Shares Details From Recently Unredacted Legal Filings About Quentin Koffey’s Multi-Year Plan to Take Control of Masimo

Masimo Corporation (“Masimo” or the “Company”) (NASDAQ: MASI), a global leader in noninvasive monitoring technologies and audio products, today mailed a letter to stockholders in connection with its upcoming Annual Meeting of Stockholders (the “Annual Meeting”) to be held on September 19, 2024, highlighting critical details about Politan and Quentin Koffey’s plan to take control of Masimo and failure to act in the best interests of all Masimo stockholders.

Masimo is urging stockholders to vote “FOR” the Company’s director nominees, Joe Kiani and Christopher Chavez, on the updated GOLD proxy card to protect the Company and the value of their investment. Stockholders of record as of the close of business on August 12, 2024 are entitled to vote at the Annual Meeting.

The full text of the letter follows:

Dear Fellow Masimo Stockholders,

You must be as tired as we are with the back and forth between Masimo and Politan. But the stakes for control and leadership of the company are higher and more critical than ever, since our founding 35 years ago. There is new information we believe is important for you to consider as you vote to determine the future of Masimo.

As the legal proceedings between the parties unfold, we now have clear examples we can share publicly that support what we have been saying – Politan’s Quentin Koffey, from February 2022, has been executing a multi-year plan to take control of Masimo and, in the process, has repeatedly acted against the best interests of Masimo’s stockholders and violated his disclosure obligations, contrary to his duties as a member of the Masimo Board.

While we encourage you to read all of the public filings, we recognize there is a lot of information in the legal filings and affidavits, so we will highlight some of the key facts that we have presented to the court in support of our request that Politan be required to correct its numerous misstatements and omissions. As you review the select examples below, we would like you to ask yourself:

IS QUENTIN KOFFEY THE PERSON YOU WANT IN CONTROL OF MASIMO AND THE FUTURE OF YOUR INVESTMENT?

• Beginning in 2022, Politan raised nearly $440 million, specifically targeting Masimo and the acquisition of its stock. Despite Securities and Exchange Commission (SEC) rules requiring disclosure of investors that provide funds to be used for specific stock purchases, Politan has gone to extreme lengths to hide the identity of its investors. It took Masimo initiating litigation against Politan to unearth a Politan investor deck marketing a “Single Investment” in Masimo. This presentation outlined Politan’s plan for a “Clear Path to Board Seats” at Masimo, and was distributed at the same time Politan was raising nearly $440 million of new capital. Then from May to August 2022, Politan acquired nearly 9% of Masimo through swaps and derivatives it did not have to disclose publicly and continued to buy positions in Masimo stock through at least November 2022. During that same period, Politan did not purchase stock or derivatives in any other company. Politan’s failure to disclose its investors in its 13D, when Politan clearly raised capital from them with the specific intent of purchasing Masimo stock, is but the first instance of what appears to be Quentin Koffey and Politan’s willingness to falsely represent their intentions to the market and to skirt SEC regulations to avoid disclosing Politan’s true intentions to both the Company and its stockholders.

Subsequently, the SEC became aware that one of Politan’s own investors issued an article confirming what we have now learned through litigation: Politan raised funds on a deal-by-deal basis, specifically targeting Masimo. Given what we know now, Politan’s response to the SEC’s inquiry seems to have omitted this key information.

SEC Comment Issued on June 7, 2023:

“Your Schedule 13D states that the funds to acquire the Common Stock were “derived from the capital of the Politan Funds.” If any part of the purchase price was represented by funds or other consideration borrowed or otherwise obtained for the purpose of acquiring, holding, trading or voting the Common Stock, revise the Schedule 13D to provide a description of the transaction(s) and the names of the parties thereto. Refer to Item 3 of Schedule 13D. In this regard, we refer to the article entitled “Partnering With the Next Wave of Activists” (May 17, 2022) available on the LinkedIn page of EnTrust Global Partners LLC. The article refers to the fact that Politan has raised capital on a deal-by-deal basis and refers to the relationship between EnTrust and Politan as one of “investment partners with whom we have recently launched activist campaigns.”

Politan’s Response on July 13, 2023:

“Politan Capital confirms that the funds used to acquire the Common Stock were derived solely from the capital of the Politan Funds. Politan Capital acts as the investment advisor to the Politan Funds and controls the investment activities of the Politan Funds. The Politan Funds’ limited partners include investors such as family offices, funds of funds, pension funds, endowments and sovereign entities. Like other hedge funds, the capital of the Politan Funds is obtained by the Politan Funds from their limited partners. As set forth more fully below in response to comments two and four, the limited partners in the Politan Funds are completely passive investors with no decision-making authority regarding assets owned by the Politan Funds. Politan Capital maintains sole voting and dispositive power over the investments of the Politan Funds, and the Reporting Persons do not coordinate their investment strategy or activities with the limited partners of the Politan Funds.”

So, the question is why? Who are the investors backing Politan’s plan to take control of Masimo that Quentin Koffey believes no one should know about? Could it be a large, well-funded entity whose interests run contrary to those of Masimo stockholders? An entity that hopes to gain access to Masimo’s leading patient monitoring advanced algorithms and sensor technologies IP? The prospect of an anonymous entity using Politan as a tool to take control of Masimo is deeply concerning. Masimo stockholders should demand disclosure of this information so they know exactly who would control their investment if Politan’s proxy contest succeeds.

• Shortly after winning two seats on the Masimo Board, Politan and Quentin Koffey hired a firm to identify former Masimo employees who would be willing to speak secretly with Politan to provide damaging information about the Company. As a sitting Masimo Director with duties to all Masimo stockholders, Quentin Koffey and Politan secretly engaged AlphaSights to find former Masimo employees willing to speak with Politan in exchange for payment. When AlphaSights questioned the ethics of certain Politan requests, including being pressured by Politan to disregard a standard rule that forbids recruiting employees who have left the Company within the past six months and who may be in possession of material nonpublic information, Quentin Koffey then hired a different agency, Mosaic Research Management, to get the job done. Politan assured Mosaic, “We are on the [B]oard of the company, so we have no rules pertaining to when employees left the company.” Quentin Koffey was in fact on the Board – with duties to all Masimo stockholders – and should never have secretly targeted former Masimo employees seeking information detrimental to the Company and, at an absolute minimum, should have reported to the Board what Politan was doing and what he had discovered.

Acting on behalf of Politan’s interests, AlphaSights and Mosaic identified two former employees with the requested background and connected them with Politan. These two former employees match the description of confidential witnesses in a plaintiff’s securities class action lawsuit against the Company.

• We have sworn affidavits stating how Quentin Koffey intimidated non-Politan directors: In an effort to resolve the proxy contest, non-Politan directors Bob Chapek and Craig Reynolds proposed multiple settlements to Politan that involved a combination of appointing one of Quentin Koffey’s nominees and working together as a Board to find an additional, mutually agreeable director for the Board. Quentin Koffey accepted none of these offers, stating that they would only “deadlock” the Board and making it clear that he would not settle for anything less than full control. After Bob Chapek’s involvement in a settlement offer to Politan, Quentin Koffey threatened that he would make Bob Chapek, the former CEO and board member of Disney, a “media target” and told him to “think carefully about how strongly” he defends the Company. Quentin Koffey added that continued efforts to resolve the dispute would “arm him with more ammunition to hurt [Bob Chapek’s] professional reputation.”¹ Quentin Koffey also threatened former director Rolf Classon, whom Quentin Koffey told to fall into line with the Special Committee, or he would run a proxy contest, which Rolf Classon would lose, and ruin his reputation.

• Quentin Koffey has consistently refused to uphold his fiduciary duties: Since joining the Board, Quentin Koffey and Michelle Brennan, another Politan-nominated Director, have refused to approve and sign required filings with the SEC – without basis. While Quentin Koffey had no outstanding questions regarding the Company’s Form 10-K for 2024, he refused to sign the filing as “his lawyers had told him it would not look good if he had criticized the lack of information he received and then signed the Form 10-K”.² Michelle Brennan had only requested that the Company make certain changes to its risk factors, but after meeting with the Company to address those concerns, she still refused to sign.³ These failures to carry out the basic duties of public company directors, inexplicable at the time, are fully explainable in light of Politan’s long-standing plan to commence a second proxy contest for control of the company.

• Despite Masimo’s commitment to separate our consumer business, Quentin Koffey has sabotaged the process, standing in the way of value creation for stockholders. It’s clear Quentin Koffey sees the Board’s attempt to separate Masimo’s consumer business as a threat to his ongoing proxy campaign. Accordingly, he exploited his position as Chair of the Special Committee evaluating a separation and weaponized it to publicly assail the Company.
  • In January and February 2024, Quentin Koffey and Joe Kiani negotiated and mutually agreed upon a term sheet for a potential separation of Masimo’s consumer business – only for Quentin Koffey to propose a revised term sheet in March 2024. This represented an entirely new transaction structure that Joe Kiani and independent non-Politan directors determined would lead to an unviable standalone consumer company.
  • After receiving the March 2024 term sheet, in an attempt to advance the spin-off effort, Joe Kiani gave up two key terms that had been previously offered to him by Quentin Koffey: 1) the control of the spun-off company, and 2) change of control as he would not leave Masimo as its Chairman and CEO. Despite these concessions, Quentin Koffey refused to engage further on the consumer separation terms.
  • As a Special Committee member, Quentin Koffey used the Special Committee’s outside counsel as his personal counsel to further his agenda, seeking personal advice about his duties as a director and insights about Joe Kiani’s employment contract that he then leveraged to make decisions to advance Politan’s position. Quentin Koffey also misrepresented his own views as those of the broader Special Committee when speaking with the Special Committee’s legal and financial advisors. He did all of this without the knowledge of any other Board member, and without sharing any information provided to outside counsel with the rest of the Special Committee – including initial term sheets.
  • When Craig Reynolds and Bob Chapek delivered a further updated proposal in an effort to be constructive and uphold stockholder value, Quentin Koffey never responded to that proposal, indicating he no longer wanted to engage with the process.
  • Most recently, Quentin Koffey demanded that the Board refuse to take any definitive action on a potential joint venture for the consumer business until after the Annual Meeting – presumably to prevent Masimo from delivering a favorable deal for stockholders that might harm Politan’s nominees’ chances of election. In spite of these reckless actions, on August 16, 2024, we publicly reaffirmed our commitment to evaluate the optimal value-maximizing structure of the separation of Masimo’s consumer business.

• It’s clear to us that Politan was planning to take control of Masimo from day one, despite Politan denying this during last year’s proxy contest. The routine, disruptive actions of Politan’s two current Board members make sense if you consider the fund’s goal was never to participate in a constructive, value-generating engagement, but rather to justify a second proxy fight so it could take control of the Company. If Politan was not planning a second proxy contest for control, Quentin Koffey would have found his onboarding sufficient, just as the non-Politan directors did – including the former CEO and board member of Disney. If Politan was not planning a second proxy contest, Quentin Koffey, a sitting Masimo Director, and Politan would not have secretly hired an investigation firm in an attempt to find damaging information about the Company. If Politan was not planning a second proxy contest for control, Quentin Koffey would have upheld his fiduciary duties by signing the Company’s Form 10-K. If Politan was not planning a second proxy contest for control, Quentin Koffey would not have threatened the reputation of other Masimo Board members. If Politan was not planning a second proxy contest for control, Quentin Koffey would not have sabotaged the process for separating the consumer business, which would have delivered significant value to Masimo stockholders.

Before joining Masimo’s Board in June 2023, Quentin Koffey wrote in a letter to Masimo’s stockholders claiming that he and Michelle Brennan would be “fully committed from day one to working constructively alongside the other directors to further the best interests of the Company.” The facts set forth above make clear to us that from day one of his joining the Board, and indeed from long before, Quentin Koffey has not acted in the best interest of Masimo stockholders and instead acted single-mindedly to gain control of Masimo, undeterred by obligations to provide full and accurate disclosure to Masimo’s stockholders and in dereliction of his fiduciary duties to the Company. All the while setting up Masimo, in order to win his proxy. And, the ultimate question is for whom? Who are the investors behind Politan’s position in Masimo, and why do they want to risk the loss of Masimo’s visionary and innovative founder and the other key members of the Masimo team?

So we ask again: IS QUENTIN KOFFEY THE PERSON YOU WANT IN CONTROL OF MASIMO AND THE FUTURE OF YOUR INVESTMENT?

***

Quentin Koffey does not possess the ethics or character to serve on any board, let alone Masimo’s, a company that is not only helping improve patient care and reduce cost of care, but is doing so through incredible innovation and candor with customers and regulators. We strongly believe that Quentin Koffey, if he were to win two more seats and take control of the Company’s Board, will destroy Masimo’s innovation engine, credibility, growth and stock price.

Quentin Koffey’s career as an activist is rife with failure. Many of the companies he has invested in – including Masimo and healthcare firms, Centene and Azenta – have not performed as well as their peers since his involvement.

Now that the curtain has been drawn back on Politan’s intentions and character, we want to reiterate Masimo’s key commitments to our stockholders. We have said it all before, but it bears repeating:

• With in-hospital patient census returning to normal levels and continued increase in market share gains thanks to our innovation and business practices, we have strong momentum and are committed to building on it, as demonstrated by our increased revenue guidance for full-year 2024.
• No other company has ever succeeded in enjoining Apple from patent infringement. Masimo did so in January, just as we previously did with Nellcor and Medtronic.
• We are committed to finding the optimal value-maximizing structure to separate our consumer business, delivering strong value and protecting our IP.
• We will continue to improve our governance. Last year we began the process of declassifying our Board, which will be fully declassified by our 2026 Annual Meeting. We have committed to expanding our Board to 9 to 11 Board members with highly-qualified, additive independent directors. Joe Kiani will not recommend any potential candidates to the Nominating, Compliance and Corporate Governance Committee as part of this process.

We mean what we say and if we fall short of our commitments, we expect you to hold us accountable. Giving Quentin Koffey control of Masimo’s future puts the value of your investment at real risk, not only because of his track record of misleading statements and hidden intentions, but because with his take over, we will lose Joe Kiani, as well as other top executives and potentially hundreds of key employees.

We urge you to vote “FOR” Masimo’s director nominees, Joe Kiani and Christopher Chavez, on the updated GOLD proxy card to protect Masimo’s future and your investment. We are incredibly grateful for your ongoing support, and we will make ourselves available to anyone who would like to discuss this further.

Sincerely,

Craig Reynolds

Bob Chapek

Joe Kiani

For more information on how to protect the value of your investment at Masimo, visit www.ProtectMasimosFuture.com.

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/.

References

1. 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.

2. 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.

3. 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.

4. 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.

5. Taenzer A et al. Postoperative Monitoring – The Dartmouth Experience. Anesthesia Patient Safety Foundation Newsletter. Spring-Summer 2012.

6. 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.

7. 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.

8. Estimate: Masimo data on file.

9. 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; Masimo’s revenue guidance for full-year 2024 and potential growth; changes to Masimo’s governance, including the composition of Masimo’s Board of Directors and Masimo’s plans to expand the Board with additional independent directors; the proposed separation of Masimo’s consumer business, including any potential joint venture or any other potential separation of Masimo’s consumer business, and the expectation that the proposed separation will maximize stockholder value or be the best path for success. 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 future actions that may be taken by Politan in furtherance of its nomination of director candidates for election at the 2024 Annual Meeting, (ii) the potential cost and management distraction attendant to Politan’s nomination of director nominees at the 2024 Annual Meeting and (iii) 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

On August 15, 2024, the Company filed a revised version of its 2024 proxy statement (the “Revised Proxy Statement”) and has mailed the Revised Proxy Statement to its stockholders of record as of the new August 12, 2024 record date for the 2024 Annual Meeting. Any votes submitted by Masimo stockholders in connection with the 2024 Annual Meeting on the prior to the filing of the Revised Proxy Statement will not be counted and previous proxies submitted will be disregarded, and therefore, all stockholders will need to resubmit their votes, even if they have previously voted. The Company filed a revised version of the Revised Proxy Statement with the SEC on August 22, 2024, which amended, superseded and replaced in its entirety the Revised Proxy Statement (the “Amended Revised Proxy Statement”). THE COMPANY’S STOCKHOLDERS ARE STRONGLY ENCOURAGED TO READ THE AMENDED REVISED PROXY STATEMENT (AND ANY AMENDMENTS AND SUPPLEMENTS THERETO) AND ACCOMPANYING UPDATED GOLD PROXY CARD AS THEY CONTAIN IMPORTANT INFORMATION. Stockholders may obtain the Amended Revised Proxy Statement and any amendments or supplements thereto 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 Amended Revised Proxy Statement, which can be found through the SEC’s website at is https://www.sec.gov/ix?doc=/Archives/edgar/data/937556/000121390024071554/ea0206756-07.htm, and any changes thereto may be found in any amendments or supplements to the Amended Revised 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.

Disclaimer

The Company has neither sought nor obtained the consent from any third party to use any statements or information contained in this press release that have been obtained or derived from statements made or published by such third parties. Any such statements or information should not be viewed as indicating the support of such third parties for the views expressed herein.

¹ Declaration of Bob Chapek ¶ 12, Masimo Corp. v Politan Cap. Mgmt. LP, et. al., C.D. Cal., No. 8:24-cv-1568

¶115-01568-JVS-JDE.

² Declaration of Bob Chapek ¶ 11, Masimo Corp. v Politan Cap. Mgmt. LP, et. al., C.D. Cal., No. 8:24-cv-1568

¶88-01568-JVS-JDE.

³ Declaration of Adam Mikkelson ¶ 3, Masimo Corp. v Politan Cap. Mgmt. LP, et. al., C.D. Cal., No. 8:24-cv-1568

¶86-87-01568-JVS-JDE.

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