As previously disclosed, on November 1, 2022, Benefitfocus,
Inc. (the “Company”) entered into an Agreement and Plan of Merger,
as amended and restated by the Amended and Restated Agreement and
Plan of Merger, dated as of December 19, 2022 (the “Merger
Agreement”), by and among the Company, Voya Financial, Inc., a
Delaware corporation (“Parent”) and Origami Squirrel Acquisition
Corp, a Delaware corporation and wholly owned subsidiary of Parent
(“Merger Sub”). Pursuant to the Merger Agreement, Merger Sub will
be merged with and into the Company (the “Merger”), with the
Company continuing as the surviving corporation in the Merger. On
December 19, 2022, in connection with the Merger, the Company
filed with the Securities and Exchange Commission (“SEC”) a
definitive proxy statement (the “Definitive Proxy Statement”) with
respect to the special meeting of the Company’s stockholders
(“Special Meeting”) scheduled to be held on January 20, 2023.
Additional information about how to attend the Special Meeting is
contained in the Definitive Proxy Statement.
Litigation Related to the
As previously disclosed in the Definitive Proxy Statement, one
lawsuit had been filed in connection with the Merger between
November 1, 2022 and December 16, 2022 against the
Company and the directors of the Company (collectively, the
“Defendants”). The complaint, Stein
v. Benefitfocus, Inc. et al., C.A. No. 1:22-cv-10358-PAE, was
filed on December 7, 2022 in the United States District Court
for the Southern District of New York.
Following the filing of the Definitive Proxy Statement with the
SEC, two additional lawsuits were filed in connection with the
Merger against the Defendants. The complaint, Weiss v. Benefitfocus, Inc. et al., C.A.
No. 1:22-cv-10719-PAE, was
filed on December 20, 2022 in the United States District Court
for the Southern District of New York. The complaint, Ballard v. Benefitfocus, Inc. et al.,
C.A. 1:22-cv-01640-UNA, was
filed on December 29, 2022 in the United States District Court
for the District of Delaware (Wilmington).
The complaints filed allege that the Defendants disseminated or
authorized the dissemination of an incomplete or misleading proxy
statement regarding the proposed Merger in violation of Sections
14(a) and 20(a) of the Securities Exchange Act of 1934 (the
“Exchange Act”) and SEC Rule 14a-9 promulgated thereunder,
including in respect of the disclosures concerning the Company’s
financial projections and the analyses performed by the Company’s
financial advisor in support of its fairness opinion. The
complaints further allege that the directors of the Company are
liable for these violations as “controlling persons” of the Company
under Section 20(a) of the Exchange Act.
The complaints seek injunctive relief, including enjoining the
Merger unless and until the Defendants disclose the allegedly
omitted material information and rescinding the Merger in the event
the Company consummates the Merger (or awarding rescissory
damages). The complaints also seek, among other relief, damages and
an award of attorneys’ and experts’ fees. The Company also has
received seven letters on behalf of purported stockholders of the
Company raising similar allegations and demanding the disclosure of
certain additional information.
The Company believes that the claims and allegations in the
complaints and stockholder letters are without merit and that no
further disclosure is required under applicable law. However, in
order to avoid the risk of the claims delaying or adversely
affecting the Merger and to minimize the costs, risks, and
uncertainties inherent in litigation, and without admitting any
liability or wrongdoing, the Company has determined to voluntarily
supplement the Definitive Proxy Statement as described in this
Current Report on Form 8-K.
Nothing in this Current Report on Form 8-K shall be deemed an admission of the
legal necessity or materiality under applicable laws of any of the
disclosures set forth herein. To the contrary, the Company
specifically denies all allegations in the complaints and letters
and any assertion that additional disclosure was or is
Supplemental Disclosures to
Definitive Proxy Statement
This supplemental information to the Definitive Proxy Statement
should be read in conjunction with the Definitive Proxy Statement,
which should be read in its entirety. Nothing herein shall be
deemed an admission of the legal necessity or materiality of any of
the disclosures set forth herein. All page references in the
information below are to pages in the Definitive Proxy Statement,
and all terms used but not defined below shall have the meanings
set forth in the Definitive Proxy Statement. Except as specifically
noted herein, the information set forth in the Definitive Proxy
Statement remains unchanged.
The following underlined language is added to footnote 2 to the
table following the last full paragraph of the Definitive Proxy
Statement entitled “The Merger Proposal—Financial Forecasts and
Financial Projections” that appears on page 68.
“Unlevered Free Cash Flow” means Adjusted EBITDA less stock-based
compensation, less capital expenditures, changes in net working
capital and taxes. Unlevered Free Cash Flow from Q4 2022E
to 2026E assumes no income taxes paid as a result of the
utilization of the Company’s net operating losses. Unlevered
Free Cash Flow was not presented in Alternative Case 2.