PENNSAUKEN, N.J., Nov. 1, 2013 (GLOBE NEWSWIRE) -- RCM Technologies, Inc. (Nasdaq:RCMT), a premier provider of business and technology solutions designed to enhance and maximize the operational performance of its customers through the adaptation and deployment of advanced information technology, engineering and specialty healthcare services, today announced that it has filed definitive proxy materials with the U.S. Securities and Exchange Commission in connection with its 2013 Annual Meeting of Stockholders, to be held on Thursday, December 5, 2013, at 6:00 p.m., at the offices of Morgan, Lewis & Bockius LLP in Philadelphia, Pennsylvania. RCM has established October 18, 2013 as the record date for stockholders entitled to vote at the 2013 Annual Meeting.
RCM's Board of Directors has also sent the following letter urging its stockholders to support the Board's highly qualified and very experienced nominees and reject the Legion Group's attempt to pursue its self-interested agenda:
Dear Fellow RCM Stockholder:
We have previously mailed you management's proxy materials for the 2013 Annual Meeting of Stockholders of RCM Technologies, Inc. Since this is an important meeting, we encourage you to read these materials carefully.
At the upcoming 2013 Annual Meeting, you will be asked to make a critical choice:
We believe that there is a very real and stark difference between your Board's highly qualified and very experienced nominees and the Legion Group's handpicked nominees. Both of your Board's nominees have a proven track record of delivering value to public company stockholders and upholding the highest standards of corporate governance. In contrast, one of the Legion Group's nominees, Bradley S. Vizi, has no such record. In fact, he has never served as a director or executive of a public company. Notwithstanding Mr. Vizi's lack of public company board or management experience, he demanded that he be named lead independent director of RCM as a condition to avoiding a proxy contest. The Legion Group's other nominee, Roger H. Ballou, is the former President and Chief Executive Officer of one of our largest competitors, CDI Corporation, and presided over CDI at a time when it was the target of a number of governmental investigations that caused CDI to have to pay millions in fines and/or settlements. In 2010, Mr. Ballou orchestrated CDI's unsuccessful hostile takeover of RCM for $5.20 per share, which if successful would have deprived you of the approximately 25% increase in stockholder value that your Board and management team have achieved since then. In January 2011, less than a year after Mr. Ballou's failed bid for RCM, Mr. Ballou and CDI agreed that he would resign as CDI's President and CEO (and from his membership on the CDI Board) as soon as a successor CEO was identified.
PROTECT YOUR INVESTMENT BY VOTING THE WHITE PROXY CARD TODAY
Your Board of directors strongly urges you to protect your investment and support your Board by re-electing your Board's two (2) independent, experienced and highly qualified nominees, Michael E.S. Frankel and Robert B. Kerr, by voting the enclosed WHITE proxy card by telephone, Internet or by signing, dating and returning the enclosed WHITE proxy card in the postage paid envelope provided. This may be the most important vote you have ever made regarding RCM and its future.
You may receive a proxy statement and a GOLD proxy card from the Legion Group and its dissident nominees. We urge you to disregard and discard any GOLD proxy card or voting instruction card and to sign and return only the enclosed WHITE proxy card. Even a WITHHOLD vote with respect to the Legion Group's nominees on their GOLD proxy card will cancel any proxy previously given to RCM. If you previously signed a GOLD proxy card sent to you by the Legion Group, you can revoke that proxy card and vote for your Board's nominees by voting a new WHITE proxy card. Only your latest-dated proxy will count.
YOUR BOARD HAS A PROVEN TRACK RECORD OF ENHANCING VALUE FOR ALL STOCKHOLDERS
Your Board and management team have a proven track record of delivering value to stockholders over the course of economic cycles and a comprehensive plan for improving upon it. They have weathered the difficult economic conditions that began in 2007, and have proven that they have the vision and skills to expand this business and position it for continued success. Consider the following facts about RCM:
- Our corporate governance provisions meet or exceed NASDAQ's requirements, and all of our directors, except for Mr. Kopyt (who is a current member of our management team), are independent under these criteria.
- As part of its effort to adopt best practices in corporate governance and be responsive to stockholder input, your Board has taken action to phase out RCM's classified board structure beginning with the 2013 Annual Meeting, adopt a majority vote standard for the election of directors in uncontested elections, adopt stock ownership guidelines for executive officers and board members and appoint a lead independent director.
YOUR BOARD BELIEVES THERE IS A VERY REAL AND STARK DIFFERENCE BETWEEN ITS HIGHLY QUALIFIED AND VERY EXPERIENCED NOMINEES AND THE LEGION GROUP'S HANDPICKED NOMINEES
We believe that there is a very real and stark difference between your Board's very experienced and highly qualified nominees and the Legion Group's handpicked nominees. Both of your Board's nominees, Michael E.S. Frankel and Robert B. Kerr, have a proven track record of serving on and advising public company boards and delivering value to stockholders. In contrast to your Board's nominees, Bradley S. Vizi, one of the Legion Group's nominees and an employee of Legion Partners, is 29 years old and has never served as a member of any public company board or as a public company executive. Despite Mr. Vizi's complete lack of experience serving on a public company board or any committee thereof, he demanded in settlement discussions that your Board appoint him the lead independent director.
Consider the following about your Board's two highly qualified and experienced nominees:
WE BELIEVE THAT STOCKHOLDERS SHOULD QUESTION THE JUDGMENT OF THE LEGION GROUP IN THE SELECTION OF ITS NOMINEES
Your Board believes that the two nominees that the Legion Group has proposed for election to your Board are highly problematic, and stockholders should question the judgment of a firm that would put forth such nominees. While the Legion Group will argue that our concerns are nothing more than personal attacks, we disagree. The backgrounds and experience of the Legion Group's nominees are critical in assessing whether they are deserving of board seats and will provide additional value to your Board. In making your voting decisions, we believe you should consider the following:
- Mr. Vizi demanded that he be immediately named Lead Independent Director - Notwithstanding his complete lack of experience serving as a public company board member, Mr. Vizi insisted during negotiations to avoid a proxy contest at the 2013 Annual Meeting that he was qualified to be named as RCM's lead independent director.
- Mr. Vizi insisted that RCM delay the declassification of your Board until the 2014 Annual Meeting - During settlement negotiations to avoid a proxy contest, Mr. Vizi insisted that RCM not declassify your Board until the 2014 Annual Meeting so that Messrs. Vizi and Mr. Ballou could be elected at the 2013 Annual Meeting for a three year-term and could avoid having to stand for re-election until the 2016 Annual Meeting.
- Mr. Vizi sought a $250,000 payment from RCM to Legion Partners to avoid a proxy contest– During settlement negotiations Mr. Vizi insisted that Legion Partners be reimbursed up to $250,000 for its "expenses" in connection with its activities against RCM.
- If Mr. Ballou had succeeded in his efforts to take control of RCM at the inadequate price he offered, $5.20 per share, he would have deprived our stockholders of the approximately 25% increase in value that has been created at RCM since his efforts to take control of RCM failed.
- Mr. Ballou's hostile approach caused RCM an unnecessary distraction and disruption and forced us to incur significant expenses to respond to CDI's unsolicited acquisition proposal.
- In January 2011, less than a year after Mr. Ballou's failed hostile takeover for RCM, Mr. Ballou and CDI entered into an agreement for him to resign as CDI's President and CEO (and from his membership on the CDI Board) as soon as a successor CEO was identified.
- RCM does not believe it is surprising that, given Mr. Ballou's previous unsuccessful efforts to acquire control of RCM and his subsequent separation from CDI, he would form a group with Legion Partners so as to further his previous efforts to obtain control of RCM.
- Given Mr. Ballou's past, and very public, activities with regard to seeking control of RCM and trying to force RCM into selling itself to CDI, we are concerned that Mr. Ballou's presence on your Board could result in perceived uncertainties as to our future direction, instability and lack of continuity which may be exploited by our competitors, cause concern to our current or potential customers, may result in the loss of potential business opportunities and make it more difficult to attract and retain qualified personnel and business partners.
- In 2009, the U.S. Department of Justice (DOJ) investigated CDI for potential claims against it under the U.S. False Claims Act. The claims stemmed from alleged mischarging of time on certain federal government projects. To resolve the matter, CDI eventually entered into a settlement with the DOJ and paid out $2.4 million.
- Also in 2009, CDI was investigated by the United Kingdom's Office of Fair Trading for alleged anti-competitive behavior. Ultimately, the United Kingdom's Office of Fair Trading fined CDI $12.3 million which was later reduced to $2.5 million.
- Given the allegations that were made against CDI by the governments of the United States and the United Kingdom during Mr. Ballou's tenure leading CDI as its President and Chief Executive Officer, RCM believes that, were Mr. Ballou to be elected to your Board, RCM's efforts to grow its revenue from governmental entities, both in the United States and abroad, could be adversely affected.
- Frankly, your Board is deeply troubled by the respective backgrounds of both Mr. Vizi and Mr. Ballou, as well as the Legion Group's efforts to impose these two people on your Board and your company.
THE LEGION GROUP ABRUPTLY CUT OFF DISCUSSIONS WITH US ON AVOIDING A DISRUPTIVE AND COSTLY PROXY CONTEST
In an effort to avoid a disruptive and costly proxy contest, we made numerous attempts to constructively engage with the Legion Group and negotiate a reasonable compromise that would include board representation consistent with its short tenure as a stockholder and in line with the size of its RCM stock holdings (13.3%). We even offered, reluctantly, to appoint Mr. Vizi as lead independent director, notwithstanding our significant concerns that, having never served on a public company's board of directors, he lacks the experience and qualifications to serve in such capacity. After weeks of discussions and the exchange of draft settlement agreements between us and the Legion Group, the Legion Group refused to continue settlement discussions with us unless we conceded to their unreasonable demands that we (i) delay declassifying your Board until the 2014 Annual Meeting so as to preserve the ability of the Legion Group's nominees to serve for three-year terms such that they could avoid standing for re-election until the 2016 Annual Meeting; and (ii) reimburse them for up to $250,000 in "expenses" that they claimed they incurred in connection with their activist activities against RCM. Stockholders should also be aware that the Legion Group has indicated in its proxy statement that it may seek reimbursement of its "expenses" from RCM if it is successful in having any of its nominees elected to your Board.
Having refused to concede to Legion Group's unreasonable demands, the Legion Group is forcing your Board and management team to devote significant resources – management time and stockholder money – to protect the interests of ALL stockholders, when these resources could better be devoted to driving organic growth, revenue, profitability increasing returns for ALL stockholders.
WE DO NOT BELIEVE THAT THE INTERESTS OF THE LEGION GROUP ARE ALIGNED WITH THE INTERESTS OF ALL OUR STOCKHOLDERS
Contrary to the assertions that you will hear from the Legion Group, we do not believe that the interests of the Legion Group are aligned with the interests of ALL stockholders. In deciding whether you share your Board's view that the Legion Group is pursuing its proxy contest to facilitate an undisclosed, self-interested agenda to have substantial influence over the future direction of RCM that may not be aligned with the interests of all RCM stockholders, consider the following:
WE BELIEVE THAT YOUR BOARD NOMINEES ARE BETTER POSITIONED TO PROTECT YOUR INTERESTS THAN THE LEGION GROUP'S HAND-PICKED NOMINEES
Your Board's nominees have no undisclosed self-interested agenda. Your Board's nominees have only one agenda -- to act in the best interests of all stockholders. Unlike Mr. Vizi, who will have his compensation as an employee of Legion Partners influenced by his actions as a member of your Board, none of your Board's nominees are parties to any such compensation arrangement with third parties, whether they be employment, consulting or investment advisory agreements, that have the possibility of creating inappropriate incentives to take a short-term view of RCM's prospects and potential or which could cause them to act in a way that would not be in the best interests of all stockholders. Accordingly, we believe that your Board's nominees are better positioned to protect your interests than the Legion Group's hand-picked nominees. Your Board's nominees are resolute in their commitment to act in the best the interests of ALL stockholders.
YOUR VOTE IS IMPORTANT!
SUPPORT A BOARD THAT HAS A DEMONSTRATED RECORD OF CREATING AND RETURNING VALUE TO STOCKHOLDERS BY ELECTING YOUR BOARD'S HIGHLY QUALIFIED AND EXPERIENCED NOMINEES
PROTECT THE VALUE OF YOUR INVESTMENT BY SIGNING, DATING AND RETURNING THE WHITE PROXY CARD TODAY
To vote your shares, please vote TODAY by telephone, Internet or by signing, dating and returning the enclosed WHITE proxy card in the postage-paid envelope provided. You may also vote by phone or Internet by following the instructions on the enclosed proxy card. If you have any questions or need assistance in voting your WHITE proxy card, we encourage you to call our proxy solicitor, Mackenzie Partners, Inc., at (800) 322-2885 (Toll Free) or at (212) 929-5500.
We appreciate your continued support as we work to protect your investment and continue creating value for all RCM stockholders. We look forward to communicating further with you in the coming weeks.
/s/ Leon Kopyt
Chairman of the Board of Directors and
Chief Executive Officer
RCM is being advised in connection with the proxy contest by Morgan, Lewis & Bockius LLP and Alston & Bird LLP. MacKenzie Partners, Inc. is serving as RCM's proxy solicitor.
RCM Technologies, Inc. is a premier provider of business and technology solutions designed to enhance and maximize the operational performance of its customers through the adaptation and deployment of advanced information technology and engineering services. RCM is an innovative leader in the delivery of these solutions to commercial and government sectors. RCM is also a provider of specialty healthcare services to major health care institutions and educational facilities. RCM's offices are located in major metropolitan centers throughout North America. Additional information can be found at www.rcmt.com.
The Statements contained in this release that are not purely historical are forward-looking statements within the Private Securities Litigation Reform Act of 1995 and are subject to various risks, uncertainties and other factors that could cause the Company's actual results, performance or achievements to differ materially from those expressed or implied by such forward-looking statements. These statements often include words such as "may," "will," "expect," "anticipate," "continue," "estimate," "project," "intend," "believe," "plan," "seek," "could," "can," "should" or similar expressions. In addition, statements that are not historical should also be considered forward-looking statements. These statements are based on assumptions that we have made in light of our experience in the industry, as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate in these circumstances. Forward-looking statements include, but are not limited to, those relating to demand for the Company's services, expected demand for our services and expectations regarding our revenues, the Company's ability to continue to utilize goodwill, to continue to increase gross margins, to achieve and manage growth, to develop and market new applications and services, risks relating to the acquisition and integration of acquired businesses, the ability of the Company to consummate acquisitions as to which it executes non-binding letters of intent, demand for new services and applications, timing of demand for services, industry strength and competition and general economic factors. Such statements are based on current expectations that involve a number of known and unknown risks, uncertainties and other factors, which may cause actual events to be materially different from those expressed or implied by such forward-looking statements. Risk, uncertainties and other factors may emerge from time to time that could cause the Company's actual results to differ from those indicated by the forward-looking statements. Investors are directed to consider such risks, uncertainties and other factors described in documents filed by the Company with the Securities and Exchange Commission. The Company assumes no obligation (and expressly disclaims any such obligation) to update any forward-looking statements contained in this release as a result of new information or future events or developments, except as may be required by law.
Additional Information and Where to Find It
RCM, its directors and certain of its executive officers and employees may be deemed to be participants in the solicitation of proxies from RCM's stockholders in connection with the 2013 Annual Meeting. RCM filed a definitive proxy statement and WHITE proxy card with the SEC in connection with the solicitation of proxies for the 2013 Annual Meeting on October 30, 2013 (the "2013 Proxy Statement"). STOCKHOLDERS ARE URGED TO READ THE 2013 PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT RCM WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Additional information regarding the identity of these potential participants and their direct or indirect interests, by security holdings or otherwise, will be set forth in the 2013 Proxy Statement and other materials to be filed with the SEC in connection with the 2013 Annual Meeting. Such information can also be found in RCM's Annual Report on Form 10-K for the fiscal year ended December 29, 2012, filed with the SEC on February 21, 2013, RCM's Quarterly Report on Form 10-Q for the quarterly period ended March 30, 2013, filed with the SEC on May 10, 2013, and RCM's Quarterly Report on Form 10-Q for the quarterly period ended June 29, 2013, filed with the SEC on August 8, 2013. To the extent holdings of RCM's securities have changed since the amounts shown in the 2013 Proxy Statement, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC.
Stockholders will be able to obtain, free of charge, copies of the 2013 Proxy Statement and any other documents filed by RCM with the SEC in connection with the 2013 Annual Meeting at the SEC's website (www.sec.gov), at RCM's website (www.rcmt.com) or by writing to Mr. Kevin D. Miller, Chief Financial Officer, RCM Technologies, Inc., 2500 McClellan Avenue, Suite 350, Pennsauken, NJ 08109. In addition, copies of the proxy materials, when available, may be requested from RCM's proxy solicitor, MacKenzie Partners, Inc., 105 Madison Avenue, New York, NY 10016 or toll-free at (800) 322-2885.
Corporate Contacts: Leon Kopyt Chairman, President & CEO Kevin D. Miller Chief Financial Officer
RCM Technologies, Inc.
Pennsauken, New Jersey, UNITED STATES
Corporate Contacts: Leon Kopyt Chairman, President & CEO Kevin D. Miller Chief Financial Officer
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