Quantum and Starboard Agree on Board of Composition
Starboard owns 17 percent of outstanding shares
July 28, 2014
LONDON—Quantum Corp. announced that it has entered
into an agreement with Starboard Value LP and its affiliates regarding the
membership and composition of Quantum’s board of directors.
Under the agreement,
Quantum will renominate Jeffrey Smith, CEO of Starboard, and two other current
Starboard-recommended directors—Louis DiNardo, president and CEO of Exar Corp.,
and Philip Black, former president and CEO of Nexsan Technologies—for election
at Quantum’s 2014 Annual Meeting of Stockholders. Quantum will also nominate an
additional Starboard-recommended director—Dale Fuller, chairman of AVG
Technologies N.V.—for election as a successor to Michael Brown, who, as
previously announced, is retiring from the board.
Also as part of
the agreement, Starboard, which beneficially owns approximately 17 percent of
the outstanding shares of Quantum’s common stock, including shares underlying
Quantum’s convertible senior subordinated notes, will vote all of its shares in
favor of each of the Quantum board’s nominees at the 2014 Annual Meeting and in
accordance with the board’s recommendation with respect to any other proposals
being voted on at the annual meeting, unless Institutional Shareholder Services
Inc. recommends otherwise regarding any such proposal. Starboard will also be
subject to certain standstill provisions for a period ending prior to the 2015
Annual Meeting of Stockholders.
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.
Alternatively, if Quantum achieves all the agreed upon objectives, the
standstill provisions of the agreement will remain in effect for a period
ending prior to the 2016 Annual Meeting of Stockholders.
The full text of
the settlement agreement between Quantum and Starboard will be filed with the
Securities and Exchange Commission as an exhibit to Quantum’s current report on