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                                                                    EXHIBIT 10.3

                              KVH INDUSTRIES, INC.

                              AMENDED AND RESTATED
                1996 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN
                  (AS AMENDED ON MAY 26, 1999 AND MAY 23, 2001)

SECTION 1. PURPOSE

      This Amended and Restated 1996 Incentive and Nonqualified Stock Option
Plan (the "Plan") of KVH Industries, Inc., a Delaware corporation (the
"Company"), is designed to provide additional incentive to executives and other
key employees of the Company and its subsidiaries and for certain other
individuals providing services to or acting as directors of the Company and its
subsidiaries. The Company intends that this purpose will be effected by the
granting of incentive stock options ("Incentive Stock Options") as defined in
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), and
nonqualified stock options ("Nonqualified Options") under the Plan which afford
such executives, key employees, directors and other eligible individuals an
opportunity to acquire or increase their proprietary interest in the Company
through the acquisition of shares of its Common Stock. The Company intends that
Incentive Stock Options issued under the Plan will qualify as "incentive stock
options" as defined in Section 422 of the Code and the terms of the Plan shall
be interpreted in accordance with this intention. The term "subsidiary" shall
have the meaning set forth in Section 424 of the Code.

SECTION 2. ADMINISTRATION

      2.1 THE COMMITTEE. The Plan shall be administered by a Committee (the
"Committee") consisting of at least two (2) "Outside Directors" who may also be
members of the Compensation Committee. As used herein, the term "Outside
Director" means any director who (i) is not an employee of the Company or of any
"affiliated group," as such term is defined in Section 1504(a) of the Code,
which includes the Company (an "Affiliate"), (ii) is not a former
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employee of the Company or any Affiliate who is receiving compensation for prior
services (other than benefits under a tax-qualified retirement plan) during the
Company's or any Affiliate's taxable year, (iii) has not been an officer of the
Company or any Affiliate and (iv) does not receive remuneration from the Company
or any Affiliate, either directly or indirectly, in any capacity other than as a
director. None of the members of the Committee shall have been granted any
incentive stock option or nonqualified option under this Plan (other than
pursuant to Section 4.4) or any other stock option plan of the Company within
one year prior to service on the Committee. It is the intention of the Company
that the Plan shall be administered by "disinterested persons" within the
meaning of Rule 16b-3 under the Securities Exchange Act of 1934 (the "Exchange
Act"), but the authority and validity of any act taken or not taken by the
Committee shall not be affected if any person administering the Plan is not a
disinterested person. Except as specifically reserved to the Company's Board of
Directors (the "Board") under the terms of the Plan, the Committee shall have
full and final authority to operate, manage and administer the Plan on behalf of
the Company. Action by the Committee shall require the affirmative vote of a
majority of all members thereof.

      2.2 POWERS OF THE COMMITTEE. Subject to the terms and conditions of the
Plan, the Committee shall have the power:

            (a) To determine from time to time the persons eligible to receive
      options and the options to be granted to such persons under the Plan and
      to prescribe the terms, conditions, restrictions, if any, and provisions
      (which need not be identical) of each option granted under the Plan to
      such persons;

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            (b) To construe and interpret the Plan and options granted
      thereunder and to establish, amend, and revoke rules and regulations for
      administration of the Plan. In this connection, the Committee may correct
      any defect or supply any omission, or reconcile any inconsistency in the
      Plan, or in any option agreement, in the manner and to the extent it shall
      deem necessary or expedient to make the Plan fully effective. All
      decisions and determinations by the Committee in the exercise of this
      power shall be final and binding upon the Company and optionees;

            (c) To make, in its sole discretion, changes to any outstanding
      option granted under the Plan, including: (i) to reduce the exercise
      price, (ii) to accelerate the vesting schedule or (iii) to extend the
      expiration date; and

            (d) Generally, to exercise such powers and to perform such acts as
      are deemed necessary or expedient to promote the best interests of the
      Company with respect to the Plan.

SECTION 3. STOCK

      3.1 STOCK TO BE ISSUED. The stock subject to the options granted under the
Plan shall be shares of the Company's authorized but unissued Class A Common
Stock, $.01 par value (the "Common Stock"), or shares of the Company's Class A
Common Stock held in treasury. The total number of shares that may be issued
pursuant to options granted under the Plan shall not exceed an aggregate of
1,915,000 shares of Common Stock; provided, however, that the class and
aggregate number of shares which may be subject to options granted under the
Plan shall be subject to adjustment as provided in Section 8 hereof.

      3.2 EXPIRATION, CANCELLATION OR TERMINATION OF OPTION. Whenever any
outstanding option under the Plan expires, is cancelled or is otherwise
terminated (other than by exercise), the shares of Common Stock allocable to the
unexercised portion of such option may again be the subject of options under the
Plan.

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      3.3 LIMITATION ON GRANTS. In no event may any Plan participant be granted
options with respect to more than 120,000 shares of Common Stock in any calendar
year. The number of shares of Common Stock issuable pursuant to an option
granted to a Plan participant in a calendar year that is subsequently forfeited,
cancelled or otherwise terminated shall continue to count toward the foregoing
limitation in such calendar year. In addition, if the exercise price of an
option is subsequently reduced, the transaction shall be deemed a cancellation
of the original option and the grant of a new one so that both transactions
shall count toward the maximum shares issuable in the calendar year of each
respective transaction.

SECTION 4. ELIGIBILITY

      4.1 PERSONS ELIGIBLE. Incentive Stock Options under the Plan may be
granted only to officers and other employees of the Company or its subsidiaries.
Nonqualified Options may be granted to officers or other employees of the
Company or its subsidiaries, and to members of the Board and consultants or
other persons who render services to the Company (regardless of whether they are
also employees), provided, however, that no such option may be granted to a
person who is a member of the Committee at the time of grant other than pursuant
to Section 4.4.

      4.2 GREATER-THAN-TEN-PERCENT STOCKHOLDERS. Except as may otherwise be
permitted by the Code or other applicable law or regulation, no Incentive Stock
Option shall be granted to an individual who, at the time the option is granted,
owns (including ownership attributed pursuant to Section 424 of the Code) more
than ten percent of the total combined voting power of all classes of stock of
the Company or any subsidiary (a "greater-than-ten-percent stockholder"), unless
such Incentive Stock Option provides that (i) the purchase price per share shall
not be less than one hundred ten percent of the fair market value of the Common
Stock at the time such option is granted, and (ii) that such option shall not be
exercisable to any extent after the expiration of five years from the date it is
granted.

      4.3 MAXIMUM AGGREGATE FAIR MARKET VALUE. The aggregate fair market value
(determined at the time the option is granted) of the Common Stock with respect
to which

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Incentive Stock Options are exercisable for the first time by any optionee
during any calendar year (under the Plan and any other plans of the Company or
its subsidiary for the issuance of incentive stock options) shall not exceed
$100,000 (or such greater amount as may from time to time be permitted with
respect to incentive stock options by the Code or any other applicable law or
regulation).

      4.4 OPTION GRANTS TO NON-EMPLOYEE DIRECTORS. As compensation for services
to the Company, each director of the Company who is not an employee of the
Company or any subsidiary of the Company (a "Non-Employee Director") in office
on the date of the closing of the initial public offering of the Common Stock of
the Company, and each other Non-Employee Director upon his or her initial
election to the Board subsequent to said closing of the initial public offering,
shall be automatically granted a Nonqualified Option to purchase 10,000 shares
of Common Stock of the Company (the "Initial Option Grant"). In addition, any
director of the Company who is elected to the Board but who is not a
Non-Employee Director at the time of his or her initial election and later
becomes a Non-Employee Director shall automatically receive an Initial Option
Grant to purchase 10,000 shares of Common Stock of the Company upon his or her
first election to the Board as a Non-Employee Director. Each Initial Option
Grant shall vest with respect to 2,500 shares on each three-month anniversary of
the date of grant, provided that the optionee is a director of the Company on
each such three-month anniversary, and shall expire on the fifth annual
anniversary of the date of grant. At the first meeting of the Board of Directors
following each annual meeting of stockholders, commencing with the first meeting
of the Board of Directors following the Company's annual meeting of stockholders
in 1997, each Non-Employee Director (other than any Non-Employee Director who
has received an Initial Option Grant as a result of election to the Board at
such meeting) shall be automatically granted an additional Nonqualified Option
to purchase 5,000 shares of Common Stock of the Company (the "Subsequent Option
Grant"). Each Subsequent Option Grant shall be exercisable in its entirety on
the date of grant and shall expire on the fifth annual anniversary of the date
of grant. The exercise price per share of Common Stock of each Nonqualified
Option granted pursuant to this

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Section 4.4 shall be equal to the fair market value of the Common Stock on the
date the Nonqualified Option is granted, such fair market value to be determined
in accordance with the provisions of Section 6.3.

      No Nonqualified Option granted under this Section 4.4 shall be
transferable by the optionee otherwise than by will or by the laws of descent
and distribution, and such Options shall be exercisable during the optionee's
lifetime only by the optionee. Any Nonqualified Option granted to a Non-Employee
Director and outstanding on the date of his or her death may be exercised by the
legal representative or legatee of the optionee until the expiration of the
stated term of the option.

      Nonqualified Options granted under this Section 4.4 may be exercised only
by written notice to the Company specifying the number of shares to be
purchased. Payment of the full purchase may be made by one or more of the
methods specified in Section 7.2. An optionee shall have the rights of a
stockholder only as to shares acquired upon the exercise of an option and not as
to unexercised options.

      The provisions of this Section 4.4 shall apply only to options granted or
to be granted to Non-Employee Directors, and shall not be deemed to modify,
limit or otherwise apply to any other provision of this Plan or to any option
issued under this Plan to a participant who is not a Non-Employee Director of
the Company. To the extent inconsistent with the provisions of any other Section
of this Plan, the provisions of this Section 4.4 shall govern the rights and
obligations of the Company and Non-Employee Directors respecting options granted
or to be granted to Non-Employee Directors.

SECTION 5. TERMINATION OF EMPLOYMENT OR DEATH OF OPTIONEE

      5.1 TERMINATION OF EMPLOYMENT. Except as may be otherwise expressly
provided herein, options shall terminate on the earlier of:

            (a) the date of expiration thereof,

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            (b) the date of termination of the optionee's employment with or
      services to the Company by it for cause (as determined by the Company), or
      voluntarily by the optionee; or

            (c) thirty days after the date of termination of the optionee's
      employment with or services to the Company by it without cause;

PROVIDED THAT Nonqualified Options granted to persons who are not employees of
the Company need not, unless the Committee determines otherwise, be subject to
the provisions set forth in clauses (b) and (c) above.

An employment relationship between the Company and the optionee shall be deemed
to exist during any period in which the optionee is employed by the Company or
any subsidiary. Whether authorized leave of absence, or absence on military or
government service, shall constitute termination of the employment relationship
between the Company and the optionee shall be determined by the Committee at the
time thereof.

      As used herein, "cause" shall mean (x) any material breach by the optionee
of any agreement to which the optionee and the Company are both parties, (y) any
act or omission to act by the optionee which may have a material and adverse
effect on the Company's business or on the optionee's ability to perform
services for the Company, including, without limitation, the commission of any
crime (other than ordinary traffic violations), or (z) any material misconduct
or material neglect of duties by the optionee in connection with the business or
affairs of the Company or any affiliate of the Company.

      5.2 DEATH OR PERMANENT DISABILITY OF OPTIONEE. In the event of the death
or permanent and total disability of the holder of an option prior to
termination of the optionee's employment with or services to the Company and
before the date of expiration of such option, such option shall terminate on the
earlier of such date of expiration or one year following the date of such death
or disability. After the death of the optionee, his/her executors,
administrators or any person or persons to whom his/her option may be
transferred by will or by the laws of descent and distribution, shall have the
right, at any time prior to such termination, to exercise

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the option to the extent the optionee was entitled to exercise such option
immediately prior to his/her death. An optionee is permanently and totally
disabled if he/she is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be
expected to last for a continuous period of not less than twelve months;
permanent and total disability shall be determined in accordance with Section
22(e)(3) of the Code and the regulations issued thereunder.

SECTION 6. TERMS OF THE OPTION AGREEMENTS

      Each option agreement shall be in writing and shall contain such terms,
conditions, restrictions, if any, and provisions as the Committee shall from
time to time deem appropriate. Such provisions or conditions may include without
limitation restrictions on transfer, repurchase rights, or such other provisions
as shall be determined by the Committee; PROVIDED THAT such additional
provisions shall not be inconsistent with any other term or condition of the
Plan and such additional provisions shall not cause any Incentive Stock Option
granted under the Plan to fail to qualify as an incentive option within the
meaning of Section 422 of the Code. Option agreements need not be identical, but
each option agreement by appropriate language shall include the substance of all
of the following provisions:

      6.1 EXPIRATION OF OPTION. Subject to Section 4.4 hereof, notwithstanding
any other provision of the Plan or of any option agreement, each option shall
expire on the date specified in the option agreement, which date shall not, in
the case of an Incentive Stock Option, be later than the tenth anniversary
(fifth anniversary in the case of a greater-than-ten-percent stockholder) of the
date on which the option was granted, or as specified in Section 5 hereof.

      6.2 EXERCISE. Subject to Sections 4.4 and 7.3 hereof, each option may be
exercised, so long as it is valid and outstanding, from time to time in part or
as a whole, subject to any limitations with respect to the number of shares for
which the option may be exercised at a particular time and to such other
conditions as the Committee in its discretion may specify upon granting the
option.

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      6.3 PURCHASE PRICE. Subject to Section 4.4 hereof, the purchase price per
share under each option shall be determined by the Committee at the time the
option is granted; provided, however, (i) that the option price of any Incentive
Stock Option shall not, unless otherwise permitted by the Code or other
applicable law or regulation, be less than the fair market value of the Common
Stock on the date the option is granted (110% of the fair market value in the
case of a greater-than-ten-percent stockholder), and (ii) that, unless approved
by the holders of a majority of the shares present and entitled to vote at a
duly convened meeting of the Company's stockholders, the option price of any
stock option shall not be less than the fair market value of the Common Stock on
the date the option is granted and the exercise price of any outstanding stock
option grant under any existing or future stock option plan may not be reduced.
Subsection 6.3(ii) hereof may not be amended or repealed without the affirmative
vote of the holders of a majority of the shares of the Company present and
entitled to vote at a duly convened meeting of the Company's stockholders. For
the purpose of the Plan the fair market value of the Common Stock shall be the
closing price per share on the date of grant of the option as reported by a
nationally recognized stock exchange, or, if the Common Stock is not listed on
such an exchange, as reported by the National Association of Securities Dealers
Automated Quotation System, Inc. ("NASDAQ"), or, if the Common Stock is not
quoted on NASDAQ, the fair market value as determined by the Committee.

      6.4 TRANSFERABILITY OF OPTIONS. Options shall not be transferable by the
optionee otherwise than by will or under the laws of descent and distribution,
and shall be exercisable, during his or her lifetime, only by him or her.

      6.5 RIGHTS OF OPTIONEES. No optionee shall be deemed for any purpose to be
the owner of any shares of Common Stock subject to any option unless and until
the option shall have been exercised pursuant to the terms thereof, and the
Company shall have issued and delivered the shares to the optionee.

      6.6 REPURCHASE RIGHT. The Committee may in its discretion provide upon the
grant of any option hereunder that the Company shall have an option to
repurchase upon such terms

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and conditions as determined by the Committee all or any number of shares
purchased upon exercise of such option. The repurchase price per share payable
by the Company shall be such amount or be determined by such formula as is fixed
by the Committee at the time the option for the shares subject to repurchase is
granted. In the event the Committee shall grant options subject to the Company's
repurchase option, the certificates representing the shares purchased pursuant
to such option shall carry a legend satisfactory to counsel for the Company
referring to the Company's repurchase option.

      6.7 "LOCKUP" AGREEMENT. The Committee may in its discretion specify upon
granting an option that the optionee shall agree for a period of time (not to
exceed 180 days) from the effective date of any registration of securities of
the Company (upon request of the Company or the underwriters managing any
underwritten offering of the Company's securities), not to sell, make any short
sale of, loan, grant any option for the purchase of, or otherwise dispose of any
shares issued pursuant to the exercise of such option, without the prior written
consent of the Company or such underwriters, as the case may be.

SECTION 7. METHOD OF EXERCISE; PAYMENT OF PURCHASE PRICE

      7.1 METHOD OF EXERCISE. Any option granted under the Plan may be exercised
by the optionee by delivering to the Company on any business day a written
notice specifying the number of shares of Common Stock the optionee then desires
to purchase and specifying the address to which the certificates for such shares
are to be mailed (the "Notice"), accompanied by payment for such shares.

      7.2 PAYMENT OF PURCHASE PRICE. Payment for the shares of Common Stock
purchased pursuant to the exercise of an option shall be made by:

            (a) cash in an amount, or a check, bank draft or postal or express
      money order payable in an amount, equal to the aggregate exercise price
      for the number of shares specified in the Notice;

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            (b) with the consent of the Committee, shares of Common Stock of the
      Company having a fair market value (as defined for purposes of Section 6.3
      hereof) equal to such aggregate exercise price;

            (c) with the consent of the Committee, a personal recourse note
      issued by the optionee to the Company in a principal amount equal to such
      aggregate exercise price and with such other terms, including interest
      rate and maturity, as the Committee may determine in its discretion;
      PROVIDED THAT the interest rate borne by such note shall not be less than
      the lowest applicable federal rate, as defined in Section 1274(d) of the
      Code;

            (d) with the consent of the Committee, such other consideration that
      is acceptable to the Committee and that has a fair market value, as
      determined by the Committee, equal to such aggregate exercise price,
      including any broker-directed cashless exercise/resale procedure adopted
      by the Committee; or

      (e) with the consent of the Committee, any combination of the foregoing.

As promptly as practicable after receipt of the Notice and accompanying payment,
the Company shall deliver to the optionee certificates for the number of shares
with respect to which such option has been so exercised, issued in the
optionee's name; provided, however, that such delivery shall be deemed effected
for all purposes when the Company or a stock transfer agent of the Company shall
have deposited such certificates in the United States mail, addressed to the
optionee, at the address specified in the Notice.

      7.3 SPECIAL LIMITS AFFECTING SECTION 16(B) OPTION HOLDERS. Shares issuable
upon exercise of options granted to a person who in the opinion of the Committee
may be deemed to be a director or officer of the Company within the meaning of
Section 16(b) of the Exchange Act and the rules and regulations thereunder shall
not be sold or disposed of until after the expiration of six months following
the date of grant.

SECTION 8. CHANGES IN COMPANY'S CAPITAL STRUCTURE

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      8.1 RIGHTS OF COMPANY. The existence of outstanding options shall not
affect in any way the right or power of the Company or its stockholders to make
or authorize, without limitation, any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of Common
Stock, or any issue of bonds, debentures, preferred or prior preference stock or
other capital stock ahead of or affecting the Common Stock or the rights
thereof, or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or otherwise.

      8.2 RECAPITALIZATION, STOCK SPLITS AND DIVIDENDS. If the Company shall
effect a subdivision or consolidation of shares or other capital readjustment,
the payment of a stock dividend, or other increase or reduction of the number of
shares of the Common Stock outstanding, in any such case without receiving
compensation therefor in money, services or property, then (i) the number,
class, and price per share of shares of stock subject to outstanding options
hereunder shall be appropriately adjusted in such a manner as to entitle an
optionee to receive upon exercise of an option, for the same aggregate cash
consideration, the same total number and class of shares as he or she would have
received as a result of the event requiring the adjustment had he or she
exercised his or her option in full immediately prior to such event; (ii) the
number and class of shares with respect to which options may be granted under
the Plan; and (iii) the number and class of shares set forth in Sections 3.3 and
4.4 shall be adjusted by substituting for the total number of shares of Common
Stock then reserved for issuance under the Plan that number and class of shares
of stock that the owner of an equal number of outstanding shares of Common Stock
would own as the result of the event requiring the adjustment.

      8.3 MERGER WITHOUT CHANGE OF CONTROL. After a merger of one or more
corporations into the Company, or after a consolidation of the Company and one
or more corporations in which (i) the Company shall be the surviving
corporation, and (ii) the stockholders of the Company immediately prior to such
merger or consolidation own after such merger or consolidation shares
representing at least fifty percent of the voting power of the Company, each

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holder of an outstanding option shall, at no additional cost, be entitled upon
exercise of such option to receive in lieu of the number of shares as to which
such option shall then be so exercisable, the number and class of shares of
stock or other securities to which such holder would have been entitled pursuant
to the terms of the agreement of merger or consolidation if, immediately prior
to such merger or consolidation, such holder had been the holder of record of a
number of shares of Common Stock equal to the number of shares for which such
option was exercisable.

      8.4 SALE OR MERGER WITH CHANGE OF CONTROL. If the Company is merged into
or consolidated with another corporation under circumstances where the Company
is not the surviving corporation, or if there is a merger or consolidation where
the Company is the surviving corporation but the stockholders of the Company
immediately prior to such merger or consolidation do not own after such merger
or consolidation shares representing at least fifty percent of the voting power
of the Company, or if the Company is liquidated, or sells or otherwise disposes
of substantially all of its assets to another corporation while unexercised
options remain outstanding under the Plan, (i) subject to the provisions of
clause (iii) below, after the effective date of such merger, consolidation,
liquidation, sale or disposition, as the case may be, each holder of an
outstanding option shall be entitled, upon exercise of such option, to receive,
in lieu of shares of Common Stock, shares of such stock or other securities,
cash or property as the holders of shares of Common Stock received pursuant to
the terms of the merger, consolidation, liquidation, sale or disposition; (ii)
the Committee may accelerate the time for exercise of all unexercised and
unexpired options to and after a date prior to the effective date of such
merger, consolidation, liquidation, sale or disposition, as the case may be,
specified by the Committee; or (iii) all outstanding options may be cancelled by
the Committee as of the effective date of any such merger, consolidation,
liquidation, sale or disposition provided that (x) notice of such cancellation
shall be given to each holder of an option and (y) each holder of an option
shall have the right to exercise such option to the extent that the same is then
exercisable or, if the Committee shall have accelerated the time for exercise of
all unexercised and unexpired options,

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in full during the 30-day period preceding the effective date of such merger,
consolidation, liquidation, sale or disposition.

      8.5 ADJUSTMENTS TO COMMON STOCK SUBJECT TO OPTIONS. Except as hereinbefore
expressly provided, the issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, for cash or property,
or for labor or services, either upon direct sale or upon the exercise of rights
or warrants to subscribe therefor, or upon conversion of shares or obligations
of the Company convertible into such shares or other securities, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Common Stock then subject to outstanding options.

      8.6 MISCELLANEOUS. Adjustments under this Section 8 shall be determined by
the Committee, and such determinations shall be conclusive. No fractional shares
of Common Stock shall be issued under the Plan on account of any adjustment
specified above.

SECTION 9. GENERAL RESTRICTIONS

      9.1 INVESTMENT REPRESENTATIONS. The Company may require any person to whom
an option is granted, as a condition of exercising such option, to give written
assurances in substance and form satisfactory to the Company to the effect that
such person is acquiring the Common Stock subject to the option for his or her
own account for investment and not with any present intention of selling or
otherwise distributing the same, and to such other effects as the Company deems
necessary or appropriate in order to comply with federal and applicable state
securities laws.

      9.2 COMPLIANCE WITH SECURITIES LAWS. The Company shall not be required to
sell or issue any shares under any option if the issuance of such shares shall
constitute a violation by the optionee or by the Company of any provisions of
any law or regulation of any governmental authority. In addition, in connection
with the Securities Act of 1933, as now in effect or hereafter amended (the
"Act"), upon exercise of any option, the Company shall not be required to issue
such shares unless the Committee has received evidence satisfactory to it to the
effect that

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the holder of such option will not transfer such shares except pursuant to a
registration statement in effect under such Act or unless an opinion of counsel
satisfactory to the Company has been received by the Company to the effect that
such registration is not required. Any determination in this connection by the
Committee shall be final, binding and conclusive. In the event the shares
issuable on exercise of an option are not registered under the Act, the Company
may imprint upon any certificate representing shares so issued the following
legend or any other legend which counsel for the Company considers necessary or
advisable to comply with the Act and with applicable state securities laws:

            The shares of stock represented by this certificate have not been
            registered under the Securities Act of 1933 or under the securities
            laws of any State and may not be sold or transferred except upon
            such registration or upon receipt by the Corporation of an opinion
            of counsel satisfactory to the Corporation, in form and substance
            satisfactory to the Corporation, that registration is not required
            for such sale or transfer.

      The Company may, but shall in no event be obligated to, register any
securities covered hereby pursuant to the Act; and in the event any shares are
so registered the Company may remove any legend on certificates representing
such shares. The Company shall not be obligated to take any other affirmative
action in order to cause the exercise of an option or the issuance of shares
pursuant thereto to comply with any law or regulation of any governmental
authority.

      9.3 EMPLOYMENT OBLIGATION. The granting of any option shall not impose
upon the Company any obligation to employ or continue to employ any optionee;
and the right of the Company to terminate the employment of any officer or other
employee shall not be diminished or affected by reason of the fact that an
option has been granted to him or her.

SECTION 10. WITHHOLDING TAXES

      10.1 RIGHTS OF COMPANY. The Company may require an employee exercising a
Nonqualified Option, or disposing of shares of Common Stock acquired pursuant to
the exercise of an Incentive Option in a disqualifying disposition (as defined
in Section 421(b) of the Code),

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to reimburse the Company for any taxes required by any government to be withheld
or otherwise deducted and paid by the Company in respect of the issuance or
disposition of such shares. In lieu thereof, the Company shall have the right to
withhold the amount of such taxes from any other sums due or to become due from
the Company to the employee upon such terms and conditions as the Company may
prescribe. The Company may, in its discretion, hold the stock certificate to
which such employee is otherwise entitled upon the exercise of an Option as
security for the payment of any such withholding tax liability, until cash
sufficient to pay that liability has been received or accumulated.

      10.2 PAYMENT IN SHARES. An employee may elect to have such tax withholding
obligation satisfied, in whole or in part, by (i) authorizing the Company to
withhold from shares of Common Stock to be issued pursuant to the exercise of a
Nonqualified Option a number of shares with an aggregate fair market value (as
defined in Section 6.3 hereof determined as of the date the withholding is
effected) that would satisfy the withholding amount due with respect to such
exercise, or (ii) transferring to the Company shares of Common Stock owned by
the employee with an aggregate fair market value (as defined in Section 6.3
hereof determined as of the date the withholding is effected) that would satisfy
the withholding amount due. With respect to any employee who is subject to
Section 16 of the Exchange Act, the following additional restrictions shall
apply:

            (a) the election to satisfy tax withholding obligations relating to
      an option exercise in the manner permitted by this Section 10.2 shall be
      made either (1) during the period beginning on the third business day
      following the date of release of quarterly or annual summary statements of
      sales and earnings of the Company and ending on the twelfth business day
      following such date, or (2) at least six (6) months prior to the date of
      exercise of the option;

            (b) such election shall be irrevocable;

            (c) such election shall be subject to the consent or approval of the
      Committee; and

                                     - 16 -
<PAGE>
            (d) the Common Stock withheld to satisfy tax withholding, if granted
      at the discretion of the Committee, must pertain to an option which has
      been held by the employee for at least six (6) months from the date of
      grant of the option.

      10.3 NOTICE OF DISQUALIFYING DISPOSITION. Each holder of an Incentive
Option shall agree to notify the Company in writing immediately after making a
disqualifying disposition (as defined in Section 421(b) of the Code) of any
Common Stock purchased upon exercise of the Incentive Option.

SECTION 11. AMENDMENT OR TERMINATION OF PLAN

      11.1 AMENDMENT. The Board may terminate the Plan and may amend the Plan at
any time, and from time to time, subject to the limitation that, except as
provided in Section hereof, no amendment shall be effective unless approved by
the stockholders of the Company in accordance with applicable law and
regulations, at an annual or special meeting held within 12 months before or
after the date of adoption of such amendment, in any instance in which such
amendment would: (i) increase the number of shares of Common Stock that may be
issued under, or as to which Options may be granted pursuant to, the Plan; or
(ii) change in substance the provisions of Section hereof relating to
eligibility to participate in the Plan. In addition, the provisions of Section
4.4 shall not be amended more than once every six months, other than to comport
with changes in the Code, the Employee Retirement Income Security Act, or the
rules thereunder. In addition, the provisions of Subsection 6.3(ii) may not be
amended or repealed without the affirmative vote of the holders of a majority of
the shares of Common Stock present and entitled to vote at a duly convened
meeting of the Company's stockholders. Without limiting the generality of the
foregoing, the Board is expressly authorized to amend the Plan, at any time and
from time to time, to confirm it to the provisions of Rule 16b-3 under the
Exchange Act, as that Rule may be amended from time to time.

      Except as provided in Section hereof, the rights and obligations under any
option granted before amendment of this Plan or any unexercised portion of such
option shall not be adversely

                                     - 17 -
<PAGE>
affected by amendment of this Plan or such option without the consent of the
holder of such option.

      11.2 TERMINATION. This Plan shall terminate as of the tenth anniversary of
its effective date. The Board may terminate this Plan at any earlier time for
any or no reason. No Option may be granted after the Plan has been terminated.
No Option granted while this Plan is in effect shall be altered or impaired by
termination of this Plan, except upon the consent of the holder of such Option.
The power of the Committee to construe and interpret this Plan and the Options
granted prior to the termination of this Plan shall continue after such
termination.

SECTION 12. NONEXCLUSIVITY OF PLAN

      Neither the adoption of this Plan by the Board of Directors nor the
submission of this Plan to the stockholders of the Company for approval shall be
construed as creating any limitations on the power of the Board to adopt such
other incentive arrangements as it may deem desirable, including the granting of
stock options otherwise than under this Plan, and such arrangements may be
either applicable generally or only in specific cases.

SECTION 13. EFFECTIVE DATE AND DURATION OF PLAN

      This Plan shall become effective upon its adoption by the Board, PROVIDED
that the stockholders of the Company shall have approved this Plan within twelve
months prior to or following the adoption of this Plan by the Board. Subject to
the foregoing, options may be granted under the Plan at any time subsequent to
its effective date; PROVIDED, HOWEVER, that (a) no such option shall be
exercised or exercisable unless the stockholders of the Company shall have
approved the Plan within twelve months prior to or following the adoption of
this Plan by the Board, and (b) all options issued prior to the date of such
stockholders' approval shall contain a reference to such condition. No option
may be granted under the Plan after the tenth anniversary of the effective date.
The Plan shall terminate (i) when the total amount of the Common Stock with
respect to which options may be granted shall have been issued upon the

                                     - 18 -
<PAGE>
exercise of options or (ii) by action of the Board of Directors pursuant to
Section 11 hereof, whichever shall first occur.

SECTION 14. PROVISIONS OF GENERAL APPLICATION

      14.1 SEVERABILITY. The invalidity or unenforceability of any provision of
this Plan shall not affect the validity or enforceability of any other provision
of this Plan, each of which shall remain in full force and effect.

      14.2 CONSTRUCTION. The headings in this Plan are included for convenience
only and shall not in any way effect the meaning or interpretation of this Plan.
Any term defined in the singular shall include the plural, and vice versa. The
words "herein," "hereof" and "hereunder" refer to this Plan as a whole and not
to any particular part of this Plan. The word "including" as used herein shall
not be construed so as to exclude any other thing not referred to or described.

      14.3 FURTHER ASSURANCES. The Company and any holder of an option shall
from time to time execute and deliver any and all further instruments, documents
and agreements and do such other and further acts and things as may be required
or useful to carry out the intent and purpose of this Plan and such option and
to assure to the Company and such option holder the benefits contemplated by
this Plan; PROVIDED, HOWEVER, that neither the Company nor any option holder
shall in any event be required to take any action inconsistent with the
provisions of this Plan.

      14.4 GOVERNING LAW. This Plan and each Option shall be governed by the
laws of the State of Delaware.

                                    * * * * *

                                     - 19 -<PAGE>
                                                                    EXHIBIT 10.4

                              KVH INDUSTRIES, INC.

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

      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.
<PAGE>
            (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.

      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.

                                     - 2 -
<PAGE>
            (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.

      7. GRANTING OF OPTION.

            (a) Except as set forth in Paragraph 7(c) hereof, on the Offering
Commencement 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 as follows: 85% of the market value per
share of the Common Stock on the applicable Offering Commencement Date shall be
divided into an amount equal to the sum of (i) the percentage of the employee's
Compensation which he has elected to have withheld (but no more than 6%)
multiplied by the employee's Compensation over the 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 the
lower of:

                  (i) 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 Commencement 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 Commencement 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
Commencement Date as determined by the Committee; and

                                     - 3 -
<PAGE>
                  (ii) 85% of the average of the bid and the asked prices as
reported by Nasdaq in the Wall Street Journal, or, if the Common Stock is
designated as a national market security by the 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 shall 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 full 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 automatically carried forward to the
next Offering unless the participant elects, by written notice to the Treasurer
of the Company, to have the excess returned to him.

            (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.

      10. WITHDRAWAL AND TERMINATION.

                                     - 4 -
<PAGE>
            (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

                                     - 5 -
<PAGE>
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.

            (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

                                     - 6 -
<PAGE>
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.

      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.

                                     - 7 -
<PAGE>
            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.

                                      * * *

                                     - 8 -

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