Exhibit 10.1

 

KVH INDUSTRIES, INC.

 

AMENDED AND RESTATED 1996 EMPLOYEE STOCK PURCHASE PLAN (AS AMENDED FEBRUARY 6,
1996, MAY 26, 1999, MAY 23, 2001 AND DECEMBER 9, 2005)

 

1. PURPOSE.

 

The KVH Industries, Inc. Amended and Restated 1996 Employee Stock Purchase Plan
(the “Plan”) is intended to provide a method whereby employees of KVH
Industries, Inc. (the “Company”) will have an opportunity to acquire an
ownership interest (or increase an existing ownership interest) in the Company
through the purchase of shares of the Common Stock of the Company. It is the
intention of the Company that the Plan qualify as an “employee stock purchase
plan” under Section 423 of the Internal Revenue Code of 1986, as amended (the
“Code”). The provisions of the Plan shall, accordingly, be construed so as to
extend and limit participation in a manner consistent with the requirements of
that section of the Code.

 

2. DEFINITIONS.

 

(a) “Board” means the Board of Directors of the Company.

 

(b) “Code” shall have the meaning set forth in Paragraph 1.

 

(c) “Committee” means the Compensation Committee of the Board.

 

(d) “Common Stock” means the common stock, $.01 par value per share, of the
Company.

 

(e) “Company” shall also include any subsidiary of KVH Industries, Inc.
designated as a participant in the Plan by the Board, unless the context
otherwise requires.

 

(f) “Compensation” means, for the purpose of any Offering pursuant to this Plan,
base pay in effect as of the Offering Commencement Date (as hereinafter
defined). Compensation shall not include any deferred compensation other than
contributions by an individual through a salary reduction agreement to a cash or
deferred plan pursuant to Section 401(k) of the Code or to a cafeteria plan
pursuant to Section 125 of the Code.

 

(g) “Employee” means any person who is customarily employed at least 20 hours
per week and more than five months in a calendar year by (i) the Company or
(ii) any subsidiary corporation.

 

(h) “Investment Accounts” shall have the meaning set forth in Paragraph 9.

 

(i) “Offering” shall have the meaning set forth in Paragraph 4.

 

(j) “Offering Commencement Date” shall have the meaning set forth in Paragraph
4.

 

(k) “Offering Termination Date” shall have the meaning set forth in Paragraph 4.

 

(l) “Plan” shall have the meaning set forth in Paragraph 1.

 

(m) “Subsidiary corporation” shall mean any present or future corporation which
is or would constitute a “subsidiary corporation” as that term is defined in
Section 425 of the Code.

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3. ELIGIBILITY.

 

(a) Participation in the Plan is completely voluntary. Participation in any one
or more of the offerings under the Plan shall neither limit, nor require,
participation in any other offering.

 

(b) Each employee of the Company shall be eligible to participate in the Plan on
the first Offering Commencement Date, as hereafter defined, following the
completion of twelve months of continuous service with the Company and/or its
subsidiary corporations. Notwithstanding the foregoing, no employee shall be
granted an option under the Plan:

 

(i) if, immediately after the grant, such employee would own stock, and/or hold
outstanding options to purchase stock, possessing 5% or more of the total
combined voting power or value of all classes of stock of the Company or any
subsidiary corporation; for purposes of this Paragraph the rules of
Section 425(d) of the Code shall apply in determining stock ownership of any
employee; or

 

(ii) which permits his rights to purchase stock under all Section 423 employee
stock purchase plans of the Company and its subsidiary corporations to exceed
$25,000 of the fair market value of the stock (determined at the time such
option is granted) for each calendar year in which such option is outstanding;
for purposes of this Paragraph, the rules of Section 423(b)(8) of the Code shall
apply.

 

4. OFFERING DATES.

 

The right to purchase stock hereunder shall be made available by a series of
six-month offerings (the “Offering” or “Offerings”) to employees eligible in
accordance with Paragraph 3 hereof. The Committee will, in its discretion,
determine the applicable date of commencement (“Offering Commencement Date”) and
termination date (“Offering Termination Date”) for each Offering. Participation
in any one or more of the Offerings under the Plan shall neither limit, nor
require, participation in any other Offering.

 

5. PARTICIPATION.

 

Any eligible employee may become a participant by completing a payroll deduction
authorization form provided by the Company and filing it with the office of the
Company’s Treasurer 20 days prior to each applicable Offering Commencement Date,
as determined by the Committee pursuant to Paragraph 4.

 

6. PAYROLL DEDUCTIONS.

 

(a) At the time a participant files his authorization for a payroll deduction,
he shall elect to have deductions made from his pay on each payday during any
Offering in which he is a participant at a specified percentage of his
Compensation as determined on the applicable Offering Commencement Date; said
percentage shall be in increments of one percent up to a maximum percentage of
six percent.

 

(b) Payroll deductions for a participant shall commence on the applicable
Offering Commencement Date when his authorization for a payroll deduction
becomes effective and shall end on the Offering Termination Date of the Offering
to which such authorization is applicable unless sooner terminated by the
participant as provided in Paragraph 10.

 

(c) All payroll deductions made for a participant shall be credited to his
account under the Plan. A participant may not make any separate cash payment
into such account.

 

(d) A participant may withdraw from the Plan at any time during the applicable
Offering period; provided, however, that a participant who is an officer or
director of the Company and who withdraws from the Plan during any Offering
period will not be eligible for the grant of any subsequent option under the
Plan for a period of six months.

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7. GRANTING OF OPTION.

 

(a) On the Offering Termination Date of each Offering, a participating employee
shall be deemed to have been granted an option to purchase a maximum number of
shares of the Common Stock equal to an amount determined by dividing 85% of the
market value per share of the Common Stock on the applicable Offering
Termination Date into an amount equal to the sum of (i) the payroll deductions
that have been withheld for the account of the participating employee during the
applicable Offering period plus (ii) any amounts in the employee’s account on
the Offering Commencement Date that have been carried forward from prior
Offerings. Such market value per share of the Common Stock shall be determined
as provided in clause (i) of Paragraph 7(b).

 

(b) The option price of the Common Stock purchased with payroll deductions made
during each such Offering for a participant therein shall be 85% of the average
of the bid and the asked prices as reported by the Nasdaq Stock Market in the
Wall Street Journal, or, if the Common Stock is designated as a national market
security by the National Association of Securities Dealers, Inc. (“NASD”) the
last trading price of the Common Stock as reported by the Nasdaq National Market
System in the Wall Street Journal, or, if the Common Stock is listed on an
exchange the closing price of the Common Stock on the exchange on the Offering
Termination Date applicable to such Offering (or on the next regular business
date on which shares of the Common Stock shall be traded in the event that no
shares of the Common Stock have been traded on the Offering Termination Date);
or if the Common Stock is not quoted on Nasdaq, not designated as a Nasdaq
national market security and not listed on an exchange, 85% of the fair market
value on the Offering Termination Date as determined by the Committee.

 

(c) A participant who is an officer or director of the Company and who elects
pursuant to Paragraph 8(a) with respect to any Offering not to exercise an
option deemed to have been granted pursuant to this Paragraph 7, shall not be
eligible for the grant of an option hereunder for a period of six months.

 

8. EXERCISE OF OPTION.

 

(a) Unless a participant gives written notice to the Treasurer of the Company as
hereinafter provided, his option for the purchase of Common Stock with payroll
deductions made during any Offering will be deemed to have been exercised
automatically on the Offering Termination Date applicable to such Offering for
the purchase of the number of whole shares of Common Stock which the accumulated
payroll deductions in his account at that time will purchase at the applicable
option price (but not in excess of the number of shares for which options have
been granted the employee pursuant to Paragraph 7(a)), and any excess in his
account at that time will be returned to the Participant.

 

(b) Fractional shares will not be issued under the Plan and any accumulated
payroll deductions which would have been used to purchase fractional shares
shall be automatically carried forward to the next Offering unless the
participant elects, by written notice to the Treasurer of the Company, to have
the excess cash returned to him.

 

9. INVESTMENT ACCOUNTS.

 

All shares of Common Stock purchased pursuant to Paragraph 8 shall be held in
separate investment accounts (“Investment Accounts”) maintained by such
brokerage house, investment banking firm, commercial bank or other such similar
institution as may be selected by the Board for the participants. Each
Investment Account shall be in the name of the participating employee. All
dividends, if any, paid with respect to shares of Common Stock in a
participant’s Investment Account shall be credited to his or her Investment
Account. Each participant shall have all of the rights and privileges of a
stockholder of the Company with respect to those shares purchased under the Plan
and held in his or her Investment Account.

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10. WITHDRAWAL AND TERMINATION.

 

(a) Prior to the Offering Termination Date for an Offering, any participant may
withdraw the payroll deductions credited to his account under the Plan for such
Offering by giving written notice to the Treasurer of the Company. All of the
participant’s payroll deductions credited to such account will be paid to him
promptly after receipt of notice of withdrawal, without interest, and no future
payroll deductions will be made from his pay during such offering. The Company
will treat any attempt to borrow by a participant on the security of accumulated
payroll deductions as an election to withdraw such deductions.

 

(b) Except as set forth in Paragraphs 6(d) and 7(c), a participant’s election
not to participate in, or withdrawal from, any Offering will not have any effect
upon his eligibility to participate in any succeeding Offering or in any similar
plan which may hereafter be adopted by the Company.

 

(c) Upon termination of the participant’s employment for any reason, including
retirement but excluding death, the payroll deductions credited to his account
will be returned to him, or, in the case of his death, to the person or persons
entitled thereto under Paragraph 14.

 

(d) Upon termination of the participant’s employment because of death, his
beneficiary (as defined in Paragraph 14) shall have the right to elect, by
written notice given to the Company’s Treasurer prior to the expiration of a
period of 90 days commencing with the date of the death of the participant,
either:

 

(i) to withdraw all of the payroll deductions credited to the participant’s
account under the Plan; or

 

(ii) to exercise the participant’s option for the purchase of stock on the
Offering Termination Date next following the date of the participant’s death for
the purchase of the number of full shares which the accumulated payroll
deductions in the participant’s account at the date of the participant’s death
will purchase at the applicable option price (subject to the limitation
contained in Paragraph 7(a)), and any excess in such account will be returned to
said beneficiary. In the event that no such written notice of election shall be
duly received by the office of the Company’s Treasurer, the beneficiary shall
automatically be deemed to have elected to withdraw the payroll deductions
credited to the participant’s account at the date of the participant’s death and
the same will be paid promptly to said beneficiary.

 

11. INTEREST.

 

No interest will be paid or allowed on any money paid into the Plan or credited
to the account of any participating employee.

 

12. STOCK.

 

(a) The maximum number of shares of Common Stock available for issuance and
purchase by employees under the Plan, subject to adjustment upon changes in
capitalization of the Company as provided in Paragraph 17, shall be 400,000
shares of Common Stock, $.01 par value per share, of the Company. The maximum
number of shares of Common Stock available for issuance and purchase by
employees under the Plan in any Offering shall be one percent of the shares of
Common Stock outstanding. If the total number of shares for which options are
exercised on any Offering Termination Date in accordance with Paragraph 8
exceeds the maximum number of shares for the applicable Offering, the Company
shall make a pro rata allocation of the shares available for delivery and
distribution in an equitable manner, with the balances of payroll deductions
credited to the account of each participant under the Plan carried forward to
the next Offering or returned to the participant if he so chooses, by giving
written notice to the Treasurer to this effect.

 

(b) The participant will have no interest in stock covered by his option until
such option has been exercised.

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(c) The shares of stock purchased by a participant who is an officer or director
of the Company, or a beneficiary of a participant who was an officer or director
of the Company pursuant to Paragraph 14 hereof, at each Offering Termination
Date may not be sold or transferred by such participant or beneficiary for a
period of six months following such Offering Termination Date. Certificates
representing said shares of stock issued pursuant to this Plan may bear legends
to that effect.

 

13. ADMINISTRATION.

 

The Plan shall be administered by the Committee. The interpretation and
construction of any provision of the Plan and adoption of rules and regulations
for administering the Plan shall be made by the Committee. Determinations made
by the Committee with respect to any matter or provision contained in the Plan
shall be final, conclusive and binding upon the Company and upon all
participants, their heirs or legal representatives. Any rule or regulation
adopted by the Committee shall remain in full force and effect unless and until
altered, amended, or repealed by the Committee.

 

14. DESIGNATION OF BENEFICIARY.

 

A participant shall file with the Treasurer of the Company a written designation
of a beneficiary who is to receive any Common Stock and/or cash under the Plan.
Such designation of beneficiary may be changed by the participant at any time by
written notice. Upon the death of a participant and upon receipt by the Company
of proof of the identity and existence at the participant’s death of a
beneficiary validly designated by him under the Plan, the Company shall deliver
such Common Stock and/or cash to such beneficiary. In the event of the death of
a participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such participant’s death, the Company shall
deliver such Common Stock and/or cash to the executor or administrator of the
estate of the participant. No beneficiary shall prior to the death of the
participant by whom he has been designated, acquire any interest in the Common
Stock and/or cash credited to the participant under the Plan.

 

15. TRANSFERABILITY.

 

Neither payroll deductions credited to a participant’s account nor any rights
with regard to the exercise of an option or to receive Common Stock under the
Plan may be assigned, transferred, pledged, or otherwise disposed of in any way
by the participant other than by will or the laws of descent and distribution.
Any such attempted assignment, transfer, pledge, or other disposition shall be
without effect, except that the Company may treat such act as an election to
withdraw funds in accordance with Paragraph 8(b).

 

16. USE OF FUNDS.

 

All payroll deductions received or held by the Company under this Plan may be
used by the Company for any corporate purpose, and the Company shall not be
obligated to segregate such payroll deductions.

 

17. EFFECT OF CHANGES OF COMMON STOCK.

 

If the Company shall subdivide or reclassify the Common Stock which has been or
may be optioned under this Plan, or shall declare thereon any dividend payable
in shares of such Common Stock, or shall take any other action of a similar
nature affecting such Common Stock, then the number and class of shares of
Common Stock which may thereafter be optioned (in the aggregate and to any
participant) shall be adjusted accordingly and in the case of each option
outstanding at the time of any such action, the number and class of shares which
may thereafter be purchased pursuant to such option and the option price per
share shall be adjusted to such extent as may be determined by the Committee,
with the approval of independent public accountants and counsel, to be necessary
to preserve the rights of the holder of such option.

 

18. AMENDMENT OR TERMINATION.

 

The Board may at any time terminate or amend the Plan. No such termination shall
affect options previously granted, nor may an amendment make any change in any
option theretofore granted which would adversely affect the rights of any
participant holding options under the Plan.

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19. NOTICES.

 

All notices or other communications by a participant to the Company under or in
connection with the Plan shall be deemed to have been duly given when received
by the Treasurer of the Company.

 

20. MERGER OR CONSOLIDATION.

 

If the Company shall at any time merge into or consolidate with another
corporation, the holder of each option then outstanding will thereafter be
entitled to receive at the next Offering Termination Date upon the exercise of
such option for each share as to which such option shall be exercised, the
securities or property which a holder of one share of the Common Stock was
entitled to upon and at the time of such merger or consolidation. In accordance
with this Paragraph and Paragraph 17, the Committee shall determine the kind and
amount of such securities or property which such holder of an option shall be
entitled to receive. A sale of all or substantially all of the assets of the
Company shall be deemed a merger or consolidation for the foregoing purposes.

 

21. APPROVAL OF STOCKHOLDERS.

 

The Plan is subject to the approval of the stockholders of the Company by
written consent or at their next annual meeting or at any special meeting of the
stockholders for which one of the purposes of such a special meeting shall be to
act upon the Plan.

 

22. GOVERNMENTAL AND OTHER REGULATIONS.

 

The Plan, and the grant and exercise of the rights to purchase shares hereunder,
and the Company’s obligation to sell and deliver shares upon the exercise of
rights to purchase shares, shall be subject to all applicable federal, state and
foreign laws, rules and regulations, and to such approvals by any regulatory or
governmental agency as may, in the opinion of counsel for the Company, be
required. The Plan shall be governed by, and construed and enforced in
accordance with, the provisions of Sections 421, 423 and 424 of the Code and the
substantive laws of the Commonwealth of Massachusetts. In the event of any
inconsistency between such provisions of the Code and any such laws, said
provisions of the Code shall govern to the extent necessary to preserve
favorable federal income tax treatment afforded employee stock purchase plans
under Section 423 of the Code.

 

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