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                                                                    EXHIBIT 10.8

                                 ULTICOM, INC.

                    1998 STOCK INCENTIVE COMPENSATION PLAN

                    (as amended, through January 20, 2000)


          1.  Purpose of the Plan
              -------------------

          The purpose of the Plan is to assist the Company, its Subsidiaries and
Affiliates in attracting and retaining valued employees by offering them a
greater stake in the Company's success and a closer identity with it, and to
encourage ownership of the Company's stock by such employees.

          2.  Definitions
              -----------

               2.1 "Affiliate" means any entity other than the Subsidiaries in
which the Company has a substantial direct or indirect equity interest, as
determined by the Board.

               2.2  "Award" means an award of Deferred Stock, Restricted Stock,
Options or SARs under the Plan.

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

               2.4 "Change in Control" means (i) the Board (or, if approval of
the Board is not required as a matter of law, the shareholders of the Company)
shall approve (a) any consolidation or merger of the Company in which the
Company is not the continuing or surviving corporation or pursuant to which
shares of Common Stock would be converted into cash, securities or other
property, other than a merger of the Company in which the holders of Common
Stock immediately prior to the merger have the same proportionate ownership of
common stock of the surviving corporation immediately after the merger, or (b)
any sale, lease, exchange or other transfer (on one transaction or a series of
related transactions) of all, or substantially all, the assets of the Company or
(c) the adoption of any plan or proposal for the liquidation or dissolution of
the Company; (ii) any person (as such term is defined in Section 13(d) of the
1934 Act), corporation or other entity other than the Company shall make a
tender offer or exchange offer to acquire any Common Stock (or securities
convertible into Common Stock) for cash, securities or any other consideration,
provided that (a) at least a portion of such securities sought pursuant to the
--------
offer in question is acquired and (b) after consummation of such offer, the
person, corporation or other entity in question is the "beneficial owner" (as
such term is defined in Rule 13d-3 under the 1934 Act), directly or indirectly,
of 20% or more of the outstanding shares of Common Stock (calculated as provided
in paragraph (d) of such Rule 13d-3 in the case of rights to acquire Common
Stock); (iii) during any period of two consecutive years, individuals who at the
beginning of such period constituted the entire Board ceased

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for any reason to constitute a majority thereof unless the election, or the
nomination for election by the Company's stockholders, of each new director was
approved by a vote of at least two-thirds of the directors then still in office
who were directors at the beginning of the period; or (iv) the occurrence of any
other event the Committee determines shall constitute a "Change in Control"
hereunder.

               2.5  "Code" means the Internal Revenue Code of 1986, as amended.

               2.6  "Common Stock" means the common stock of the Company,
without par value, or such other class or kind of shares or other securities
resulting from the application of Section 10.

               2.7  "Company" means ULTICOM, INC., a New Jersey corporation, or
any successor corporation.

               2.8  "Committee" means the committee designated by the Board to
administer the Plan under Section 4. The Committee shall have at least three
members, each of whom shall be a member of the Board, a Non-Employee Director
and an Outside Director.

               2.9  "Deferred Stock" means an Award made under Section 6 of the
Plan to receive Common Stock at the end of a specified Deferral Period.

               2.10  "Deferral Period" means the period during which the receipt
of a Deferred Stock Award under Section 6 of the Plan will be deferred.

               2.11  "Director" means each member of the Board who is not an
Employee, who does not receive compensation from the Company, or from any Parent
corporation or Subsidiary of the Company in any capacity other than as a
Director, and whose membership on the Board is not attributable to any contract
between the Company and such Director or any other entity with which such
Director is affiliated.

               2.12  "Employee" means an officer or other key employee of the
Company, a Subsidiary or an Affiliate including a director who is such an
employee.

               2.13  "Fair Market Value" means, on any given date, the mean
between the highest and lowest prices of actual sales of shares of Common Stock
on the principal national securities exchange on which the Common Stock is
listed on such date or, if Common Stock was not traded on such date, on the last
preceding day on which the Common Stock was traded, or, if the Common Stock is
not listed for trading on any national securities exchange, the fair market
value on such date of one share of Common Stock as the Board shall determine.

               2.14  "Holder" means an Employee to whom an Award is made.

               2.15  "Hostile Change in Control" means any Change in Control
described in Section 2.4(ii) that is not approved or recommended by the Board.

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               2.16  "Incentive Stock Option" means an Option intended to meet
the requirements of an incentive stock option as defined in Section 422 of the
Code and designated as an Incentive Stock Option.

               2.17  "1934 Act" means the Securities Exchange Act of 1934, as
amended.

               2.18  "Non-Employee Director" means a person defined in Rule 16b-
3(b)(3) promulgated by the Securities and Exchange Commission under the 1934
Act, or any successor definition adopted by the Securities and Exchange
Commission.

               2.19  "Non-Qualified Option" means an Option not intended to be
an Incentive Stock Option, and designated as a Non-Qualified Option.

               2.20  "Option" means any stock option granted from time to time
under Section 8 of the Plan.

               2.21  "Outside Director" means a member of the Board who is an
"outside director" within the meaning of Section 162(m) of the Code and the
regulations promulgated thereunder.

               2.22  "Parent" means any corporation (other than the Company) in
an unbroken chain of corporations ending with the Company if each of the
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.

               2.23  "Plan" means the Ulticom, Inc. 1998 Stock Incentive
Compensation Plan herein set forth, as amended from time to time.

              2.24  "Restricted Stock" means Common Stock awarded by the
Committee under Section 7 of the Plan.

              2.25  "Restriction Period" means the period during which
Restricted Stock awarded under Section 7 of the Plan is subject to forfeiture.

              2.26  "Retirement" means retirement from the active employment of
the Company, a Subsidiary or an Affiliate pursuant to the relevant provisions of
the applicable pension plan of such entity or as otherwise determined by the
Committee.

              2.27  "SAR" means a stock appreciation right awarded by the
Committee under Section 9 of the Plan.

              2.28  "Subsidiary" means any corporation (other than the Company)
in an unbroken chain of corporations beginning with the Company (or any
subsequent parent of the

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Company) if each of the corporations other than the last corporation in the
unbroken chain owns stock possession 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.

              2.29  "Ten Percent Shareholder" means a person who on any given
date owns, either directly or indirectly (taking into account the attribution
rules contained in Section 424(d) of the Code), stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company or a
Subsidiary or Parent.

          3.  Eligibility
              -----------

              3.1  Any Employee is eligible to receive an Award.

              3.2  Subject to adjustment as provided in Section 10, each
Director shall receive (i) upon joining the Board, Options to purchase 15,000
shares of Common Stock having an exercise price per share equal to the Fair
Market Value as of the date he or she becomes a Director and (ii) in each fiscal
year of the Company, commencing with the year after the year such Director first
joins the Board, Options to purchase 5,000 shares of Common Stock having an
exercise price per share equal to the Fair Market Value as of the date two
business days after the publication of the audited year-end financial statements
of the Company for the immediately preceding fiscal year (the "Annual Options").
The Annual Options shall vest and become non-forfeitable incrementally, to the
extent of one-fifth of the total number of shares per meeting of the Board, and
any committees of the Board of which such Director is a member, attended by the
recipient during the year of grant. In the event a Director attends fewer than
five Board or Committee meetings in any year in which such Director receives
Annual Options, the portion of such Director's Annual Options which have not
previously vested shall be forfeited back to the Company.

          4.  Administration and Implementation of Plan
              -----------------------------------------

              4.1  The Plan shall be administered by the Committee, which shall
have full power to interpret and administer the Plan and full authority to act
in selecting the Employees to whom Awards will be granted, in determining the
type and amount of Awards to be granted to each such Employee, the terms and
conditions of Awards granted under the Plan and the terms of agreements which
will be entered into with Holders.

              4.2  The Committee's powers shall include, but not be limited to,
the power to determine whether, to what extent and under what circumstances an
Option may be exchanged for cash, Common Stock, Restricted Stock, Deferred Stock
or some combination thereof; to determine whether, to what extent and under what
circumstances an Award is made and operates in tandem with other Awards made
hereunder; to determine whether, to what extent and under what circumstances
Common Stock or cash payable with respect to an Award shall be deferred, either
automatically or at the election of the Holder (including the power to add
deemed earnings to any such deferral); and to grant Awards (other than Incentive
Stock Options) that are transferable by the Holder.

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              4.3  The Committee shall have the power to adopt regulations for
carrying out the Plan and to make changes in such regulations as it shall, from
time to time, deem advisable.  Any interpretation by the Committee of the terms
and provisions of the Plan and the administration thereof, and all action taken
by the Committee, shall be final and binding on Holders.

              4.4  The Committee may condition the grant of any Award or the
lapse of any Deferral or Restriction Period (or any combination thereof) upon
the Holder's achievement of a Performance Goal that is established by the
Committee before the grant of the Award. For this purpose, a "Performance Goal"
shall mean a goal that must be met by the end of a period specified by the
Committee (but that is substantially uncertain to be met before the grant of the
Award) based upon: (i) the price of Common Stock, (ii) the market share of the
Company, its Subsidiaries or Affiliates (or any business unit thereof), (iii)
sales by the Company, its Subsidiaries or Affiliates (or any business unit
thereof), (iv) earnings per share of Common Stock, (v) return on shareholder
equity of the Company, or (vi) costs of the Company, its Subsidiaries or
Affiliates (or any business unit thereof). The Committee shall have discretion
to determine the specific targets with respect to each of these categories of
Performance Goals. Before granting an Award or permitting the lapse of any
Deferral or Restriction Period subject to this Section, the Committee shall
certify in writing that an individual has satisfied the applicable Performance
Goal.

              4.5  In the event that a committee of the Board shall not have
been appointed hereunder, or having been appointed shall at any time be
incapacitated or unavailable, the Board may exercise all powers and authority of
the Committee and all references in this Plan to the Committee shall be deemed
to refer to the Board, acting in such capacity.

          5.  Shares of Stock Subject to the Plan
              -----------------------------------

              5.1  Subject to adjustment as provided in Section 10, the total
number of shares of Common Stock available for Awards under the Plan shall be
6,500,000 shares.

              5.2  The maximum number of shares of Common Stock subject to an
Award that may be awarded to any Employee shall not exceed 250,000 during any
calendar year (the "Individual Limit"). Subject to Section 5.3 and Section 10,
any shares of Common Stock subject to an Award that is canceled or repriced by
the Committee shall count against the Individual Limit. Notwithstanding the
foregoing, the Individual Limit may be adjusted to reflect the effect on shares
of Common Stock of any transaction or event described in Section 10.

              5.3  Any shares issued by the Company through the assumption or
substitution of outstanding grants from an acquired company shall not (i) reduce
the shares available for Awards under the Plan, or (ii) be counted against the
Individual Limit. Any shares issued hereunder may consist, in whole or in part,
of authorized and unissued shares or treasury shares. If any shares subject to
any Award granted hereunder are forfeited or such Award otherwise terminates
without the issuance of such shares or the payment of other consideration in

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lieu of such shares, the shares subject to such Award, to the extent of any such
forfeiture or termination, shall again be available for Awards under the Plan.

          6.  Deferred Stock
              --------------

          An Award of Deferred Stock is an agreement by the Company to deliver
to the recipient a specified number of shares of Common Stock at the end of a
specified deferral period or periods.  Such an Award shall be subject to the
following terms and conditions:

              6.1  Deferred Stock Awards shall be evidenced by Deferred Stock
agreements.  Such agreements shall conform to the requirements of the Plan and
may contain such other provisions as the Committee shall deem advisable.

              6.2  Upon determination of the number of shares of Deferred Stock
to be awarded to a Holder, the Committee shall direct that the same be credited
to the Holder's account on the books of the Company but that issuance and
delivery of the same shall be deferred until the date or dates provided in
Section 6.5 hereof. Prior to issuance and delivery hereunder the Holder shall
have no rights as a stockholder with respect to any shares of Deferred Stock
credited to the Holder's account.

              6.3  Amounts equal to any dividends declared during the Deferral
Period with respect to the number of shares covered by a Deferred Stock Award
will be paid to the Holder currently, or deferred and deemed to be reinvested in
additional Deferred Stock, or otherwise reinvested on such terms as are
determined at the time of the Award by the Committee, in its sole discretion,
and specified in the Deferred Stock agreement.

              6.4  The Committee may condition the grant of an Award of Deferred
Stock or the expiration of the Deferral Period upon the Employee's achievement
of one or more Performance Goal(s) specified in the Deferred Stock agreement.
If the Employee fails to achieve the specified Performance Goal(s), either the
Committee shall not grant the Deferred Stock Award to the Employee or the Holder
shall forfeit the Award and no Common Stock shall be transferred to him pursuant
to the Deferred Stock Award.  Unless otherwise determined by the Committee at
the time of an Award, dividends paid during the Deferral Period on Deferred
Stock subject to a Performance Goal shall be reinvested in additional Deferred
Stock and the lapse of the Deferral Period for such Deferred Stock shall be
subject to the Performance Goal(s) previously established by the Committee.

              6.5  The Deferred Stock agreement shall specify the duration of
the Deferral Period taking into account termination of employment on account of
death, disability, Retirement or other cause. The Deferral Period may consist of
one or more installments. At the end of the Deferral Period or any installment
thereof the shares of Deferred Stock applicable to such installment credited to
the account of a Holder shall be issued and delivered to the Holder (or, where
appropriate, the Holder's legal representative) in accordance with the terms of
the Deferred Stock agreement. The Committee may, in its sole discretion,
accelerate the delivery of all or any part of a Deferred Stock Award or waive
the deferral limitations for all or any part of a

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Deferred Stock Award, other than Deferred Stock Awards intended to qualify for
the "performance-based compensation exception" to Section 162(m) of the Code.

          7.  Restricted Stock
              ----------------

          An Award of Restricted Stock is a grant by the Company of a specified
number of shares of Common Stock to the Employee, which shares are subject to
forfeiture upon the happening of specified events.  Such an Award shall be
subject to the following terms and conditions:

              7.1  Restricted Stock shall be evidenced by Restricted Stock
agreements.  Such agreements shall conform to the requirements of the Plan and
may contain such other provisions as the Committee shall deem advisable.

              7.2  Upon determination of the number of shares of Restricted
Stock to be granted to the Holder, the Committee shall direct that a certificate
or certificates representing the number of shares of Common Stock be issued to
the Holder with the Holder designated as the registered owner. The
certificate(s) representing such shares shall be legended as to sale, transfer,
assignment, pledge or other encumbrances during the Restriction Period and
deposited by the Holder, together with a stock power endorsed in blank, with the
Company, to be held in escrow during the Restriction Period.

              7.3  Unless otherwise determined by the Committee at the time of
an Award, during the Restriction Period the Holder shall have the right to
receive dividends from and to vote the shares of Restricted Stock.

              7.4  The Committee may condition the grant of an Award of
Restricted Stock or the expiration of the Restriction Period upon the Employee's
achievement of one or more Performance Goal(s) specified in the Restricted Stock
Agreement. If the Employee fails to achieve the specified Performance Goal(s),
either the Committee shall not grant the Restricted Stock to the Employee or the
Holder shall forfeit the Award of Restricted Stock and the Common Stock shall be
forfeited to the Company.

              7.5  The Restricted Stock agreement shall specify the duration of
the Restriction Period and the performance, employment or other conditions
(including termination of employment on account of death, disability, Retirement
or other cause) under which the Restricted Stock may be forfeited to the
Company. At the end of the Restriction Period the restrictions imposed hereunder
shall lapse with respect to the number of shares of Restricted Stock as
determined by the Committee, and the legend shall be removed and such number of
shares delivered to the Holder (or, where appropriate, the Holder's legal
representative). The Committee may, in its sole discretion, modify or accelerate
the vesting and delivery of shares of Restricted Stock, other than Restricted
Stock intended to qualify for the "performance-based compensation exception" to
Section 162(m) of the Code.

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          8.  Options
              -------

          Options give an Employee or Director the right to purchase a specified
number of shares of Common Stock, Deferred Stock or Restricted Stock (as
selected by the Committee) from the Company for a specified time period at a
fixed price.  Options granted to Employees may be either Incentive Stock Options
or Non-Qualified Stock Options.  Option granted to Directors pursuant to Section
3.2 shall be Non-Qualified Stock Options.  The grant of Options shall be subject
to the following terms and conditions:

              8.1  Options shall be evidenced by Option agreements. Such
agreements shall conform to the requirements of the Plan, and may contain such
other provisions as the Committee shall deem advisable.

              8.2  Subject to Section 3.2, the price per share at which Common
Stock may be purchased upon exercise of an Option shall be determined by the
Committee, but, in the case of grants of Incentive Stock Options, shall be not
less than the Fair Market Value of a share of Common Stock on the date of grant.
In the case of any Incentive Stock Option granted to a Ten Percent Shareholder,
the option price per share shall not be less than 110% of the Fair Market Value
of a share of Common Stock on the date of grant. The option price per share for
Non-Qualified Options may be less than the Fair Market Value of a share of
Common Stock on the date of grant.

              8.3  The Option agreements shall specify when an Option may be
exercised and the terms and conditions applicable thereto.  The term of an
Option shall in no event be greater than ten years (five years in the case of an
Incentive Stock Option granted to a Ten Percent Shareholder).

              8.4  Each provision of the Plan and each Option agreement relating
to an Incentive Stock Option shall be construed so that each Incentive Stock
Option shall be an incentive stock option as defined in Section 422 of the Code,
and any provisions of the Option agreement thereof that cannot be so construed
shall be disregarded. Incentive Stock Options may not be granted to employees of
Affiliates.

              8.5  No Incentive Stock Option shall be transferable otherwise
than by will or the laws of descent and distribution and, during the lifetime of
the Holder, shall be exercisable only by the Holder. Upon the death of a Holder,
the person to whom the rights have passed by will or by the laws of descent and
distribution may exercise an Incentive Stock Option only in accordance with this
Section 8.

              8.6  Except as provided in an Option Agreement, the option price
of the shares of Common Stock upon the exercise of an Option shall be paid in
full at the time of the exercise in cash, in Shares of Common Stock valued at
Fair Market Value on the date of exercise or a combination of cash and such
shares of Common Stock. With the consent of the Committee, payment upon the
exercise of a Non-Qualified Option may be made in whole or in part by Restricted
Stock (based on the fair market value of the Restricted Stock on the date the
Option is exercised, as determined by the Committee). In such case the Common
Stock to which the

                                      -8-
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Option relates shall be subject to the same forfeiture restrictions originally
imposed on the Restricted Stock exchanged therefor. The Committee may provide in
the applicable Option agreement for other methods for exercising options
including by delivery of a note by the Holder in the amount of the exercise
price.

              8.7  With the Holder's consent, the Committee may amend any
outstanding Option to deliver shares of Deferred Stock or Restricted Stock
instead of Common Stock.

              8.8  If a Holder's employment by the Company, a Subsidiary or
Affiliate terminates by reason of death, any Option granted to such Holder may
thereafter be exercised (to the extent such Option was exercisable at the time
of death or on such accelerated basis as the Committee may determine at or after
grant) by, where appropriate, the Holder's transferee or by the Holder's legal
representative, until the earlier of the date specified in the applicable Option
Agreement or one year after the Holder's death.

              8.9  If a Holder's employment by the Company, a Subsidiary or
Affiliate terminates by reason of disability (as determined by the Committee) or
Retirement, any unexercised Option granted to the Holder shall become
immediately exercisable and may thereafter be exercised by the Holder (or, where
appropriate, the Holder's transferee or legal representative) until the earlier
of the date specified in the applicable Option Agreement or 90 days after such
termination of employment.

              8.10  If a Holder's employment by the Company, Subsidiary or
Affiliate terminates for any reason other than death, disability or Retirement,
all unexercised Options awarded to the Holder shall terminate on the earlier of
the date specified in the applicable Option Agreement or 90 days after such
termination of employment.

              8.11  The Committee or the Board may in their discretion extend
the period during which an Option held by an Employee may be exercised to such
period, not to exceed three years following the termination of an Employee's
employment or service with the Company or any of the Subsidiaries, as the
committee or the Board may determine to be appropriate in any particular
instance.

          9.  Stock Appreciation Rights
              -------------------------

          SARs are rights to receive a payment in cash, Common Stock, Restricted
Stock or Deferred Stock (as selected by the Committee) equal to the increase in
the Fair Market Value of a specified number of shares of Common Stock from the
date of grant of the SAR to the date of exercise.  The grant of SARs shall be
subject to the following terms and conditions:

              9.1  SARs shall be evidenced by SAR agreements. Such agreements
shall conform to the requirements of the Plan and may contain such other
provisions as the committee shall deem advisable. A SAR may be granted in tandem
with all or a portion of a related Option under the Plan ("Tandem SAR"), or may
be granted separately ("Freestanding

                                      -9-
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SAR"). A Tandem SAR may be granted either at the time of the grant of the Option
or at any time thereafter during the term of the Option and shall be exercisable
only to the extent that the related Option is exercisable. In no event shall any
SAR be exercisable within the first six months of its grant.

              9.2  The base price of a Tandem SAR shall be the option price
under the related Option. The base price of a Freestanding SAR shall be not less
than 100% of the Fair Market Value of the Common Stock, as determined by the
Committee, on the date of grant of the Freestanding SAR.

              9.3  A SAR shall entitle the recipient to receive a payment equal
to the excess of the Fair Market Value of the shares of Common Stock covered by
the SAR on the date of exercise over the base price of the SAR. Such payment may
be in cash, in shares of Common Stock, in shares of Deferred Stock, in shares of
Restricted Stock or any combination, as the Committee shall determine. Upon
exercise of a Tandem SAR as to some or all of the shares of Common Stock covered
by the grant, the related Option shall be canceled automatically to the extent
of the number of shares of Common Stock covered by such exercise, and such
shares shall no longer be available for purchase under the Option pursuant to
Section 8. Conversely, if the related Option is exercised as to some or all of
the shares of Common Stock covered by the Award, the related Tandem SAR, if any,
shall be canceled automatically to the extent of the number of shares of Common
Stock covered by the Option exercise.

              9.4  SARs shall be subject to the same terms and conditions
applicable to Options as stated in Sections 8.3, 8.5, 8.7, 8.8, 8.9 and 8.10.

          10.  Adjustments upon Changes in Capitalization
               ------------------------------------------

          In the event of a reorganization, recapitalization, stock split, spin-
off, split-off, split-up, stock dividend, issuance of stock rights, combination
of shares, merger, consolidation or any other change in the corporate structure
of the Company affecting Common Stock, or any distribution to stockholders other
than a cash dividend, the Board shall make appropriate adjustment in the number
and kind of shares authorized by the Plan and any adjustments to outstanding
Awards as it determines appropriate.  No fractional shares of Common Stock shall
be issued pursuant to such an adjustment.  The Committee may determine to pay
the Fair Market Value of any fractional shares resulting from adjustments
pursuant to this Section in cash to the Holder.

          11.  Adjustments Upon a Change in Control
               ------------------------------------

          Except as otherwise provided in an applicable agreement, upon the
occurrence of a Change in Control (other than a Hostile Change of Control), the
Committee may elect to provide that all outstanding Options and Stock
Appreciation Rights shall immediately vest and become exercisable, each Deferral
Period and Restriction Period shall immediately lapse or all shares of Deferred
Stock subject to outstanding Awards shall be issued and delivered to the Holder.
In the event of a Hostile Change in Control, each of the foregoing actions shall
occur

                                      -10-
<PAGE>

automatically upon the occurrence of such Hostile Change in Control.  At
any time before a Change in Control, the Committee may, without the consent of
any Holder of an Option, (i) require the entity effecting the Change in Control
or a parent or subsidiary of such entity to assume each outstanding Option or
substitute an equivalent option therefor or (ii) terminate and cancel all
outstanding Options upon the Change in Control and pay the Holder of each such
Option cash equal to the product of (x) the difference between the Fair Market
Value of Common Stock on the date of the Change in Control and the exercise
price of such Option and (y) the number of shares of Common Stock subject to
such Option.  For the purposes of this Section, an Option shall be considered
assumed if, following the merger, the option confers the right to purchase, for
each share of Common Stock subject to the Option immediately prior to the
merger, the consideration (whether stock, cash, or other securities or property)
received in the merger by holders of Common Stock for each share held on the
effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided, however, that if such consideration received
                         --------  -------
in the merger was not solely common stock of the successor corporation or its
parent, the Committee may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the Option,
for each share of Common Stock subject to the Option, to be solely common stock
of the successor corporation or its parent equal in fair market value to the per
share consideration received by holders of Common Stock in the merger.

          12.  Effective Date, Termination and Amendment
               -----------------------------------------

          The Plan shall become effective on December 21, 1998, subject to
shareholder approval.  The Plan shall remain in full force and effect until the
earlier of 10 years from the date of its adoption by the Board, or the date it
is terminated by the Board.  The Board shall have the power to amend, suspend or
terminate the Plan at any time, provided that no such amendment shall be made
without stockholder approval which shall:

              12.1  Increase (except as provided in Section 10) the total number
of shares available for issuance pursuant to the Plan;

              12.2  Change the class of individuals eligible to be Holders;

              12.3  Modify the Individual Limit (except as provided in Section
10) or the categories of Performance Goals previously disclosed to shareholders;

              12.4  Change the provisions of this Section 12; or

              12.5  Make any other change for which shareholder approval is
required under Section 16(b) or any successor provision of the 1934 Act.

          Termination of the Plan pursuant to this Section 12 shall not affect
Awards outstanding under the Plan at the time of termination.

                                      -11-
<PAGE>

          13.  Transferability
               ---------------

          Except as provided below, Awards may not be pledged, assigned or
transferred for any reason during the Holder's lifetime, and any attempt to do
so shall be void and the relevant Award shall be forfeited.  The Committee may
grant Awards (except Incentive Stock Options) that are transferable by the
Holder during his lifetime, but such Awards shall be transferable only to the
extent specifically provided in the agreement entered into with the Holder.  The
transferee of the Holder shall, in all cases, be subject to the provisions of
the agreement between the Company and the Holder.

          14.  General Provisions
               ------------------

               14.1  Nothing contained in the Plan, or any Award granted
pursuant to the Plan, shall confer upon any Employee any right with respect to
continued employment by the Company, a Subsidiary or Affiliate, nor interfere in
any way with the right of the Company, a Subsidiary or Affiliate to terminate
the employment of any Employee at any time.

               14.2  For purposes of this Plan, transfer of employment between
the Company and its Subsidiaries and Affiliates shall not be deemed termination
of employment.

               14.3  In connection with the transfer of shares of Common Stock
as a result of the exercise or vesting of an Award or upon any other event that
would subject the Holder to taxation, the Company shall have the right to
require the Holder to pay an amount in cash or to retain or sell without notice,
or to demand surrender of, shares of Common Stock in value sufficient to cover
any tax, including any Federal, state or local income tax, required by any
governmental entity to be withheld or otherwise deducted and paid with respect
to such transfer ("Withholding Tax"), and to make payment (or to reimburse
itself for payment made) to the appropriate taxing authority of an amount in
cash equal to the amount of such Withholding Tax, remitting any balance to the
employee. For purposes of this Section 14.3, the value of shares of Common Stock
so retained or surrendered shall be the Fair Market Value on the date that the
amount of the Withholding Tax is to be determined (the "Tax Date"), and the
value of shares of Common Stock so sold shall be the actual net sale price per
share (after deduction of commissions) received by the Company.

          Notwithstanding the foregoing, the Holder shall be entitled to satisfy
the obligation to pay any Withholding Tax, in whole or in part, by providing the
Company with funds sufficient to enable the Company to pay such Withholding Tax
or by requiring the Company to retain or to accept upon delivery thereof shares
of Common Stock (other than unvested Restricted Stock) sufficient in value
(determined in accordance with the last sentence of the preceding paragraph) to
cover the amount of such Withholding Tax.  Each election by a Holder to have
shares retained or to deliver shares for this purpose shall be subject to the
following restrictions:  (i) the election must be in writing and made on or
prior to the Tax Date; and (ii) the election shall be subject to the disapproval
of the Committee.

              14.4  With respect to Holders subject to Section 16 of the
Exchange Act, transactions under the Plan are intended to comply with all
applicable conditions of Rule 16b-3

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<PAGE>

or its successors under the Exchange Act. To the extent any provision of the
Plan or action by the Committee fails to so comply, it shall be deemed null and
void, to the extent permitted by law and deemed advisable by the Committee.

              14.5  Without amending the Plan, Awards may be granted to
Employees who are foreign nationals or employed outside the United States or
both, on such terms and conditions different from those specified in the Plan as
may, in the judgment of the Committee, be necessary or desirable to further the
purpose of the Plan.

              14.6  To the extent that Federal laws (such as the 1934 Act, the
Code or the Employee Retirement Income Security Act of 1974) do not otherwise
control, the Plan and all determinations made and actions taken pursuant hereto
shall be governed by the law of New Jersey and construed accordingly.

              14.7  The Committee may amend any outstanding Awards (other than
an Award intended to qualify for the "performance-based compensation exception"
to Section 162(m) of the Code) to the extent it deems appropriate. Such
amendment may be made by the Committee without the consent of the Holder, except
in the case of amendments adverse to the Holder, in which case the Holder's
consent is required for any such amendment. Notwithstanding the foregoing, the
Committee may exercise its authority under Section 11 without the consent of
Holders.

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