|By PR Newswire||
|February 28, 2014 01:15 PM EST||
BOSTON, Feb. 28, 2014 /PRNewswire/ -- North Tide Capital Master, LP (together with its affiliates, "North Tide"), the second largest shareholder of Healthways, Inc. ("Healthways" or the "Company") (NASDAQ: HWAY) with current ownership of approximately 11% of the outstanding shares, today announced that it has delivered a letter to the Company's Board of Directors (the "Board") and has nominated a slate of highly qualified candidates for election to the Healthways Board at the Company's 2014 Annual Meeting.
The full text of the letter to the Board follows:
February 28, 2014
To the Board of Directors,
North Tide Capital, LLC, together with its affiliates ("North Tide"), currently owns 11% of the outstanding common stock of Healthways, Inc. ("Healthways" or the "Company"), making us one of the Company's largest shareholders. As we described in our detailed letter to you, dated January 14, 2014 (the "January Letter"), we believe that your refusal to hold CEO Ben Leedle accountable for his significant shortcomings and your failure to address the severe underperformance and decline of Healthways' core health and wellness operations demonstrate that material changes in board composition, executive leadership, and corporate strategy are immediately required at Healthways.
To that end, we have repeatedly attempted to reach an agreement with the Board that would provide for the level of management and Board change required to put the Company on the right path towards shareholder value creation while avoiding a costly and distracting proxy battle. Our nominations today follow the failure of weeks of private outreach to the Board to arrive at a negotiated settlement. Unfortunately, the Board has been unwilling to embrace the level of change required at Healthways. Our discussions with Chairman John Ballantine have indicated that despite years of poor performance and no accountability, Mr. Ballantine appears interested only in protecting his job and that of Mr. Leedle's. The Board's settlement proposals have been woefully inadequate and appear to have been designed to preserve the unacceptable status quo while giving the illusion that the Board is open to change. Healthways' shareholders, employees, and customers deserve better, and allowing the Board to perpetuate management's underperformance would be a deep disservice to each of these stakeholders.
In light of the Board's inaction and failures, we were compelled to take this necessary step of nominating a slate of new highly-qualified, independent directors with relevant credentials for Healthways, as well as direct shareholder representation to ensure the best interests of all shareholders are appropriately represented on the Board at all times.
From our first communication with the Board, our platform has been about the need for change at Healthways. In our letter to the Board, dated December 2, 2013 (the "December Letter"), we outlined the substantial value destruction that Healthways' shareholders have endured under Mr. Leedle's decade-plus tenure as CEO. Our December Letter was designed to be a call to action for the Board. Since then, the Company has missed earnings and further reduced its profit outlook for 2014. Most notably, the Company's Founder, Tom Cigarran, has resigned from the Board over its lack of a response to his requests over the past three years to address the need for "changes in company focus and direction". Mr. Cigarran's resignation points to a dysfunctional board environment in desperate need of shareholder intervention. And yet, instead of receiving Mr. Cigarran's resignation letter as a final wake-up call, you have further entrenched yourselves in support of the status quo, and in so doing have put your own interests ahead of those of your shareholders. As the Company's second largest shareholder, we find your inaction to be inexcusable and tantamount to a total disregard of your fiduciary duties.
We have formally delivered a notice today nominating an alternative slate of director candidates for election to the Board at the 2014 annual meeting of shareholders. Our nominees have deep expertise in the healthcare industry, a demonstrated track record of outstanding financial performance and shareholder value creation, and a strong belief that while Healthways sits in an enviable position, the Company is in dire need of new and better leadership to reach its full potential. Our nominees are highly qualified to usher in a new era of shareholder value creation at Healthways, and we have detailed their backgrounds below.
As the second largest shareholder of Healthways, we are extremely frustrated with the current performance and direction of the Company. We have made significant efforts to communicate constructively with the Board to arrive at a mutually agreeable resolution without the need for an election contest. Every attempt to do so has been unfruitful. We are absolutely committed to making sure that the best interests of all shareholders are represented on the Board and doing whatever it takes to bring about real change at Healthways for the benefit of all shareholders.
Conan J. Laughlin
Managing Member, North Tide Capital, LLC
Biographical Information about North Tide's Director Nominees:
Edwin "Mac" Crawford most recently served as Chairman of CVS Caremark, a Fortune 20 company formed by the 2007 merger of CVS and Caremark Rx. From 1998-2007, Mr. Crawford was CEO of Caremark Rx (and its predecessor MedPartners Inc.). Mr. Crawford joined MedPartners in 1998 when the company, then the country's largest physician practice management company, was struggling amid operating losses, debt obligations of $1.8 billion and major changes in the healthcare industry. He made the strategic decision to sell assets and focus on the small but growing pharmacy benefits management ("PBM") business. Mr. Crawford oversaw dramatic growth of the PBM business, increasing revenues from approximately $2 billion to $9 billion by 2003, while significantly lowering Caremark's debt. In 2004, he orchestrated the acquisition of AdvancePCS, which made Caremark the second-largest PBM, generating over $23 billion in annual revenue. By 2007, Caremark had grown to be a $37 billion PBM managing over 600 million prescriptions when Mr. Crawford led the company through the strategic merger with drug chain CVS in a transaction valued at approximately $27 billion. During Mr. Crawford's nine-year tenure as CEO of Caremark Rx, the total shareholder return was +516% versus the S&P 500 Index total return of +52% and the S&P Healthcare Index total return of +97% over the same period. Mr. Crawford was named Institutional Investor's Best CEO in Healthcare Technology and Distribution for 2005, 2006 and 2007. Previously, Mr. Crawford was Chairman and CEO of Magellan Health Services, which he led through a successful restructuring and turnaround. Mr. Crawford currently serves on the Board of Trustees of Washington & Lee University. He graduated from Auburn University with a degree in Business and with a major in Accounting in 1971.
Bradley S. Karro is a principal of Hillcote Advisors, a firm focused on investing in and restructuring healthcare companies. Prior to founding Hillcote, Mr. Karro held a number of senior executive positions in the healthcare industry, including serving as Executive Vice President of Caremark Rx, a prescription benefit management company. Mr. Karro served at Caremark Rx from 1998 through 2007 and during his time at Caremark Rx, he was responsible for mergers & acquisitions, integration planning, information technology and Medicare product development. Mr. Karro was also appointed as a charter member of the Governor's e-Health Advisory Council in Tennessee, an organization established to coordinate Tennessee's initiatives leading towards the adoption of electronic medical records. Mr. Karro is currently a member of the Board of Directors of Angiotech Pharmaceuticals, Inc., where he chairs the Audit Committee. Mr. Karro previously served on the Board of Directors of Emageon Inc. Mr. Karro received his B.A. in Honors Business Administration from the University of Western Ontario.
Paul H. Keckley is the Editor of The Keckley Report and an expert on health industry trends and U.S. health system reform. In his thirty-five year health industry career, Dr. Keckley served as an expert commentator for national media coverage of healthcare reform, CEO of four health care companies funded by private investors, in senior management at Vanderbilt Medical Center and most recently as Executive Director of the Deloitte Center for Health Solutions in Washington, D.C, a position he held from 2006 through 2013. Dr. Keckley currently serves on the board of directors of the Healthcare Financial Management Leadership Council, Western Governors University Advisory Board and Lipscomb University College of Pharmacy. He previously served as an Independent Director at Ohio State University Medical Center, Interdent and PhyCor Inc. and as advisor to the Bipartisan Policy Center in Washington, DC. Dr. Keckley is a member of the Health Executive Network. He received his B.A. at Lipscomb University and his M.A. and PhD from Ohio State University and completed additional graduate studies at Oxford University.
Conan J. Laughlin is the Founder, Portfolio Manager, and Managing Member of North Tide Capital LLC, a Boston-based investment firm with over $1 billion in assets under management. The firm invests in global equities utilizing a value-oriented approach with a dedicated focus on the healthcare sector. Mr. Laughlin has covered the healthcare industry as an equity research analyst since 1995. Prior to founding North Tide, from 2005-2011 Mr. Laughlin was a portfolio manager and sub-adviser to Millennium Management LLC, a multi-billion dollar investment firm based in New York. From 2002-2004, Mr. Laughlin was an equity research analyst covering the healthcare sector in the Asset Management group at American Express in Boston. Prior to joining American Express in 2002, he spent seven years as a sell-side analyst at Morgan Stanley Dean Witter (1995-1997), SG Cowen (1997-1999), and Deutsche Bank Alex. Brown (1999-2002). Mr. Laughlin graduated from the College of William and Mary with a BBA in Finance in 1995. Mr. Laughlin currently serves on the Board of Trustees at The Park School in Brookline, MA.
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
North Tide Capital Master, LP ("North Tide"), together with the other participants named herein, intends to make a preliminary filing with the Securities and Exchange Commission ("SEC") of a proxy statement and accompanying proxy card to be used to solicit votes for the election of a slate of director nominees at the 2014 annual meeting of shareholders of Healthways, Inc., a Delaware corporation (the "Company").
NORTH TIDE STRONGLY ADVISES ALL STOCKHOLDERS OF THE COMPANY TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN THIS PROXY SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT CHARGE UPON REQUEST.
The participants in the proxy solicitation are North Tide Capital Master, LP ("North Tide"), North Tide Capital, LLC ("North Tide Capital"), Conan J. Laughlin, E. Mac Crawford, Bradley S. Karro and Paul H. Keckley (collectively, the "Participants").
As of the date of this filing, North Tide beneficially owns 3,425,000 shares of common stock, par value $.001 per share (the "Common Stock") of the Company. As of the date of this filing, North Tide Capital, as the investment manager of each of North Tide and a certain managed account (the "Account"), beneficially owns the 3,425,000 shares of Common Stock beneficially owned by North Tide and 425,000 shares of Common Stock beneficially owned by the Account. As of the date of this filing, Mr. Laughlin, as the Manager of North Tide Capital, beneficially owns the 3,825,000 shares beneficially owned by North Tide Capital. As of the date of this filing, neither of Messrs. Crawford and Karro nor Dr. Keckley directly owns any shares of Common Stock.
Contact: Conan Laughlin
North Tide Capital
SOURCE North Tide Capital
With worldwide spending on cloud services and infrastructure growing by 23% in 2015 to $118B, it is clear that cloud services are here to stay. Yet, the rate of cloud adoption varies by companies and markets around the world. With thousands of outages and hijacks across the Internet every day, one reason for hesitation is the faith in quality Internet performance. In his session at 16th Cloud Expo, Michael Kane, Senior Manager at Dyn, will explore how Internet performance affects your end-user...
May. 22, 2015 02:15 PM EDT Reads: 1,165
Cloud Expo, Inc. has announced today that Andi Mann returns to DevOps Summit 2015 as Conference Chair. The 4th International DevOps Summit will take place on June 9-11, 2015, at the Javits Center in New York City. "DevOps is set to be one of the most profound disruptions to hit IT in decades," said Andi Mann. "It is a natural extension of cloud computing, and I have seen both firsthand and in independent research the fantastic results DevOps delivers. So I am excited to help the great team at ...
May. 22, 2015 02:00 PM EDT Reads: 1,205
Organizations today are confounded by an avalanche of data that needs to be processed and managed on a daily basis. Through relevant use cases and a thought-provoking dialogue on an organization’s ‘Data to Decisions’ journey, Andrew Clyne, Chief Data Officer at CenturyLink Cognilytics, will reveal in his session at Big Data Expo how your organization can monetize data as a strategic asset. State-of-the-art Big Data and Advanced Analytics capabilities provided as a managed service can enable da...
May. 22, 2015 02:00 PM EDT Reads: 1,445
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Ar...
May. 22, 2015 02:00 PM EDT Reads: 4,488
With SaaS use rampant across organizations, how can IT departments track company data and maintain security? More and more departments are commissioning their own solutions and bypassing IT. A cloud environment is amorphous and powerful, allowing you to set up solutions for all of your user needs: document sharing and collaboration, mobile access, e-mail, even industry-specific applications. In his session at 16th Cloud Expo, Shawn Mills, President and a founder of Green House Data, will discus...
May. 22, 2015 02:00 PM EDT Reads: 1,292
Move from reactive to proactive cloud management in a heterogeneous cloud infrastructure. In his session at 16th Cloud Expo, Manoj Khabe, Innovative Solution-Focused Transformation Leader at Vicom Computer Services, Inc., will show how to replace a help desk-centric approach with an ITIL-based service model and service-centric CMDB that’s tightly integrated with an event and incident management platform. Learn how to expand the scope of operations management to service management. He will al...
May. 22, 2015 01:00 PM EDT Reads: 1,095
For IoT to grow as quickly as analyst firms’ project, a lot is going to fall on developers to quickly bring applications to market. But the lack of a standard development platform threatens to slow growth and make application development more time consuming and costly, much like we’ve seen in the mobile space. In his session at @ThingsExpo, Mike Weiner is Product Manager of the Omega DevCloud with KORE Telematics Inc., will discuss the evolving requirements for developers as IoT matures and co...
May. 22, 2015 01:00 PM EDT Reads: 1,480
There is no question that the cloud is where businesses want to host data. Until recently hypervisor virtualization was the most widely used method in cloud computing. Recently virtual containers have been gaining in popularity, and for good reason. In the debate between virtual machines and containers, the latter have been seen as the new kid on the block – and like other emerging technology have had some initial shortcomings. However, the container space has evolved drastically since coming on...
May. 22, 2015 12:30 PM EDT Reads: 816
Mobile commerce traffic is surpassing desktop, yet less than 20% of sales in the U.S. are mobile commerce sales. In his session at 15th Cloud Expo, Dan Franklin, Segment Manager, Commerce, at Verizon Digital Media Services, defined mobile devices and discussed how next generation means simplification. It means taking your digital content and turning it into instantly gratifying experiences.
May. 22, 2015 12:30 PM EDT Reads: 3,335
Enterprises are fast realizing the importance of integrating SaaS/Cloud applications, API and on-premises data and processes, to unleash hidden value. This webinar explores how managers can use a Microservice-centric approach to aggressively tackle the unexpected new integration challenges posed by proliferation of cloud, mobile, social and big data projects. Industry analyst and SOA expert Jason Bloomberg will strip away the hype from microservices, and clearly identify their advantages and d...
May. 22, 2015 12:30 PM EDT Reads: 788
SYS-CON Events announced today that DragonGlass, an enterprise search platform, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. After eleven years of designing and building custom applications, OpenCrowd has launched DragonGlass, a cloud-based platform that enables the development of search-based applications. These are a new breed of applications that utilize a search index as their backbone for data...
May. 22, 2015 12:00 PM EDT Reads: 1,565
Converging digital disruptions is creating a major sea change - Cisco calls this the Internet of Everything (IoE). IoE is the network connection of People, Process, Data and Things, fueled by Cloud, Mobile, Social, Analytics and Security, and it represents a $19Trillion value-at-stake over the next 10 years. In her keynote at @ThingsExpo, Manjula Talreja, VP of Cisco Consulting Services, will discuss IoE and the enormous opportunities it provides to public and private firms alike. She will shar...
May. 22, 2015 12:00 PM EDT Reads: 1,712
Container frameworks, such as Docker, provide a variety of benefits, including density of deployment across infrastructure, convenience for application developers to push updates with low operational hand-holding, and a fairly well-defined deployment workflow that can be orchestrated. Container frameworks also enable a DevOps approach to application development by cleanly separating concerns between operations and development teams. But running multi-container, multi-server apps with containers ...
May. 22, 2015 12:00 PM EDT Reads: 1,631
Software Development Solution category in The 2015 American Business Awards, and will ultimately be a Gold, Silver, or Bronze Stevie® Award winner in the program. More than 3,300 nominations from organizations of all sizes and in virtually every industry were submitted this year for consideration. "We are honored to be recognized as a leader in the software development industry by the Stevie Awards judges," said Steve Brodie, CEO of Electric Cloud. "We introduced ElectricFlow and our Deploy app...
May. 22, 2015 12:00 PM EDT Reads: 1,491
What do a firewall and a fortress have in common? They are no longer strong enough to protect the valuables housed inside. Like the walls of an old fortress, the cracks in the firewall are allowing the bad guys to slip in - unannounced and unnoticed. By the time these thieves get in, the damage is already done and the network is already compromised. Intellectual property is easily slipped out the back door leaving no trace of forced entry. If we want to reign in on these cybercriminals, it's hig...
May. 22, 2015 12:00 PM EDT Reads: 3,930