Evermore Supports Calls for Management Changes at ModusLink

SUMMIT, N.J., Oct. 19, 2011 /PRNewswire/ -- Evermore Global Advisors, manager of the Evermore Global Value Fund, is calling on the board of directors of ModusLink Global Solutions (Ticker: MLNK) to replace the company's senior management team, starting with chairman, chief executive officer and president Joseph C. Lawler.

In a letter to ModusLink's board, Evermore chief executive officer David E. Marcus wrote that Mr. Lawler "has continually mismanaged ModusLink's balance sheet while simultaneously letting company operations stagnate." He urged the company's directors to "act now" and "install a team that is willing and able to pursue strategic alternatives" while "there is significant value left in the company."

"I believe ModusLink's board has a duty to the company's shareholders to replace Mr. Lawler and other members of the board, and bring in a new team that can unlock the company's true value," said Mr. Marcus. "ModusLink's stock is down more than 30% in the last year and we're adding our voice to the growing chorus of the company's shareholders who say it's time for a drastic change in direction that will return value to the stockholders."

Evermore is also supporting the proxy initiative filed by ModusLink investor Peerless Systems Corp. to replace two members of ModusLink's board along with Mr. Lawler. Peerless has nominated Timothy Brog, its chairman and chief executive officer, and Jeffrey Wald, COO of Work Market, Inc., for seats on ModusLink's board.

Another large ModusLink shareholder, LCV Capital Management, has come out in support of the elections of Mr. Brog and Mr. Wald and the removal of Mr. Lawler.

"Our investment philosophy is to identify undervalued companies that are experiencing catalysts that will drive their stock prices higher," said Mr. Marcus. "We believe the removal of Mr. Lawler and the addition of two outside, independent directors to ModusLink's board are exactly the kind of catalysts needed to accomplish just that goal."

The full text of Evermore Global Advisors' letter to ModusLink's board appears below.

Board of Directors
ModusLink Global Solutions
1100 Winter Street, Suite 4600
Waltham, MA 02451

October 17, 2011

Dear Board of Directors:

Evermore Global Advisors is the investment adviser to the Evermore Global Value Fund, a shareholder of ModusLink Global Solutions.  We are writing to voice our displeasure with the company's current management team.  We urge you, as fiduciaries of the company, to replace the current senior leadership of the company and install a team that is willing and able to pursue strategic alternatives.

We believe that the current management team, led by CEO Joe Lawler, has continually mismanaged ModusLink's balance sheet while simultaneously letting company operations stagnate.  The board has a responsibility to shareholders to preserve what value is left in Moduslink and the first step in doing this is removing the current management team. 

We support Peerless Systems Corporation's decision to nominate Timothy Brog and Jeffrey Wald to the ModusLink board of directors and their goal of exploring all operational and strategic alternatives to maximize shareholder value.  We believe there is significant value left in ModusLink in spite of management's best efforts.  The company still has ample cash, large tax losses, and undermanaged operations.  However, this value is eroding rapidly.  You need to act now.

The following list is a subset of the director responsibilities, all of which were taken word for word from the ModusLink website:

1. Oversee Management of the Company.  The principal responsibility of the directors is to oversee the management of the Company and, in so doing, serve the best interests of the Company and its stockholders.  This responsibility includes:

• Reviewing and approving fundamental operating, financial and other corporate plans, strategies and objectives.
• Evaluating the performance of the Company and its senior executives and taking appropriate action, including removal, when warranted.
• Evaluating the Company's compensation programs on a regular basis and determining the compensation of its senior executives.
• Requiring, approving and implementing senior executive succession plans.
• Evaluating whether corporate resources are used only for appropriate business purposes.
• Establishing a corporate environment that promotes timely and effective disclosure (including robust disclosure controls, procedures and incentives), fiscal accountability, high ethical standards and compliance with all applicable laws and regulations.
• Reviewing and approving material transactions and commitments not entered into in the ordinary course of business.
• Developing a corporate governance structure that allows and encourages the Board to fulfill its responsibilities.
• Providing advice and assistance to the Company's senior executives.
• Evaluating the overall effectiveness of the Board and its committees.

It is clear to us that most, if not all, of these points have not been effectively followed by the board.  Joe Lawler and his team have run out of time and chances to affect positive change for shareholders and it is time for new leadership.  It is incumbent upon the board to be decisive and stand up on behalf of ModusLink shareholders while there is still value left to preserve. 

Regards,
David Marcus
Chief Executive Officer

CC: Joseph C. Lawler
CC: Virginia G. Breen
CC: Thomas H. Johnson
CC: Francis J. Jules
CC: Edward E. Lucente
CC: Michael J. Mardy
CC: Anthony J. Bay

For more information about Evermore Global Advisors, contact Jami Schlicher of JCPR at 973-850-7309 or [email protected].

About Evermore Global Advisors

Evermore Global Advisors is the manager of the Evermore Global Value Fund. Founded in 2009 by Chief Executive Officer and lead portfolio manager David Marcus, and President and Chief Operating Officer Eric LeGoff, Evermore employs a distinctive active value investment discipline designed to find undervalued companies anywhere in the world that are undergoing strategic changes that have the potential to unlock long-term value for investors while mitigating risk. Evermore makes investment decisions based on its original fact-based research, traditional financial analysis, and insights gained in face-to-face meetings with its unique global network of business owners, executives, and major investors.

Headquartered in Summit, N.J., Evermore Global Advisors is an investment adviser registered under the Investment Advisers Act of 1940. For more information, visit http://evermoreglobal.com.

CONTACT:   
Jami Schlicher
JCPR
973-850-7309
[email protected]

SOURCE Evermore Global Advisors