MiMedx Files Definitive Proxy Materials and Mails Letter to Shareholders
Urges Shareholders to Vote "FOR" All the Board's Qualified Nominees on the BLUE Proxy Card
The Company has nominated to the board of directors of the Company (the "Board") three experienced healthcare professionals, none of whom has served on the MiMedx Board previously. Two of these candidates were identified by one of the Company's largest shareholders,
In connection with the filing of the definitive proxy statement, the Chairman of the MiMedx Board of Directors mailed a letter to shareholders informing them of what is at stake at the Annual Meeting. Highlights of the letter include:
- In the Company's view, the return of Mr. Petit to the Board would disrupt the Company and the substantial progress it has made since the allegations regarding certain sales and distribution practices at the Company in early 2018.
- Working with outside counsel and forensic accountants, the Audit Committee of the Board (the "Audit Committee") conducted its independent investigation into those allegations. The unmistakable conclusion from the independent investigation was that Mr. Petit and certain members of his management team engaged in serious wrongdoing.
- This misconduct has harmed
MiMedx and its shareholders—the Company is a defendant in a multitude of lawsuits, faces regulatory inquiries and has had its stock delisted from Nasdaq. The stock price has fallen substantially, and the Company's market value is down more than$1 billion sinceFebruary 2018 . - The Board has made important strides toward helping the Company recover from the fallout from the wrongful conduct of Mr. Petit and his prior management team—aside from conducting the Audit Committee investigation, the Board has hired a new Chief Executive Officer and other new senior management team members and the Company has appointed a new auditor.
- In addition, the Board has established a comprehensive plan to refresh the composition of the Board, developed in cooperation with Prescience Point, which owns more than 6.8% of the outstanding shares of
MiMedx common stock. MiMedx's nominees for the upcoming Annual Meeting are allnew toMiMedx and include the Company's new Chief Executive Officer and two accomplished industry professionals, one of whom is slated to become the new Chairwoman of the Board if she is elected.MiMedx believes that its nominees have the industry experience and governance expertise to objectively oversee the Company's strategy, act in the best interest of shareholders, assist with the resolution of the remaining issues stemming from the prior management team's misconduct and help put the Company back on the path to success.MiMedx believes that, by contrast, Mr. Petit's campaign for election to the Board is motivated by his desire to achieve personal and professional redemption, rather than a desire to serve shareholders, andMiMedx struggles to understand what either of Mr. Petit's nominees could possibly bring to the Board.
The MiMedx Board of Directors unanimously recommends that shareholders vote "FOR" all of the Board's highly qualified nominees on the BLUE proxy card today.
The full text of the letter follows:
Dear Fellow Shareholders:
This meeting is extremely important, and we urge you to carefully read the enclosed information about recent developments at
If Elected, Our Nominees Would Be New to the Board.
Our three nominees are accomplished industry professionals who we believe will help the Company turn the corner and move beyond the former management team's misconduct that damaged
We believe that, if elected, our three nominees will help make a substantial difference in the future of the Company. All three of our nominees are experienced executives and board members with expertise in healthcare. We strongly encourage you to vote your shares in favor of them. Enclosed with this letter is a proxy statement and a BLUE proxy card. Please support the future of
As you may know, the Company's former Chairman and Chief Executive Officer, Parker H. "Pete" Petit, has nominated himself and two of his hand-picked business associates to be elected to the Board. Mr. Petit's separation from
Electing Mr. Petit and his associates to our Board would, we believe, have dire consequences for the Company. Among other things, we believe electing them would damage
The Audit Committee Investigation Determined Mr. Petit Engaged in Serious Wrongdoing.
The Audit Committee has conducted an extensive investigation into allegations regarding certain sales and distribution practices at the Company and certain other matters. To conduct its independent investigation, the Audit Committee held 84 meetings (since
Together,
The clear directive given by the Audit Committee to its independent outside advisors was to find the truth.
The unmistakable conclusion reached by the independent investigation and the Audit Committee was that Mr. Petit and certain members of his former management team engaged in serious wrongdoing, including disregarding revenue recognition rules under generally accepted accounting principles; engaging in revenue "management;" making material misstatements to regulators, the Board, the Audit Committee and the Company's outside auditors; taking actions to investigate or silence whistleblowers; and setting an inappropriate "tone at the top."
Mr. Petit's misconduct has done serious harm to
We Believe Mr. Petit Should Not Be Allowed Back in the Boardroom.
Despite the harm his actions have caused
Mr. Petit resigned as our Chief Executive Officer in
Mr. Petit's conduct is not the kind of conduct we would expect of a person acting in a leadership capacity at
In our view, Mr. Petit's campaign for election is motivated by his desire to achieve personal and professional redemption, rather than a desire to serve shareholders. In fact, we believe it may be hard for Mr. Petit and his nominees to put the interests of shareholders ahead of Mr. Petit's own interests, which are bound to conflict. This is especially noteworthy because Mr. Petit has announced that he intends to seek control of the Board. If he achieves control, we believe he is unlikely to pursue the recovery of compensation paid by the Company to him and his former management team during the time of their prior misconduct or to continue
Perhaps most importantly, the election of Mr. Petit and his nominees would, in our view, send the wrong signal about the Company's commitment to ethical conduct. We have heard this first-hand. During the selection process, potential new independent auditors indicated that Mr. Petit's return to the Board would likely require them to reconsider their willingness to be engaged by the Company. In light of all of the evidence of wrongdoing by the prior management team, electing Mr. Petit to the Board would likely be perceived as a statement by shareholders that they and
The Board is Helping the Company Recover.
The Board has worked diligently to help the Company recover from the fallout from the wrongful conduct of Mr. Petit and his prior management team.
In addition to the Audit Committee conducting its independent investigation, the Board has recruited and hired new members of the senior management team, including our new CEO, Mr. Wright. Mr. Wright is supportive of our strategic plan and in a short period has provided leadership to our employees and worked with the management team to help ensure the Company is well-positioned to achieve the Company's long-range objectives.
The Board has also taken an active role in reforming the Company's culture to ensure that everyone at the Company places
And the Audit Committee recently engaged a new auditor.
That said, there is clearly more to be done at
We Have a Comprehensive Board Refreshment Plan, Developed in Cooperation with One of Our Largest Shareholders.
The Board has developed a comprehensive plan to refresh the composition of the Board in the near term while providing important business oversight and leadership continuity. None of the incumbent directors whose terms expire at the Annual Meeting or the 2019 annual meeting of shareholders will stand for reelection. In their stead, the Board will nominate or appoint six new directors, including our new CEO. We were pleased to work constructively with
The first critical step in our Board refreshment plan will occur at the Annual Meeting with the election of three exceptional candidates, none of whom has previously served on the MiMedx Board.
Both Dr.
Our new CEO,
Together, we believe our three nominees can help our Board improve
Mr. Petit's Two Nominees Are Not Qualified to Serve on the Board.
Mr. Petit is asking shareholders to support the election of himself and two additional individuals. One of his nominees is a former employee in the tax department of a home building company, and the other nominee is a
We believe, as described above, that the election of Mr. Petit or his nominees to the Board would be damaging to the Company's progress. Neither of Mr. Petit's fellow nominees appears to have any knowledge of our products or markets, healthcare experience, executive operating experience or public company board experience. We struggle to understand what either of them could possibly bring to our Board at this critical juncture.
In addition, the election of Mr. Petit and his nominees would mean our new CEO, Mr. Wright, and our two independent nominees would not be elected. Our experienced nominees were carefully selected by our Board in consultation with one of our largest shareholders; we believe rejecting their candidacy in favor of Mr. Petit and his unqualified nominees would be a significant setback for the Company.
Conclusion
The Board of
We encourage you to vote for the Board's nominees using the enclosed BLUE proxy card today. (Please note that voting on Mr. Petit's white card — even if you vote against Mr. Petit — is not the same as voting for our candidates. Please use the BLUE card.)
For more information, please visit www.VoteBlueforMiMedx.com.
Sincerely,
Chairman
Board of Directors
Your Vote Is Important, No Matter How Many Or How Few Shares You Own.
If you have questions about how to vote your shares, or need additional assistance, please contact
the firm assisting us in the solicitation of proxies:
INNISFREE M&A INCORPORATED
Stockholders may call toll-free at 1 (877) 800-5195
Banks and Brokers may call collect at 1 (212) 750-5833
We urge you NOT to sign any white proxy card sent to you by the
If you have already done so, you have every legal right to change your vote by using the enclosed BLUE proxy card to vote TODAY—by telephone, by Internet or by signing, dating and returning the BLUE proxy card in the postage-paid envelope provided.
The Company's letter to shareholders and additional materials regarding the Board's recommendation for the 2018 annual meeting can be found at www.VoteBlueforMiMedx.com.
Important Information
Contacts
Investors:
Corporate & Investor Communications
770.651.9066
investorrelations@mimedx.com
Media:
212.355.4449
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