EXHIBIT 10.11

                           1997 INCENTIVE BENEFIT PLAN
                                       OF
                              DIALOGIC CORPORATION

         Section 1.  Rules of Interpretation; Definitions.

          As used in this Incentive  Benefit Plan, (i) the singular includes the
plural,  and the masculine gender includes the feminine and neuter genders,  and
vice versa,  as the context  requires;  and (ii) the word "person"  includes any
natural  person  and  any  corporation,  firm,  partnership  or  other  form  of
association.

          For purposes of this Incentive Benefit Plan, the following terms shall
have the following meanings:

          "Award Authority" means either the Selected Participants  Committee or
the General  Participants  Committee,  depending  upon the context in which such
term is used.  With respect to  Incentives  awarded or to be awarded to Selected
Participants,  the term "Award  Authority"  refers to the Selected  Participants
Committee.  With respect to Incentives  awarded or to be awarded to Participants
other than  Selected  Participants,  the term  "Award  Authority"  refers to the
General Participants Committee.

          "Award  Date" means the date on which an  Incentive  is awarded by the
Award Authority.

          "Benefit Administration Committee" shall mean a committee of the Board
consisting  solely  of  all  members  of  the  Compensation  Committee  who  are
Disinterested Persons.

          "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.

          "Change in Control Event" has the meaning stated in Section 14 hereof.

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

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

          "Company" means Dialogic Corporation and any successor thereto.

          "Compensation  Committee" shall mean the Compensation Committee of the
Board, as it may be constituted from time to time.

          "Consultant"  shall mean any person who performs  consulting  services
for, or who serves as an advisor to, any member of the Group.

          "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 is an  "outside  director"
within  the  meaning of  Section  162(m) of the Code as  amended by the  Revenue
Reconciliation Act of 1993.

          "Election" has the meaning stated in Section 13.09(a) hereof.

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

          "Fair Market Value" has the meaning stated in Section 13.13 hereof.

          "General  Participants  Committee"  means a  committee  of one or more
members of the Board, none of whom need be a Disinterested  Person, to which the
Board has delegated  certain  authority to  administer  the Plan under Section 3
hereof.

          "Group" means the Company,  each "parent  corporation" of the Company,
and each "subsidiary  corporation" of the Company, as these terms are defined in
Sections 424(e) and 424(f), respectively, 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 hereof
that may be awarded under the Plan.

          "Named Executive Officer" shall mean (i) any Selected  Participant who
is named in any proxy  statement  of the  Company as either the chief  executive
officer of the  Company or as one of the five  highest  paid (in terms of salary
and  bonus)  executive  officers  of the  Company  and (ii) any  other  Selected
Participant  designated  as a  "Named  Executive  Officer"  by the  Compensation
Committee in a notice delivered by the  Compensation  Committee to the Secretary
of the Company.

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

          "Participant"  means any  part-time or full-time  employee of, and any
Consultant to, any member of the Group to whom an Incentive has been or is to be
awarded.

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

          "Plan" means this 1997 Incentive Benefit Plan of the Company.

          "Qualified  Person"  means a  Participant's  legal  guardian  or legal
representative  or a deceased  Participant's  executor,  administrator,  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 a
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"  shall  have the  meaning  ascribed  to such  term in any
retirement  plan  adopted  by the  Board.  In the  absence  of  any  such  plan,
"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.

          "Selected  Participant"  means (i) any person who is  identified as an
executive  officer of the Company in any Annual Report on Form 10-K filed by the
Company  pursuant to the  Securities  Exchange  Act or who has the title of Vice
President,  President or Chairman of the Board of the  Company,  (ii) any person
who, by virtue of his or her position with the Company, is advised by counsel to
the Company that he or she is subject to Section 16 of the  Securities  Exchange
Act, (iii) any Consultant  whom the Special  Participants  Committee  determines
should  receive  an  Incentive  under the Plan and (iv) any other  part-time  or
full-time  employee  of any  member of the Group whom the  Special  Participants
Committee  designates,  in  a  notice  delivered  by  the  Special  Participants
Committee  to the  Secretary  of the Company,  as a "Selected  Participant"  for
purposes  of the Plan.  A person who  becomes a Selected  Participant  solely by
virtue of clause (i) above shall cease to be a Selected Participant in the event
that he or she does not have the title of Vice President,  President or Chairman
of the Board of the Company and is advised by counsel to the Company  that he or
she is not an executive officer of the Company.  A person who becomes a Selected
Participant  solely by virtue of clause  (iv) above shall cease to be a Selected
Participant when and if the Special Participants  Committee delivers a notice to
the Secretary of the Company  stating that such  Participant  is no longer to be
treated as a Selected Participant.

          "Selected  Participants   Committee"  means  either  the  Compensation
Committee or the Benefit Administration Committee, depending upon the context in
which the term is used. All actions which this Plan contemplates be taken by the
Selected  Participants  Committee with respect to Named Executive Officers shall
be taken by the  Benefit  Administration  Committee  if there  are at least  two
Disinterested Persons on the Benefit  Administration  Committee at that time; in
such instances,  references to the Selected Participants  Committee herein shall
constitute references to the Benefit Administration Committee. All actions which
this Plan  contemplates  be taken by the Selected  Participants  Committee other
than with respect to Named Executive  Officers,  and all actions which this Plan
contemplates be taken by the Selected Participants  Committee when there are not
at least two  Disinterested  Persons on the  Benefit  Administration  Committee,
shall be taken by the Compensation Committee;  in such instances,  references to
the Selected  Participants  Committee herein shall constitute  references to the
Compensation  Committee.  All questions of interpretation as to whether the term
"Selected  Participants  Committee" refers to the Compensation  Committee or the
Benefit   Administration   Committee  shall  be  resolved  by  the  Compensation
Committee, whose determination shall be final and conclusive.

          "Share" means a share of Common Stock.

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

          "Stock Option" means a stock option granted  pursuant to the Plan. Any
Stock Option which is not designated as an Incentive Stock Option at the time of
grant or which ceases to qualify as an  "incentive  stock option" under the Code
shall be deemed to be a Non-Statutory Stock Option for purposes of the Plan.

          "Tax Date" has the meaning stated in Section 13.09(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 the Plan is to advance the  interests  of the Group by
furnishing Incentives designed to attract, retain and motivate employees and, in
circumstances  identified by the Special Participants Committee,  Consultants to
the Group.  Incentives may consist of opportunities to acquire Shares or cash or
both, as provided by the Plan.

          Section 3. Administration.

          3.01.  Administrative Body. The General  Participants  Committee shall
have authority to administer the Plan to the express extent  provided for in the
Plan.  Except to the extent  that the Plan  expressly  provides  for the General
Participants Committee to administer the Plan, the Plan shall be administered by
the Special Participants Committee.  Any interpretive question regarding whether
authority  to  administer  any  aspect  of the Plan is  vested  in the  Selected
Participants  Committee or the General Participants  Committee shall be resolved
by the Special  Participants  Committee,  whose determination shall be final and
conclusive.  From time to time, the Board shall  designate one or more Directors
who need not be  Disinterested  Directors  to serve on the General  Participants
Committee.

          3.02. Award Authority. The Selected Participants Committee shall serve
as the Award  Authority with respect to the Selected  Participants.  The General
Participants  Committee  shall serve as the Award  Authority with respect to all
part-time  and  full-time  employees  of each member of the Group other than any
such employees who are Selected Participants.  Subject to applicable law and the
terms of the Plan, the Award Authority 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 and (c) accelerate the date on
which a previously  granted  Incentive may be exercised.  Terms,  conditions and
restrictions  of Incentives may vary from  Participant  to Participant  and from
award to award.  Acceleration may be to any date, including the date on which an
Incentive is granted.

          3.03.  Authority of the Selected  Participants  Committee.  Subject to
applicable  law and the terms of the Plan, the Selected  Participants  Committee
shall  have  plenary  authority,  with  respect  to  Incentives  granted  to all
Participants, to (a) prescribe the form of agreements awarding and governing the
Incentives,  (b)  interpret the Plan,  (c)  establish  any rules or  regulations
relating  to the  Plan  and (d) make all  other  determinations  for the  proper
administration of the Plan. The Selected  Participants  Committee's decisions on
matters  relating to the Plan shall be final and  conclusive  on the Group,  all
part-time and full-time employees of, and all Consultants to, all members of the
Group, all Participants and their respective successors,  assigns,  transferees,
heirs and representatives.

          3.04  Limitations  on  the  Authority  of  the  General   Participants
Committee.  From time to time, the Selected Participants Committee shall deliver
to the General  Participants  Committee a memorandum  setting  forth the maximum
number  of  Shares  for  which  the  General  Participants  Committee  may award
Incentives  during a specified  period of time and setting forth the  guidelines
under which the General Participants  Committee may grant such Incentives during
such  period.  Such  memorandum  may be  amended  by the  Selected  Participants
Committee at any time.  Without the prior approval of the Selected  Participants
Committee,  the General Participants Committee shall not award Incentives in any
such period in excess of the applicable  maximum Share limit  established by the
Selected  Participants  Committee  and shall not  grant  Incentives  that do not
satisfy the  applicable  guidelines  established  by the  Selected  Participants
Committee.

          Section 4. Eligibility.

          4.01. Designation. All part-time and full-time employees of any member
of the Group,  including  officers and  directors who are part-time or full-time
employees of any member of the Group,  are eligible to receive  Incentives under
the Plan.  All  Consultants  of any member of the Group are  eligible to receive
Incentives  (other than Incentive  Stock Options) under the Plan.  Directors and
officers  who are not  employees  of any  member  of the  Group  and who are not
Consultants  to any  member of the Group may not  receive  Incentives  under the
Plan.

          4.02.  Participants.  The Award  Authority may consider any factors in
selecting  Participants  and in  determining  the  types  and  amounts  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 Award
Authority's  award of an Incentive to a person in any year shall not require the
Award Authority to award any Incentive to that person in any other year.
 
          Section 5. Types of  Incentives.  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 13.08 hereof, the aggregate
number of Shares  which may be issued under the Plan shall not exceed the sum of
2,000,000  Shares plus the "Unused  Shares".  For purposes of the plan, the term
"Unused  Shares" shall mean the lesser of (i) 400,000 Shares and (ii) the number
of Shares that would be available for the award of benefits  under the Company's
1988 Incentive  Compensation  Plan (the "1988 Plan") on December 5, 1998 but for
the fact that the 1988 Plan expires  (with respect to the grant of new incentive
awards)  on such  date,  without  giving  effect  to  lapses,  cancellations  or
forfeitures  that occur  subsequent  to such date.  For purposes of this Section
6.01,  each Unit of Phantom Stock shall  constitute a single  Share.  Subject to
Section 13.08 hereof, the maximum number of Shares which may be issued under the
Plan pursuant to Incentive Stock Options is 2,000,000 Shares.

          6.02.  Expiration and cancellation.  If an Incentive granted under the
Plan expires,  is terminated,  is forfeited or is otherwise  canceled before the
related Shares are issued,  that Incentive and the related Shares, SARs or Units
of Phantom Sock shall not apply  toward the limits  provided in Section 6.01 and
shall be available again for the grant of Incentives under the Plan.

          6.03.  Maintenance  of stock.  Shares of Common Stock issued under the
Plan shall be authorized and unissued  shares or shares of treasury  stock.  The
Company shall always  reserve a number of Shares at least equal to the number of
Shares which remain issuable pursuant to the Plan.

          Section 7. Stock  Options.  Each Stock Option  granted  under the Plan
shall be subject to the following terms and conditions:

          7.01.  Price.  The option price per share shall be  determined  by the
Award Authority; 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.  Any option  granted  subsequent to February 27, 1997 at an exercise
price that is expressly  designated at the time of grant as an exercise price of
less than 100% of the Fair  Market  Value on the Award Date of the Common  Stock
subject to the 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  such  vesting  arises  as a result of the
optionee's satisfying performance criteria approved by the Committee.

          7.02.  Number.  The number of Shares subject to Stock Options shall be
determined by the Award Authority; provided, however, that the maximum number of
Shares covered by Stock Options  granted to any Participant in any calendar year
shall not exceed  1,000,000  Shares  (subject to adjustment  pursuant to Section
13.08 hereof).

          7.03. Duration and time for exercise. The Award Date of a Stock Option
shall be the date  specified  by the Award  Authority,  provided  that that date
shall not be prior to the date on which the Stock  Option is  actually  granted.
With respect to an employee that is granted a Stock Option pursuant to the Plan,
the Award Date (i.e., the date of grant) of such Stock Option shall not be prior
to the date on which such  employee  commences  employment  with a member of the
Group.  With respect to a Consultant  that is granted a Stock Option pursuant to
the Plan,  the Award Date (i.e.,  the date of grant) of such Stock  Option shall
not be prior to the date on which such Consultant commences providing consulting
or  advisory  services to a member of the Group.  The term of each Stock  Option
shall be  determined  by the Award  Authority,  but shall not exceed eight years
from the date of  grant.  In the  event  that the term of a Stock  Option is not
specified in the applicable grant agreement, the term of such Stock Option shall
be eight years from the Award Date.  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 Award Authority at the time of grant; provided,  however, that
the Special Participants  Committee may accelerate the exercisability of a Stock
Option  granted to any  Participant  at any time.  In the event that the vesting
schedule of a Stock Option is not specified in the applicable  grant  agreement,
such Stock Option shall vest in four equal  annual 25%  installments  commencing
one year after the date of grant and  continuing  thereafter on each of the next
three annual  anniversaries of the date of grant.  Unless otherwise specified by
the Award Authority, once a Stock Option becomes exercisable, whether in full or
in part,  it shall  remain  so  exercisable  until its  expiration,  forfeiture,
termination or cancellation.

          7.04. 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  Company  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  Award
Authority,  by delivery of previously acquired Shares having a Fair Market Value
on the date of exercise equal to the exercise price of the Stock Option,  or (c)
at the discretion of the Award Authority, 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 one or more stock certificates
representing the Shares.

          7.05. Incentive Stock Options. Notwithstanding anything in the 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 on or before
February 26, 2007;

               (c) unless  exercised  sooner,  each Incentive Stock Option shall
expire  no later  than 8 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) only  part-time or  full-time  employees of any member of the
Group are eligible to receive an Incentive Stock Option;

               (f) no Incentive Stock Option shall be granted to any person 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;

               (g)  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

               (h) each Incentive Stock Option agreement  referred to in Section
13.06 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 the Plan shall be  interpreted  and  construed to
effect such treatment under that Section of the Code.

          Section 8.  Stock  Appreciation  Rights.  An SAR may be granted by the
Award  Authority (i) together  with any Stock Option  granted under the 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 the 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 the Plan
shall be subject to the following terms and conditions:

          8.01. Number.  Subject to Section 13.15 hereof,  each SAR shall relate
to such number of Shares as shall be determined by the Award Authority.

          8.02.  Duration and Time for Exercise.  The Award Date of an SAR shall
be the date specified by the Award Authority,  provided that that date shall not
be before  the date on which the SAR is  actually  granted.  With  respect to an
employee that is granted an SAR pursuant to the Plan, the Award Date (i.e.,  the
date of grant) of such SAR shall not be prior to the date on which such employee
commences  employment  with a member of the Group.  With respect to a Consultant
that is granted an SAR pursuant to the Plan,  the Award Date (i.e.,  the date of
grant)  of such SAR  shall  not be prior  to the date on which  such  Consultant
commences  providing  consulting or advisory  services to a member of the Group.
The term of each SAR shall be determined by the Award  Authority,  but shall not
exceed eight years from the date of grant.  In the event that the term of an SAR
is not specified in the applicable grant  agreement,  the term of such SAR shall
be eight years from the Award Date.  Each SAR shall become  exercisable  at such
time or  times  and in such  amount  or  amounts  during  its  term as  shall be
determined by the Award Authority at the time of grant; provided,  however, that
the Selected Participants  Committee may accelerate the exercisability of an SAR
granted to any Participant at any time. Unless otherwise  specified by the Award
Authority, once an SAR becomes exercisable, whether in full or in part, it shall
remain  so  exercisable  until  its  expiration,   forfeiture,   termination  or
cancellation.

          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 Special Participants Committee may require. As soon
as practicable after receipt of the written notice, the Company shall deliver to
the person  exercising  the SAR stock  certificates  for the  Shares,  cash or a
combination thereof to which that person is entitled under Section 8.04 hereof.

          8.04.  Payment.  When the  Award  Authority  awards  an SAR,  it shall
specify  whether the SAR is exercisable  (a) in United States dollars in cash or
by check,  (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 Award Authority at the time of the
exercise of the SAR. The following provisions apply with respect to the exercise
of an SAR under the Plan:

               (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  exercise  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 of a Share on the Exercise
Date  multiplied  by the number of 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
Selected  Participants  Committee may decide to pay cash to Participants covered
by Section 16 of the  Securities  Exchange Act only if the Company,  the Special
Participants Committee and the Participant comply with all applicable provisions
of such Section 16 and the related regulations.

          Section 9. Phantom Stock. Each Unit of Phantom Stock granted under the
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  and Time for  Exercise.  The Award  Date of a Unit of
Phantom Stock shall be the date specified by the Award Authority,  provided that
that date  shall not be before  the date on which the Unit of  Phantom  Stock is
actually granted.  With respect to an employee that is granted a Unit of Phantom
Stock  pursuant to the Plan,  the Award Date  (i.e.,  the date of grant) of such
Unit of  Phantom  Stock  shall not be prior to the date on which  such  employee
commences  employment  with a member of the Group.  With respect to a Consultant
that is granted a Unit of Phantom  Stock  pursuant  to the Plan,  the Award Date
(i.e.,  the date of grant) of such Unit of Phantom  Stock  shall not be prior to
the date on which such  Consultant  commences  providing  consulting or advisory
services to a member of the Group.  The term of each Unit of Phantom Stock shall
be determined by the Award Authority,  but shall not exceed eight years from the
date of grant.  In the  event  that the term of a Unit of  Phantom  Stock is not
specified in the applicable  grant  agreement,  the term of such Unit of Phantom
Stock shall be eight years from the Award Date. Each Unit of Phantom Stock shall
become  exercisable  at such time or times and in such amount or amounts  during
its term as shall be  determined  by the Award  Authority  at the time of grant;
provided,  however, that the Selected Participants  Committee may accelerate the
exercisability  of a Unit  of  Phantom  Stock  at  any  time.  Unless  otherwise
specified  by the  Award  Authority,  once  a  Unit  of  Phantom  Stock  becomes
exercisable,  whether in full or in part, it shall remain so  exercisable  until
its expiration, forfeiture, termination or cancellation.

          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 Award Authority awards a Unit of Phantom Stock, the Award
Authority  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 Awards. 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 Award  Authority;  provided,  however,  that no more than
500,000 Shares may be issued under all Stock Awards and Restricted  Stock Awards
(independent  of the  number of Shares  covered  by  Performance  Stock  Rights)
granted pursuant to the Plan.

          10.02. Sale Price. The Approval  Authority 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  Award
Authority,  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  Award
Authority, 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 Award Authority. 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 stock  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 stock
certificates for the Shares as provided in Section 10.07.

          10.05. Restrictions.  All Shares issued under a Restricted Stock Award
shall be subject to such  restrictions  as the Award  Authority  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 Award  Authority  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.

          10.06 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 Committee.

          10.07. Escrow.  Shares of Common Stock 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 stock
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  1997
               Incentive  Benefit 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."

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

          10.09.  Stockholder.  Subject to the terms and  conditions of the Plan
and any other  restrictions  determined by the Award  Authority 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
restricted Shares paid in cash or property shall be held in escrow together with
the restricted  Shares and shall not be released to the  Participant  unless and
until  the  restrictions  lapse or the  conditions  to  release  are  satisfied.
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 Award  Authority
considers appropriate. Each award of a Performance Stock Right shall include the
performance  objectives to be achieved by the Group or the  Participant  or both
the Group and 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
Award  Authority;  provided,  however,  that no more than 500,000  Shares may be
issued under all Performance  Stock Rights  (independent of the number of Shares
covered by Stock Awards and  Restricted  Stock Awards)  granted  pursuant to the
Plan. 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 Share Unit relate solely to continued employment,  three
years  from the  date of grant of such  Unit  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 Award  Authority.  Cash Awards shall be subject to such other
terms and conditions as the Award Authority may determine.
 
          Section 13. General.

          13.01.  Effective  Date;  Effectiveness.  The Plan was  adopted by the
Board on February 27, 1997. Any Incentive  granted pursuant to the Plan prior to
the date on which the  shareholders  of the  Company  approve  the Plan shall be
granted  subject to the condition that the  shareholders  of the Company approve
the Plan on or before  February  26,  1998.  This  Plan  shall be void and of no
effect if such shareholder approval is not given on or before February 26, 1998.

          13.02. Duration. Unless the Plan is terminated earlier, the Plan shall
terminate  on February  26,  2007.  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 or suspend
the Plan.  After  termination of the Plan, no further  Incentives may be granted
under the Plan.  Incentives  granted before any termination or suspension of the
Plan shall  continue  to be  exercisable  in  accordance  with the terms of such
Incentives.

          13.03.  Limited  Transferability of Incentives.  Except as provided in
the balance of this Section  13.03,  no Option  granted under this Plan shall be
transferable  otherwise  than by will or the  law of  descent  and  distribution
following the Optionee's  death, and during the lifetime of the Optionee,  shall
be  exercisable  only  by him or for  his  benefit  by his  attorney  in fact or
guardian.  An Incentive  other than an Incentive Stock Option may, in connection
with a Participant's  estate plan and with the approval of the Award  Authority,
be assigned in whole or in part during the Participant's lifetime to one or more
members  of  the  Participant's  immediate  family  or  to a  trust  established
exclusively for one or more such family members.  The assigned  portion may only
be exercised by the person or persons who acquire a proprietary  interest in the
Incentive  pursuant to the  assignment.  The terms  applicable  to the  assigned
portion shall be the same as those in effect for the Incentive immediately prior
to such  assignment  and  shall be set  forth in such  documents  issued  to the
assignee as the Award Authority may deem appropriate.

          13.04.  Effects of Termination of Employment or Death.  Each agreement
providing for an Incentive  shall include such provisions as the Award Authority
may  determine for the exercise and  termination  of the  Incentive,  the rights
thereunder and the forfeiture thereof, in each case if the Participant ceases to
be an employee  of, or a  Consultant  to, 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 13.05
shall govern in the event that the employment of an  employee-holder  of a Stock
Option or SAR  terminates  as a result of death,  Disability or Retirement or in
the event that the employment of an  employee-holder of a Stock Option or SAR is
terminated  by  the  Company  either  with  "cause"  or  without   "cause"  (any
determination of "cause" to be made by the Special Participants Committee and to
be binding and conclusive for purposes of the Plan) or is terminated voluntarily
by such  employee-holder.  Subject to Section  13.05(e)  hereof,  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 Special  Participants  Committee's  determination  as to
whether a leave of absence  (whether  or not with  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.

          13.05  Termination  of Employment as a Result of Death,  Disability or
Retirement;  Other Terminations of Employment.  Notwithstanding any provision to
the contrary  herein or in any Incentive  Agreement,  the  following  provisions
shall   apply   with   respect   to  Stock   Options   and   SARs   held  by  an
employee-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  by the Company  either with "cause" or
without  "cause"  (any  determination  of  "cause"  to be  made  by the  Special
Participants  Committee  and to be binding and  conclusive  for  purposes of the
Plan):

                    (a) If such employment  terminates as a result of death, the
                    Participant's  Stock  Options and SARs shall be deemed fully
                    exercisable  as of the date of death and such  Participant's
                    estate  shall have the right to exercise  the  Participant's
                    Stock Options and SARs for a period ending on the earlier of
                    the expiration dates of such Stock Options and SARs or three
                    years from the date of termination of employment.

                    (b) If such employment terminates as a result of Disability,
                    the  Participant's  Stock  Options  and SARs shall be deemed
                    fully  exercisable  as of the date that the  Participant  is
                    notified  that he will not longer be employed by any members
                    of the Group (the "Notification  Date") and such Participant
                    shall have the right to exercise his Stock  Options and SARs
                    for a period ending on the earlier of the  expiration  dates
                    of such  Stock  Options  and  SARs or three  years  from the
                    Notification  Date,  provided  that  if an  Incentive  Stock
                    Option is  exercised  beyond the last date  consistent  with
                    treatment  of such  option as an  "incentive  stock  option"
                    under  the  Code,  such  option  shall  be  deemed  to  be a
                    Non-Statutory Stock Option hereunder.

                    (c) If such employment terminates as a result of Retirement,
                    the  Participant  shall have the right to exercise his Stock
                    Options  and SARs for a period  ending on the earlier of the
                    expiration  dates of such  Stock  Options  and SARs or three
                    years from the date of termination  of employment,  provided
                    that unless the Special  Participants  Committee  determines
                    otherwise  (i.e.,  determines that some or all of a retiring
                    Participant's unvested Stock Options be deemed fully vested)
                    with respect to a particular Retirement,  such Stock Options
                    and  SARs  shall be  exercisable  by the  Participant  after
                    Retirement  only to the  extent  exercisable  on the date of
                    termination  of employment and provided that if an Incentive
                    Stock  Option is exercised  beyond the last date  consistent
                    with treatment of such option as an "incentive stock option"
                    under  the  Code,  such  option  shall  be  deemed  to  be a
                    Non-Statutory Stock Option hereunder.
 
                    (d) If such  employment is terminated by the Company without
                    "cause",  the  Participant  shall have the right to exercise
                    his  Stock  Options  and  SARs for a  period  ending  on the
                    earlier of the  expiration  dates of such Stock  Options and
                    SARs  or  three  months  from  the  date of  termination  of
                    employment,  provided that such Stock Options and SARs shall
                    be  exercisable  by the  Participant  after  termination  of
                    employment  only to the  extent  exercisable  on the date of
                    termination of employment.

                    (e) If such  employment  is  terminated  by the Company with
                    "cause", all Stock Options and SARs held by such Participant
                    shall  terminate  as of the  date on which  such  employment
                    terminates.

                    (f) In the event that an  employee  continues  to serve as a
                    director or Consultant of any member of the Group after such
                    employee  ceases to be  employed by any member of the Group,
                    the employee  shall,  for purposes of the Plan, be deemed to
                    continue in the  employment  of the Company  until such time
                    that  such  person   ceases  to  serve  as  a  director  of,
                    Consultant  to or  employee  of any  member  of  the  Group;
                    provided  that if an  Incentive  Stock  Option is  exercised
                    beyond  the last  date  consistent  with  treatment  of such
                    option as an "incentive  stock option" under the Code,  such
                    option  shall be deemed to be a  Non-Statutory  Stock Option
                    hereunder.

Unless  otherwise  provided by the Award  Authority in the applicable  Incentive
Agreement  or at  the  time  of  termination  of  employment,  if a  Participant
voluntarily  terminates his or her employment with all members of the Group, the
Participant  shall have the right to exercise  his Stock  Options and SARs for a
period ending on the earlier of the  expiration  dates of such Stock Options and
SARs or three months from the date of termination  of employment,  provided that
such  Stock  Options  and SARs shall be  exercisable  by the  Participant  after
termination  of  employment  only  to the  extent  exercisable  on the  date  of
termination of employment. The Award Authority may provide at any time before or
within  one  week  after  such  voluntary   termination  of  employment  that  a
Participant's  right to exercise  Stock Options or SARs in such  instance  shall
terminate as of the date of termination of employment.

          13.06.  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 Special  Participants  Committee.  The
Participant must execute and deliver the agreement to the Company as a condition
to the effectiveness of the Incentive. The Award Authority 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  such  terms  and  conditions  as the  Award  Authority
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 as provided in
Section 13.07 hereof.

          13.07.  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 the 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 the 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 Special Participants Committee, in its sole discretion,  shall
determine  whether  the  sale and  issue of  Shares  is in  compliance  with all
applicable laws and regulations.

          13.08.  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 or of another  corporation,  by reason of a
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 Special Participants  Committee 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 Special  Participants
Committee,  to provide each  Participant  with  substantially  the same relative
rights before and after such adjustment to the extent practical.

          13.09. 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. Subject to Section  13.09(b) hereof,  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").  Each Election must be made before the
Tax Date.

          (b) The Special  Participants  Committee 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
the  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 six months before the Tax Date.

          13.10. No right to a Continued  Relationship.  No employee-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 such  employee's
participation in the Plan. No  Consultant-Participant  under the Plan shall have
any right to continue as a consultant or advisor to the Company or any member of
the Group for any period of time because of such  Consultant's  participation in
the Plan.

          13.11.  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.

          13.12.  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  change  or impair  an  Incentive  without  the  consent  of the
Participant or Qualified Person holding that Incentive.

          13.13.  Definition  of Fair Market  Value.  Whenever  the "Fair Market
Value" of the Common  Stock is to be  determined  as of a  particular  date (the
"Valuation  Date")  for  purposes  of the Plan,  "Fair  Market  Value"  shall be
determined as follows:

               (a) If the Common  Stock is quoted on the Nasdaq  Stock Market on
the  Valuation  Date,  "Fair  Market  Value"  shall equal the average of (i) the
highest  sales price of the Common  Stock as reported on the Nasdaq Stock Market
on the  Valuation  Date and (ii) the lowest  sales price of the Common  Stock as
reported on the Nasdaq Stock Market on the Valuation Date.

               (b) If the Common  Stock is then traded on a national  securities
exchange,  "Fair Market  Value shall equal the average of (i) the highest  sales
price of the Common Stock as reported on such exchange on the Valuation Date and
(ii) the lowest sales price of the Common Stock as reported on such  exchange on
the Valuation Date.

               (c) If the Common Stock is not  publicly  traded at the time that
"Fair Market  Value" is to be  determined  under the Plan,  "Fair Market  Value"
shall be determined in good faith by the Special Participants Committee.

          13.14.  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 exercise  price.  The Award  Authority  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 canceled.  In the event of a merger or  consolidation  in which the
Company is the effective survivor, 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 Company  may  substitute  Stock
Options  under the Plan for options  under a 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.  In the event
that (x) the Company should adopt a plan of reorganization pursuant to which (i)
it shall merge into,  consolidate with, or sell  substantially all of its assets
to,  any other  corporation  or entity or (ii) any other  corporation  or entity
shall merge into the Company in a transaction  in which the Company shall not be
the effective survivor, then the Company shall have the right to provide for all
Incentives  granted  hereunder  to be  assumed  by the  acquiring  or  surviving
corporation on such terms as the Selected Participants Committee shall determine
to be appropriate.

          13.15. Fractional and Minimum Shares; Maximum Shares In no event shall
a fraction of a Share be purchased or issued under the Plan without  approval of
the Special  Participants  Committee.  The Special  Participants  Committee  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.

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

          13.17 Other  Incentives and Plans.  Nothing in the Plan shall prohibit
any member of the Group from establishing other employee incentives and plans.

          13.18 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 herein) occurs,  all
Stock 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  Stock  Options  on and  after  such
Termination  Date.  For purposes of the Plan, the term "Change in Control Event"
shall mean any of the following events:

               (a) 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;

               (b) 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

               (c) a change of 50%  (rounded  to the next whole  percent) in the
membership  of the Board  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,  (ii)  such  Senior  Level
Optionee's base salary (excluding bonuses and/or commissions) is reduced by more
than 10% per annum or (iii) 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  "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.