SeaChange Adopts Tax Benefits Preservation Plan to Protect Tax Assets

11/03/2019

SeaChange Adopts Tax Benefits Preservation Plan to Protect Tax Assets

March 11th, 2019

Shareholders to Vote on Tax Benefits Preservation Plan at 2019 Annual Meeting

ACTON, Mass., March 5, 2019 Video delivery platform leader SeaChange International, Inc. ( SeaChange or the Company ) (NASDAQ: SEAC) today announced that its Board of Directors has adopted a Tax Benefits Preservation Plan (the plan ) to protect and preserve the usability of certain tax assets primarily associated with net operating loss carryforwards ( NOLs ), which may be used to reduce its potential future tax liabilities. SeaChange intends to submit the plan, which is effective immediately and similar to tax benefit preservation plans adopted by many other public companies with significant tax assets, for shareholder ratification at its 2019 Annual Meeting of Shareholders.

As of January 31, 2019, the Company had U.S. federal NOLs in excess of $115 million.

SeaChange's use of its NOLs could be substantially limited if the Company experiences an ownership change as defined in Section 382 of the Internal Revenue Code. In general, an ownership change occurs if there is a cumulative change in the Company's 5-percent shareholders (as defined in Section 382 of the Internal Revenue Code) that increases their ownership in the Company by more than 50 percentage points over the lowest percentage owned by such shareholders at any time during the prior three years, on a rolling basis.

In connection with the adoption of the plan, on March 4, 2019, the Board of Directors declared a dividend of one preferred share purchase right (a Right ) for each outstanding share of the Company's common stock to holders of record as of the close of business on March 15, 2019. The Rights will become exercisable on the tenth business day subsequent to the date a person or group becomes an Acquiring Person after adoption of the plan without meeting certain customary exceptions or a person or group commences or announces an intention to commence a tender or exchange offer pursuant to which it will become an Acquiring Person . Under the plan, an Acquiring Person is a person or group who acquires, without Board approval, 4.9% or more of the Company's common stock. Shareholders owning 4.9% or more of SeaChange's outstanding shares at the time of adoption of the plan are grandfathered in and will only become Acquiring Persons if they acquire an additional 0.5% or more of SeaChange's outstanding shares. In addition, in its discretion, the Board may exempt certain persons whose acquisition of securities is determined by the Board not to jeopardize the availability of the Company's NOLs or other tax assets and may also exempt certain transactions. In the event a person or group becomes an Acquiring Person, each Right would become exercisable and entitle shareholders (other than 5-percent shareholders or other Acquiring Persons ) to purchase additional shares of common stock of SeaChange at a significant discount, resulting in significant dilution to the economic interest and voting power of the 5-percent shareholder or Acquiring Person.

Generally, the Rights will expire on the earliest of (i) the date on which the Rights are redeemed or exchanged under the plan, (ii) the determination by the Board that the protection of the Company's tax assets is not required by the plan, (iii) the fifth business day following the filing by the Company of the voting results from the 2019 annual meeting of shareholders should the plan not be approved by the Company's shareholders, and (iv) March 4, 2022.

Subject to customary limitations, the plan may be amended, redeemed or terminated by the SeaChange Board of Directors at any time prior to being triggered or its expiration.

Additional details regarding the plan are contained in a Form 8-K to be filed by SeaChange with the U.S. Securities and Exchange Commission.

About SeaChange International

For 25 years, SeaChange (Nasdaq: SEAC) has pioneered innovative solutions to help video providers around the world manage and monetize their content. As the video industry rapidly evolves to meet the anytime, anywhere demands of today's viewers, SeaChange's comprehensive content, business, viewer experience and advertising management solutions provide a mature, network-agnostic, cloud-enabled platform of scalable core capabilities that video service providers, broadcasters, content owners and brand advertisers need to create the personalized, indivisual experiences that drive viewer engagement and monetization. For more information, please visit www.seachange.com.

Safe Harbor Provision

Any statements contained in this press release that do not describe historical facts, including with respect to the plan and NOLs, are neither promises nor guarantees and may constitute forward-looking statements as that term is defined in the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements may include words such as may, might, will, should, expects, plans, anticipates, believes, estimates, predicts, potential or continue, the negative of these terms and other comparable terminology. Any such forward-looking statements contained herein are based on current assumptions, estimates and expectations, but are subject to a number of known and unknown risks and significant business, economic and competitive uncertainties that may cause actual results to differ materially from expectations. Numerous factors could cause actual future results to differ materially from current expectations expressed or implied by such forward-looking statements, including the risks and other risk factors detailed in various publicly available documents filed by the Company from time to time with the Securities and Exchange Commission (SEC), whic

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SeaChange Adopts Tax Benefits Preservation Plan to Protect Tax Assets

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