SeaChange International announced Thursday that it has reached an agreement with Ramius, an investment advisory firm that owns 6.9% of the video-on-demand vendor's outstanding common stock, and certain of Ramius's affiliates.
Under the terms of the agreement, SeaChange will increase the size of its board of directors from six to eight members, and appoint Edward Terino and Raghu Rau to its board. Terino is president of GET Advisory Services, a strategic and financial management consulting firm, and Rau is a strategic advisor specializing in global marketing and business strategy and venture capital and market development for high-technology companies.
As part of the settlement agreement, Ramius has withdrawn its nomination of director candidates to SeaChange's board and will vote in favor of each of the board's nominees for election at its 2010 annual shareholders meeting.
"We welcome open dialogue with and input from our shareholders, and are pleased to have reached this agreement with Ramius," Bill Styslinger, SeaChange chairman and CEO, said in a statement. "We are delighted to add Ed and Raghu to the Board, as each will bring extensive experience and a strong track record of leadership to the SeaChange Board."
Noted Ramius managing director Peter Feld: "We are pleased to have worked constructively with SeaChange with the shared goal of enhancing value for all shareholders. We support the company's strategy of focusing on its core software business and its commitment to significantly improve the profitability of the company. We are confident that the appointments of Ed Terino and Raghu Rau to the board will strengthen SeaChange and help to create value for all shareholders."
SeaChange has undertaken steps to improve margins in its software business, targeting 10% pretax margins for the full year fiscal 2011 and 15% for the full year fiscal 2012 through R&D cost reductions and other measures.
For the quarter ended April 30, SeaChange laid off 64 employees, or approximately 5% of its work base, and recorded a $4.3 million restructuring charge reflecting severance costs and a write-down of inventory.
Ramius owns 2.25 million SeaChange shares, representing 6.9% of the company's outstanding common stock, according to SeaChange's 10-K for its fiscal year ended Jan. 31, 2010.