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Insperity responds to Stadium Capitals open letter and stockholder proposals

The Board’s response noted, among other things, that:

Correcting the Facts

•             Stadium Capital’s letter and press release are full of inaccuracies and mischaracterizations as detailed in the Board’s response, including:

o             Insperity’s reported adjusted EBITDA actually increased 12% from 2011 to 2013 (not a decrease of 6% as reported by Stadium Capital), which is in line with the public competitors cited in Stadium Capital’s letter, and represents a 67% increase since 2009.

o             Executive compensation is directly impacted by our performance, as reflected in the CEO’s 2013 compensation decline of 12% and was most recently supported by the leading proxy advisor firms and 92% of the stockholders.

o             The CEO’s total compensation, including commuting and other perquisites, is reasonable. In fact, the proxy report of ISS issued in 2013 placed him near the bottom quarter of peers.

o             Stadium Capital overstated the total executive compensation for all named executive officers over the past five years by 14%.

o             In the letter, Stadium Capital failed to properly consider Insperity’s multi-year strategic plan.

o             Numerous corporate governance initiatives were implemented over the past two years.

Stadium Capital Rejected a Reasonable Proposal by Insperity

•             Despite being a stockholder since 2004 (and a major stockholder since 2008) and a long history of open dialogue, Stadium Capital first raised these concerns in the past few weeks.

•             During recent discussions, Stadium Capital focused upon the number of seats that it could obtain on the Board and not on the other issues that were raised in its letter.

•             Despite making allegations of governance failures at Insperity, Stadium Capital demanded to circumvent important corporate governance policies and procedures designed to protect the interest of all stockholders.

•             Stadium Capital rejected the Board’s offer to add a Stadium Capital employee and another new independent director, potentially from another large stockholder, to the Board.

Best Path for Creating Value for All Stockholders

•             Insperity has made $69 million of stock repurchases and paid $103 million in dividends over the past five years.

•             Insperity is focused on and committed to executing its multi-year strategic plan.

•             The Board is committed to ensuring that the company is on a path that is in the best interests of all of the stockholders and does not become beholden to the individual interest of any one stockholder.

The Board also expressed its disappointment that, after spending significant time and effort considering Stadium Capital’s requests and speaking nearly daily to its representatives during the past several weeks, Stadium Capital has chosen this route. The Board prides itself on its accessibility and responsiveness to all stockholder concerns, and reaffirmed its commitment to serving the interests of all stockholders and executing on its strategic plan going forward.

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