<PAGE>
                  SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C.  20549

                             FORM 10-K
 (Mark One)
 _X_  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended __December 31, 1996__.
                                     OR
 ___  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934
 For the transition period from _________ to ______________.

 Commission file number ____1-7203____.

                             AYDIN CORPORATION


 _______________________________________________________
      (Exact name of registrant as specified in its charter)

     Delaware                                23-1686808

 ________________________________  ___________________________
 (State or other jurisdiction of        (I.R.S. Employer
 incorporation or organization           Identification No.)

        700 DRESHER ROAD
      HORSHAM, PENNSYLVANIA                           19044
 _________________________________  __________________________
 (Address of principal executive offices)          (Zip Code)

 Registrant's telephone number, including area code (215)
 657-7510

 Securities registered pursuant to Section 12(b) of the Act:

                                    Name of each exchange
      Title of each class            on which registered
 ______________________________     _________________________

    Common Stock, $1 Par Value       New York Stock Exchange

 Securities registered pursuant to Section 12(g) of the Act:

                                   NONE
                             _________________
                             (Title of Class)

 Indicate by check mark whether the registrant (1) has filed
 all reports required to be filed by Section 13 or 15(d) of the
 Securities Exchange Act of 1934 during the preceding 12 months
 (or for such shorter period that the registrant was required
 to file such reports), and (2) has been subject to such filing
 requirements for the past 90 days. Yes _X_ No ___

 Indicate by check mark if disclosure of delinquent filers
 pursuant to Item 405 of Regulation S-K is not contained
 herein, and will not be contained, to the best of registrant's
 knowledge, in definitive proxy or information statements
 incorporated by reference in Part III of this Form 10-K or any
 amendment to this Form 10-K.  _X_

 The aggregate market value of 5,095,834 shares of Common Stock
 held by non-affiliates, computed using the closing price as of
 March 27, 1997, was $57,328,133.

 Number of shares of Common Stock outstanding as of March 28,
 1997 5,173,400.

 DOCUMENTS INCORPORATED BY REFERENCE

 Portions of the following documents are incorporated by
 reference:

 - 1996 Annual Report to Stockholders of Aydin Corporation
   (hereinafter, "Annual Report") - Parts I and II
 - Proxy Statement of Aydin Corporation, dated March 27, 1997
   (hereinafter,"Proxy Statement") - Part III

 <PAGE>
 INDEX TO FORM 10-K

 ----------------------------------------------------------

    This index lists the requirements of Form 10-K and the
     page number in this Form 10-K (or in the Annual Report or
     the Proxy Statement) where each item can be found.

     PART I

 Item 1 Business . . . . . . . . . . . .10-K, pp. 2-5
 Item 2 Properties . . . . . . . . . . .10-K, p. 6
 Item 3 Legal Proceedings. . . . . . . .10-K, p. 6
 Item 4 Submission of Matters to a Vote
        of Security Holders. . . . . . .10-K, p. 6
        Executive Officers of the
        Registrant . . . . . . . . . . .10-K, pp. 6-7

        PART II

 Item 5 Market for the Registrant's Common
        Equity and Related Stockholder
        Matters. . . . . . . . . . . . .Annual Report, p. 27
                                        Inside back cover
 Item 6 Selected Financial Data. . . . .Annual Report, p. 27
 Item 7 Management's Discussion and Analysis
        of Financial Condition and Results
        of Operation . . . . . . . . . .Annual Report, p. 23
 Item 8 Financial Statements and
        Supplementary Data . . . . . . .Annual Report,
                                        pp. 10-22, 26
 Item 9 Changes In and Disagreements With
        Accountants on Accounting and
        Financial Disclosure . . . . . .Not Applicable

        PART III

 Item 10                                Directors and Executive Officers of the
        Registrant . . . . . . . . . . Proxy Statement,
                                        pp. 3-5, 13
                                       10-K, pp. 6-7
 Item 11  Executive Compensation . . . . Proxy Statement,
                                        pp. 5-8, 10-12
 Item 12                                Security Ownership of Certain
        Beneficial Owners and Management
                 . . . . . . . . . . . . Proxy Statement,
                                        p. 2-3
 Item 13                                Certain Relationships and Related
        Transactions . . . . . . . . . .10-K, p. 8

        PART IV

 Item 14                                Exhibits, Financial Statement
        Schedules and Reports on
        Form 8-K . . . . . . . . . . . .10-K, pp. 9-10
                                        Exhibits

 <PAGE>

 PART I

 ITEM 1.  BUSINESS

 (a)     General Development of Business

    Aydin Corporation (the "Company" or "Aydin") was
     incorporated under the laws of the State of Delaware in
     September, 1967.

    The Company consists domestically of three major operating
     and three smaller support divisions, and two foreign
     operating subsidiaries.  The Company disposed of its 80%
     interest in its Argentine subsidiary on December 31, 1996
     and now owns 19% of that company.  The divisions and
     subsidiaries are profit centers each with engineering,
     manufacturing, marketing and accounting functions.

 (b)     Financial Information About Industry Segments

    The Company operates predominantly in the electronics
     manufacturing industry.  Therefore, no segment information
     is reported.

 (c)     Narrative Description of Business

    The following table sets forth the percentage of the
     Company's total revenue contributed by each of its classes
     of products (among which overlapping does occur) for each
     of the last three years:


 <TABLE>
 <CAPTION>
                                                  1996     1995    1994
                                                  ----     ----    ----
 <S>  <C>                                         <C>      <C>     <C>
 (1)  Telecommunications                           23 %     25 %     30 %
 (2)  Airborne & Ground Data Acquisition
      and Avionics                                 40       34       29
 (3)  Computer Equipment and Software              24       23       22
 (4)  Radars, Radar Simulation, Integration
      and Modernization                             1        6        5
 (5)  Command, Control and Communications
      Systems                                      12       12       14
                                                  ----     ----    ----
      Totals                                      100 %    100 %   100 %
 </TABLE>
      As stated above, the Company operates predominantly in
       the electronics manufacturing industry, and all
       information set forth below is with respect to the
       Company's business as a whole.  The Company designs,
       manufactures, and sells five classes of products as set
       forth above and as described below:

      (1)  Telecommunications
           Aydin engineers, manufactures and sells microwave
            digital and analog transmission equipment and
            systems for commercial and military applications,
            which include wireless telephony communications
            equipment, cellular range extender, line-of-site
            (LOS) microwave radios, time division multiple
            access (TDMA) terminals for satellite earth
            stations and solid state amplifiers, portable
            communications terminals, troposcatter networks and
            wired network access products.  Aydin also installs
            turnkey telecom systems.

      (2)  Airborne and Ground Data Acquisition and Avionics
           Aydin provides airborne equipment and systems to
            gather critical information and to process, format
            and transmit to the ground through communication
            data links from a communications satellite,
            spacecraft, aircraft and/or missile.  Aydin's
            terminals receive this data on the ground and
            analyze and distribute it for display, tracking and
            control.

                                (page 2)
 <PAGE>

      (3)  Computer Equipment and Software
           Aydin sells a line of commercial, high-resolution
            cathode ray tube (CRT) monitors ranging in size
            from 10 inches to 29 inches.  Workstations are also
            offered, mostly for the process control industry.
            Aydin also offers ruggedized and TEMPEST-qualified
            versions of the same for military applications.
            Software is written by Aydin for commercial and
            military purposes for specific applications such as
            radar simulation, modernization and integration;
            command, control and communications; and air
            traffic control systems.

      (4)  Radars, Radar Simulation, Integration and
            Modernization
           Aydin has developed several projects in radar
            simulation, radar integration and automation of
            manual radars.  Modernization of previously
            designed radars is also done by Aydin.

      (5)  Command, Control and Communications Systems
           Aydin provides turnkey command, control and
            communications (C3) systems with or without radars
            for defense systems, both fixed and mobile.

      The Company's products and systems are sold directly by
       Company sales personnel and manufacturers'
       representatives.  Sales personnel for the Company are
       located in many cities across the United States as well
       as at key major military bases, with corporate marketing
       located in Horsham, PA and in the Washington, D.C. area.
       With respect to exports, sales efforts are conducted by
       its international subsidiaries, its international sales
       network and manufacturers' representatives in many
       countries.

      The Company maintains standard product lines and systems
       sold by catalog, although it generally does not maintain
       an inventory of finished goods.  A significant portion
       of current sales is attributable to such standard
       products, modifications thereof, and turnkey
       communications systems using these products.  Another
       portion of sales is attributable to special, made-to-
       order equipment based upon a customer's specific
       requirements.

      The Company's customers include U.S. and foreign
       communications and electronic and aerospace firms,
       electric utilities, regulated and unregulated telephone
       organizations, major transportation organizations, other
       industrial and financial concerns and process control
       companies, research laboratories, universities, large
       defense contractors, foreign governments, the U.S.
       Government through various agencies of the Department of
       Defense, and the National Aeronautics and Space
       Administration.

      A breakdown of sales for the last three years including
       sales to major customers who accounted for 10% or more
       of sales is as follows:

 <TABLE>
 <CAPTION>
                                       1996          1995          1994
                                   ------------  ------------  ------------
 <S>                               <C>           <C>           <C>
 U.S. Government Agencies (direct  $ 38,728,000  $ 44,309,000  $ 42,015,000
 and indirect), principally
 Department of Defense (1)

 Export and foreign sales
 including equipment sold to
 other U.S. companies for
 export (1) (2) (3)                  47,495,000    58,059,000    75,166,000

 U.S. commercial and industrial
 business                            30,355,000    38,239,000    25,260,000
                                   ------------  ------------  ------------
 TOTAL NET SALES                   $116,578,000  $140,607,000  $142,441,000
                                   ------------  ------------  ------------
                                   ------------  ------------  ------------
 <FN>
    (1)  The U.S. Government, the Government of Turkey and CTI
          (Argentina) were the only customers to whom sales
          exceeded 10% of consolidated sales during any of the
          past three years.  Sales to the Government of Turkey
          amounted to $15,116,000 in 1996, $16,549,000 in 1995,
          and $24,888,000 in 1994.  Sales to CTI (Argentina)
          amounted to $15,739,000 in 1994.

                                (page 3)
 <PAGE>

    (2)  Includes foreign sales of $27,000,000 for 1996,
          $28,943,000 for 1995, and $37,167,000 for 1994.

    (3)  A breakdown of total export and foreign sales by
          geographic area follows in section (d) below.
 </TABLE>

    Raw materials for the Company's business consist of
     manufactured components and parts.  The Company's raw
     materials are presently available in adequate supply on
     the open market.

    The Company holds no material patents, trademarks,
     licenses, franchises or concessions.

    The Company's operations are not seasonal to any material
     extent.

    As stated above, although the Company maintains standard
     product lines and systems sold by catalog, it generally
     does not maintain a significant level of finished goods
     inventory.  However, the Company maintains an adequate
     level of raw materials inventory so that it will be able
     to meet initial delivery requirements of customers.  The
     Company has had no material difficulty in obtaining goods
     from suppliers. The Company does not provide rights to
     return its products, and generally does not provide
     extended payment terms to customers.

    The backlog of unfilled orders at December 31, 1996 was
     $84 million as compared to $106 million at December 31,
     1995.  Approximately 25% of the 1996 backlog is not
     reasonably expected to be filled within the current year.

    The backlog includes approximately $27 million for a
     command, control and communications project for the
     Government of Turkey for which most of the work is to be
     done over the next two years.  This contract became
     effective in October, 1990.

    All contracts with the U.S. Government and some of the
     foreign governments are subject to cancellation at the
     convenience of the government.  In the event a contract
     with the U.S. Government is so terminated, the Armed
     Services Procurement Regulations provide that the Company
     shall be reimbursed for expenses incurred and shall be
     entitled to reasonable profits.

    The greater portion of the Company's business is obtained
     by competitive bidding, while some is obtained through
     sole source negotiation.  In the domestic marketplace,
     the Company competes with some major U.S. companies from
     time to time; however, some of the competition in the
     U.S. comes from companies which are similar in size or
     smaller than Aydin.  In the international marketplace,
     Aydin competes with major companies in addition to U.S.
     firms. A number of such competitors are larger than Aydin
     with greater financial resources, while some are similar
     to or smaller than Aydin.

    Technical capability, reputation, price, ability to meet
     delivery schedules and reliability are the principal
     competitive factors.  No single competitor offers the
     same range of products and systems as Aydin. Depending on
     the particular product itself and the requirements of the
     contract documents, the number of firms competing with
     Aydin generally ranges from one to ten.

    Estimated amounts spent during 1996, 1995, and 1994 on
     Company-sponsored research and development activities,
     and customer-sponsored research activities relating to
     the development of new products, services or techniques
     or the improvement of existing products, services or
     techniques are as follows:

 <TABLE>
 <CAPTION>
                                       1996       1995       1994
                                     --------   --------   --------
  <S>                                <C>        <C>        <C>
  Company-sponsored research and
  development on direct cost basis   $8,315,000 $6,603,000 $5,159,000

  Customer-sponsored research
  and development activities         $2,081,000 $2,873,000 $4,859,000
 </TABLE>

    The Company, along with others, is responsible for the
     cost of cleanup under an order of the State of California
     at a site leased by the Company prior to 1984.  Cleanup of
     the site has been completed.  Costs incurred to date and
     future expected monitoring costs amount to $9.7 million.
     Of the total amount, $3.1

                                (page 4)
 <PAGE>

    million are costs to be expended over the next thirty (30)
     years to monitor the cleanup.  Those costs have been
     included in the accompanying consolidated balance sheet as
     liabilities discounted at 7% for the time value of money
     to the expected payment dates.  Expected payments for the
     years following December 31, 1996 are $105,000 annually.

    In 1993 the Company reached settlement with three
     insurance carriers (with which the Company maintained
     environmental coverage on this site) for the payment of
     $6.7 million of costs.  A court granted a declaratory
     judgement requiring the fourth carrier to pay cleanup
     costs in excess of the $6.7 million.  That carrier is
     currently appealing that judgement.  The amounts paid by
     the Company in excess of the $6.7 million recovered from
     the three insurance carriers, $1.5 million, plus the
     discounted future costs of monitoring the site, $1.1
     million, have been recorded as Other Assets in the
     accompanying consolidated balance sheet at December 31,
     1996.  Management believes that it is probable that the
     Company will be successful in recovering these amounts
     from the insurer and that the resolution of this matter
     will not have an adverse affect on the financial condition
     or results of operations of the Company.

    The Company employs approximately 1,200 persons, with
     operations concentrated principally in the Philadelphia
     and San Jose areas.  Employer-employee relations are
     considered to be satisfactory.

 (d) Financial Information About Foreign and Domestic
 Operations and Export Sales
    The Company had no significant foreign operations prior to
     1991 although a $210 million contract from the Government
     of Turkey became effective in October, 1990 with
     approximately 35% of this contract being performed by the
     Company's Turkish subsidiary.  Foreign assets included in
     the consolidated balance sheet amounted to $21.7 million,
     $25.6 million, and $25.2 million, at December 31, 1996,
     1995, and 1994, respectively.  Of these amounts, $2.5
     million, $.4 million, and $6.7 million at December 31,
     1996, 1995, and 1994, respectively, are cash and short-
     term investments of the Company's Turkish subsidiary
     consisting mainly of U.S. dollar denominated interest-
     bearing time deposits.  Foreign sales and pretax income
     for 1996 amounted to $27.0 million and $.9 million
     respectively.  Foreign sales and pretax income for 1995
     amounted to $28.9 million and $5.4 million, respectively.
     Foreign sales and pretax income for 1994 amounted to
     $37.2 million and $6.7 million, respectively. The
     Company's domestic operations include sales derived from
     customers or projects located in areas of the world
     outside the United States.  Export and foreign sales for
     1996, 1995, and 1994 by geographic area are set forth
     below:

 <TABLE>
 <CAPTION>
                           1996         1995         1994
                       -----------  -----------  -----------
 <S>                   <C>          <C>          <C>
 Asia                  $ 4,259,000  $ 6,224,000  $ 6,788,000
 Africa                  3,203,000    4,003,000    2,553,000
 Europe                 28,452,000   35,360,000   41,465,000
 North America           1,273,000    1,605,000    1,852,000
 South America           9,735,000   10,604,000   22,125,000
 Other                     573,000      263,000      383,000
                       -----------  -----------  -----------
 Total export and
  foreign sales        $47,495,000  $58,059,000  $75,166,000
                       -----------  -----------  -----------
                       -----------  -----------  -----------
 </TABLE>

    On a percentage basis, export and foreign sales (direct
     and indirect) accounted for approximately 41% of total
     sales in 1996, 41% of total sales in 1995, and 53% in
     1994.  A majority of such export and foreign sales were in
     the telecommunications field.  Licenses are required from
     U.S. Government agencies for most of the Company's export
     products.  The Company and its foreign subsidiaries may be
     adversely affected by certain risks generally associated
     with foreign contracts and operations, including ownership
     and control limitations, currency fluctuations,
     restrictions on repatriation of profits, difficulty in the
     enforcement of judgments, late delivery penalties,
     potential political or labor instability and general
     worldwide economic conditions.  However, such factors have
     not had a material effect on the Company's operations to
     date, and management believes that the risks involved in
     such foreign business are no greater than the normal risks
     of any other portion of the Company's sales.  The Company
     has generally been able to protect itself against foreign
     credit risks through contract provisions, advance payments
     and irrevocable letters of credit in its favor.  However,
     it should be noted that foreign contracts are sometimes
     subject to foreign laws.

                                (page 5)
 <PAGE>

 ITEM 2.  PROPERTIES
 The Company's total plant capacity at December 31, 1996 is
 approximately 630,000 square feet of administrative and
 production facilities, 495,000 of which it owns and the
 balance of which it leases.  All major leased properties are
 held under leases expiring between 1998 and 1999, most with
 renewal options.  As part of the restructuring and
 consolidation, three Company-owned buildings (258,000 square
 feet), have been offered for sale.  Two of these facilities
 are under contract for sale and an offer has been received on
 the third facility.  The Company maintains its corporate
 headquarters in Horsham, Pennsylvania, and numerous sales
 offices within and outside the U.S.  The administrative and
 production facilities occupied by the Company are well
 maintained and suitable for its operations, and include plant
 area, warehouse space, and management, engineering and
 clerical offices.  The plants of each of the manufacturing
 operations generally contain machine shops, assembly areas,
 testing facilities and packing and shipping departments in
 addition to the engineering and laboratory areas.


 ITEM 3.  LEGAL PROCEEDINGS
 On June 16, 1995, the Company filed a claim with Loral Defense
 Systems-Eagan (formerly Unisys Corporation), a subcontractor
 to the Company on the TMRC program with the Government of
 Turkey, in the sum of $19.04 million for losses sustained as a
 result of Loral's breach of the subcontract. On June 30, 1995,
 Loral filed a Demand For Arbitration with the American
 Arbitration Association claiming damages of $12.4 million for
 breach of contract by the Company. On July 12, 1995, the
 Company filed a revised claim of $32.8 million against Loral.
 The arbitration claims were put on hold pursuant to an interim
 settlement agreement dated October 3, 1995 between the parties
 until completion of the User Test in Turkey and the payment of
 $8.25 million by Aydin, which occurred March 13, 1996.  On
 June 12, 1996, Loral filed an Amended Arbitration Demand, now
 claiming $18.4 million.  On July 23, 1996, the Company filed
 its answer to the amended claim and filed its Amended
 Arbitration Counterclaim against Loral, demanding in excess of
 $65 million as damages resulting from Loral's intentional
 breach of the subcontract, and for Loral's failure to produce
 software in accordance with the subcontract specifications.
 The Company intends to vigorously prosecute its counterclaim.
  The Company believes that it has meritorious defenses and
 counterclaims to the claims of Loral.

 ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 There were no matters submitted to a vote of security holders
 during the Fourth Quarter of 1996.

 EXECUTIVE OFFICERS OF THE REGISTRANT
 The names, ages, year first elected as officer or appointed as
 general manager, positions and recent prior experience of all
 current executive officers of the Company as of March 27,
 1997, are as follows:

   I. GARY BARD, CHAIRMAN, PRESIDENT AND C.E.O.
   59.  1996.  Chairman of the Board of Directors and Chief
    Executive Officer since May 6, 1996.  President of the
    Company since October 8, 1996.  Prior to that, Vice
    President and General Manager, Federal Systems Solutions
    Integration Division of Unisys Corporation, providing
    integration solutions to the federal, state and local
    government marketplace, since October 1995.  Consultant
    on software development from February 1993 to October
    1995.  Chief Operating Officer of Open Software
    Foundation, from November 1992 to February 1993, and
    President of Integrated Systems Division of Computer
    Sciences Corporation, from July 1984 to November 1992.

   JOHN F. VANDERSLICE, EXECUTIVE VICE PRESIDENT
   56.  1983.  Executive Vice President of the Company and
    President of the Products Group (formerly the Vector and
    Controls Divisions) (manufactures airborne data
    communications products and color display terminals)
    since November 1982.  Previously, he was Manager of
    Engineering (1969-1972), Operations Manager (1972-1973),
    and Vice President of Operations (1973-1982) of the
    Vector Division.

                                (page 6)
 <PAGE>

   KLAUS D. OEBEL, VICE PRESIDENT
   55.  1996.  Vice President of the Company and President
    of the Communication Systems Group (formerly the
    Computer & Monitor and Telecom Divisions) (products and
    systems for commercial and military communication and
    control, radar intergration and modernization programs)
    since September 1996, having initially joined the
    Company as Director of Corporate Business Development in
    August 1996.  Prior to joining the Company, he was
    President of Oebel Associates Inc., a consulting firm
    specializing in strategic market planning, restructuring
    and performance systems management, from October 1985 to
    August 1996.

   JAMES R. HENDERSON, VICE PRESIDENT
   39.  1996.  Vice President, Treasurer and Chief
    Financial Officer of the Company since July 1996.  Prior
    to joining the Company, he held various accounting and
    financial positions with Unisys Corporation (services
    and computer manufacturing):  Director of Financial
    Planning and Accounting (1989-1991), Controller of
    Defense Operations (1991-1993), Executive Assistance to
    the President of the Defense Group (1993-1994), Director
    of Operations for Unisys Services Division (1994-1995),
    and Controller of Unisys Outsourcing Division (1995-
    1996).

   H. BARRY MASER, VICE PRESIDENT
   60.  1996.  Vice President of Business Development of
    the Company since November 1996.  Prior to joining the
    Company, he was President of Lynbar Group, Inc., a
    manufacturing representative, business planning and
    market planning company (1981-1996).

   DEMIRHAN HAKIMOGLU, VICE PRESIDENT
   58.  1992.  Vice President of the Company.  Mr.
    Hakimoglu was first elected Vice President in February
    1991, and resigned that position in July 1991.  He was
    re-elected Vice President in February 1992. He also
    served as Chairman of the Board and CEO of the Company's
    foreign subsidiary, Aydin Yazilim ve Elektronik Sanayi
    A.S. (software design, manufactures digital microwave
    radios, telcom equipment and systems), since July 1990.
    Prior to that, he served in various engineering and
    management positions with various divisions of the
    Company since 1968 (except for a two year period, 1978-
    1980).

   THOMAS M. LOCASALE, VICE PRESIDENT
   59. 1994.  Vice President of the Company and Chief
    Scientist since August 1996.  Prior to that, he was
    President of Aydin Telecom Division (manufactures
    digital wireless telephony equipment and systems) since
    October 1994. From September 1988 to October 1994, he
    was Executive Vice President of Aydin's Computer and
    Monitor Division (manufactures communication and air
    defense systems). Prior to the merger of the Computer
    and Monitor divisions in 1988, he was Executive Vice
    President of Monitor Systems Division (manufacturer of
    telemetry, data acquisition, network and satellite
    communication products) and held various engineering and
    management positions since May 1965.

   HERBERT WELBER, CONTROLLER AND ASSISTANT TREASURER
   61.  1986.  Controller and Assistant Treasurer of the
    Company since August 1986.  Previously, he was
    Controller and Vice President of Controls Division
    (manufactures display terminals) since August 1981.

 Except for Messrs. Bard, Oebel, Henderson and Maser, each of
 the above officers was elected at the Annual Meeting of the
 Board of Directors on April 26, 1996.  Mr. Bard was elected
 Chairman and Chief Executive Officer on May 6, 1996 to fill
 the vacancy created by the resignation of Ayhan Hakimoglu and
 elected President of the Company on October 8, 1996.  Mr.
 Henderson was elected a Vice President of the Company on July
 25, 1996.  On October 25, 1996, Messrs. Oebel and Maser were
 elected Vice Presidents.  Officers are elected each year after
 the Annual Meeting of Stockholders.  Each serves subject to
 the discretion of the Board of Directors until his successor
 shall be elected or until his death, disqualification,
 resignation or removal in the manner provided in the Company's
 By-Laws.  There are no family relationships among any
 executive officers of Aydin.

                                (page 7)
 <PAGE>

 PART II

 ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
 STOCKHOLDER MATTERS
 Incorporated by reference is the information under the
 heading, "Common Stock Prices" and "Stockholder and Dividend
 Information" on page 27 of the Annual Report.  The Company has
 no present plans to pay any cash dividends.  Future cash
 dividends, if any, will depend on business conditions.  There
 are no restrictions that prevent the Company from paying
 future cash dividends, except that the Company's Board of
 Directors had determined in December 1992 that no cash
 dividend will be declared or paid for the foreseeable future,
 and except for maintaining compliance with certain covenants
 of a Credit Agreement for the funding of a standby Letter of
 Credit, as described more fully in Note D to the Financial
 Statements.

 ITEM 6.  SELECTED FINANCIAL DATA
 Incorporated by reference is the information under the
 heading, "Selected Financial Data" on page 27 of the Annual
 Report.

 ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
 CONDITION AND RESULTS OF OPERATIONS
 Incorporated by reference is the information under the
 heading, "Management's Discussion and Analysis of Financial
 Condition and Results of Operations" on page 23 of the Annual
 Report.

 ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 Incorporated by reference are the Consolidated Financial
 Statements of Aydin Corporation and the related Notes to
 Consolidated Financial Statements, and Report of Independent
 Auditors on pages 10 to 22, inclusive, and the data under the
 heading, "Quarterly Financial Data" on page 27, of the Annual
 Report.

 ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
 ACCOUNTING AND FINANCIAL
          DISCLOSURE
 None.

 PART III

 ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 Incorporated by reference is the information under the
 heading, "Election of Directors" on pages 3-5 of the Proxy
 Statement, the information under the heading, "Section 16(a)
 Beneficial Ownership Reporting Compliance" on page 13 of the
 Proxy Statement, and the information under the heading,
 "Executive Officers of the Registrant" on pages 6 and 7, Part
 I of this 10-K.

 ITEM 11.  EXECUTIVE COMPENSATION
 Incorporated by reference is the information under the
 heading, "Compensation of Executive Officers", "Option Grants
 in Last Fiscal, "Aggregated Option Exercises and Fiscal Year-
 End Option Values", "Employment Contracts and Termination of
 Employment Arrangements", and "Compensation Committee
 Interlocks and Insider Participation" on pages 5-8 and 10-12
 of the Proxy Statement.

 ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
 MANAGEMENT
 Incorporated by reference is the information under the
 headings, "Beneficial Ownership of Common Stock" and
 "Beneficial Ownership by Management" on pages 2 and 3 of the
 Proxy Statement.

 ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 None.

                                (page 8)
 <PAGE>

 PART IV

 ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
 ON FORM 8-K
 The Company files as part of this report the following
 documents:

 (a)  1.
           Financial Statements
    The following is a list of the Consolidated Financial
     Statements of Aydin Corporation and Subsidiaries which
     have been incorporated by reference from the Annual Report
     as set forth in Item 8 - "Financial Statements and
     Supplementary Data":

    Consolidated Balance Sheets, as of December 31, 1996 and
     1995.
    Consolidated Statements of Operations for the years ended
         December 31, 1996, 1995 and 1994.
    Consolidated Statements of Cash Flows for the years ended
         December 31, 1996, 1995 and 1994.
    Notes to Consolidated Financial Statements.
    Report of Independent Auditors.

   2.
      Schedules
    The following is a list of the Schedules of Aydin
     Corporation and Subsidiaries filed as part of this report:

    Schedule II - Valuation and Qualifying Accounts

    Report of Independent Auditors

    All other schedules not listed above are omitted because
     they are inapplicable or are not required.

   3. Exhibits
    The following is a list of Exhibits filed as part of this
     report:

     3(i)       Restated Certificate of Incorporation (filed as
                 Exhibit No. 3(i) to Registrant's Annual Report on
                 Form 10-K for the year ended December 31, 1994 and
                 incorporated herein by reference).

     3(ii) By-Laws.

     10.1       Employment Agreement, I. Gary Bard (filed as
                 Exhibit No. 10.1 to Registrant Quarterly Report on
                 Form 10-Q for the quarter ended September 28, 1996
                 and incorporated herein by reference).

     10.2       Employment Agreement, Klaus D. Oebel (filed as
                 Exhibit No. 10.2 to Registrant Quarterly Report on
                 Form 10-Q for the quarter ended September 28, 1996
                 and incorporated herein by reference).

     10.3       Employment Agreement, H. Barry Maser (filed as
                 Exhibit No. 10.3 to Registrant Quarterly Report on
                 Form 10-Q for the quarter ended September 28, 1996
                 and incorporated herein by reference).

     10.4       Employment Agreement, James R. Henderson (filed as
                 Exhibit No. 10.4 to Registrant Quarterly Report on
                 Form 10-Q for the quarter ended September 28, 1996
                 and incorporated herein by reference).

     10.5       The 1994 Incentive Stock Option Plan, as amended.

     10.6       The 1996 Equity Incentive Plan, as amended.

     10.7  Restricted Stock Agreement, Klaus D. Oebel,
                dated October 8, 1996.

     10.8  Restricted Stock Agreement, H. Barry Maser,
                dated December 16, 1996.

     10.9  Consulting Agreement, Ayhan Hakimoglu, dated
                 May 1, 1996.

                                (page 9)
 <PAGE>

     10.10 Restrictive Covenant Agreement, Ayhan Hakimoglu,
                dated May 1, 1996.

     10.11 Resignation Agreement, Donald S. Taylor, dated
                September 13, 1996.

     13    Annual Report to Security Holders

     21    Subsidiaries of Registrant

     23    Consent of Independent Auditors

     27    Financial Data Schedule (electronic filing only)

     99  Independent Auditors' Report

       All other exhibits not listed above are omitted
        because they are inapplicable.

 (b) Reports on Form 8-K
     No reports on Form 8-K were filed during the Fourth
      Quarter of 1996.

 <TABLE>
 <CAPTION>
                                          AYDIN CORPORATION
                            SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                 FOR THE YEARS 1996, 1995, AND 1994

       COLUMN A                             COLUMN B             COLUMN C           COLUMN D       COLUMN E
 DESCRIPTION                               Balance at            ADDITIONS          Deductions -   Balance at
                                           Beginning     Charged to  Charged to     Describe       End of Period
                                           of Period     Costs and   Other Accounts
                                                         Expenses    - Describe
 <S>                                      <C>          <C>           <C>            <C>            <C>
 Year 1996
 _________
   Deducted from asset accounts:
     Allowance for doubtful accounts      $  289,000   $1,061,000                   $  368,000 (1) $  982,000
     Raw materials inventory reserve       1,256,000    3,842,000                    3,268,000 (2)  1,830,000
                                          __________   __________                   __________     __________
                    Totals                $1,545,000   $4,903,000                   $3,636,000     $2,812,000

 Year 1995
 _________
   Deducted from asset accounts:
     Allowance for doubtful accounts      $  323,000   $   19,000                   $   53,000 (1) $  289,000
     Raw materials inventory reserve       2,450,000    1,120,000                    2,314,000 (2)  1,256,000
                                          __________   __________                   __________     __________
                    Totals                $2,773,000   $1,139,000                   $2,367,000     $1,545,000

 Year 1994
 _________
   Deducted from asset accounts:
     Allowance for doubtful accounts      $  331,000   $   43,000                   $   51,000 (1) $  323,000
     Raw materials inventory reserve       2,029,000    1,240,000                      819,000 (2)  2,450,000
                                          __________   __________                   __________     __________
                    Totals                $2,360,000   $1,283,000                   $  870,000     $2,773,000

 <FN>
 (1) Uncollectible accounts written off, net of recoveries.
 (2) Obsolete inventory written off.
 </TABLE>

                               (page 10)
 <PAGE>
                               SIGNATURES

 Pursuant to the requirements of section 13 or 15(d) of the
 Securities Exchange Act of 1934, the registrant has duly
 caused this report to be signed on its behalf by the
 undersigned, thereunto duly authorized.

                                        Aydin Corporation



 Dated: __March 31, 1997__   By: ____/s/ Robert A. Clancy_____
                                      Robert A. Clancy
                                         Secretary

 Pursuant to the requirements of the Securities Exchange Act of
 1934, this report has been signed below by the following
 persons on behalf of the registrant and in the capacities and
 on the dates indicated.


 By: ___/s/ I. Gary Bard _______    Dated: __March 28, 1997__
     I. Gary Bard
     Chief Executive Officer, President and
     Chairman of the Board of Directors

 By: __/s/ John F. Vanderslice__    Dated: __March 17, 1997__
     John F. Vanderslice
     Executive Vice President and Director

 By: __/s/ James R. Henderson___    Dated: __March 26, 1997__
     James R. Henderson
     Vice President, Treasurer and
     Chief Financial Officer

 By: __/s/ Herbert Welber_______    Dated: __March 24, 1997__
     Herbert Welber
     Controller and Assistant Treasurer
     Principal Accounting Officer

 By: __/s/ Nev A. Gokcen________    Dated: __March 18, 1997__
     Nev A. Gokcen
     Director

 By: __/s/ Irwin L. Gross_______    Dated: __March 20, 1997__
     Irwin L. Gross
     Director

 By: ___________________________    Dated: __________________
     Gary Mozenter
     Director

 By: __/s/ Harry D. Train_______    Dated: __March 24, 1997__
     Harry D. Train, II
     Director

 <PAGE>

                                    EXHIBIT INDEX

 Exhibit             Description of Exhibit
 No.
 3(i)      Restated Certificate of Incorporation (filed as
           Exhibit No. 3(i) to Registrant's Annual Report on
           Form 10-K for the year ended December 31, 1994
           and incorporated herein by reference).
 3(ii)     By-Laws.
 10.1      Employment Agreement, I. Gary Bard (filed as
           Exhibit No. 10.1 to Registrant Quarterly Report
           on Form 10-Q for the quarter ended September 28,
           1996 and incorporated herein by reference).
 10.2      Employment Agreement, Klaus D. Oebel (filed as
           Exhibit No. 10.2 to Registrant Quarterly Report
           on Form 10-Q for the quarter ended September 28,
           1996 and incorporated herein by reference).
 10.3      Employment Agreement, H. Barry Maser (filed as
           Exhibit No. 10.3 to Registrant Quarterly Report
           on Form 10-Q for the quarter ended September 28,
           1996 and incorporated herein by reference).
 10.4      Employment Agreement, James R. Henderson (filed
           as Exhibit No. 10.4 to Registrant Quarterly
           Report on Form 10-Q for the quarter ended
           September 28, 1996 and incorporated herein by
           reference).
 10.5      The 1994 Incentive Stock Option Plan, as amended.
 10.6      The 1996 Equity Incentive Plan, as amended.
 10.7      Restricted Stock Agreement, Klaus D. Oebel, dated
           October 8, 1996.
 10.8      Restricted Stock Agreement, H. Barry Maser, dated
           December 16, 1996.
 10.9      Consulting Argreement, Ayhan Hakimoglu, dated
           May 1, 1996.
 10.10     Restrictive Covenant Agreement, Ayhan Hakimoglu,
           dated May 1, 1996.
 10.11     Resignation Agreement, Donald S. Taylor, dated
           September 13, 1996.
 13        Annual Report to Security Holders
 21        Subsidiaries of Registrant
 23        Consent of Independent Auditors, Grant Thornton
           LLP
 27        Financial Data Schedule (electronic filing only)
 99        Independent Auditors' Report, Grant Thornton LLP

 <PAGE>
                                                  Exhibit 3(ii)

                           AYDIN CORPORATION
                                BY-LAWS
                    (Last Amended February 27, 1997)
                                *******

                               ARTICLE I
                                OFFICERS
    Section 1. The registered office shall be in the City of
 Dover, County of Kent, State of Delaware.
    Section 2. The corporation may also have offices at such
 other places both within and without the State of Delaware as
 the Board of Directors may from time to time determine or the
 business of the corporation may require.

                               ARTICLE II
                        MEETINGS OF STOCKHOLDERS
    Section 1. All meetings of the stockholders for the
 election of Directors shall be held in the City of Fort
 Washington, State of Pennsylvania, at such place as may be
 fixed from time to time by the Board of Directors, or at such
 other place either within or without the State of Delaware as
 shall be designed from time to time by the Board of Directors
 and stated in the notice of the meeting.  Meetings of
 stockholders for any other purpose may be held at such time
 and place, within or without the State of Delaware, as shall
 be stated in the notice of the meeting or in a duly executed
 waiver of notice thereof.
    Section 2. Annual meetings of stockholders shall be held
 on the third Thursday of April if not a legal holiday, and if
 a legal holiday, then on the next secular day following at
 3:00 P.M. or at such other date and time as shall be
 designated from time to time by the Board of Directors and
 stated in the notice of the meeting, at which they shall elect
 by a plurality vote a board of Directors, and transact such
 other business as may properly be brought before this meeting.
    Section 3. Written notice of the annual meeting stating
 the place, date and hour of the meeting shall be given to each
 stockholder entitled to vote at such meeting not less than ten
 nor more than fifty days before the date of the meeting.
    Section 4. The officer who has charge of the stock ledger
 of the corporation shall prepare and make, at least ten days
 before every meeting of stockholders, a complete list of the
 stockholders entitled to vote at the meeting, arranged in
 alphabetical order, and showing the address of each
 stockholder and the number of shares registered in the name of
 each stockholder.  Such list shall be open to the examination
 of any stockholder, for any purpose germane to the meeting,
 during ordinary business hours, for a period of at least ten
 days prior to the meeting, either at a place within the city
 where the meeting is to be held, which place shall be
 specified in the notice of the meeting, or, if not so
 specified, at the place where the meeting is to be held.  The
 list shall also be produced and kept at the time and place of
 the meeting during the whole time thereof, and may be
 inspected by any stockholder who is present.
    Section 5. Special meetings of the stockholders, for any
 purpose or purposes, unless otherwise prescribed by statute or
 by the certificate of incorporation, may be called by the
 Chairman of the Board and shall be called by the Chairman of
 the Board or Secretary at the request in writing of a majority
 of the Board of Directors, or at the request in writing of
 stockholders owning a majority in amount of the entire capital
 stock of the corporation issued and outstanding and entitled
 to vote.  Such request shall state the purpose or purposes of
 the proposed meeting.
    Section 6. Written notice of a special meeting stating the
 place, date and hour of the meeting and the purpose or
 purposes for which the meeting is called, shall be given not
 less than ten nor more than fifty days before the date of the
 meeting, to each stockholder entitled to vote at such meeting.
    Section 7. Business transacted at any special meeting of
 stockholders shall be limited to the purposes stated in the
 notice.
    Section 8. The holders of a majority of the stock issued
 and outstanding and entitled to vote thereat, present in
 person or represented by proxy, shall constitute a quorum at
 all meeting of the stockholders for the transaction of
 business except as otherwise provided by statute or by the
 certificate of incorporation.  If, however, such quorum shall
 not be present or represented at any meeting of the
 stockholder, the stockholders entitled to vote thereat,
 present in person or represented by proxy, shall have power to
 adjourn the meeting from time to time, without notice other
 than announcement at the meeting, until a quorum shall be
 present or represented.  At such adjourned meeting at which a
 quorum shall be present or represented any business may be
 transaction which might have been transacted at the meeting as
 originally notified.  If the adjournment is for more than
 thirty days, or if after the adjournment a new record date is
 fixed for the adjourned meeting, a notice of the adjourned
 meeting shall be given to each stockholder of record entitled
 to vote at the meeting.
    Section 9. When a quorum is present at any meeting, the
 vote of the holder of a majority of the stock having voting
 power present in person or represented by proxy shall decide
 any question brought before such meeting, unless the question
 is one upon which by express provision of the statutes or of
 the certificate of incorporation, a different vote is required
 in which case such express provision shall govern and control
 the decision of such question.
    Section 10. Each stockholder shall at every meeting of the
 stockholders be entitled to one vote in person or by proxy for
 each share of the capital stock having voting power held by
 such stockholder, but no proxy shall be voted on after three
 years from its date, unless the proxy provides for a longer
 period.
    Section 11. Whenever the vote of stockholders at a meeting
 thereof is required or permitted to be taken for or in
 connection with any corporate action, by any provision of the
 statutes, the meeting and vote of stockholders may be
 dispensed with if all of the stockholder who would have been
 entitled to vote upon the action if such meeting were held
 shall consent in writing to such corporate action being taken;
 or if the certificate of incorporation authorizes the action
 to be taken with the written consent of the holders of less
 than all of the stock who would have been entitled to vote
 upon the action if a meeting were held, then on the written
 consent of the stockholders having not less than such
 percentage of the total number of votes as may be authorized
 in the certificate of incorporation; provided that in no case
 shall the written consent be by the holders of stock having
 less than the minimum percentage of the total vote required by
 statute for the proposed corporate action, and provided that
 prompt notice must be given to all stockholders of the taking
 of corporate action without a meeting and by less than
 unanimous written consent.

                              ARTICLE III
                               DIRECTORS
    Section 1. The number of Directors which shall constitute
 the whole Board shall be six (6).  The Directors shall be
 elected at the annual meeting of the stockholders, except as
 provided in Section 2 of this Article, and each Director
 elected shall hold office until his successor is elected and
 qualified.  Directors need not be stockholders.
    Section 2. Vacancies and newly created directorships
 resulting from any increase in the authorized number of
 Directors may be filled by a majority of the Directors then in
 office, though less than a quorum, or by a sole remaining
 director, and the Directors so chosen shall held office until
 the next annual election and until their successors are duly
 elected and shall qualify, unless sooner displaced.  If their
 are no Directors in office, then an election of Directors may
 be held in the manner provided by statute.  If, at the time of
 filling any vacancy or any newly created directorship, the
 Directors then in office shall constitute less than a majority
 of the whole board (as constituted immediately prior to any
 such increase), the Court of Chancery may, upon application of
 any stockholder or stockholders holding at least ten percent
 of the total number of the shares at the time outstanding
 having the right to vote for such Directors, summarily order
 an election to be held to fill any such vacancies or newly
 created directorships, or to replace the Directors chosen by
 the Directors then in office.
    Section 3. The business of the corporation shall be
 managed by its Board of Directors which may exercise all such
 powers of the corporation and do all such lawful acts and
 things as are not by statute or by the Certificate of
 Incorporation or by these by-laws directed or required to be
 exercised or done by the stockholders.

                   MEETING OF THE BOARD OF DIRECTORS
    Section 4. The Board of Directors of the corporation may
 hold meetings, both regular and special, either within or
 without the State of Delaware.
    Section 5. The first meeting of each newly elected Board
 of Directors shall be held at such time and place as shall be
 fixed by the vote of the stockholders at the annual meeting
 and no notice of such meeting shall be necessary to the newly
 elected Directors in order legally to constitute the meeting,
 provided a quorum shall be present.  In the event of the
 failure of the stockholders to fix the time or place of such
 first meeting of the newly elected Board of Directors, or in
 the event such meeting is not held at the time and place so
 fixed by the stockholders, the meeting may be held at such
 time and place as shall be specified in a notice given as
 hereinafter provided for special meetings of the Board of
 Directors, or as shall be specified in a written waiver signed
 by all of the Directors.
    Section 6. Regular meetings of the Board of Directors may
 be held without notice at such time and at such place as shall
 from time to time be determined by the Board.
    Section 7. Special meetings of the Board may be called by
 the Chairman of the Board on one day's notice to each
 director, either personally, by telephone, by mail or by
 telegram; special meetings shall be called by the Chairman of
 the Board or Secretary in like manner and on like notice on
 the written request of two directors.
    Section 8.  At all meetings of the Board, a majority of
 the directors shall constitute a quorum for the transaction of
 business and the act of a majority of the directors present at
 any meeting at which there is a quorum shall be the act of the
 Board of Directors, except as may be otherwise specifically
 provided by statute or by the certificate of incorporation.
 If a quorum shall not be present at any meeting of the Board
 of Directors the directors present thereat may adjourn the
 meeting from time to time, without notice other than
 announcement at the meeting, until a quorum shall be present.
    Section 9. Unless otherwise restricted by the certificate
 of incorporation or these by-laws, any action required or
 permitted to be taken at any meeting of the Board of Directors
 or of any committee thereof may be taken without a meeting, if
 all members of the Board or committee, as the case may be,
 consent thereto in writing, and the writing or writings are
 filed with the minutes of proceedings of the Board or
 committee.

                        COMMITTEES OF DIRECTORS
    Section 10. The Board of Directors may, by resolution
 passed by a majority of the whole board, designate one or more
 committees, each committee to consist of two or more of the
 directors of the corporation.  The board may designate one or
 more directors as alternate members of any committee, who may
 replace any absent or disqualified member at any meeting of
 the committee.  Any such committee, to the extent provided in
 the resolution, shall have and may exercise the powers of the
 Board of Directors in the management of the business and
 affairs of the corporation, and may authorize the seal of the
 corporation to be affixed to all papers which may require it;
 provided, however, that in the absence or disqualification of
 any member of such committee or committees, the member of
 members thereof present at any meeting and not disqualified
 from voting, whether or not he or they constitute a quorum,
 may unanimously appoint another member of the Board of
 Directors to act at the meeting in the place of any such
 absent or disqualified member.  Such committee or committees
 shall have such name or names as may be determined from time
 to time by resolution adopted by the Board of Directors.
    Section 11. Each committee shall keep regular minutes of
 its meetings and report the same to the Board of Directors
 when required.

                       COMPENSATION OF DIRECTORS
    Section 12. The Directors may be paid their expenses, if
 any, of attendance at each meeting of the Board of Directors
 and may be paid a fixed sum for attendance at each meeting of
 the Board of Directors or a stated salary as Director.  No
 such payment shall preclude any Director from serving the
 corporation in any other capacity and receiving compensation
 therefor.  Members of special or standing committees may be
 allowed like compensation for attending committee meetings.

                               ARTICLE IV
                                NOTICES
    Section 1. Whenever, under the provisions of the statutes
 or of the Certificate of Incorporation or of these by-laws,
 notice is required to be given to any Director or stockholder,
 it shall not be construed to mean personal notice, but such
 notice may be given in writing, by mail, addressed to such
 Director or stockholder, at his address as it appears on the
 records of the corporation, with postage thereon prepaid, and
 such notice shall be deemed to be given at the time when the
 same shall be deposited in the United States mail.  Notice to
 Directors may also be given by telegram, or by telephone.
    Section 2. Whenever any notice is required to be given
 under the provisions of the statutes or of the Certificate of
 Incorporation or of these by-laws, a waiver thereof in
 writing, signed by the person or persons entitled to said
 notice, whether before or after the time stated therein, shall
 be deemed equivalent thereto.

                               ARTICLE V
                                OFFICERS
    Section 1. The officers of the corporation shall be chosen
 by the Board of Directors and shall be a Chairman of the
 Board, a President, an Executive Vice President, a Secretary
 and a Treasurer.  The Board of Directors may also choose
 additional Vice Presidents, and one or more Assistant
 Secretaries and Assistant Treasurers.  Any number of offices
 may be held by the same person, unless the certificate of
 incorporation of these by-laws otherwise provide.
    Section 2. The Board of Directors at its first meeting
 after each annual meeting of stockholders shall choose a
 Chairman of the Board, a President, an Executive Vice
 President, a Secretary and a Treasurer, and may choose
 additional Vice Presidents, and one or more Assistant
 Secretaries and Assistant Treasurers.
    Section 3. The Board of Directors may appoint such other
 officers and agents as it shall deem necessary who shall hold
 their offices for such terms and shall exercise such powers
 and perform such duties as shall be determined from time to
 time by the Board.
    Section 4. The salaries of all officers and agents of the
 corporation shall be fixed by the Board of Directors.
    Section 5. The officers of the corporation shall hold
 office until their successors are chosen and qualified.  Any
 officer elected or appointed by the Board of Directors may be
 removed at any time by the affirmative vote of a majority of
 the Board of Directors.  Any vacancy occurring in any office
 of the corporation shall be filled by the Board of Directors.

                         CHAIRMAN OF THE BOARD
    Section 6. The Chairman of the Board shall be the chief
 executive officer of the corporation and, subject to the
 control of the Board of Directors, shall have the general
 direction and supervision over the business and affairs of the
 corporation.  He shall preside at all meetings of the
 stockholders and of the Board of Directors and shall be an ex
 officio member of all committees and shall see that all orders
 and resolutions of the Board of Directors are carried into
 effect.  He shall participate in determining the policies to
 be followed by the corporation and shall perform such other
 duties as the Board of Directors shall from time to time
 request.

                             THE PRESIDENT
    Section 7. The President shall undertake such duties as
 may be delegated to him by the Chairman of the Board and shall
 also have such other powers and duties as the Board of
 Directors may from time to time determine.  In the absence of
 the Chairman of the Board or in the event of his inability or
 refusal to act, the President shall perform the duties of the
 Chairman of the Board, and when so acting, shall have all the
 powers of and be subject to all the restrictions upon the
 Chairman of the Board.

                          THE VICE PRESIDENTS
    Section 8. In the absence of the President or in the event
 of his inability or refusal to act, the Executive Vice
 President, (or in the event of the absence or inability of or
 refusal to act by the Executive Vice President and in the
 further event there be more than one Vice President, the Vice
 Presidents in the order designated, or in the absence of any
 designation, then in the order of their election) shall
 perform the duties of the President, and when so acting, shall
 have all the powers of and be subject to all the restrictions
 upon the President.  Such powers of and restrictions upon the
 President shall include the performance of the duties of the
 Chairman of the Board in the further event that the Chairman
 is absent or is unable or refuses to act.  Vice Presidents
 shall perform such other duties and have such other powers as
 the Board or Directors may from time to time prescribe.

                 THE SECRETARY AND ASSISTANT SECRETARY
    Section 9. The Secretary shall attend all meetings of the
 Board of Directors and all meetings of the stockholders and
 record all the proceedings of the meetings of the corporation
 and of the Board of Directors in a book to be kept for that
 purpose and shall perform like duties for the standing
 committees when required.  He shall give, or cause to be
 given, notice of all meetings of the stockholders and special
 meetings of the Board of Directors, and shall perform such
 other duties as may be prescribed by the Board of Directors or
 Chairman of the Board, under whose supervision he shall be.
 He shall have custody of the corporate seal of the corporation
 and he, or an Assistant Secretary, shall have authority to
 affix the same to any instrument requiring it and when so
 affixed, it may be attested by his signature or by the
 signature of such Assistant Secretary.  The Board of Directors
 may give general authority to any other officer to affix the
 seal of the corporation and to attest the affixing by his
 signature.
    Section 10. The Assistant Secretary, or if there be more
 than one, the Assistant Secretaries in the order determined by
 the Board of Directors (or if there is no such determination,
 then in the order of their election), shall, in the absence of
 the Secretary or in the event of his inability or refusal to
 act, perform the duties and exercise the powers of the
 Secretary and shall perform such other duties and have such
 other powers as the Board of Directors may from time to time
 prescribe.

                 THE TREASURER AND ASSISTANT TREASURERS
    Section 11. The Treasurer shall have the custody of the
 corporate funds and securities and shall keep full and
 accurate accounts if receipts and disbursements in books
 belonging to the corporation and shall deposit all moneys and
 other valuable effects in the name and to the credit of the
 corporation in such depositories as may be designated by the
 Board of Directors.
    Section 12. He shall disburse the funds of the corporation
 as may be ordered by the Board of Directors, taking proper
 vouchers for such disbursements, and shall render to the
 Chairman of the Board and the Board of Directors, at its
 regular meetings, or when the Board of Directors so requires,
 an account of all his transactions as Treasurer and of the
 financial conditions of the corporation.
    Section 13. If required by the Board of Directors, he
 shall give the corporation a bond (which shall be renewed
 every six years) in such  sum and with such surety or sureties
 as shall be satisfactory to the Board of Directors for the
 faithful performance of the duties of his office and for the
 restoration to the corporation, in case of his death,
 resignation, retirement or removal form office, of all books,
 papers, vouchers, money and other property of whatever kind in
 his possession or under his control belonging to the
 corporation.
    Section 14. The Assistant Treasurer, or if there shall be
 more than one, the Assistant Treasurers in the order
 determined by the Board of Directors (or if there be no such
 determination, then in the order of their election), shall, in
 the absence of the Treasurer or in the event of his inability
 or refusal to act, perform the duties and exercise the powers
 of the Treasurer and shall perform such other duties and have
 such other powers as the Board of Directors may from time to
 time prescribe.

                               ARTICLE VI
                         CERTIFICATES OF STOCK
    Section 1. Every holder of stock in the corporation shall
 be entitled to have a certificate, signed by, or in the name
 of the corporation by, the Chairman or Vice Chairman of the
 Board of Directors, the President or a Vice President and the
 Treasurer or an Assistant Treasurer, or the Secretary or an
 Assistant Secretary of the corporation, certifying the number
 of shares owned by him in the corporation.
    Section 2. Where a certificate is countersigned (1) by a
 transfer agent other than the corporation or its employee, or,
 (2) by a registrar other than the corporation or its employee,
 the signatures of the officers of the corporation may be
 facsimiles.  In case any officer who has signed or whose
 facsimile signature has been placed upon a certificate shall
 have ceased to be such officer before such certificate is
 issued, it may be issued by the corporation with the same
 effect as if he were such officer at the date of issue.

                           LOST CERTIFICATES
    Section 3. The Board of Directors may direct a new
 certificate or certificates to be issued in place of any
 certificate or certificates theretofore issued by the
 corporation alleged to have been lost, stolen or destroyed,
 upon the making of an affidavit of that fact by the person
 claiming the certificate of stock to be lost, stolen or
 destroyed.  When authorizing such issue of a new certificate
 or certificates, the Board of Directors may, in its discretion
 and as a condition precedent to the issuance thereof, require
 the owner of such lost, stolen or destroyed certificate or
 certificates, or his legal representative, to advertise the
 same in such manner as it shall require and/or to give the
 corporation a bond in such sum as it may direct as indemnity
 against any claim that may be made against the corporation
 with respect to the certificate alleged to have been lost,
 stolen or destroyed.

                           TRANSFERS OF STOCK
    Section 4. Upon surrender to the corporation or the
 transfer agent of the corporation of a certificate for shares
 duly endorsed or accompanied by proper evidence of succession,
 assignment or authority to transfer, it shall be the duty of
 the corporation to issue a new certificate to the person
 entitled thereto, cancel the old certificate and record the
 transaction upon its books.

                           FIXING RECORD DATE
    Section 5. In order that the corporation may determine the
 stockholders entitled to notice of or to vote at any meeting
 of stockholders or any adjournment thereof, or to express
 consent to corporate action in writing without a meeting, or
 entitled to receive payment of any dividend or other
 distribution or allotment of any rights, or entitled to
 exercise any rights in respect of any change, conversion or
 exchange of stock or for the purpose of any other lawful
 action, the Board of Directors may fix, in advance, a record
 date, which shall not be more than sixty nor less than ten
 days before the date of such meeting, nor more than sixty days
 prior to any other action.  A determination of stockholders of
 record entitled to notice of or to vote at a meeting of
 stockholders shall apply to any adjournment of the meeting;
 provided, however, that the Board of Directors may fix a new
 record date for the adjourned meeting.

                        REGISTERED STOCKHOLDERS
    Section 6. The corporation shall be entitled to recognize
 the exclusive right of a person registered on its books as the
 owner of shares to receive dividends, and to vote as such
 owner, and to hold liable for calls and assessments a person
 registered on its books as the owner of shares, and shall not
 be bound to recognize any equitable or other claim to or
 interest in such share or shares on the part of any other
 person, whether or not it shall have express or other notice
 thereof, except as otherwise provided by the laws of Delaware.

                              ARTICLE VII
                           GENERAL PROVISIONS
                               DIVIDENDS
    Section 1. Dividends upon the capital stock of the
 corporation, subject to the provisions of the Certificate of
 Incorporation, if any, may be declared by the Board of
 Directors at any regular or special meeting, pursuant to law.
 Dividends may be paid in cash, in property, or in shares of
 the capital stock, subject to the provisions of the
 Certificate of Incorporation.
    Section 2. Before payment of any dividend, there may be
 set aside out of any funds of the corporation available for
 dividends such sum or sums as the Directors from time to time,
 in their absolute discretion, think proper as a reserve or
 reserves to meet contingencies, or for equalizing dividends,
 or for repairing or maintaining any property of the
 corporation, or for such other purpose as the Directors shall
 think conducive to the interest of the corporation, and the
 Directors may notify or abolish any such reserve in the manner
 in which it was created.

                             ANNUAL REPORT
    Section 3. (a) The Board of Directors shall present at
 each annual meeting, and at any special meeting of the
 stockholders when called for by vote of the stockholders, a
 full and clear statement of the business and condition of the
 corporation.
        (b) On or before 120 days from the close of each
 fiscal year, the Board of Directors shall cause to be
 delivered to each stockholder of record an audited statement
 of financial condition of the corporation as at the close of
 such fiscal year, together with a statement of operations,
 including profit and loss for such fiscal year.  For the
 purposes of subsection (b), it will be sufficient if such
 report is mailed in the ordinary course of business to those
 shareholder of record as at the date on which the record of
 shareholders has been taken for the purpose of the annual
 meeting, pursuant to Section 5 of ARTICLE VI of these by-laws.

                                 CHECKS
    Section 4. All checks or demands for money and notes of
 the corporation shall be signed by such officer or officers or
 such other person or persons as the Board of Directors may
 from time to time designate.

                              FISCAL YEAR
    Section 5. The fiscal year of the corporation shall be
 fixed by resolution of the Board of Directors.

                                  SEAL
    Section 6. The corporate seal shall have inscribed thereon
 the name of the corporation, the year of its organization and
 the words "Corporate Seal, Delaware."
 The seal may be used by causing it or a facsimile thereof to
 be impressed or affixed or reproduced or otherwise.

                            INDEMNIFICATION
    Section 7. (a) Directors, Officers and Employees of the
 Corporation.  Every person now or hereafter serving as a
 Director, Officer or Employee of the Corporation shall be
 indemnified and held harmless by the corporation from and
 against any and all loss, cost, liability and expense that may
 be imposed upon or incurred by him in connection with or
 resulting from any claim, action, suit, or proceeding, civil
 or criminal, in which he may become involved, as a party or
 otherwise, by reason of his being or having been a director,
 officer or employee of the corporation, whether or not he
 continues to be such at the time such loss, cost, liability or
 expense shall have been imposed or incurred.  As used herein,
 the term "loss, cost, liability and expense" shall include,
 but shall not be limited to, counsel fees and disbursements
 and amounts of judgments, fines or penalties against, and
 amounts paid in settlement by, any such director, officer or
 employee; provided, however that no such director, officer or
 employee shall be entitled to claim such indemnity:  (1) with
 respect to any matter as to which there shall have been a
 final adjudication that he has committed or allowed some act
 or omission, (a) otherwise than in good faith in what he
 considers to be the best interests of the corporation, and (b)
 without reasonable cause to believe that such act or omission
 was proper and legal; or (2) in the event of a settlement of
 such claim, action, suit, or proceeding unless (a) the court
 having jurisdiction thereof shall have approved of such
 settlement with knowledge of the indemnity provided herein, or
 (b) a written opinion of independent legal counsel, selected
 by or in manner determined by the Board of Directors, shall
 have been rendered substantially concurrently with such
 settlement, to the effect that it was not probable that the
 matter as to which indemnification is being made would have
 resulted in a final adjudication as specified in clause (1)
 above and that the said loss, cost, liability or expense may
 properly be borne by the corporation.  A conviction or
 judgment (whether based on a plea of guilty or nolo contendere
 or its equivalent, or after trial) in a criminal action, suit
 or proceeding shall not be deemed an adjudication that such
 director, officer or employee has committed or allowed some
 act or omission as hereinabove provided if independent legal
 counsel, selected as hereinabove set forth, shall
 substantially concurrently with such conviction or judgement
 give to the corporation a written opinion that such director,
 officer or employee was acting in good faith in what he
 considered to be the best interests of the corporation or was
 not without reasonable cause to believe that such act or
 omission was proper and legal.
     (b) Directors, Officers and Employees of Subsidiaries.
 Every person (including a director, officer or employee of the
 corporation) who at the request of the corporation acts as a
 director, officer or employee of any other corporation in
 which the corporation owns shares of stock or of which it is a
 creditor shall be indemnified to the same extent and subject
 to the same conditions that the directors, officers, and
 employees of the corporation are indemnified under the
 preceding paragraph, except that the amount of such loss,
 cost, liability or expense paid to any such director, officer
 or employee shall be reduced by and to the extent  of any
 amounts which may be collected by him from such other
 corporation.
     (c) Miscellaneous.  The provisions of this section shall
 cover claims, actions, suits and proceedings, civil or
 criminal, whether now pending or hereafter commenced and shall
 be retroactive to cover acts or omissions or alleged acts or
 omissions which heretofore have taken place.  In the event of
 death of any person having a right of indemnification under
 the provisions of this section, such right shall inure to the
 benefit of his heirs, executors, administrators and personal
 representatives.  If any part of this section should be found
 to be invalid or ineffective in any proceeding, the validity
 and effect of the remaining provisions shall not be affected.
     (d) Indemnification Not Exclusive.  The foregoing right
 of indemnification shall not be deemed exclusive of any other
 right to which those indemnified may be entitled, and the
 corporation may provide additional indemnity and rights to its
 directors, officers or employees.

                              ARTICLE VIII
                               AMENDMENTS
    Section 1. These by-laws may be altered or repealed at any
 regular meeting of the stockholders or of the Board of
 Directors or at any special meeting of the stockholders or of
 the Board of Directors if notice of such alteration or repeal
 be contained in the notice of such special meeting.

 <PAGE>
                                               Exhibit 10.5

                  THE 1994 INCENTIVE STOCK OPTION PLAN
                                   OF
                           AYDIN CORPORATION

                             150,000 Shares
                   (Last amended, December 16, 1996)
 I. Purpose

        The purpose of this Plan is to advance the interests
     of the Corporation and its shareholders by strengthening
     the ability of the Corporation to attract and retain in
     its employ key individuals of training, experience and
     ability and to furnish additional incentive to officers
     and valued key employees upon whose judgement, initiative
     and efforts the successful conduct and development of its
     business largely depends, by encouraging them to purchase
     stock in the Corporation.

 II.    Definitions

        As used in this Plan, "Corporation" means Aydin
     Corporation; "Board of Directors" means the Board of
     Directors of Aydin Corporation; "employee" includes
     officers and other key employees of the Corporation and
     its subsidiaries but excludes members of the Board of
     Directors who are not also officers or employees of the
     Corporation; "Stock Option Committee" (the "Committee")
     means the Board of Directors; "Common Stock" means the
     Corporation's Common Stock of the par value of $1.00 per
     share; "Code" means the Internal Revenue Code of 1986, as
     amended from time to time.

 III.   Eligible Personnel

    A.  All full-time salaried officers and key employees.

    B.  An employee who has been granted an option may, if he
         is otherwise eligible, be granted an additional option
         or options.

 IV.    Stock Option Committee

    A.  Subject to the provisions of the Plan, the Committee
         shall administer the Plan.  It shall have authority to
         construe and interpret the Plan, to define the terms
         used therein, to prescribe, amend and rescind rules
         and regulations for the administration of the Plan and
         to take such other action in the administration of the
         Plan as it shall deem proper.  The interpretation by
         the Committee of any provision of the Plan or of any
         option agreement entered into hereunder shall be in
         accordance with Section 422 of the Code and
         Regulations issued thereunder as they may be amended
         from time to time, in order that rights granted
         hereunder and under said option agreements shall
         constitute "Incentive Stock Options" within the
         meaning of that Section.

    B.  A majority of the members of the Committee shall
         constitute a quorum and make all determinations, take
         all actions and conduct all business.  They shall keep
         minutes of their respective meetings.

    C.  Any Committee action may be taken or determination
         made without a meeting if all members of the
         respective committee shall individually or
         collectively consent in writing to such action or
         determination.  Such written consent or consents shall
         be filed with the minutes of the Corporation.

    D.  All interpretations, determinations and actions by the
         respective committee shall be final, conclusive and
         binding upon all parties.

    E.  No member of the Committee shall be liable for any
         action or determination made in good faith with
         respect to the Plan or any option agreement.

 V. Granting of Options

    A.  The Committee may at any time and from time to time
         grant options to eligible employees, to purchase
         shares of Common Stock of the Corporation under this
         Plan, and determine the specific employees to whom
         options may be granted, the number of shares to be
         subject to each option, the terms and provisions of
         the option agreements, and the time or times at which
         such options shall be granted.

    B.  The date of grant shall be the date the Committee
         takes the necessary action to make the grant;
         provided, however, that if the minutes or appropriate
         resolutions of the Committee provide than an option is
         to be granted as of a date in the future, the date of
         grant shall be such future date.  In any event, the
         optionee must be an employee on the date of the grant.

    C.  No option shall be granted under this Plan after the
         close of business on December 31, 2003, but options
         theretofore granted may extend beyond that date.

    D.  The options granted hereunder shall be "Incentive
         Stock Options" as that term is used in Section 422 of
         the Code.

 VI.    Shares Subject to the Plan

        The total number of shares of Common Stock that may be
     purchased pursuant to options granted under this Plan
     shall not exceed 150,000 subject to adjustment as provided
     in Section IX and subject to amendment as provided in
     Section X.  If any option outstanding hereunder shall
     expire or terminate for any reason without having been
     exercised in full, the unpurchased shares subject to the
     option shall again be available for the grant of options
     under this Plan.  Upon the exercise of an option
     outstanding hereunder, the Corporation may reissue Common
     Stock held in its treasury or issue authorized but
     unissued Common Stock.

 VII.   Terms of Options

    A.  Each option granted under the Plan shall include the
         following provisions, or terms consistent with the
         following provisions:

        1.  The purchase price (option price) of the shares
             subject to option shall be not less than the fair
             market value of the stock on the day the option
             is granted.  Such fair market value shall be
             established as the following, in order of
             descending preference:

            a.  Mean between the highest and the lowest
                 quoted selling prices of the stock on an
                 exchange.

            b.  Lacking a. above, the mean between the "bid"
                 and "asked" prices as provided to the Company
                 by a legitimate broker.

            c.  Lacking a. or b. for the date of grant, the
                 mean between the "bid" and "asked" prices for
                 the most recent date quoted, as obtained for
                 the Company by a legitimate broker.

            d.  Lacking a., b. or c., the last established
                 determinable price.

        2.  Except as provided in Section VIII herein, no
             option may be exercised unless the optionee is at
             the time of such exercise in the employ of the
             Corporation or of a subsidiary and shall have
             been continuously so employed since the granting
             of his option.  For the purpose of the Plan, an
             employee who is on leave of absence or who is in
             the Armed Services or the civilian employment of
             the United States will be considered in the
             employ of the Corporation or its subsidiaries to
             the extent his employment would be treated as
             continuing intact under Sections 421 and 422 of
             the Code, and the Regulations thereunder, as
             amended, from time to time.

        3.  No option may be exercised after ten years from
             the date of its grant.  Unless the option
             Agreement provides otherwise, any time after one
             year from the date of grant the employee may
             exercise his option in accordance with the
             following schedule:

       After:                        The optionee may purchase:
 One year from date of grant..................25% of the total.
 Two years from date of grant...An additional 25% of the total.
 Three years from date of grant.An additional 25% of the total.
 Four years from date of grant..An additional 25% of the total.

        4.  Upon each exercise of an option the purchase
             price shall be payable in full in cash, (or its
             equivalent acceptable to the Corporation), or
             Common Stock already owned by the employee, or a
             combination of cash and Common Stock.

        5.  No fractional shares shall be issued under this
             Plan or under any option granted hereunder, nor
             shall any cash payment be made in lieu thereof.

        6.  An option shall not be assignable or transferable
             by the employee to whom granted otherwise than by
             will or by the laws of descent and distribution,
             and may be exercised, during his lifetime, only
             by such employee.

        7.  No person shall have the rights and privileges of
             a shareholder with respect to shares subject to
             or purchased under an option until the date
             appearing on the certificates issued upon the
             exercise of the option.

    B.  The aggregate fair market value (determined as of the
         date the option is granted) of the stock for which any
         employee may be granted options first exercisable in
         any calendar year under this Plan and all other
         "Incentive Stock Option Plans" of the Corporation or
         its subsidiaries, shall not exceed $100,000.

    C.  No option under this Plan may be granted to an
         employee who, at the time the option is granted, owns
         stock possessing more than 10 percent of the total
         combined voting power of all classes of stock of the
         Corporation or of its subsidiaries, provided, however,
         this limitation shall not apply if such option is
         granted at an option price of at least 110 percent of
         the fair market value of the stock on the date of the
         grant and, by its terms, the option is not exercisable
         after the expiration of five years from the date of
         grant.

    D.  Each option granted under this Plan may, but need not,
         include other terms and conditions not inconsistent
         with the provisions hereof, including a requirement
         that the optionee represent at the time of each
         exercise of option that the shares purchased are being
         acquired for investment and not for resale.

    E.  Nothing in this Plan nor in any option granted
         hereunder shall confer any rights to continue in the
         employ of the Corporation or its subsidiaries or
         interfere in any way with the rights of the
         Corporation or any subsidiary to terminate the
         employee at any time.

 VIII.  Termination of Employment or Death of Employee

    A.  If the employment of an optionee is terminated for
         cause, or if he voluntarily quits, his option shall
         expire forthwith, but he may exercise any options that
         are exercisable as of the date of termination or
         voluntary quit provided payment for same is received
         within 30 days of the termination.  Retirement,
         including Early Retirement, under any retirement plan
         of the Corporation or subsidiary is not deemed a
         voluntary quit.

    B.  If the employment of an optionee terminates for any
         reason other than termination for cause, a voluntary
         quit, disability or death, the option shall expire
         three months thereafter unless by its terms it expires
         sooner.  During said period, the option may be
         exercised in accordance with its terms but only for
         the number of shares with respect to which options
         could be exercised as of the date of termination of
         employment.

    C.  If an optionee dies while he is employed by the
         Corporation or a subsidiary or within the three month
         period referred to in Section VIII(B) above or within
         the twelve month period referred to in Section VIII(D)
         below, during said period, the option may be exercised
         by his personal representatives or the persons to whom
         his rights under the option shall pass by will or the
         laws of descent and distribution in accordance with
         terms of the option but only for that number of shares
         with respect to which options could be exercised as of
         the date of death.  Such exercisable option must be
         exercised within three months of death, unless, by its
         terms, it expires sooner.

    D.  If the employment of an optionee terminates by reason
         of the optionee's "disability" (within the meaning of
         Section 22(e)(3) of the Code), the option shall expire
         12 months thereafter unless by its terms it expires
         sooner.  During said period, the option may be
         exercised in accordance with its terms but only for
         the number of shares with respect to which options
         could be exercised as of the date of termination of
         employment.

    E.  Notwithstanding the above, an option may not be
         exercised after the expiration of ten years from the
         date the option is granted.

 IX.    Adjustments Upon Changes in Capitalization

        In the event of any recapitalization, stock dividend,
     stock split, or combination affecting the stock subject to
     this Plan, or in the event of any merger, consolidation,
     or reorganization as a result of which the Corporation is
     the surviving corporation, the Committee will make
     appropriate adjustments in the aggregate number of kind of
     shares subject to the Plan, the number of shares that may
     be granted to any one employee, and the number of shares
     and the price per share subject to outstanding options
     provided that such options remain or constitute incentive
     stock options within the meaning of Section 422 of the
     Code.  Any such determination of adjustment shall be final
     and conclusive upon the parties.

        In the event of the dissolution or liquidation of the
     Corporation, or in the event of a reorganization, merger,
     or consolidation of the Corporation with one or more
     corporations as a result of which the Corporation is not
     the surviving corporation, or in the event of a sale of
     substantially all of the property or stock of the
     Corporation to another corporation, the Plan shall
     terminate; and any option then outstanding hereunder shall
     terminate on the effective date of such transaction;
     provided, however, that in the event of any such
     transaction the Board of Directors may, but need not,
     modify all outstanding options so as to make all such
     options exercisable in full on a date sufficiently in
     advance of the effective date of such transaction to
     permit the shares acquired pursuant to any exercise of
     such options to be issued before the effective date of
     such transaction.

 X. Amendment and Termination

    A.  The Board of Directors shall have the power, in its
         discretion, to amend, suspend or terminate this Plan
         at any time.  The Board of Directors shall not have
         the power except as may be permitted in Section IX
         herein:

        1.  To change the class of employees eligible to
             receive options under the Plan; or

        2.  To increase the number of shares subject to the
             Plan in the aggregate unless such increase is
             submitted to the shareholders of the Corporation
             for their approval; or

        3.  To increase the number of shares subject to an
             option for any one individual; or

        4.  To reduce the option price below the fair market
             value of the stock (or below the 110% fair market
             value when required by Section VII (C) hereof) at
             the time the option was granted; or

        5.  To increase the maximum terms of options provided
             herein.

    B.  The Board of Directors may, with the consent of an
         optionee, make such modifications of the terms and
         conditions of his option as it shall deem advisable.

 XI.    Compliance with Rule 16b-3

    The provisions of this Plan are intended to comply in all
 respects with the provisions of Rule 16b-3 under the
 Securities Exchange Act of 1934 and any amendments thereto,
 and, if this Plan shall not so comply, whether on the date of
 adoption or by reason of any later amendment to or
 interpretation of Rule 16b-3, the provisions of this Plan
 shall be deemed to be automatically amended so as to bring
 them into full compliance with such rule.

 XII.   Effective Date of Plan

        This Plan shall become effective as of January 3, 1994
     upon approval of the shareholders of the Corporation and
     shall terminate at the close of business on December 31,
     2003.

 <PAGE>
                                           Exhibit 10.6

                     THE 1996 EQUITY INCENTIVE PLAN
                                   OF
                           AYDIN CORPORATION

                             500,000 Shares
                    (Last Amended December 16, 1996)

    1.  Purpose. The purpose of the Aydin Corporation 1996
 Equity Incentive Plan (the "Plan") is to further the growth,
 development and financial success of Aydin Corporation and its
 subsidiaries by providing additional incentives to those
 officers and key employees who are responsible for the
 management of the business affairs of the Company, or its
 subsidiaries, which will enable them to participate directly
 in the growth of the capital stock of the Company. The Company
 intends that the Plan will facilitate securing, retaining and
 motivating management employees of high caliber and potential.
 To accomplish these purposes, the Plan provides a means
 whereby management employees may receive stock options
 ("Options") to purchase the Company's Common Stock.

    2.  Definitions. As used in this plan, "Corporation" or
 the "Company" means Aydin Corporation; "Board of Directors"
 means the Board of Directors of Aydin Corporation; "employee"
 includes directors, officers and other key employees of the
 Corporation and its subsidiaries; "Stock Option Committee"
 (the "Committee") means the Board of Directors; "Common Stock"
 means the Corporation's Common Stock of the par value of $1.00
 per share; "Code" means the Internal Revenue Code of 1986, as
 amended from time to time.

    3.  Administration.  The Plan shall be administered by the
 Committee who shall have full and final authority, in its sole
 discretion, to interpret the provisions of the Plan and to
 decide all questions of fact arising in its application; to
 determine the employees to whom Options shall be granted and
 the type, amount, size and terms of each such grant; to
 determine the time when Options shall be granted; and to make
 all other determinations necessary or advisable for the
 administration of the Plan.  All decisions, determinations and
 interpretations of the Committee shall be final and binding on
 all optionees and all other holders of Options granted under
 the Plan.

    4.  Stock Subject to the Plan.  Subject to Section 17
 hereof, the shares that may be issued under the Plan shall not
 exceed in the aggregate 500,000 shares of Common Stock. Such
 shares may be authorized and unissued shares or shares issued
 and subsequently reacquired by the Company.  Except as
 otherwise provided herein, any shares subject to an Option
 that for any reason expires or are terminated unexercised as
 to such shares shall again be available under the Plan.

    5.  Eligibility To Receive Options.  Persons eligible to
 receive Options under the Plan shall be limited  to those
 officers and other key employees of the Company, or any
 subsidiary of the Company (as defined in Section 425 of the
 Code), who are in positions in which their decisions, actions
 and counsel significantly impact upon the profitability and
 success of the Company, or any subsidiary of the Company.
 Directors of the Company who are not also officers or
 employees of the Company, or any subsidiary of the Company
 shall be eligible to participate in the Plan, provided that
 such persons shall not be eligible to receive grants of
 Incentive Stock Options, as such term is defined in Section 6
 hereof.

    6.  Types of Options. Grants may be made at any time and
 from time to time by the Committee in the form of stock
 options to purchase shares of Common Stock.  Options granted
 hereunder may be Options that are intended to qualify as
 incentive stock options within the meaning of Section 422 of
 the Code or any amendment or substitute thereto ("Incentive
 Stock Options") or Options that are not intended to so qualify
 ("Nonqualified Stock Options").

    7.  Option Agreements.  Options for the purchase of Common
 Stock shall be evidenced by written agreements in such form
 not inconsistent with the Plan as the Committee shall approve
 from time to time. The Options granted hereunder may be
 evidenced by a single agreement or by multiple agreements, as
 determined by the Committee in its sole discretion. Each
 option agreement shall contain in substance the following
 terms and conditions:

        (a) Type of Option.  Each option agreement shall
 identify the Options represented thereby either as Incentive
 Stock Options or Nonqualified Stock Options, as the case may
 be.

        (b) Option Price.  Each option agreement shall set
 forth the purchase price of the Common Stock purchasable upon
 the exercise of the Option evidenced thereby. Subject to the
 limitation set forth in Section 7(d)(ii) off the Plan, the
 purchase price of the Common Stock subject to an Incentive
 Stock Option shall be not less than 100% of the fair market
 value of such stock on the date the Option is granted, as
 determined by the Committee, but in no event less than the par
 value of such stock.  The purchase price of the Common Stock
 subject to a Nonqualified Stock Option shall be not less than
 100% of the fair market value of such stock on the date the
 Option is granted, as determined by the Committee.  For this
 purpose, fair market value on any date shall be the mean
 between the highest and the lowest quoted selling prices of
 the stock on an exchange, or if the stock is not traded that
 day, the fair market value shall be as determined by the
 Committee pursuant to Section 422 of the Code.

        (c) Exercise Term.  No option may be exercised after
 ten years from the date of its grant.  Unless the option
 Agreement provides otherwise, any time after one year from the
 date of grant the employee may exercise his option in
 accordance with the following schedule:

 After:                  The optionee may purchase:

 One year from date of grant..................25% of the total.
 Two years from date of grant...An additional 25% of the total.
 Three years from date of grant.An additional 25% of the total.
 Four years from date of grant..An additional 25% of the total.

 The Committee shall have the power to permit an acceleration
 of previously established exercise terms, subject to the
 requirements set forth herein, upon such circumstances and
 subject to such terms and conditions as the Committee deems
 appropriate.

        (d) Incentive Stock Options.  In the case of an
 Incentive Stock Option, each option agreement shall contain
 such other terms, conditions and provisions as the Committee
 determines to be necessary or desirable in order to qualify
 such Option as a tax-favored Option (within the meaning of
 Section 422 of the Code or any amendment or substitute thereto
 or regulation thereunder) including without limitation, each
 of the following except that any of these provisions may be
 omitted or modified if it is no longer required in order to
 have an Option qualify as a tax-favored Option within the
 meaning of Section 422 of the Code or any substitute therefor:


            (i) The aggregate fair market value (determined
 as of the date the Option is granted) of the Common Stock with
 respect to which Incentive Stock Options are first exercisable
 by any employee during any calendar year (under all plans of
 the Company) shall not exceed $100,000.

            (ii)    No Incentive Stock Options shall be
 granted to any employee if at the time the Option is granted
 to the individual who owns stock possessing more than 10% of
 the total combined voting power of all classes of stock of the
 Company or its subsidiaries unless at the time such Option is
 granted the Option price is at least 110% of the fair market
 value of the stock subject to the Option and, by its terms,
 the Option is not exercisable after the expiration of five
 years from the date of grant.

            (iii)   No Incentive Stock Options shall be
 exercisable more than 30 days (or three months, in the case
 where the employee is placed on layoff, or one year, in the
 case of an employee who dies or becomes disabled within the
 meaning of Section 22(e)(3) of the Code or any substitute
 therefor) after termination of employment.

        (e) Substitution of Options.  Options may be granted
 under the Plan from time to time in substitution for stock
 options held by employees of other corporations who are about
 to become, and who do concurrently with the grant of such
 options become, employees of the Company, or a subsidiary of
 the Company as a result of a merger or consolidation of the
 employing corporation with the Company, or a subsidiary of the
 Company, or the acquisition by the Company, or a subsidiary of
 the Company of the assets of the employing corporation, or the
 acquisition by the Company, or a subsidiary of the Company of
 stock of the employing corporation. The terms and conditions
 of the substitute options so granted may vary from the terms
 and conditions set forth in this Section 7 to such extent as
 the Committee at the time of grant may deem appropriate to
 conform, in whole or in part, to the provisions of the stock
 options in substitution for which they are granted.

    8.  Date of Grant.  The date on which an Option shall be
 deemed to have been granted under the Plan shall be the date
 of the Committee's authorization of the Option or such later
 date as may be determined by the Committee at the time the
 Option is authorized. Notice of the determination shall be
 given to each individual to whom an Option is so granted
 within a reasonable time after the date of such grant.

    9.  Exercise and Payment for Shares.  Options may be
 exercised in whole or in part, from time to time, by giving
 written notice of exercise to the Secretary of the Company,
 specifying the number of shares to be purchased, except that
 no Option may be exercised in whole or in part during the
 first twelve months after such Option is granted.  The
 purchase price of the shares with respect to which an Option
 is exercised shall be payable in full with the notice of
 exercise in cash, Common Stock at fair market value, or a
 combination thereof.  The fair market value of Stock so
 delivered shall be the mean of the high and the low prices on
 the principal exchange upon which the Stock is traded on the
 trading day immediately preceding the date of exercise.

    10. Rights upon Termination of Employment.  In the
 event that an optionee ceases to be an employee of the
 Company, or any subsidiary of the Company for any reason other
 than lay-off, death, or disability (within the meaning of
 Section 22(e)(3) of the Code or any substitute therefore), the
 optionee shall have the right to exercise the Option during
 its term within a period of 30 days (three months in the event
 of a lay-off) after such termination to the extent that the
 Option was exercisable at the time of termination.  In the
 event that an optionee dies or becomes disabled prior to the
 expiration of his Option and without having fully exercised
 his Option, the optionee or his successor shall have the right
 to exercise the Option during its term within a period of one
 year after termination of employment due to death or
 disability to the extent that the Option was exercisable at
 the time of termination unless, by its terms, it expires
 sooner.

    11. General Restrictions.  Each Option granted under
 the Plan shall be subject to the requirement that if at any
 time the Committee shall determine that (i) the listing,
 registration or qualification of the shares of Common Stock
 subject or related thereto upon any securities exchange or
 under any state or federal law, or (ii) the consent or
 approval of any government regulatory body, or (iii) an
 agreement by the recipient of an Option with respect to the
 disposition of shares of Common Stock is necessary or
 desirable as a condition of or in connection with the granting
 of such Option or the issuance or purchase of shares of Common
 Stock thereunder, such Option shall not be consummated in
 whole or in part unless such listing, registration,
 qualification, consent, approval or agreement shall have been
 effected or obtained free of any conditions not acceptable to
 the Committee.

    12. Rights of a Stockholder.  The recipient of any
 Option under the Plan, unless otherwise provided by the Plan,
 shall have no rights as a stockholder unless and until
 certificates for shares of Common Stock are issued and
 delivered to him.

    13. Right to Terminate Employment.  Nothing contained
 in the Plan or in any option agreement entered into pursuant
 to the Plan shall confer upon any optionee the right to
 continue in the employment of the Company or any subsidiary of
 the Company or affect any right that the Company or any
 subsidiary of the Company may have to terminate the employment
 of such optionee.

    14. Withholding.  Whenever the Company proposes or is
 required to issue or transfer shares of Common Stock under the
 Plan, the Company shall have the right to require the
 recipient to remit to the Company an amount sufficient to
 satisfy any federal, state or local withholding tax
 requirements prior to the delivery of any certificate or
 certificates for such shares. If and to the extent authorized
 by the Committee in its sole discretion, an optionee may make
 an election, by means of a form of election to be prescribed
 by the Committee, to have shares of Common Stock that are
 acquired upon exercise of an Option withheld by the Company or
 to tender other shares of Common Stock or other securities of
 the Company owned by the optionee to the Company at the time
 of exercise of an Option to pay the amount of tax that would
 otherwise be required by law to be withheld by the Company as
 a result of any exercise of an Option.  Any such election
 shall be irrevocable and shall be subject to termination by
 the Committee, in its sole discretion, at any time. Any
 securities so withheld or tendered will be valued by the
 Committee at the mean of the high and the low prices the
 Common Stock traded on the trading day immediately preceding
 the date exercised.

    15. Non-Assignability.  No Option under the Plan shall be
 assignable or transferable by the recipient thereof except by
 will or by the laws of descent and distribution.  During the
 life of the recipient, such Option shall be exercisable only
 by such person or by such person's guardian or legal
 representative.

    16. Non-Uniform Determinations. The Committee's
 determination under the Plan (including without limitation
 determinations of the persons to receive Options, the form,
 amount and timing of such grants, the terms and provisions of
 Options, and the agreements evidencing same) need not be
 uniform and may be made selectively among persons who receive,
 or are eligible to receive, grants of Options under the Plan
 whether or not such persons are similarly situated.

    17. Adjustments.

        (a) Changes in Capitalization. Subject to any
 required action by the stockholders of the Company, the number
 of shares of Common Stock covered by each outstanding Option
 and the number of shares of Common Stock that have been
 authorized for issuance under the Plan but as to which no
 Options have yet been granted or which have been returned to
 the Plan upon cancellation or expiration of an Option, as well
 as the price per share of Common Stock covered by each such
 outstanding Option, shall be proportionately adjusted for any
 increase or decrease in the number of issued shares of Common
 Stock resulting from a stock split, reverse stock split, stock
 dividend, combination or reclassification of the Common Stock,
 or any other increase or decrease in the number of issued
 shares of Common Stock effected without receipt of
 consideration by the Company; provided, however, that
 conversion of any convertible securities of the Company shall
 not be deemed to have been "effected without receipt of
 consideration." Such adjustment shall be made by the
 Committee, whose determination in that respect shall be final,
 binding and conclusive. Except as expressly provided herein,
 no issuance by the Company of shares of stock of any class, or
 securities convertible into shares of stock of any class,
 shall affect, and no adjustment by reason thereof shall be
 made with respect to, the number or price of shares of Common
 Stock subject to an Option.

        (b) Dissolution or Liquidation.  In the event of the
 proposed dissolution or liquidation of the Company, all
 outstanding Options will terminate immediately prior to the
 consummation of such proposed action, unless otherwise
 provided by the Committee. The Committee may, in the exercise
 of its sole discretion in such instances, declare that any
 Option shall terminate as of a date fixed by the Committee and
 give each Option holder the right to exercise his Option as to
 all or any part of the shares of Common Stock covered by the
 Option, including shares as to which the Option would not
 otherwise be exercisable.

        (c) Sale or Merger. In the event of a proposed sale
 of all or substantially all of the assets of the Company, or
 the merger of the Company with or into another corporation,
 the Committee, in the exercise of its sole discretion, may
 take such action as it deems desirable, including, but not
 limited to (i) causing an Option to be assumed or an
 equivalent option to be substituted by such successor
 corporation or a parent or subsidiary of such successor
 corporation, (ii) providing that each Option holder shall have
 the right to exercise his Option as to all of the shares of
 Common Stock covered by the Option, including shares as to
 which the Option would not otherwise be exercisable, or (iii)
 declare that an Option shall terminate at a date fixed by the
 Committee provided that the Option holder is given notice and
 opportunity to exercise his Option prior to such date.

    18.  Amendment. The Committee may terminate or amend the
 Plan at any time.  The termination or any modification or
 amendment of the Plan shall not, without the consent of a
 participant, affect his rights under an Option previously
 granted.

    19. Reservation of Shares. The Company, during the
 term of the Plan, will at all times reserve and keep available
 such number of shares as shall be sufficient to satisfy the
 requirement of the Plan. Inability of the Company to obtain
 authority from any regulatory body having jurisdiction, which
 authority is deemed by the Company's counsel to be necessary
 to the lawful issuance and sale of any shares hereunder, shall
 relieve the Company of any liability for the failure to issue
 or sell such shares as to which such requisite authority shall
 not have been obtained.

    20. Effect on Other Plans. Participation in the Plan
 shall not affect an employee's eligibility to participate in
 any other benefit or incentive plan of the Company or any
 subsidiary of the Company.  Any Options granted pursuant to
 the Plan shall not be used in determining the benefits
 provided under any other plan of the Company or any subsidiary
 of the Company unless specifically provided.

    21. Duration of the Plan.  The Plan shall remain in
 effect until all Options granted under the Plan have been
 satisfied by the issuance of shares, but no Option shall be
 granted more than ten years after the date the Plan is adopted
 by the Company's Board of Directors.

    22. Forfeiture for Dishonesty.  Notwithstanding
 anything to the contrary in the Plan, if the Committee finds,
 by a majority vote, after full consideration of the facts
 presented on behalf of both the Company and any optionee, that
 the optionee has been engaged in fraud, embezzlement, theft,
 commission of a felony or dishonest conduct in the course of
 his employment or retention by the Company or any subsidiary
 of the Company that damaged the Company, or any subsidiary of
 the Company or that the optionee has disclosed confidential
 information of the Company or any subsidiary of the Company,
 the optionee shall forfeit all unexercised Options and all
 exercised Options under which the Company has not yet
 delivered the certificates. The decision of the Committee in
 interpreting and applying the provisions of this Section 22
 shall be final. No decision of the Committee however, shall
 affect the finality of the discharge or termination of such
 optionee by the Company or any subsidiary of the Company in
 any manner.

    23. No Prohibition on Corporate Action.  No provision
 of the Plan shall be construed to prevent the Company or any
 officer or director thereof from taking any action deemed by
 the Company or such officer or director to be appropriate or
 in the Company's best interests whether or not such action
 could have an adverse effect on the Plan or any Options
 granted hereunder, and no optionee or optionee's estate,
 personal representative or beneficiary shall have any claim
 against the Company or any officer or director thereof as a
 result of the taking of such action.

    24. Indemnification.  With respect to the
 administration of the Plan, the Company shall indemnify each
 present and future member of the Committee and the Board of
 Directors against, and each member of the Committee and the
 Board of Directors shall be entitled without further action on
 their part to indemnity from the Company for, all expenses
 (including the amount of judgments and the amount of approved
 settlements made with a view to the curtailment of costs of
 litigation, other than amounts paid to the Company itself)
 reasonably incurred by them in connection with or arising out
 of, any action, suit or proceeding in which they may be
 involved by reason of they being or having been a member of
 the Committee or the Board of Directors, whether or not they
 continue to be such member at the time of incurring such
 expenses; provided, however, that such indemnity shall not
 include any expenses incurred by any such member of the
 Committee or the Board of Directors (i) in respect of matters
 as to which they shall be finally adjudged in any such action,
 suit or proceeding to have been guilty of gross negligence or
 willful misconduct in the performance of their duty as such
 member of the Committee or the Board of Directors: or (ii) in
 respect of any matter in which any settlement is affected for
 an amount in excess of the amount approved by the Company on
 the advice of its legal counsel; and provided further that no
 right of indemnification under the provisions set forth herein
 shall be available to or enforceable by any such member of the
 Committee or the Board of Directors unless, within 60 days
 after institution of any such action, suit or proceeding, they
 shall have offered the Company in writing the opportunity to
 handle and defend same at its own expense.  The foregoing
 right of indemnification shall inure to the benefit of the
 heirs, executors or administrators of each such member of the
 Committee or the Board of Directors and shall be in addition
 to all other rights to which such member may be entitled as a
 matter of law, contract or otherwise.

    25. Miscellaneous Provisions.

        (a) Compliance with Plan Provisions.  No optionee or
 other person shall have any right with respect to the Plan,
 the Common Stock reserved for issuance under the Plan or in
 any Option until a written option agreement shall have been
 executed by the Company and the optionee and all the terms,
 conditions and provisions of the Plan and the Option
 applicable to such optionee (and each person claiming under or
 through him) have been met.

        (b) Approval of Counsel. In the discretion of the
 Committee, no shares of Common Stock, other securities or
 property of the Company or other forms of payment shall be
 issued hereunder with respect to any Option unless counsel for
 the Company shall be satisfied that such issuance will be in
 compliance with applicable federal, state, local and foreign
 legal, securities exchange and other applicable requirements.

        (c) Compliance with Rule 16b-3.  To the extent that
 Rule 16b-3 under the Exchange Act applies to Options granted
 under the Plan, it is the intent of the Company that the Plan
 comply in all respects with the requirements of Rule 16b-3,
 that any ambiguities or inconsistencies in construction of the
 Plan be interpreted to give effect to such intention and that
 if the Plan shall not so comply, whether on the date of
 adoption or by reason of any later amendment to or
 interpretation of Rule 16b-3, the provisions of the Plan shall
 be deemed to be automatically amended so as to bring them into
 full compliance with such rule.

        (d) Effects of Acceptance of Option.  By accepting
 any Option or other benefit under the Plan, each optionee and
 each person claiming under or through him shall be
 conclusively deemed to have indicated his acceptance and
 ratification of, and consent to, any action taken under the
 Plan by the Company, the Board of Directors, the Committee or
 its delegates.

        (e) Construction.  The masculine pronoun shall
 include the feminine and neuter, and the singular shall
 include the plural, where the context so indicates.

    26. Stockholder Approval.  The exercise of any Option
 granted under the Plan shall be subject to the approval of the
 Plan by the affirmative vote of the holders of a majority of
 the outstanding shares of the Common Stock present, or
 represented, and entitled to vote at a meeting duly held.

 <PAGE>
                                                Exhibit 10.7
                           AYDIN CORPORATION
                       RESTRICTED STOCK AGREEMENT

    THIS AGREEMENT, made on this 8th day of October, 1996, by
 and between AYDIN CORPORATION, a Delaware corporation
 (hereinafter called the "Company"), and KLAUS D. OEBEL
 (hereinafter called the "Employee").

                              WITNESSETH:

    WHEREAS, the Company and the Employee have agreed to
 certain terms and conditions of employment of the Employee as
 set forth in the Employment Agreement (the "Employment
 Agreement") dated August 22, 1996; and

    WHEREAS, the Employment Agreement provides for a one-time
 bonus for joining the Company of a restricted stock award (the
 "Award") of 10,000 shares of common stock of the Company (the
 "Common Stock") that will vest over a three-year period; and

    WHEREAS, the Board has authorized the granting of the
 Award conditioned upon the execution by the Company and the
 Employee of this Agreement, thereby allowing the Employee to
 acquire a proprietary interest in the Company in order that
 the Employee will have a further incentive for remaining with
 and increasing his efforts on behalf of the Company or one of
 its Affiliates;

    NOW THEREFORE, in consideration of the foregoing and of
 the mutual covenants hereinafter set forth and other good and
 valuable consideration, the receipt and adequacy of which are
 hereby acknowledged, the parties hereto hereby agree as
 follows:

    1.  The Company, effective this date, hereby awards to the
 Employee as a separate incentive in connection with his
 employment and not in lieu of any salary or other compensation
 for his services, an Award covering 10,000 shares (the
 "Shares") of Common Stock on the terms and conditions set
 forth in this Agreement.

    2.  The Shares covered by the Award shall vest in three
 installments of 3,333, 3,333 and 3,334 Shares on the first,
 second and third anniversary, respectively, of the date of
 this Agreement as long as the Employee remains employed by the
 Company or one of its Affiliates until such dates.

    3.  Upon notification that the New York Stock Exchange has
 authorized listing of the Shares, a stock certificate
 evidencing the Shares shall be registered on the Company's
 books in the name of the Employee as of the date of this
 Agreement.  Such certificate shall contain a legend
 restricting the transferability of such certificate and the
 Shares represented thereby, and referring to the terms and
 conditions approved by the Board and applicable to the Shares
 represented by the certificate (the "Restrictive Legend").
 While the Shares are restricted and subject to the Delaware
 General Corporation Law, the Employee shall be entitled to all
 rights of a shareholder of the Company, including the right to
 vote the Shares and receive dividends and other distributions
 declared on the Shares.  The Employee shall have the right to
 return the certificate to the Company at any time for
 cancellation and to receive a certificate without the
 Restrictive Legend representing the Shares that have vested as
 provided in Section 2 hereof and a balance certificate bearing
 the Restrictive Legend for those Shares, if any, that shall
 not have been vested at such time; provided, however, that
 certificates representing vested or unvested Shares shall also
 bear a restrictive legend restricting transferability if legal
 counsel for the Company deems such legend to be required under
 applicable securities laws.

    4.  If the employment of the Employee with the Company
 terminates for any reason during a vesting period, the Shares
 that have not vested shall be forfeited on the date of such
 termination of employment, except that for any portion of a
 vesting period that has elapsed through the date of such
 termination, the Employee shall receive a pro-rata portion of
 the Shares that would have been vested at the end of such
 period (the "Pro-Rata Shares") equal to the product of the
 Shares that are subject to vesting during such period (i.e.,
 3,333, 3,333 or 3,334 Shares as the case may be) multiplied by
 a fraction the numerator of which is the number of days that
 have elapsed during such vesting period through the date of
 termination and the denominator of which is 365.  Upon
 termination of employment, the certificate(s) bearing the
 Restrictive Legend shall be returned to the Company for
 cancellation and a new certificate representing Shares that
 have vested as of the termination date for which the
 Restrictive Legend had not previously been removed and for the
 Pro-Rata Shares shall be issued to the Employee.  The Employee
 may designate a beneficiary to receive the stock certificate
 representing the Shares that the Employee would have been
 entitled to receive under this Section 4 in the event that
 termination of employment of the Employee is due to his death.
 Each such beneficiary designation shall be in writing, making
 specific reference to this Agreement, and shall be addressed
 to the Company's Secretary and Corporate Counsel.  The
 Employee has the right to change such beneficiary at will by
 delivering another written designation similar in form to the
 preceding designation to the Company's Secretary and Corporate
 Counsel.

    5.  The Company shall have the right to obtain and
 withhold from any payment or transfer of property under this
 Agreement the amount of taxes required by any government to be
 withheld or otherwise deducted and paid with respect to such
 payment or transfer.  At its discretion, the Company may
 require the Employee as a condition to receiving any Shares
 pursuant to the Award to reimburse the Company for any such
 taxes required to be withheld by the Company and withhold any
 distribution or transfer of Shares in whole or in part until
 the Company is so reimbursed.  In lieu thereof, the Company
 shall have the right to withhold from any other cash amount
 due or to become due from the Company to the Employee an
 amount equal to such taxes as required to be withheld by the
 Company to reimburse the Company for any such taxes or to
 retain and withhold a number of Shares having a market value
 no less than the amount of such taxes and to cancel (in whole
 or in part) any such Shares so withheld in order to reimburse
 the Company for any such taxes.  Moreover, if the Employee
 elects, in accordance with Section 83(b) of the Internal
 Revenue Code of 1986, as amended, to recognize ordinary income
 upon the grant of the Award, the Company will require at the
 time of that election the Employee to reimburse the Company
 for the amount of taxes required by any government to be
 withheld or otherwise paid as a consequence of that election.

    6.  Any notice to be given to the Company under the terms
 of this Agreement shall be addressed to the Company, in care
 of its Secretary and Corporate Counsel, at 700 Dresher Road,
 P.O. Box 349, Horsham, Pennsylvania 19044, or at such other
 address as the Company may hereafter designate in writing.
 Any notice to be given to the Employee shall be addressed to
 the Employee at the Employee's home address of record as
 reflected in the Company's personnel files.  Any such notice
 shall be deemed to have been duly given, if and when enclosed
 in a properly sealed envelope, addressed as aforesaid,
 registered or certified and deposited, postage and registry
 fee prepaid, in a United States post office.

    7.  Nothing herein contained shall affect the Employee's
 right to participate in and receive benefits under and in
 accordance with the then current provisions of any pension,
 insurance or other employee welfare plan or program of the
 Company or any Affiliate.

    8.  Except as otherwise herein provided, the Award herein
 granted and the rights and privileges conferred hereby shall
 not be transferred, assigned, pledged or hypothecated in any
 way (whether by operation of law or otherwise) and shall not
 be subject to sale under execution, attachment or similar
 process.

    9.  Subject to the limitation on the transferability
 contained herein, this Agreement shall be binding upon and
 inure to the benefit of the heirs, legatees, legal
 representatives, successors and assigns of the parties hereto.

    10. The Board shall have the power to interpret this
 Agreement and to adopt such rules for the administration,
 interpretation and application of this Agreement as are
 consistent therewith and to interpret or revoke any such
 rules.  All actions taken and all interpretations and
 determinations made by the Board in good faith shall be final
 and binding upon Employee, the Company and all other
 interested persons.  No member of the Board shall be
 personally liable for any action, determination or
 interpretation made in good faith with respect to this
 Agreement.

    11. In the event of changes in the capital stock of the
 Company by reason of stock dividends, split-ups or
 combinations of shares, reclassifications, mergers,
 consolidations, reorganizations or liquidations during the
 restriction period, any and all new, substituted or additional
 securities to which the Employee is entitled by reason of the
 ownership of the Award shall be subject immediately to the
 terms, conditions and restrictions of this Agreement.

    12. In the event that any provision in this Agreement
 shall be held invalid or unenforceable, such provision shall
 be severable from, and such invalidity or unenforceability
 shall not be construed to have any effect on, the remaining
 provisions of this Agreement.

    13. This Agreement shall be construed and enforced in
 accordance with the internal laws of the Commonwealth of
 Pennsylvania.

    14. The Agreement may be executed in any number of
 counterparts, each of which shall be deemed an original, but
 all of which together shall constitute but one and the same
 instrument.

    15. This Agreement may be amended or modified only by a
 written instrument executed by both the Company and the
 Employee.

    IN WITNESS WHEREOF, the parties have executed this
 Agreement, in duplicate, the day and year first above written.


 Attest:                       AYDIN CORPORATION

 __/s/ Robert A. Clancy___        By: ____/s/ I. Gary Bard____
 Secretary                        Title: __Chairman & C.E.O.__


                                     /s/ Klaus D. Oebel
                                  ______________________
                                  Employee's Signature

                                  ______________________
                                  Social Security Number

 <PAGE>
                                                Exhibit 10.8

                           AYDIN CORPORATION
                       RESTRICTED STOCK AGREEMENT

    THIS AGREEMENT, made on this 16th day of December, 1996,
 by and between AYDIN CORPORATION, a Delaware corporation
 (hereinafter called the "Company"), and H. BARRY MASER
 (hereinafter called the "Employee").

                              WITNESSETH:

    WHEREAS, the Company and the Employee have agreed to
 certain terms and conditions of employment of the Employee as
 set forth in the Offer Letter (the "Employment Agreement")
 dated October 23, 1996; and

    WHEREAS, the Employment Agreement provides for a one-time
 bonus for joining the Company of a restricted stock award (the
 "Award") of 10,000 shares of common stock of the Company (the
 "Common Stock") that will vest over a four-year period; and

    WHEREAS, the Board has authorized the granting of the
 Award conditioned upon the execution by the Company and the
 Employee of this Agreement, thereby allowing the Employee to
 acquire a proprietary interest in the Company in order that
 the Employee will have a further incentive for remaining with
 and increasing his efforts on behalf of the Company or one of
 its Affiliates;

    NOW THEREFORE, in consideration of the foregoing and of
 the mutual covenants hereinafter set forth and other good and
 valuable consideration, the receipt and adequacy of which are
 hereby acknowledged, the parties hereto hereby agree as
 follows:

    1.  The Company, effective this date, hereby awards to the
 Employee as a separate incentive in connection with his
 employment and not in lieu of any salary or other compensation
 for his services, an Award covering 10,000 shares (the
 "Shares") of Common Stock on the terms and conditions set
 forth in this Agreement.

    2.  The Shares covered by the Award shall vest in four
 installments of 2,500 Shares on the first, second, third and
 fourth anniversary, respectively, of the date of this
 Agreement as long as the Employee remains employed by the
 Company or one of its Affiliates until such dates.

    3.  Upon notification that the New York Stock Exchange has
 authorized listing of the Shares, a stock certificate
 evidencing the Shares shall be registered on the Company's
 books in the name of the Employee as of the date of this
 Agreement.  Such certificate shall contain a legend
 restricting the transferability of such certificate and the
 Shares represented thereby, and referring to the terms and
 conditions approved by the Board and applicable to the Shares
 represented by the certificate (the "Restrictive Legend").
 While the Shares are restricted and subject to the Delaware
 General Corporation Law, the Employee shall be entitled to all
 rights of a shareholder of the Company, including the right to
 vote the Shares and receive dividends and other distributions
 declared on the Shares.  The Employee shall have the right to
 return the certificate to the Company at any time for
 cancellation and to receive a certificate without the
 Restrictive Legend representing the Shares that have vested as
 provided in Section 2 hereof and a balance certificate bearing
 the Restrictive Legend for those Shares, if any, that shall
 not have been vested at such time; provided, however, that
 certificates representing vested or unvested Shares shall also
 bear a restrictive legend restricting transferability if legal
 counsel for the Company deems such legend to be required under
 applicable securities laws.

    4.  If the employment of the Employee with the Company
 terminates for any reason during a vesting period, the Shares
 that have not vested shall be forfeited on the date of such
 termination of employment, except that for any portion of a
 vesting period that has elapsed through the date of such
 termination, the Employee shall receive a pro-rata portion of
 the Shares that would have been vested at the end of such
 period (the "Pro-Rata Shares") equal to the product of the
 Shares that are subject to vesting during such period (i.e.,
 2,500 Shares) multiplied by a fraction the numerator of which
 is the number of days that have elapsed during such vesting
 period through the date of termination and the denominator of
 which is 365.  Upon termination of employment, the
 certificate(s) bearing the Restrictive Legend shall be
 returned to the Company for cancellation and a new certificate
 representing Shares that have vested as of the termination
 date for which the Restrictive Legend had not previously been
 removed and for the Pro-Rata Shares shall be issued to the
 Employee.  The Employee may designate a beneficiary to receive
 the stock certificate representing the Shares that the
 Employee would have been entitled to receive under this
 Section 4 in the event that termination of employment of the
 Employee is due to his death.  Each such beneficiary
 designation shall be in writing, making specific reference to
 this Agreement, and shall be addressed to the Company's
 Secretary and Corporate Counsel.  The Employee has the right
 to change such beneficiary at will by delivering another
 written designation similar in form to the preceding
 designation to the Company's Secretary and Corporate Counsel.

    5.  The Company shall have the right to obtain and
 withhold from any payment or transfer of property under this
 Agreement the amount of taxes required by any government to be
 withheld or otherwise deducted and paid with respect to such
 payment or transfer.  At its discretion, the Company may
 require the Employee as a condition to receiving any Shares
 pursuant to the Award to reimburse the Company for any such
 taxes required to be withheld by the Company and withhold any
 distribution or transfer of Shares in whole or in part until
 the Company is so reimbursed.  In lieu thereof, the Company
 shall have the right to withhold from any other cash amount
 due or to become due from the Company to the Employee an
 amount equal to such taxes as required to be withheld by the
 Company to reimburse the Company for any such taxes or to
 retain and withhold a number of Shares having a market value
 no less than the amount of such taxes and to cancel (in whole
 or in part) any such Shares so withheld in order to reimburse
 the Company for any such taxes.  Moreover, if the Employee
 elects, in accordance with Section 83(b) of the Internal
 Revenue Code of 1986, as amended, to recognize ordinary income
 upon the grant of the Award, the Company will require at the
 time of that election the Employee to reimburse the Company
 for the amount of taxes required by any government to be
 withheld or otherwise paid as a consequence of that election.

    6.  Any notice to be given to the Company under the terms
 of this Agreement shall be addressed to the Company, in care
 of its Secretary and Corporate Counsel, at 700 Dresher Road,
 P.O. Box 349, Horsham, Pennsylvania 19044, or at such other
 address as the Company may hereafter designate in writing.
 Any notice to be given to the Employee shall be addressed to
 the Employee at the Employee's home address of record as
 reflected in the Company's personnel files.  Any such notice
 shall be deemed to have been duly given, if and when enclosed
 in a properly sealed envelope, addressed as aforesaid,
 registered or certified and deposited, postage and registry
 fee prepaid, in a United States post office.

    7.  Nothing herein contained shall affect the Employee's
 right to participate in and receive benefits under and in
 accordance with the then current provisions of any pension,
 insurance or other employee welfare plan or program of the
 Company or any Affiliate.

    8.  Except as otherwise herein provided, the Award herein
 granted and the rights and privileges conferred hereby shall
 not be transferred, assigned, pledged or hypothecated in any
 way (whether by operation of law or otherwise) and shall not
 be subject to sale under execution, attachment or similar
 process.

    9.  Subject to the limitation on the transferability
 contained herein, this Agreement shall be binding upon and
 inure to the benefit of the heirs, legatees, legal
 representatives, successors and assigns of the parties hereto.

    10. The Board shall have the power to interpret this
 Agreement and to adopt such rules for the administration,
 interpretation and application of this Agreement as are
 consistent therewith and to interpret or revoke any such
 rules.  All actions taken and all interpretations and
 determinations made by the Board in good faith shall be final
 and binding upon Employee, the Company and all other
 interested persons.  No member of the Board shall be
 personally liable for any action, determination or
 interpretation made in good faith with respect to this
 Agreement.

    11. In the event of changes in the capital stock of the
 Company by reason of stock dividends, split-ups or
 combinations of shares, reclassifications, mergers,
 consolidations, reorganizations or liquidations during the
 restriction period, any and all new, substituted or additional
 securities to which the Employee is entitled by reason of the
 ownership of the Award shall be subject immediately to the
 terms, conditions and restrictions of this Agreement.

    12. In the event that any provision in this Agreement
 shall be held invalid or unenforceable, such provision shall
 be severable from, and such invalidity or unenforceability
 shall not be construed to have any effect on, the remaining
 provisions of this Agreement.

    13. This Agreement shall be construed and enforced in
 accordance with the internal laws of the Commonwealth of
 Pennsylvania.

    14. The Agreement may be executed in any number of
 counterparts, each of which shall be deemed an original, but
 all of which together shall constitute but one and the same
 instrument.

    15. This Agreement may be amended or modified only by a
 written instrument executed by both the Company and the
 Employee.

    IN WITNESS WHEREOF, the parties have executed this
 Agreement, in duplicate, the day and year first above written.

 Attest:      AYDIN CORPORATION

 __/s/ Robert A. Clancy___        By: ____/s/ I. Gary Bard____
 Secretary                        Title: __Chairman & C.E.O.__


                                   /s/ H. Barry Maser
                                  ______________________
                                  Employee's Signature

                                  ______________________
                                  Social Security Number
 <PAGE>
                                                Exhibit 10.9

                          CONSULTING AGREEMENT

         THIS CONSULTING AGREEMENT (this "Agreement") is made and
 effective as of May 1, 1996 by and between Aydin Corporation,
 a Delaware corporation with its principal executive offices
 located at 700 Dresher Road, Horsham, Pennsylvania 19044 (the
 "Company"), and Ayhan Hakimoglu, a Pennsylvania resident with
 an address at 431 Righters Mill Road, Narberth, Pennsylvania
 19072 ("Consultant").  The definition of "Company" includes
 all of its subsidiaries.

                               BACKGROUND

         The Company operates internationally in the following
 businesses:  engineering and manufacturing of
 telecommunications equipment and systems, computer monitor and
 ruggedized workstations, and computer control systems with
 software for industrial and governmental applications
 (together with such businesses as the Company may enter during
 the Term, the "Business").

         On the date Ayhan Hakimoglu may sell all of his capital
 stock of the Company to EA Industries, Inc. ("EA") and on the
 date he may resign as Chairman and Chief Executive Officer of
 the Company, this Consulting Agreement with the Company will
 be effective.

         In consideration of their mutual promises and covenants
 set forth herein, and intending to be legally bound hereby,
 Company and Consultant agree as follows:

         1.   Engagement.  The Company hereby engages the Consultant
 and the Consultant hereby accepts such engagement on the terms
 and conditions hereinafter set forth.

         2.   Term.  The term of this Agreement shall begin on the
 date hereof and shall terminate on April 30, 1999 (the
 "Term"), unless sooner terminated in accordance with Paragraph
 6 hereof.

         3.   Duties.  The Consultant is engaged hereunder as a
 consultant, on a part-time basis, to the Company reporting to
 the Chief Executive Officer.  As such he shall do the
 following:

           (a)   Consult with and assist the Company in
 developing, with senior management of the Company, and
 implementing through such senior management, strategic plans,
 both long and short term relating to obtaining contracts for
 the Company in Turkey.

           (b)   Consistent with developed strategic plans, help
 the Company to identify and procure key employees or entities
 which will supplement the Company's management and other
 capabilities in the Business.

           (c)   Assist the Company in the collection of amounts
 due to the Company arising from contracts performed for the
 Turkish government.

         The Consultant shall devote such of his business time,
 attention, energies and best efforts to the performance of his
 services hereunder and to the promotion of the business and
 interests of the Company and of any of its affiliated
 companies, as may be reasonably necessary to carry out his
 activities as described above, it being understood that
 Consultant need not spend any specific time in his activities.

         4.   Compensation.  In consideration for the services to be
 rendered by Consultant hereunder and his obligations under
 paragraphs 6 and 7 hereof, Company shall pay to Consultant (a)
 the sum of one hundred fifty thousand dollars ($150,000) per
 annum payable in advance on or before May 3, 1996, May 1, 1997
 and May 1, 1998; and (b) a fee payable in 90 days computed as
 follows:  for any contract executed by the Company with the
 Turkish Government during the term of this Agreement, if the
 contract is secured by an irrevocable letter of credit in
 favor of the Company or by an advance cash payment to the
 Company (collectively the "Turkish LC"), the Consultant shall
 be paid a fee equal to 0.25% of such basic contract price
 representing the firm commitments (excluding options and
 conditional extra work) under such Turkish contract, and
 within ninety (90) days after payments under such contract the
 Consultant shall be paid a fee equal to 0.25% of such
 payments.  These fees will continue to be paid to the
 Consultant after the term of this Agreement as performance
 continues under such Turkish contracts.

         5.   Expenses and Benefits.

           (a)   The Company will reimburse the Consultant for
 all ordinary and reasonable expenses for office rental,
 secretarial expense and business travel incurred in connection
 with his performance of services hereunder; provided that the
 Company has approved of such expenses before they are incurred
 and upon presentation to the Company of an itemized account
 and written proof of such expenses.

           (b)   The Company shall during the term of this
 Agreement, to the extent allowed by law without rendering the
 Company subject to the provisions of the Employee Retirement
 Income Security Act of 1974 ("ERISA") as the operator of a
 "multiemployer plan" (within the meaning of Section 3(37) of
 ERISA), continue to provide the Consultant with the
 automobile, life insurance and health insurance coverage
 benefits he is currently receiving or with comparable
 replacement benefits if the Company changes such plans.

         6.   Death of the Consultant.  Except as required by law,
 in the event of the death of the Consultant during the term of
 this Agreement, this Agreement shall terminate effective as of
 the date of the Consultant's death, and the Company shall not
 have any further obligation or liability hereunder except that
 the Company shall pay to Consultant's designated beneficiary
 or, if none, his estate the portion, if any, of the
 Consultant's compensation for the period up to the
 Consultant's date of death which remains unpaid.

         7.   Non-disparagement.  Except as required by law, during
 the Term, the Consultant shall not say, write or communicate
 anything which would be harmful, detrimental or injurious to,
 or otherwise disparage, the Company or EA or any of their
 current or future employees, managers, executives or
 directors, or the Company's or EA's name, reputation or
 business, to any entity or person in public or in private.
 The Consultant's communications to members of his family in
 private or to the Board of Directors or Officers of the
 Company as part of his performance in good faith under this
 Consulting Agreement shall not be deemed to violate the
 provisions of this Paragraph 7.

         8.   Non-interference.  The Consultant shall not in any
 manner interfere with any current or future negotiations or
 transactions of any nature between the Company and EA or any
 of their respective affiliates..

         9.   Notices.  All notices, requests, demands, claims, and
 other communications hereunder shall be in writing.  Any
 notice, request, demand, claim, or other communication
 hereunder shall be deemed duly given if (and then two business
 days after) it is sent by registered or certified mail, return
 receipt requested, postage prepaid, and addressed to the
 intended recipient as set forth below:

           If to Consultant:   431 Righters Mill Road
                              Narberth, PA 19072

           If to Company:      700 Dresher Road
                              Horsham, Pennsylvania 19044
                              Attn:  President

 Any party hereto may give any notice, request, demand, claim
 or other communication hereunder using any other means
 (including personal delivery, expedited courier, messenger
 service, telecopy, telex, ordinary mail, or electronic mail),
 but no such notice, request, demand, claim, or other
 communication shall be deemed to have been duly given unless
 and until it actually is received by the individual for whom
 it is intended.  Any party hereto may change the address to
 which notices, requests, demands, claims, and other
 communications hereunder are to be delivered by giving the
 other parties hereto notice in the manner herein set forth.

         10.  Relationship of Parties.  Consultant, in the
 performance of the foregoing consulting services, shall be
 deemed an independent contractor.  Consultant shall have no
 right or authority to assume or create any obligations on
 behalf of the Company or to make any representations on its
 behalf.  The Company shall not directly control or dictate the
 manner of performance of Consultant's obligations under this
 Agreement.

         11.  Governing Law.  This Agreement shall be governed by
 and construed in accordance with the internal laws (and not
 the law of conflicts) of the State of Delaware.

         12.  Contents of Agreement; Amendment and Assignment.
 This Agreement sets forth the entire understanding between the
 parties hereto with respect to the subject matter hereof.
 This Agreement cannot be changed, modified or terminated
 except upon written amendment duly executed by the parties
 hereto.  All of the terms and provisions of this Agreement
 shall be binding upon and inure to the benefit of and be
 enforceable by the respective heirs, representatives,
 successors and assigns of the parties hereto, except that the
 duties and responsibilities of the Consultant hereunder are of
 a personal nature and shall not be assignable in whole or in
 part by him.

         IN WITNESS WHEREOF, this Agreement has been executed by
 the parties on the date first above written.

                                   CONSULTANT

                                   /s/ Ayhan Hakimoglu
                                   AYHAN HAKIMOGLU

                                   AYDIN CORPORATION

                                   By:/s/ John F. Vanderslice
                                        EXECUTIVE VICE PRESIDENT

 <PAGE>
                                                Exhibit 10.10

                     RESTRICTIVE COVENANT AGREEMENT

         THIS RESTRICTIVE COVENANT AGREEMENT (this "Agreement") is
 made and effective as of May 1, 1996 by and between Aydin
 Corporation, a Delaware corporation with its principal
 executive offices located at 700 Dresher Road, Horsham,
 Pennsylvania 19044 (the "Company"), and Ayhan Hakimoglu, a
 Pennsylvania resident with an address at 431 Righters Mill
 Road, Narberth, Pennsylvania 19072 ("Ayhan").  The definition
 of "Company" includes all of its subsidiaries.

                               BACKGROUND

         The Company operates internationally in the following
 businesses:  engineering and manufacturing of
 telecommunications equipment and systems, computer monitor and
 ruggedized workstations, and computer control systems with
 software for industrial and governmental applications
 (together with such businesses as the Company may enter during
 the Term, the "Business").

         On the date Ayhan Hakimoglu may sell all of his capital
 stock of the Company to EA Industries, Inc. ("EA") and on the
 date he may resign as Chairman and Chief Executive Officer of
 the Company, this Restrictive Covenant Agreement with the
 Company will be effective.

         NOW, THEREFORE, in consideration of the Company's
 payments to Ayhan as provided in this Agreement and intending
 to be legally bound hereby, Ayhan and the Company agree, for a
 period commencing on the date hereof and ending on April 30,
 1999 (the "Term") as follows:

         1.   Non-Disclosure.  Ayhan recognizes and acknowledges
 that he will have access to certain confidential information
 of the Company and that such information constitutes valuable,
 special and unique property of the Company.  Ayhan agrees that
 he will not, for any reason or purpose whatsoever, during or
 after the Term use, directly or indirectly, for his own
 benefit or the benefit of any other person, or disclose any of
 such confidential information to any party without express
 authorization of the Company, except as reasonably necessary
 in the performance of his duties hereunder.  As used in this
 Paragraph 1, "Confidential Information" shall mean any
 information relating to the business or affairs of the Company
 as presently conducted or proposed to be conducted now or
 during the term of the Consulting Agreement, including but not
 limited to information relating to financial statements,
 client identities, potential clients, employees, suppliers,
 servicing methods, programs, strategies and information,
 analyses, profit margins, computer software, data, and
 documentation, trade secrets and confidential business
 information (including ideas, formulas, compositions,
 inventions (whether patentable or unpatentable and whether or
 not reduced to practice), know-how, manufacturing and
 production processes and techniques, research and development
 information, drawings, specifications, designs, plans,
 proposals, technical data, copyrightable works, financial,
 marketing, and business data, pricing and cost information,
 business and marketing plans), other proprietary rights, and
 copies and tangible embodiments thereof (in whatever form or
 medium) or other proprietary information used by the Company
 in connection with its business; provided, however, that
 Confidential Information shall not include any information
 which is in the public domain or becomes generally known in
 the industry through no wrongful act on the part of Ayhan.
 Ayhan acknowledges that the Confidential Information is vital,
 sensitive, confidential and proprietary to the Company.

         2.   Noncompetition.  Ayhan agrees that during the Term he
 shall not, unless acting with the prior written consent of the
 Board of Directors of the Company (the "Board"), directly or
 indirectly:

           (a)   solicit business from or perform services for,
 any person, company or other entity which at any time during
 the Term is a client or customer of the Company if such
 business or services are of the same general character as
 those engaged in or performed by the Company or supplied to
 the Company;

           (b)   solicit for employment or in any other fashion
 hire any of the employees of the Company;

           (c)   own an interest in, manage, operate, finance,
 join, control or participate in the ownership, management,
 operation, financing or control of, or be connected as an
 officer, director, employee, partner, principal, agent,
 representative, consultant or otherwise with any business or
 enterprise engaged in the Business;

           (d)   use or willingly permit his name to be used in
 connection with, any business or enterprise engaged in the
 business of the same general character as the Business;

           (e)   use the name of the Company or any name similar
 thereto, but nothing in this clause shall be deemed, by
 implication, to authorize or permit use of such name after
 expiration of the Term;

 provided, however, that this provision shall not be construed
 to preclude Ayhan from describing his position at the Company
 or from using the Company's name and his name on his resume or
 curriculum vitae or to prohibit the ownership by Ayhan of not
 more than 3% of any class of the outstanding equity securities
 of any corporation which is engaged in any of the foregoing
 businesses having a class of securities registered pursuant to
 the Securities Exchange Act of 1934.

         3.   Non-interference.  Ayhan shall not in any manner
 interfere with any current or future negotiations or
 transactions of any nature between the Company and EA or any
 of their respective affiliates.

         4.   Consideration.  In consideration of the undertaking of
 Ayhan contained in Paragraphs 1, 2 and 3 hereof, Company
 agrees to pay to Ayhan an aggregate sum of six hundred
 thousand ($600,000) dollars, payable in three equal annual
 installments of two hundred thousand ($200,000) dollars in
 advance on May 3, 1996, May 1, 1997 and May 1, 1998.

         5.   Equitable Relief; Survival.  Ayhan acknowledges that
 the restrictions contained in Paragraphs 1, 2 and 3 hereof
 are, in view of the nature of the business of the Company,
 reasonable and necessary to protect the legitimate interests
 of the Company, and that any violation of any provisions of
 those Paragraphs will result in irreparable injury to the
 Company.  Ayhan also acknowledges that the Company shall be
 entitled to temporary and permanent injunctive relief, without
 the necessity of proving actual damages, and to an equitable
 accounting of all earnings, profits and other benefits arising
 from any such violation, which rights shall be cumulative and
 in addition to any other rights or remedies to which the
 Company may be entitled.  In the event of any such violation,
 the Company shall be entitled to commence an action for
 temporary and permanent injunctive relief and other equitable
 relief in any court of competent jurisdiction and Ayhan
 further irrevocably submits to the jurisdiction of any
 Delaware court or Federal court sitting in Delaware over any
 suit, action or proceeding arising out of or relating to
 Paragraphs 1, 2, or 3.  Ayhan hereby waives, to the fullest
 extent permitted by law, any objection that he may now or
 hereafter have to such jurisdiction or to the venue of any
 such suit, action or proceeding brought in such a court and
 any claim that such suit, action or proceeding has been
 brought in any inconvenient forum.  Effective service of
 process may be made upon Ayhan by mail under the notice
 provisions contained in Paragraph 8 hereof.

         6.   Remedies Cumulative; No Waiver.  No remedy conferred
 upon the Company by this Agreement is intended to be exclusive
 or any other remedy, and each and every such remedy shall be
 cumulative and shall be in addition to any other remedy given
 hereunder or now or hereafter existing at law or in equity.
 No delay or omission by the Company in exercising any right,
 remedy or power hereunder or existing at law or in equity
 shall be construed as a waiver thereof, and any such right,
 remedy or power may be exercised by the Company from time to
 time and as often as may be deemed expedient or necessary by
 the Company in its sole discretion.

         7.   Enforceability.  If any provision of this Agreement
 shall be invalid or unenforceable, in whole or in part, then
 such provision shall be deemed to be modified or restricted to
 the extent and in the manner necessary to render the same
 valid and enforceable, or shall be deemed excised from this
 Agreement, as the case may require, and this Agreement shall
 be construed and enforced to the maximum extent permitted by
 law, as if such provision had been originally incorporated
 herein as so modified or restricted, or as if such provision
 had not been originally incorporated herein, as the case may
 be.

         8.   Notices.  All notices, requests, demands, claims, and
 other communications hereunder shall be in writing.  Any
 notice, request, demand, claim, or other communication
 hereunder shall be deemed duly given if (and then two business
 days after) it is sent by registered or certified mail, return
 receipt requested, postage prepaid, and addressed to the
 intended recipient as set forth below:

           If to Ayhan: 431 Righters Mill Road
                          Narberth, PA 19072

           If to Company: 700 Dresher Road
                          Horsham, Pennsylvania 19044
                          Attn:  President

 Any party hereto may give any notice, request, demand, claim
 or other communication hereunder using any other means
 (including personal delivery, expedited courier, messenger
 service, telecopy, telex, ordinary mail, or electronic mail),
 but no such notice, request, demand, claim, or other
 communication shall be deemed to have been duly given unless
 and until it actually is received by the individual for whom
 it is intended.  Any party hereto may change the address to
 which notices, requests, demands, claims, and other
 communications hereunder are to be delivered by giving the
 other parties hereto notice in the manner herein set forth.

         9.   Governing Law.  This Agreement shall be governed by
 and construed in accordance with the internal laws (and not
 the law of conflicts) of the State of Delaware.

         10.  Contents of Agreement; Amendment and Assignment.
 This Agreement sets forth the entire understanding between the
 parties hereto with respect to the subject matter hereof.
 This Agreement cannot be changed, modified or terminated
 except upon written amendment duly executed by the parties
 hereto.  All of the terms and provisions of this Agreement
 shall be binding upon and inure to the benefit of and be
 enforceable by the respective heirs, representatives,
 successors and assigns of the parties hereto, except that the
 duties and responsibilities of Ayhan hereunder are of a
 personal nature and shall not be assignable in whole or in
 party by him.

         IN WITNESS WHEREOF, this Agreement has been executed by
 the parties on the date first above written.

                            /s/ Ayhan Hakimoglu
                            AYHAN HAKIMOGLU

                            AYDIN CORPORATION


                            By:/s/ Donald S. Taylor
                                    PRESIDENT

 <PAGE>
                                                Exhibit 10.11
                             AYDIN CORPORATION

    Telephone                                 700 Dresher Road
 (215) 657-7510                                 P.O. Box 349
     FACSIMILE                                Horsham, PA 19044
 (215) 657-3830                                    U.S.A.

 September 13, 1996

 Dr. Donald S. Taylor
 3 Country Lakes Drive
 Marlton, NJ   08053

 Dear Dr. Taylor:

 The purpose of this letter is to confirm the agreement between
 Aydin Corporation  ("the Company") and you concerning your
 resignation as President of the Company and a Member of the
 Board of Directors  as follows:

         1.   You hereby confirm your resignation from the Board of
 Directors and as President of the Company as well as your
 resignation from all officerships, directorships and
 employment with all subsidiaries and affiliates of the Company
 (collectively, the "Companies").

         2.   Subject to the terms and conditions of this agreement,
 the Company will pay you a salary continuation benefit and
 certain other benefits as outlined on Appendix A hereto.

         3.   The provisions of this agreement, and any payment
 provided hereunder, shall not reduce or increase any amounts
 otherwise payable, or affect your rights under, any benefit
 plan of the Company in accordance with the terms of any such
 plan. All payments to be made to you under this agreement
 shall be subject to required withholding of federal, state and
 local income and employment taxes.

         4.   In the event of your death prior to September 13,
 1997, this agreement shall terminate effective as of the date
 of your death and none of the Companies shall have any further
 obligations or liability hereunder except that the Company
 shall pay to your estate the unpaid portion, if any, of your
 salary continuation benefit for the period up to your date of
 death.

         5.   (a)   You recognize and acknowledge that you have
 certain confidential information about the Companies, the
 business activities of the Companies and entities related to
 the Companies and the ownership thereof and related entities,
 and that such information constitutes valuable, special and
 unique property of the Companies. You agree that you will not,
 for any reason or purpose whatsoever, during or after the term
 of this agreement, (i) disclose any of such confidential
 information to any person without the prior written approval
 of the Company or (ii) commit any act or become involved in
 any situation or occurrence which disparages the Companies or
 their products or services or which reflects unfavorably upon
 the reputation of the Companies or their officers or
 directors.

           (b)   You agree with the Companies that pursuant to
 the Agreement, dated January 4, 1995, you will not directly or
 indirectly solicit any client, customer or employee of the
 Company.

          (c) You agree with the Companies that for a period of
 three (3) years from this date that you will not directly or
 indirectly compete with the Companies (i) as to any technology
 developed or identified by the Companies during the term of
 your employment and (ii) as to any programs developed of
 identified during the term of your employment.

 (d) You agree with the Companies that you will do nothing to
 circumvent the undertakings you have agreed to in paragraphs 5
 (a), 5 (b) and 5(c).

           (e)   You acknowledge that your compliance with your
 agreements in paragraphs 5(a), 5 (b) and 5(c) and 5(d) hereof
 is necessary to protect the good will and other proprietary
 interests of the Companies and that a breach of your
 agreements in paragraphs 5(a) or 5(b) or 5(c) or 5(d) hereof
 will result in irreparable and continuing damage to the
 Companies and their respective owners, for which there will be
 no adequate remedy at law, and you agree that, in the event of
 any breach of your agreements in paragraphs 5(a) or 5(b) or
 5(c) or 5(d) hereof, the Companies and their respective
 successors and assigns shall be entitled to injunctive relief
 and to such other and further relief as may be proper,
 including the termination of the benefits specified on
 Appendix A hereto.

         6.   (a)   In consideration of the execution of this
 agreement by you and the Company, you, on behalf of yourself
 and all persons claiming by, through and under you including,
 without limitation, each and every dependent, heir, executor
 and administrator, together with your agents, successors,
 assigns and legal representatives (collectively the "Taylor
 Parties"), hereby waive, remise, release, settle and forever
 discharge the Companies, their respective affiliates, parents,
 subsidiaries and divisions, and any current or former
 director, officer, agent, employee or stockholder of the
 Companies, together with their agents, successors, assigns and
 legal representatives (collectively the "Company Parties")
 from any and all claims, sums of money, fees, compensation,
 counterclaims, cross claims, rights, demands, losses, damages,
 trespasses, bonds, executions, liabilities, suits, actions and
 causes of action against the Company Parties and each of them
 that any of the Taylor Parties, jointly or severally, ever
 had, now has or may have, in law or in equity, of every nature
 or description, whether known or unknown, suspected or
 unsuspected, foreseen or unforeseen, actual or potential,
 which exist as of the date of this agreement in whole or in
 part as a result of any act or omission in connection with
 your employment with any of the Companies and your resignation
 from such employment, including, without limitation, by reason
 of specification, Title VII of the Civil Rights Act of 1964,
 as amended, the Pennsylvania Human Relations Act, the Age
 Discrimination in Employment Act, the Employee Retirement
 Income Security Act, as amended, the Fair Labor Standards Act,
 the Americans with Disabilities Act, any state statute or
 local ordinance similar to the foregoing federal acts,
 Pennsylvania wage payment law or other federal or state law,
 including any claim of alleged discrimination, defamation,
 slander, libel, invasion of privacy, breach of employment
 contract, breach of implied covenant of good faith and fair
 dealing, intentional or negligent infliction of emotional
 distress or wrongful discharge, up to the date of this
 agreement. This release of rights does not extend to claims
 that may arise after the date of this agreement.

           (b)   In consideration of the execution of this
 agreement by you and the Company, the Company Parties (except
 as noted hereinafter) hereby waive, remise, release, settle
 and forever discharge you from any and all claims, sums of
 money, fees, compensation, counterclaims, cross claims,
 rights, demands, losses, damages, trespasses, bonds,
 executions, liabilities, suits, actions and causes of action
 against you that any of the Company Parties, jointly or
 severally, ever had, now has or may have, in law or in equity,
 of every nature or description, whether known or unknown,
 suspected or unsuspected, foreseen or unforeseen, actual or
 potential, which exist as of the date of this agreement or
 arise hereafter in whole or in part as a result of any act or
 omission committed from the beginning of time to the date of
 this agreement.  This release does not run to any act
 committed by you during your employment in which you exceeded
 your authority as President of the Company or as a member of
 the Companies Board of Directors and such act results in a
 claim being made against the Companies.

         7.   The Companies deny any wrongdoing or liability
 whatsoever to you, and the execution of this agreement by the
 Company on behalf of the Companies does not constitute an
 admission of any liability whatsoever to you under statutory
 or common law.

         8.   You acknowledge that the Company advised you to
 consult with an attorney prior to executing this agreement.
 You further acknowledge that you have read this agreement and
 understand all of its terms and that your execution of this
 agreement has not been induced by any representations,
 statements, warranties or agreements other than those
 expressed or referred to herein. You acknowledge that you have
 executed this agreement knowingly and voluntarily, with full
 knowledge of its significance.

         9.   You acknowledge that the Company has advised you that
 you have 21 days from receipt of this agreement to consider
 it. In the event you sign this agreement before the expiration
 of the twenty-one day review period, you explicitly agree
 hereby to waive the opportunity to use the full review period.
 This agreement shall become effective seven days following the
 date of your signature.

         10.     This agreement sets forth the entire agreement
 between you and the Company and, except for the Agreement
 dated January 4, 1995, and the Restricted Stock Agreement
 dated January 3, 1995, supersedes all prior agreements or
 understandings between you and any of the Companies related to
 your employment by any of the Companies.

         11.  In case any one or more of the provisions contained
 herein shall, for any reason, be held to be invalid, illegal
 or unenforceable in any respect, such invalidity, illegality
 or unenforceability shall not affect any other provision of
 this agreement but this agreement shall be construed as if
 such invalid, illegal or unenforceable provision or provisions
 had never been contained herein unless the deletion of such
 provision or provisions would result in such a material change
 as to cause performance of this agreement to be unreasonable.

         12. This agreement shall be governed by and construed in
 accordance with the laws of the Commonwealth of Pennsylvania.

         If the foregoing correctly sets forth our agreement,
 please sign the enclosed copy of this letter where indicated
 and return it to me.

                             AYDIN CORPORATION

                             By: /s/ I. Gary Bard
                                 I. Gary Bard
                                 Chairman of the Board &
                                 Chief Executive Officer

 Accepted and agreed to,
 intending to be legally
 bound hereby this 30
 day of September, 1996:

 /s/ Donald S. Taylor
 Donald S. Taylor

 Witness:

  /s/ Gwendolyn Taylor

 <PAGE>
                                                 APPENDIX  A

                          DONALD S. TAYLOR

                    COMPENSATION AND BENEFIT OFFER


 1. Continue salary at $3,000 per week until September 13,
 1997.
 2. Continued participation in Company medical and dental plans
 until March 13, 1997.
 3. Company will pay you the 40% holdback on the first half
 1996 bonus plan ($12,000) when the holdback is paid to all
 other Company employees.
 4. The Company will pay you $12,167 as your  pro-rata share of
 the Third Quarter bonus (through September 13, 1996) when the
 payments (60% and 40%) are made in the regular course to
 Company employees.
 5. The Board of Directors will be requested to remove the
 restrictions imposed upon the grant to you of 10,000 shares of
 the Company's Common Stock, as specified in the Aydin
 Corporation Restricted Stock Agreement, dated January 3, 1995.
 6. The Company will make available to you out placement
 services and office space for 6 months not to exceed $5,000.
 7. You will have until October 14, 1996, to exercise all or
 any portion of your current stock option to purchase 17,500
 shares of the Company Common Stock at $11.56 per share,
 pursuant to the terms of the Individual Non-Qualified Stock
 Option Agreement dated January 3, 1995.

 <PAGE>
                                               Exhibit 13

                                 AYDIN
                           ANNUAL REPORT 1996

 <PAGE>

THE COMPANY

Aydin is a world class provider of products and systems for the
acquisition and distribution of information over electronic
communications media.

The Company designs, engineers, manufactures, markets, distributes
and installs technologically advanced communications products and
systems. AYDIN's customers are military, space, government and
commercial organizations around the world.

AYDIN's products and systems include:  airborne and ground telemetry
products, displays, radios, microwave components, C3 systems
(Command, Control and Communications), radar automation and
integration systems, military communication systems and
telecommunications infrastructure equipment and systems.

AYDIN's offerings range from supplying basic components to providing
turnkey systems.

                                 (page 1)
<PAGE>

TO MY FELLOW STOCKHOLDERS:

As your new Chairman of the Board and Chief Executive Officer, I
want to share with you my perspective on where we are now and where
we are going.

1996 was a year of transition for AYDIN.  Since I came on board in
May, we have been restructuring and repositioning the Company.  We
are redirecting AYDIN from a business focused on government and
defense contracts with modest potential for growth, to a company
focused on communications, with a broader customer base and
potential for greater growth.

There was, and continues to be, a need to redefine our company and
its corporate culture.  We are in the process of converting from
being technology directed to using technology to meet customers'
needs. We are changing from being engineering driven to being market
driven. We are moving from being a group of autonomous businesses,
to being a single business operating as a team.  We are committed to
maximizing our key assets: a recognized and respected name in
specialized markets, a reputation for excellence in the design and
manufacture of high performance products, and a core group of high
skilled technologists.

FINANCIAL RESUTS. . . . . Our results in 1996 are clearly
disappointing. Sales were down.  Our cost structure was not
consistent with the changing size and mix of our business.  AYDIN's
sales in 1996 were $116,578,000 versus $140,607,000 in 1995, a
decrease of 17%.  Our net loss was $14,780,000 versus a net income
of $3,930,000 in 1995. Loss per share in 1996 was $2.88.

AYDIN's sales were down for several reasons.  We have stopped
selling several products that were not profitable, and we sold one
non-profitable product line. Our Systems Division did not win any
large projects, reducing both sales and backlog in the systems area.

                                 (page 2)
<PAGE>

During the latter part of 1996, the Company made significant
restructuring changes which helped us to realign our business
structure to be consistent with our long term goals.  We
discontinued non-profitable product lines, stopped the development
of products that no longer fit our business objectives, and
reestimated the costs required to  complete our major systems jobs,
resulting in inventory write downs, severance and related charges.
While all of these charges negatively impacted 1996 profits, they do
improve our ability to operate profitably in 1997 and in the future.

AYDIN had both marketing and financial accomplishments in 1996.  We
gained initial customer acceptance on two large projects:  TMRC
(Turkish Mobile Radar Complexes) and RIS (a NATO Radar Integration
System).  We built backlog for our new TDMA INTELSAT Earth Station
Terminal and expect to build sales and backlog in 1997.  Our asset
management improved as we lowered unbilled revenue by $8,934,000 or
19%, and accounts receivable by $28,060,000 or 53%.  We have
dramatically improved cash provided from operating activities,
generating a positive cash flow of $189,000 in 1996 versus a cash
drain of $7,979,000 in 1995.  AYDIN Vector maintained its long
record of outstanding performance, maintaining growth and
profitability.

MOVING FORWARD . . . . AYDIN enters 1997 with an aggressive plan to
improve growth and profitability.  We have already begun to build a
profitable foundation on which to expand our business.  We
simplified our organizational structure, helping us to better take
advantage of our existing resources. AYDIN now has two main revenue
producing organizations:  Products Group and Communications Systems
Group.  Each of these groups is described in the following pages of
this Annual Report to Stockholders.

We have cut costs where possible and have several additional cost
cutting efforts well underway.  We anticipate annual savings of
approximately $11,000,000 as a result of these actions.  Specific
actions taken include:
  - Restructuring our business into two primary divisions saving
    overhead.
  - Combining three manufacturing lines into a single facility,
    cutting overhead and creating the opportunity to reduce costs by
    increasing buying leverage.
  - Securing agreements of sale for two buildings and placing a
    third underutilized building on the market.
  - Selling the unprofitable High Power Amplifier product line.

                                 (page 3)
<PAGE>

                                  [Photo]
                        The AYDIN Management Team:
                              (left to right)
             John F. Vanderslice (seated), James R. Henderson,
                          Barry Maser, Gary Bard,
                              Klaus D. Oebel


MANAGEMENT CHANGES. . . . . The year 1996 was one of significant
change in AYDIN's management team.  In May, Ayhan Hakimoglu, AYDIN's
founder, CEO and Chairman of the Board resigned.  We thank him for
his contributions over the years and wish him the best in his new
endeavors.

I succeeded him, but am no newcomer to AYDIN.  I was a young manager
when the Company started, and later a division president.  I
rejoined AYDIN with three decades of experience in high technology
electronics and information systems as founder of Delta Data Systems
and Division President at Computer Sciences Corporation.  I helped
these high technology businesses to achieve growth and
profitability.  I returned to AYDIN's Board of Directors two years
ago and in May of this year was elected Chairman of the Board and
appointed CEO.

Immediately after my appointment, I set out to find additional
leadership to guide our company into its new future.  In July, Jim
Henderson joined us as Chief Financial Officer. He brings to our
team many years of successful experience in finance and financial
controls at Unisys.  In August, Klaus Oebel, with twenty-five years
experience in international business development and strategic
planning, became President of AYDIN Communication Systems Group and
corporate Vice President.  In November, Barry Maser joined us as
Vice President of Business Development and International Sales.
Barry's experience includes developing and running an international
sales and marketing organization for Delta Data Systems as well as
being the principal of a regional communications and computer
peripheral products sales company.

                                 (page 4)
<PAGE>

One of AYDIN's outstanding performing divisions has been and will
continue to be our Vector Products operation.  Under the leadership
of John Vanderslice it has shown growth, profits and has a
significant market share in the avionics electronics business.  As
Executive Vice President of AYDIN and President of AYDIN Products,
John completes a senior executive team that is committed to success.

FUTURE GOALS. . . . . AYDIN's management is committed to achieving
solid growth and returns.  Our financial goals for 1997 are to
ensure that all product lines are profitable, to increase sales and
to grow backlog.  We will continue our efforts to reduce costs.  We
will continue our efforts to improve the quantity and quality of
sales.  We will continue to seek new opportunities to maximize sales
of developed products and expand our systems business.

We will focus on sustaining and growing our core global defense
business and our industrial and military display business.  We have
narrowed our focus in the systems business by only prosecuting
opportunities in communications systems and in air defense and radar
modernization projects.  It is these opportunities that will utilize
the know-how and skill we have gained in successfully executing
programs like TMRC and RIS.  We believe that using our related
experience as a basis for selecting systems opportunities to bid,
both improves our ability to win projects and allows us to deliver
greater value to our customers.

Our future efforts will be on building a telecommunications business
where we can anticipate more rapid growth. The market for telephony
equipment and systems is growing rapidly both in the United States
and overseas.  We see an opportunity for companies like AYDIN to
provide complete information systems. Starting with basic
telephony, we will be in a position to add information products,
systems and services to take sources of data and provide useful
information to users.

Management's job in 1997 is to continue our efforts to position our
Company to achieve our long range vision, and as a result, continue
to add value to our stockholders.  I close this letter with a
personal thank you to each of you for your continuing confidence in
AYDIN and for your support.

/s/ I. Gary Bard

I. Gary Bard
Chairman of the Board, President and Chief Executive Officer

                                 (page 5)

<PAGE>

AYDIN PRODUCTS GROUP

In line with the company's new market driven focus, AYDIN product
divisions have been grouped to maximize the synergy of our people,
products, systems and technical expertise.  The airborne telemetry
(AYDIN Vector) and ground telemetry product lines have been combined
to form AYDIN Telemetry.  AYDIN Displays, formerly AYDIN Controls,
serves commercial, marine and military command and control and
display markets.  AYDIN Microwave includes microwave components and
microwave radios for sophisticated commercial and military
customers.

AYDIN TELEMETRY

AYDIN telemetry's airborne and avionics products gather and process
critical information on board spacecraft, aircraft, missiles, guided
weapons and ground vehicles.  Data is recorded and/or transmitted by
radio links to fixed or mobile receiving stations.  AYDIN airborne
and ground station products receive, analyze, distribute and display
information collected.  These products are ruggedized for extreme
environments.

AYDIN Telemetry products are used in defense and aerospace programs
such as aircraft and weapons development, flight test and satellite
communications for space agencies including NASA.

AYDIN DISPLAYS

AYDIN Displays provides a complete line of high-resolution color CRT
monitors, flat panel displays, and work stations.  Our display
products are packaged to meet industrial, ruggedized and military
environments.  AYDIN displays are used on factory floors, especially
in process control industries (chemicals, food and beverage,
electric utilities); in ship board information centers; in military
Command and Control Systems; in air traffic control centers and at
NASA Mission Control.

                                 (page 6)
<PAGE>

AYDIN MICROWAVE

AYDIN Microwave combines digital and analog microwave radios and
microwave components for commercial and military applications.

AYDIN digital radios incorporate modern modulation and coding
techniques to efficiently handle North American and International
data rates.  The Company's data multiplexers and channel banks
complement these radios.

AYDIN Microwave provides thin and thick film RF (Radio Frequency) ,
microwave and digital micro-circuits.  Our hybrid devices are
suitable for use in extreme environments.  They are used in
commercial and military telecommunications products for satellite
and microwave systems.  AYDIN communications amplifiers have become
a standard for performance and reliability in the telecommunications
industry.

AYDIN COMMUNICATIONS SYSTEMS GROUP

Like our product divisions, the AYDIN systems divisions are grouped
to better take advantage of our design, development and installation
expertise.  AYDIN Government Systems designs turnkey integrated
systems for air defense, and command, control & communications
applications.  AYDIN Telecom provides products and systems for
government and commercial users.

                                 (page 7)
<PAGE>

AYDIN GOVERNMENT SYSTEMS

AYDIN's Government Systems specializes in providing turnkey air
defense, C3 (Command, Control & Communications) and backbone
communications  systems.  Our systems aid in:  flight plan
processing, data recording-reduction-playback, simulation &
training; and air traffic control. In Turkey, AYDIN provides turnkey
communications systems capability, including design, site survey,
civil works, shelterization, test, installation and training.

Our customers include NATO, defense agencies in the US and around
the world, major aerospace corporations  and private commercial
businesses.  Major projects currently include RIS (radar
integration) for NATO countries and TMRC (Turkish Mobile Radar
Complexes).  Both projects integrate radar inputs, process the radar
data and provide Command and Control information to system
operators.

AYDIN TELECOM

AYDIN Telecom provides both digital and analog products and systems
for telecommunications service providers and private network
operators such as satellite networks, and railroad & utility
communications. AYDIN also engineers, manufactures and sells
telephone infrastructure equipment.  Our product line includes
network access, data compression and satellite earth station
equipment.

In cooperation with COMSAT Laboratories, AYDIN is currently
marketing a second generation TDMA (Satellite Time Division Multiple
Access) terminal for the INTELSAT satellite network.

Aydin provides systems, products and services all along the
information and communications spectrum. The company continues to
keep pace with changing technology, serving an expanding world wide
customer base.  The company's focus is to help people communicate.
AYDIN's products and systems help our customers manage the link
between raw data and useful information.

                                 (page 8)
<PAGE>

                           FINANCIAL STATEMENTS

                                 (page 9)

<PAGE>

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                              Year Ended December 31,
                                       1996            1995            1994
                                  ----------------------------------------------
<S>                                <C>             <C>             <C>
Net sales                          $116,578,000    $140,607,000    $142,441,000
________________________________________________________________________________
Costs and expenses:
 Cost of sales                       94,363,000     102,391,000     104,270,000
 Selling, general, and
  administrative                     29,833,000      25,660,000      26,080,000
 Research and development             8,315,000       6,603,000       5,159,000
 Interest expense, net                  189,000          45,000           5,000
 Restructuring costs                  3,730,000              -               -
________________________________________________________________________________
                                    136,430,000     134,699,000     135,514,000
________________________________________________________________________________

Income (loss) before income taxes
  and minority interest             (19,852,000)      5,908,000       6,927,000

Income tax provision (recovery)      (4,979,000)      1,971,000       1,880,000
________________________________________________________________________________
Income (loss) before minority
  interest                          (14,873,000)      3,937,000       5,047,000

Less minority interest                  (93,000)          7,000              -
________________________________________________________________________________
Net income (loss)                  $(14,780,000)     $3,930,000      $5,047,000
________________________________________________________________________________
________________________________________________________________________________



Earnings (loss) per common and
  common equivalent share              $  (2.88)         $  .77         $  1.01
________________________________________________________________________________
________________________________________________________________________________

</TABLE>
See notes to consolidated financial statements

                                 (page 10)
<PAGE>

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

December 31,
                                                      1996              1995
                                                 --------------------------------
<S>                                              <C>              <C>
Assets
Current Assets
 Cash and cash equivalents:
   1996-$1,584,000; 1995-$3,569,000              $   5,495,000    $   4,638,000
 Restricted cash                                     7,571,000       11,672,000
 Accounts receivable                                25,156,000       53,216,000
 Unbilled revenue                                   37,993,000       46,927,000
 Inventories                                        16,415,000       22,780,000
 Prepaid expenses                                    2,331,000        1,577,000
________________________________________________________________________________
     Total Current Assets                           94,961,000      140,810,000

Property, Plant and Equipment,
  at cost, net of accumulated
  depreciation and amortization                     22,739,000       25,624,000

Other assets                                         2,622,000          426,000
________________________________________________________________________________
________________________________________________________________________________
                                                  $120,322,000     $166,860,000
________________________________________________________________________________
________________________________________________________________________________

Liabilities and Stockholder's Equity
Current Liabilities
 Current maturities of long-term debt             $         -      $    342,000
 Short-term bank debt                                2,800,000        5,486,000
 Accounts payable                                   14,865,000       29,222,000
 Accrued liabilities:
  Compensation                                       3,836,000        3,405,000
  Department of Justice settlement                     119,000        2,064,000
  Other                                              1,872,000        1,901,000
 Advance payments and contract billings
  in excess of recognized revenue                    2,278,000        2,843,000
 Accrued and deferred income taxes                     426,000        9,932,000
________________________________________________________________________________
     Total Current Liabilities                      26,196,000       55,195,000

Long-Term Debt, less current maturities                     -           770,000
Other Liabilities                                    1,134,000               -
Deferred Income Taxes                                2,665,000        6,232,000
Minority Interest                                            -           90,000
Stockholder's Equity
 Common stock, par value $1-authorized,
  7,500,000 shares; issued and outstanding,
  1996-5,133,400 shares; 1995-5,112,127 shares       5,133,000        5,112,000
    Additional paid-in capital                       2,436,000        2,188,000
    Retained earnings                               83,103,000       97,883,000
    Foreign currency translation effects              (345,000)        (610,000)
________________________________________________________________________________
                                                    90,327,000      104,573,000
________________________________________________________________________________
                                                  $120,322,000     $166,860,000
________________________________________________________________________________
________________________________________________________________________________
</TABLE>
See notes to consolidated financial statements

                                 (page 11)
<PAGE>

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                               Year Ended December 31,
                                       1996             1995            1994
                                  ----------------------------------------------
<S>                              <C>              <C>             <C>
Operating Activities
 Net income (loss)               $ (14,780,000)   $   3,930,000   $   5,047,000
 Adjustments to reconcile net
 income (loss) to net cash
 provided (used) by operating
 activities:
  Depreciation and amortization      3,008,000        3,032,000       4,101,000
  Deferred income taxes             (3,891,000)         833,000      (7,444,000)
  Minority interest                    (93,000)           7,000              -
  Gain on sale of facility            (216,000)
 Changes in other operating assets
 and liabilities, net:
  Accounts receivable               28,060,000      (17,865,000)     (1,826,000)
  Unbilled revenue                   8,934,000        7,982,000      11,650,000
  Advance payments and contract
   billings in excess of
   recognized revenue                 (565,000)      (1,326,000)      2,606,000
  Inventories                        6,365,000       (2,216,000)     (2,967,000)
  Prepaid expenses                    (754,000)        (227,000)        120,000
  Accounts payable                 (14,357,000)       2,167,000       5,324,000
  Accrued liabilities               (1,543,000)      (3,230,000)     (4,695,000)
  Other long-term liabilities        1,134,000               -               -
  Accrued income taxes              (9,182,000)      (1,269,000)     10,800,000
  Other non-current assets          (2,196,000)              -               -
  Other                                265,000          203,000         118,000
________________________________________________________________________________
 Cash provided (used) by
 operating activities                  189,000       (7,979,000)     22,834,000

Investing Activities
Proceeds from sale of facility       1,159,000               -               -
Purchase of property, plant,
 and equipment                      (1,066,000)      (3,170,000)     (4,377,000)
________________________________________________________________________________
     Cash provided (used) by
     investing activities               93,000       (3,170,000)     (4,377,000)

Financing Activities
Release of collateral on
 restricted cash                     4,101,000        6,498,000       1,685,000
Principal payments on
 long-term debt                     (1,112,000)        (839,000)       (348,000)
Purchase of treasury stock                  -          (248,000)             -
Minority investment in
 consolidated subsidiary                 3,000           83,000        (105,000)
Proceeds from exercise of
 stock options                         269,000        1,522,000          96,000
Net short-term borrowings
 (repayments)                       (2,686,000)      (1,000,000)    (15,039,000)
________________________________________________________________________________
     Cash provided (used)
     by financing activities           575,000        6,016,000     (13,711,000)

     Increase (decrease) in cash
     and cash equivalents              857,000       (5,133,000)      4,746,000

Cash and cash equivalents at
 beginning of year                   4,638,000        9,771,000       5,025,000
________________________________________________________________________________

Cash and cash equivalents
 at end of year                  $   5,495,000    $   4,638,000   $   9,771,000
________________________________________________________________________________
________________________________________________________________________________
</TABLE>
See notes to consolidated financial statements

                                 (page 12)

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A-LIQUIDITY, CASH FLOWS AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES

Liquidity and Cash Flows:
The Company has financed its operations over the past two years
from internal cash sources because of the limited availability
of outside cash borrowing sources. At December 31, 1996 there
was $2.8 million of short-term cash borrowings outstanding with
no current availability for further cash borrowings. Also at
December 31, 1996 there was a letter of credit balance of $13.9
million issued against a $49 million advance payment received
in 1990 in connection with a contract from the Government of
Turkey. Offsetting the $13.9 million balance was $7.6 million
of cash collateral. This letter of credit is currently being
renewed in four month intervals or until it reaches zero,
whichever comes first. The Company anticipates that the letter
of credt will reach zero during the second half of 1998.
Although there can be no assurance that this letter of credit
will continue to be renewed, management is confident that the
letter of credit will be renewed upon its current expiration
and thereafter. The Company is currently seeking new banking
arrangements on terms acceptable to the Company to supplement
internally generated cash flows in meeting future potential
operating requirements.
  The Company anticipates that its near-term cash requirements
(in addition to renewed short-term financing requirements) can
be financed through internally generated cash flows.
Substantial amounts of cash flows are expected from certain of
the Company's largest current long-term type contracts on which
significant progress toward completion is expected in 1997.
Performance in accordance with the contracts will permit the
Company to bill and collect a significant portion of the $38
million of unbilled revenues at December 31, 1996 as well as
additional amounts to be earned in 1997. However, if the
Company is unable to meet delivery deadlines, cash flow will be
negatively impacted.
  During 1996, management initiated a restructuring plan to
consolidate operations and develop marketing strategies which
are expected to increase sales and reduce operating costs. Full
implementation of these operational changes is expected to
take effect in 1997. As part of the restructuring and
consolidation, three Company-owned buildings have been offered
for sale. Two of these facilities are under contract for sale
and an offer has been received on the third facility. Net
proceeds from these sales are expected to generate
approximately $10 million of available cash during 1997. There
can be no assurances that the anticipated effects of
management's restructuring, consolidation and other plans will
result in the cash flows as expected and described above.

Summary of Significant Accounting Policies:

Principles of Consolidation
  The consolidated financial statements include the accounts of
the Company and its majority-owned subsidiaries. All
significant inter-company transactions and balances are
eliminated in consolidation. At December 31, 1996, the Company
disposed of all but 19% of its prior 80% ownership in Aydin
S.A. (Argentina). Accordingly, the assets and liabilities of
Aydin S.A. are no longer included in the December 31, 1996
consolidated balance sheet but 80% of the operating results (a
$600,000 net loss) are included in the Consolidated Statement
of Operations.

Contract Accounting
  Revenue on long-term type contracts in excess of $100,000 is
recorded on the percentage-of-completion method. For such
contracts, a portion of the total contract price is included in
sales in the proportion that costs incurred to date bear to
total estimated costs at completion. The impact of periodic
revisions in costs and estimated profit is reflected in the
accounting period in which the facts become known.

                                 (page 13)
<PAGE>

  For all other contracts, revenue is recognized upon
completion of the contract or upon shipment of identifiable
units.
  The entire amount of ultimate losses estimated to be incurred
upon completion of contracts is charged to income when such
losses become known.
  Contract progress billings are based upon contract provisions
for customer advance payments, contract costs incurred, and
completion of specified contract objectives. Progress billing
balances at December 31, 1996 and 1995 amounted to $4,649,000
and $6,152,000, respectively. Contract billings for partial
shipments where product title passes to the customer are not
considered progress billings. Progress billings are netted
against unbilled revenue on the consolidated balance sheet.
Contracts may provide for customer retainage of a portion of
amounts billed until contract completion. All contract
retainage of $687,000 at December 31, 1996 matures in 1997.
Contract retainage is included on the consolidated balance
sheet as part of accounts receivable. Substantially all of the
unbilled revenue balance at December 31, 1996 of $37,993,000 is
expected to be billed during 1997 although this is dependent
upon the Company meeting performance milestones.
  Claims from a customer of approximately $1.0 million for work
performed outside the scope of a contract for which the Company
anticipates recovery were included in unbilled revenue at
December 31, 1995. This claim was settled in 1997 with no
negative impact on operations.

Use of Estimates
  In preparing its financial statements in accordance with
generally accepted accounting principles, management is
required to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and revenues and expense during the reported
periods. Actual results could differ from those estimates. One
such area where the use of estimates could have a significant
impact on future results is estimated costs at completion and,
in some cases, contract value on the company's larger long-term
type contracts. During 1996, changes to these estimates on the
Company's larger long-term type contracts had no significant
aggregate impact, except for the TMRC contract with the
Government of Turkey. For TMRC, there was a negative impact of
approximately $5.7 million pre-tax resulting from revisions of
contract values and estimates of costs to complete, of which
$2.6 million represented negotiations with the customer which
extended performance milestones. Other areas where use of
estimates could have a significant impact on future results are
inventory obsolescence reserves, accounts receivable bad debt
reserves and warranties.

Cash and Cash Equivalents
  The Company considers all highly-liquid investments with a
maturity of three months or less when purchased to be cash
equivalents. The Company's bank balances (including cash
equivalents and short-term investments in commercial
paper) in excess of the Federally insured limit ($100,000) per
bank, amounted to $14.3 million at December 31, 1996. All of
this cash is in high quality banks. Approximately $2.6 million
of the Company's total cash balances at December 31, 1996 was
in foreign banks.
  Restricted cash at December 31, 1996 and 1995 represents
interest bearing cash collateral required to be maintained
against letters of credit.

Inventories
  Inventories are valued at the lower of cost or market. Cost
is determined using the first-in, first-out(FIFO) and average
cost method which approximates FIFO.

                                 (page 14)
<PAGE>

Depreciation and Amortization
  Depreciation is provided by the straight-line method over the
estimated useful lives of the depreciable assets. Amortization
of leasehold improvements under operating leases is provided
over the terms of the related leases or the asset lives, if
shorter. Buildings are depreciated over lives ranging up to 35
years. Machinery and equipment is depreciated over useful lives
ranging from 3 to 5 years.

Capitalized Software
  The Company wrote off approximately $1.2 million of
capitalized software development costs related to
telecommunication products in 1996, of which $586,000 had been
capitalized at December 31, 1995 in accordance with FASB 86.
The costs were written off in 1996 because the Company decided
not to pursue this development for the future. At December 31,
1996 there were no remaining capitalized software development
costs on the balance sheet.

Advertising and Research and Development Costs
  The Company expenses advertising costs and research and
development costs as incurred. Advertising costs were $441,000,
$371,000 and $255,000 for 1996, 1995 and 1994, respectively.

Income Taxes
  The Company accounts for income taxes on the liability method
in accordance with Statement of Financial Accounting Standards
(FAS) No. 109.

Foreign Currency Translation
  In accordance with FAS No. 52, balance sheet accounts of the
Company's United Kingdom and Argentina subsidiaries are
translated from the local currency into U.S. dollars at
year-end rates while income and expenses are translated at the
weighted average exchange rate for the year. The resulting
translation gains or losses are shown as a separate component
of stockholders' equity. The translation effects of the Turkish
subsidiary are reflected in the statements of operations as
required by FAS No. 52 because of the high inflation in the
Turkish economy. Pretax income includes foreign currency
translation gains relating to the Turkish subsidiary of
$274,000 for 1996 and $516,000 for 1995.

Earnings (Loss) Per Share
  Earnings (loss) per share are based on the weighted average
number of common shares outstanding plus shares issuable upon
the assumed exercise of dilutive common stock options. The
number of shares used in earnings per share calculations was
5,123,622 for 1996, 5,114,642 for 1995, and 4,998,701 for 1994.

Warranty Costs
  The usual warranty period on the Company's contracts and
products is one year, which is provided for in warranty
accruals.

NOTE B-INVENTORIES
Inventories consist of:

<TABLE>
<CAPTION>
                                                      1996              1995
                                               ---------------------------------
<S>                                             <C>               <C>
Raw materials                                   $   7,938,000     $  11,581,000
Work in process                                     5,957,000         7,965,000
Finished product                                    2,520,000         3,234,000
________________________________________________________________________________
                                                $  16,415,000     $  22,780,000
________________________________________________________________________________
________________________________________________________________________________
</TABLE>
                                 (page 15)
<PAGE>

NOTE C-PROPERTY, PLANT, AND EQUIPMENT
  The Company's investment in property, plant, and equipment is
shown below. The net book value at December 31, 1996 of land
and buildings which are held for sale pursuant to the Company
restructuring plans amounts to $8,682,000.

<TABLE>
<CAPTION>
                                                      1996              1995
                                               ---------------------------------
<S>                                              <C>               <C>
Land                                             $  5,074,000      $  5,264,000
Buildings                                          18,987,000        20,519,000
Machinery and equipment                            57,939,000        58,896,000
________________________________________________________________________________
                                                   82,000,000        84,679,000

Less accumulated depreciation and amortization     59,261,000        59,055,000
________________________________________________________________________________
                                                 $ 22,739,000      $ 25,624,000
________________________________________________________________________________
________________________________________________________________________________
</TABLE>


  Financial Accounting Standard No. 121, regarding the
"Accounting for Impairment of Long-Lived Assets and for
Long-Lived Assets to be disposed of", became
effective for 1996 with no resulting impact on income.

NOTE D-CREDIT ARRANGEMENTS
  The Company has borrowing arrangements with certain banks
aggregating $31.5 million at December 31, 1996 for short-term
borrowings and letters of credit. At December 31, 1996 and
1995, $2.8 million and $5.5 million of cash borrowings
were outstanding against the agreements, respectively. At
December 31, 1996, $1.4 million remains available, principally
for issuance of letters of credit. The Company is seeking new
banking arrangements to cover its potential future
operating needs on terms that are acceptable to the Company.
  In addition to the short-term cash borrowings outstanding
under the lines of credit with banks at December 31, 1996,
$27.3 million of letters of credit was also outstanding. The
letters of credit have been issued to foreign entities
principally to guarantee performance under contracts or the
return of unearned advanced payments in the event that the
Company's performance is not in accordance with its contracts.
Of the amount of letters of credit outstanding, $13.9 million
relates to the Company's contract with the Government of Turkey
and extends to June 4, 1997 or until the contract is completed,
whichever occurs first. Although the contract will not be
completed by June 4, 1997, the letter of credit agreement is
renewable every four months. Management expects the letters of
credit to be renewed until the completion date of the contract
which is expected during the second half of 1998, although
there are no contractual assurances of renewal.
  Interest on cash borrowings accrues at the annual rate of
10%. Commission rates on letters of credit range from .5% to
2.0%
  The letters of credit and short-term borrowing agreements
require various collateral to be maintained. At December 31,
1996, collateral held includes most of the Company-owned
buildings, a security interest in personal and intellectual
properties (excluding machinery and equipment) in the United
States, and cash and/or short-term investments amounting to
$7.6 million. In addition, certain financial covenants apply to
these agreements as well as a limitation on the payment of
dividends and/or the purchase of treasury stock to 50% of net
income for the prior four fiscal quarters.

                                 (page 16)
<PAGE>

NOTE E-LONG-TERM DEBT
  All long-term debt was paid off during 1996. Long-term debt
at December 31, 1995 consisted of the following:

<TABLE>
<CAPTION>
                                                         1996          1995
                                               ---------------------------------
<S>                                                    <C>           <C>
Variable-rate mortgage bearing interest at
70% of the prime rate (5.95% at December 31, 1995),
quarterly principal payments of $55,000 plus
interest through November 30, 1997                     $     -       $  437,000

Variable-rate mortgage bearing interest at
70% of the prime rate (5.95% at December 31, 1995),
quarterly principal payments of $31,000 plus
interest through May 1, 2001                                 -          675,000
________________________________________________________________________________
                                                             -        1,112,000
Less current maturities                                      -          342,000
________________________________________________________________________________
                                                       $     -       $  770,000
________________________________________________________________________________
________________________________________________________________________________
</TABLE>

  Interest expense for the years 1996, 1995, and 1994 amounted
to $988,000, $1,243,000, and $1,142,000, respectively. Interest
paid for the years 1996, 1995, and 1994 amounted to $1,416,733,
$832,000, and $1,226,000, respectively.

NOTE F-STOCKHOLDERS' EQUITY
  The changes in common stock, additional paid-in capital,
treasury stock, retained earnings, and foreign currency
translation effects during the years 1994, 1995, and 1996 were
as follows:

<TABLE>
<CAPTION>

                                                                                             Foreign
                                            Common     Additional                            Currency
                                            Stock       Paid-In    Treasury    Retained     Translation
                                            Par $1      Capital     Stock      Earnings       Effects
                                       -----------------------------------------------------------------
<S>                                     <C>          <C>          <C>        <C>           <C>
Balance, January 1, 1994
(4,981,273 common shares)               $ 4,981,000  $  697,000   $    -     $ 88,906,000  $(625,000)
Issuance of 9,127 shares on
exercise of stock options                     9,000      87,000
Tax benefit related to shares acquired
by employees under stock options                          3,000
Foreign currency translation adjustment                                                      112,000
Net income                                                                      5,047,000
________________________________________________________________________________________________________

Balance, December 31, 1994
     (4,990,400 common shares)            4,990,000     787,000        -       93,953,000   (513,000)
Issuance of 136,716 shares on
exercise of stock options                   137,000   1,385,000
Tax benefit related to shares acquired
by employees under stock options                        249,000
Acquisition of 14,991 shares of treasury stock
received from employees as payment for
stock options exercises                                            (248,000)
Retirement of 14,991 treasury shares        (15,000)   (233,000)    248,000
Foreign currency translation adjustment                                                      (97,000)
Net income                                                                      3,930,000
________________________________________________________________________________________________________
<PAGE>
Balance, December 31, 1995
(5,112,127 common shares)                 5,112,000   2,188,000        -       97,883,000   (610,000)
Issuance of 21,273 shares on
exercise of stock options                    21,000     237,000
Tax benefit related to shares
acquired by employees
under stock options                                      11,000
Foreign currency translation adjustment                                                      265,000
Net loss                                                                      (14,780,000)
______________________________________________________________________________________________________________
______________________________________________________________________________________________________________

Balance, December 31, 1996
(5,133,400 common shares)               $ 5,133,000 $ 2,436,000   $    -      $ 83,103,000 $(345,000)
______________________________________________________________________________________________________________
______________________________________________________________________________________________________________
</TABLE>

NOTE G-STOCK OPTIONS
  Pursuant to stock option plans, the Company has granted
certain officers, directors, and key employees options to
purchase shares of its common stock. Options granted under the
plans must have an option price determined by the Board of
Directors, but in any event, not less than the fair market
value of the stock on the date of grant. Generally, options
become exercisable one-fourth annually beginning one year after
grant, on a cumulative basis, and expire five years after
grant.
  There is no charge to income with respect to stock options
under the plans. A summary of the changes in options during
1994, 1995, and 1996 follows:

<TABLE>
<CAPTION>
                                   Shares        Weighted Average      Shares
                                    Under           Exercise          Available
                                   Option             Price          for Option
                              --------------------------------------------------
<S>                              <C>                <C>              <C>
At January 1, 1994                323,293           $ 13.28            47,235
Options granted:
     Option plan                  164,600             11.56          (164,600)
     Individual options            30,000             10.56           (30,000)
Options exercised                  (9,127)            10.55               -
Options cancelled                (185,648)            15.27           185,648
Authorization of 1994 options          -                -             150,000
Cancellations of authorization         -                -             (97,000)
________________________________________________________________________________

At December 31, 1994              323,118           $ 11.66            91,283
Options granted:
     Option plan                   22,900             12.11           (22,900)
     Individual options            72,000             11.37           (72,000)
Options exercised                (136,716)            11.13               -
Options                           (22,639             12.34            22,639
Authorization of individual
 options                               -                -              72,000
________________________________________________________________________________

At December 31, 1995              258,663            $12.02            91,022
Options granted:
     Option plan                  378,000             10.39          (378,000)
Options exercised                 (10,275)            12.69               -
Options cancelled                (113,300)             9.89           113,300
Authorization of 1996 options          -                -             500,000
Cancellations of authorization         -                -             (70,000)
________________________________________________________________________________

At December 31, 1996
 (59,487 exercisable)             513,088            $10.81           256,322
________________________________________________________________________________
________________________________________________________________________________
</TABLE>
                                 (page 18)
<PAGE>

  These options, with an exercise price range of $10.16 to
$15.34, expire on various dates beginning February 1998 and
ending December 2001. The weighted average remaining
contractual life is 4.27 years. The weighted average option
price of shares exercisable at December 31, 1996 was $12.11.
Financial Accounting Standard No. 123 regarding "Accounting for
Stock-Based Compensation" became effective for 1996. The
Company has chosen to disclose the impact of stock-based
compensation in its notes and will not include such impact on
its recorded earnings. Had compensation cost been determined
based on the fair value of options at the grant dates
consistent with the method of SFAS 123, the Company's net
income (loss) and earnings (loss) per share would have been as
follows:

<TABLE>
<CAPTION>
                                           1996                       1995
                              --------------------------------------------------
<S>                             <C>                               <C>
Net income (loss)               As reported $ (14,780,000)        $ 3,930,000
                                  Pro-forma $ (15,128,000)        $ 3,855,000

Earnings (loss) per share       As reported     $ (2.88)             $ .77
                                  Pro-forma     $ (2.95)             $ .76
</TABLE>


  The fair value of each option grant is estimated on the date
of grant using the Black-Sholes options-pricing model with the
following weighted-average assumptions used for grants in 1996
and 1995, respectively: dividend yield of 0 percent for all
years; expected volatility of 27.3 and 29.9 percent; risk-free
interest rates of 6.23 and 7.60 percent; and expected lives of
5 years.

NOTE H-TAXES ON INCOME
The provision (recovery) for income taxes is shown below. The
recoveries shown on the current lines for each year represent
tax loss carrybacks to earlier years.

<TABLE>
<CAPTION>
                              Federal         State       Foreign        Total
                        --------------------------------------------------------
<S>                       <C>             <C>          <C>          <C>
1996
Current                   $(5,019,000)    $  (3,000)   $3,923,000   $(1,099,000)
Deferred                       21,000      (344,000)   (3,568,000)   (3,891,000)
Charge equivalent to
 tax benefit related to
 shares acquired by
 employees under
 stock options                 11,000           -              -         11,000
________________________________________________________________________________
                          $(4,987,000)    $(347,000)    $ 355,000   $(4,979,000)
________________________________________________________________________________
________________________________________________________________________________
1995
Current                   $  (877,000)    $(130,000)  $ 1,896,000   $   889,000
Deferred                      533,000       173,000       127,000       833,000
Charge equivalent to
 tax benefit related to
 shares acquired by
 employees under
 stock options                 249,000          -             -         249,000
________________________________________________________________________________
                          $    (95,000)   $  43,000   $ 2,023,000   $ 1,971,000
________________________________________________________________________________
________________________________________________________________________________
1994
Current                   $  5,799,000    $ 973,000   $ 2,549,000   $ 9,321,000
Deferred                    (5,929,000)  (1,418,000)      (97,000)   (7,444,000)
Charge equivalent to
 tax benefit related to
 shares acquired by
 employees under
 stock options                   2,000        1,000           -           3,000
________________________________________________________________________________
                            $ (128,000)  $ (444,000)  $ 2,452,000   $ 1,880,000
________________________________________________________________________________
________________________________________________________________________________
</TABLE>
                                 (page 19)
<PAGE>

  The components of deferred income tax balances follow. No
valuation allowances were required.

<TABLE>
<CAPTION>
                                               Year Ended December 31,
                                        1996            1995            1994
                                    --------------------------------------------
<S>                                 <C>             <C>             <C>
Contract accounting                 $ 2,271,000     $ 7,353,000     $ 7,169,000
Excess tax over book depreciation     2,755,000       2,811,000       2,765,000
Inventory valuation                    (829,000)       (677,000)     (1,141,000)
State deferred taxes                   (211,000)       (328,000)       (269,000)
Other, net                              847,000        (435,000)       (633,000)
________________________________________________________________________________
                                    $ 4,833,000     $ 8,724,000     $ 7,891,000
________________________________________________________________________________
________________________________________________________________________________
</TABLE>

  A reconciliation between the federal statutory rate and the
effective income tax rate (computed by dividing income taxes by
income before income taxes and minority interest) is as
follows:

<TABLE>
<CAPTION>
                                                     Year Ended December 31,
                                                  1996        1995       1994
                                               ---------------------------------
<S>                                              <C>          <C>        <C>
Federal statutory rate                           (34.0%)      34.0%      34.0%
State income taxes net of federal tax benefit      (.5)         .5       (3.7)
Benefit from nontaxable FSC income                (1.0)       (2.1)      (7.1)
Effects of higher foreign income taxes             4.5         1.3        2.5
Dividends of a foreign subsidiary                  1.6          -          -
Other, net                                         4.3         (.3)       1.4
________________________________________________________________________________
Effective income tax rate                        (25.1%)      33.4%      27.1%
________________________________________________________________________________
________________________________________________________________________________
</TABLE>

  Income tax payments, net of refunds, amounted to $1,614,000
in 1995 and $6,989,000 in 1996. Income tax refunds, net of
payments, amounted to $940,000 in 1994. As of December 31, 1996
there were no unpaid income taxes including interest owed to
the IRS.
  The Company has not provided deferred income taxes on
cumulative unremitted earnings of foreign subsidiaries
amounting to $8.0 million because of the availability of
foreign tax credits which would eliminate the U.S. tax
liability related to the inclusion of the foreign earnings.
During 1996, $1.0 million of dividends was received from the
Company's Turkish subsidiary.
  Pre-tax income from foreign operations is shown under Note I
below.

NOTE I-NATURE OF OPERATIONS, EXPORT SALES, MAJOR CUSTOMERS, AND
FOREIGN OPERATIONS
  The Company operates predominantly in the electronics
manufacturing industry. Aydin designs, manufactures and markets
a wide range of telecommunications equipment, defense
electronic systems and computer equipment and software, which
are sold worldwide. Aydin generates approximately one-half of
its sales from standard products and systems and the balance of
its sales from custom-designed systems and equipment based on
customers' specific requirements. Aydin offers a broad range of
products due to its ability to combine analog microwave
engineering methods with digital techniques and software.

                                 (page 20)
<PAGE>

  Export sales by geographic area are as follows:

<TABLE>
<CAPTION>
                                        1996            1995            1994
                                 -----------------------------------------------
<S>                                 <C>             <C>             <C>
Asia                                $ 4,259,000     $ 6,224,000     $ 6,788,000
Africa                                3,203,000       4,003,000       2,553,000
Europe                               10,767,000      18,273,000      27,137,000
North America                         1,273,000       1,605,000       1,852,000
South America                           435,000         376,000       1,005,000
Other                                   573,000         263,000         384,000
________________________________________________________________________________
Total export sales                  $20,510,000      30,744,000     $39,719,000
________________________________________________________________________________
________________________________________________________________________________
</TABLE>

  The U.S. Government, the Government of Turkey and CTI
(Argentina) were the only customers to whom sales exceeded 10%
of consolidated sales during any of the past three years. Sales
to U.S. Government agencies, principally the Department of
Defense, amounted to $38,728,000, $44,309,000 and $42,015,000
in 1996, 1995 and 1994, respectively. Sales to the Government
of Turkey amounted to $15,116,000, $16,549,000 and $24,888,000
in 1996, 1995 and 1994, respectively. Sales to CTI (Argentina)
amounted to $15,739,000 in 1994.
  Foreign assets included in the consolidated balance sheet
amounted to $21.7 million, $25.6 million and $25.2 million at
December 31, 1996, 1995 and 1994, respectively. Of these
amounts, $2.5 million, $.4 million and $6.7 million, at
December 31, 1996, 1995 and 1994, respectively, are cash and
short-term investments of the Company's Turkish subsidiary
consisting primarily of U.S. dollar denominated
interest-bearing time deposits. Foreign sales
and pretax income for 1996 was $27.0 million and $.9 million,
respectively, of which substantially all of the income comes
from the Company's Turkish subsidiary. Foreign sales and pretax
income for 1995 amounted to $28.9 million and $5.4 million,
respectively, of which substantially all of the income was from
the Turkish subsidiary. Foreign sales and pretax income for
1994 amounted to $37.2 million and $6.7 million, respectively.
On December 31, 1996, the company disposed of the Argentina
subsidiary. Accordingly, these assets are excluded from the
December 31, 1996 foreign assets totals.

NOTE J-COMMITMENTS AND CONTINGENCIES
  The Company, along with others, is responsible for the costs
of cleanup under an order of the State of California at a site
leased by the Company prior to 1984. Cleanup of the site has
been completed. Costs incurred to date and future expected
monitoring costs amount to $9.7 million. Of the total amount,
$3.1 million are costs to be expended over the next thirty (30)
years to monitor the cleanup. Those costs have been included in
the accompanying consolidated balance sheet as liabilities
discounted at 7% for the time value of money to the expected
payment dates. Expected payments for the years following
December 31, 1996 are $105,000 annually.
  In 1993 the Company reached settlement with three insurance
carriers (with which the Company maintained environmental
coverage on this site) for the payment of $6.7 million of
costs. A court granted a declaratory judgement requiring the
fourth carrier to pay cleanup costs in excess of the $6.7
million. That carrier is currently appealing that judgement.
Amounts paid by the Company in excess of the $6.7 million
recovered from the three insurance carriers, $1.5 million, plus
the discounted future costs of monitoring the site, $1.1
million, have been recorded as Other Assets in the accompanying
consolidated balance sheet at December 31, 1996. Management
believes that it is probable that the Company will be
successful in recovering these amounts from the insurer and
that the resolution of this matter will not have an adverse
affect on the financial position or results of operations of
the Company.

                                 (page 21)
<PAGE>

  During 1995 a subcontractor to the Company in the TMRC
program with the Government of Turkey filed a demand for
arbitration alleging a breach of contract and equitable
adjustment of $12.4 million. This claim was amended in 1996 and
increased to $18.4 million. The Company has filed a claim
against the subcontractor for an amount in excess of the
subcontractor's claim.  Based on discussions with its outside
counsel, management believes that it has meritorious defenses
and counterclaims and expects the outcome to have no material
adverse impact on the Company's financial position.
  The IRS is currently conducting field examinations of certain
years' income tax filings. Management does not believe there
will be any adverse effect from these examinations on financial
position or results of operations.
  The Company's fixed price U.S. Government contracts are
subject to audit by the government and price redetermination
under certain circumstances.

NOTE K-RESTRUCTURING COSTS
  During the third quarter of 1996 the Company announced a plan
to consolidate and restructure its domestic operations. The
Company recorded a charge of $3.7 million in the third quarter
for the restructuring of which approximately $1.5 million was
for cash outlays and $2.2 million was for non-cash asset
write-offs. The major charges consisted of: severance benefits
for 150 terminated employees ($600,000); loss on sale of a
product line ($500,000); inventory write-offs ($1,000,000) and
capital equipment ($300,000) write-offs in connection with the
cutback of product lines; and write-off of goodwill in
connection with the sale of a product line ($400,000). The
restructuring has proceeded through the fourth quarter as
planned with only minor changes. At December 31, 1996, $586,000
of the $3.7 million remains accrued to complete the
restructuring which is expected to be completed during the
second quarter of 1997.

                                 (page 22)
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

  This section represents a review of the Company's
consolidated financial condition and results of operations. In
addition to historical information, this discussion and
analysis contains forward-looking statements. The
forward-looking statements contained herein are subject to
certain risks and uncertainties that could cause actual results
to differ materially from those projected. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which reflect management's analysis only as of the
date hereof. The Company undertakes no obligation to publicly
revise or update these forward-looking statements to reflect
events and circumstances that arise after the date hereof.

Liquidity and Sources of Capital
  The Company has financed its operations over the past two
years from internal cash sources because of the limited
availability of outside cash borrowing sources. At December 31,
1996 there was $2.8 million of short-term cash borrowings
outstanding with no current availability for further cash
borrowings. Also at December 31, 1996 there was a letter of
credit balance of $13.9 million issued against a $49 million
advance payment received in 1990 in connection with a contract
from the Government of Turkey. Offsetting the $13.9 million
balance was $7.6 million of cash collateral. This letter of
credit is currently being renewed in four month intervals or
until it reaches zero, whichever comes first. The Company
anticipates that the letter of credit will reach zero during
the second half of 1998. Although there can be no assurance
that this letter of credit will continue to be renewed,
management is confident that the letter of credit will
be renewed upon its current expiration and thereafter. The
Company is currently seeking new banking arrangements on terms
acceptable to the Company to supplement internally generated
cash flows in meeting future potential operating requirements.
  The Company anticipates that its near-term cash requirements
(in addition to renewed short-term financing requirements) can
be financed through internally generated cash flows.
Substantial amounts of cash flows are expected from certain of
the Company's largest current long-term type contracts on which
significant progress toward completion is expected in 1997.
Performance in accordance with the contracts will permit the
Company to bill and collect a significant portion of the $38
million of unbilled revenues at December 31, 1996 as well as
additional amounts to be earned in 1997. However, if the
Company is unable to meet delivery deadlines, cash flow will be
negatively impacted.
  During 1996, management initiated a restructuring plan to
consolidate operations and develop marketing strategies which
are expected to increase sales and reduce operating costs. Full
implementation of these operational changes is expected to
take effect in 1997. As part of the restructuring and
consolidation, three Company-owned buildings have been offered
for sale. Two of these facilities are under contract for sale
and an offer has been received on the third facility. Net
proceeds from these sales are expected to generate
approximately $10 million of available cash during 1997. There
can be no assurances that the anticipated effects of
management's restructuring, consolidation and other plans will
result in the cash flows as expected and described above.
  Cash provided by operations was $189,000 compared to a
negative cash flow from operations of $8.0 million last year.
Cash collected during 1996 was approximately $153 million
compared to net sales of $117 million. The excess of
collections versus sales is reflected as a $37 million
reduction on the consolidated balance sheet at December 31,
1996 compared to 1995 in accounts receivable and unbilled
revenue. Most of these decreases relate to two large contracts
(TMRC and RIS). Further reductions in unbilled revenue of
approximately $15 million are expected during 1997 on these two
contracts, which should generate significant positive cash
flow. The year 1996 included two significant uses of cash, one
being approximately $7 million of payments to the IRS and the
other was a $9 million payment to a TMRC software
subcontractor.

                                 (page 23)
<PAGE>

  Cash used by operations during 1995 was $8.0 million. The
primary reason for the negative cash flow had been delays of in
excess of one year in obtaining delivery from the software
subcontractor of the software for the TMRC-C3 contract with the
Government of Turkey. These delays had held up collection from
the customer of approximately $26 million, of which
approximately $8 million was payable to the software
subcontractor. The software was accepted by the customer during
1996.
  The major component of the $8.0 million of cash used by
operations during 1995 was a net increase of $9.9 million in
the aggregate of accounts receivable and unbilled revenue of
which $1.7 million related to the TMRC-C3 program and $8.2
million related to non-TMRC activity reflecting increased sales
volume during 1995 in contracts other than TMRC.

Results of Operations

1996 versus 1995
  Net sales for 1996 of $117 million declined by 17% from 1995
sales of $141 million. Approximately $10 million of this
decline was in the company's non-TMRC systems type business
where no new large contracts were won during 1996 although the
company has bid and is hopeful of winning at least one such
large ($30 to $40 million) contract during the first half of
1997. In addition, sales (and pre-tax profits) on the TMRC
contract for 1996 were negatively impacted by $5.7 million
because of  prior years' delays in reaching contract
performance milestones which required increases in estimated
costs at completion during 1996 and resulted in the customer
imposing liquidated damages. Negotiations with the customer
concluded in the third quarter of 1996 resulted in contract
modifications which extended performance milestones and should
have a positive effect on maintaining contract profitability.
  U.S. Government sales, although still depressed, increased
slightly to 33% of total sales from 32% last year.  Export and
foreign sales were 41% of total sales in both 1996 and 1995.
Domestic industrial (commercial) sales were 26% of total sales
compared to 27% last year.
  Backlog at December 31, 1996 was approximately $84 million as
compared to $106 million a year ago, a decline of $22 million.
Most of this decline was from the TMRC backlog which declined
by $14 million, from $41 million to $27 million. Probable
production options are not included in these backlog numbers.
  Cost of sales as a percentage of sales was 80.9% in 1996
compared to 72.8% in 1995. Approximately 50% of the increase
resulted from the 1996 negative TMRC sales impact referred to
above. The balance of the increase results from a combination
of (1) inventory write-offs caused by discontinued or
de-emphasized product lines; and (2) a higher proportion of
fixed overhead costs in relationship to the reduced 1996 sales.
  Selling, general and administrative (SG&A) expenses increased
by $4,173,000 (16%) in 1996 to $29,833,000 because of certain
unusual operating expenses incurred in 1996 which are part of
SG&A. These included: (1) $1.3 million of costs related to the
Argentine subsidiary for which we disposed of our majority
interest during 1996; (2) $750,000 of proposal costs; and (3)
$1 million of bad debts write-offs involving mostly foreign
receivables. The balance of the increase was from increased
selling costs in the telecommunications area, added corporate
infrastructure costs and costs related to a potential business
combination which was abandoned.
  Research and development costs increased by $1.7 million
(26%) during 1996 because of expanded developments in
telecommunications systems.

                                 (page 24)
<PAGE>

  During the third quarter of 1996, the Company announced a
plan to consolidate and restructure its domestic operations.
The Company recorded a charge of $3.7 million in the third
quarter for expected restructuring costs of which approximately
$1.5 million was for cash outlays and $2.2 million for non-cash
asset write-offs. The major components of the charge were:
severance benefits for 150 terminated employees ($600,000);
loss on sale of a product line ($500,000); inventory write-offs
($1,000,000) and capital equipment ($300,000) write-offs in
connection with the discontinuation of product lines; and write
off of goodwill associated with the sale of a product line
($400,000).  The restructuring has proceeded throughout the
remainder of 1996 as planned with no significant changes from
the original plan. The Company anticipated annual cash savings
of approximately $4.3 million as a result of lower labor and
facility costs emanating from the restructuring.
  The original restructuring plan anticipated the termination
of 150 employees. At December 31, 1996, 90 of these
terminations had occured and termination benefits were paid to
those individuals. The remainder of the terminations, and
payment of the related termination benefits of $331,000, are
expected to occur during the first half of 1997.
  Restructuring charges and their application during 1996 are
as follows:

<TABLE>
<CAPTION>
                                        Total         Activity
                                        Amount        in 1996        Remainder
                                 -----------------------------------------------
<S>                                 <C>            <C>              <C>
Employee termination benefits       $  600,000     $  269,000       $ 331,000
Loss on sale of product line           500,000        500,000            -
Inventory and equipment write-off    1,300,000      1,300,000            -
Goodwill write-off                     400,000        400,000            -
Other costs                            900,000        645,000         255,000
________________________________________________________________________________
Totals                              $3,700,000     $3,114,000       $ 586,000
________________________________________________________________________________
________________________________________________________________________________
</TABLE>

  The effective income tax rate decreased to 25.1% for 1996
compared to 33.4% for 1995 primarily because the effects of
higher foreign income taxes and dividends from a foreign
subsidiary reduced the tax benefit from the U.S. losses.

1995 versus 1994
  Net sales for 1995 declined by 1% from 1994. U.S. Government
sales, although still depressed, increased to 32% of total
sales from 29% in 1994. Export and foreign sales decreased to
41% of total sales from 53% in 1994 primarily because of lower
sales of the Argentine subsidiary compared to 1994's unusually
high level and a slow-down in sales on the TMRC-C3 contract.
Domestic industrial sales increased to 27% of total sales from
18% in 1994 because of higher commercial color CRT monitors and
telecommunication sales.
  Backlog at December 31, 1995 was approximately $106 million
as compared to $134 million in 1994.  The Company has
additional production options not included in the above
figures. The TMRC-C3 contract backlog amounted to $41 million
and $52 million, respectively, at December 31, 1995 and 1994.
  Research and Development costs increased by $1.4 million
(28%) during 1995 because of expanded development efforts in
telecommunication systems. Additionally, $586,000 of software
development costs related to the telecommunication R&D was
capitalized during 1995 in accordance with Financial Accounting
Standard 86.

                                 (page 25)
<PAGE>

REPORT OF INDEPENDENT AUDITORS

Report of Grant Thornton LLP
Independent Auditors
Stockholders and Board of Directors
Aydin Corporation

  We have audited the consolidated balance sheets of Aydin
Corporation and subsidiaries as of December 31, 1996 and 1995
and the related consolidated statements of operations and cash
flows for each of the three years in the period ended December
31, 1996. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based on
our audits.
  We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used
and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our
opinion.
  In our opinion, the consolidated financial statements
referred to above present fairly, in all material respects, the
consolidated financial position of Aydin Corporation and
subsidiaries as of December 31, 1996 and 1995 and the
consolidated results of their operations and their consolidated
cash flows for each of the three years in the period ended
December 31, 1996, in conformity with generally accepted
accounting principles.

/s/ Grant Thornton LLP

Philadelphia, Pennsylvania
March 7, 1997

                                 (page 26)
<PAGE>

SELECTED FINANCIAL DATA

($000 omitted except for per share amounts)

<TABLE>
<CAPTION>
                              1996*      1995       1994       1993       1992
                            ----------------------------------------------------
<S>                        <C>        <C>        <C>        <C>        <C>
For the Year

Net sales                  $116,578   $140,607   $142,441   $141,475   $145,221
Cost of sales                94,363    102,391    104,270    118,554    101,452
Income (loss) before
 income taxes and
 minority interest          (19,852)*    5,908      6,927     (7,312)    12,281
Net income (loss)           (14,780)     3,930      5,047     (4,967)     7,062

Earnings (loss) per share     (2.88)       .77       1.01      (1.00)      1.40
Cash dividend per share         -           -          -          -          .5

Return on average
 stockholders equity           (16%)        4%         5%        (5%)        7%

At Year End
Total Assets               $120,322   $166,860   $166,078   $169,721   $172,332
Working Capital              68,765     85,615     81,786     76,506     80,578
Long-term debt                  -          770      1,549      1,902      2,295
Stockholders' equity         90,327    104,573     99,217     93,959     98,421

Stockholders' equity
 per share                    17.60      20.46      19.88      18.86      19.93

<FN>
* Income (loss) before income taxes and minority interest
includes a $3,730,000 restructuring charge in the third quarter.
</TABLE>

Quarterly Financial Data
($000 omitted except for per share amounts)

<TABLE>
<CAPTION>
                               1st        2nd        3rd        4th      Year
                            ----------------------------------------------------
<S>                        <C>        <C>        <C>        <C>        <C>
1996
Net sales                  $ 36,283   $ 26,706   $ 25,249   $ 28,340   $116,578
Cost of sales                25,308     25,228     20,425     23,402     94,363
Income (loss) before
 income taxes and
 minority interest            1,441     (9,352)    (7,756)    (4,185)   (19,852)
Net income (loss)               963     (7,024)    (5,467)    (3,252)   (14,780)
Earnings (loss) per share       .19      (1.37)     (1.07)      (.63)     (2.88)

1995
Net sales                  $ 35,588   $ 36,494   $ 32,932   $ 35,593   $140,607
Cost of sales                25,937     26,661     24,014     25,779    102,391
Income before income
 taxes and minority
 interest                     1,835      1,665      1,077      1,331      5,908
Net income                    1,191      1,073        774        892      3,930
Earnings per share              .24        .21        .15        .17        .77
</TABLE>

Common Stock Prices

<TABLE>
<CAPTION>

1996                High       Low         1995               High        Low
------------------------------------       -------------------------------------
<S>                <C>       <C>           <C>               <C>        <C>
Fourth Quarter     $11.0     $ 8.5         Fourth Quarter    $17.75     $14.75
Third Quarter       13.75      9.75        Third Quarter      19.75      14.125
Second Quarter      17.5      13.0         Second Quarter     15.75      14.125
First Quarter       15.5      12.875       First Quarter      15.0       11.5
</TABLE>

Stockholder and Dividend Information

Aydin has approximately 6,000 stockholders of record and
individual partipants in security position listings. Aydin has
no present plans to pay any special cash dividends.

                                 (page 27)
<PAGE>
[FLYLEAF]

AYDIN CORPORATE HEADQUARTERS
Horsham, PA

AYDIN PRODUCTS GROUP
AYDIN TELEMETRY
Newtown, PA
Airborne Data Acquisition Equipment and Systems (Telemetry),
Ground Data Receive & Processing, Transmitters, Transponders,
Receivers, Power Amplifiers, Digital Recorders, Data Links,
Avionics, Bus Products, Ground to Air UHF/VHF Transceivers &
Multiplexers, Special Microcircuits

AYDIN DISPLAYS
Horsham, PA
High Resolution Color Monitors, Flat Panels & Workstation
Products Military Display Processors, Ruggedized Monitors &
Workstations, SPECTRUM AUTOSYNC(R) Color Monitors, Color
Display
Terminals, Workstations, X-Terminals

AYDIN MICROWAVE
San Jose, CA; Newtown, PA
Thin Film Solid State Amplifiers & Microwave Integrated Circuit
Components for the Wireless Telecommunications OEM industry,
Digital & Analog Microwave Radios

AYDIN COMMUNICATIONS SYSTEMS GROUP
AYDIN GOVERNMENT SYSTEMS
Horsham, PA; San Jose, CA
System Integration, Command, Control & Communications (C3), Air
Traffic Control, Modernization and Integration of Radars,
Troposcatter Terminals, Turnkey Communications Systems

AYDIN TELECOM
Horsham, PA
Digital Wireless Telephony Equipment & Systems, Cell Extender,
Network Access Equipment, Transcoders, Multiplexers, Telecom
Systems, Microcell, DACS, Satellite Modems, Satellite TDMA Next
Generation Equipment

AYDIN GOVERNMENT SYSTEMS
Belgium
NATO Program Support

OTHER
AYDIN EUROPE LIMITED
United Kingdom
European Operations (All products, systems & support)

AYDIN YAZILIM VE ELEKTRONIK SANAYI A.S.
Turkey
Software, Command, Control and Communications Systems (C3), Air
Defense, Digital Microwave Radios, Air-to-Ground VHF and UHF
Radios, Telecom Equipment & Systems, Computer Equipment &
Systems, Display Terminals

AYDIN ELECTRO FAB
Croydon, PA
Single-sided, Double-sided, & Multilayer Printed Circuit Boards

AYDIN RAYTOR
Montgomeryville, PA
Precision Metal Fabrications

AYDIN MOLDED DEVICES
Rancho Dominguez, CA
Vinyl Components

<PAGE>

[INSIDE BACK COVER]

CORPORATE INFORMATION AND DIRECTORY

Board of Directors

I. Gary Bard
Chairman of the Board
AYDIN

Dr. Nev A. Gokcen
Retired.  Former Thermodynamicist, Department of the Interior
Bureau of Mines

Irwin L. Gross
Chairman of the Board
EA Industries

Admiral Harry D. Train, II
United States Navy (Retired)
Former Commander-In-Chief, US Atlantic Command.  Manager,
Hampton
Roads Operations,
Science Applications International Corporation

John F. Vanderslice
Executive Vice President, AYDIN
President, AYDIN Products Group


Corporate Officers

I. Gary Bard (*)
Chairman
President and Chief Executive Officer

John F. Vanderslice (*)
Executive Vice President, AYDIN
President, AYDIN Products Group

James R. Henderson (*)
Vice President
Treasurer and Chief Financial Officer

Klaus D. Oebel (*)
Vice President
President, AYDIN Communications Systems Group

H. Barry Maser (*)
Vice President of Business Development and International Sales


Demirhan Hakimoglu (*)
Vice President
Chief Executive Officer, AYDIN Yazilim ve Elektronik Sanayi
A.S.,
Turkey

Thomas M. LoCasale (*)
Vice President
Chief Scientist

Robert A. Clancy
Secretary

Herbert Welber (*)
Controller
Assistant Treasurer

 (*) Executive Officer


Corporate Headquarters:

AYDIN
700 Dresher Road
Horsham, Pennsylvania  19044
Telephone (215) 657-7510
FAX: (215) 657-3830

Independent Auditors
Grant Thornton, L.L.P.
Philadelphia, Pennsylvania

Registrar & Transfer Agent
ChaseMellon Shareholder Services, L.L.C.
Overpeck Centre
85 Challenger Road
Ridgefield Park, New Jersey  07660
1-800-526-0801

Stock Data
AYDIN shares (ticker symbol AYD) are traded on the New York
Stock
Exchange

Form 10-K
A copy of the AYDIN 1996 Annual Report on Form 10-K to the
Securities and Exchange Commission is available without charge
upon written request to:
     Investor Relations
     AYDIN
     700 Dresher Road
     P.O. Box 349
     Horsham, Pennsylvania  19044
     (215) 657-7510
Annual Meeting
Shareholders are invited to attend our annual meeting:
Friday, April 25, 1997 at 3:00 pm
AYDIN Corporate Headquarters
700 Dresher Road
Horsham, Pennsylvania  19044

Get More Information Online
Chat with the CEO and learn more about AYDIN on the Internet
at:
http://www.aydin.com

<PAGE>
                                             Exhibit 21

                       SUBSIDIARIES OF REGISTRANT

<TABLE>
<CAPTION>
NAME (and name under which      JURISDICTION        PERCENTAGE
they do business-same)          OF INCORPORATION    OWNED
--------------------------      -----------------   ----------
<S>                             <C>                 <C>
Aydin Europe Limited            United Kingdom       100%
Aydin, S.A.                     Argentina             19%
Aydin Foreign Sales Limited     Guam                 100%
Aydin Investments, Inc.         Delaware             100%
Aydin Yazilim ve Elektronik
 Sanayi A.S.                    Turkey               100% (1)

<FN>
--------------
(1)  Ninety nine (99%) percent of the 100% is owned by
     registrant's wholly owned subsidiary, Aydin Investments,
     Inc.

<PAGE>
                                              Exhibit 23

                    CONSENT OF INDEPENDENT AUDITORS

The Board of Directors
Aydin Corporation:

We consent to incorporation by reference in Registration
Statement Numbers: 33-61537, 33-53549, 33-34863, 33-22016, 33-
14284, 2-97645, 2-93603, 2-77623, and 2-64093 on Form S-8 of
Aydin Corporation of our reports dated March 7, 1997, relating
to the consolidated balance sheet of Aydin Corporation and
subsidiaries as of December 31, 1996 and the related
consolidated statements of operations and cash flows, and
related schedules for the year ended December 31, 1996, which
reports appear in or incorporated by reference in the 1996
annual report on Form 10-K of Aydin Corporation.

/s/ Grant Thornton LLP
 Grant Thornton LLP

Philadelphia, Pennsylvania
March 28, 1997

<PAGE>
                                               Exhibit 99

                     INDEPENDENT AUDITORS' REPORT

Under date of March 7, 1997, we reported on the consolidated
balance sheet of Aydin Corporation and subsidiaries as of
December 31, 1996, and the related consolidated statements of
operations and cash flows for the year ended December 31, 1996,
as contained in the 1996 Annual Report to stockholders.  These
consolidated financial statements and our reports thereon are
incorporated by reference in the annual report on Form 10-K for
the year 1996.  In connection with our audit of the
aforementioned consolidated financial statements, we also have
audited the related financial statement schedules as listed in
the accompanying index.  These financial statement schedules
are the responsibility of the Company's management.  Our
responsibility is to express an opinion on these financial
statement schedules based on our audit.

In our opinion, such financial statement schedules, when
considered in relation to the basic consolidated financial
statements taken as a whole, present fairly, in all material
respect, the information set forth therein.

/s/ Grant Thornton LLP
 Grant Thornton LLP

Philadelphia, Pennsylvania
March 7, 1997

<PAGE>

</TABLE>