MODUSLINK GLOBAL SOLUTIONS, INC. 
By Strongly Urges Stockholders to Vote the WHITE Proxy Card to Elect ModusLink's Highly Qualified Nominees at January 20, 2012 Annual Meeting of Stockholders
WALTHAM, Mass.--(BUSINESS WIRE)--Jan. 12, 2012-- ModusLink Global Solutions(TM), Inc. (NASDAQ: MLNK), today announced that it is mailing a letter to stockholders in connection with 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 experiencedhighly-qualified nominees for directors: Thomas H. JohnsonJeffrey J. Fenton - by telephone, Internet or by signing, datingreturning 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:
TIME IS SHORT -- VOTE THE ENCLOSED WHITE PROXY CARD TODAY
January 12, 2012
Dear Fellow Stockholder:
ModusLink's January 20, 2012 Annual Meeting of Stockholders is rapidly approaching. We urge you to elect ModusLink's experienced, independentcommitted nominees - Tom JohnsonJeff Fenton - to your Board of Directors.Since time is short, please take a moment of your time to use the enclosed WHITE proxy card to vote TODAY by Internet or telephone.
MAKE THE RIGHT CHOICE -- YOUR VOTE IS CRITICAL NO MATTER HOW MANY SHARES YOU OWN
At this Annual Meeting you have an important decision to make. You can choose to vote for dissident representatives from Peerless Systems Corporation, a publicly traded hedge fund that is pursuing its own short-term agendawhose nominees are not familiar with ModusLink or its industryhave failed to provide any constructive input or perspective on the Company - OR - you can choose to vote for ModusLink's two highly-qualified nominees - Tom JohnsonJeff Fenton - who bring criticalcomplementary skillsexperience to your Board. We think the choice is clear. Please consider the following:
PEERLESS IS ONLY LOOKING TO ADVANCE ITS OWN SHORT-TERM INTERESTS
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 Boardnegatively impact stockholder value. Consider the facts:
-
Today, Peerless owns approximately 2.4 percent of ModusLink
stock. If its nominees are elected, Peerless will gain
control of 25 percent of the Board, a percentage that is
vastly disproportionate to Peerless' recentlimited
ownership. In addition, Peerless is not familiar with
ModusLink or its industry, having no experience in the
supply-chain industry.
- Leading proxy advisory firm, Glass Lewis & Co., echoed this sentiment in its January 9, 2012 report, which stated: "Given Peerless' relatively brief period of ownership, lack of substantive plansrelatively smaller stake in ModusLink, we do not believe it is suitable to afford the Dissident two seats on an eight member board."1
- Peerless first purchased ModusLink stock just six months agohasrecentlysold approximately 10% of its ModusLink position.
- Peerless notified us of its intent to nominate director candidates less than one month after becoming a ModusLink stockholder.
- Peerless' nominees have refused ModusLink's request to be interviewed by the Board's NominatingCorporate Governance Committee.
- Peerless has chosen to engage the Company in a costlydisruptive proxy contest, despite numerous concessions by the Company to reach a settlement.
IN CONTRAST, MODUSLINK HAS A PLAN THAT IS DELIVERING TANGIBLE RESULTS AND WILL BENEFIT ALL MODUSLINK STOCKHOLDERS
- ModusLink's Boardmanagement team have developedbegun to execute an investmentcost reduction plan designed to increase revenue from new programs, improve profitabilitystrengthen leadership to drive improved results. This plan is already beginning to contribute to our results as ModusLink achieved its highest gross profit margin in nearly two yearsfirst operating profit in six quarters in the first quarter of fiscal 2012.
- ModusLink's Board has also 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 assetsother strategic options. To this end, the Board has formed a committee comprised of independent directors led by ModusLink director nominee Jeff Fenton to oversee the review processrecommend actions to the full Board.
Both our planthe review of strategic alternatives are focused on delivering value for ALL ModusLink stockholders. It is important that these be allowed to continue under the supervision of experiencedcommitted Board Members.
EGAN-JONES PROXY SERVICES RECOMMENDS MODUSLINK STOCKHOLDERS VOTE FOR ALL MODUSLINK DIRECTOR NOMINEES
In its report dated January 3, 2012, Egan-Jones, an independent proxy advisory firm, states:
"We believe that our support for the management is meritedthat voting the management ballot (WHITE PROXY CARD) is in the best interest of the Companyits shareholders." The report also states: "We are not persuaded that the dissidents' nominees would bring appropriate backgroundsexperience to the Board."2
Like Egan-Jones, we are confident that our Boardmanagement, including our director nominees - Tom JohnsonJeff Fenton - are 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 revenueprofits,also continue to conduct a comprehensive review of strategic alternatives to enhance stockholder value.
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.
PEERLESS NOMINEE TIMOTHY BROG FAILED TO WIN SUPPORT FROM ANY OF THE THREE LEADING INDEPENDENT VOTING ADVISORY FIRMS
You should be aware that Peerless nominee Timothy Brog failed to garner support from any of the three independent proxy advisory firms - Egan-Jones, ISSGlass Lewis - a fact that he, himself, has neglected to include in any of Peerless' recent press releases.
As detailed in our prior SEC filings, Mr. Brog has a troubling history regarding violations of the securities lawsthe failure to disclose such violations to stockholders.
In addition, Peerless used to be a company that provided imagingnetworking technologies, but since Mr. Brog took control of Peerless, it has somehow evolved into a publicly traded hedge fund, albeit with only approximately $13 million under management. In so doing, we believe that Mr. Brog is operating Peerless as an unregistered investment company in violation of federal securities laws. Based on its public filings, we believe Peerless fails several quantitativequalitative tests under the Investment Company Act of 1940. While Peerless has not been subject to regulatory action on this issue, the Company has contacted the SEC's Division of Investment Management regarding its views based on Peerless' public filings.
It is our belief that this concerning behavior was a contributing factor that resulted in all three proxy advisory firms recommending that ModusLink stockholders reject Mr. Brog's election.
PEERLESS' OTHER NOMINEE, JEFFREY WALD, LACKS THE EXPERIENCE NECESSARY FOR CONSTRUCTIVE CONTRIBUTION TO THE MODUSLINK BOARD
The following table demonstrates the basis of our conviction that both of the ModusLink nominees, Tom JohnsonJeff Fenton, are far more qualified than Peerless nominee, Jeffrey Wald:
