MiMedx Updates Corporate Presentation in Advance of 2018 Annual Meeting
Posted on June 06, 2019 by Medtech[y] Staff
In an effort to do damage control, MiMedx has updated their corporate presentation to address key steps the board has taken to address allegations of misconduct by certain members of the company's former management, including former Chairman and CEO Parker Petit.
The presentation is meant to summarize these steps and the reasons why the company believes shareholders should support the company's three nominees for the Board of Directors (the "Board") at the 2018 annual meeting of shareholders that will take place on June 17, 2019.
Other highlights of the MiMedx investor presentation include:
- MiMedx's director nominees are new, experienced and objective. K. Todd Newton, Dr. M. Kathleen Behrens Wilseyand Timothy R. Wright are accomplished industry professionals and, in MiMedx's view, bring the right skills and experience required to act in the best interests of all shareholders and assist with the resolution of the remaining issues stemming from the misconduct of certain members of the former senior management team. In contrast, the Company believes that Mr. Petit and his nominees would not contribute positively to the Board or the Company's ongoing efforts to recover from Mr. Petit's wrongdoing.
- MiMedx believes Mr. Petit is unfit to serve on its Board and that his nominees are not qualified. Mr. Petit served as the Company's CEO and Chairman of the Board from 2009 until his separation in 2018, which was determined by the Board to be "for cause." The Audit Committee's independent investigation concluded that Mr. Petit and certain members of his former senior management team engaged in wrongdoing and set an inappropriate "tone at the top." In addition, the investigation concluded that Mr. Petit emphasized short-term business goals over compliance and ethics, purposely took action to disregard revenue recognition rules under GAAP and manipulate the timing and recognition of revenue, acted against employees who raised concerns about the Company's practices and made material misstatements and omissions to the SEC, the Board and the Company's outside auditors. MiMedx's Board and new management team have been working hard to recover from the fallout of the wrongful conduct of Mr. Petit and certain members of his former senior management team. If Mr. Petit were to return to the Board, the Company fears much of this progress could be undone. Mr. Petit's two nominees – one a former director of tax for a home builder and the other a West Virginia litigator – do not have industry, public company leadership, operations or Board experience, as far as the Company knows.
- The Board has taken decisive remedial action, including:
- Determining to recoup compensation from the Company's former Chairman and CEO, Mr. Petit, as well as the Company's former COO, CFO and Controller, following the completion of the restatement;
- Creating an Ethics and Compliance Committee at the Board level;
- Hiring a Chief Compliance Officer and implementing plans to ensure compliance and improve internal controls;
- Hiring a new CEO; and
- Selecting and engaging a new independent auditor.
- MiMedx's Board is implementing a Board refreshment plan. In cooperation with Prescience Point Capital Management LLC and its affiliates ("Prescience Point"), one of the Company's largest shareholders, the Board has developed a comprehensive plan to refresh its composition. Under the plan, following the 2019 annual meeting, MiMedx Board's ten-person Board would include six new directors. Notably, none of the incumbent directors whose terms expire at the 2018 annual meeting or the 2019 annual meeting of shareholders will stand for reelection. One of the Company's nominees, Dr. M. Kathleen Behrens Wilsey will become Chairwoman of the MiMedx Board upon her election to the Board by shareholders. One of the Board's other nominees, Mr. Newton, is expected to become the new Chairman of the Audit Committee following the 2019 annual meeting.
The MiMedx Board recommends that shareholders vote in favor of the Company's three nominees, all of whom are experienced industry executives and new to MiMedx. Because the meeting is scheduled for less than two weeks from now, the Board encourages shareholders to vote online or by phone for all of the Company's nominees as soon as they receive the Company's BLUE proxy card.
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