Healthways (NASDAQ: HWAY) (the "Company"), the largest independent global provider of well-being improvement solutions, today announced that it has reached an agreement with North Tide Capital, LLC ("North Tide"), the Company's second largest stockholder. Pursuant to the agreement, the Company will amend its proxy statement in connection with the Company's June 24, 2014 Annual Meeting of Stockholders to nominate three directors selected by North Tide, Bradley S. Karro, Paul H. Keckley and Conan J. Laughlin, along with current director Kevin G. Wills, for election to its Board of Directors.
As part of the agreement, current directors John W. Ballantine, Daniel J. Englander and C. Warren Neel will step down at the Company's Annual Meeting. Accordingly, the Healthways Board will name an existing Healthways director who will serve as Chairman. North Tide has agreed to withdraw its slate of director nominees and vote the shares that it controls in support of the combined slate of director nominees and in accordance with the recommendation of Healthways' Board on all other proposals to be presented at the 2014 Annual Meeting.
John Ballantine, Chairman of the Healthways Board, stated, "We appreciate the productive and supportive comments we have received from many stockholders in recent weeks regarding Healthways' strategic direction, our management team, and the progress the Company is making toward achieving sustained growth and profitability. We have also heard their, and many of our customers', concerns about the cost and disruption to our business of continuing the proxy contest with North Tide, and so we are pleased to reach this agreement. We believe the agreement is in the best interests of the Company and all stockholders. We welcome Messrs. Karro, Keckley and Laughlin to the Board and look forward to working with them constructively as we all focus on generating value for stockholders and meeting our customers' needs."
Mr. Ballantine continued, "I am honored to have served as Chairman of the Board of Directors for the past three years and as a Board member since 2003. I would also like to thank Warren Neel for his 23 years of distinguished service on the Healthways Board and Dan Englander for his valuable insights since joining the Board earlier this year. We all appreciate their contributions."
Conan Laughlin, managing member of North Tide Capital, added, "We are pleased to have reached this agreement with Healthways, which we believe is in the best interests of all stockholders, and we look forward to getting started working with management and the Board to create value for shareholders, customers and employees."
As part of the agreement, the Board will form a Strategic Review Committee for the purpose of reviewing, evaluating and making recommendations to the Board regarding the Company's business strategies. The Committee will be comprised of four members, two of whom will be new directors, including Bradley Karro, who will serve as chair of the committee.
The agreement also includes certain standstill restrictions that will be in effect until 10 days prior to the deadline by which a stockholder must give notice to the Company of its intention to nominate a director at, or bring other business before, the 2015 Annual Meeting.
The complete agreement between Healthways and North Tide will be included as an exhibit to the Company's Current Report on Form 8-K, which will be filed with the Securities and Exchange Commission ("SEC"). Further details regarding the 2014 Annual Meeting will be included in the Company's definitive proxy materials, including an amended proxy card, which will be filed with the SEC.