Bass, Berry & Sims PLC Announces Proposed Settlement of the Healthways Shareholders Litigation

NASHVILLE, Tenn., March 13, 2015 /PRNewswire/ -- The following statement is being issued by Bass, Berry & Sims PLC regarding the Healthways Shareholder Litigation.

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

PONTIAC GENERAL EMPLOYEES RETIREMENT SYSTEM, On Behalf of Itself and All Others Similarly Situated and On Behalf of Nominal Defendant HEALTHWAYS, INC., Plaintiff,

v.

JOHN W. BALLANTINE, J. CRIS BISGARD, MARY JANE ENGLAND, BEN R. LEEDLE JR., C. WARREN NEEL, WILLIAM D. NOVELLI, ALISON TAUNTON-RIGBY, DONATO TRAMUTO, JOHN A. WICKENS, KEVIN WILLS, and SUNTRUST BANK, Defendants, and HEALTHWAYS, INC., Nominal Defendant.

C.A. No. 9789-VCL

SUMMARY NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION

TO: All persons and entities who held Healthways Inc. ("Healthways" or the "Company") common stock at any time during the period from June 8, 2012 through and including the close of trading on February 10, 2015 (the "Class Period") and that continued to hold Healthways common stock as of the end of the Class Period, but excluding (a) the Individual Defendants and their respective immediate family members; (b) the Company, SunTrust and each of the other Lenders, as well as each of their respective subsidiary companies, officers, directors and affiliates; and (c) the legal representatives, agents, affiliates, heirs, successors-in-interest or assigns of any of the foregoing excluded parties (the "Class").¹ Members of the Class are referred to herein as "Class Members."

PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. YOUR RIGHTS WILL BE AFFECTED BY A CLASS ACTION LAWSUIT PENDING IN THIS COURT.

YOU ARE HEREBY NOTIFIED that, pursuant to Delaware Court of Chancery Rules 23(a), 23(b)(1) and 23(b)(2), the Court of Chancery of the State of Delaware (the "Court") has preliminarily certified the above-captioned litigation (the "Action") as a non-"opt-out" class action on behalf of the Class.

YOU ARE ALSO NOTIFIED that plaintiff Pontiac General Employees Retirement System ("Plaintiff") has reached a proposed settlement of the Action (the "Settlement"), that, if approved, will resolve all claims in the Action.

A hearing will be held on May 8, 2015, at 11:00 AM, before Vice Chancellor J. Travis Laster at the Court of Chancery of the State of Delaware, New Castle County Courthouse, 500 North King Street, Wilmington, DE 19801 (the "Settlement Hearing").  At the Settlement Hearing, the Court will, among other things:  (a) determine whether the certification of the Class should be made final; (b) determine whether the proposed Settlement on the terms and conditions provided for in the Stipulation is fair, reasonable and adequate to the Class, and should be approved by the Court; (c) determine whether the Judgment should be entered dismissing the Action with prejudice against Defendants pursuant to the Stipulation; (d) determine whether the application by Plaintiff's Counsel for an award of attorneys' fees and litigation expenses should be approved; (e) hear and consider any objections to the Settlement, final certification of the Class or Plaintiff's Counsel's application for an award of attorneys' fees and litigation expenses; and (f) consider any other matters that may properly be brought before the Court in connection with the Settlement.

If you are a Class Member, your rights will be affected by the pending Action and the Settlement.  If you have not yet received full printed Notice of Pendency and Proposed Settlement of Class Action (the "Notice"), you may obtain a copy of the Notice by contacting the Notice Administrator at Healthways Shareholder Litigation, c/o GCG, PO Box 10166, Dublin, OH 43017-3166. Copies of the Notice can also be downloaded from the website www.gardencitygroup.com or by calling the Notice Administrator toll-free at 1-800-231-1815.

As consideration for the Settlement, Defendants have agreed to eliminate the Proxy Put provision in the Company's 2012 Loan Agreement.  Plaintiff alleged that the Proxy Put provision in the 2012 Loan Agreement had the potential to deter stockholders from nominating directors and/or supporting the director nominees of other stockholders because, under certain circumstances, the nomination of directors through an actual or threatened proxy contest could give rise to an "event of default."  As a result of the Action and Settlement, the parties have agreed to eliminate the Proxy Put provision, and Healthways stockholders can nominate or support director nominees without concern for the possibility of triggering an event of default under the 2012 Loan Agreement.  Additionally, the Healthways Board has agreed to issue a resolution instructing the Company's senior management and its General Counsel that any material corporate contract containing a change of control provision like the Proxy Put provision must be brought to the attention of and explained to the Board, including its impact on the shareholder franchise, prior to its execution. 

Any objections to the proposed Settlement or Plaintiff's Counsel's application for an award of attorneys' fees and litigation expenses must be filed with the Court and delivered to representative counsel for Plaintiff and Defendants such that they are received no later than April 28, 2015, in accordance with the instructions set forth in the Notice.

Please note that there is no proof of claim form for Class Members to submit in connection with the Settlement.  Also, because the Class was preliminarily certified as a non-"opt-out" class, Class Members do not have the right to exclude themselves from the Class. 

Please do not call or write to the Court or the Register in Chancery regarding this notice.  All questions, other than requests for the Notice, should be made to Plaintiff's Counsel:

BERNSTEIN LITOWITZ BERGER & GROSSMANN LLP
Mark Lebovitch, Esq.
1285 Avenue of the Americas
New York, NY 10019
1-800-380-8496

FRIEDLANDER & GORRIS, P.A.
Joel Friedlander, Esq.
222 Delaware Avenue, Suite 1400
Wilmington, DE 19801
1-302-573-3500

Requests for the Notice should be made to the Notice Administrator:

Healthways Shareholder Litigation
c/o GCG
PO Box 10166
Dublin, OH 43017-3166
1-800-231-1815
www.gardencitygroup.com

By Order of the Court of Chancery of the State of Delaware
February 20, 2015

¹All capitalized terms used in this Notice that are not otherwise defined herein shall have the meanings provided in the Stipulation and Agreement of Compromise, Settlement and Release dated February 10, 2015 (the "Stipulation").  A copy of the Stipulation is available for review at www.gardencitygroup.com.

SOURCE Bass, Berry & Sims PLC