If  such  employment  terminates  for  reasons  that  do not
                    constitute  death,  Disability,  Retirement or "cause",  the
                    Participant  shall  have the  right to  exercise  his  Stock
                    Options for a period ending on the earlier of the expiration
                    dates of such Stock  Options or ninety days from the date of
                    termination of employment,  provided that such Stock Options
                    shall be exercisable by the Participant after termination of
                    employment  only to the  extent  exercisable  on the date of
                    termination of employment.

          13.05.  Incentive  agreements.  Except in the case of Cash Awards, the
terms of each Incentive shall be stated in an agreement  between the Company and
the Participant in a form approved by the Board.  The  Participant  must execute
and deliver the agreement to the Company as a condition to the  effectiveness of
the  Incentive.  The Board may also  determine  to enter  into  agreements  with
holders of options (a) to reclassify  or convert  certain  outstanding  options,
within the terms of the Plan,  as Incentive  Stock  Options or as  Non-Statutory
Stock  Options or (b) to eliminate  SARs for all or part of such options and any
other previously  issued options.  All such agreements may contain all terms and
conditions as the Board considers  advisable that are not inconsistent  with the
Plan,  including,  but not limited to,  transfer  restrictions,  rights of first
refusal,   forfeiture   provisions,   representations   and  warranties  of  the
Participant  and  provisions  to ensure  compliance  with all  applicable  laws,
regulations and rules and provided in Section 13.06.

          13.06.  Compliance  with law. The Company may  determine,  in its sole
discretion,  that it is necessary or desirable to list,  register or qualify (or
to update any listing,  registration or  qualification  of) any Incentive or the
Shares  issuable or issued under any  Incentive  or this Plan on any  securities
exchange or under any federal or state  securities  law, or to obtain consent or
approval of any governmental  body as a condition of, or in connection with, the
award of any Incentive, the issuance of Shares under any Incentive or this Plan,
or the removal of any restrictions  imposed on such Shares. If the Company makes
such a determination, the Incentive shall not be awarded or the Shares shall not
be issued or the restrictions shall not be removed,  as applicable,  in whole or
in part, unless and until the listing, registration,  qualification,  consent or
approval  shall  have been  effected  or  obtained  free of any  conditions  not
acceptable  to the Company.  The  Company's  obligation  to sell or issue Shares
under an  Incentive  is  subject  to  compliance  with all  applicable  laws and
regulations. The Board, in its sole discretion, shall determine whether the sale
and issue of Shares is in compliance with all applicable laws and regulations.

          13.07.  Adjustment.  If the  outstanding  Shares of  Common  Stock are
increased or decreased  or changed into or exchanged  for a different  number or
kind of securities of the Company (after the filing of the Restated  Certificate
of  Incorporation  approved  by the Board on  February  25,  1993) or of another
corporation,    by   reason   of    reorganization,    merger,    consolidation,
recapitalization,  reclassification,  stock split,  combination of securities or
dividend payable in corporate securities,  then an appropriate  adjustment shall
be made by the  Board in the  number,  kind  and/or  price of  Shares  for which
Incentives  may be granted  under the Plan.  In  addition,  the Board shall make
appropriate  adjustment  in the number,  kind and/or price of Shares as to which
outstanding  Incentives,   or  portions  thereof  then  unexercised,   shall  be
exercisable.  In the event of any such  adjustment,  the  exercise  price of any
Stock  Option,  the  performance  objectives,  restrictions  or other  terms and
conditions of any Incentive and the Shares issuable under any Incentive shall be
adjusted as and to the extent  appropriate,  in the sole and absolute discretion
of the Board, to provide each Participant with  substantially  the same relative
rights before and after such adjustment to the extent practical.

          13.08. Withholding.

          (a) The  Company  shall have the right to withhold  from any  payments
made  under the Plan or to  collect  as a  condition  to any  award,  payment or
issuance of Shares under the Plan any taxes  required to be withheld by Federal,
state or local law.  Whenever a Participant is required to pay to the Company an
amount  required to be withheld under  applicable tax laws in connection  with a
distribution  of Shares or cash or upon  exercise of a Stock  Option or SAR, the
Participant  may satisfy this  obligation  in whole or in part by electing  (the
"Election") to have the Company  withhold from the  distribution  that number of
Shares having a value equal to the amount required to be withheld.  The value of
the Shares to be withheld  shall be based on the Fair Market Value of the Shares
on the date on which  the  amount  of tax to be  withheld  is  determined  ("Tax
Date").

          (b) Each  Election  must be made  before  the Tax Date.  The Board may
disapprove any Election,  may suspend or terminate the right to make  Elections,
or may provide with respect to any Incentive  that the right to make an Election
shall not apply to that Incentive. An Election is irrevocable.

          (c) If a Participant is subject to the  restrictions  of Section 16 of
Securities Exchange Act, then an Election is subject to the following additional
restrictions:

                    (i) No  Election  shall be  effective  for a Tax  Date  that
     occurs within six months of the Award Date of the Incentive; and

                    (ii) The Election  must be made either six months before the
     Tax Date or  during a period  beginning  on the  third  business  day after
     release  for  publication  of the  Company's  quarterly  or annual  summary
     statements  of sales and  earnings  and ending on the twelfth  business day
     after that release.

          13.09. No right to continued employment. No Participant under the Plan
shall have any right to  continue  in the employ of the Company or any member of
the Group for any  period of time  because  of his or her  participation  in the
Plan.

          13.10.  No right as  stockholder.  No Participant or Qualified  Person
shall have the rights of a stockholder  with respect to the Shares covered by an
Incentive unless a stock certificate is issued to that person for the Shares. No
adjustment  shall be made for cash  dividends  or  similar  rights for which the
record date is before the date on which such stock certificate is issued.

          13.11.  Amendment of the Plan.  The Board may amend the Plan from time
to time in such  respects  as the  Board  deems  advisable.  No such  amendment,
however,  shall (a) change or impair an  Incentive  without  the  consent of the
Participant or Qualified Person holding that Incentive, or (b) without the prior
approval of the Company stockholders (i) increase the limits provided in Section
6.01 (except by adjustment under Section 11.07), (ii) change or expand the types
of  Incentives  that may be granted  under the Plan,  (iii)  change the class of
persons eligible to receive Incentives under the Plan, (iv) materially  increase
either the benefits  accruing to Participants  under the Plan or the cost of the
Plan to the Company,  or (v) make any other change that requires approval of the
Company  stockholders  under  applicable law or to preserve the treatment of the
Incentive Stock Options as such under Section 422 of the Code.

          13.12.  Definition of fair market value.  Whenever "Fair Market Value"
of Common  Stock is to be  determined  for  purposes  of this Plan,  it shall be
determined as follows:

          (a) If the Common  Stock is  publicly  traded at the time Fair  Market
Value is to be determined under the Plan, "Fair Market Value" shall mean closing
sale price on that date on the over-the-counter market as reported by NASDAQ or,
if the  Common  Stock is then  traded on a  national  securities  exchange,  the
closing sale price on that date on the principal national securities exchange on
which it is so traded; or

          (b) If the Common Stock is not publicly traded at the time Fair Market
Value  is to be  determined  under  the  Plan,  "Fair  Market  Value"  shall  be
determined in good faith from time to time by the Board.

          13.13.  Repurchase,  replacement  and  substitution  of options.  Upon
approval of the Board,  the Company may  repurchase a previously  granted  Stock
Option from a Participant by mutual  agreement before that Stock Option has been
exercised  upon such terms and  conditions  as the Company  and the  Participant
shall agree,  provided  that the  purchase  price per Share shall not exceed the
amount by which the Fair Market Value of the Common Stock  subject to the option
on the date of  purchase  exceeds the option  price.  The Board may agree to the
cancellation  of Stock Options in order to make a  Participant  eligible for the
grant of a  replacement  Stock  Option at a lower  price  than the  option to be
cancelled. In the event of a merger or consolidation,  or the acquisition by the
Company of property or stock of an acquired corporation or any reorganization or
other  transaction  qualifying  under Section 424 of the Code, the Board may, in
accordance with the provisions of that section,  substitute  Stock Options under
this Plan for options under the plan of the acquired corporation,  provided that
(a) the excess of the aggregate  Fair Market Value of the Shares  subject to the
option  immediately  after the  substitution  over the aggregate option price of
such  Shares  is not more  than  the  similar  excess  immediately  before  such
substitution,  and (b) the new option does not give the Participant or Qualified
Person holding that Stock Option additional benefits.

          13.14.  Fractional and minimum Shares. In no event shall a fraction of
a Share be purchased or issued under the Plan without Board approval.  The Board
may specify a minimum  number of Shares for which each Stock  Option  and/or SAR
must be exercised, which number, however, shall not be more than 100.

          13.15. Application of funds. The proceeds received by the Company from
the sale of Shares under the Plan shall be used for general corporate purposes.

          13.16. Other incentives and plans. Nothing in this Plan shall prohibit
any member of the Group from establishing other employee incentives and plans.

          13.17. Governing law. The validity and construction of the Plan and of
each agreement evidencing  Incentives shall be governed by the laws of the State
of New Jersey, excluding the conflict-of-laws principles thereof.

          14. Change in Control. In the event that a "Senior Level Optionee" (as
defined  herein)  experiences a "Termination  Event" (as defined  herein) within
twelve months after a "Change in Control Event" (as defined) occurs, all Options
granted  hereunder which are held by such Senior Level Optionee on the date that
such  Termination  Event occurs (the  "Termination  Date") shall be deemed to be
fully vested  hereunder as of such  Termination Date for purposes of determining
the  exerciseability  of such Options on and after such  Termination  Date.  For
purposes of this Section 14, the term  "Change in Control  Event" shall mean any
of the following events occurring after the "Two Year Date" (as defined herein):

                    (i) the  acquisition  by any one  person,  or more  than one
     person acting as a group, of ownership of stock of the Company,  other than
     any person or group of persons  who held such total  voting  power on April
     10,  1994  (the  day  before  the  Company  commenced  its  initial  public
     offering),  possessing  50.1%  or more of the  total  voting  power  of the
     capital stock of the Company;

                    (ii) the approval by the  stockholders of the Company of (i)
     any consolidation or merger of the Company,  in which the holders of voting
     stock of the Company  immediately  before the  consolidation or merger will
     not own 50% or more of the voting  shares of the  continuing  or  surviving
     corporation  immediately  after such  consolidation or merger,  or (ii) any
     sale,  lease,  exchange or other transfer (in one  transaction or series of
     related  transactions)  of all or  substantially  all of the  assets of the
     Company; or

                    (iii) a change of 50% (rounded to the next whole percent) in
     the membership of the Board of Directors within a 12-month  period,  unless
     the  election,  or  nomination  for election by  stockholders,  of each new
     director within such period was approved by the vote of 80% (rounded to the
     next whole person) of the directors then still in office who were in office
     at the beginning of such 12-month period.

For purposes of this Section 14, a Senior Level Optionee shall be deemed to have
experienced a "Termination  Event" if, and only if, within twelve months after a
"Change in Control Event" occurs,  (i) such Senior Level  Optionee's  employment
with the Company or any subsidiary  thereof is terminated by the Company or such
subsidiary   without  cause,  (b)  such  Senior  Level  Optionee's  base  salary
(excluding bonuses and/or  commissions) is reduced by more than 10% per annum or
(c)  the  duties  and   responsibilities  of  such  Senior  Level  Optionee  are
substantially reduced without such Senior Level Optionee's consent.

For  purposes  of this  Section  14, the term "Two Year Date" shall mean (x) the
date hereof if the event described in clauses (i), (ii) or (iii) above is not to
be  accounted  for as a pooling of  interests  or (y) if the event  described in
clauses  (i),  (ii) or  (iii)  above  is to be  accounted  for as a  pooling  of
interests, February 16, 1997 (the date two years after this Section 14 was first
approved by the Board of Directors of the Company).

For purposes of this Section 14, the term "Senior Level Optionee" shall mean the
Company's  Chairman of the Board, the Company's Chief Executive Officer and each
vice  president  of the  Company  who,  on the date on which a Change in Control
Event occurs, reports directly to the Company's Chief Executive Officer pursuant
to the Company's then existing table of organization.