Officials at Analogic Corp. (NSDQ:ALOG) said Dr. Burton Drayer took his name out of the running for a board seat at the Peabody, Mass.-based imaging device maker.
Drayer, the executive vice president for risk and chair of the radiology department at the New York’s Mount Sinai Medical Center, was handpicked by Ramius LLC, a New York-based hedge fund and activist investor group that agitated for changes after Analogic posted dismal results for fiscal 2009. Company officials said Drayer came to his decision after consulting with his employer about sitting on outside boards.
Ramius owns about 5 percent of Analogic’s outstanding shares. In December, Analogic officials announced that the company and Ramius managers reached a settlement to avoid a potential proxy fight over the direction of the company.
The settlement called for Analogic to nominate Drayer to its board of directors. The company expected Drayer to serve on its nominating and corporate governance committee. The deal also called for Analogic to ask shareholders to approve an expansion of its board from 10 to 11 members, with a new independent director taking a seat by March 31, 2010. It also called for the company to issue a “Financial Pathway Statement,” detailing its plans to reach “double-digit operating margins by fiscal year 2012.”
Despite Drayer’s removal of himself from consideration, the former dissident investors will still have a chance to imprint their vision onto the company. According to the settlement, if Drayer leaves the board prior to the 2011 annual meeting, Ramius is still entitled to recommend a replacement.
“We have agreed that our Nominating and Corporate Governance Committee will not unreasonably withhold acceptance of any replacement director recommended by the Ramius Group,” Analogic officials wrote in a December filing with the federal Securities and Exchange Commission.
