The El Segundo, Calif.-based company agreed on May 1 to revise its slate of director nominees to include a representative from 11.4% shareholder Stadium Capital Management LLC.
As part of the agreement, another disgruntled shareholder, Engaged Capital LLC, has agreed to withdraw its nominees.
Shareholders on June 12 will have the chance to elect three directors, including Stadium CEO Dominic P. DeMarco.
Big 5, which sells sporting goods via stores mainly on the West Coast, will expand its board of directors from six to eight members to accommodate the new nominees.
Company director Michael Brown has agreed to step down.
"We are pleased to have reached an agreement with Stadium," said Big 5 CEO Steven Miller in a statement. "This agreement will allow us to eliminate the distraction and unnecessary costs of a possible proxy contest and focus on driving business performance and long-term stockholder value."
Stadium's bout with Big 5 began in December 2014 when the firm asked the company to change its governance policies and eliminate its dual-class board makeup.
Stadium, which did not immediately respond to calls seeking further comment, seems to have settled for board seats, at least for now.
Big 5, which trades on the Nasdaq, has a market cap of $321 million.
Entertainment distributor Cinedigm Corp. (CIDM) is under pressure from activist shareholders who want to take matters into their own hands to effect change.