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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 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.

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                           (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 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 


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                  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.

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 2,000,000.

                           (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.

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                           (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 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

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                  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.

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.

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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.

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

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                           (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.

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.