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                                                                    EXHIBIT 10.3

               1996 EMPLOYEE INCENTIVE STOCK OPTION PLAN AGREEMENT

             INCENTIVE STOCK OPTION PLAN OF S.T RESEARCH CORPORATION

                           ADOPTED AS OF MAY 22, 1996

1.     PURPOSE OF THE PLAN. The purpose of the Incentive Stock Option Plan of
S.T. Research Corporation (STR) (the "Plan") is to encourage selected employees
to acquire or expand a proprietary interest in STR, a Virginia corporation (the
"Company"). To accomplish this objective, the Plan provides a means whereby
eligible employees may receive stock options that qualify as "incentive stock
options" under Section 422A of the Internal Revenue Code as added by the
Economic Recovery Tax Act of 1981 and as it may be amended from time to time
("Section 422A").

2.     ELIGIBLE EMPLOYEES. Key employees, including officers and directors who
are employees of the Company or of any affiliate of the Company, are eligible to
receive an option or options under the Plan. The term "affiliate", as used in
the Plan, means a parent or subsidiary corporation, as defined in the applicable
provisions of the Internal Revenue Code (the "Code").

3.     STOCK SUBJECT TO THE PLAN. An aggregate of 60,000 authorized but
unissued, or treasury, shares of the common stock of the Company, or such number
and class of securities as adjusted to give effect to the anti dilution
provisions contained in Paragraph 6.2 hereof, may be sold upon the exercise of
options granted under the Plan. In the event that any option outstanding under
the Plan expires, or is terminated for any reason, unexercised in whole or in
part, prior to the end of the period during which options may be granted under
the Plan, the shares of stock allocable to the unexercised portion of such
option may again be subjected to option under the Plan.

4.     ADMINISTRATION. The Plan shall be administered by the Company's Board of
Directors (the "Board"). Subject to the general purposes, terms and conditions
of the Plan, the Board shall have full power to implement and carry out the Plan
in all ways permissible under the applicable provisions of the Code, including,
but not limited to, the following: (1) to construe and interpret the Plan; (2)
to prescribe, amend and rescind rules and regulations relating to the Plan; and
(3) to make all other determinations necessary or advisable for the
administration of the Plan. The Board shall determine which employees should be
granted options under the Plan, the number of shares of stock covered by each
option, and the terms and conditions of each option.

5.     GRANTING OF OPTIONS. Options shall be granted within 10 years from the
effective date of the Plan. Each option shall be evidenced by a written Stock
Option Agreement executed by the Company and the employee to whom such option is
granted. An option shall be deemed to have been granted only when the Stock
Option Agreement has been duly executed by the Company and the employee to whom
such option is granted has been notified of the granting of the option.


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6.     TERMS AND CONDITIONS OF OPTIONS. Each option shall be subject to the
following terms and conditions:

6.1    OPTION PRICE. The option price, that shall be approved by the Board,
shall be determined in accordance with the applicable provisions of the Code and
shall in no event be less than the fair market value of the Company's common
stock at the time the option is granted. If an employee owns more than 10% of
the outstanding stock of the Company, the option price shall be at least 110% of
the fair market value of the stock. The fair market value for the purposes of
the Plan shall be determined by the Board in accordance with reasonable criteria
that do not conflict with the applicable provisions of the Code.

6.2    ADJUSTMENTS. In the event that the common stock of the Company is changed
by reason of any stock split, reverse stock split, recapitalization, or other
change in the capital structure of the Company, or converted into or exchanged
for other securities as a result of any merger, consolidation or reorganization,
or in the event that the outstanding number of shares of common stock of the
Company is increased through payment of a stock dividend, appropriate
proportionate adjustments shall be made in the number and class of shares of
stock subject to the Plan, and the number and class of shares of stock subject
to any option outstanding under the Plan; provided, however, that the Company
shall not be required to issue fractional shares as a result of any such
adjustment. Any such adjustment shall be made by the Board, whose determination
shall be conclusive. If there is any other change in the number or kind of the
outstanding shares of common stock of the Company, or of any other security into
which such stock shall have been changed or for which it shall have been
exchanged, and if the Board, in its sole discretion, determines that such change
equitably requires any adjustment in the options then outstanding under the
Plan, such adjustment shall be made in accordance with the determination of the
Board. No adjustments shall be required by reason of the issuance or sale by the
Company for cash or other consideration of additional shares of its common stock
or securities convertible into or exchangeable for shares of its common stock.
All adjustments shall be made in such a manner that each option which is
adjusted will continue to qualify under Section 422A as an "incentive stock
option."

6.3    OTHER RIGHTS IN EVENT OF CERTAIN REORGANIZATIONS. New option rights may
be substituted for the option rights granted under the Plan, or the Company's
duties as to options outstanding under the Plan may be assumed, by an employer
corporation other than the Company, or by a parent or subsidiary of such
employer corporation, in connection with any merger, consolidation, acquisition,
separation, reorganization, liquidation or like occurrence in which the Company
is involved, in such a manner that will allow the then outstanding options to
continue to qualify as "incentive stock options" under Section 422A and to the
full extent permitted thereby. Despite the foregoing provisions of this Section
6(3), in the event such employer corporation, or parent or subsidiary of such
employer corporation, refuses to substitute new option rights for, and
substantially equivalent to, the option rights granted under this Agreement, or
to assume the option rights granted under this Agreement, as permitted by the
Code, the option rights granted under this Agreement shall terminate and
thereupon become null and void: (1) upon the reorganization, dissolution or
liquidation of the Company, or similar occurrence; or (2) upon any merger,
consolidation, acquisition or separation, or similar occurrence, if the Company
is not the surviving corporation; provided, however, that each


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optionee shall have the right, immediately prior to or concurrently with such
reorganization, dissolution, liquidation, merger, consolidation, acquisition,
separation, or similar occurrence, and upon at least 10 days' written notice
thereof to exercise any unexpired option rights granted hereunder to the extent
such option rights are exercisable at the time of mailing of such notice, but in
any event subject to the time limitations for exercise of options provided in
the Code.

       In the event that the Board, in its sole discretion, determines that it
is desirable to offer its shares to the public pursuant to a registration
statement filed with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, or pursuant to an exemption under such Act, the
Secretary of the Company shall notify all optionees affected of such
determination in writing. In that event, all outstanding options shall become
null and void 30 days after such notice is mailed, but each affected optionee
shall, during such 30 day period, have the right to exercise any unexpired
option rights granted under this Agreement to the extent such option rights are
exercisable at the time of mailing of such notice, but in any event subject to
the time limitations for exercise of options provided in the Code.

6.4    OPTION EXERCISE PERIOD. Each option granted under the Plan shall become
exercisable on a date or in installments, and shall expire on a date, determined
by the Board, but in no event shall an option expire later than 10 years from
the date such option is granted, and in the case of an employee who owns more
than 10% of the outstanding stock of the Company, in no event shall an option
expire later than five (5) years from the date such option is granted.

6.5    NON ASSIGNABILITY OF OPTION RIGHTS. No option granted under the Plan
shall be assignable or otherwise transferable by the optionee except by will or
by the laws of descent and distribution. During the life of an optionee, his or
her option shall be exercisable only by him or her.

6.6    OTHER PROVISIONS. Each option granted under the Plan may contain such
other terms, provisions, and conditions not inconsistent with the Plan as may be
determined by the Board, and shall include such provisions and conditions as are
necessary to qualify the option under Section 422A as an "incentive stock
option.

7.     AMENDMENT, SUSPENSION, OR TERMINATION OF THE PLAN. The Board may at any
time amend, suspend, or terminate the Plan. However, the Board of Directors may
not, without approval of the holders of a majority of the combined issued and
outstanding voting shares of the Company, increase the aggregate number of
shares of stock subject to the Plan (except as provided in Section 6.2 of this
Agreement), and neither the amendment, suspension, nor termination of the Plan
shall, without the consent of the optionee, alter or impair any rights or
obligations under any option granted under the Plan (except as provided in
Section 6.2 or Section 6.3 in this Agreement). No option may be granted during
any period of suspension or after termination of the Plan.

8.     ACTION BY EXECUTIVE COMMITTEE. Any and all action authorized or required
under Sections 1 through 7 of the Plan to be taken by the Board may be taken by
the Executive Committee of the Board if there be one and if the Board has duly
delegated its authority to the Executive Committee to take such action.


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9.     LIMIT ON STOCK SUBJECT TO OPTIONS. Options shall not be granted to any
individual pursuant to this Plan, the effect of which would be to permit such
person to first exercise options, in any calendar year, for the purchase of
shares having a fair market value in excess of ($100,000) (determined at the
time of the grant of the options).

10.    NON-EXCLUSIVITY OF PLAN. Neither the adoption of the Plan by the Board,
the submission of the Plan to the shareholders of the Company for their
approval, nor any provision of the Plan shall be construed as creating any
limitation on the power of the Board to adopt additional compensation
arrangements from time to time as it may deem desirable, including, without
limitation, the granting of stock options and bonuses otherwise than under the
Plan, and such arrangements may be either generally applicable or applicable
only in specific cases.

11.    EFFECTIVE DATE OF THE PLAN. The effective date of this Plan is May 22,
1996. On this date the approval of both the shareholders and the board of
directors of the Company was duly obtained. Options may be granted and exercised
under the Plan only after there has been compliance with all applicable federal
and state securities laws.