Quantum’s directors appear to have agreed to hand over board control to activist investor Starboard Value if “certain ... objectives” are not met in its fiscal 2015 year.
Starboard currently has three directors on the nine-person Quantum board and will get a fourth at Quantum’s 2014 meeting of stockholders, when its nominee Dale Fuller should replace the retiring Michael Brown.
Quantum and Starboard have agreed that: “If Quantum does not achieve certain agreed upon objectives in its fiscal 2015 business plan, Starboard will have the right to add two additional directors to the board.”
That will take the board member count to 11 and the Starboard slate to six, a majority. Until and unless this happens, the pro-Starboard directors will abide by a standstill agreement that “will remain in effect for a period ending prior to the 2016 Annual Meeting of Stockholders".
We don’t know what the ”certain agreed upon objectives” are, but reckon they are to do with increasing shareholder value. And that's surely going to depend upon Quantum's business growing despite the continuing (so far) decline in tape automation revenues.
Starboard wanted board control in May and it has now agreed with Quantum to give it nine months to produce what Starboard wants (in business results terms, we'd imagine).
There has been recent improvement in Quantum's financials, so perhaps there will be no new bums on seats.
Watch this space. ®