Blackhawk Network Holdings, Inc. (NASDAQ:HAWK) and JANA Partners
LLC today announced that the Company will add two new independent
directors to its Board of Directors, effective no later than April
24, 2017. These two directors will be on Blackhawk’s slate of
directors nominated for election to the Board of Directors at the
Company’s 2017 Annual Meeting, along with eleven incumbents,
pursuant to an agreement with JANA Partners LLC. The two new
directors will be Robert Henske and Jeffrey H. Fox.
Biographical information on the new directors is provided
below. The Board will increase to thirteen members from the
current eleven.
Under the agreement with JANA, Blackhawk will also
form a Cost Savings Committee of the Board that will evaluate all
options for increasing cost savings, including by, if the Cost
Savings Committee so determines, engaging a cost consultant.
The Committee will be comprised of four members, two of whom will
be the new directors.
In addition, Jerry Ulrich, the Company’s Chief
Financial Officer, announced that he plans to retire by the end of
this year after 11 years with the Company. The Company has
initiated a search to identify a replacement for Ulrich, with
assistance from Mr. Henske and other Board members. The
Company also reaffirmed all previous 2017 guidance. “We’re
very grateful to Jerry for his significant contributions to the
success of Blackhawk,” said Talbott Roche, Chief Executive Officer
of Blackhawk. “Jerry has been a great leader, colleague and
friend, and I appreciate his strong commitment to the Company.”
Mr. Ulrich added, “I’ve been honored to be part of
a great team at Blackhawk and look forward to assisting the Company
with the search and transition process.”
As previously disclosed, the Blackhawk Board has also been
engaged in succession planning for Bill Tauscher’s responsibilities
as Head of International leading the Company’s international
business and its corporate development strategy and execution.
Mr. Tauscher anticipates stepping down from his international
responsibilities in 2017 as a search and transition is
completed. In addition, a similar transition is planned for
Mr. Tauscher’s corporate development responsibilities following the
transition of his international responsibilities. Mr.
Tauscher intends to continue serving as Chairman of the Blackhawk
Board. Roche said, “Bill’s service to the Company has been
integral to our success. I look forward to his continued support as
Chairman of the Board.”
Blackhawk also announced that it intends to
restructure equity compensation for the Company’s named executive
officers beginning in 2018 to enhance alignment with stockholder
value creation. In addition, the Company has made certain
changes to its compensation practices that will result in a lower
dilution rate for 2017.
Barry Rosenstein, Managing Partner of JANA
Partners, said, “We have appreciated our constructive dialogue with
Bill Tauscher, Talbott Roche and their team. We believe that
all Blackhawk stockholders will benefit from Jeff’s and Robert’s
experience as the Company enhances its operational efficiency,
including through the creation of the Cost Savings Committee, and
makes the other value-creating enhancements announced today.”
JANA Partners currently owns approximately 4.7 percent of the
Company’s outstanding common stock.
The director nominations will be included in the
Company’s 2017 proxy statement and submitted for stockholder
approval at the Company's 2017 Annual Meeting, to be held on June
9, 2017. The Company expects to file its proxy materials for
the 2017 Annual Meeting in the near future and encourages
stockholders to review the proxy materials when they become
available.
In connection with the appointments, Blackhawk and
JANA have entered into a cooperation agreement. Under the
agreement, Blackhawk has agreed to nominate Mr. Henske and Mr. Fox
for election to the Board at the Company’s 2017 Annual Meeting and
JANA has agreed to customary standstill and voting
commitments. The cooperation agreement will be filed with the
Securities and Exchange Commission.
Biographical Information on New Director
NomineesJeffrey H. Fox is a principal of The Circumference
Group LLC, an investment and advisory firm which he founded in 2009.
Mr. Fox was President and Chief Executive Officer of Convergys
Corporation from 2010 to November 2012, and then Executive Chairman
until April 2013. Previously, Mr. Fox worked for Alltel Corporation
as Chief Operating Officer from 2007 through 2008, and as a Group
President from 1996 until 2007. Prior to joining Alltel, Mr. Fox
worked in investment banking for ten years with Stephens Inc.,
preceded by two years with Merrill Lynch, specializing in mergers
and acquisitions advisory services. Mr. Fox also currently serves
as non-executive Chairman of the Board of Convergys Corporation
(NYSE:CVG) and as a member of the Board of Avis Budget Group, Inc.
(NASDAQ:CAR).
Robert B. Henske served as a Managing Director at
Hellman & Friedman LLC from July 2007 through 2014, and as a
Senior Advisor from 2014 to 2016. From May 2005 until July 2007, he
served as Senior Vice President and General Manager of the Consumer
Tax Group of Intuit Inc. He was Intuit’s CFO from January 2003 to
September 2005. Prior to joining Intuit, he served as Senior Vice
President and CFO of Synopsys, Inc., a supplier of electronic
design automation software, from May 2000 until January 2003. From
January 1997 to May 2000, Mr. Henske was a partner at Oak Hill
Capital Management, a Robert M. Bass Group private equity
investment firm. Prior to that he was a Partner at Bain &
Company. Mr. Henske has served as a director of VeriFone
Systems, Inc. (NYSE:PAY) since January 2005.
About Blackhawk Network Holdings,
Inc.
Blackhawk Network Holdings, Inc. (NASDAQ:HAWK) is a leading global
stored value and payments provider, which supports the program
management and distribution of gift cards, telecom products, and
financial services products in retail, digital and incentive
channels. Blackhawk’s digital platform enables the management of
stored value products, promotions, and loyalty programs across a
network of digital distribution partners including retailers,
financial service providers, and mobile wallets. For more
information, please visit www.blackhawknetwork.com or product
websites Cardpool, Gift Card Lab, Gift Card Mall,
GiftCards.com and OmniCard.
Forward-Looking StatementsThis
press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Forward-looking
statements are indicated by words or phrases such as “guidance,”
“believes,” “expects,” “forecasts,” “projects,” “outlook,”
“anticipates,” “estimates,” “plans,” “continuing,” “ongoing,” and
similar words or phrases and the negative of such words and
phrases. Forward-looking statements are based on our current plans
and expectations and involve risks and uncertainties which are, in
many instances, beyond Blackhawk’s control, and which could cause
actual results to differ materially from those included in or
contemplated or implied by the forward-looking statements. Such
risks and uncertainties include the following: Blackhawk’s
ability to grow adjusted operating revenues and adjusted net income
as anticipated; Blackhawk’s ability to grow at historic rates or at
all; the consequences should Blackhawk lose one or more of its top
distribution partners or fail to attract new distribution partners
to its network or if the financial performance of Blackhawk’s
distribution partners’ businesses decline; Blackhawk’s reliance on
its content providers; the demand for their products and
Blackhawk’s exclusivity arrangements with them; Blackhawk’s
reliance on relationships with card issuing banks; the consequences
to Blackhawk’s future growth if its distribution partners fail to
actively and effectively promote its products and services; the
timing and manner that Blackhawk’s distribution partners restore
the full offering of Blackhawk’s products after they achieve EMV
compliance; changes in consumer behavior away from Blackhawk’s
distribution partners or our products resulting from limits or
controls implemented by Blackhawk’s distribution partners during
their transition to EMV compliance; the consequences if consumers
do not return to purchase Blackhawk’s products at distribution
partner stores; the requirement that Blackhawk comply with
applicable laws and regulations, including increasingly stringent
money-laundering rules and regulations; and other risks and
uncertainties described in Blackhawk’s reports and filings with the
Securities and Exchange Commission (the “SEC”), including the risks
and uncertainties set forth in Item 1A under the heading Risk
Factors in Blackhawk’s Annual Report Form 10-K for the year ended
January 2, 2016 which was filed on March 2, 2016, in Blackhawk’s
Quarterly Report on Form 10-Q for the fiscal quarter ended
September 10, 2016 which was filed on October 19, 2016 and in
Blackhawk’s Form 10-K for the year ended December 31, 2016 which
was filed on February 27, 2017, and other subsequent periodic
reports Blackhawk files with the Securities and Exchange
Commission. Blackhawk undertakes no obligation to update
forward-looking statements to reflect developments or information
obtained after the date hereof and disclaims any obligation to do
so other than as may be required by law.
INVESTORS/ANALYSTS:
Patrick Cronin
(925) 226-9973
investor.relations@bhnetwork.com
MEDIA:
Abernathy MacGregor
Pat Tucker, PCT@abmac.com, 212-371-5999
Jim Lucas, JBL@abmac.com, 213-630-6550
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