Insperity, Inc. (NYSE:NSP), a leading provider of human
resources and business performance solutions for America’s best
businesses, today announced that its Board of Directors has reached
an agreement with Starboard Value LP (together with its affiliates,
“Starboard”), its largest shareholder, in advance of the Company’s
2015 annual meeting of shareholders.
Under the terms of the agreement, Starboard has agreed to vote
all of its shares at the upcoming annual meeting in favor of the
Company’s incumbent Class II directors, who are Paul Sarvadi,
Chairman and Chief Executive Officer, Carol Kaufmann, Lead
Independent Director, and Austin Young, Chairman of the Finance and
Risk Management Committee. The agreement also calls for the
immediate appointment of two new directors to the Board of
Directors (Norman Sorensen and Peter Feld, who will be the only
nominee affiliated with Starboard) and the later appointment of a
third director nominated by Starboard. Two existing directors, Paul
Lattanzio and Jack Fields, who had decided not to seek re-election
when their terms expire in 2016, have announced their decisions to
depart from the Board immediately following the 2015 annual
meeting. In addition, Starboard has agreed to customary standstill
restrictions.
Pursuant to the agreement, the Board has created a new
independent advisory committee to review the Company’s business and
make recommendations to the Board regarding capital allocation,
expenses and targeted ranges for Adjusted EBITDA Margins, as
defined in the agreement, while taking into consideration the
Company’s risk profile and the potential impact of any
recommendations on the Company’s business model and strategic plan.
The new committee consists of two current independent directors and
two Starboard nominees, including Mr. Feld, who chairs the
committee. The committee will evaluate Insperity’s cost structure
and Insperity, Inc. recommend targeted ranges for Adjusted EBITDA
Margins for fiscal years 2015 and 2016, which the Board will have
the right to review and approve. Subject to the approval of such
recommendations by the Board, the Company will issue a press
release or public announcement discussing such approved
recommendations no later than the second quarter fiscal year 2015
earnings announcement.
“This agreement represents the best possible outcome for all of
our shareholders. We look forward to working with the new directors
toward our common goal of enhancing long-term shareholder value and
continuing our strong business momentum,” said Mr. Sarvadi. “I want
to express my sincere gratitude to Mr. Lattanzio and Mr. Fields for
their many years of commitment and distinguished service on the
Board, which helped oversee our recently completed business
transformation.”
Peter Feld, on behalf of Starboard, stated: “As the Company’s
largest shareholder, we recognize the value of Insperity’s platform
and are pleased to join the Board. We believe the addition of new
independent directors will bring a fresh perspective to the
boardroom and we look forward to working constructively with the
incumbent Board members to enhance shareholder value.”
The new directors qualify as “independent” directors under the
New York Stock Exchange’s governance rules. Mr. Sorensen has been
appointed as a Class II director and the Board unanimously
recommends that shareholders elect him at the upcoming annual
meeting. Mr. Feld has been and the future nominee of Starboard will
be appointed as Class I directors and will be subject to the
election by shareholders at the annual meeting in 2017. One or more
new directors will be named to serve on each of the Board’s
existing committees.
Additionally, the Company has been in the process of exploring
alternatives regarding the Company’s two aircraft, including the
possible sale of the aircraft. However, pursuant to the agreement
with Starboard, the Company is announcing its intent to commence
activities to market the aircraft for sale. The Company is in the
process of initiating an appraisal of the aircraft to determine the
current market values. In the event that the current market
values are less than the Company’s book value of the aircraft, then
the Company would incur an impairment loss equal to the
difference.
The agreement will be filed by the Company with the U.S.
Securities and Exchange Commission as an exhibit to a Current
Report on Form 8-K.
Peter Feld is a Managing Member and Head of Research of
Starboard Value LP, a New York-based investment adviser with a
focused and fundamental approach to investing in publicly traded
U.S. companies (“Starboard Value LP”), a position he has held since
April 2011. From November 2008 to April 2011, Mr. Feld served as a
Managing Director of Ramius LLC and a Portfolio Manager of Ramius
Value and Opportunity Master Fund Ltd. From February 2007 to
November 2008, Mr. Feld served as a Director at Ramius LLC. Since
October 2014, Mr. Feld has served as a member of the board of
directors of Darden Restaurants, Inc. (“Darden”), a full service
restaurant company. Mr. Feld has also served as a member of the
board of directors of Tessera Technologies, Inc., which develops,
invests in, licenses and delivers innovative miniaturization
technologies and products for next-generation electronic devices,
since June 2013. Mr. Feld previously served on the board of
directors of Integrated Device Technology, Inc., a company which
designs, develops, manufactures and markets a range of
semiconductor solutions for the advanced communications, computing
and consumer industries, from June 2012 until February 2014. Mr.
Feld received a BA in economics from Tufts University.
Norman Sorensen formerly served as Chairman of the International
Insurance Society, Inc., a professional organization for the
insurance industry, from January 2010 until June 2013. Mr. Sorensen
has served as a director of the International Insurance Society,
Inc. since January 2005. Previously, from November 2011 until
December 2012, he was Chairman of the International Advisory
Council of Principal Financial Group, Inc., a global financial
investment management company. He was Chairman of Principal
International, Inc., serving from June 2011 to October 2012, and
President and CEO of International Asset Management and
Accumulation of Principal International, Inc., serving from January
2001 to June 2011. Mr. Sorensen has served as a director of Encore
Capital Group, Inc., a consumer banking company, since November
2011. Mr. Sorensen also served as a director of Sara Lee
Corporation, an American consumer-goods company, from January 2007
to November 2011. He has served as Executive Vice President of both
Principal Financial Group Inc. and Principal Life Insurance
Company, a life insurance company, since January 2007, as well as
having held a number of other senior management positions since
1998. Mr. Sorensen also served as Chairman of the U.S. Coalition of
Service Industries, a leading forum for the services sector, from
January 2003 to March 2005. Mr. Sorensen served as a senior
executive of American International Group, Inc., an insurance
services company, from September 1989 to December 1998. He also
formerly served as Chairman and director of DE Master Blenders,
from December 2011 until September 2013.
About Insperity
Insperity, a trusted advisor to America’s best businesses for
more than 28 years, provides an array of human resources and
business solutions designed to help improve business performance.
Insperity® Business Performance Advisors offer the most
comprehensive suite of products and services available in the
marketplace. Insperity delivers administrative relief, better
benefits, reduced liabilities and a systematic way to improve
productivity through its premier Workforce Optimization® solution.
Additional company offerings include Human Capital Management,
Payroll Services, Time and Attendance, Performance Management,
Organizational Planning, Recruiting Services, Employment Screening,
Financial Services, Expense Management, Retirement Services and
Insurance Services. Insperity business performance solutions
support more than 100,000 businesses with over 2 million employees.
With 2014 revenues of $2.4 billion, Insperity operates in 57
offices throughout the United States. For more information,
visit http://www.insperity.com.
About Starboard Value LP
Starboard Value LP is a New York-based investment adviser with a
focused and fundamental approach to investing in publicly traded
U.S. companies. Starboard invests in deeply undervalued companies
and actively engages with management teams and boards of directors
to identify and execute on opportunities to unlock value for the
benefit of all shareholders.
The statements contained herein that are not historical facts
are forward-looking statements within the meaning of the federal
securities laws (Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934). You can
identify such forward-looking statements by the words “expects,”
“intends,” “plans,” “projects,” “believes,” “estimates,” “likely,”
“possibly,” “probably,” “goal,” “opportunity,” “objective,”
“target,” “assume,” “outlook,” “guidance,” “predicts,” “appears,”
“indicator” and similar expressions. Forward-looking
statements involve a number of risks and uncertainties. In the
normal course of business, Insperity, Inc., in an effort to help
keep our stockholders and the public informed about our operations,
may from time to time issue such forward-looking statements, either
orally or in writing. Generally, these statements relate to
business plans or strategies, projected or anticipated benefits or
other consequences of such plans or strategies, or projections
involving anticipated revenues, earnings, unit growth, profit per
worksite employee, pricing, operating expenses or other aspects of
operating results. We base the forward-looking statements on
our expectations, estimates and projections at the time such
statements are made. These statements are not guarantees of
future performance and involve risks and uncertainties that we
cannot predict. In addition, we have based many of these
forward-looking statements on assumptions about future events that
may prove to be inaccurate. Therefore, the actual results of
the future events described in such forward-looking statements
could differ materially from those stated in such forward-looking
statements. Among the factors that could cause actual results
to differ materially are: (i) adverse economic conditions; (ii)
regulatory and tax developments and possible adverse application of
various federal, state and local regulations; (iii) the ability to
secure competitive replacement contracts for health insurance and
workers’ compensation contracts at expiration of current contracts;
(iv) increases in health insurance costs and workers’ compensation
rates and underlying claims trends, health care reform, financial
solvency of workers’ compensation carriers, other insurers or
financial institutions, state unemployment tax rates, liabilities
for employee and client actions or payroll-related claims; (v)
failure to manage growth of our operations and the effectiveness of
our sales and marketing efforts; (vi) the competitive environment
in the PEO industry may impact growth and/or profitability; (vii)
our liability for worksite employee payroll, payroll taxes and
benefits costs; (viii) our liability for disclosure of sensitive or
private information; (ix) our ability to integrate or realize
expected returns on our acquisitions; (x) failure of our
information technology systems; (xi) an adverse final judgment or
settlement of claims against Insperity; and (xii) the actions of
certain stockholders that could disrupt our business. These
factors are discussed in further detail in Insperity’s filings with
the U.S. Securities and Exchange Commission. Any of these
factors, or a combination of such factors, could materially affect
the results of our operations and whether forward-looking
statements we make ultimately prove to be accurate.
Except to the extent otherwise required by federal securities
law, we do not undertake any obligation to update our
forward-looking statements to reflect events or circumstances after
the date they are made or to reflect the occurrence of
unanticipated events.
Important Additional Information
Insperity, its directors and certain of its executive officers
and employees may be deemed to be participants in the solicitation
of proxies from Insperity stockholders in connection with the
matters to be considered at Insperity’s 2015 annual meeting.
Insperity plans to file a proxy statement and proxy card with the
U.S. Securities and Exchange Commission in connection with the 2015
annual meeting. INSPERITY STOCKHOLDERS ARE STRONGLY ENCOURAGED TO
READ THE 2015 PROXY STATEMENT AND ACCOMPANYING PROXY CARD
(INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Information regarding the identity of potential participants, and
their direct or indirect interests, by security holdings or
otherwise, will be set forth in the proxy statement and other
materials to be filed with the SEC in connection with the 2015
annual meeting. Stockholders will be able to obtain the proxy
statement, any amendments or supplements to the proxy statement and
other documents filed by Insperity with the SEC for no charge at
the SEC’s website at http://www.sec.gov/. Copies will also be
available at no charge at the Investor Relations section of our
corporate website at http://www.insperity.com.
Insperity, Inc.Investor Relations Contact:Douglas S.
Sharp, 281-348-3232Senior Vice President of Finance,Chief Financial
Officer and TreasurerorNews Media Contact:Jason Cutbirth,
281-312-3085Senior Vice President of
Marketingjason.cutbirth@insperity.com
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