An activist shareholder who believes the Redbox DVD kiosk business is in “secular decline,” and should cut costs, just secured as many as three seats on the board of its parent company, Outerwall.

The arrangement is part of a “Cooperation Agreement” that Outerwall made with Engaged Capital, which owns 14.6% of the shares. In February it called for the company to go private in a public letter that attacked its “failed strategies, flawed capital allocation policies, and misaligned governance. “

Outerwall shares are up 1.7% this morning following the announcement.

Last month Outerwall said that it hired financial advisors to “explore strategic and financial alternatives.”

In the deal with Engaged, Outerwall raised the number of directors to eight by giving a board seat to Brown Equity Partners’ Jeffrey Brown. By the time of the 2016 Annual Meeting it will cut one of the current directors and add two submitted by Engaged — giving the firm three of nine seats.

In return, Engaged agreed to support the company’s slate and not acquire more than 19.99% of Outerwall shares. The terms run until 30 days before the deadline to nominate directors for the 2017 Annual Meeting.

“We appreciate the open and constructive dialogue we have had with all of our shareholders, including Engaged Capital, and are pleased to have reached this agreement,” CEO Erik Prusch says. “We welcome the additional perspectives to our Board as we continue to evaluate all strategic and financial options to maximize shareholder value while managing our business for profitability and cash flow.”

Outerwall shares have lost nearly 40% of their value during the past 12 months as Redbox suffered from the public’s shift from DVDs to streamed entertainment.

In its February letter, Engaged said that management “should accept the fact that Redbox is in secular decline and operate the business accordingly.” Specifically, it urged the company to “substantially reduce” Redbox’s costs, especially the $190 million of general and administrative expenses.