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Egan-Jones Recommends ModusLink Stockholders Vote For All ModusLink Director Nominees

Stocks in this article: MLNKPRLS

ModusLink Global Solutions™, Inc. (NASDAQ: MLNK), today announced that independent proxy advisory firms, Egan-Jones Proxy Services (Egan-Jones), Institutional Shareholder Services (ISS) and Glass Lewis & Co. (Glass Lewis), have issued reports in connection to ModusLink's 2011 Annual Meeting of Stockholders to be held on January 20, 2012. Egan-Jones recommends that its clients vote for ModusLink’s two director nominees - Thomas (“Tom”) H. Johnson and Jeffrey (“Jeff”) J. Fenton. ISS supports the election of ModusLink nominee, Jeff Fenton. All three firms recommend that ModusLink stockholders reject Peerless Systems Corporation (NASDAQ: PRLS) (“Peerless”) nominee, Timothy E. Brog.

In its report, dated January 3, 2012, Egan-Jones states:

“We believe that our support for the management is merited and that voting the management ballot (WHITE PROXY CARD) is in the best interest of the Company and its shareholders.” The report also states: “We are not persuaded that the dissidents’ nominees would bring appropriate backgrounds and experience to the Board.” [1]

In response to these reports, ModusLink issued the following statement:

          We are extremely pleased that Egan-Jones supports the election of ModusLink’s two highly-qualified and experienced director nominees. ModusLink’s Board and management team are actively engaged and committed to building value for all ModusLink stockholders and have the necessary depth and breadth of expertise in areas that are critical to ModusLink’s continued success. We are confident that our Board and management team, including our director nominees – Tom Johnson and Jeff Fenton – is the right team to continue leading ModusLink as we push forward on executing our plan to set the Company on a path to sustained growth in revenue and profits, which is already delivering results, and also continue to conduct a comprehensive review of strategic alternatives to enhance stockholder value. We strongly urge all ModusLink stockholders to follow the recommendation of Egan-Jones and protect the value of their investment by voting for our Director nominees on the WHITE proxy card today.

 

We are also pleased that ISS supports the election of ModusLink’s director nominee, Jeff Fenton. However, we believe that ISS and Glass Lewis reached the wrong conclusion in failing to support our nominee Tom Johnson. Both ModusLink director nominees, like every member of the Company’s Board, are committed to representing the interests of all ModusLink stockholders, not those of one stockholder.

 

In contrast, we strongly 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. This is supported by the Peerless nominees’ lack of any relevant experience related to the industry in which ModusLink operates and their failure to provide any strategic or operational suggestions that might lead to improved stockholder value creation at ModusLink.

 

This is further demonstrated by comparing the experience of ModusLink nominee Tom Johnson to that of Peerless nominee, Jeffrey Wald:

 
  • Board recommends voting FOR ModusLink director nominee: Thomas H. Johnson (63) – Tom Johnson has significant board experience with multi-national corporations such as Coca-Cola Enterprises, GenOn Energy, Inc., Universal Corporation, Chesapeake Corporation and Mirant Corporation. This includes serving on such companies’ audit, nominating and governance and compensation committees. Mr. Johnson provides to the Board more than 15 years of leadership and financial experience, including service as the CEO of several large corporations. Mr. Johnson was identified by an outside search firm, Spencer Stuart, as part of a nationwide search for director candidates. Importantly, his experience as Chairman and CEO of Chesapeake Corporation, a specialty packaging manufacturer with facilities in Asia, Europe and the United States provides important, relevant and extensive operational, manufacturing and international management experience in ModusLink’s key regions.
 
  • Board recommends discarding gold card as a vote against Peerless director nominee: Jeffrey S. Wald (38) – Conversely, Jeffrey Wald is a relative unknown who refused to be interviewed by ModusLink’s Nominating and Governance Committee. Based on publicly available information, Mr. Wald provides no relevant industry experience. Mr. Wald’s board experience is limited to serving as a director on the dissident’s board and on the board of Sielox, Inc., a $2 million market cap company whose stock has a 52-week high of 11 cents.
 

Furthermore, Peerless, which owns approximately 2 percent of ModusLink stock, is seeking to control 25 percent of the Company’s Board in order to pursue its own short-term agenda. Peerless has been a ModusLink stockholder for only six months, and since October 4, 2011, Peerless has sold approximately 10 percent of its ModusLink stockholdings.

 

ModusLink is at a critical juncture in its development.  We urge stockholders to protect their investment and not risk the Company’s future by exposing ModusLink to Peerless and its nominees.  Stockholders should vote for ModusLink’s director nominees on the WHITE proxy card today.

ModusLink stockholders are reminded that their vote is important, no matter how many shares they own. Whether or not they attend the Annual Meeting, ModusLink stockholders are encouraged to submit a WHITE proxy by Internet, telephone or by signing and dating the WHITE proxy card itself and returning it as soon as possible.

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