UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2019
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
Commission file number 001-33834
RUBICON TECHNOLOGY, INC.
(Exact Name of Registrant as Specified in Its Charter)
|
Delaware |
|
36-4419301 |
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(I.R.S.
Employer
Identification No.) |
| |
|
|
|
900 East Green Street
Bensenville, Illinois
|
|
60106 |
| (Address
of Principal Executive Offices) |
|
(Zip
Code) |
Registrant’s Telephone Number, Including Area Code:
(847) 295-7000
Securities registered pursuant to Section 12(b) of the
Act:
|
Title
of each class |
|
Name
of each exchange on which registered |
| Common
Stock, par value $0.001 per share |
|
The
NASDAQ Capital Market |
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities
Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or 15(d) of the
Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90
days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted
electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
chapter) during the preceding 12 months (or for such shorter period
that the registrant was required to submit such
files). Yes ☒ No ☐
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of registrant’s knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K ☐
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer,
smaller reporting company, or an emerging growth company. See the
definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule
12b-2 of the Exchange Act.
| Large
accelerated filer |
☐ |
Accelerated
filer |
☐ |
| Non-accelerated
filer |
☐ |
Smaller
reporting company |
☒ |
| Emerging
growth company |
☐ |
|
|
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange
Act). Yes ☐ No ☒
As of June 30, 2019, there were 2,304,639 shares of common
stock outstanding held by non-affiliates of the registrant, with an
aggregate market value of the common stock (based upon the closing
price of these shares on the NASDAQ Capital Market) of
approximately $19,128,504.
The number of shares of the registrant’s common stock outstanding
as of the close of business on February 28, 2020 was 2,668,507.
Documents incorporated by reference:
None
EXPLANATORY NOTE
Rubicon Technology, Inc. (“Rubicon” or the “Company”) is filing
this Amendment No. 1 (“Amended Report”) to our Annual Report on
Form 10-K for the fiscal year ended December 31, 2019, filed with
the Securities and Exchange Commission (SEC) on March 23, 2020
(“Original Report”), in order to add certain information required
by the following items in Part III of Form 10-K:
We hereby amend Items 10, 11, 12, 13 and 14 of Part III of our
Original Report by deleting the text of such Items 10, 11, 12, 13
and 14 in their entirety and replacing them with the information
provided below under the respective headings. The Amended Report
does not affect any other items in our Original Report. As a result
of this amendment, we are also filing as exhibits to this Amended
Report the certifications pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 and amending Item 15 of Part IV to
include such certifications. Because no financial statements are
contained in this Amended Report, we are not including
certifications pursuant to Section 906 of the Sarbanes-Oxley Act of
2002. Except as otherwise expressly stated for the items amended in
this Amended Report, this Amended Report continues to speak as of
the date of the Original Report and we have not updated the
disclosure contained herein to reflect events that have occurred
since the filing of the Original Report. Accordingly, this Amended
Report should be read in conjunction with our Original Report.
Capitalized terms used but not otherwise defined herein have the
meanings ascribed to such terms in the Original Report.
PART III
|
ITEM 10. |
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
Our bylaws permit our Board of Directors to establish by resolution
the authorized number of directors. Our Board of Directors
currently consists of four directors, who are divided into three
classes with staggered three-year terms.
All of our directors bring to our Board of Directors a wealth of
executive leadership experience derived from their service as
corporate executives as well as service as directors on other
boards. When evaluating director candidates, the Nominating and
Governance Committee takes into account all factors it considers
appropriate, which include (i) ensuring that the Board of
Directors, as a whole, is diverse and consists of individuals with
various and relevant career experience, relevant technical skills,
industry knowledge and experience, and financial expertise
(including expertise that could qualify a director as a “financial
expert,” as that term is defined by the rules of the SEC), and
(ii) minimum individual qualifications, including strength of
character, mature judgment, familiarity with the Company’s business
and industry and independence of thought. The Nominating and
Governance Committee also considers geographical, cultural,
experiential and other forms of diversity when evaluating director
candidates. In addition, the Nominating and Governance Committee
also may consider the extent to which the candidate would fill a
present need on the Board of Directors. Information about our
current directors, including their business experience for the past
five years, appears below.
Class I Director
Susan M. Westphal, 54,
is a continuing Class I director whose current term expires at our
2020 Annual Meeting. Ms. Westphal has served as a member of our
Board of Directors since March 17, 2017. She currently serves as a
member of the Audit, Compensation, and Nominating and Governance
Committees. Ms. Westphal, is Chief Counsel at Melissa & Doug,
LLC, a leading designer of educational toys and children’s’
products, since February 2016. Ms. Westphal is responsible for a
range of legal, strategic, and organizational matters. From January
2012 to January 2016, Ms. Westphal was an attorney with Brody and
Associates, LLC. Ms. Westphal was previously an attorney at law
firms including Epstein, Becker, & Green, p.c, where she
represented corporate clients in litigations and negotiations in
commercial, real estate, and employment matters. She holds a JD
from The George Washington University National Law Center and a BA
from Tufts University. Ms. Westphal’s qualifications to serve on
our Board of Directors include her extensive legal and negotiation
experience.
Class II Directors
Timothy Brog, 56, is a continuing Class II director whose
current term expires at our 2021 Annual Meeting. Mr. Brog joined us
in May 2016 as a member of our Board of Directors and was appointed
as our President and Chief Executive Officer effective March 17,
2017. Mr. Brog served on our Audit Committee from July 1, 2016
until March 17, 2017 and on the Compensation Committee from
December 14, 2016 to March 17, 2017. From March 2015 until March
17, 2017, Mr. Brog served as the president of Locksmith Capital
Management LLC, an investment advisory firm. Previously, he served
as Chairman of the Board of Directors of Peerless Systems
Corporation from June 2008 to February 2015, Chief Executive
Officer from August 2010 to March 2015 and a director beginning in
July 2007. Mr. Brog served as a Managing Director and Portfolio
Manager to Locksmith Value Opportunity Fund LP from September 2007
to August 2010. He also served as Managing Director of E2
Investment Partners LLC, a special purpose vehicle to invest in
Peerless, from March 2007 to July 2008. Prior to his experience at
Locksmith Capital and E2 Investment Partners, Mr. Brog was
President of Pembridge Capital Management LLC and the Portfolio
Manager of Pembridge Value Opportunity Fund LP, a small cap value
hedge fund, from June 2004 to September 2007. He also worked as the
Managing Director of The Edward Andrews Group Inc., a boutique
investment bank, from 1996 to 2007. From 1989 to 1995, Mr. Brog was
a corporate finance and mergers and acquisitions associate of the
law firm Skadden, Arps, Slate, Meagher & Flom LLP. Mr. Brog has
previously served as a director of Eco-Bat Technologies Limited
from October 2007 to July 2019, Chairman of the Board and Chairman
of the Audit Committee of Deer Valley Corporation from October 2014
to April 2015, and as a member of the board of directors of the
Topps Company Inc., from July 2006 to October 2007. Mr. Brog
received a JD from Fordham University School of Law in 1989 and a
BA from Tufts University in 1986. Mr. Brog’s qualifications to
serve on our Board of Directors include his operational, legal,
investment banking, executive management and financial analysis
experience.
Michael Mikolajczyk, 68, is a continuing Class II director
whose current term expires at our 2021 Annual Meeting. Mr.
Mikolajczyk has served as a member of our Board of Directors from
June 2001 until May 2002 and rejoined our Board of Directors in
March 2004. Mr. Mikolajczyk was elected as the chairman of our
Board of Directors in December 2017. Mr. Mikolajczyk also serves as
a member of our Audit, Compensation, and Nominating and Governance
Committees. Since September 2003, Mr. Mikolajczyk has served as
managing director of Catalyst Capital Management, LLC, a private
equity firm. From 2001 through 2003, Mr. Mikolajczyk worked as an
independent consultant providing business and financial advisory
services to early stage and mid-cap companies. Mr. Mikolajczyk also
served as vice chairman of Diamond Management & Technology
Consultants, Inc., a management and technology consulting firm,
from 2000 to 2001, president from 1998 to 2000 and chief financial
officer from 1994 to 1998. Mr. Mikolajczyk served as chief
financial officer of Technology Solutions Company, a business
solutions provider, from 1993 to 1994. In addition, Mr. Mikolajczyk
served as a director of Diamond Management & Technology
Consultants, Inc. from 1994 to 2010 and served as director of
Kanbay International, Inc. from 2004 to 2007. Mr. Mikolajczyk is a
CPA in the State of Michigan and holds an MBA from Harvard Business
School and a BS in business from Wayne State University. Mr.
Mikolajczyk’s qualifications to serve on our Board of Directors
include his experience as an operating executive and his years of
experience providing business and financial advisory services. Mr.
Mikolajczyk is a financial expert with extensive experience in
corporate governance.
Class III Director
Jefferson Gramm, 44, is a continuing Class III director
whose current term will expire at our 2022 Annual Meeting. Mr.
Gramm, in connection with a Stock Purchase Agreement dated November
16, 2017, was appointed to the Board on November 16, 2017. He
currently serves as a member of our Audit, Compensation and
Nominating and Governance Committees. Mr. Gramm has served as
managing director, managing partner and portfolio manager of
Bandera Partners, LLC, a value-oriented investment partnership, and
Bandera Partners Management LLC, an affiliate general partner
entity, since August 2006. Previous to Bandera Partners, Mr. Gramm
was a managing director of Arklow Capital LLC, a hedge fund manager
focused on distressed and value investments, from October 2004 to
July 2006. Mr. Gramm serves as a director of Tandy Leather Company,
a distributor of leather and related products, since 2014 and as
chairman of the board since 2017. Mr. Gramm served as director of
Peerless Systems Corporation from June 2009 to November 2010, as
director of Morgan’s Foods Inc., a restaurant company, from April
2013 to May 2014, and as director of Ambassadors Group, Inc., an
educational travel company, from May 2014 to October 2015. He holds
an MBA from Columbia University and a BA from the University of
Chicago. Mr. Gramm’s qualifications to serve on our Board of
Directors include his extensive experience in finance, especially
in areas of reviewing acquisition targets and negotiating and the
consummation of potential acquisitions.
Current Executive Officers
Timothy E. Brog, age 56, was appointed as our President and
Chief Executive Officer effective March 17, 2017. Mr. Brog has also
been a member of our Board of Directors since May 2016. His
biographical information is provided above.
Mathew J. Rich, age 47, was appointed as our Chief Financial
Officer effective November 18, 2019. From August 15, 2019 to
November 15, 2019, Mr. Rich was a financial consultant to the
Company. Prior to August 2019, Mr. Rich was a regional strategy
lead for Cargill’s food ingredients business. From 2007 to 2016,
Mr. Rich held roles of increasing responsibility across Unilever’s
North American foods businesses. Prior to that, Mr. Rich served in
various capacities for Abbott Laboratories and The Procter &
Gamble Company. Mr. Rich holds an MBA from the University of
Chicago Booth School of Business and is registered as a Certified
Public Accountant.
CORPORATE GOVERNANCE
Director Independence
Our Board of Directors undertook a review of the independence of
each director and considered whether any director has a material
relationship with us that could compromise his or her ability to
exercise independent judgment in carrying out his or her
responsibilities. As a result of this review, our Board of
Directors determined that Messrs. Mikolajczyk, Gramm and Ms.
Westphal are independent under the standards for director
independence adopted by the Board of Directors and are “independent
directors” as defined under the rules of the NASDAQ Stock Market.
Based on the foregoing, our Board of Directors has concluded that a
majority of our Board of Directors has been independent during
2019, as required by the rules of the NASDAQ Stock Market. The
standards for director independence adopted by the Board of
Directors are available for review on our website
www.rubicontechnology.com.
Board of Directors Leadership Structure
Our Board of Directors is led by an independent Chairman, Mr.
Mikolajczyk. The Board has determined that having an independent
Chairman is in the best interest of the Company’s stockholders at
this time and adopted a formal policy to that effect on December
14, 2016. The Board believes that this leadership structure is
appropriate because it strikes an effective balance between
management and independent director participation in the Board
process. The independent Chairman role allows our Chief Executive
Officer to focus on his management responsibilities in leading the
business, setting the strategic direction of the Company and
optimizing the day-to-day performance and operations of the
Company. At the same time, the independent Chairman can focus on
Board leadership, providing guidance to the Chief Executive Officer
and the Company’s overall business strategy. The Board believes
that the separation of functions between the Chief Executive
Officer and Chairman of the Board provides independent leadership
of the Board in the exercise of its management oversight
responsibilities, increases the accountability of the Chief
Executive Officer and creates transparency into the relationship
among executive management, the Board of Directors and the
stockholders. The independent Chairman regularly presides at
executive sessions of the independent directors, without the
presence of management.
Board of Directors Oversight of Risk
Our executive management team is responsible for our day-to-day
risk management activities. The Board of Directors oversees these
risk management activities, delegating its authority in this regard
to the standing committees of the Board of Directors. The Audit
Committee is responsible for discussing with executive management
policies with respect to financial risk and enterprise risk
management. The Audit Committee also oversees the Company’s
corporate compliance programs. The Compensation Committee considers
risk in connection with its design of compensation programs for our
executives. The Nominating and Governance Committee reviews the
Company’s corporate governance principles and their implementation.
Each committee regularly reports to the Board of Directors. In
addition to each committee’s risk management oversight, the Board
of Directors regularly engages in discussions of the most
significant risks that the Company is facing and how these risks
are being managed.
The Board of Directors believes that each committee’s risk
oversight function, together with the efforts of the full Board of
Directors and the Chief Executive Officer in this regard, enables
the Board of Directors to effectively oversee the Company’s risk
management activities.
Committees of the Board of Directors and Meetings
Our Board of Directors has established three standing committees:
an Audit Committee, a Compensation Committee and a Nominating and
Governance Committee. Described below are the membership and
principal responsibilities of each of the standing committees of
the Board of Directors, as well as the number of meetings held
during 2019. Each of these committees is composed entirely of
non-employee directors who have been determined by our Board of
Directors to be independent under the current requirements of the
NASDAQ Stock Market and the rules and regulations of the SEC. Each
committee operates under a charter approved by the Board of
Directors setting out the purposes and responsibilities of the
committee. All committee charters are available for review on our
website, www.rubicontechnology.com.
The Board of Directors held five meetings during 2019. Each of our
directors attended at least 75% of the aggregate of the total
number of meetings of the Board of Directors and the committees on
which he or she served during 2019. Our non-employee directors meet
regularly without our Chief Executive Officer present.
Audit Committee
From January 1, 2019 to December 31, 2019, our Audit Committee was
comprised of Michael E. Mikolajczyk, Susan M. Westphal and
Jefferson Gramm.
Mr. Mikolajczyk is the chairman of our Audit Committee. Our Board
of Directors has determined that each member of our Audit
Committee, during the period served on the committee, met or meets
the requirements for financial sophistication and independence for
Audit Committee membership under the current requirements of the
NASDAQ Stock Market and SEC rules and regulations. Our Board of
Directors has also determined that Mr. Mikolajczyk is an “audit
committee financial expert” as defined in the SEC rules. The Audit
Committee’s responsibilities include, but are not limited to:
| |
● |
selecting
and hiring our independent registered public accounting firm, and
approving the audit and permitted non-audit services to be
performed by our independent registered public accounting
firm; |
| |
● |
evaluating
the qualifications, experience, performance and independence of our
independent registered public accounting firm; |
| |
● |
monitoring
the integrity of our financial statements and our compliance with
legal and regulatory requirements as they relate to financial
statements or accounting matters; |
| |
● |
reviewing
the adequacy, effectiveness and integrity of our internal control
policies and procedures; |
| |
● |
discussing
the scope and results of the audit with the independent registered
public accounting firm and reviewing with management and the
independent registered public accounting firm our interim and
year-end operating results; |
| |
● |
preparing
the Audit Committee report required by the SEC in our annual proxy
statement; and |
| |
● |
overseeing
management with respect to enterprise and financial risk
management. |
Our Audit Committee held six meetings during 2019.
Compensation Committee
From January 1, 2019 to December 31, 2019, our Compensation
Committee was comprised of Jefferson Gramm, Michael E. Mikolajczyk
and Susan M. Westphal.
Mr. Gramm is the chairman of our Compensation Committee. The
Compensation Committee’s responsibilities include, but are not
limited to:
| |
● |
reviewing
and approving our Chief Executive Officer’s and other executive
officers’ annual base salaries and annual bonuses; |
| |
● |
evaluating
and recommending to the Board of Directors incentive compensation
plans; |
| |
● |
overseeing
an evaluation of the performance of our executive
officers; |
| |
● |
administering,
reviewing and making recommendations with respect to our equity
compensation plans; and |
| |
● |
reviewing
and making recommendations to the Board of Directors with respect
to director compensation. |
The Compensation Committee may, in its sole discretion, retain or
obtain the advice of one or more compensation consultants or other
advisors to assist it with these duties.
Our Compensation Committee held two meetings during 2019.
Nominating and Governance Committee
From January 1, 2019 to December 31, 2019, our Nominating and
Governance Committee was comprised of Susan M. Westphal, Jefferson
Gramm and Michael E. Mikolajczyk.
Ms. Westphal is the chairman of our Nominating and Governance
Committee. The Nominating and Governance Committee’s
responsibilities include, but are not limited to:
| |
● |
developing
and recommending to the Board of Directors criteria for Board of
Directors and committee membership; |
| |
● |
assisting
our Board of Directors in identifying prospective director nominees
and recommending to the Board of Directors nominees for each annual
meeting of stockholders; |
| |
● |
recommending
members for each committee to our Board of Directors; |
| |
● |
reviewing
developments in corporate governance practices and developing and
recommending governance principles applicable to our Board of
Directors; and |
| |
● |
overseeing
the evaluation of the Board of Directors. |
Our Nominating and Governance Committee held one meeting during
2019.
Code of Conduct
We have adopted a Business Code of Conduct that applies to all of
our employees, officers and directors. A copy of the Business Code
of Conduct is available on our website at
www.rubicontechnology.com, and any waiver from or amendment to the
Business Code of Conduct granted to our principal executive
officer, principal financial officer, principal accounting officer
or controller, or persons performing similar functions, will be
timely disclosed on the Company’s website as set forth above rather
than by filing a Form 8-K. The information found on our website is
not part of any report filed with or furnished to the SEC.
Policies and Procedures Governing Director Nominations
The Nominating and Governance Committee considers candidates for
nomination to the Board of Directors from a number of sources,
including recommendations by current members of the Board of
Directors and members of management. Current members of the Board
of Directors are considered for re-election unless they have
notified us that they do not wish to stand for re-election. The
Nominating and Governance Committee will also consider director
candidates recommended by our stockholders, although a formal
policy has not been adopted with respect to consideration of such
candidates because stockholders may nominate director candidates
pursuant to our bylaws. Stockholders desiring to submit
recommendations for director candidates must follow the following
procedures:
| |
● |
The
Nominating and Governance Committee will accept recommendations of
director candidates throughout the year; however, in order for a
recommended candidate to be considered for nomination for election
at an upcoming annual meeting of stockholders, the recommendation
must be received by the Acting Secretary of the Company not later
than the close of business on the 60th day nor earlier than the
close of business on the 90th day prior to the anniversary date of
our most recent annual meeting of stockholders, unless the date of
the annual meeting is more than 30 days before or more than 60 days
after the first anniversary of the preceding year’s annual meeting,
in which case notice must be delivered not earlier than the 90th
day prior to such annual meeting and not later than the close of
business on the later of the 60th day prior to such annual meeting
or the 10th day following the day on which we first publicly
announce the date of such annual meeting. If the number of
directors to be elected to the Board is increased and the Company
does not make public announcement naming all of the nominees for
director or specifying the size of the increased Board at least 70
days prior to the first anniversary of the preceding year’s annual
meeting, a stockholder’s nomination notice will also be considered
timely with respect to nominees for any newly created positions if
such notice is delivered to the Acting Secretary not later than the
close of business on the 10th day following the day on which such
public announcement is first made by the Company. |
| |
● |
A
stockholder making the recommendation must be a stockholder of
record at the time of giving of notice, be entitled to vote at the
meeting and comply with the notice procedures set forth in the
bylaws. Furthermore, this recommendation must be in writing and
must include the following initial information: (i) as to each
person whom the stockholder proposes to nominate for election as a
director, all information relating to such person that would be
required to be disclosed in proxy solicitations for election of
directors in an election contest, or would otherwise be required,
in each case pursuant to Regulation 14A under the Securities and
Exchange Act of 1934, as amended (the “Exchange Act”) and Rule
14a-11 promulgated under the Exchange Act, including such person’s
written consent to being named in the proxy statement as a nominee
and to serving as a director if elected; and (ii) as to the
stockholder giving the notice and the beneficial owner, if any, on
whose behalf the nomination is made, the name and address of such
stockholder and beneficial owner, and the class and number of
shares of the Company that are owned beneficially and of record by
such stockholder and beneficial owner. The Nominating and
Governance Committee may subsequently request additional
information regarding the candidate. |
| |
● |
Recommendations
must be sent by U.S. Mail, courier or expedited delivery service to
Timothy E. Brog, Acting Secretary, Rubicon Technology, Inc., 900
East Green Street, Bensenville, Illinois 60106. |
In evaluating nominees for director, the Nominating and Governance
Committee is guided by, among other things, the objective that the
Board of Directors be composed of qualified, dedicated and highly
regarded individuals who have experience relevant to our operations
and who understand the complexities of our business environment.
The Nominating and Governance Committee may also consider other
factors such as whether the candidate is independent under the
standards adopted by the Board of Directors and within the meaning
of the listing standards of the NASDAQ Stock Market, and whether
the candidate meets any additional requirements for service on the
Audit Committee. The Nominating and Governance Committee does not
intend to evaluate candidates recommended by stockholders any
differently than other candidates.
Stockholder Communications with the Board of Directors
Interested parties, including stockholders, may communicate by mail
with all or selected members of the Board of Directors.
Correspondence should be addressed to the Board of Directors or any
individual director(s) or group or committee of directors either by
name or title (for example, “Chairman of the Nominating and
Governance Committee” or “All Non-Management Directors”). All
correspondence should be sent c/o Timothy E. Brog, Acting
Secretary, Rubicon Technology, Inc., 900 East Green Street,
Bensenville, Illinois 60106. The Acting Secretary will, in
consultation with the appropriate members of the Board, as
necessary, generally screen out communications from stockholders to
identify communications that are (i) commercial, charitable or
other solicitations for products, services and funds,
(ii) matters of a personal nature not relevant for
stockholders, or (iii) matters that are of a type that render
them improper or irrelevant to the functioning of the Board and the
Company.
Attendance at Annual Meeting
Directors are encouraged, but not required, to attend our annual
stockholders’ meeting. All directors attended the 2019 Annual
Meeting of Stockholders.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE
Section 16(a) of the Exchange Act requires our directors,
executive officers and persons who own more than 10% of our common
stock to file with the SEC initial reports of ownership and reports
of changes in ownership of our common stock and to provide us
copies of these reports. Based solely on a review of the copies of
these reports furnished to us and written representations that no
other reports were required to be filed, we believe that all such
filings applicable to our officers, directors and beneficial owners
of greater than 10% of our common stock were made timely during the
fiscal year ended December 31, 2019.
|
ITEM 11. |
EXECUTIVE
COMPENSATION |
Summary Compensation Table
The table below sets forth, the compensation earned by Timothy E.
Brog, the President and Chief Executive Officer, William F.
Weissman, our former President and Chief Executive Officer, Mathew
J. Rich, the Chief Financial Officer, and Inga A. Slavutsky and
Mardel A. Graffy, our former Chief Financial Officers, during
fiscal 2018 and fiscal 2019. Such persons are referred to in this
Report on Form 10-K/A as our “named executive officers.” Mr.
Weissman’s employment with us ended on March 16, 2017. Ms.
Slavutsky was the Company’s Chief Financial Officer from June 1,
2018 to April 24, 2019 and prior to that she was our comptroller.
Ms. Graffy’s employment with us ended on June 1, 2018. Per terms of
Mr. Weissman’s employment agreement severance payments continued
through part of 2018.
|
Name and Principal
Position |
|
Year |
|
|
Salary
($) |
|
|
Bonus
($) |
|
|
Stock
Awards
($) |
|
|
All Other
Compensation
($) |
|
|
Total
($) |
|
|
Timothy E.
Brog |
|
|
2019 |
|
|
|
350,000 |
|
|
|
— |
|
|
|
445,410 |
(1) |
|
|
— |
|
|
|
795,410 |
|
|
President & Chief Executive
Officer |
|
|
2018 |
|
|
|
350,000 |
|
|
|
— |
|
|
|
209,169 |
(2) |
|
|
— |
|
|
|
559,169 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Mathew J. Rich(12) |
|
|
2019 |
|
|
|
19,238 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
19,238 |
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| William
F. Weissman(3) |
|
|
2018 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
68,120 |
(4) |
|
|
68,120 |
|
|
Former President & Chief
Executive Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Inga
A. Slavutsky(5) |
|
|
2019 |
|
|
|
41,500 |
|
|
|
13,750 |
(6) |
|
|
— |
|
|
|
— |
|
|
|
55,250 |
|
|
Former Chief Financial
Officer |
|
|
2018 |
|
|
|
112,050 |
|
|
|
3,700 |
(7) |
|
|
3,250 |
(8) |
|
|
— |
|
|
|
119,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Mardel
A. Graffy(9) |
|
|
2018 |
|
|
|
91,775 |
|
|
|
3,750 |
(10) |
|
|
3,086 |
(11) |
|
|
— |
|
|
|
98,611 |
|
|
Former Chief Financial
Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
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|
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|
|
|
|
|
| (1) |
Pursuant
to Mr. Brog’s employment agreement, he was eligible for a bonus
based upon certain objectives set forth by the Compensation
Committee and agreed to by him. For work performed in 2018 and paid
in 2019, Mr. Brog was eligible to earn up to 49,000 shares (the
“Objective Bonus Shares”) of the Company’s common stock if certain
goals were achieved. The Board of Directors determined
that Mr. Brog’s objectives were met and such shares were issued to
Mr. Brog in 2019. |
|
(2) |
On
January 1, 2018, we granted Mr. Brog 30,902 RSUs. The equity grant
is subject to price-based vesting and was not an outright stock
grant. Amount represents the full aggregate grant date fair
value of this grant, calculated in accordance with FASB ASC Topic
718. For a discussion of the assumptions and methodologies used in
calculating the grant date fair value of the RSU awards in 2018,
please see Note 8 to the Company’s consolidated financial
statements in our Annual Report on Form 10-K for the year ended
December 31, 2018. |
|
(3) |
Mr.
Weissman served as our President and Chief Executive Officer from
December 2014 to March 16, 2017. The table includes his
compensation for the year ended December 31, 2018. |
|
(4) |
Reflects
severance and continuation of benefits paid in 2018 in accordance
with Mr. Weissman’s employment agreement for termination without
cause on March 16, 2017. |
|
(5) |
Ms.
Slavutsky was our Chief Financial Officer from June 2018 to April
2019. The table includes her compensation for the years ended
December 31, 2018 and December 31, 2019. In addition, after her
resignation, Ms. Slavutsky performed services for the Company on a
fee basis and was paid an additional $950 for such services. Such
payment was excluded from the table above. |
| (6) |
|
Amount
represents a $13,750 cash bonus paid to Ms. Slavutsky in
2019. |
| (7) |
|
Amount
represents a $3,700 cash bonus paid to Ms. Slavutsky in
2018. |
| (8) |
|
In
2018, we granted Ms. Slavutsky 438 shares of Rubicon common
stock. |
| (9) |
|
Ms.
Graffy was our Chief Financial Officer from December 2014 to June
2018. The table includes her compensation for the year ended
December 31, 2018. |
| (10) |
|
Amount
represents a $3,750 cash bonus paid to Ms. Graffy. |
| (11) |
|
In
2018, we granted Ms. Graffy 444 shares of Rubicon common
stock. |
| (12) |
|
Prior
to his appointment as CFO in November 2019, Mr. Rich served as a
consultant to the Company from August 2019 to the date of such
appointment and was paid $46,250 for his services during that
period. |
Discussion of Summary Compensation Table
Our executive compensation policies and practices for fiscal 2019
and 2018, pursuant to which the compensation set forth in the
“Summary Compensation Table” table was paid or awarded, are
described below.
Base salary
Pursuant to the terms of their employment agreements, the annual
base salaries for 2019 for Mr. Brog, Mr. Rich and Ms. Slavutsky
were $350,000, $165,000 and $130,000, respectively. For 2018, the
annual base salaries for Mr. Brog, Ms. Slavutsky and Ms. Graffy
were $350,000, $130,000 and $200,000, respectively. We formally
evaluate executive performance on an annual basis, and these
evaluations are one of the factors considered in making adjustments
to base salaries.
Incentive bonuses
The primary objectives of our incentive bonus plan are to provide
an incentive for superior work, to motivate our executives toward
even higher achievement and business results, to tie our
executives’ goals and interests to ours and our stockholders’ and
to enable us to attract and retain highly qualified individuals.
These targets are typically set in the first three months of the
year. The targets under our objective incentive bonus plan are
mutually agreed upon by the independent directors and each of the
executives.
Discretionary Incentive bonuses
In 2019, the Compensation Committee approved a bonus plan for some
of our employees in key areas of operations. Accordingly, in 2019
Ms. Slavutsky received a cash bonus of $13,750. Mr. Brog did not
receive a discretionary bonus in 2019.
In
2018, Ms. Graffy received a discretionary cash bonus of $3,750 and
Ms. Slavutsky received a discretionary cash bonus of $3,700.
Objective incentive compensation
In 2008, our Board of Directors adopted a policy generally to grant
equity awards to executives once per year to the extent equity
awards are to be granted during such year (except in the case of
newly hired executives, as described below). With respect to newly
hired executives, our practice is typically to make equity grants
at the first meeting of the Board of Directors following such
executive’s hire date. We do not have any program, plan or practice
to time equity awards in coordination with the release of material
non-public information.
Pursuant to Mr. Brog’s employment agreement, he was eligible for a
bonus based upon certain objectives set forth by the Compensation
Committee and agreed to by him.
In 2019, Mr. Brog was eligible to earn up to 40,500 shares (the
“2019 Objective Bonus Shares”) of the Company’s common stock if
certain goals were achieved. While Mr. Brog’s 2018 goal for earning
his bonus was based solely on preserving and building capital
through liquidation of assets, management of short-term
investments, and reductions of liabilities, his 2019 goals included
several specific, and more qualitative, targets that the Board
believes are critical to the long term success of the Company.
There is no set formula to weight the importance of each target --
the Board will consider Mr. Brog’s performance in relation to all
three targets when determining the amount of his bonus.
Goal 1: Progress towards an acquisition
The Board wishes to incentivize Mr. Brog to further develop the
Company’s acquisition pipeline, with the ultimate goal of finding
suitable acquisition targets and eventually closing a transaction.
To achieve Goal 1, the Board wants to see material progress from
Mr. Brog in improving deal-flow and allocating more time to the
search for acquisitions. A signed purchase agreement or the actual
consummation of an acquisition would also satisfy Goal 1.
Goal 2: Signed purchase agreements for the Malaysia
properties
The Board believes the Company’s assets in Malaysia continue to be
an unwanted distraction from Rubicon’s domestic operations. Mr.
Brog would achieve Goal 2 by negotiating and signing a purchase
agreement for one or both of the Malaysia properties with Board
approval. Material progress in finding a buyer for the properties
will also be considered by the Board for achieving Goal 2.
Goal 3: 2019 Year-End Cash
Similar to in 2018, the Board wishes to incentivize Mr. Brog in his
efforts to preserve capital.
As of December 31, 2018, Rubicon’s net short-term investments, cash
and cash equivalents and restricted cash were as follows:
| Cash and cash
equivalents: |
|
$ |
11,241,000 |
|
| Restricted Cash: |
|
$ |
169,000 |
|
| Short-term investments: |
|
$ |
14,356,000 |
|
| Total: |
|
$ |
25,766,000 |
|
The term “Total Cash” is defined as cash and cash equivalents,
restricted cash and short-term investments. The total current
liabilities as of December 31, 2018 were $1,194,000 (“TCL”). The
difference between the Total Cash ($25,766,000) and the TCL
($1,194,000) as of December 31, 2018 was $24,572,000.
If the difference between the Total Cash and the TCL as of December
31, 2019 (“2019 YE Cash”) is equal to or greater than $25,000,000
then Mr. Brog would satisfy Goal 3.
The 2019 YE Cash would be adjusted for any unusual items that occur
in 2019. For instance, if Rubicon merges or acquires another
entity, then the cash used in such transactions and the related
costs thereto should be added back into the 2019 YE Cash. If cash
is raised pursuant to the sale of Rubicon’s Common Stock then the
net cash raised shall be subtracted from the 2019 YE Cash. If
Rubicon uses cash to repurchase shares of its Common Stock, that
cash shall be subtracted from 2019 YE Cash. The above examples are
for illustrative purposes only and are not a complete list of the
types of unusual items that may occur in 2019.
Prior to December 31, 2019, Mr. Brog had no rights, interest or
title in the 2019 Objective Bonus Shares and such shares were not
deemed issued or granted in 2019. If setting the bonus objectives
described above violates any provision of the 2016 Rubicon Stock
Incentive Plan, then the payment of this bonus shall be null and
void and Mr. Brog and the Compensation Committee shall negotiate in
good faith a new bonus that will be approximately equal to the
value of the bonus described above.
Notwithstanding that Mr. Brog reached certain of the objectives set
forth by the Compensation Committee, due to the Covid-19 crisis,
the fact that no other employee earned a bonus for 2019 and a
relatively poor performance of certain investments made by the
Company, Mr. Brog requested that the Board not consider him for the
payment of a bonus, at least not until the sale of the Company’s
real estate located in Malaysia is consummated. The Board accepted
Mr. Brog’s request and no 2019 Objective Bonus Shares have been
granted.
For work performed in 2018 and paid in 2019, Mr. Brog was eligible
to earn up to 49,000 shares (the “2018 Objective Bonus Shares”) of
the Company’s common stock if certain goals were achieved. The
Board of Directors determined that Mr. Brog’s objectives were met
and such shares were issued to Mr. Brog in 2019.
Mr. Brog’s 2018 objective incentive compensation goals, in order to
earn the 2018 Objective Bonus Shares, was based upon the (a)
liquidation of certain of Rubicon’s assets, (b) generation and
preservation of Rubicon’s net short-term investments, cash and cash
equivalents and restricted cash and (c) reduction of current
liabilities, each of which were on the Company’s Balance Sheet as
of December 31, 2018. As of December 31, 2017, Rubicon’s net
short-term investments, cash and cash equivalents and restricted
cash were as follows:
| Cash and cash
equivalents: |
|
$ |
11,544,190 |
|
| Restricted Cash: |
|
$ |
180,655 |
|
| Short-term investments: |
|
$ |
6,450,833 |
|
| Total: |
|
$ |
18,175,678 |
|
The term “2017 Total Cash” was defined as cash and cash
equivalents, restricted cash and short-term investments. The total
current liabilities as of December 31, 2017 were $1,715,000 (“2017
TCL”). The difference between the 2017 Total Cash ($18,175,678) and
the 2017 TCL ($1,714,851) as of December 31, 2017 was $16,460,827.
The closing price of the Common Stock the day prior to the
agreement of these bonus objectives was $7.16 per share.
If the difference between the 2018 Total Cash and the 2018 TCL as
of December 31, 2018 (“2018 YE Cash”) is equal to or greater than
$26,000,000 then Mr. Brog shall earn all of the 2018 Objective
Bonus Shares. If the 2018 YE Cash is equal to or less than
$23,000,000 then Brog shall earn none of the 2018 Objective Bonus
Shares. If the 2018 YE Cash is less than $26,000,000 and greater
than $23,000,000 then Brog shall earn a pro rata percentage of the
2018 Objective Bonus Shares.
The 2018 YE Cash would be adjusted for any unusual items that occur
in 2018. In 2018, the purchase by the Company of its building
located at 900 East Green Street, Bensenville, Illinois and the
amount of cash used in the Company’s Stock Repurchase Plan were
deemed to be unusual items.
The Board determined that in 2018, Mr. Brog achieved all of the
goals set forth by the Compensation Committee and therefore all of
the 2018 Objective Bonus Shares were earned and subsequently
issued.
Severance and change in control arrangements
Payments upon termination are described below under “Termination of
Employment or Change in Control”.
OUTSTANDING EQUITY AWARDS AT 2019 FISCAL YEAR-END
The following table sets forth the outstanding equity awards for
our named executive officers as of December 31, 2019.
| |
|
Option
Awards |
|
Stock
Awards |
|
| Name |
|
Number
of securities underlying unexercised options (#)
exercisable |
|
|
Number
of securities underlying unexercised options (#)
unexercis-able |
|
|
Option
exercise price ($) |
|
|
Option
expiration date |
|
Number
of shares or units of stock that have not vested
(#)
|
|
|
Market
value of shares or units of stock that have not vested
($)(2) |
|
|
Equity
incentive
plan
awards:
number
of
unearned
shares, units or other rights that
have not
vested
(#)
|
|
|
Equity
incentive
plan
awards:
market
or payout
value of
unearned
shares, units or other rights that have not
vested
($) |
|
| Timothy
Brog |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
14,098 |
(1) |
|
|
117,295 |
|
|
|
|
|
|
|
|
|
| |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
30,902 |
(3) |
|
|
257,105 |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
The
award of 14,098 RSUs vests in the amounts set forth below on the
first date the 15-trading day average closing price of the
Company’s common stock equals or exceeds the corresponding target
price of $11.00 for the common stock before March 15, 2021,
provided that Mr. Brog remains employed with us through the
applicable vesting dates. This award did not vest in
2019. |
|
(2) |
The
market value of unvested stock awards is calculated by multiplying
the number of unvested RSUs by $8.32, the closing price of the
Company’s common stock on The NASDAQ Stock Market on
December 31, 2019. |
|
(3) |
The
award of 30,902 RSUs vest in the amounts set forth below on the
first date the 15-trading day average closing price of the
Company’s common stock equals or exceeds the corresponding target
price for the common stock before March 15, 2021: 902 - $11.00,
15,000 - $12.50 and 15,000 - $14.00, provided that Mr. Brog remains
employed with us through the applicable vesting dates. No tranches
vested in 2019. |
TERMINATION OF EMPLOYMENT OR CHANGE IN CONTROL
Mr. Brog’s Severance Terms. Pursuant to the
terms of his employment agreement, if Mr. Brog’s employment is
terminated by us without “cause” or if he resigns for “good
reason,” he will receive a continuation of his annual base salary
for twelve months thereafter and all of his outstanding RSU awards
will become vested, provided that Mr. Brog delivers a release of
claims to the Company. In addition, he is entitled to receive any
unused vacation pay, any bonus earned prior to the termination date
that remained unpaid, and continuation of his medical and
welfare benefits for a period of twelve months thereafter. If
within two years after a “change in control,” as defined in the
2016 Plan and summarized below, we terminate Mr. Brog without cause
or he resigns for good reason, he will be entitled to a lump sum
payment equal to 100% of his annual base salary in lieu of the
salary continuation described above.
For purposes of Mr. Brog’s agreement (i) “cause” generally is
defined as willful misconduct materially and adversely affecting
us; theft, fraud, embezzlement or similar behavior; indictment or
conviction of a felony; or willfully failing to substantially
perform the material duties of his position, other than failure
resulting from incapacity due to physical or mental illness,
following a demand for performance delivered by the Board of
Directors and a specified cure period of not less than 10 days; and
(ii) “good reason” generally is defined as a material
reduction in base salary or benefits; substantial diminution in Mr.
Brog’s duties, responsibilities or title, if uncured by us within
30 days of receipt of notice from Mr. Brog; or Mr. Brog is required
by the Board to work in the Company’s office located in any place
other than in the New York metropolitan area for more than 12 days
in any one month in order to maintain employment with the
Company.
Restrictive Covenants. Each executive’s
employment agreement contained or contains customary
non-competition and non-solicitation covenants. These restrictions
survive for a period of 12 months after the executive’s resignation
or termination, and in the event of a breach of his or her
employment agreement, the period is automatically extended by the
period of the breach.
Equity Compensation Awards. The equity
compensation awards granted under the 2016 Plan or 2007 Plan may
become vested upon a change in control. The 2016 and 2007 Plans
provide that in the event of “change in control,” as defined in the
2016 and 2007 Plans, each outstanding award will be treated as the
Compensation Committee determines, including that the successor
corporation or its parent or subsidiary may be required to assume
or substitute an equivalent award for each outstanding award. The
Compensation Committee is not required to treat all awards
similarly. If there is no assumption or substitution of outstanding
awards, the award recipient will fully vest in and have the right
to exercise all of his or her outstanding options and stock
appreciation rights, all restrictions on restricted stock and RSUs
will lapse and all performance goals or other vesting requirements
for performance awards will be deemed achieved at 100% of target
levels and all other terms and conditions will be deemed met. If an
option or stock appreciation right is not assumed or substituted,
the Compensation Committee will provide notice to the award
recipient that the option or stock appreciation right will be fully
vested and exercisable for a period of time determined by the
Compensation Committee in its discretion, and the option or stock
appreciation right will terminate upon the expiration of such
period. Notwithstanding the Compensation Committee’s general
discretionary authority described above, the individual award
agreements may provide for the vesting of such awards upon the
occurrence of a change in control. Under the 2016 and 2007 Plans, a
“change in control” is deemed to occur when (i) a person
becomes the beneficial owner (directly or indirectly) of at least
50% of the voting power represented by the Company’s outstanding
voting securities, (ii) the Company sells or disposes of all
or substantially all of its assets, (iii) the composition of
the Board of Directors changes within a two-year period resulting
in fewer than a majority of the directors being “incumbent
directors” (as defined in the 2016 and 2007 Plans), or (iv) a
merger or consolidation of the Company is consummated with any
other corporation resulting in the voting securities of the Company
outstanding immediately prior thereto representing (either by
remaining outstanding or by being converted into voting securities
of the surviving entity or its parent) less than 50% of the total
voting power represented by the voting securities of the Company or
such surviving entity or its parent outstanding immediately after
such merger or consolidation.
|
ITEM 12. |
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS |
Securities Authorized for Issuance under Equity Compensation
Plans
The following table represents securities authorized for issuance
under, the Rubicon Technology Inc. 2007 Stock Incentive Plan, as
amended and restated, and the Rubicon Technology Inc. 2016 Stock
Incentive Plan as of December 31, 2019.
Equity Compensation Plan Information
| Plan
category |
|
Number of
securities
to be issued
upon exercise of
outstanding options,
warrants and rights |
|
|
Weighted-average
exercise price of
outstanding options,
warrants and rights |
|
|
Number of securities
remaining available
for future issuances
under the equity
compensation plans
(excluding securities
reflected in column
(a)) |
|
| |
|
(a) |
|
|
(b) |
|
|
(c) |
|
| Equity
compensation plans approved by security holders(1) |
|
|
76,842 |
|
|
$ |
13.48 |
|
|
|
281,386 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
The
Rubicon Technology Inc. 2007 Stock Incentive Plan was approved by
stockholders before our initial public offering. The Rubicon
Technology Inc. 2016 Stock Incentive Plan was approved by
stockholders in June 2016. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Unless otherwise noted, the following table sets forth, as of April
6, 2020, the beneficial ownership of our common stock by:
| |
● |
each
person that was a beneficial owner of 5% of more of our outstanding
shares of common stock; |
| |
● |
each
of our named executive officers; |
| |
● |
each
of our directors, including the director nominees; and |
| |
● |
all
of our named executive officers and directors as a
group. |
Beneficial ownership is determined in accordance with the rules of
the SEC. Except as described below, in computing the number of
shares beneficially owned by a person and the percentage ownership
of that person, shares of common stock subject to RSUs, options or
warrants held by that person that are currently exercisable or
exercisable within 60 days of April 6, 2020 are deemed outstanding
for such person, but are not deemed outstanding for computing the
percentage ownership of any other person. These rules generally
attribute beneficial ownership of securities to persons who possess
sole or shared voting power or investment power with respect to
such securities. Except as otherwise indicated, all of the shares
reflected in the table are shares of common stock and all persons
listed below have sole voting and investment power with respect to
the shares beneficially owned by them, subject to applicable
community property laws. Percentage of beneficial ownership is
based on 2,554,336 shares of common stock outstanding as of April
6, 2020. Unless otherwise indicated in the footnotes below, the
address for each beneficial owner is c/o Rubicon Technology, Inc.,
900 East Green Street, Bensenville, Illinois 60106.
| |
|
Shares beneficially owned |
|
| Name
of beneficial owner |
|
Number |
|
|
Percent |
|
|
5% stockholders: |
|
|
|
|
|
|
| Bandera Master
Fund L.P.(1) (7) |
|
|
258,256 |
|
|
|
10.1 |
% |
| Aldebaran
Capital, LLC(2) |
|
|
160,373 |
|
|
|
6.3 |
% |
| Sententia
Capital Management LLC(3) |
|
|
143,120 |
|
|
|
5.6 |
% |
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Named Executive Officers and Directors: |
|
|
|
|
|
|
|
|
| Timothy
Brog(4) |
|
|
75,000 |
|
|
|
2.9 |
% |
| Mathew
J. Rich |
|
|
— |
|
|
|
* |
|
| Jefferson
Gramm(5) |
|
|
260,251 |
|
|
|
10.2 |
% |
| Michael
E. Mikolajczyk(6) |
|
|
59,848 |
|
|
|
2.4 |
% |
| Susan
M. Westphal(7) |
|
|
5,429 |
|
|
|
* |
|
| |
|
|
|
|
|
|
|
|
| All
executive officers and directors as a group (5
persons)(8) |
|
|
400,528 |
|
|
|
15.7 |
% |
| |
* |
Represents
less than 1% of the outstanding shares of common stock. |
|
(1) |
The
ownership information set forth in the table is based on
information contained in a statement on Schedule 13D (the “Bandera
13D”), filed on November 11, 2017, with the SEC by Bandera
Master Fund L.P. (“Bandera”), together with Bandera Partners LLC,
Gregory Bylinsky and Jefferson Gramm, Managing Partners, Managing
Directors and Portfolio Managers of Bandera Partners (“Reporting
Persons”) with respect to ownership of shares of our common stock.
The Bandera 13D reflects that each of Bandera Master Fund L.P. and
Bandera Partners has sole dispositive and voting power with respect
to 258,256 of the reported shares. Bandera reports on the Bandera
13D that each of Messrs. Bylinsky and Gramm as Managing Partners,
Managing Directors and Portfolio Managers of Bandera Partners may
be deemed to have shared power to vote or dispose of the shares
owned by Bandera. Bandera reports on the Bandera 13D that no person
other than the Reporting Persons have the right to receive or the
power to direct the receipts of dividends from, or the proceeds
from the sale of, our common stock. Mr. Gramm is a director of the
Company. The principal business address of Bandera is 50
Broad Street, Suite 1820, New York, New York 10004. |
|
(2) |
The
ownership information set forth in the table is based on
information contained in a statement on Schedule 13D (the
“Aldebaran 13D”), filed on June 30 2017, with the SEC by
Aldebaran Capital LLC (“Aldebaran”), together with Kenneth R.
Skarbeck (“Reporting Persons”) with respect to ownership of shares
of our common stock. The Aldebaran 13D reports that included in the
160,373 shares held by Aldebaran are 3,770 shares beneficially held
in family accounts related to Kenneth R. Skarbeck. The Aldebaran
13D reflects that the Reporting Persons have shared dispositive and
voting power with respect to 160,373 of the reported shares.
Aldebaran reports on the Aldebaran 13D that no person other than
the Reporting Persons have the right to receive or the power to
direct the receipts of dividends from, or the proceeds from the
sale of, our common stock and that none of Aldebaran’s clients have
an economic interest in more than 5% of the Company’s outstanding
shares. The principal business address of Aldebaran is 10293 N.
Meridian Street, Suite 100, Indianapolis, Indiana
46290. |
|
(3) |
The
ownership information set forth in the table is based on
information contained in a statement on Schedule 13D (the
“Sententia 13D”), filed on December 5, 2017, with the SEC by
Sententia Capital Management LLC (“Sententia”), together
with Sententia Group, LP, Sententia CI-I, LP and Michael R. Zapata
(“Reporting Persons”) with respect to ownership of shares of our
common stock. The Senentia 13D reflects that each of the Reporting
Persons have dispositive and voting power with respect to 143,120
of the reported shares. Sententia reports on the Sententia 13D that
no person other than the Reporting Persons have the right to
receive or the power to direct the receipts of dividends from, or
the proceeds from the sale of, our common stock but that none of
Sententia’s clients have an economic interest of more than 5% of
the Company’s outstanding shares. The principal business address of
Sententia is 745 Fifth Avenue, 14th Floor, New York, New
York 10151. |
|
(4) |
Excludes
45,000 restricted stock units granted to Mr. Brog. One third of
such RSUs will vest if prior to May 12, 2021, the 15-trading day
average closing price of the Company's common stock is greater than
or equal to the target prices of $11.00, $12.50 and $14.00,
respectively. |
|
(5) |
Includes
1,995 shares of common stock, owned by Mr. Gramm, and 258,256
shares of common stock beneficially owned by Bandera Master Fund
LLP. See footnote (1) above for a description of the
relationship between Mr. Gramm and Bandera Master Fund LLP. Mr.
Gramm disclaims beneficial ownership of the shares beneficially
owned by Bandera Master Fund LLP. Excludes 1,199 RSUs that will
vest on the date of the 2020 stockholder meeting. |
|
(6) |
Excludes 1,199
RSUs that will vest on the date of the 2020 stockholder
meeting. |
|
(7) |
Excludes 1,199
RSUs that will vest on the date of the 2020 stockholder
meeting. |
|
(8) |
Includes 400,528 shares of common
stock, and excludes 3,597 RSUs that will vest on the date of the
2020 stockholder meeting, beneficially owned by our executive
officers and directors. |
|
ITEM 13. |
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE |
Policy and Procedures for Review, Approval or
Ratification
We recognize that transactions between the Company and related
persons present a potential for actual or perceived conflicts of
interest. Our general policies with respect to such transactions
are included in our Code of Conduct which is administered by our
Audit Committee. All employees and members of our Board of
Directors agree to be bound by the Code of Conduct. As a supplement
to the Code of Conduct, the Audit Committee adopted a written
policy setting out the procedures and standards to be followed for
the identification and evaluation of “related party transactions.”
For purposes of the policy, a related party transaction is any
transaction or series of related transactions in excess of $120,000
in which we are a party and in which a “related person” has a
material interest. Related persons include our directors, director
nominees, executive officers, beneficial owners of 5% or more of
any class of our voting securities and members of their immediate
families. The Audit Committee has determined that certain
transactions are deemed to be pre-approved under this policy. These
include (i) transactions with another company in which the
related person’s only interest is as a director or beneficial owner
of less than 10% of the equity interests in that other company and
(ii) certain compensation arrangements that have either been
disclosed in our public filings with the SEC or approved by our
Compensation Committee.
We collect information about potential related party transactions
in our annual questionnaires completed by directors, executive
officers and certain beneficial owners of 5% or more of any class
of our voting securities. Potential related party transactions are
first reviewed and assessed by our Acting Secretary to consider the
materiality of the transactions and then reported to the Audit
Committee. If a related party transaction is identified during the
year, it is reported promptly to the Audit Committee. The Audit
Committee reviews and considers all relevant information available
to it about each related party transaction. A related party
transaction is approved or ratified only if the Audit Committee
determines that it is in, or is not inconsistent with, our best
interests and those of our stockholders and is in compliance with
the Code of Conduct.
On June 10, 2019, the Company acquired 12,818 shares of Common
Stock at a price of $8.12 per share from Michael Mikolajczyk, the
Company’s Chairman of the Audit Committee and the Board of
Directors. This purchase was unanimously approved by all of the
disinterested directors of the Company.
Director Independence
Our Board of Directors undertook a review of the independence of
each director and considered whether any director has a material
relationship with us that could compromise his or her ability to
exercise independent judgment in carrying out his or her
responsibilities. As a result of this review, our Board of
Directors determined that Messrs. Mikolajczyk, Gramm and Ms.
Westphal are independent under the standards for director
independence adopted by the Board of Directors and are “independent
directors” as defined under the rules of the NASDAQ Stock Market.
Based on the foregoing, our Board of Directors has concluded that a
majority of our Board of Directors has been independent during
2019, as required by the rules of the NASDAQ Stock Market. The
standards for director independence adopted by the Board of
Directors are available for review on our website
www.rubicontechnology.com.
|
ITEM 14. |
PRINCIPAL
ACCOUNTANT FEES AND SERVICES |
The Audit Committee of the Board of Directors has selected Marcum
LLP (“Marcum”) to serve as the Company’s independent registered
public accounting firm for the fiscal year ending December 31,
2020, and is submitting this matter to the stockholders for
ratification at the Annual Meeting. Marcum has served as the
Company’s independent registered public accounting firm since
2017.
Neither our bylaws nor other governing documents or law require
stockholder ratification of the selection of Marcum as our
independent registered public accounting firm. However, the Board
is submitting the selection of Marcum to the stockholders for
ratification as a matter of good corporate practice. In the event
the proposal to ratify the selection of Marcum is defeated, the
adverse vote will be considered as a direction to the Board to
select another independent registered public accounting firm for
the next fiscal year ending December 31, 2021. However,
because of the expense and difficulty in changing independent
registered public accounting firms after the beginning of a year,
the Board intends to allow the appointment of Marcum for the fiscal
year ending December 31, 2020 to stand unless the Board finds
other reasons for making a change.
Audit Fees
The aggregate fees billed by Marcum for audit services of the
Company’s annual financial statements and review services of the
Company’s quarterly financial statements for the fiscal year 2019
were $146,481. The aggregate fees billed by Marcum for audit
services of the Company’s annual financial statements and
assistance with and review of SEC filings for the fiscal year 2018
were $150,000.
Audit-Related Fees
There were no audit-related fees billed by Marcum in the fiscal
years 2019 and 2018.
Tax Fees
There were no tax fees billed by Marcum in the fiscal years 2019
and 2018.
All Other Fees
There were no other fees billed by Marcum in the fiscal years 2019
and 2018 for any other services.
Pre-Approval Policy and Procedures
In accordance with the Sarbanes-Oxley Act of 2002, the Audit
Committee is required to pre-approve all auditing services and
permissible non-audit services, including related fees and terms,
to be performed for the Company by its independent registered
public accounting firm subject to the de minimis exceptions for
non-audit services described under the Exchange Act, which are
approved by the Audit Committee prior to the completion of the
audit. In the fiscal years 2019 and 2018, the Audit Committee
pre-approved all audit and non-audit services provided to the
Company by its independent registered public accounting firm.
PART IV
|
ITEM 15. |
EXHIBITS
AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES |
(a) Documents filed as part of this report: The financial
statements of Rubicon Technology, Inc. listed below were set forth
in Item 8 of the Original Report:
|
|
|
| |
|
| Report
of Independent Registered Public Accounting Firm |
|
|
Consolidated Balance Sheets as of December 31, 2019 and
2018
|
|
|
Consolidated Statements of Operations for each of the two years in
the period ended December 31, 2019
|
|
|
Consolidated Statements of Comprehensive Income (Loss) for each of
the two years in the period ended
December 31, 2019
|
|
|
Consolidated Statements of Stockholders’ Equity for each of the two
years in the period ended December 31, 2019
|
|
|
Consolidated Statements of Cash Flows for each of the two years in
the period ended December 31, 2019
|
|
|
Notes to Consolidated Financial Statements
|
|
(b) Exhibits. The exhibits filed or incorporated by reference as a
part of this report are listed in the Index to Exhibits which
appears following the signature page to this Annual Report on Form
10-K and are incorporated by reference.
(c) Financial statement schedules not listed above have been
omitted because they are inapplicable, are not required under
applicable provisions of Regulation S-X, or the information that
would otherwise be included in such schedules is contained in the
registrant’s financial statements or accompanying notes.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized on April 29, 2020.
| |
Rubicon
Technology, Inc. |
| |
|
|
| |
By |
/s/
Timothy E. Brog |
| |
|
Timothy E. Brog
President and Chief Executive Officer
|
KNOWN BY ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Timothy E. Brog
and Mathew J. Rich, jointly and severally, his or her
attorney-in-fact, with the power of substitution, for him or her in
any and all capacities, to sign any amendments to this Annual
Report on Form 10-K and to file the same, with exhibits thereto and
other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that each
of said attorneys-in-fact, or his or her substitute or substitutes,
may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities indicated on April
29, 2020.
|
Signature |
|
Title |
| |
|
|
| /s/
Timothy E. Brog |
|
Director,
President and Chief Executive Officer |
| Timothy
E. Brog |
|
(Principal
Executive Officer) |
| |
|
|
| /s/
Mathew J. Rich |
|
Chief
Financial Officer |
| Mathew
J. Rich |
|
(Principal
Financial and Accounting Officer) |
| |
|
|
| /s/
Michael E. Mikolajczyk |
|
Chairman
of the Board of Directors |
| Michael
E. Mikolajczyk |
|
|
| |
|
|
| /s/
Susan Westphal |
|
Director |
| Susan
Westphal |
|
|
| |
|
|
| /s/
Jefferson Gramm |
|
Director |
| Jefferson
Gramm |
|
|
EXHIBIT INDEX
The Exhibits listed below are filed or incorporated by reference as
part of this Amendment No. 1 of the Annual Report on Form 10-K.
19
