Red Oak Partners, LLC Announces Resignation of Red Oak's Designees from the Board of Directors of RF Industries, Ltd.
Red Oak Partners, LLC Announces Resignation of Red Oak's Designees from the Board of Directors of RF Industries, Ltd. PR Newswire NEW YORK, March 25, 2013 NEW YORK, March 25, 2013 /PRNewswire/ -- Red Oak Partners, LLC ("Red Oak"), today announced that its two designees entitled to serve as Directors on the Board of RF Industries Ltd ("RF") (NASDAQ: RFIL), David Sandberg and J. Randall Waterfield, have resigned effective immediately and in accordance with the terms of the agreement reached between RF and Red Oak on August 29, 2011. Under that agreement, upon Red Oak's ownership falling below a threshold level as defined in the agreement, its designees shall no longer be entitled to serve on RF's Board of Directors. After significant appreciation in RF's share price in recent months and largely via sales effected under a 10b5-1 plan, Red Oak's current ownership level is now below the required threshold as defined in the agreement. Although Red Oak has no influence over whether its second designee, Mr. Waterfield, will resign or not, Mr. Waterfield has agreed to honor the agreement and resign effective immediately as well. Stated David Sandberg, Red Oak's Founder and Managing Member, "RF has been a successful investment for Red Oak, more than doubling over a sub two and one-half year investment time-frame with such return excluding additional capital returned to shareholders via dividends (and we recently proposed to the Board and achieved a sharp increase in the regular quarterly dividend). Red Oak and RF initially established ownership terms in its 2011 agreement to ensure Directors had sufficient skin in the game. Given Mr. Waterfield and I no longer have the levels of share ownership which we believe Directors of public companies should have in order to be aligned with shareholder's best interests, we are resigning effective immediately. Despite my resignation, I have offered to assist RF, if requested, to evaluate new Directors, to improve its governance policies towards making RF more shareholder friendly, and to assist with certain strategic and other transition issues over the next few months, all at no compensation. Mr. Waterfield has indicated that he too is willing to assist the company on such matters upon request and at no compensation as well." Continued Mr. Sandberg, "The timing of our resignations allows RF to add other independent Directors before the upcoming annual meeting. To optimize shareholder value going forward, I strongly suggest that RF's Board also: o add more independent Directors (noting that two independent Directors worked at Teledyne with RF's CEO), and that such Director nominees be referred by RF's large shareholders to ensure true independence; o adopt Board rotation policies to ensure that fresh perspective exists and that current Directors represent current shareholders; o ensure that current Directors retain sufficient share ownership in correlation to their years of tenure (ie., the longer you serve the more you should own) so as to be aligned with shareholders, and retain at least the ownership levels defined in the August 29, 2011 agreement; o pursue formal and professional processes, including regarding the evaluation of several candidates with requisite past CFO experience for the vacant CFO position; o and consider retaining a credible banker to oversee a strategic alternatives process, which is something I believe all business should do periodically to ensure that shareholder value is optimized. "We believe RF has a strong niche and should continue to generate positive cash flows going forward. Red Oak wishes RF the best of luck going forward. It's been a pleasure to serve as a Director and to witness the dramatic recent growth and share appreciation." David Sandberg Red Oak Partners, LLC (212) 614-8952 email@example.com SOURCE Red Oak Partners, LLC Website: http://www.redoakpartners.com