Masimo (NASDAQ: MASI) today issued the following statement to
set the record straight regarding Politan’s “Background of the
Solicitation” section of its proxy statement issued in connection
with Masimo’s upcoming Annual Meeting of Stockholders.
Masimo strongly believes Politan is providing investors with
inaccurate and incomplete information, as Masimo Founder, Chairman
and CEO Joe Kiani noted during the Goldman Sachs Global Healthcare
Conference on June 12, 2024. When referring to Politan’s proxy
statement, Mr. Kiani intended to state that he believes many of the
paragraphs in Politan’s “Background of the Solicitation” section
contain inaccurate, incomplete and misleading information. While he
inadvertently referred at the Conference to potential criminal
penalties for a Board member who provides false information to
stockholders, he intended to stress the importance of Board members
being truthful in communications with investors. Masimo strongly
rejects what it believes are false and misleading claims by
Politan’s Quentin Koffey, a member of Masimo’s Board of Directors,
and believes Politan should not be rewarded with votes for its
candidates when it is providing stockholders with inaccurate,
incomplete and misleading information in an effort to gain control
of Masimo. Included below are examples of quotes from Politan’s
proxy statement that Masimo strongly believes are false and
misleading and Masimo’s explanation of the facts.
Politan’s Claims Regarding Masimo’s
Onboarding Process
1. Politan Fiction: “Ms. Brennan and Mr. Koffey did not even
receive a substantive update about the [Masimo strategic
alternatives review] process until the first in-person Board
meeting, which occurred on October 31, 2023—more than four months
after Mr. Kiani had started the sale process.”
FACTS: Mr. Koffey began communicating with
the lead banker at Morgan Stanley, Masimo’s independent financial
advisor managing the strategic alternatives review process, on July
11, 2023, two weeks after he joined the Board. On August 1, 2023,
as part of the Company’s onboarding process described below, the
lead banker hosted a one-hour meeting with Politan directors Ms.
Brennan and Mr. Koffey to bring them up to speed on Masimo’s
strategic alternatives review process and to answer any questions
that they had.
2. Politan Fiction: “The 2023 Newly-Elected Directors met Mr.
Kiani in person on Friday, September 1, 2023 (the day before Labor
Day weekend, when the Company headquarters was nearly empty).”
FACTS: By noting the timing of the
September 1, 2023 meeting as an example of “the absence of
customary onboarding” on the part of Masimo, Politan misleadingly
suggests that the Company went out of its way to schedule the
meeting on a date when the Company headquarters was nearly empty.
In fact, Ms. Brennan was the one who suggested Friday, September 1,
2023 as the date of the in-person onboarding meeting. The Politan
directors met with Craig Reynolds, Masimo’s Lead Independent
Director, and Mr. Kiani, during this in-person onboarding
meeting.1
3. Politan Fiction: “[The in-person onboard meeting] was the
sole onboarding that Ms. Brennan and Mr. Koffey received other than
receiving prior Board books and Board meeting minutes.”
FACTS: Ms. Brennan and Mr. Koffey’s
onboarding process involved multiple meetings and exchanges, during
the course of which a variety of materials and documents were
provided to the Politan directors. Tom McClenahan, Masimo’s General
Counsel and Corporate Secretary, reached out to Mr. Koffey on June
27, 2023, the day after the Company’s 2023 annual stockholder
meeting, to discuss the Politan directors’ onboarding. Mr. Koffey
informed Mr. McClenahan that he would send a list of materials Mr.
Koffey wanted to review. Mr. Koffey sent the list to Mr. McClenahan
on Friday, June 30, 2023, and requested that the materials be sent
the following week. Mr. McClenahan cut short his family vacation
and traveled back to California to compile the materials requested
by Mr. Koffey. The Politan directors’ onboarding process included
the following materials, meetings and calls:
- On July 7, 2023, Mr. McClenahan provided Mr. Koffey copies
of all Board and Board Committee meeting minutes, quarterly
financial updates, Board books dating back to 2021, a Board
calendar, a list of Board Committees and members, a list of the
Masimo’s consultants and amounts paid for 2022 and 2023, all Board
policies and procedures, a signature authority matrix, a director
search status report from Masimo’s independent director search
firm, Heidrick & Struggles, forecasts and results by product
platform for 2021 and 2022, and forecasts by product platform for
2023.
- On July 10, 2023, Mr. McClenahan provided Mr. Koffey
engagement letters with Masimo’s independent financial advisor,
Morgan Stanley, and Heidrick & Struggles and an organizational
chart for Masimo’s healthcare business.
- On July 10 and August 3, 2023, Masimo’s outside legal
counsel representing Masimo with respect to the Apple litigation
hosted separate onboarding sessions with each of Mr. Koffey and Ms.
Brennan based on Mr. Koffey and Ms. Brennan’s
availability.
- On July 21, 2023, Mr. Reynolds and Adam Mikkelson, who was
Chairman of the Audit Committee at the time, had a half-day meeting
with Mr. Koffey in Boston.
- On August 1, 2023, the lead banker at Morgan Stanley,
Masimo’s independent financial advisor managing the strategic
alternatives review process, hosted a one-hour meeting with Ms.
Brennan and Mr. Koffey to bring them up to speed on Masimo’s
strategic alternatives review process and to answer any questions
that they had.
- On September 1, 2023, Mr. Kiani and Mr. Reynolds met with
the Politan directors. Mr. Kiani gave an extensive presentation
regarding Masimo’s past, present, and 5-year product and
partnership roadmap. Mr. Koffey asked few, if any, questions during
the meeting. Mr. Koffey did not ask to meet with any other members
of senior management during his visit. Mr. Koffey has been provided
with extensive financial and other information, including in
connection with his work as the chair of the Special Committee, and
has met with nearly every member of Masimo’s senior management. See
Masimo’s press release dated April 1, 2024:
https://investor.masimo.com/news/news-details/2024/Masimo-Responds-to-Politan-Capitals-Nomination-of-Director-Candidates-and-Refutes-Politans-False-Claims/default.aspx.
- In addition, Masimo’s records indicate that Mr. Koffey has
had at least 18 phone calls with Mr. Kiani; 20 phone calls with
Masimo’s Chief Financial Officer Micah Young; and 10 phone calls
with Mr. McClenahan.
On January 12, 2024, Rolf Classon, an
independent director who joined the Masimo Board on November 7,
2023 and who received the same onboarding as the Politan directors,
described his onboarding experience in an email to Mr.
Kiani:
“Dear Joe—thank you for an outstanding
onboarding session yesterday and also thank you for being so
generous with your time. The topics we covered, the transparency
and the solid professionalism of your team made a very powerful
impression on me.”
4. Politan Fiction: “To date, Ms. Brennan and Mr. Koffey have
only been provided redacted minutes from [the June 24, 2023] Board
meeting.”
FACTS: Masimo provided an unredacted
version of the June 24, 2023 minutes to Mr. Koffey and Ms. Brennan
on December 8, 2023. Moreover, in an email dated June 30, 2023,
from Mr. Koffey to Mr. McClenahan, Mr. Koffey agreed that it was
appropriate for the Company to redact information from Board
minutes relating to then-pending litigation with Politan. Since
joining the Board, the Politan directors have never disputed the
prior redactions or requested that Masimo provide unredacted
versions of the Board minutes.
Politan’s Claims Regarding Masimo’s
Process to Add Highly Qualified Independent Directors to its
Board
5. Politan Fiction: “On November 3, 2023 the Board appointed Mr.
Classon as a Class II director, over the objections of the 2023
Newly-Elected Directors, who believed there was a total absence of
a legitimate search process.”
6. Politan Fiction: “On January 15, 2024, the Board appointed
Mr. Chapek as a Class I director, over the objections of the 2023
Newly-Elected Directors, who believed there was a total absence of
a legitimate search process. Mr. Kiani referred Mr. Chapek to the
Board as a director candidate, and, as noted above, the Board had
previously interviewed Mr. Chapek as a potential director in the
first quarter of 2023.”
FACTS: In February 2023, Masimo’s
Nominating Committee retained Heidrick & Struggles
(“Heidrick”), a leading independent third-party search firm, to
identify qualified and skilled director candidates who previously
served in a CEO position with experience in the healthcare industry
or expertise in consumer markets, or who had payor/provider
business model or audit experience.2 Heidrick presented the
Nominating Committee with more than 50 quality candidates. The
Nominating Committee interviewed a number of the candidates, but
did not appoint anyone at the time due to last year’s proxy contest
and Politan’s threat to sue if the Company added any new
directors.
After Ms. Brennan joined the Board and
Nominating Committee, Heidrick and the other Committee members
brought her up to speed on the work and candidate interviews that
had been done to date. Heidrick presented her with the leading
candidates, which included Mr. Classon, formerly Chairman of the
Executive Committee of Bayer HealthCare, Bob Chapek, formerly CEO
of Disney, and others. Mr. Kiani had never met Mr. Classon and had
met Mr. Chapek only once at a civic function prior to their
inclusion in the search process. Ms. Brennan rejected all the
leading candidates and asked that the Nominating Committee have a
call with Mr. Koffey.
The Nominating Committee had a call with
Mr. Koffey on October 4, 2023. During the call, the Nominating
Committee agreed to modify the director search specifications. The
Committee also invited Mr. Koffey to attend future Nominating
Committee meetings and to participate in candidate interviews. The
Nominating Committee agreed to allow additional time for Ms.
Brennan and Mr. Koffey to evaluate and interview any of the more
than 50 candidates that had previously been identified, and invited
them to propose additional candidates for consideration.
Ms. Brennan reviewed the candidates that
had previously been identified and selected four candidates. She
did not propose any additional candidates. Two of the four
candidates selected by Ms. Brennan declined to proceed, and two
were interviewed and evaluated by the Nominating Committee. Mr.
Koffey proposed four additional candidates. One of Mr. Koffey’s
candidates worked for a competitor, one was unavailable to join the
Board at the time, and the other two were interviewed and evaluated
by the Nominating Committee.
Mr. Classon and Mr. Chapek were each
interviewed several times by five different independent directors,
including Ms. Brennan and Mr. Koffey. Ms. Brennan and Mr. Koffey
voted against both candidates. When Ms. Brennan indicated she would
vote against Mr. Chapek, Mr. Mikkelson asked her if she would vote
for any of the candidates that had been identified. She replied
that she would not vote for any of the candidates, including those
Mr. Koffey had proposed.
7. Politan Fiction: “At [a Board meeting on May 16, 2024], the
Board voted, over the objections of the 2023 Newly-Elected
Directors, to propose Christopher G. Chavez as a nominee for
election at the 2024 Annual Meeting to fill the Class II director
position left vacant by Mr. Classon’s resignation. Mr. Kiani had
referred Mr. Chavez to the Board as a director candidate. The
Nominating Committee had not met to discuss Mr. Chavez’s nomination
or consider alternative candidates.”
FACTS: On March 25, 2024, Politan notified
Masimo of its intent to nominate two additional Politan directors
to Masimo’s Board, initiating a proxy contest for control of
Masimo. On April 25, 2024, Masimo’s Nominating Committee met and
recommended that the Board nominate Mr. Kiani and Mr. Classon for
election to the Board at the 2024 Annual Meeting. On April 30,
2024, the Board met and agreed with the recommendation, except for
Mr. Koffey and Ms. Brennan. On May 3, 2024, Mr. Classon notified
the Board of his decision to resign from the Board effective May
10, 2024.3
Given Politan’s proxy contest for control
and the unexpected resignation of Mr. Classon, the non-Politan
directors commenced a process to identify a replacement director
candidate to run against the Politan candidates. The Politan
directors were not included in this process due to their conflict
of interest.
During this process, Christopher Chavez, a
former public company CEO and director with more than 30 years of
leadership experience in the medical device industry, was
interviewed by all the independent non-Politan members of Masimo’s
Board. Mr. Reynolds interviewed Mr. Chavez on May 10 and May 12,
2024, with further follow-up calls on May 14, 2024. Masimo’s
independent director Mr. Chapek, a member of the Nominating
Committee, interviewed Mr. Chavez on May 13, 2024.
Mr. Reynolds and Mr. Chapek constitute all
the members of Masimo’s Nominating Committee other than Politan
director Ms. Brennan. At the May 16, 2024 Board meeting, all Board
members except for the Politan directors nominated Mr. Chavez to
stand for election at Masimo’s 2024 Annual Meeting.4
Politan’s Claims Regarding Masimo’s
Board Process
8. Politan Fiction: “On Saturday, June 24, 2023, the Board met
to delegate authority to Mr. Kiani to pursue and carry out a sale
of the entire Company without any obligation to provide process
updates to the Board or to obtain any additional Board approvals to
retain financial or other advisors.”
FACTS: The Board minutes from this meeting
state that the Board delegated authority to management (not Mr.
Kiani individually) and only “to coordinate with Morgan Stanley
[Masimo’s independent financial advisor] on the process for
exploring strategic transaction options, including the solicitation
of potential third party offers (whether publicly or privately),
and authorized management to retain additional financial and other
advisors to assist with exploring and pursuing any such options.”
This quoted language was not redacted from the June 24, 2023 Board
minutes that were provided to Ms. Brennan and Mr. Koffey on July 7,
2023.
9. Politan Fiction: “When the Audit Committee was asked to sign
off on the Quarterly Report on Form 10-Q for the second and third
quarter of 2023 and first quarter of 2024, Mr. Koffey declined in
each case to do so, believing that, despite the numerous requests,
he had not received sufficient financial and operational
information regarding the Company to fully evaluate the information
and analysis presented in the report.”
FACTS: The Audit Committee receives a
substantial set of documents each quarter for review and comments,
including a quarterly financial update, external auditor-required
communications, a draft Form 10-Q, a draft press release, a draft
earnings presentation, and a SOX 404 and internal audit update. The
Audit Committee also meets quarterly with Grant Thornton LLP,
Masimo’s independent auditor, without management present and the
Audit Committee members are free to ask Grant Thornton any
questions regarding the Company’s financial statements in these
executive sessions. Mr. Kiani does not attend Audit Committee
meetings in order to facilitate an open dialogue between the
independent Board members who serve on the Audit Committee and
Masimo’s independent auditor. Mr. Koffey abstained from approving
the 10-Qs, but did not offer any substantive changes or comments
for incorporation into the filings.
10. Politan Fiction: “On February 26, 2024, the Board met to
discuss and finalize the Company’s Annual Report on Form 10-K for
the fiscal year ended December 30, 2023 (the “2023 Annual Report”).
The Company’s management team discussed a draft of the 2023 Annual
Report with the Board, but following such discussion, a majority of
the independent directors of the Board were unwilling to sign the
2023 Annual Report until additional information that Board members
had repeatedly requested was provided.”
FACTS: At the Board meeting on February
26, 2024, all of the independent directors other than Mr. Koffey
and Ms. Brennan were initially prepared to sign the Form 10-K (Mr.
Chapek, Mr. Classon, Mr. Mikkelson and Mr. Reynolds). When Mr.
Koffey and Ms. Brennan made clear they would not sign the Form
10-K, Mr. Classon said he would defer his approval in the hope that
the Politan directors would also agree to sign the Form 10-K.
Masimo management met with Mr. Koffey for two and a half hours on
Saturday, February 24, 2024, and spent many hours the following
Sunday and Monday gathering additional information and preparing
presentations for the Politan directors. The Politan directors
asked questions during the presentations on February 27, 2024,
which management answered, and they did not indicate they had any
additional questions that remained unanswered. Despite these
efforts, the Politan directors ultimately refused to sign the 10-K.
All non-Politan members of the Board, including Mr. Classon,
approved and signed the Form 10-K.
Politan’s Claims Regarding Access to
Masimo Information
11. Politan Fiction: “In late 2023, the 2023 Newly-Elected
Directors began asking to see a draft budget for FY 2024 so that
the Board could review and comment prior to being asked for their
approval. They were informed that no budget approval was required.
The only budget information the 2023 Newly-Elected Directors were
ever subsequently given was the same financial guidance provided
publicly to the market. No draft or final budget was ever provided
to the Board. The Board never approved a budget or even had the
opportunity to provide input.”
FACTS: On October 31, 2023, Mr. Young
presented to the Board, including Mr. Koffey and Ms. Brennan,
details of Masimo’s financial plans and projections for 2024
through 2034. The financial information included revenue by major
product category, cost of goods sold, gross profit, research and
development expenses, selling, general and administrative expenses,
adjusted EBIT margin, adjusted EBITDA capital expenditures and
working capital requirements for the professional healthcare,
consumer health and consumer audio businesses. Mr. Young also
presented short-term and long-term plans for cost reduction
initiatives and margin expansion. In addition, following the
presentation, Mr. Young provided Mr. Koffey with the underlying
Excel data used to support the presentation. The Politan directors
did not ask any additional questions.
On February 13, 2024, Mr. Young presented
to the Board, including Mr. Koffey and Ms. Brennan, final 2024
financial plan targets, including revenue, operating profit and
margin, and EPS targets for the year. Thereafter, Bilal Muhsin, COO
for Healthcare, and Blair Tripodi, COO for Consumer, presented
detailed operating plans and major initiatives for their respective
businesses. Mr. Koffey and Ms. Brennan complimented the
presentations. Financial guidance for 2024 was approved by the
Board, and short- and long-term financial targets for executive
compensation were approved by the Compensation Committee.
12. Politan Fiction: “The Company’s 2023 Annual Report disclosed
a $10 million impairment with respect to the Sound United business
segment (less than 1% of the purchase price). As a member of the
Audit Committee, Mr. Koffey asked to review the impairment analysis
multiple times. To date, he has never been able to review the
Company’s impairment analysis and does not know why only $10
million of impairment has been taken.”
FACTS: Mr. Koffey attended an Audit
Committee meeting on November 6, 2023, that included a review and
discussion of management’s ASC 350 and 360
impairment/recoverability tests which resulted in a tradename
impairment in Q3 and why goodwill was not impaired as of Q3. The
Audit Committee members received supporting materials and
participated in the discussions. During the Audit Committee
meeting, the Audit Committee members met separately with Grant
Thornton LLP, Masimo’s independent auditor, without management
present, and were free to ask Grant Thornton any questions
regarding the Company’s impairment analysis in this executive
session.
13. Politan Fiction: “Following the dramatic decline in sales
during the second quarter of 2023, the 2023 Newly-Elected Directors
asked to speak with the head of U.S. sales for the Company’s
professional healthcare business. To date, they have never been
able to speak with such executive and therefore have not been able
to adequately learn about the discounting and bulk orders whose
discontinuation appear to have dramatically impacted sales starting
in the second quarter of 2023.”
FACTS: On July 13, 2023, Mr. Koffey
requested and participated in a two-hour call with members of
Masimo management, including Bilal Muhsin, Masimo’s Chief Operating
Officer for Healthcare and head of worldwide sales, to discuss the
decline in second quarter sales. Management presented detailed
sales and ordering data and trends for the second quarter as well
as management’s assessment of the reasons for the decline. Mr.
Koffey asked questions and received answers.
14. Politan Fiction: “From when they first joined the Board and
regularly thereafter, the 2023 Newly-Elected Directors asked for
information on research and development (“R&D”) spending so
they could understand how much was being spent on what initiatives.
To date, they have never received any information on R&D beyond
the publicly disclosed consolidated R&D number disclosed in the
Company’s quarterly reports and 2023 Annual Report. The 2023
Newly-Elected Directors made similar requests about cost of goods
sold and selling, general, and administrative expenses and have
similarly received no more detailed information than what has been
publicly disclosed in the Company’s quarterly reports and 2023
Annual Report.”
FACTS: As explained above, on October 31,
2023, Mr. Young presented to the Board, including Mr. Koffey and
Ms. Brennan, details of Masimo’s financial plans and projections
for 2024 through 2034. The information presented included research
and development spending, cost of goods sold, and selling, general
and administrative expenses for the professional healthcare,
consumer health and consumer audio businesses. In addition, as the
chair of the Special Committee, Mr. Koffey was provided updated
plans and projections as well as additional detailed financial
information regarding R&D and SG&A expenses in the first
quarter of 2024. Mr. Koffey and the Special Committee’s financial
and legal advisors spent extensive time with Mr. Young, the COOs of
Masimo’s Healthcare and Consumer businesses, and Masimo’s financial
and legal advisors to review the information provided and
understand the details of both businesses.
Politan’s Claims Regarding the Board’s
Decision to Pursue a Separation of the Consumer
Business
15. Politan Fiction: “Mr. Kiani then revived the idea proposed
by Politan nearly a year earlier to separate the consumer business
from the rest of the Company.”
FACTS: Mr. Kiani first proposed the
separation to Mr. Koffey on January 29 2024. Mr. Koffey and Ms.
Brennan never proposed a separation of the consumer business to
Masimo’s Board or management. In fact, while Masimo hears from
stockholders that Mr. Koffey has various proposals for Masimo’s
business, neither Mr. Koffey nor Ms. Brennan have made any
proposals or recommendations to the Board for strategic or
operational changes to the business.
16. Politan Fiction: “On January 30, 2024, Mr. Koffey met with
Mr. Kiani to further explore the proposed separation of the
consumer business subject to the conditions Mr. Kiani had earlier
raised and a commitment from Politan to forego nominating any
director candidates during separation discussions. Mr. Koffey
stated that as a single director on the Board, he was not in a
position to negotiate or agree to Mr. Kiani’s requests and
suggested that it would be advisable for the whole Board to
consider forming a special committee to negotiate the separation
given the related party issues.”
FACTS: At their meeting on January 30,
2024, Mr. Koffey presented Mr. Kiani with a list of proposed terms
for the separation. An actual image of the document Mr. Koffey
provided to Mr. Kiani can be found at
https://protectmasimosfuture.com/term-sheet/. Mr. Koffey
led Mr. Kiani to believe that he was in agreement with the list of
typewritten terms presented by Mr. Koffey, as well as the
additional handwritten terms proposed by Mr. Kiani. They agreed
that additional work needed to be done and that a Special Committee
should be set up to address any conflicts of interest.5
17. Politan Fiction: “Mr. Kiani’s demands at this stage
included: that the Company’s corporate headquarters and corporate
jet be included in the spun off assets; that the Company contribute
up to $150 million in cash plus working capital to the new consumer
entity; that the new entity have a class of 20:1 supermajority
voting stock that would confer majority voting control to Mr.
Kiani, granted to him without additional consideration.”
FACTS: As discussed above, Mr. Koffey led
Mr. Kiani to believe that he was in agreement with the above
proposed terms. It was Mr. Koffey, not Mr. Kiani, who first
proposed that the new entity have a class of supermajority voting
stock for Mr. Kiani. Mr. Koffey and Mr. Kiani agreed that the
Special Committee should determine what the cost of the
supermajority stock should be to Mr. Kiani.6
18. Politan Fiction: “On March 11, 2024 the Special Committee
unanimously agreed to send a revised term sheet that rejected the
terms that Mr. Kiani had proposed and instead reflected the Special
Committee’s independent position on the separation transaction to
Mr. Kiani.”
FACTS: This is the first time Politan has
admitted that the “revised term sheet” sent by the Special
Committee’s counsel “rejected” the terms that Mr. Koffey and Mr.
Kiani had discussed and agreed on. Before the “revised term sheet”
was sent to Mr. Kiani, Mr. Reynolds and Mr. Classon raised concerns
that it seemed different from what Mr. Koffey had described at the
February 13, 2024 Board meeting. Mr. Koffey assured the other
members of the Special Committee that the “revised term sheet,”
which Mr. Koffey had drafted with the Special Committee’s advisors,
was consistent with the terms that he and Mr. Kiani had agreed. Mr.
Koffey never showed the term sheet to which he and Mr. Kiani had
agreed to the other members of the Special Committee.7
19. Politan Fiction: “On March 20, 2024, the Company entered
into a confidentiality agreement with a potential joint venture
partner in connection with the separation of the consumer business.
The full Board knew nothing about the existence of the joint
venture partner or any discussions that had occurred. The full
Board was never notified that a confidentiality agreement had been
entered into or that any confidential information had been
exchanged until nearly eight weeks later on May 13, 2024.”
FACTS: Mr. Kiani mentioned discussions
with a potential joint venture partner in the press on March 25,
2024.8 Mr. Kiani provided an overview of the terms being discussed
with the potential joint venture partner at the next regularly
scheduled Board meeting on April 30, 2024. The Board met again on
May 16, 2024 to discuss the terms of a non-binding term sheet
reached with the potential joint venture partner.
20. Politan Fiction: “Despite multiple requests after the public
disclosure of the joint venture partner’s existence, Mr. Kiani
refused to disclose the identity of the potential joint venture
partner to the full Board until after Mr. Koffey demanded that
information by exercising his rights as a director under Section
220 of the Delaware General Corporation Law (the “DGCL”) (see
“Director Records Request” on May 8, 2024, below).”
FACTS: Prior to Mr. Koffey sending a 220
books and records demand about the potential joint venture
transaction, Masimo had already contacted all Board members,
including Mr. Koffey, to schedule a meeting to discuss the joint
venture. In connection with that Board meeting, all directors were
provided with a term sheet providing an overview of the proposed
transaction, preliminary financial analysis regarding the proposed
transaction and an overview of proposed next steps. Mr. Koffey’s
books and records demand, which he filed publicly, seeks, among
other things, text messages and personal emails of the management
team, the Board, and their advisors.
Politan’s Claims Regarding Additional
Matters
21. Politan Fiction: “In an effort to facilitate a more
collaborative boardroom dynamic, on August 28, 2023, Politan,
through counsel, informed Masimo that it and the California State
Teachers’ Retirement System intended to drop the Delaware action
regarding the Employment Agreement without prejudice.”
FACTS: Politan voluntarily dismissed the
Delaware action only after the court questioned Politan’s continued
participation in the litigation during a scheduling conference.9
The court noted that “my recollection of the posture over the past
few months is that Politan wanted to work with Mr. Kiani, was not
seeking to remove him or see him off the board.”10 After the
Politan nominees were elected to the Board, the court noted that it
had “questions as to why it is that the Politan folks are
continuing to participate in the litigation of this
case.”11
22. Politan Fiction: “Mr. Kiani proposed the Company purchase
Politan’s shares in the Company at a substantial premium in
exchange for Politan agreeing to not purchase more shares and to
never run a proxy contest in the future. Mr. Koffey flatly rejected
this idea.”
FACTS: Mr. Kiani inquired during his
January 30, 2024 meeting with Mr. Koffey whether Politan would be
willing to sell its shares to a third party. Mr. Kiani was aware of
other investors that had expressed interest in investing in Masimo
but were concerned about the upcoming proxy contest and the
possibility of Mr. Kiani being ousted. He did not propose that the
Company would buy Politan’s shares. Mr. Koffey responded that he
was 15 years into a 35-year career as an activist and that he could
not be seen to accept such a proposal.
23. Politan Fiction: “On May 31, 2024, the Company filed a
preliminary version of its proxy statement and did not include the
record date and annual meeting date that had previously been
approved by the full Board.”
FACTS: Mr. Koffey, and thus Politan, were
well aware of the record date and the annual meeting date as they
were set during a Board meeting Mr. Koffey attended on April 30,
2024. As is customary, these dates were left blank in Masimo’s
preliminary proxy filings, and added when Masimo filed its
definitive proxy statement.
About Masimo
Masimo (NASDAQ: MASI) is a global medical technology company
that develops and produces a wide array of industry-leading
monitoring technologies, including innovative measurements,
sensors, patient monitors, and automation and connectivity
solutions. In addition, Masimo Consumer Audio is home to eight
legendary audio brands, including Bowers & Wilkins, Denon,
Marantz, and Polk Audio. Our mission is to improve life, improve
patient outcomes, and reduce the cost of care. Masimo SET®
Measure-through Motion and Low Perfusion™ pulse oximetry,
introduced in 1995, has been shown in over 100 independent and
objective studies to outperform other pulse oximetry technologies.1
Masimo SET® has also been shown to help clinicians reduce severe
retinopathy of prematurity in neonates,2 improve CCHD screening in
newborns3 and, when used for continuous monitoring with Masimo
Patient SafetyNet™ in post-surgical wards, reduce rapid response
team activations, ICU transfers, and costs.4-7 Masimo SET® is
estimated to be used on more than 200 million patients in leading
hospitals and other healthcare settings around the world,8 and is
the primary pulse oximetry at 9 of the top 10 hospitals as ranked
in the 2022-23 U.S. News and World Report Best Hospitals Honor
Roll.9 In 2005, Masimo introduced rainbow® Pulse CO-Oximetry
technology, allowing noninvasive and continuous monitoring of blood
constituents that previously could only be measured invasively,
including total hemoglobin (SpHb®), oxygen content (SpOC™),
carboxyhemoglobin (SpCO®), methemoglobin (SpMet®), Pleth
Variability Index (PVi®), RPVi™ (rainbow® PVi), and Oxygen Reserve
Index (ORi™). In 2013, Masimo introduced the Root® Patient
Monitoring and Connectivity Platform, built from the ground up to
be as flexible and expandable as possible to facilitate the
addition of other Masimo and third-party monitoring technologies;
key Masimo additions include Next Generation SedLine® Brain
Function Monitoring, O3® Regional Oximetry, and ISA™ Capnography
with NomoLine® sampling lines. Masimo’s family of continuous and
spot-check monitoring Pulse CO-Oximeters® includes devices designed
for use in a variety of clinical and non-clinical scenarios,
including tetherless, wearable technology, such as Radius-7®,
Radius PPG®, and Radius VSM™, portable devices like Rad-67®,
fingertip pulse oximeters like MightySat® Rx, and devices available
for use both in the hospital and at home, such as Rad-97® and the
Masimo W1® medical watch. Masimo hospital and home automation and
connectivity solutions are centered around the Masimo Hospital
Automation™ platform, and include Iris® Gateway, iSirona™, Patient
SafetyNet, Replica®, Halo ION®, UniView®, UniView :60™, and Masimo
SafetyNet®. Its growing portfolio of health and wellness solutions
includes Radius Tº®, Masimo W1 Sport, and Masimo Stork™. Additional
information about Masimo and its products may be found at
www.masimo.com. Published clinical studies on Masimo products can
be found at www.masimo.com/evidence/featured-studies/feature/.
RPVi has not received FDA 510(k) clearance and is not available
for sale in the United States. The use of the trademark Patient
SafetyNet is under license from University HealthSystem
Consortium.
References
- Published clinical studies on pulse oximetry and the benefits
of Masimo SET® can be found on our website at
http://www.masimo.com. Comparative studies include independent and
objective studies which are comprised of abstracts presented at
scientific meetings and peer-reviewed journal articles.
- Castillo A et al. Prevention of Retinopathy of Prematurity in
Preterm Infants through Changes in Clinical Practice and SpO2
Technology. Acta Paediatr. 2011 Feb;100(2):188-92.
- de-Wahl Granelli A et al. Impact of pulse oximetry screening on
the detection of duct dependent congenital heart disease: a Swedish
prospective screening study in 39,821 newborns. BMJ. 2009;Jan
8;338.
- Taenzer A et al. Impact of pulse oximetry surveillance on
rescue events and intensive care unit transfers: a before-and-after
concurrence study. Anesthesiology. 2010:112(2):282-287.
- Taenzer A et al. Postoperative Monitoring – The Dartmouth
Experience. Anesthesia Patient Safety Foundation Newsletter.
Spring-Summer 2012.
- McGrath S et al. Surveillance Monitoring Management for General
Care Units: Strategy, Design, and Implementation. The Joint
Commission Journal on Quality and Patient Safety. 2016
Jul;42(7):293-302.
- McGrath S et al. Inpatient Respiratory Arrest Associated With
Sedative and Analgesic Medications: Impact of Continuous Monitoring
on Patient Mortality and Severe Morbidity. J Patient Saf. 2020 14
Mar. DOI: 10.1097/PTS.0000000000000696.
- Estimate: Masimo data on file.
-
http://health.usnews.com/health-care/best-hospitals/articles/best-hospitals-honor-roll-and-overview.
Forward-Looking Statements
This press release includes forward-looking statements as
defined in Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
in connection with the Private Securities Litigation Reform Act of
1995. These forward-looking statements include, among others,
statements regarding the 2024 Annual Meeting of Stockholders (the
“2024 Annual Meeting”) of Masimo and the potential stockholder
approval of the Board’s nominees and the proposed separation of
Masimo’s consumer business. These forward-looking statements are
based on current expectations about future events affecting Masimo
and are subject to risks and uncertainties, all of which are
difficult to predict and many of which are beyond Masimo’s control
and could cause its actual results to differ materially and
adversely from those expressed in its forward-looking statements as
a result of various risk factors, including, but not limited to (i)
uncertainties regarding a potential separation of Masimo’s consumer
business, (ii) uncertainties regarding future actions that may be
taken by Politan in furtherance of its nomination of director
candidates for election at the 2024 Annual Meeting, (iii) the
potential cost and management distraction attendant to Politan’s
nomination of director nominees at the 2024 Annual Meeting and (iv)
factors discussed in the “Risk Factors” section of Masimo’s most
recent periodic reports filed with the Securities and Exchange
Commission (“SEC”), which may be obtained for free at the SEC’s
website at www.sec.gov. Although Masimo believes that the
expectations reflected in its forward-looking statements are
reasonable, the Company does not know whether its expectations will
prove correct. All forward-looking statements included in this
press release are expressly qualified in their entirety by the
foregoing cautionary statements. You are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of today’s date. Masimo does not undertake any obligation
to update, amend or clarify these statements or the “Risk Factors”
contained in the Company’s most recent reports filed with the SEC,
whether as a result of new information, future events or otherwise,
except as may be required under the applicable securities laws.
Additional Information Regarding the 2024 Annual Meeting of
Stockholders and Where to Find It
The Company has filed a definitive proxy statement containing a
form of GOLD proxy card with the SEC in connection with its
solicitation of proxies for its 2024 Annual Meeting. THE COMPANY’S
STOCKHOLDERS ARE STRONGLY ENCOURAGED TO READ THE DEFINITIVE PROXY
STATEMENT (AND ANY AMENDMENTS AND SUPPLEMENTS THERETO) AND
ACCOMPANYING GOLD PROXY CARD AS THEY WILL CONTAIN IMPORTANT
INFORMATION. Stockholders may obtain the proxy statement, any
amendments or supplements to the proxy statement and other
documents as and when filed by the Company with the SEC without
charge from the SEC’s website at www.sec.gov.
Certain Information Regarding Participants
The Company, its directors and certain of its executive officers
and employees may be deemed to be participants in connection with
the solicitation of proxies from the Company’s stockholders in
connection with the matters to be considered at the 2024 Annual
Meeting. 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
definitive proxy statement for the 2024 Annual Meeting, which can
be found through the SEC’s website at
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000937556/000121390024053125/ea0206756-05.htm,
and any changes thereto may be found in any amendments or
supplements to the proxy statement and other documents as and when
filed by the Company with the SEC, which can be found through the
SEC’s website at www.sec.gov.
________________________ 1 Masimo’s 2024 Definitive Proxy
Statement, page 15:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000937556/000121390024053125/ea0206756-05.htm.
2 Masimo’s 2024 Definitive Proxy Statement, page 15:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000937556/000121390024053125/ea0206756-05.htm.
3 Masimo’s 2024 Definitive Proxy Statement, page 18-19:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000937556/000121390024053125/ea0206756-05.htm.
4 Masimo’s 2024 Definitive Proxy Statement, page 21:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000937556/000121390024053125/ea0206756-05.htm.
5 Masimo’s 2024 Definitive Proxy Statement, page 16:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000937556/000121390024053125/ea0206756-05.htm.
6 Masimo’s 2024 Definitive Proxy Statement, page 16-17:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000937556/000121390024053125/ea0206756-05.htm.
7 Masimo’s 2024 Definitive Proxy Statement, page 18:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000937556/000121390024053125/ea0206756-05.htm.
8
https://www.wsj.com/business/masimo-may-look-at-joint-venture-for-consumer-split-ceo-says-1e0f2b4c
9 Transcript of Scheduling Conference, August 2, 2023, at page 5–9,
Politan Capital L.P. vs Masimo Corporation, C.A. No. 2022-0948-NAC
(Del. Ch. Dec. 20, 2022). 10 Transcript of Scheduling Conference,
August 2, 2023, at page 9, Politan Capital L.P. vs Masimo
Corporation, C.A. No. 2022-0948-NAC (Del. Ch. Dec. 20, 2022). 11
Transcript of Scheduling Conference, August 2, 2023, at page 5–6,
Politan Capital L.P. vs Masimo Corporation, C.A. No. 2022-0948-NAC
(Del. Ch. Dec. 20, 2022).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240620388368/en/
Investor Contact: Eli Kammerman (949) 297-7077
ekammerman@masimo.com
Media Contact: Evan Lamb (949) 396-3376
elamb@masimo.com
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