ModusLink Global Solutions (TM), Inc. (NASDAQ:MLNK), today announced that it has mailed a letter to stockholders in connection with its nomination of two highly-qualified and proven individuals for election to the Board of Directors at the Company’s Annual Meeting of Stockholders to be held on January 20, 2012.
ModusLink’s Board of Directors unanimously recommends that stockholders vote “FOR” the Company’s two directors: Thomas H. Johnson and Jeffrey J. Fenton – by telephone, Internet or by signing, dating and returning the WHITE proxy card TODAY. The Company also urges shareholders to discard any gold proxy card that they receive from Peerless Systems Corporation (NASDAQ:PRLS).
The text of the letter to ModusLink stockholders is below:
January 3, 2012Dear Fellow Stockholder: We are writing to you again regarding your vote at the important Annual Meeting of Stockholders on January 20, 2012, because we want to make sure that you are apprised of all the facts before you make your voting decision. The future of your investment is at stake! At this critical juncture, your Board of Directors unanimously recommends that you vote “FOR” the Company’s two experienced and highly-qualified nominees for director, Tom Johnson and Jeff Fenton, using the WHITE proxy card. We urge you to simply discard any Gold proxy card you may receive from Peerless Systems Corporation. DO NOT BE MISLED BY PEERLESS OR ITS NOMINEES WHO OFFER NO PLAN TO CREATE VALUE FOR ALL MODUSLINK STOCKHOLDERS Please take a moment of your time to consider the reasons why we believe that, if elected, the Peerless nominees could interrupt the ongoing implementation of ModusLink’s strategic plan, disrupt the current review of strategic alternatives, reduce the level of relevant experience on the Board and negatively impact stockholder value.
|X||The Peerless nominees are not familiar with ModusLink or its industry and have failed to provide any constructive input or perspective on the Company. Throughout numerous meetings and phone conversations with both management and members of the ModusLink Board, Peerless has revealed an overall lack of coherence in both message and agenda and has failed to provide any strategic or operational suggestions that might lead to improved stockholder value creation at ModusLink. In fact, Peerless readily admits in its proxy materials that its nominees “do not have specific plans as of this date with respect to enhancing the value of the Company.”|
|X||The Peerless nominees fail to enhance the composition of your Board. The Peerless nominees have NO meaningful experience in ModusLink’s industry and have NO new ideas for enhancing the value of your investment in ModusLink. Additionally, Peerless has refused ModusLink’s request for its nominees to be interviewed by the Board’s Nominating & Corporate Governance Committee. What do they have to hide?|
|X||Peerless nominee Timothy Brog has a track record of SEC violations and a failure to disclose material information to stockholders. As detailed in our prior SEC filings, we believe this behavior is troubling and has no place on ModusLink’s Board.|
|X||Peerless’ pursuit of this proxy contest could result in the removal of two of ModusLink’s Board members at a critical time. In particular, this could result in the disruption of the Company’s review of strategic alternatives, as Mr. Fenton is the Chairman of the committee that is currently overseeing the review process.|
|X||Peerless has been a ModusLink stockholder for only five months, and since October 4, 2011, Peerless has sold approximately 10 percent of its ModusLink stockholdings.|
|X||Peerless has chosen to engage the Company in a costly and disruptive proxy contest, despite numerous concessions by the Company to reach a settlement.|
- A strategic plan to set the Company on a path to sustained growth in revenue and profits. The Board and management have developed and begun to execute an investment and cost reduction plan designed to increase revenue from new programs, improve profitability and strengthen leadership to drive improved results.
- Already started to see results from this plan. In the first quarter of fiscal 2012, these initiatives contributed to our highest gross profit margin in nearly two years and our first operating profit in six quarters.
- Initiated a thorough review of strategic alternatives to enhance stockholder value. This process includes among other things a possible sale of certain of the Company’s assets and other strategic options. To this end, the Board has formed a committee comprised of independent directors to oversee the review process and make associated recommendations to the full Board.
- Returned significant capital to stockholders. Since the beginning of fiscal 2008, ModusLink has returned nearly $97 million of cash to stockholders through stock buybacks and the March 2011 special dividend. Since initiating its buyback programs in early fiscal 2008, the Company has repurchased $56.7 million of ModusLink shares, reducing its total shares outstanding by approximately 12 percent.
- A strong, experienced and independent Board. All of ModusLink’s directors are seasoned executives who are actively engaged and keenly aware of their duties to create value for all stockholders. Importantly, seven of our eight highly-qualified Board members are independent, and half of the directors have joined the Board within the past five years.
- Enhanced corporate governance through the separation of the roles of chairman and chief executive officer. This action further strengthens the independence and governance structure of ModusLink’s Board.
- Put forth for election highly-qualified director nominees who bring critical and complementary skills and experience to the ModusLink Board. Mr. Johnson and Mr. Fenton understand their responsibility as directors to protect and create value for all stockholders.
- Appointed a stockholder nominee to the Board. Last year, the Nominating & Corporate Governance Committee interviewed director candidates put forward by stockholders for election at the 2010 Annual Meeting. Following this process, the Board appointed one of those nominees, Mr. Fenton, to the Board, and has nominated Mr. Fenton for a three-year term at this year’s Annual Meeting.
- Taken appropriate action to protect stockholder assets. ModusLink recently adopted a tax benefit preservation plan to help preserve the value of the Company’s net operating losses and other deferred tax benefits, which can be utilized in certain circumstances to offset future U.S. taxable income. The adoption of this plan is subject to stockholder approval at this year’s Annual Meeting.
- Been reasonable and open to a settlement with Peerless. ModusLink maintains an open dialogue with its stockholders and values your opinions. Despite concerns about the Peerless nominees, ModusLink has made a concerted effort to work with Peerless to resolve the proxy contest and come to an agreement that is in the best interests of all stockholders. However, Peerless has rebuffed the Company’s efforts each time.
|Francis J. Jules||Joseph C. Lawler|
|Chairman of the Board||President and Chief Executive Officer|
|ModusLink Global Solutions, Inc.||ModusLink Global Solutions, Inc.|
|Your Vote is Important, No Matter How Many or How Few Shares You Own|
|If you have questions about how to vote your shares, or need additional assistance, please contact the firm assisting us in the solicitation of proxies:|
|INNISFREE M&A INCORPORATED|
|Stockholders Call Toll-Free: (877) 750-5836|
|Banks and Brokers Call Collect: (212) 750-5833|
|We urge you NOT to vote using any Gold proxy card sent to you by Peerless, as doing so will revoke your vote on the WHITE proxy card.|
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