Legion Partners Files Countersuit Against RCMT For Trying To Mislead Stockholders

While RCM repeatedly attacks the qualifications and experience of the Stockholder Group's nominees, it fails to inform stockholders of its own two nominees' shortcomings. 

Robert B. Kerr:

• 19-year incumbent but only owns 0.5% of RCM stock;
• No prior public company board experience other than RCM;
• Member of RCM's compensation committee that approved outrageous compensation agreements for CEO Leon Kopyt;
• Member of RCM's audit committee tasked with overseeing RCM's disclosures and controls when Mr. Kopyt misrepresented his academic credentials.  Recently remarked that misrepresentations were "immaterial."

Michael F.S. Frankel:

• Recently selected by a newly formed nominating committee;
• Notably worked at the same law firm (Skadden, Arps) and during the same period as RCM's special counsel, Keith Gottfried, who has been retained to advise RCM on this election contest and whose current firm is counsel of record on the complaint filed against the Stockholder Group. 
• Also notably serves on the Board of Directors of Onvia.  Keith Gottfried also serves as counsel to Onvia.  Is this relationship just a coincidence or was Mr. Frankel a rushed selection by an unprepared Board to appear less entrenched? 
• Owns 0.0% of RCM stock

The Stockholder Group also reminds its fellow stockholders of the significant underperformance of RCM and poor compensation and corporate governance practices:

• The Board claims it has returned over 587% in total stockholder return over the past five years but fails to reveal that its starting point for this measurement was the peak of the financial crisis, when RCM's stock was a mere 23 cents shy of its lowest closing price in the past 20 years. If one were to run that same five year return for RCM as of the date ending December 31, 2012 (the date corresponding to RCM's proxy statement and the most relevant date for judging RCM's performance), RCM only returned 3.8% to stockholders, significantly underperforming the Russell 2000 and its Peer Set at 19.1% and 40.1%, respectively.
• Despite acquiring $32 million in incremental revenue since 2007, RCM has lost approximately $66 million in revenue over the same period of time.
• The Board has approved outrageous compensation arrangements for its three top executives – over $8 million ($6.1 million for the Chairman and CEO alone) despite RCM's underperformance.
• Mr. Kopyt's $6.1 million parachute payment can be triggered if even one of the Stockholder Group's nominees is elected to the Board.
• The Board has ignored the fact that its own Chairman and CEO previously misrepresented his academic credentials repeatedly to the invested public. It is unfortunate that stockholders first discovered this misrepresentation at such a late juncture.
• The Board delayed the 2013 Annual Meeting by 6 months with no communication to stockholders and no stated rationale for this delay.
• The independent directors of the Board lack any meaningful ownership in RCM – owning less than 1% of the outstanding common stock – making them unvested stewards of stockholder capital.

Rather than provide stockholders explanations for these and other serious failures, RCM instead lobs personal and untruthful attacks against highly qualified candidates nominated by the Company's largest stockholder and wastes stockholder money by filing frivolous lawsuits.

The Stockholder Group urges its fellow stockholders to send a clear message to the Board that the status quo is not acceptable by voting the GOLD proxy card today.

VOTE FOR CHANGE AT RCM -- PLEASE SIGN, DATE AND MAIL THE GOLD PROXY CARD TODAY

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Call Toll-Free at: (877) 566-1922
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SOURCE Legion Partners Asset Management, LLC