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                                                                  EXHIBIT 10.4





                         TRANSCRYPT INTERNATIONAL, INC.

                     1996 STOCK INCENTIVE PLAN, AS AMENDED




Section 1.       PURPOSE OF PLAN

                 The purpose of this 1996 Stock Incentive Plan ("Plan") of
Transcrypt International, Inc., a Delaware corporation (the "Company"), is to
enable the Company to attract, retain and motivate its employees, non-employee
directors and independent contractors by providing for or increasing the
proprietary interests of such employees, non-employee directors and independent
contractors in the Company.

Section 2.       PERSONS ELIGIBLE UNDER PLAN

                 Any person, including any director of the Company, who is an
employee of the Company or any of its subsidiaries (an "Employee"), and any
non-employee director (a "Non-Employee Director") or independent contractor of
the Company (an "Independent Contractor," or, together with the Employees and
the Non-Employee Directors, the "Eligible Persons") shall be eligible to be
considered for the grant of Awards (as hereinafter defined) hereunder.

Section 3.       AWARDS

                 (a)      The Committee (as hereinafter defined), on behalf of
the Company, is authorized under this Plan to enter into any type of
arrangement with an Eligible Person that is not inconsistent with the
provisions of this Plan and that, by its terms, involves or might involve the
issuance of (i) shares of Common Stock, $.01 par value per share, of the
Company or of any other class of security of the Company which is convertible
into shares of the Company's Common Stock ("Shares") or (ii) a right or
interest with an exercise or conversion privilege at a price related to the
Shares or with a value derived from the value of the Shares, which right or
interest may, but need not, constitute a "Derivative Security," as such term is
defined in Rule 16a-1 promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as such Rule may be amended from time to time.
The entering into of any such arrangement is referred to herein as the "grant"
of an "Award."

                 (b)      Awards are not restricted to any specified form or
structure and may include, without limitation, sales or bonuses of stock,
restricted stock, stock options, reload stock options, stock purchase warrants,
other rights to acquire stock, securities convertible into or redeemable for
stock, stock appreciation rights, limited stock appreciation rights, phantom
stock, dividend equivalents, performance units or performance shares, and an
Award may consist of one such security or benefit, or two or more of them in
tandem or in the alternative.  The terms upon





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which an Award is granted shall be evidenced by a written agreement executed by
the Company and the Eligible Person to whom such Award is granted.

                 (c)      Subject to paragraph (d)(ii) below, Awards may be
issued, and Shares may be issued pursuant to an Award, for any lawful
consideration as determined by the Committee, including, without limitation,
services rendered by the Eligible Person.

                 (d)      Subject to the provisions of this Plan, the
Committee, in its sole and absolute discretion, shall determine all of the
terms and conditions of each Award granted under this Plan, which terms and
conditions may include, among other things:

                          (i)     provisions permitting the Committee to allow
         or require the recipient of such Award, including any Eligible Person
         who is a director or officer of the Company, or permitting any such
         recipient the right, to pay the purchase price of the Shares or other
         property issuable pursuant to such Award, or such recipient's tax
         withholding obligation with respect to such issuance, or both, in whole
         or in part, by any one or more of the following means:

                                  (A)      the delivery of cash;

                                  (B)      the delivery of other property
                          deemed acceptable by the Committee;

                                  (C)      the delivery of previously owned
                          shares of capital stock of the Company (including
                          "pyramiding") or other property;

                                  (D)      a reduction in the amount of Shares
                          or other property otherwise issuable pursuant to such
                          Award; or

                                  (E)      the delivery of a promissory note of
                          the Eligible Person or of a third party, the terms
                          and conditions of which shall be determined by the
                          Committee;

                          (ii)    provisions specifying the exercise or
         settlement price for any option, stock appreciation right or similar
         Award, or specifying the method by which such price is determined,
         provided that the exercise or settlement price of any option, stock
         appreciation right or similar Award shall be not less than the fair
         market value of a Share on the date such Award is granted;

                          (iii)   provisions relating to the exercisability
         and/or vesting of Awards, lapse and non-lapse restrictions upon the
         Shares obtained or obtainable under





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                 Awards or under the Plan and the termination, expiration
                 and/or forfeiture of Awards;

                          (iv)    provisions conditioning or accelerating the
                 grant of an Award or the receipt of benefits pursuant to such
                 Award, either automatically or in the discretion of the
                 Committee, upon the occurrence of specified events, including,
                 without limitation, the achievement of performance goals, the
                 exercise or settlement of a previous Award, the satisfaction
                 of an event or condition within the control of the recipient
                 of the Award or within the control of others, a change of
                 control of the Company, an acquisition of a specified
                 percentage of the voting power of the Company, the dissolution
                 or liquidation of the Company, a sale of substantially all of
                 the property and assets of the Company or an event of the type
                 described in Section 7 hereof; and/or

                          (v)     provisions required in order for such Award to
                 qualify as an incentive stock option ("Incentive Stock Option")
                 under Section 422 of the Internal Revenue Code of 1986, as
                 amended (the "Code").

                 (e)      Unless otherwise provided by the Committee in the
written agreement evidencing an Award, the terms of any stock option or stock
appreciation right granted under the Plan shall provide:

                          (i)    that the term of such option or stock
                 appreciation right shall be ten years from the date of grant;

                          (ii)   that, upon an Employee ceasing to be employed
                 by the Company for any reason other than death or disability,
                 or a Non-Employee Director ceasing to be a Non-Employee
                 Director of the Company, an option or stock appreciation right
                 shall not become exercisable to an extent greater than it could
                 have been exercised on the date the Employee's employment by
                 the Company, or the Non-Employee Director's incumbency, as the
                 case may be, ceased; 

                          (iii)    that the option or stock appreciation right
                 shall expire ninety (90) days after the Employee ceases to be
                 employed with the Company or a Non-Employee Director ceases to
                 be a Non-Employee Director of the Company; and

                          (iv)   that the amount of compensation the optionee or
                 holder of the stock appreciation right could receive under the
                 option or stock appreciation right is based solely on an
                 increase in value of the Shares after the date of grant or
                 award.




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Section 4.       STOCK SUBJECT TO PLAN

                 (a)      Subject to adjustment as provided in Section 7
hereof, at any time, the aggregate number of Shares issued and issuable
pursuant to all Awards (including all Incentive Stock Options) granted under
this Plan shall not exceed 1,200,000.

                 (b)      The aggregate number of Shares subject to Awards
granted during any calendar year to any one Eligible Person (including the
number of shares involved in Awards having a value derived from the value of
Shares) shall not exceed 400,000. Such aggregate number of shares shall be
subject to adjustment under Section 7 only to the extent that such will not
affect the status of any Award intended to qualify as "performance based
compensation" under Section 162(m) of the Code.

                 (c)      Subject to adjustment as provided in Section 7
hereof, the aggregate number of Shares issued and issuable pursuant to all
Incentive Stock Options granted under this Plan shall not exceed 1,200,000;
provided, however, that such aggregate number of shares shall be subject to
adjustment under Section 7 only to the extent that such adjustment will not
affect the status of any Incentive Stock Option under Section 422 of the Code.
Such maximum number does not include the number of Shares subject to the
unexercised portion of any Incentive Stock Option granted under this Plan that
expires or is terminated.

                 (d)      The aggregate number of Shares issued under this Plan
at any time shall equal only the number of shares actually issued upon exercise
or settlement of an Award and shall not include Shares, or rights with respect
to shares, that have been canceled or returned to the Company upon forfeiture
of an Award or in payment or satisfaction of the purchase price, exercise price
or tax withholding obligation of an Award.

Section 5.       NATURE AND DURATION OF PLAN

                 (a)      This Plan is intended to constitute an unfunded
arrangement for a select group of management or other key employees.

                 (b)      No Awards shall be made under this Plan after
December 31, 2006.  Although Shares may be issued after December 31, 2006
pursuant to Awards made prior to such date, no Shares shall be issued under
this Plan after December 31, 2016.

Section 6.       ADMINISTRATION OF PLAN

                 (a)      This Plan shall be administered by one or more
committees of the Board (any such committee, the "Committee").  If no persons
are designated by the Board to serve on the Committee, the Plan shall be
administered by the Board and all references herein to the Committee shall
refer to the Board.  The Board shall have the discretion to appoint, add,
remove





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or replace members of the Committee, and shall have the sole authority to fill
vacancies on the committee.  Unless otherwise provided by the Board: (i) with
respect to any Award for which such is necessary and desired for such Award to
be exempted by Rule 16b-3 of the Exchange Act, the Committee shall consist of
two or more directors, each of whom is a "non-employee director" (as such term
is defined in Rule 16b-3 promulgated under the Exchange Act, as such Rule may
be amended from time to time), (ii) with respect to any Award that is intended
to qualify as "performance based compensation" under Section 162(m) of the
Code, the Committee shall consist of two or more directors, each of whom is an
"outside director" (as such term is defined under Section 162(m) of the Code),
and (iii) with respect to any other Award, the Committee shall consist of one
or more directors (any of whom also may be an Eligible Person who has been
granted or is eligible to be granted Awards under the Plan).

                 (b)      Subject to the provisions of this Plan, the Committee
shall be authorized and empowered to do all things necessary or desirable in
connection with the administration of this Plan with respect to the Awards over
which such Committee has authority, including, without limitation, the
following:

                          (i)     adopt, amend and rescind rules and
                 regulations relating to this Plan;

                          (ii)    determine which persons are Eligible Persons
                 and to which of such Eligible Persons, if any, and when Awards
                 shall be granted hereunder;

                          (iii)   grant Awards to Eligible Persons and
                 determine the terms and conditions thereof, including the
                 number of Shares subject thereto and the circumstances under
                 which Awards become exercisable or vested or are forfeited or
                 expire, which terms may but need not be conditioned upon the
                 passage of time, continued employment, the satisfaction of
                 performance criteria, the occurrence of certain events
                 (including events which the Board or the Committee determine
                 constitute a change of control), or other factors;

                          (iv)    at any time cancel an Award with the consent
                 of the holder and grant a new Award to such holder in lieu
                 thereof, which new Award may be for a greater or lesser number
                 of Shares and may have a higher or lower exercise or
                 settlement price;

                          (v)     determine whether, and the extent to which
                 adjustments are required pursuant to Section 7 hereof; and

                          (vi)    interpret and construe this Plan, any rules
                 and regulations under the Plan and the terms and conditions of
                 any Award granted hereunder.





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All decisions, determinations, and interpretations of the Committee shall be
final and conclusive upon any Eligible Person to whom an Award has been granted
and to any other person holding an Award.

                 (c)      The Committee may, in the terms of an Award or
otherwise, temporarily suspend the issuance of Shares under an Award if the
Committee determines that securities law considerations so warrant.

                 (d)      The Committee from time to time may permit a
recipient holding any stock option granted by the Company to surrender for
cancellation any unexercised portion of such option and receive in exchange an
option or other Award for such number of Shares as may be designated by the
Committee.  The Committee may, with the consent of the person entitled to
exercise any outstanding option, amend such option, including reducing the
exercise price of any option and/or extending the term thereof.

Section 7.       ADJUSTMENTS

                 If the outstanding securities of the class then subject to
this Plan are increased, decreased or exchanged for or converted into cash,
property or a different number or kind of shares or securities, or if cash,
property or shares or securities are distributed in respect of such outstanding
securities, in either case as a result of a reorganization, merger,
consolidation, recapitalization, restructuring, reclassification, dividend
(other than a regular, quarterly cash dividend) or other distribution, stock
split, reverse stock split, spin-off or the like, or if substantially all of
the property and assets of the Company are sold, then, unless the terms of such
transaction shall provide otherwise, the Committee shall make appropriate and
proportionate adjustments in (i) the number and type of shares or other
securities or cash or other property that may be acquired pursuant to Awards
theretofore granted under this Plan and the exercise or settlement price of
such Awards, and (ii) the maximum number and type of shares or other securities
that may be issued pursuant to such Awards thereafter granted under this Plan.
The foregoing adjustments shall be applied to any Awards or Incentive Stock
Options only to the extent permitted by Sections 162(m) and 422 of the Code,
respectively.

Section 8.       AMENDMENT AND TERMINATION OF PLAN

                 The Board may amend or terminate this Plan at any time and in
any manner; provided, however, that no such amendment or termination shall
deprive the recipient of any Award theretofore granted under this Plan, without
the consent of such recipient, of any of his or her rights thereunder or with
respect thereto; provided, further, that if an amendment to the Plan would
affect the Plan's compliance with Rule 16b-3 under the Exchange Act or Section
422 or 162(m) or other applicable provisions of the Code, the amendment shall
be approved by the Company's stockholders to the extent required to comply with
Rule 16b-3 under the Exchange Act, Sections 422 and 162(m) of the Code, or
other applicable provisions of or rules under the Code.





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Section 9.       EFFECTIVE DATE OF PLAN

                 This Plan shall be effective as of the date upon which it was
approved by the Board, subject however to approval of the plan by the
affirmative votes of the holders of a majority of the securities of the Company
present, or represented, and entitled to vote at a meeting duly held in
accordance with the laws of the State of Delaware.

Section 10.      COMPLIANCE WITH OTHER LAWS AND REGULATIONS

                 The Plan, the grant and exercise of Awards thereunder, and the
obligation of the Company to sell and deliver shares under such Awards, shall
be subject to all applicable federal and state laws, rules and regulations and
to such approvals by any governmental or regulatory agency as may be required.
The Company shall not be required to issue or deliver any certificates for
shares of Common Stock prior to the completion of any registration or
qualification of such shares under any federal or state law or issuance of any
ruling or regulation of any government body which the Company shall, in its
sole discretion, determine to be necessary or advisable.  Any adjustments
provided for in Section 7 shall be subject to any shareholder action required
by Delaware corporate law.

Section 11.      NO RIGHT TO COMPANY EMPLOYMENT

                 Nothing in this Plan or as a result of any Award granted
pursuant to this Plan shall confer on any individual any right to continue in
the employ of the Company or interfere in any way with the right of the Company
to terminate an individual's employment at any time.  The agreement evidencing
an Award may contain such provisions as the Committee may approve with
reference to the effect of approved leaves of absence.

Section 12.      LIABILITY OF COMPANY

                 The Company and any affiliate which is in existence or
hereafter comes into existence shall not be liable to an Eligible Person or
other persons as to:

                 (a)      The Non-Issuance of Shares.  The non-issuance or sale
of shares as to which the Company has been unable to obtain from any regulatory
body having jurisdiction the authority deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any shares hereunder; and

                 (b)      Tax Consequences.  Any tax consequence expected, but
not realized, by any Eligible Person or other person due to the issuance,
exercise, settlement, cancellation or other transaction involving any Award
granted hereunder.





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Section 13.      GOVERNING LAW

                 This Plan and any Awards and agreements hereunder shall be
interpreted and construed in accordance with the laws of the State of Delaware
and applicable federal law.