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Share Name | Share Symbol | Market | Type |
---|---|---|---|
KVH Industries Inc | NASDAQ:KVHI | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 4.54 | 4.12 | 6.79 | 0 | 12:00:00 |
Announces Glass Lewis Endorses VIEX’s Case for Change and Recommends Stockholders Vote on the WHITE Proxy Card to Elect Nominee John Mutch
Highlights that Glass Lewis and ISS have Chided KVH’s Attack-Filled Campaign, Which is Costing an Astounding 5% of the Company’s Total Cash
Notes Glass Lewis Specifically Spotlighted Eric Singer’s Record Helping Turn Around Founder-Dominated and Underperforming Technology Companies
Reiterates Stockholders Should Question the Integrity of KVH’s Defensive Board Refresh Efforts Given its Nominees’ Links to the Company’s Defense Advisors
Urges Stockholders to Vote on the WHITE Proxy Card to Elect Messrs. Mutch and Singer, who Possess Superior Governance Acumen, Ownership Perspectives and Turnaround Experience
VIEX Capital Advisors, LLC and the other participants in its solicitation (collectively, the “VIEX-led investor group” or “we”) today issued the below open letter to stockholders of KVH Industries, Inc. (NASDAQ: KVHI) (“KVH” or the “Company”) regarding the Company’s Annual Meeting of Stockholders (the “Annual Meeting”). The VIEX-led investor group is seeking to elect two highly-qualified individuals – John Mutch and Eric Singer – to KVH’s Board of Directors (the “Board”) at the Annual Meeting on June 17, 2021.
***
Fellow Stockholders,
The VIEX-led investor group holds nearly 10% of KVH’s outstanding common stock, making us the Company’s largest stockholder. We believe the case for change atop KVH is crystal clear after 20 years of abysmal financial performance and insular corporate governance under founder, chairman and chief executive officer Martin Kits van Heyningen. We contend the case for change has grown even stronger in recent months as Mr. Kits van Heyningen and his long-standing boardroom allies threatened to invalidate our nomination, rebuffed our proposal to settle for one designee and subsequently initiated a multi-million-dollar smear campaign that has been chided by leading independent proxy advisory firms.
We find the Board’s wasteful campaign all the more alarming when taking into account that KVH appears to have not repaid its nearly $7 million loan under the Paycheck Protection Program. We are truly confounded by the Company’s decision to spend 5% of its capital on a proxy fight, especially when we were willing to settle for one designee. Given this seemingly irresponsible level of spending, we want stockholders to receive a detailed breakdown of the millions of dollars in professional fees and incentive payments associated with this contest.
In our view, stockholders have two distinct choices at this week’s Annual Meeting:
Prior to voting, we encourage all stockholders to review our two public presentations and also consider the findings in the report issued by Glass, Lewis & Co. LLC (“Glass Lewis”) late last week. In addition to recommending that stockholders vote on VIEX’s WHITE proxy card to elect Mr. Mutch, Glass Lewis notes:1
Although we believe stockholders seeking to facilitate truly meaningful change should vote to elect both of our nominees, we largely agree with the Glass Lewis conclusions. We were especially pleased that Glass Lewis joined Institutional Shareholder Services, Inc. (“ISS”) in rebuking KVH’s unseemly campaign. ISS noted in its own report that the Company was “launching questionable attacks on the dissident's character.”2 We hope all of our fellow stockholders can agree that money-losing companies such as KVH should not be spending millions of dollars in this manner.
It is equally notable that both Glass Lewis and ISS consider KVH’s attempted board refresh to be defensive in nature. We could not agree more. While KVH claims its two new nominees were identified by an independent search firm, both candidates appear to have recent overlap with the Company’s advisors. KVH’s proxy solicitor was also the proxy solicitor for South Jersey Industries, Inc. (NYSE: SJI) when nominee Cielo Hernandez served as Chief Financial Officer. KVH’s activism defense advisor was also the activism defense advisor to TESSCO Technologies, Inc. (NASDAQ: TESS) during the period when nominee Cathy-Ann Martine-Dolecki was placed on the Board for one month. This apparent overlap gives us significant concern about the integrity of KVH’s refreshment efforts in recent months.
In light of the facts pertaining to KVH’s long-term underperformance and recent entrenchment maneuvers, we believe it is absolutely essential for the Company’s stockholders to send a loud and clear message at the Annual Meeting. Mr. Kits van Heyningen and his allies have not earned the right to unilaterally refresh the Board. We feel their apparent willingness to peddle mischaracterizations and waste stockholder capital on an unnecessary contest validates our conclusion. The Company’s leadership should instead be focusing on improving its operating model to return capital to investors.
Stockholders can rest assured that our two nominees will work to fix KVH’s broken corporate culture and hold management accountable if they are elected to the Board. Our slate has the sector expertise, turnaround experience and passion that KVH’s Board needs at this pivotal point in its lifecycle. John Mutch and I have collectively served on nearly 20 public boards, including many founder-dominated tech companies similar to KVH. Both of us have also repeatedly received recommendations from leading independent proxy advisory firms over the years.
In closing, we want to emphasize that the VIEX-led investor group has committed a significant amount of its own capital and resources to this campaign – unlike Mr. Kits van Heyningen and the Board. We have done so because we fear the value of our investment will greatly depreciate if Mr. Kits van Heyningen and his hand-picked Board members continue to preside over KVH without the addition of truly independent directors. We urge all stockholders, including the many fund managers who owe fiduciary obligations to their own investors, to realize the risk associated with allowing the status quo to persist. A credible refresh of the Board can help finally put the Company on a path to long-term growth and profitability after two decades of stagnation.
Sincerely,
Eric Singer VIEX Capital Advisors, LLC
***
1 Approval to quote Glass Lewis neither sought nor received. Emphasis added by VIEX. 2 Approval to quote ISS neither sought nor received. Emphasis added by VIEX.
View source version on businesswire.com: https://www.businesswire.com/news/home/20210614005366/en/
For investors:
Saratoga Proxy Consulting LLC John Ferguson / Joe Mills, 212-257-1311 jferguson@saratogaproxy.com / jmills@saratogaproxy.com
For media:
Profile Greg Marose, 201-936-4126 gmarose@profileadvisors.com
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