This follows a fiery letter to shareholders from Wilson earlier this year, calling for activism, as the athletic apparel retailer has seen its shares collapse, lost market share in the leggings market, and become entangled in multiple see-through leggings quality-control issues with customers.

Reuters first reported Tuesday evening that Lululemon and Wilson were nearing a settlement that would give him two board nominees and include a commitment to find another mutually agreed-upon director at a future date.

The agreement would give Wilson regular access to Heidi O'Neill, Lululemon's incoming CEO, according to Reuters, which cited sources.

The dispute comes as Lululemon's North American sales weaken, competition from Alo and Vuori intensifies, and the stock is down nearly 77% from its 2024 peak of around $500 per share.

In late February, Wilson wrote a fiery letter to shareholders, in which he said, "In support of all shareholders, I am pursuing a campaign to catalyze a quantum of change that is sorely needed at Lululemon. To effect that change, I have pursued private, constructive dialogues with the Lululemon Board of Directors (the 'Board') for the past few months. My attempts toward a sensible solution have not been reciprocated."

He continued, "While we have proposed changing three directors, our strong feeling is that more than three directors should be replaced."

Wall Street analysts tracked by Bloomberg are mostly neutral on the stock. 

Even before Chip's public letter, we pointed out: "Lululemon's path back to relevance in the athletic space may require a shake-up of the Board."

Time for Chip to launch a plan to save comapny he founded in 1998.