Item 1.01 Entry into a Material Definitive Agreement.
KVH Industries, Inc. (the “Company”) entered into a Cooperation Agreement (the “Cooperation Agreement”) with Vintage Capital Management, LLC and Kahn Capital Management, LLC (together, the “Investors”), dated as of April 8, 2020, regarding the membership and composition of the Board and related matters.
Pursuant to the Cooperation Agreement, the Company (i) increased the size of Company’s board of directors (the “Board”) by one director and (ii) the appointed Robert Tavares to the newly created vacancy as a Class II director with a term ending on the date of the Company’s 2022 annual meeting of stockholders (the “2022 Annual Meeting”), in each case, effective immediately. Each Investor has also irrevocably withdrawn its notice to the Company regarding each Investor’s intent to nominate individuals for election to the Board at the Company’s 2020 annual meeting of stockholders.
At any stockholder meeting during the period from the date of the Cooperation Agreement until the date that is 30 days prior to the director nomination deadline for the Company’s 2021 annual meeting of stockholders (such period, the “Restricted Period”), each Investor has agreed to vote its shares of the Company’s common stock (i) in favor of the slate of directors recommended by the Board and (ii) in accordance with the Board’s recommendation with respect to any other matter or proposal presented at any such meeting, subject to certain exceptions relating to business combination or other extraordinary transactions.
During the Restricted Period, the Investors have also agreed to certain standstill provisions, including, among other things, agreeing not to (i) engage in any solicitation of proxies or consents with respect to any matter or proposal, (ii) acquire cumulative ownership (beneficial or otherwise) of 10% or more of the Company’s outstanding common stock, (iii) effect or seek to effect, directly or indirectly, any tender or exchange offer, merger, consolidation or other extraordinary transaction or action involving the Company, (iv) nominate or recommend for nomination any person for election to the Board, (v) make or be the proponent of any stockholder proposal or (vi) pursue any legal proceeding against the Company, subject to certain exceptions. In addition, the Investors have agreed not to nominate directors or take certain other actions until the date that is 30 days prior to the director nomination deadline for the 2022 Annual Meeting.
During the Restricted Period, each of the Company and the Investors also agreed to non-disparagement provisions, subject to certain exceptions.
The foregoing summary of the Cooperation Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Cooperation Agreement, a copy of which is attached as Exhibit 10.1 hereto and is incorporated herein by reference.