Advance Auto Parts, Inc. has announced that it has entered into an agreement with Starboard Value LP and its affiliates (“Starboard”), which has an ownership stake of approximately 3.7% of Advance Auto Parts’ shares, regarding the membership and composition of the Advance Auto Parts Board of Directors.
Under the terms of the agreement, Jeffrey C. Smith, Starboard’s CEO and chief investment officer, has been appointed to the Advance Auto Parts Board, effective immediately, and the size of the Board has been expanded from 12 to 13 members. Smith will serve as chair of the Nominating and Corporate Governance Committee and will also be a member of the Compensation and Finance Committees. In addition, Starboard will designate two independent directors to be added to the Advance Auto Parts Board as soon as practical. The company will name two additional independent directors designated by the nominating and corporate governance committee for election at the company’s 2016 annual meeting. It is expected that following the 2016 annual meeting the board will have 12 or 13 members.
“We are pleased to welcome Jeff Smith to the Advance Auto Parts board,” said Jack Brouillard, who has been named executive chairman. “Jeff is a respected leader, investor, and valued board member. We welcome his insights, and the board and I look forward to working closely together as we successfully execute on our strategic objectives.”
Smith said, “I am pleased to join the Advance Auto Parts board. Advance Auto Parts is a terrific company which is well positioned to be even more successful with best in class execution. I look forward to working constructively with my fellow board members and the management team to help take advantage of the tremendous opportunity to continue growing shareholder value.”
As part of the agreement, Starboard has agreed to vote all of its shares in favor of the Company’s nominees at the 2016 Annual Meeting as well as other customary standstill and voting commitments. The full agreement between Advance Auto Parts and Starboard will be filed with the Securities and Exchange Commission.