THE NOVAMETRIX 13D SHAREHOLDERS GROUP
August 30, 1996
Dear Shareholder:
The 13D Group of shareholders has completely lost confidence in
Management's integrity and trustworthiness. From the signed proxy cards we are
getting back, many other shareholders agree with us.
Why has this happened? Here's why:
PEOPLE CREATE OR DESTROY CONFIDENCE BY WHAT THEY SAY AND WHAT THEY DO.
SO:
1. What Has Management Done?
ON MAY 20, 1996, MANAGEMENT PULLED A RAW, NAKED POWER PLAY TO PERPETUATE
THEIR CONTROL OF THE BOARD OF DIRECTORS.
* In 1994 and in 1995, the company operated with only six directors.
* Both the 1994 and 1995 Management proxy statements promised
shareholders to elect THREE class A directors in 1996.
* Management now claims that on May 20, 1996, the Directors held a
private telephone conversation among themselves and reshuffled
directorships and the whole election process. As a result of that
reshuffling, Management is telling shareholders that they will only
allow you to elect TWO directors at the 1996 annual meeting instead
of the THREE that they have been promising shareholders for two
years.
* On May 24, 1996, we warned them in writing NOT to meddle with the
election process. Now they want you to believe that their
reshuffling conversation took place just four days before we warned
them not to do it.
IF MANAGEMENT HAD KEPT ITS PROMISE TO SHAREHOLDERS TO ELECT THREE
DIRECTORS (OUT OF SIX) IN 1996, A VICTORY BY THE 13D GROUP WOULD
HAVE JEOPARDIZED MANAGEMENT CONTROL OF THE COMPANY. THEY COULDN'T ALLOW THAT.
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2. Is Management Telling the Truth to Shareholders?
MANAGEMENT STATES THAT ALL DIRECTORS OWN STOCK IN THE COMPANY. THIS IS
ABSOLUTELY NOT TRUE. THE COMPANY'S OWN OFFICIAL LISTS OF CURRENT
SHAREHOLDERS DO NOT LIST DIRECTORS MICHAEL J. NEEDHAM OR STEVEN J. SHULMAN
AS SHAREHOLDERS. (NEEDHAM OWNS WARRANTS, BUT HE DOES NOT OWN ANY STOCK
AND IS LEGALLY NOT A SHAREHOLDER ENTITLED TO VOTE.)
Two-thirds of the company's directors either own no stock at all in the
company, or just have minimal amounts (Paulsen and Vincent). Can these
directors have any real incentive to maximize shareholder values?
3. The Andros Deal:
We still don't have the whole story on the Andros Genstar deal from
Management, even though we asked for it over a month ago. It smells
politically motivated to us however; just another device to keep control.
If the deal goes through, it appears that the interest of the current
Novametrix shareholders will be diluted by about 50%. That would
effectively kill any future opposition to Management by present
shareholders. We'll get back to you once we have received the full
details from Management.
4. How Can Management Get Away With This?
The answer is simple: They operate almost with impunity behind a legal
Iron Curtain with shareholders on the outside looking in.
Why Is That? - Because when they set up the company, Management
structured it so that they would have almost complete control over the
number and election of directors. Example: The May 20 reshuffling of the
Board. Shareholders have very little legal ability to control them
without lawsuits.
CONFIDENCE:
The whole issue boils down to CONFIDENCE. The 13D Group has lost
confidence in Management integrity because of their unfair tactics and
misrepresentations.
IF YOU HAVE ALSO LOST CONFIDENCE IN MANAGEMENT, THEN VOTE NO CONFIDENCE BY
SENDING US YOUR SIGNED 13D PROXY CARD (THE GREEN ONE).
Please contact us at 1-800-344-1116 if you want any additional information
or if you need another proxy card.
Very truly yours,
Paul A. Cote
On Behalf of the 13D Shareholders Group*
*13D Shareholders Group is comprised of 30 shareholders of the company.
