Item
1.01 Entry into a Material Definitive Agreement.
KVH
Industries, Inc. (the “Company”) entered into a Cooperation Agreement (the “Cooperation Agreement”) with
Black Diamond Capital Management, L.L.C., which beneficially owns approximately 17.2% of the Company’s outstanding common stock
and Stephen H. Deckoff (collectively with each of their respective affiliates and associates that beneficially owns, directly or indirectly,
any securities of the Company, “Black Diamond”), dated as of February 3, 2023.
Pursuant
to the Cooperation Agreement, the Company (i) has granted Black Diamond a waiver, during the Standstill Period (as defined below),
under the Company’s stockholder rights plan, as set forth in the Stockholder Rights Agreement, dated August 18, 2022, between
the Company and Computershare Trust Company, N.A., as Rights Agent (the “Rights Agreement”), allowing Black Diamond to acquire
up to 25% of the Company’s outstanding common stock without being deemed an “Acquiring Person” under the Rights Agreement,
(ii) has permitted Stephen H. Deckoff, Founder and Managing Principal of Black Diamond, to serve as an observer on the Company’s
board of directors (the “Board”), and (iii) has
agreed to nominate and support Mr. Deckoff as an independent Class III Board director (in such capacity, the “New Director”)
at the Company’s 2023 annual meeting of stockholders (the “2023 Annual Meeting”), subject to certain limitations. If
and when the New Director is seated as a director, Black Diamond’s observer right as described above will terminate. In the event
of the death, disability or other incapacity of the New Director or other compelling reason, Black Diamond will have a replacement right
with respect to the New Director, which will be subject to the Company’s approval (not to be unreasonably withheld or delayed).
Under
the Cooperation Agreement, Black Diamond has agreed to certain voting commitments. Commencing on the date of the Cooperation Agreement
and ending on the date that is the later of (i) the date that is thirty calendar days prior to the notice deadline under the Company’s
bylaws for stockholders to submit stockholder nominations for election to the Board at the Company’s 2024 annual meeting of stockholders
and (ii) the effective date of any termination or resignation letter submitted by the New Director (such period, the “Standstill
Period”), Black Diamond has agreed to appear in person or by proxy at each meeting of the Company’s stockholders and to vote
all of its shares of the Company’s common stock in accordance with the Board’s recommendation with respect to the election,
removal and/or replacement of directors. Black Diamond has also agreed that until the conclusion of the Company’s 2024 annual meeting
of stockholders it will vote all of its shares of the Company’s common stock in excess of 3,298,597 shares in accordance with the
Board’s recommendation with respect to all proposals submitted to Company stockholders for their vote (including a transaction with
a third party that would result in a change in control of the Company or the sale of substantially all of its assets); provided that if
the recommendation of the Board is not unanimous with respect to any stockholder proposal (not including the vote of the New Director),
then Black Diamond may vote such excess shares in the same proportion that all other stockholders of the Company vote on the matter.
During
the Standstill Period, Black Diamond has also agreed to certain standstill provisions, including, among other things, agreeing not to,
subject to certain exceptions, (i) acquire cumulative ownership (directly or indirectly) of more than 25% of the Company’s
outstanding common stock, (ii) transfer its shares of common stock to any third party that would result in such third party owning
more than 4.9% of the Company’s outstanding common stock, (iii) engage in any solicitation of proxies or consents with respect
to any matter or proposal, (iv) nominate or recommend for nomination any person for election to the Board, (v) make or be the
proponent of any stockholder proposal, (vi) initiate or participate in any tender or exchange offer, merger, consolidation or other
extraordinary transaction involving the Company, (vii) subject any voting securities of the Company to any voting arrangement or
agreement, or (viii) acquire or engage in any transaction involving synthetic equity interests or short interests in the Company.
Pursuant
to the Cooperation Agreement, the Company will accept the resignation of one of its incumbent directors, which resignation will become
effective at the 2023 Annual Meeting, such that if and when the New Director is seated as a director, the size of the Board will remain
six directors thereafter.
The
Company and Black Diamond have also agreed to certain non-disparagement and no-litigation 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.
Amendment
to Stockholder Rights Agreement
On
February 3, 2023, the Company and Computershare Trust Company, N.A., as Rights Agent (the “Rights Agent”) executed
Amendment No. 1 (“Amendment No. 1”) to the Stockholder Rights Agreement (the “Amendment”), effective
as of February 3, 2023. A copy of the Amendment is attached hereto as Exhibit 4.1 and incorporated herein by reference.
Amendment
No. 1 amends the Rights Agreement to exempt purchases of capital stock of the Company by Black Diamond from the provisions of the
Rights Agreement, up to an aggregate of 25% of the Company’s outstanding common stock.
The
above description of Amendment No. 1 is qualified in its entirety by reference to Exhibit 4.1 attached hereto.