Investing.com -- On March 3, 2025, Daktronics, Inc. entered into a Cooperation Agreement with Alta Fox Capital Management and its affiliates. The agreement includes several significant changes to the company’s structure and operations.

As part of the agreement, Daktronics has agreed to increase the size of its board of directors by one seat and appoint Peter Feigin to this new position. Feigin’s term will expire at the company’s 2027 annual meeting of shareholders. Feigin will also join the Transformation Committee of the Board.

Alta Fox, in turn, has agreed to stop its solicitation related to Daktronics’ 2025 special meeting of shareholders, which will vote on the reincorporation of the company from South Dakota to Delaware. From March 3, 2025 until the day after the 2027 annual meeting, Alta Fox will vote all shares of Daktronics’ common stock it owns in favor of the reincorporation and in accordance with the board’s recommendations on proposals.

Furthermore, Alta Fox has agreed to dismiss all claims against Daktronics and its directors and officers, including an ongoing lawsuit in the U.S. District Court for the District of South Dakota. Both parties have agreed to release each other from any claims, except those arising from the Cooperation Agreement.

The agreement also imposes restrictions on Alta Fox during the Standstill Period, including a prohibition on acquiring more than 5,973,599 shares of common stock and influencing board decisions.

Daktronics, in connection with the agreement, will amend its bylaws to require a Lead Independent Director be selected by independent directors if the Chairperson of the Board is not independent. It will also engage an independent compensation consultant by March 31, 2025, hold an investor day before December 31, 2025, and not re-nominate at least one of its incumbent directors at the 2025 annual meeting of shareholders.

The company also agreed to amend its Rights Agreement with Equiniti Trust Company, LLC, so that the Final Expiration Date will occur as soon as possible following March 3, 2025.

As of March 3, 2025, Alta Fox owned approximately 5,973,599 shares of Daktronics’ common stock and is also a party to the Convertible Note and other Notes Related Agreements entered into with the company on May 11, 2023.

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