Specifically it provides:
(3) Members of a reserve component while on inactive-duty training, but in the case of members of the Army National Guard of the United States or the Air National Guard of the United States only when in Federal service.
Kerry was a member of the individual ready reserve but was never on inactive-duty training.
John Kerry: A Navy Dove Runs for Congress
Kerry is a pilot, and on October 14 and 15 he flew Ted Kennedy's advisor Adam Walinsky by private plane throughout the State of New York so that Walinsky could give speeches against the Vietnam War. But Kerry was smart enough not to put down "Moratorium" on the Navy signout sheet for that Tuesday and Wednesday.
These demonstrations were organized by the Vietnam Moratorium Committee, identified in FBI documents as a front for the Socialist Workers Party, an organization designated by the Attorney General under Executive Order 10450, which is the E.O. invoked here:
Department of Defense DIRECTIVE: SUBJECT: Wearing of the Uniform
[SNIP]
POLICY