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Paragon Technologies News Release

ATLANTA, GA / ACCESSWIRE / July 20, 2016 / Paragon Technologies, Inc. would like to thank shareholders for their tremendous support in Paragon's effort to effectuate lasting and beneficial change for the stockholders of Rubicon Technology, Inc. (NASDAQ: RBCN).

As a direct result of Paragon's efforts, we believe we have made Rubicon's management and board more accountable to shareholders. However, we believe Rubicon's Board and Management can take additional steps to continue proving to shareholders that they are truly committed to behaving and operating in the best interest of shareholders.

On behalf of Rubicon shareholders, Paragon asks the Rubicon Board to take the following additional steps to improve and enhance its corporate governance:

  1. Immediately declassify the Board so that all directors stand for election each and every year – this step will show shareholders that Rubicon's Board is committed to the absolute best corporate governance practices. Declassifying the Board would substantially increase the credibility of the incumbent directors and signal a true display of fiduciary stewardship.
  2. We ask the Board to immediately cease the granting of equity options or restricted stock as a form of compensation given the extreme undervaluation of Rubicon's stock price. Using significantly undervalued equity as compensation is a short-sighted mechanism that punishes existing shareholders by diluting them. Paragon recommends, based on our analysis of companies similar to Rubicon that non-employee directors instead receive a fixed annual retainer of $30,000 for their services while the company is undergoing its turnaround plan.

As Paragon stated before, we believe Rubicon is at a key inflection point today with respect to its business future and ultimate shareholder outcome. We believe that Rubicon's past results cannot be repeated in the future if the company is to create any meaningful shareholder value from current levels.

Paragon is pleased that its efforts have successfully caused Rubicon to evaluate its future and do what is in the best interest of shareholders. Paragon Chairman and CEO Hesham Gad states, "Paragon's efforts have forced Rubicon to begin to discuss some changes in the business that appear to be inspired by those changes proposed by Paragon. Also, while we strongly believe Paragon's director candidates were far more qualified and incentivized, the addition of an outside director is a step forward. If such sprouts of change are steps towards better governance and higher shareholder value, that's a benefit for all shareholders, including Paragon."

However, we believe important concrete steps remain that the Rubicon Board can take now to fully and faithfully demonstrate its sincere commitment to shareholders. These steps do not impede or disturb any turnaround plan that may be currently underway; on the contrary, we believe the two steps we have outlined will increase shareholder value given the positive impacts they should have the corporate governance and cash flows.

SOURCE: Paragon Technologies, Inc.

ReleaseID: 442615

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