As you may know, Glenhill Capital Advisors, LLC and its affiliates (“Glenhill”) own 1,264,820 shares of the outstanding common stock of NMT Medical, Inc. (the “Company”), representing approximately 9.7% of the Company’s outstanding shares. Glenhill has been a stockholder of the Company since July 2006 and has continually monitored the Company’s developments since that time. As the Company’s largest stockholder, Glenhill has a significant interest in the future of the Company and has spent significant time considering the Company’s business.
As the Managing Member of Glenhill, I am writing to express my concern with the plan of the Company’s Board of Directors (the “Board”) to launch a search for a new President and Chief Executive Officer to replace John Ahern. I urge the Board to reconsider this plan, as an executive search, in my view, is not in the best interests of the Company or its stockholders at this time. First of all, hiring a new chief executive is an expensive proposition, as any candidate will, in all likelihood, demand a significant compensation package, including a substantial salary and a large number of stock options. Such a package will strain the Company’s limited resources and dilute the equity of the Company’s existing stockholders. In addition, an executive search is a time-consuming process and will likely divert the attention of management and the Board. Major decisions facing the Company will inevitably be postponed until the executive is hired and familiarizes himself or herself with the Company and its operations.
Furthermore, searching for a new chief executive at this time is especially unnecessary since realistically the Company’s future is dependent upon the decision by the Food and Drug Administration (“FDA”) in December 2010 regarding the Company’s main device. Regardless of the FDA’s ultimate decision, it is likely that the Company will consider at that time various strategic alternatives to continuing its existence as a stand-alone entity. Since it will take a new chief executive a substantial amount of time to familiarize himself or herself with the Company and the issues that it faces, it is unlikely that he or she will be able to make a significant contribution to the Company prior to the FDA decision.
