Upon consummation of the investment, ModusLink Directors Edward E. Lucente and Joseph M. O’Donnell would step down from the Board, and current Chairman Francis J. Jules and Director and Audit Committee Chairman Michael J. Mardy, whose terms on the Board conclude at the Annual Meeting, would each be reappointed to the Board as Class II directors. In addition, at that time, Mr. Lichtenstein would be designated Chairman of the Board of the Company. The size of the Board would be fixed at seven directors immediately following the Annual Meeting.
ModusLink expects to announce the date and location of the Annual Meeting in connection with the filing of its definitive proxy statement concerning the transaction which will, in addition to seeking the election of the Steel Group representatives and approval of the investment, seek approval of the declassification of the Company’s Board of Directors such that the annual election of all directors would take place beginning at the 2013 annual meeting. The Board is submitting this latter proposal in response to the approval at the 2011 annual meeting of a shareholder proposal urging such change.
“The commitment of new capital from Steel Holdings at a significant premium to the recent price of ModusLink shares is a strong vote of confidence in ModusLink’s future by our largest stockholder,” said Mr. Jules. “The investment also validates the recent strategic changes and improvements the Company has undertaken, and further strengthens the Company’s balance sheet. We are also pleased to reach an agreement where the Company will be nominating Warren Lichtenstein and Glen Kassan, two highly qualified nominees, for election to ModusLink’s board of directors at our upcoming annual meeting. The Board looks forward to the opportunity to work with Warren and Glen to increase stockholder value.”
“We have worked constructively with ModusLink to reach these agreements and are excited by the opportunity to invest further in the Company’s future and to contribute significantly to the creation of value for all ModusLink stockholders,” said Mr. Lichtenstein. “I believe ModusLink has considerable potential for value creation as evidenced by Steel Holdings’ investment. I also believe that Glen and I are well suited to help the Company towards that objective and we look forward to working with the rest of the Board and ModusLink management to that end.”