Benefitfocus Issues Statement in Response to Indaba
April 15 2021 - 1:13PM
Benefitfocus, Inc. (NASDAQ: BNFT), an industry-leading benefits
technology platform that simplifies benefits administration for
employers, health plans and brokers, today issued the following
statement in response to a letter filed by Indaba Capital
Management, LP. (“Indaba”), on April 15, 2021:
We are disappointed with Indaba’s
decision to misrepresent our private negotiations. The company has
repeatedly attempted to engage in constructive negotiations.
Despite our good faith efforts, Indaba seems determined to
misrepresent the terms of our proposed cooperation agreement.
Benefitfocus proposed a customary
settlement agreement, under which Indaba nominee Ronald P. Mitchell
would be appointed to the Benefitfocus board, with terms that are
consistent with market standards and intended to protect the
interests of all the company’s shareholders. Many of these terms
were made necessary because of Indaba’s continued refusal to allow
us to vet Mr. Mitchell, or even meet or interview him, until an
agreement is reached to appoint him to the board. Consistent with
its fiduciary obligations, the Board sought protections to ensure
Mr. Mitchell would abide by our standard Board policies, including
customary confidentiality obligations. The Board sought these
provisions in order to protect the company’s information and the
interests of all the company’s shareholders.
We offered Indaba representation on
the board that is commensurate with its ownership stake. We believe
Indaba remains focused on forcing a near-term sale of the company,
which, as a large debt holder (in addition to its equity stake),
would disproportionately benefit Indaba.
Benefitfocus is committed to
generating substantial value for all shareholders and we remain
open to constructive input from our shareholders to achieve that
goal. Benefitfocus has taken meaningful action over the past few
months to improve our governance practices, refresh our board and
execute on our strategy:
- In March, Coretha Rushing, a leader in the human resources
industry, was appointed to the board. She was previously corporate
vice president and chief human resources officer (CHRO) of Equifax
Inc, and before that, she was senior vice president and the first
woman to serve as CHRO at The Coca Cola Company.
- Following the 2021 Annual Meeting, Doug Dennerline will become
independent chairman of the board and Lanham Napier will step down
as lead independent director.
- As previously announced, the company intends to submit a
proposal to shareholders to declassify its board. This proposal
will be the first matter on the agenda at our 2021 annual meeting
of stockholders.
Additional details will be included
in our proxy statement for the 2021 annual meeting of stockholders,
which will be filed with the Securities and Exchange
Commission.
About Benefitfocus Benefitfocus (NASDAQ:
BNFT) unifies the entire benefits industry through innovative
technology solutions that bring efficiency, cost savings and
simplicity to employee benefits administration. Our powerful
cloud-based software, data-driven insights and
thoughtfully designed services help employers, insurance
brokers, health plans and suppliers address the complexity of
benefits enrollment and engagement, while bringing easier access to
health, wealth and lifestyle products through a world-class
benefits experience. Our mission is simple: to improve lives
with benefits. Learn more
at www.benefitfocus.com, LinkedIn and Twitter.
DISCLAIMER REGARDING FORWARD LOOKING
STATEMENTS Except for historical
information, all of the statements, expectations, and assumptions
contained in this press release are forward-looking statements.
Actual results might differ materially from those explicit or
implicit in the forward-looking statements. Important factors that
could cause actual results to differ materially include: the costs
and distractions of dealing with activist stockholders; our ability
to maintain our culture and recruit, integrate and retain qualified
personnel, including on our board of directors; our ability to
compete effectively; the need to innovate and provide useful
products and services; risks related to changing healthcare and
other applicable regulations; the immature and volatile nature of
the market for our products and services; privacy; security and
other risks associated with our business; management of
growth; volatility and uncertainty in the global economy and
financial markets in light of the evolving COVID-19 pandemic; and
the other risk factors set forth from time to time in
our SEC filings, copies of which are available free of
charge within the Investor Relations section of
the Benefitfocus website
at http://investor.benefitfocus.com/sec-filings or upon
request from our Investor Relations
Department. Benefitfocus assumes no obligation and does
not intend to update these forward-looking statements, except as
required by law.
Important Additional Information and Where to Find
ItThe company intends to file a proxy statement on
Schedule 14A, an accompanying WHITE proxy card and other relevant
documents with the SEC in connection with such solicitation of
proxies from the company’s stockholders for the company’s 2021
annual meeting of stockholders. STOCKHOLDERS OF THE COMPANY ARE
STRONGLY ENCOURAGED TO READ THE COMPANY’S DEFINITIVE PROXY
STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ALL
OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY
WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Investors and stockholders may obtain a copy of the
definitive proxy statement, an accompanying WHITE proxy card, any
amendments or supplements to the definitive proxy statement and
other documents filed by the company with the SEC at no charge at
the SEC’s website at www.sec.gov. Copies will also be available at
no charge in the Investor Relations section of the Benefitfocus
website at https://investor.benefitfocus.com/sec-filings or by
contacting the company’s Investor Relations department at
ir@benefitfocus.com, as soon as reasonably practicable after such
materials are electronically filed with, or furnished to, the
SEC.
Certain Information Regarding Participants to the
SolicitationThe company, its directors and certain of its
executive officers are participants in the solicitation of proxies
from the company’s stockholders in connection with matters to be
considered at the company’s 2021 annual meeting of stockholders.
Information regarding the direct and indirect interests, by
security holdings or otherwise, of the company’s directors and
executive officers in the company is included in the company’s
Proxy Statement on Schedule 14A for its 2020 annual meeting of
stockholders, filed with the SEC on April 29, 2020, the company’s
Annual Report on Form 10-K for the year ended December 31, 2020,
filed with the SEC on March 10, 2021 and in the company’s Current
Reports on Form 8-K filed with the SEC from time to time. Changes
to the direct or indirect interests of the company’s directors and
executive officers are set forth in SEC filings on Initial
Statements of Beneficial Ownership on Form 3 or Statements of
Change in Ownership on Form 4. These documents are available free
of charge as described above. Updated information regarding the
identities of potential participants and their direct or indirect
interests, by security holdings or otherwise, in the company will
be set forth in the company’s Proxy Statement for its 2021 annual
meeting of stockholders and other relevant documents to be filed
with the SEC, if and when they become available.
Benefitfocus, Inc.843-981-8898pr@benefitfocus.comInvestor
Relations:Patti Leahy843-981-8899ir@benefitfocus.com
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