On January 14, 2014, North Tide Capital Master, LP delivered a letter to the Board of Directors of the Healthways Inc. In the letter, North Tide stated that while it sincerely appreciates the open dialogue that the Board has maintained with North Tide over the last two months, North Tide is shocked by the Board's blatant laissez-faire attitude toward the need for change at the Company and unwavering support for CEO Ben Leedle despite the value destruction that shareholders have suffered during his tenure. In the letter, North Tide emphasized its concerns regarding: (i) the Board's failure to hold Ben Leedle accountable for his continued operational shortcomings or meaningfully respond to the serious concerns that North Tide raised in its December 2, 2013 letter to the Board and in North Tide's ensuing private conversations with Chairman John Ballantine; (ii) the Board's failure to address the underperformance and decline of the Company's core health and wellness operations, which has been masked to a large extent by the success of the Silver Sneakers business; and (iii) the current Board members' seeming unwillingness to act as unbiased stewards in their service to the Company's shareholders and set a new direction for the Company to reverse the years of disappointment to which shareholders have unfortunately grown accustomed. North Tide stated in the letter that it currently intends to pursue all available options to effect necessary leadership change at the Company, including, but not limited to, nominating a slate of directors at the Company's 2014 annual meeting of shareholders, in order to ensure that the best interests of all shareholders are properly represented in the boardroom.