KVH INDUSTRIES, INC.

NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
to be held on May 23, 2001

and

PROXY STATEMENT

IMPORTANT
Please mark, sign and date your proxy and promptly return
it in the enclosed envelope or vote your proxy over the Internet
or by Telephone.

KVH Industries, Inc.
50 Enterprise Center
Middletown, RI 02842

April 30, 2001

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 23, 2001, beginning at 11:00 a.m. local time.

At this year's Annual Meeting, stockholders will be asked to elect two
directors, to amend our stock option and stock purchase plans to increase the
number of shares available under our plans, to amend our stock option plans to
restrict our ability to grant options at below-market prices or to reduce the
price of granted options, and to approve the sale of common stock. Additional
information about the Annual Meeting is given in the attached Notice of Annual
Meeting and Proxy Statement.

Whether or not you plan to attend the Annual Meeting, we hope you will vote
as soon as possible. You may vote over the Internet, by telephone or by mailing
a completed proxy card. Voting your proxy will ensure your representation at the
Annual Meeting.

I urge you to carefully review the proxy materials and to vote for the
proposals as described in the proxy statement.

Thank you for your cooperation, continued support and interest in KVH
Industries, Inc. I hope to see you at the Annual Meeting.

Sincerely,

Martin Kits van Heyningen
President and Chief Executive Officer

KVH Industries, Inc.

Notice of Annual Meeting of Stockholders
To be Held May 23, 2001

The 2001 Annual Meeting of Stockholders of KVH Industries, Inc. will be
held on Wednesday, May 23, 2001 at 11:00 a.m. at the offices of Foley, Hoag &
Eliot LLP, One Post Office Square, 16th Floor, Boston, Massachusetts, to conduct
the following items of business:

1. To elect two directors to serve for a three-year term and until their
successors have been elected.

2. To vote to increase the shares available in the 1996 Incentive and
Non-Qualified Stock Option Plan by 500,000 shares.

3. To vote to increase the shares available in the 1996 Employee Stock
Purchase Plan by 100,000 shares.

6. To transact any other business that may properly come before the meeting or
any postponement or adjournment of the meeting.

Stockholders, who owned shares of our stock at the close of business on
Friday, April 13, 2001, are entitled to attend and vote at the meeting. A list
of shareholders entitled to vote at the annual meeting will be available at our
headquarters in Middletown, Rhode Island, during normal business hours for 10
days prior to the annual meeting. A stockholder may examine the list for any
legally valid purpose related to the meeting.

Whether or not you plan to attend the meeting, please complete, date, sign
and return the enclosed proxy card in the accompanying reply envelope as
promptly as possible. To make your voting experience easier, KVH has made
arrangements with its transfer agent to allow you to vote your proxy over the
Internet or by telephone. Should you choose to vote either by the Internet or by
telephone, you are not required to complete and mail the enclosed proxy card.
For specific instructions, please refer to the information provided with your
proxy card.

By Order of the Board of Directors,

Robert W. B. Kits van Heyningen
Secretary

Middletown, Rhode Island
April 30, 2001

PROXY STATEMENT
Table of Contents

Page
General Information
Notice of Meeting 4
Record Date 4
Attendance at Meeting 4
Voting 4
Soliciation 5

Proposal I
Election of Directors 6
Director Nominees 6

Proposal II
Increase Shares in the 1996 Incentive and Non-Qualified Stock Option Plan 6

Proposal III
Increase Shares in the 1996 Employee Stock Purchase Plan 6

Proposal IV
Amendment to the 1995 Incentive Stock Option Plan and 1996 Incentive and
Non-Qualified Stock Plans 7

Proposal V
Approve the Sale of Common Stock 7

Other Matters 8

Board of Directors
Directors and Executive Officers 8
Committees, and Meetings of the Board of Directors 10
Audit and Related Fees 11

Stock Ownership Information
Compliance with 16(a) Reporting 11
Beneficial Ownership of Common Stock 12
Stock Option Plans 12
Ten-year Option / SAR Repricing 13

Directors' and Officers' Compensation
Directors' Compensation 14
Summary Compensation Table 14
Option Grants During Last Fiscal Year 15
Options Exercised During Last Fiscal Year 15
Cumulative Total Return Graph 15

Other Information
Shareholder Proposals 16
Available Information 17

Exhibit A - Audit Committee Charter 18

Exhibit B - Proxy Card 21

PROXY STATEMENT
GENERAL INFORMATION

The enclosed proxy is solicited on behalf of the Board of Directors of KVH
Industries, Inc., a Delaware corporation, with its principal executive offices
at 50 Enterprise Center, Middletown, Rhode Island 02842. This proxy is for use
at KVH's 2001 Annual Meeting of Stockholders to be held at 11:00 a.m. on
Wednesday, May 23, 2001, at the offices of Foley, Hoag & Eliot LLP, One Post
Office Square, 16th Floor, Boston, Massachusetts 02110. Our proxy statement
contains important information regarding the KVH Industries, Inc.'s 2001 Annual
Meeting of Stockholders, the proposals on which you are being asked to vote,
information you may find useful in determining how to vote and voting
procedures.

A number of abbreviations are used in this proxy statement. We refer to KVH
Industries, Inc. as "KVH" The term "proxy materials" includes this proxy
statement, the enclosed proxy card and the 2000 Form 10-K. KVH's 2001 Annual
Meeting of Stockholders is referred to as "the meeting."

The Board of Directors of KVH is mailing this proxy statement on or about
April 30, 2001, to all KVH stockholders as of the record date, April 13, 2001.
Stockholders who owned KVH's common stock at the close of business on April 13,
2001, are entitled to attend and vote at the meeting. On the record date, there
were 9,259,578 shares of KVH's common stock issued and outstanding entitled to
vote.

Voting Procedures

As a stockholder of KVH, you have a right to vote on certain business
matters affecting KVH. The proposals that will be presented at the meeting and
upon which you are being asked to vote are discussed in the following sections
entitled "Proposals." Each share of KVH's common stock you own entitles you to
one vote. You may vote by mail, by telephone, over the Internet or in person at
the meeting.

Methods of Voting

Your shares will be voted in accordance with the instructions you indicate.
If you do not indicate your voting instructions, your shares will be voted for
the proposals as presented in the proxy statement and at the discretion of the
proxies (as defined below) as to all other matters that may properly come before
the meeting.

Voting by Mail. By signing and returning the proxy card in the enclosed
prepaid and addressed envelope, you are enabling the individuals named on the
proxy card (known as "proxies") to vote your shares at the meeting in the manner
you indicate. We encourage you to sign and return the proxy card even if you
plan to attend the meeting. In this way, your shares will be voted even if you
are unable to attend the meeting. If you received more than one proxy card, it
is an indication that your shares are held in multiple accounts. Please sign and
return all proxy cards to ensure that all of your shares are voted.

Voting by Telephone. To vote by telephone, please follow the instructions
included on your proxy card. If you vote by telephone, you do not need to
complete and mail your proxy card.

Voting on the Internet. To vote on the Internet, please follow the
instructions included on your proxy card. If you vote on the Internet, you do
not need to complete and mail your proxy card.

Voting in Person at the Meeting. If you plan to attend the meeting and vote
in person, we will provide you with a ballot at the meeting. If your shares are
registered directly in your name, you are considered the stockholder of record
and you have the right to vote in person at the meeting.

If your shares are held in the name of your broker or other nominee, you
are considered the beneficial owner of shares held in street name. If you wish
to vote at the meeting, you will need to bring with you to the meeting a legal
proxy from your broker or other nominee authorizing you to vote your shares.

If you own shares under the Employees' Stock Purchase Plan and do not vote,
your shares will be voted in accordance with normal brokerage industry
practices, as described in this proxy statement under the section "Broker
Non-Votes."

Revoking Your Proxy

You may revoke your proxy at any time before it is voted at the meeting. In
order to do this, you must either: sign and return another proxy at a later
date; provide written notice of the revocation of your proxy to KVH's Secretary;
or attend the meeting and vote in person.

Quorum Requirement

A quorum, which is a majority of the outstanding shares entitled to vote as
of the record date, April 13, 2001, must be present in order to hold the meeting
and to conduct business. Shares are counted as being present at the meeting if
you appear in person at the meeting or if you vote your shares on the Internet,
by telephone or by submitting a properly executed proxy card. If any broker
non-votes (as described below) are present at the meeting, they will be counted
as present for the purpose of determining a quorum.

Votes Required to Pass Proposals

The vote required and the method of calculation for the proposals to be
considered at the meeting are as follows.

o Proposal I - Election of Directors: The two nominees receiving the
highest number of votes, in person or by proxy, will be elected as directors.

o Proposals II, III, IV and V - Amendments to Option Plans, the Purchase
Plan and the Sale of Common Shares: The amendments to our stock option plans,
stock purchase plan and the sale of common stock will require the affirmative
vote of a majority of the issued and outstanding shares entitled to vote as of
the record date and present at the meeting.

You may vote "for" the proposals, you may vote "against" the proposals, or
you may "withhold" your vote with respect to one or more of the proposals. If
you return a proxy card that withholds your vote from the proposals, your shares
will be counted as present for the purpose of determining a quorum but will not
be counted in the vote on the proposals.

Broker Non-Votes

If your shares are held in the name of a broker and you do not return a
proxy card, brokerage firms have authority to vote your non-voted shares (known
as "broker non-votes") on certain routine matters. The proposal to elect two
directors and the proposals to amend the stock option plans and the stock
purchase plan and the proposal to approve the sale of common stock should be
treated as routine matters. Consequently, if you do not provide a proxy to vote
your shares, your brokerage firm may elect to vote or not vote your shares for
you. To the extent your brokerage firm votes shares on your behalf, your shares
will be counted as present for the purpose of determining a quorum.

Voting Confidentiality

Proxies, ballots and voting tabulations are handled on a confidential basis
to protect your voting privacy. Information will not be disclosed except as
required by law.

Voting Results

Final voting results will be announced at the meeting and will be published
in KVH's Quarterly Report on Form 10-Q for the second quarter of fiscal 2001,
filed with the Securities and Exchange Commission. After the report is filed,
you may obtain a copy by: visiting our website at www.kvh.com; contacting our
investor relations department at 401-847-3327; or viewing our Quarterly Report
on Form 10-Q for the second quarter on the SEC's website at www.sec.gov.

Solicitation

KVH will bear the entire cost of solicitation, including the preparation,
assembly, printing and mailing of the proxy materials. We have hired Corporate
Investor Communications to assist in the distribution and solicitation of
proxies. In addition to the estimated proxy solicitation cost of $8,000 plus
reasonable out-of-pocket expenses for this service, we will reimburse brokerage
firms and other custodians for their reasonable out-of-pocket expenses for
forwarding the proxy materials to you.

Proposal I - Election of Directors. The Board has nominated Arent H. Kits van
Heyningen and Charles R. Trimble, who currently serve as Class II Directors, for
reelection as Class II Directors at the meeting, each to serve until our annual
meeting of stockholders in 2004 or special meeting in lieu thereof, and until a
successor is duly elected and qualified.

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. Our By-laws provide that the number of directors may vary from two to
seven with increases or decreases determined by the stockholders or directors.

Arent H. Kits van Heyningen and Charles R. Trimble have agreed to serve as
Class II Directors if elected, and we have no reason to believe that they will
be unable to serve. In the event that either is unable or declines to serve as a
director at the time of the annual meeting, proxies will be voted for such other
nominee as is then designated by the Board.

Arent H. Kits van Heyningen, 85, 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, 59, was appointed a director of the Company in 1999 and
is a member of the Audit Committee. 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.

The Board recommends that you vote FOR the election of Messrs.
Kits van Heyningen and Trimble as Class II directors.

Proposal II - Amendment to Our 1996 Incentive and Non-Qualified Stock Option
Plans to Increase the Number of Shares Available under the Plans by 500,000
Shares.

The following proposal has been included on the agenda for the meeting. Our
Board of Directors has approved an amendment that would increase the shares
reserved for issuance under the 1996 Incentive and Non-Qualified Stock Option
Plans by 500,000 shares to a total of 809,460 shares. As of December 31, 2000,
there were options to purchase a total of 907,360 shares of common stock
outstanding under the 1996 Incentive and Non-Qualified Stock Option Plans and
483,960 shares were available for issuance.

We believe that stock options are an important incentive to attract and
retain skilled employees. We are experiencing a period of rapid expansion, and
in the coming year we expect to hire a larger number of new employees than we
have in previous years. This potential increase in the number of employees will
require us to award a larger number of stock options to employees than in
previous years.

The Board recommends that you vote FOR the amendment to increase the shares
available under the 1996 Incentive and Non-Qualified Stock Option Plans.

Proposal III - Amendment to Our 1996 Employee Stock Purchase Plan to Increase
the Number of Shares Available under the Plan by 100,000 Shares

The following proposal has been included on the agenda for the meeting. Our
Board of Directors has approved an amendment that would increase the shares
reserved for issuance under the 1996 Employee Stock Purchase Plan by 100,000
shares to a total of 169,054 shares. As of December 31, 2000, employees had
purchased a total of 226,595 shares under the 1996 Employee Stock Purchase Plan
and there were 69,054 shares available in the plan for issuance to employees. We
believe that employees that are also stockholders are more committed and loyal
to KVH. Approval of the amendment would allow us to continue to offer our
employees the incentive to participate in our growth as stockholders.

The Board recommends that you vote FOR the increase in shares
available under the 1996 Employee Stock Purchase Plan.

Proposal IV - Amendment to the 1995 Incentive Stock Option Plan and the
1996 Incentive and Non-Qualified Stock Option Plan to restrict our ability to
grant stock options at exercise prices less than fair market value or to reduce
the exercise price of outstanding stock options.

The following proposal has been included on the agenda for the meeting. Our
Board of Directors has approved an amendment to our 1995 Incentive Stock Option
Plan, our 1996 Incentive and Non-Qualified Stock Option Plan to restrict our
ability to grant stock options at exercise prices less than the fair market
value of our Common Stock or to change the exercise price of outstanding stock
options, unless such action was approved by the holders of a majority of shares
present and entitled to vote at a meeting of stockholders. The amendment would
also provide that these restrictions may not be amended or repealed without the
affirmative vote of the holders of a majority of shares of our common stock
present and entitled to vote at a meeting of stockholders.

On December 29, 2000, we issued and sold 800,000 shares of common stock to
the State of Wisconsin Investment Board in a private transaction. On April 2,
2001, we issued and sold 615,385 shares of common stock to certain investment
funds in a private transaction. This purchaser has also agreed to purchase an
additional 615,385 shares of common stock upon our satisfaction of certain
requirements. As part of these transactions we agreed that we would not at any
time without the approval of our stockholders, (i) reduce the exercise price of
outstanding stock options granted to employees and others under our 1995
Incentive Stock Option Plan, our 1996 Incentive and Non-Qualified Stock Option
Plan, or any similar plan or (ii) grant any stock option with an exercise price
that is less than 100% of the fair market value of the underlying stock on the
date of grant (except pursuant to the Employee Stock Purchase Plan or similar
plan). We also agreed that we would recommend to our stockholders that they
approve such amendments to our 1995 Incentive Stock Option Plan and our 1996
Incentive and Non-Qualified Stock Option Plan to reflect this agreement.

The Board recommends that you vote FOR the amendments to the 1995 Incentive
Stock Option Plan and the 1996 Incentive and Non-Qualified Stock Option Plan.

Proposal V -To vote to approve the sale of a maximum of 700,000 shares of common
stock at a discount on the market price of our common stock as of the date we
agree to sell the shares, but, unless otherwise approved by the unanimous vote
of our board of directors, at a price not less than $6.50 per share.

The following proposal has been included on the agenda for the meeting. As
part of our plan to increase our research and development activities, our board
of directors has adopted a program of increasing our equity capitalization
through the sale of shares of our common stock. We are actively engaged in
discussing this sale of stock with a select group of strategic partners and
institutional investors.

As part of this plan, on April 2, 2001, we completed the sale of 615,385
shares of our common stock at a purchase price of $6.50 per share, a $.81
discount per share on the market price of our common stock on such date. The
purchasers in the April transaction have also agreed to purchase an additional
615,385 shares of common stock at a purchase price of $6.50 per share. The
purchase price of $6.50 per share may or may not represent a discount from the
market price of our common stock at the time of the sale. To complete this
financing plan we may sell up to an additional 1,076,922 shares (in addition to
the 615,835 shares we have agreed to sell as part of the April transaction). If
we are successful in selling all of the shares we are offering, the aggregate
number of shares sold will exceed 20% of our outstanding common stock by
approximately 700,000 shares.

Our common stock is listed on the Nasdaq Stock Market, and we have agreed
to comply with Nasdaq's listing rules. Rule 4350 of the Nasdaq listing rules
sets forth certain corporate governance standards for issuers whose common stock
is listed on the Nasdaq Stock Market. Rule 4350 requires, among other matters,
that an issuer obtain stockholder approval for the sale or issuance, other than
through a public offering, of a number of shares of common stock, at a price
less than the market price of the common stock, which equals 20% or more of the
common stock or the voting power of the company outstanding prior to the
issuance. Therefore, in order to comply with Rule 4350, we are asking you to
approve the sale of up to a maximum of 700,000 shares of common stock at a
discount on the market price of our common stock as of the date we agree to sell
the shares, but, unless otherwise approved by the unanimous vote of our board of
directors, at a price not less than $6.50 per share.

Based on our equity capitalization immediately prior to our April 2, 2001
sale of stock, the date we are required to use pursuant to the Nasdaq's listing
rules, our proposed sale of an aggregate of up to 2,307,692 shares would
represent the sale of more than 20% of the outstanding shares of our common
stock. In the last six months the closing price of our common stock has ranged
from $5.50 to $10.44. The volatility of the Nasdaq market and the trading price
of our stock have made it difficult for us to complete our financing plan. We
need the flexibility to sell these shares at a discount to market in order to
complete the financing plan.

The Board recommends that you vote FOR the approval of the sale of a maximum of
700,000 shares of common stock at a discount on the market price of our common
stock as of the date we agree to sell the shares, but, unless otherwise approved
by the unanimous vote of our board of directors, at a price not less than $6.50
per share.

Other Matters

Other than the proposals as discussed in the proxy statement, KVH's Board
of Directors does not intend to bring any other matters to be voted on at the
meeting. KVH's Board is not currently aware of any other matters that will be
presented by others for action at the meeting. However, if other matters are
properly presented at the meeting and you have signed and returned your proxy
card, or voted on the Internet or by telephone, the proxies will have discretion
to vote your shares on such matters to the extent authorized in applicable
regulations under the Securities Exchange Act of 1934.

Directors and Executive Officers

The following table sets forth certain information with respect to the
directors and executive officers of KVH:

Name Age Position
- -------------------------------- ----- -------------------------------------
Arent H. Kits van Heyningen(1) 85 Chairman, Board of Directors
Martin A. Kits van Heyningen(1) 42 President, Chief Executive Officer and Director
Richard C. Forsyth 54 Chief Financial Officer
Josina de Smit(2) 64 Treasurer
Sid Bennett 62 Vice President, FOG Business Development
Christopher T. Burnett 46 Vice President of Business Development
James S. Dodez 42 Vice President of Marketing and Sales Support
Robert W.B. Kits van Heyningen(1) 44 Vice President of R&D and Director
Mads E. Bjerre-Petersen 57 Managing Director, KVH Europe
Mark S. Ain (3)(4) 57 Director
Stanley K. Honey(3) 46 Director
Werner Trattner (3)(4) 48 Director
Charles Trimble (3) 59 Director
- ---------------------------
(1) Arent Kits van Heyningen is the spouse of Josina de Smit and the father of Martin Kits van Heyningen and Robert Kits van
Heyningen
(2) Josina de Smit is the spouse of Arent Kits van Heyningen and the mother of Martin Kits van Heyningen and Robert Kits van
Heyningen
(3) Member of the Audit Committee
(4) Member of the Compensation Committee

Arent H. Kits van Heyningen, 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.

Martin A. Kits van Heyningen, 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, the New England Consulting
Group, a marketing consulting firm, employed Mr. Kits van Heyningen as a
marketing consultant. Mr. Kits van Heyningen received a BA cum laude from Yale
University.

Richard C. Forsyth has been Chief Financial Officer of KVH since joining
the Company in 1988. Mr. Forsyth consulted for Technology Transition, Inc., a
venture capital firm, from 1986 until 1988 and served as the Chief Financial
Officer for two of Technology Transition's portfolio companies. Between 1981 and
1985, Mr. Forsyth was Divisional Controller at Wang Laboratories, a computer
manufacturer. Mr. Forsyth is a Certified Public Accountant and received BS and
AB degrees from Boston College.

Josina de Smit, a founder of the Company, has been Treasurer of KVH since
1986. Previously Ms. de Smit held a variety of financial, administrative and
human resources positions at the Company, including Financial Manager and Human
Resources Manager.

Sid Bennett joined the Company as Vice President of the Fiber Optic Group
in November 1997 after the group was acquired from Andrew Corporation. Andrew
Corporation employed Mr. Bennett from 1985 to 1997 and his most recent positions
were Director, Sensor Products, and President, Andrew-Thompson Broadcasting,
Inc. Previously Mr. Bennett was with Sanders Associates managing military
electronic systems development. Mr. Bennett has received a BEE from Cornell
University and an MEE from New York University. He is Chair of the IEEE Gyro and
Accelerometer Panel and a member of the Board of Governors of the IEEE Aerospace
and Electronic Systems Society.

Christopher T. Burnett has been KVH's Vice President of Business
Development since 1994. Mr. Burnett joined the Company in 1988 as its Director
of Business Development and held that position until 1994. From 1985 until 1988,
Mr. Burnett was Program Manager for Sippican Inc., an engineering and
manufacturing company. From 1983 until 1985, Mr. Burnett was a Senior Consultant
in the Aerospace Defense Consulting Group of Peat Marwick and Mitchell. Mr.
Burnett received a BS from the U.S. Naval Academy and an MBA from Golden Gate
University.

James S. Dodez was named KVH's Vice President of Marketing and Sales
Support in October 1998 after serving as the Vice President of Marketing and
Reseller Sales since 1995. Mr. Dodez joined KVH in 1986 as Marketing Director, a
position he held until 1995. From 1985 until 1986, Mr. Dodez was Marketing
Director at Magratten Wolley, Inc., an advertising agency. Mr. Dodez received a
BS from Miami University (Ohio).

Robert W. B. Kits van Heyningen, 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.

Mads E. Bjerre-Petersen has been Managing Director of the Company's Danish
subsidiary, KVH Europe A/S, since 1992. After founding in 1976 KVH Europe's
predecessor company, Danaplus A/S, Mr. Bjerre-Petersen served as its Managing
Director until 1992, when the Company acquired its assets in a bankruptcy
proceeding. Prior to founding Danaplus A/S, Mr. Bjerre-Petersen founded and
operated MBP Trading, a marine electronic distribution firm. Mr. Bjerre-Petersen
received a MSc. in mechanical engineering from Technical University of Denmark.

Ian C. Palmer has been KVH's vice president of satellite sales since 2000.
He joined KVH in 1993 and served as director of satellite sales from 1998 until
2000. Previously, Mr. Palmer was sales manager for Euro Marine Trading. He
earned a BA in International Relations and Business from Boston University.

Mark S. Ain has been a director of the Company since 1997. He is the
founder, Chief Executive Officer, and Chairman of the Board of Directors of
Kronos Incorporated 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, Digital Equipment Corporation employed Mr. Ain 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 has been a director of the Company since 1997. 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.

Werner Trattner 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.

Charles R. Trimble was appointed a director of the Company in 1999 and is a
member of the Audit Committee. 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.

Board of Directors

Committees and Meetings of the Board

During the fiscal year ended December 31, 2000, our Board met six 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.

Compensation Committee

Our Compensation Committee is composed of two independent, non-employee
directors, Messrs. 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
2000.

Compensation Committee Report

The compensation package for KVH executive officers in fiscal 2000 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 operating income and dependant upon KVH
achieving the year's financial plan. Stock option awards are intended to provide
longer-term incentives.

As submitted by the Compensation Committee Messrs.:
/S/ Mark S. Ain
/S/ Werner Trattner
Audit Committee

The Audit Committee of the Board of Directors is composed of four
independent directors, as defined by Nasdaq rules, and operates under a written
charter adopted by the Board of Directors. The members of the Audit Committee
are Messrs. Werner Trattner, Mark S. Ain, Charles R. Trimble and Stanley K.
Honey. The Audit Committee met once during 2000.

Audit Committee Report

In the section below, we describe our financial and accounting management
policies and practices.

Responsibilities. The responsibilities of the Audit Committee include
recommending to the Board of Directors an accounting firm to be engaged as KVH's
independent accountants. Management is responsible for KVH's internal controls
and financial reporting process. The independent accountants are responsible for
performing an independent audit of KVH's consolidated financial statements in
accordance with generally accepted auditing standards and for issuing a report
thereon. The Audit Committee's responsibility is to oversee these processes and
the activities of KVH's internal accounting controls.

Review with Management and Independent Accountants. In this context, the
Audit Committee has met and held discussions with management and the independent
accountants. Management represented to the Audit Committee that KVH's
consolidated financial statements were prepared in accordance with generally
accepted accounting principles, and the Audit Committee has reviewed and
discussed the consolidated financial statements with management and the
independent accountants. The Audit Committee discussed with the independent
accountant matters required to be discussed by Statement on Auditing Standards
No. 61, "Communication with Audit Committees."

KVH's independent accountants also provided to the Audit Committee the
written disclosures and a letter required by Independent Standards Board
Standard No. 1, "Independence Discussions with Audit Committees," and the Audit
Committee discussed with the independent accountants, KPMG, LLP the firm's
independence.

Summary. Based upon the Audit Committee's discussions with management and
the independent accountants and the Audit Committee's review of the
representations of management, and the report of the independent accountants to
the Audit Committee, the Audit Committee recommended that the Board of Directors
include the audited consolidated financial statements in KVH's Annual Report on
Form 10-K for the year ended December 31, 2000, as filed with the Securities and
Exchange Commission.
As submitted by the Audit Committee Messrs.:
/S/ Warner Trattner
/S/ Mark S. Ain
/S/ Charles R. Trimble
/S/ Stanley K. Honey
Audit and Related Fees

Audit Fees. The aggregate fees billed by KPMG LLP for professional services
for the audit of KVH's annual consolidated financial statements for fiscal 2000
and the review of the consolidated financial statements included in KVH's Forms
10-Q for fiscal 2000 were $89,039.

Financial Information Systems, Design and Implementation Fees. There were
no fees billed by KPMG LLP to KVH for financial information systems design and
implementation fees for fiscal 2000.

All Other Fees. The aggregate fees billed to KVH for all other services
rendered by KPMG LLP for fiscal 2000, including fees for statutorily required
audits in certain locations outside the U.S. where KVH has operations, were
$34,514.

The Audit Committee has determined that the services rendered by KPMG LLP,
as described above were compatible with maintaining KPMG LLP's independence. The
Audit Committee of the Board of Directors has selected KPMG, LLP as independent
public accountants to audit our financial statements for 2001. KPMG has been our
auditors since 1986.
Stock Ownership Information

Compliance with Section 16(a) Reporting

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.

Security Ownership of Beneficial Owners and Management

The following sets forth certain information regarding the beneficial
ownership of our Common Stock as of March 31, 2001, by (i) each stockholder
known to us to beneficially own five percent or more of our Common Stock; (ii)
each of our current directors; and (iii) each of our executive officers. Except
as otherwise noted, each beneficial owner has sole voting and investment power
with respect to the shares shown.

Shares Beneficially Owned (2)
Name (1) Number Percent
-------------------------------------------- ----------------- ------------------
State of Wisconsin Investment Board
P.O. Box 7842
Madison, WI 53707 1,395,000 16.13%
Arent H. Kits van Heyningen (3) 602,685 6.97%
Josina de Smit (4) 602,685 6.97%
Gerhard Swarovski (5) 601,710 6.96%
Martin A. Kits van Heyningen (6) 440,623 5.10%
Robert W. B. Kits van Heyningen 355,900 4.11%
Christopher T. Burnett (7) 98,503 1.1 3%
James S. Dodez 95,944 1.10%
Richard C. Forsyth 58,750 *
Mads E. Bjerre-Petersen 52,441 *
Werner Trattner 47,680 *
Sid Bennett 42,147 *
Mark S. Ain 31,800 *
Stanley K. Honey 23,000 *
Charles Trimble 18,000 *
Ian C.Palmer 11,989 *
All current directors and executive officers as a group 1,879,462 21.74%
(14 persons)
*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 262,002 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.
(4) Includes indirect beneficial ownership of 340,683 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.
(5) Includes indirect beneficial ownership of 149,141 shares of Common Stock
held by Gerhard Swarovski's spouse.
(6) Includes indirect beneficial ownership of 5,066 shares of Common Stock
owned by Martin Kits van Heyningen's spouse.
(7) Includes indirect beneficial ownership of 14,755 shares of common stock
owned by Mr. Burnett's spouse and child.

The number of beneficially owned shares listed in the table above includes
options that are exercisable with a period of 60 days from March 31, 2001.
Shares exercisable within 60 days are as follows: Arent H. Kits van Heyningen
18,750, Josina de Smit 20,250, Martin A. Kits van Heyningen 88,000, Robert W. B.
Kits van Heyningen 18750, James S. Dodez 55,000, Christopher T. Burnett 26,500,
Richard C. Forsyth 58,750, Mads E. Bjerre-Petersen 38,750, Sid Bennett 32,500,
Mark S. Ain 23,000, Stanley K. Honey 23,000, Charles Trimble 15,000 and Ian C.
Palmer 9,000.

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. As of
December 31, 2000, options to purchase a total of 907,360 shares of Common
Stock, having a weighted average exercise price of $4.08 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 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 departure from KVH due to disability
or death.
o Nonqualified options under the 1996 Option Plan need not be subject to
the foregoing restrictions.

Ten-year Option/SAR Repricing

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 that participated in the option exchange.

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
Repriced or Repricing Amendment Price Amendment
Amended or Amendment

Name Date (#) ($) ($) ($) (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

Directors' and Officers' Compensation

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 our common stock at an exercise price equal to the fair
market value of the common stock on the date granted. Each option
vests in four equal installments, commencing from the date of
appointment to the board of directors.
o Following each annual stockholders meeting, serving directors are
granted options to purchase an additional 5,000 shares of common stock
that vest on the grant date.

Summary Compensation Table

The following table lists compensation for our chief executive officer and
other four most highly compensated executive officers in 2000.

Long-term
Compensation
Annual Compensation Awards
-------------------------------- -------------
Securities
Name and Fiscal Salary(1) Bonus(2) Underlying
Principal Position Year ($) ($) Options(#)
- ---------------------------------- -------- ------------ ----------- -------------

Martin A. Kits van Heyningen 2000 206,000 -- 30,000
President and Chief Executive 1999 189,000 -- 20,000
Officer 1998 180,000 -- 78,000

Robert W. B. Kits van Heyningen 2000 151,491 -- 10,000
Vice President of 1999 143,325 -- 10,000
Research and Development 1998 136,500 -- 25,000

Arent H. Kits van Heyningen 2000 139,915 -- 10,000
Chairman, Board of 1999 132,300 -- 10,000
Directors 1998 126,000 -- 15,000

Christopher T. Burnett 2000 164,849 (3) -- 10,000
Vice President of Business 1999 153,349 (3) -- 10,000
Development 1998 147,621 (3) -- 24,000

James S. Dodez 2000 157,944 (4) -- 10,000
Vice President of Marketing 1999 144,286 (4) -- 10,000
and Sales Support 1998 137,783 (4) -- 50,000
- -------------------------------
(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: $20,767 in 2000, $17,080 in 1999 and $15,321 in 1998.
(4) Includes commissions as follows: $23,385 in 2000, $17,086 in 1999 and $17,783 in 1998.

Options Granted During the Last Fiscal Year Ended December 31, 2000

The following table lists information related to stock options granted to
our chief executive officer and other four most highly compensated executive
officers in 2000.

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
Name lying Options Employees in Price Expiration Option Term (2)
Granted(#) Fiscal Year ($/Sh)(1) Date 5%($) 10%($)
Martin A. Kits van
- ------------------------ 30,000 15.3 5.02 1/24/05 3,753.75 10,859.44
Heyningen

Robert W. B. Kits van
Heyningen 10,000 5.1 5.02 1/24/05 1,876.87 5,429.72

Arent H. Kits van
Heyningen 10,000 5.1 5.02 1/24/05 1,876.87 5,429.72

Christopher T. Burnett 10,000 5.1 4.56 1/24/05 2,936.87 6,489.72

James S. Dodez 10,000 5.1 4.56 1/24/05 2,936.87 6,489.72
- -----------------------
(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.

Options Exercised in Last Fiscal Year Ended December 31, 2000

The following table provides certain information concerning options
exercised by our chief executive officer and other four most highly compensated
executive officers during the fiscal year ended December 31, 2000 and the number
of options exercisable and unexercisable as of December 31, 2000.

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
- ---------------------------- 125,000 799,250 68,000 60,000 97,528 93,795
Heyningen
Robert W. B. Kits van
Heyningen 125,000 825,065 30,000 30,000 22,853 49,308
Arent H. Kits van
Heyningen 125,000 295,375 25,000 25,000 68,043 44,498
Christopher T. Burnett 24,000 40,200 27,500 27,500 30,343 56,398
James S. Dodez 26,428 91,250 22,500 22,500 72,968 49,523
- ----------------------------
(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 $5.50, the last per-share sale price of the Common
Stock on December 31, 2000, as reported by the Nasdaq National Market,
less the applicable option exercise price.

Cumulative Total Return Graph Comparing KVH Industries, Inc.,
Nasdaq Telecommunication Stocks and the Nasdaq National Market Composite
April 2, 1996 - December 31, 2000

The following Performance Graph compares the performance of the Company's
cumulative stockholder return with that of two broad market indexes, the Nasdaq
National Market Composite Index 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.

Month Nasdaq Nasdaq KVH Nasdaq Nasdaq KVH
Stock Telecommunications Industries, Stock Telecommunications Industries,
Market Stocks Inc. Market Stocks Inc.

4/2/96(IPO) 425.22 200.00 6.50 100.00 100.00 100.00
12/31/96 600.44 219.06 9.12 145.91 109.53 119.23
12/31/97 710.36 306.60 5.06 167.06 153.30 77.88
12/31/98 996.16 500.91 1.21 234.27 250.46 18.75
12/31/99 1,851.60 1,015.40 3.06 435.45 507.70 47.12
12/31/00 1,124.50 463.44 5.50 264.45 231.72 84.62

Other Information

Shareholder Proposals

The Company must receive shareholder proposals for inclusion in the proxy
materials related to the fiscal 2001 Annual Meeting of Stockholders at its
executive offices in Middletown, RI, no later than December 20, 2001.
Shareholders must notify the Company no later than March 5, 2002, of their
intent to introduce proposals at the fiscal 2001 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 April 13, 2001 will receive a Proxy Statement and
our 2000 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

You may contact our transfer agent at:

State Street Bank & Trust Company
c/o EquiServe
P.O. Box 43011
Providence, RI 02940-3011
Shareholder Inquiries 1-800-426-5523
http://www.equiserve.com

Our independent accountants are:

KPMG LLP
600 Fleet Center
Providence, RI 02903

Exhibit A - Audit Committee Charter

KVH Industries, Inc.
Charter for the Audit Committee of the Board of Directors

Purpose:

The purpose of the Audit Committee (the "Committee") established pursuant
to this charter is to make such inquiries as are necessary to monitor the
corporate financial reporting and the internal and external audits of KVH
Industries, Inc., and its subsidiaries (the "Company"), to provide to the Board
of Directors (the "Board") the results of its examinations and recommendations
derived therefrom, to propose to the Board improvements made or to be made in
internal accounting controls, to nominate independent auditors and to provide to
the Board such additional information and materials as it may deem necessary to
make the Board aware of significant financial matters that require Board
attention.

In addition, the Committee shall have the authority to undertake the
specific duties and responsibilities listed below and the authority to undertake
such other specific duties as the Board of Directors from time to time may
prescribe.

Membership:

Except as otherwise permitted by Rule 4200 promulgated by the National
Association of Securities Dealers, all members of the Committee shall be
"independent directors" (as that term is defined in subsection (a)(15) Rule
4200). Each member of the Board who is an "independent director" as defined by
such Rule shall be a member of the Committee and the Committee shall have at all
times not less than two (2) members. Each member of the Committee shall either
(a) be able to read and understand fundamental financial statements, including
the Company's balance sheet, income statement, and cash flow statement, or (b)
become able to do so within a reasonable period of time after his or her
appointment to the Committee. In addition, at least one member of the Committee
shall have past employment experience in finance or accounting, professional
certification in accounting, or other comparable experience or background which
results in such member's being financially sophisticated, including being or
having been a chief executive officer, chief financial officer or other senior
officer with financial oversight responsibilities. The members of the Committee
shall be appointed by, and shall serve at the discretion of, the Board.

Responsibilities:

The Committee shall undertake the following duties and responsibilities:

1. Reviewing on a continuing basis the adequacy of the Company's system
of internal controls, policies and procedures and approving policies
relating to internal controls and protection of assets;

2. Reviewing on a continuing basis the activities, organizational
structure and qualifications of the Company's internal audit function
to the extent that the size and operations of the Company warrant this
function;

3. Prior to the annual independent audit, reviewing with the independent
auditors and management the auditors' proposed audit scope and
approach and the areas of audit emphasis;

4. Conducting a post-audit review of the financial statements and audit
findings, including any significant suggestions for improvements
provided to management by the independent auditors, the form and
content of the Company's financial statements and disclosures and the
required communications from the independent auditors under generally
accepted auditing standards and any applicable Securities and Exchange
Commission ("SEC") regulations;

5. Reviewing the performance of the independent auditors;

6. Reviewing and recommending to the Board the selection and retention of
independent auditors;

7. Receiving from the Company's independent auditors a formal written
statement delineating all relationships between the auditor and the
Company, consistent with Independence Standards Board Standard 1,
actively engaging in a dialogue with the auditors with respect to any
disclosed relationships or services that may affect the objectivity
and independence of the auditor and taking, or recommending that the
Board take, appropriate action to oversee the independence of the
outside auditor;

8. Where appropriate, replacing the outside auditor (or nominating the
outside auditor to be proposed for shareholder approval in the proxy
statement);

9. Approving fee arrangements with the independent auditors;

10. Overseeing compliance with SEC requirements for disclosure of
auditors' services and Committee members and activities;

11. Reviewing, in conjunction with counsel, any legal matters that could
have a significant impact on the Company's financial statements;

12. Providing oversight and review of the Company's asset management
policies, including an annual review of the Company's investment
policies and performance for cash and short-term investments, and
approving such policies;

13. Instituting, if necessary, special investigations and, if appropriate,
hiring special counsel or experts to assist;

14. Reviewing related party transactions for potential conflicts of
interest and making recommendations to the Board of Directors with
respect thereto;

15. Providing a forum for the independent auditors to meet in closed
session with the Committee;

16. Establishing the delegation of authority to officers of the Company
regarding finance and audit matters and approving a hierarchical
approval structure embodying that delegation;

17. Approving all expenditures, contracts or legal commitments in excess
of amounts for which authority is delegated pursuant to the foregoing
approval structure;

18. Reviewing with senior management and the independent auditors the
Company's accounting and financial personnel resources;

19. Receiving and reviewing the response of the management of the Company
to any management letter or report from the independent auditors;

20. Reviewing any dispute between management and the independent auditors
and recommending action to the Board; and

21. Performing other oversight functions as requested by the full Board of
Directors.

In addition to the above responsibilities, the Committee shall undertake
such other duties as the Board delegates to it, and shall report, at least
annually, to the Board regarding the Committee's examinations and
recommendations.

Meetings:

It is anticipated that the Committee will meet at least once each year.
However, the Committee may establish its own schedule. Each meeting shall
include an executive session that excludes Company management in order to allow
the Committee to maintain free and open communications with the Company's
independent auditors.

The Committee shall meet separately with each of the Chief Executive
Officer and the Chief Financial Officer of the Company at least annually to
review the financial affairs of the Company. The Committee shall meet with the
independent auditors of the Company, at such times as it deems appropriate, to
review the independent auditors' examination and management report.

The Committee is authorized, by majority vote or unanimous written consent
of its members, to adopt its own rules of procedure, including the formalities
of calling, noticing and holding meetings and for the taking of action of the
Committee by vote at any such meeting or by unanimous written consent of the
members thereof. Unless and until any such procedures are formally adopted by
the Committee, the procedures with respect to calling, noticing and holding
meetings of the Committee and conducting business of the Committee shall be the
same as those provided in the By-laws of the Company with respect to calling,
noticing and holding meetings of and taking action by the Board.

Reports:

The Committee may present reports or recommendations to the Board in
written or oral form. Any Committee recommendations shall be incorporated as a
part of the minutes of the Board meeting at which those recommendations are
presented.

Minutes:

The Committee will maintain written minutes of its meetings, which minutes
will be filed with the minutes of the meetings of the Board.

Accountability of Outside Auditor:

It is the policy of the Company and of the Committee that the Company's
outside auditor is ultimately accountable to the Board and the Audit Committee
as representatives of the Company's shareholders. It shall be the responsibility
of the Board of Directors, with the advice and counsel of the Committee, to
select, evaluation, and where appropriate, to replace the Company's independent
auditors.

Other:

The Committee shall have the right, as and when it shall determine to be
necessary or appropriate to the functions of the Committee:

1 at the Company's expense and not at the expense of the members
thereof, to retain counsel (which may be, but need not be, the regular
corporate counsel to the Company) and other advisors to assist it in
connection with its functions; and

2. to request, and to rely upon, advice, orally or in writing, from the
Chief Executive Officer and the Chief Financial Officer of the Company
and from any representative of the independent auditors to the Company
participating in such independent auditors' engagement by the Company,
concerning aspects of the operation or financial condition of the
Company relevant to the functions of the Committee.

The officers of the Company are requested to cooperate with the Committee
and to render assistance to it as it shall request in carrying out its
functions.

Annual Review:

The Committee will review and reassess the adequacy of this Charter on at
least an annual basis and will report to the Board the results of such review
and reassessment.

Exhibit B - Proxy Card

KVH INDUSTRIES, INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF KVH INDUSTRIES, INC.

A STOCKHOLDER WISHING TO VOTE IN
ACCORDANCE WITH THE
RECOMMENDATIONS OF THE BOARD OF
DIRECTORS NEED ONLY SIGN AND
DATE THIS PROXY AND RETURN IT IN
THE ENCLOSED ENVELOPE.

Proxy for Annual Meeting of Stockholders
to be held on May 23, 2001

The undersigned hereby appoints Martin Kits van Heyningen and Robert Kits van
Heyningen, or either of them acting singly, proxies and attorneys-in-fact, with
full power of substitution, to vote all shares of Common Stock of KVH
Industries, Inc. which the undersigned is entitled to vote at the Annual Meeting
of Stockholders to be held at the offices of Foley, Hoag & Eliot LLP, 16th
Floor, One Post Office Square, Boston, Massachusetts on May23, 2001 at 11:00
a.m., local time, and at any adjournments thereof, upon matters set forth in the
Notice of Annual Meeting and Proxy Statement dated April 30, 2001, a copy of
which has been received by the undersigned, and in their discretion upon any
business that may properly come before the meeting or any adjournments thereof.
Attendance of the undersigned at the meeting or any adjourned session thereof
will not be deemed to revoke this proxy unless the undersigned shall
affirmatively indicate the intention of the undersigned to vote the shares
represented hereby in person prior to the exercise of this proxy.

- --------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN
PROMPTLY IN THE ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------

- ---------------------------------------------------------------------------------
Please sign exactly as your name(s) appear(s) on the books of the Company. Joint
owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
- ---------------------------------------------------------------------------------

HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?

KVH INDUSTRIES, INC.

Dear Stockholder,

Please take note of the important information enclosed with this proxy
card.

Your vote counts, and you are strongly encouraged to exercise your right to
vote your shares.

Please mark the boxes on this proxy card to indicate how your shares will
be voted. Then sign the card, detach it and return your proxy vote in
the enclosed postage paid envelope.

Your vote must be received prior to the Annual Meeting of Stockholders to
be held on May 23, 2001.

Thank you in advance for your prompt consideration of these matters.

Sincerely,

KVH Industries, Inc.

PLEASE MARK VOTES
AS IN THIS EXAMPLE

- -----------------------------------------------------------
KVH INDUSTRIES, INC. For AgainstAbstain

- -----------------------------------------------------------
1. To elect two directors to serve for a three-year term. 2. To vote to increase the shares available in --- --- ----
For Withhold the 1996 Incentive and Non-Qualified Stock
Authority Option Plan by 500,000 shares. --- --- ----
Arent H. Kits van Heyningen
Charles R. Trimble

CONTROL NUMBER:
RECORD DATE SHARES:

- -----------------------------------------------------------
- -----------------------------------------------------------

- -----------------------------------------------------------
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3. To vote to increase the shares available in
the 1996 Employee Stock Purchase Plan by --- --- ---
100,000 shares.
- ----------------------------------------------------------- --------------------------------------------------- --- --- ---
- ----------------------------------------------------------- ---------------------------------------------------

4. To vote to amend
the 1995
Incentive Stock
Option Plan and
the 1996
Incentive and
Non-Qualified
Stock Option
Plan to restrict
our ability to
grant stock
options at
exercise prices
less than fair
market value or
to change the
exercise price
of outstanding
stock options.
- ----------------------------------------------------------- ---------------------------------------------------
- ----------------------------------------------------------- ---------------------------------------------------

- ----------------------------------------------------------- ---------------------------------------------------
- ----------------------------------------------------------- ---------------------------------------------------

- -----------------------------------------------------------

5. To vote to approve the sale of a maximum of
700,000 shares of common stock at a discount
on the market price of our common stock as of
the date we agree to sell the shares, but,
unless otherwise approved by the unanimous --- --- ---
vote of our board of directors, at a price
not less than $6.50 per share. --- --- ---
- ----------------------------------------------------------- ---------------------------------------------------
- ----------------------------------------------------------- ---------------------------------------------------

- -----------------------------------------------------------
- -----------------------------------------------------------
6. To transact any other business as may --- --- ---
properly come before the meeting.
--- --- ---

- ------------------------------------------- ---------------
Date Mark box at right if an address change or ---
Please be sure to sign and date this comment has been noted on the reverse side
Proxy. of this card. ---

Stockholder sign here Co-owner sign here
- -----------------------------------------------------------

DETACH CARD DETACH CARD

- ---------------------------------- -----------------------
Vote by Telephone Vote by Internet
- ---------------------------------- -----------------------
It's fast, convenient, and immediate! It's fast, convenient, and your vote is
immediately Call Toll-Free on a Touch-Tone Phone confirmed and posted. Follow
these four easy steps: Follow these four easy steps:
----------------------------------------------------------
- ------------------------------------------------------------- ----------------------------------------------------------
1. Read the accompanying Proxy Statement/Prospectus and 1. Read the accompanying Proxy Statement/Prospectus and
Proxy Card. Proxy Card.

2. Call the toll-free number 2. Go to the Website
1-877-PRX-VOTE (1-877-779-8683). http://www.eproxyvote.com/kvhi
There is NO CHARGE for this call.
3. Enter your Control Number located on your Proxy Card.
3. Enter your Control Number located on your Proxy Card.
4. Follow the instructions provided
4. Follow the recorded instructions.
- ------------------------------------------------------------- ----------------------------------------------------------

Your vote is important! Your vote is important!
Call 1-877-PRX-VOTE anytime! Go to http://www.eproxyvote.com/kvhi anytime!

Do not return your Proxy Card if you are voting by Telephone or Internet