KVH INDUSTRIES, INC.
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
to be held on May 24, 2000
and
PROXY STATEMENT
IMPORTANT
Please mark, sign and date your proxy
and promptly return it in the enclosed envelope.
<PAGE>
KVH Industries, Inc.
50 Enterprise Center
Middletown, RI 02842
April 17, 2000
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of KVH
Industries, Inc. Our meeting will be held at the offices of Foley, Hoag & Eliot
LLP, One Post Office Square, 16th Floor, Boston, Massachusetts on Wednesday, May
24, 2000, beginning at 11:00 a.m. local time.
The "Notice of Annual Meeting of Stockholders" included with this letter (please
see Page 1) describes the proposals for your action. At the meeting, we also
will present a report on KVH's business results for fiscal 1999 and discuss
current matters of interest to our stockholders.
Please read these materials so that you'll have important information about the
company and know what we plan to act on at the meeting. Also, please sign and
return the accompanying proxy card in the postage-paid envelope so that your
shares will be represented and voted at the meeting. If you attend the meeting,
you may vote in person. As a stockholder, your vote is important and we
encourage you to return your proxy promptly.
Thank you for your cooperation, continued support and interest in KVH
Industries, Inc.
/s/Martin Kits van Heyningen
President and Chief Executive Officer
<PAGE>
Table of Contents
Page
Notice of Meeting 1
Record Date 1
Attendance at Meeting 1
Voting 1
Proxy Statement 2
Board of Directors 2
Director Nominees 2
Proposal I - Election of Directors 2
Directors with Terms Expiring 2001 2
Directors with Terms Expiring 2002 3
Directors' Compensation 3
Committees and Meetings 3
Stock Ownership Information 4
Compliance with 16(a) Reporting 4
Stock Option Plans 4
Stock Option Repricing 4
Ten-year Option/SAR Repricing Table 5
Principal Stockholders Table 6
Executive Compensation 7
Summary Compensation Table 7
Report on Executive Compensation 7
1999 Option Grants Table 8
1999 Options Exercised and Year-end Values Table 9
Performance Graph 9
Other Information 10
Solicitation 10
Shareholder Proposals 10
Available Information 10
Exhibit A 11
<PAGE>
KVH Industries, Inc.
Notice of Annual Meeting of Stockholders
To be Held May 24, 2000
The Annual Meeting of Stockholders of KVH Industries, Inc. will be held at the
offices of Foley, Hoag & Eliot LLP, One Post Office Square, 16th Floor, Boston,
Massachusetts on Wednesday, May 24, 2000, beginning at 11:00 a.m. local time for
the following purposes:
1. To elect two Class I Directors.
2. To transact any other business appropriate to the meeting.
Record Date
Our Board of Directors has fixed the close of business on March 31, 2000, as the
record date for the purpose of determining shareholders who are entitled to
notice of and to vote at the meeting. A list of shareholders entitled to vote at
the meeting will be available at our headquarters in Middletown, RI, during
business hours for 10 days prior to the meeting.
Voting
Each share of KVH stock you own entitles you to one vote. As of March 31, 2000,
there were 7,598,094 shares of KVH common stock outstanding.
How you can vote your shares:
o Come to the Annual Meeting and cast your vote.
o Sign and return the enclosedproxy card. The individuals named on the card will
act as your proxy and vote your shares in the manner you indicate.
o You may revoke a submitted proxy before it has been exercised by:
- notifying the Company's Secretary in writing;
- submitting another proxy that is properly signed and later dated; or
- voting in person at the meeting.
o If you do not specify on your proxy card how you want to vote your shares,
they will be voted by the proxies "for' the election of those nominees for
director on page 2.
By Order of the Board of Directors,
Robert Kits van Heyningen
Secretary
Middletown, Rhode Island
April 17, 2000
<PAGE>
KVH Industries, Inc.
50 Enterprise Center
Middletown, Rhode Island 02842
(401) 847-3327
PROXY STATEMENT
Our Board of Directors is soliciting proxies to be used at the May 24, 2000,
annual meeting. This proxy statement and proxy card are being mailed to
stockholders beginning April 17, 2000.
A majority of the votes that could be cast at the meeting, either in person or
represented by proxy, is required to elect the nominees for directors and
approve any proposals. Abstentions and broker non-votes on any particular
proposals will be counted as shares present at the meeting for purposes of
determining if a quorum exists. Class I directors will be elected by a plurality
of the votes cast, and abstentions and broker non-votes will not count as votes
for or against the nominees. Votes will be tabulated by our transfer agent,
Boston EquiServe.
KVH BOARD OF DIRECTORS
Our Board of Directors consists of seven members, four non-employee
directors and three employee directors. The Board is divided into three classes,
with two directors in Class I, two in Class II and three in Class III. Directors
serve three-year terms, or until a qualified successor is elected. Each year at
the Company's annual meeting, the terms of directors in one of the three classes
expire. The number of directors may vary from two to seven with increases or
decreases determined by the stockholders or directors.
Class I Directors Nominated This Year for Terms Expiring in 2003
Mark S. Ain, 56, has been a director of the Company since 1997 and is a
member of the Compensation Committee. He is the founder of Kronos Incorporated
and has served as its Chief Executive Officer and Chairman of the Board of
Directors since its organization in 1977. He also held the office of President
from 1977 until October 1996. From 1974 to 1977, Mr. Ain operated his own
consulting company, providing strategic planning, product development and market
research services. From 1971 to 1974, he was associated with a consulting firm.
From 1969 to 1971, Mr. Ain was employed by Digital Equipment Corporation in
product development and as Sales Training Director. He received a BS from the
Massachusetts Institute of Technology and an MBA from the University of
Rochester.
Stanley K. Honey, 45, has been a director of the Company since 1997 and is
a member of the Audit Committee. He has been the Executive Vice President and
Chief Technology Officer of SporTVision Systems, LLC, since November 1997. From
1993 to 1997 Mr. Honey was Executive Vice President, Technology, for the New
Technology Group of News Corporation. From 1989 to 1993 Mr. Honey was President
and Chief Executive Officer of ETAK, Inc., a wholly owned subsidiary of News
Corporation. Mr. Honey founded ETAK in 1983 and was its Executive Vice
President, Engineering, until News Corporation acquired it in 1989. Mr. Honey
received a BS from Yale University and an MS from Stanford University.
PROPOSAL I - ELECTION OF DIRECTORS
The Board recommends that you vote FOR the election of Messrs Ain and Honey
as Class I directors.
Class II Directors with Terms Expiring in 2001
Arent H. Kits van Heyningen, 84, a founder of the Company, has been
Chairman of the Company's Board of Directors since 1982. He also has served as
the Company's Chief Scientist since that time. From 1963 to 1986, Mr. Kits van
Heyningen was Principal Engineer at the Submarine Signal Division of Raytheon
Company. Mr. Kits van Heyningen received a BS and an MS in electrical
engineering from Delft Technical University, The Netherlands.
Charles R. Trimble, 58, was appointed a director of the Company in 1999 to
fill a vacancy on the board. He is the founder, and was President and Chief
Executive Officer until 1998, of Trimble Navigation Limited. Mr. Trimble is an
elected member of the National Academy of Engineering and he has been chairman
of the United States GPS Industry Council since 1996. Previously, he was manager
of Integrated Circuit Research and Development at Hewlett-Packard's Santa Clara
Division. He received a BS in engineering physics, with honors, and an MS in
electrical engineering from the California Institute of Technology.
Class III Directors with Terms Expiring in 2002
Martin A. Kits van Heyningen, 41, a founder of the Company, has been
President and a director of the Company since 1982 and has served as the
Company's Chief Executive Officer since 1990. From 1980 to 1982, Mr. Kits van
Heyningen was employed as a marketing consultant by the New England Consulting
Group, a marketing consulting firm. Mr. Kits van Heyningen received a BA cum
laude from Yale University.
Robert W. B. Kits van Heyningen, 43, a founder of the Company, has been a
director since 1982 and the Company's Vice President of Research and Development
since 1998. Previously he served as the Company's Vice President of Engineering
from 1982 until 1998. Mr. Kits van Heyningen was an associate engineer at the
Submarine Signal Division of Raytheon Company and was also a consultant to
various companies and universities from 1980 to 1985. Mr. Kits van Heyningen
received a BS in physics from McGill University.
Werner Trattner, 47, has been a director of the Company since 1994 and is a
member of the Compensation and Audit committees. Mr. Trattner has been Chief
Financial Officer/Vice President of Sales of Swarovski Optik KG, an Austrian
manufacturer of optical equipment, since 1989. Mr. Trattner received a degree in
business administration from the Studiengemeinschaft in Darmstadt, Germany and
received a diploma from the Controller Akademie in Munich/Gauting, Germany. Mr.
Trattner completed the Program for Executive Development at the International
Institute for Management Development in Lausanne, Switzerland.
Directors' Compensation
The principal components of non-employee director compensation are:
o A $1,500 fee for each board meeting attended
o Reimbursement for meeting-related expenses
o Upon election to the Board, five-year options to purchase 10,000 shares
of the Company's Common Stock at a fair-market exercise price on the date
granted. Each option vests in four equal installments.
o Following each annual stockholders meeting, serving directors are granted
options to purchase an additional 5,000 shares that vest on the grant date.
Committees and Meetings of the Board
During the fiscal year ended December 31, 1999, our Board met four times.
No incumbent director attended fewer than 80% of the total number of meetings
held by our Board and committees on which he served. We currently have two
committees, the Audit Committee and the Compensation Committee.
Audit Committee
Werner Trattner and Stanley Honey are members of our Audit Committee, which
reviews the internal accounting procedures of the Company and consults with and
reviews the services provided by the Company's independent auditors. The Audit
Committee met once during fiscal 1999.
Compensation Committee
Our Compensation Committee is composed of two independent, non-employee
directors, Werner Trattner and Mark Ain. The Committee makes general policy
decisions relating to compensation and benefits for our employees, including
executive officers. It administers the Company's 1996 Incentive and Nonqualified
Stock Option Plan, the 1995 Incentive Stock Option Plan and the 1996 Employee
Stock Purchase Plan. The Compensation Committee met twice during 1999.
STOCK OWNERSHIP INFORMATION
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires our officers
and directors, and persons who own more than 10% of a registered class of our
equity securities, to file reports of ownership and changes in ownership with
the Securities and Exchange Commission (the "SEC"). Officers, directors and
greater-than-10% stockholders are required by SEC regulations to furnish us with
copies of all Section 16(a) forms they file. Based upon submissions of Forms 3,
4 and 5 and amendments, or written notices that Form 5 was not required, we
believe that all Section 16(a) filing requirements were fulfilled in a timely
manner.
Stock Option Plans
Our 1995 Option Plan authorizes the Board to grant incentive options to
purchase 740,000 shares of Common Stock. Our 1996 Incentive and Nonqualified
Stock Option Plan authorizes the Board to grant incentive (qualified) options to
purchase a total of 1,415,000 shares of Common Stock. The 1996 Option Plan also
authorizes grants of non-qualified options to non-employees such as directors
and to employees who are not eligible to receive incentive stock options. The
difference between qualified and non-qualified options is when taxes must be
paid: taxes on qualified options are paid when shares are sold while taxes on
non-qualified shares must be paid at the time options are exercised. As of
December 31, 1999, options to purchase a total of 1,261,360 shares of Common
Stock, having a weighted average exercise price of $3.00 per share, were
outstanding under the 1995 and 1996 option plans.
KVH option plans are administered by our Board's Compensation Committee,
which consists of non-employee directors. The Committee selects individuals to
whom awards will be granted and determines the option exercise price and other
terms of each award, subject to the following provisions of the option plans:
o Fair market value is determined at the time of each grant.
o For employees or officers holding 10% or less of our stock, incentive options
may extend for no more than 10 years from the grant date.
o For employees or officers holding more than 10% of our stock, incentive
options may extend for no more than five years from the grant date.
o The percentage of shares held is determined by combining all classes of KVH,
subsidiary and parent stock owned by a beneficial stockholder.
o For stockholders with 10% or less of our stock, the exercise price for
incentive options may not be less than the fair market value of the Common
Stock.
o For stockholders with more than 10% of our stock, the exercise price for
incentive options may not be less than 110% of fair market value.
o In each calendar year, the total fair market value of incentive options that
become eligible for an employee or officer to exercise may not exceed
$100,000.
o Participants in the 1996 Option Plan may not be granted more than 120,000
shares in any calendar year.
o Options are non-transferable except by will or by the laws of descent or
distribution.
o Vested incentive options generally may not be exercised after:
- an employee voluntarily terminates employment with KVH or we terminate an
employee for cause;
- 30 days following an employee's retirement from KVH due to age or
termination by us without cause; or
- one year following an employee's retirement from KVH due to disability or
death.
o Nonqualified options under the 1996 Option Plan need not be subject to the
foregoing restrictions.
Stock Option Repricing
On March 2, 1998, the Compensation Committee approved a stock option
repricing program. All our employees and directors could choose to exchange
certain previously granted incentive and non-qualifying stock options for new
options granted under the 1996 Plan. We repriced the options because their
exercise prices were significantly higher than the fair market value of our
Common Stock, and therefore were not an incentive to employees. The Board
believes that stock option plans promote our interests by providing an incentive
for qualified employees and officers to join and remain with KVH. Stock option
participation also aligns executive officers' interests with those of our
stockholders.
Under the terms of the exchange, employees had the option to surrender all
outstanding previously granted options with per-share exercise prices of $5.00
or more. In return, participants received a new option amounting to 80 percent
of the previously granted options. New exercise prices, which were based on our
closing stock price on March 2, 1998, ranged from $4.125 to $4.538 per share for
the new options. Options to purchase 361,500 shares of Common Stock, with an
average exercise price per share of $7.77, were surrendered and exchanged for
289,200 repriced shares. The vesting schedule and all other terms and conditions
of the options remained unchanged.
The following table provides stock option repricing information for
beneficial owners of Common Stock as of March 31, 2000, for each current
director and executive officer who participated in the option exchange.
Ten-year Option/SAR Repricing
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Length of
------- ------------- ------------ ----------- --------- ---------------
Exercise Original Option
Number of Market Price at Term
Securities Price Of Time of Remaining at
Underlying Stock at Repricing New Date of
Options/SARs Time of Or Exercise Repricing or
Name Repriced or Repricing Amendment Price Amendment
Date Amended (#) or Amendment
($) ($) (Years)
($)
- ---------------------------------------------------------------------------------------------------------------------------
Mark Ain
Director 3/2/98 8,000 4.125 6.750 4.125 3.93
Mads Bjerre-Petersen
Managing Director, KVH Europe 3/2/98 20,000 4.125 7.375 4.125 4.00
Christopher Burnett
Vice President, Business
Development 3/2/98 4,000 4.125 7.375 4.125 4.00
Josina de Smit
Treasurer 3/2/98 20,000 4.125 8.390 4.538 3.64
James Dodez
Vice President, Marketing and
Sales Support 3/2/98 40,000 4.125 8.000 4.125 3.19
Richard C. Forsyth
Chief Financial Officer 3/2/98 40,000 4.125 8.000 4.125 3.19
Stanley K. Honey 3/2/98 8,000 4.125 5.500 4.125 4.18
Director
Martin A. Kits van Heyningen 3/2/98 24,000 4.125 8.750 4.125 3.36
President and 3/2/98 12,966 4.125 7.250 4.125 3.13
Chief Executive Officer 3/2/98 11,034 4.125 7.980 4.538 3.13
Werner Trattner 3/2/98 8,000 4.125 6.500 4.125 3.09
Director 3/2/98 4,000 4.125 8.250 4.125 4.40
</TABLE>
The following table shows information on the beneficial ownership of Common
Stock as of March 31, 2000, by:
o each person known to own more than five percent of the Common Stock;
o each current director;
o each current executive officer;
o all current executive officers and directors as a group; and
o each person who served as an executive officer or director during 1999.
Principal Beneficial Ownership of Common Stock
Shares Beneficially Owned (2)
Name (1) Number Percent
Gerhard Swarovski (3) 604,210 7.95%
State of Wisconsin Investment Board
P.O. Box 7842
Madison, WI 53707 595,000 7.83%
Arent H. Kits van Heyningen (4) 593,685 7.81%
Josina de Smit (5) 593,685 7.81%
Martin A. Kits van Heyningen (6) 433,131 5.70%
Robert W. B. Kits van Heyningen 371,399 4.89%
James S. Dodez (7) 85,982 1.13%
Christopher T. Burnett (8) 79,346 1.04%
Richard C. Forsyth (7) 50,000 *
Mads E. Bjerre-Petersen 36,770 *
Sid Bennett 37,568 *
Werner Trattner 22,000 *
Mark S. Ain 26,800 *
Stanley K. Honey 18,000 *
Charles Trimble (9) 13,000 *
All current directors and executive
officers as a group (13 persons) 1,767,681 23.27%
*Less than one percent.
(1)The address of all KVH directors and executive officers is c/o KVH
Industries, Inc., 50 Enterprise Center, Middletown, RI 02842. The address of
Gerhard Swarovski and Erika Swarovski is c/o Swarovski 18A, Wattens, Austria.
(2)The persons named in this table have sole voting and investment power with
respect to the shares listed, except as otherwise indicated. The inclusion of
shares listed as beneficially owned does not constitute an admission of
beneficial ownership.
(3)Includes indirect beneficial ownership of 151,641 shares of Common Stock
held by Gerhard Swarovski's spouse, Erica Swarovski.
(4)Includes indirect beneficial ownership of 261,752 shares of Common
Stock held by Arent H. Kits van Heyningen's spouse, Josina de Smit. Arent Kits
van Heyningen is the father of Martin A. Kits van Heyningen and Robert W.B. Kits
van Heyningen and disclaims beneficial ownership of his sons' shares.
(5)Includes indirect beneficial ownership of 331,933 shares of Common Stock held
by Josina de Smit's spouse, Arent H. Kits van Heyningen. Josina de Smit is the
mother of Martin A. Kits van Heyningen and Robert W.B. Kits van Heyningen and
disclaims beneficial ownership of her sons' shares.
(6)Includes indirect beneficial ownership of 5,165 shares of Common Stock
owned by Martin Kits van Heyningen's spouse.
(7)Includes 6,667 shares issuable upon the exercise of outstanding options
exercisable within 60 days of March 31, 2000.
(8)Includes indirect beneficial ownership of 5,755 shares of Common Stock owned
by Mr. Burnett's spouse and child.
(9)Includes 2,500 shares issuable upon the exercise of outstanding options
exercisable within 60 days of March 31, 2000.
EXECUTIVE COMPENSATION
The following table shows compensation for our chief executive officer and
other four most highly compensated executive officers in 1999.
Summary Compensation Table
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Long-term
Compensation
Annual Compensation Awards
-------------------------------- -------------
Securities
Name and Fiscal Salary(1) Bonus(2) Underlying
Principal Position Year ($) ($) Options(#)
- ----------------------------------- -------- ------------ ----------- -------------
Martin A. Kits van Heyningen 1999 189,000 -- 20,000
President and Chief Executive 1998 180,000 -- 78,000
Officer 1997 150,000 106,248 --
Robert W. B. Kits van Heyningen 1999 143,325 -- 10,000
Vice President of 1998 136,500 -- 25,000
Research and Development 1997 130,000 63,744 --
Arent H. Kits van Heyningen 1999 132,300 -- 10,000
Chairman, Board of 1998 126,000 -- 15,000
Directors 1997 120,000 42,498 --
Christopher T. Burnett 1999 153,349 (3) -- 10,000
Vice President of Business 1998 147,621 (3) -- 24,000
Development 1997 148,464 (3) 10,625 5,000
James S. Dodez 1999 144,286 (4) -- 10,000
Vice President of Marketing 1998 137,783 (4) -- 50,000
and Sales Support 1997 135,303 (4) 10,625 --
</TABLE>
(1) Includes amounts deferred by the named individuals pursuant to the
Company's 401(k) Plan and Trust. Does not include amounts paid to plans,
including group disability, life and health, that do not discriminate in favor
of officers and directors and are generally available to all full-time
employees.
(2) Includes amounts earned in designated fiscal year but paid in the
subsequent fiscal year.
(3) Includes commissions as follows: $17,080 in 1999, $15,321 in 1998 and
$20,156 in 1997.
(4) Includes commissions as follows: $17,086 in 1999, $17,783 in 1998 and
$23,188 in 1997.
Compensation Committee Report on Executive Compensation
The compensation package for KVH executive officers in fiscal 1999 had
three principal components:
(1) base salary; (2) bonus; and (3) stock options. The Company's executive
officers were also eligible to participate in benefit plans on substantially the
same terms as other employees.
In determining executive compensation, the Compensation Committee believes
packages need to offer: fair and competitive compensation that attracts and
retains superior executive talent; links to performance and stockholder
interests with rewards for both short-term and long-term results; incentive
compensation programs that recognize both individual and team performance; and
features that encourage long-term career commitments to the Company and its
stockholders.
Salaries are reviewed annually, and any adjustments are based on individual
performance, changes in responsibilities and market-based comparisons with
similar companies. Bonuses, which are included in the compensation table,
generally are based on a percentage of base salary and depend upon KVH achieving
the year's financial plan. Stock option awards are intended to provide
longer-term incentives. The Compensation Committee granted additional incentive
stock options to nine KVH executive officers during fiscal 1999.
SUBMITTED BY THE COMPENSATION COMMITTEE:
/s/ Mark S. Ain
/s/ Werner Trattner
Executive Options
The following table shows information related to stock options granted to
individuals named in the Summary Compensation Table on page 7.
Option Grants in Fiscal Year Ended December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Potential Realizable
Individual Grants Value at Assumed
Percent of Annual Rates of
Number of Total Options Exercise Stock Price
Shares Under- Granted to or Base Appreciation For
lying Options Employees in Price Expiration Option Term (2)
Name Granted(#)_ Fiscal Year ($/Sh)(1) Date 5%($) 10%($)
Martin A. Kits van
Heyningen 20,000 11.0 1.169 3/02/04 3,753.75 10,859.44
Robert W. B. Kits van
Heyningen 10,000 5.5 1.169 3/2/04 1,876.87 5,429.72
Arent H. Kits van
Heyningen 10,000 5.5 1.169 3/2/04 1,876.87 5,429.72
Christopher T. Burnett 10,000 5.5 1.063 3/2/04 2,936.87 6,489.72
James S. Dodez 10,000 5.5 1.063 3/2/04 2,936.87 6,489.72
- -------------------------
</TABLE>
(1) Options were granted at 100 percent of fair market value on the grant
date, with the exception of Arent H., Martin A. and Robert W.B. Kits van
Heyningen, whose shares were granted at 110 percent of fair market value.
(2) Amounts reported in this column represent hypothetical values that may
be realized upon exercise of the options immediately prior to the expiration of
their term, assuming the specified compounded rates of appreciation of our
Common Stock over the term of the options. These numbers are calculated based on
SEC rules and do not represent our estimate of future stock price growth. Actual
gains, if any, on stock option exercises and Common Stock holdings depend on the
exercise timing and the future performance of our Common Stock. There can be no
assurance that the rates of appreciation assumed in this table can be achieved
or that the amounts reflected will be received by the individuals. This table
does not take into account any appreciation in the price of the Common Stock
from the date of grant to the current date. The values shown are net of the
option exercise price, but do not include deductions for taxes or other expenses
associated with the exercise.
The following table provides certain information concerning options
exercised by each named executive officer during the fiscal year ended December
31, 1999 and the number of shares subject to both exercisable and unexercisable
options as of December 31, 1999.
Options Exercised in Last Fiscal Year and Year-end Option Values
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Number of Shares of
Shares Common Stock Underlying Value of Unexercised
Acquired Unexercised Options In-the-Money Options
on Value at 12/31/99(#) at 12/31/99 ($)(2)
-------------------------- -------------------------
Name Exercise(#) Realized($)(1) Exercisable Unexercisable Exercisable Unexercisable
Martin A. Kits van
Heyningen -- -- 180,500 42,500 170,375 37,880
Robert W. B. Kits van
Heyningen -- -- 131,250 28,750 170,375 18,940
Arent H. Kits van
Heyningen -- -- 128,750 21,250 170,375 18,940
Christopher T. Burnett 1,000 1,425 33,000 25,000 32,712 20,000
James S. Dodez -- -- 62,261 24,167 65,092 20,000
</TABLE>
(1) Value is based on the last sale price of Common Stock on the exercise
date, as reported by the NASDAQ National Market, less the applicable option
exercise price.
(2) Value is based on $3.063, the last per-share sale price of the Common
Stock on December 31, 1999, as reported by the NASDAQ National Market, less the
applicable option exercise price.
The following Performance Graph compares the performance of the Company's
cumulative stockholder return with that of two broad market indexes, the NASDAQ
Stock Market Index for U.S. Companies and the NASDAQ Telecommunications Stock
Index. The cumulative stockholder returns for Company shares and the indexes are
calculated assuming $100 was invested on April 2, 1996, the date on which our
Common Stock began trading on the NASDAQ National Market. The performance of the
market indexes is shown on a total return basis.
We paid no cash dividends during the periods shown on the graph.
Performance Chart
April 2, 1996 - December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Month Nasdaq Nasdaq KVH Nasdaq Nasdaq KVH
Stock Market Telecomm Industries, Stock Market Telecomm Industries,
Stocks Inc. Stocks Inc.
4/2/96 (IPO) 365.213 597.032 6.500 100.00 100.00 100.00
12/31/96 425.222 579.681 9.125 116.43 97.09 140.38
12/31/97 521.032 847.698 5.063 142.67 141.99 77.88
12/31/98 734.202 1,395.708 1.219 201.03 233.77 18.75
12/31/99 1,326.416 2,430.547 3.063 363.19 407.10 47.12
</TABLE>
OTHER INFORMATION
Our Board does not intend to present to the Annual Meeting any business
other than the proposals listed in this Proxy Statement. At the time this proxy
was mailed, the Board was not aware of any other business which may be presented
for action at the meeting. If any other business should be presented, those
present at the meeting can vote shares that they own or represent by proxy at
their discretion.
The Board has selected KPMG LLP as independent public accountants to audit
our financial statements for 2000. KPMG has been our auditors since 1986.
Solicitation
No compensation will be paid by any person in connection with the
solicitation of proxies. Brokers, banks and other nominees will be reimbursed
for their out-of-pocket expenses and other reasonable clerical expenses incurred
in obtaining instructions from beneficial owners of the Common Stock. In
addition to the solicitation by mail, special solicitation of proxies may, in
certain instances, be made personally or by telephone by directors, officers and
certain employees of the Company. It is expected that the expense of such
special solicitation will be nominal. All expenses incurred in connection with
this solicitation will be borne by the Company.
Shareholder Proposals
Shareholder proposals for inclusion in the proxy materials related to the
fiscal 2000 Annual Meeting of Stockholders must be received by the Company at
its executive offices in Middletown, RI, no later than December 20, 2000.
Shareholders must notify the Company no later than March 5, 2001, of their
intent to introduce proposals at the fiscal 2000 Annual Meeting of Stockholders,
otherwise management can use its discretionary voting authority for the
proposals when they are raised at the meeting.
Available Information
Stockholders of record on March 31, 2000, will receive a Proxy Statement
and our 1999 Annual Report on Form 10-K, which contains detailed financial
information. For up-to-date information such as SEC filings, press releases,
conference calls and product information, please visit our web site:
www.kvh.com
To receive printed materials, be added to the Company's distribution list
or make specific inquiries, please direct calls, faxes, letters and e-mail to:
Corporate Communications
KVH Industries, Inc.
50 Enterprise Center
Middletown, RI 02842
Phone: 401-847-3327
Fax: 401-849-0045
[email protected]
You may contact our transfer agent at:
State Street Bank & Trust Company
c/o EquiServe
P.O. Box 8200
Boston, MA 02266-8200
800-426-5523
Our independent accountants are:
KPMG LLP
600 Fleet Center
Providence, RI 02903
