EXTON, Pa., Feb. 26 /PRNewswire-FirstCall/ -- WPCS International Incorporated (Nasdaq: WPCS), a leader in design-build engineering services for communications infrastructure, has acknowledged a 13D filing made by Bryant Riley and Riley Investment Management LLC on February 22, 2010. Andrew Hidalgo, Chairman and CEO of WPCS International Incorporated, commented "Within the 13D filing, Mr. Riley states his serious concerns with an extension of the former three year employment agreement for myself and Mr. Joseph Heater, our CFO, to five year employment agreements, which as a matter of record do not contain any salary increases. Mr. Riley continues by stating that he believes it represents waste and mismanagement by the WPCS board of directors. Riley Investment Partners L.P. has submitted a request for books and records pursuant to Section 220 of the Delaware General Corporation Law in order to obtain information in connection with any potential assertion that such action represents a breach of fiduciary duty by the directors." Mr. Hidalgo continues, "We believe this statement made by Mr. Riley has no merit as these employment agreements were submitted for consideration to our executive committee, comprised of independent directors, who exercised their business judgment, within the corporate governance parameters established by WPCS, that five year agreements were fair and secured the long term stability of key executives as they continue to focus on building shareholder value. These employment agreements and the executed resolution were administered in the highest ethical manner. The employment agreements are a matter of public record and were filed with the Securities and Exchange Commission on February 16, 2010. WPCS has decided to object to the request for books and records, as WPCS does not believe that the request was proper pursuant to Delaware law. We also believe that Mr. Riley has an ulterior motive for the request. On February 2, 2010, we met at our headquarters with a representative of LCC International, Inc. ("LCC"), a company in which Mr. Riley is a director and beneficially owns more than 40% of their common stock based on the most recent public filings made by LCC. At that meeting, LCC had expressed an interest in a merger between WPCS and LCC." Mr. Hidalgo continues, "Although WPCS would entertain any transaction that would enhance value for our shareholders, we will also defend WPCS from actions that we believe are detrimental to WPCS shareholder value. WPCS has been waiting for a formal proposal from LCC, but instead, received the 13D filing and a books and records request from Riley Investment Partners L.P. Independent of Mr. Riley's action, WPCS has an obligation to protect shareholder value. To that end, the WPCS board of directors has adopted a shareholder rights plan that is designed to discourage coercive or unfair takeover tactics and provide fair and equal treatment for all WPCS shareholders in the event an unsolicited offer is made to acquire the company. To implement this rights plan, the WPCS board of directors authorized the distribution of one right for each outstanding share of WPCS common stock to holders of record as of the close of business on March 8, 2010. The rights will expire on February 24, 2020. WPCS, in conjunction with its legal counsel, has been evaluating proposed measures for more than a year, measures including a shareholder rights plan which the board of directors could adopt to protect WPCS and its shareholders from coercive, underpriced or unfair acquisition attempts. As a result of this effort, the board of directors has concluded that such a plan is appropriate and in the interests of WPCS shareholders.