Ned Sherwood, a major stockholder of ChinaCast Education
Corporation (Nasdaq GS: CAST), today issued the following letter to
all stockholders of the Company: Dear Fellow ChinaCast
Stockholders: I encourage all ChinaCast stockholders to ignore CEO
Ron Chans latest letter, issued today, which in my view is clearly
a desperate last-minute attempt to prevent all stockholders the
true owners of ChinaCast from having a truly independent board of
directors. In fact, Mr. Chans letter is in my view a six-page
compendium of misleading statements, revisionist efforts and thinly
veiled threats, most of which I have already addressed in my prior
letters to stockholders. ChinaCasts current board of directors
consists of seven directors, including two management directors
(Ron Chan and Michael Santos) and five non-management directors,
including Daniel Tseung and myself. Justin Tang, Steve Markscheid
and Hope Ni, who are on Mr. Chans slate, have an unblemished record
of always voting with management directors. It is my strong belief
that only Daniel Tseung and I have voted and acted with
independence to protect the stockholders against questionable
actions by management directors on the board as currently
constituted. Chan asserts in his letter that somehow Ned Sherwood
is gaining control of CAST along with Fir Tree. This is obviously
totally untrue! If you elect my three independent director nominees
Daniel Tseung, Derek Feng and myself on the GREEN card, the CAST
board will include five out of the seven current directors. In my
opinion, it is hard to conceive of how this would be a change of
control without employing Mr. Chans flawed logic and linguistic
contortions. In fact, it is Mr. Chan who has had effective control
of the Company with its current board, which includes two
management directors and three individuals who in my view are
puppet independent directors. The election of my three independent
nominees will not give me control, but it will take de facto
control of the board away from Mr. Chan and place it into the hands
of a truly independent board. Also troubling in Mr. Chans latest
letter is the reiteration of managements threats. Mr. Chan points
out, as a fact helpful to his cause, that each of the four
executives named in Mr. Sherwoods proxy statement (Li Wei, X.Y.
Jiang, Jim Ma and Donald Gardner), together with Ron Chan, Michael
Santos and Tony Sena, have ALL signed a statement that they will
not work for a company that is controlled by Ned Sherwood. I invite
Mr. Chan to explain to all stockholders the circumstances
surrounding the we would hope uncoerced spontaneous signing of this
declaration of loyalty towards Mr. Chan by all these executives. As
recently as yesterday, I called and held a meeting of the
Compensation Committee of the board to propose a Retention Bonus
Program for Li Wei, X.Y. Jiang, Jim Ma, Donald Gardner and other
unspecified key mainland Chinese CAST managers. I proposed that we
approve and announce publicly to the CAST team that each of these
key managers (and possibly others) receive a minimum of a one-time
bonus of 18 months base salary if the manager remains as an
employee of a new acquiror of CAST for at least two years after the
acquisition. Although the January 10 election will NOT result in a
company controlled by Ned Sherwood, I thought it would be prudent
to potentially allocate between $1 to 2.5 million for retention
bonuses for key managers at this critical time in CASTs history, as
a relatively cheap insurance policy to be better positioned to
potentially effect a multi hundred-million dollar sale transaction.
So far, the Compensation Committee has delayed action on my
proposal. I continue to urge all stockholders to vote with our
GREEN proxy card. The Delaware Chancery Court has provided an
opinion on this case worth reviewing by all stockholders. The
nations leading independent proxy advisory service, ISS, has issued
a recommendation that its clients vote on the GREEN proxy card.
Dont listen to the continued revisionist history in CASTs latest
letter. Now is the time for stockholders to make sure that they
have true independent voices in the board room committed to looking
out for their best interests. The ChinaCast annual meeting of
stockholders is just days away. Please vote your GREEN proxy card
TODAY. If you have any questions or need assistance in voting your
GREEN proxy card, please call the firm assisting in the
solicitation of proxies, Innisfree MA Incorporated, toll-free at
(888)750-5834 (banks and brokers call collect at
(212)750-5833). Thank you for your support, Ned Sherwood
Important Information SECURITY HOLDERS ARE ADVISED TO READ THE
DEFINITIVE PROXY STATEMENT FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION (THE SEC) AND OTHER DOCUMENTS RELATED TO THE
SOLICITATION OF PROXIES BY NED SHERWOOD, ZS EDU L.P., ZS EDU GP
LLC, ROBERT HORNE AND THE NOMINEES FROM THE STOCKHOLDERS OF
CHINACAST EDUCATION CORPORATION (THE ISSUER) FOR USE AT THE ISSUERS
ANNUAL MEETING BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT
INFORMATION. INVESTORS CAN GET THE DEFINITIVE PROXY STATEMENT AND
OTHER RELEVANT DOCUMENTS, AT NO CHARGE, AT THE SECS WEBSITE AT
HTTP://WWW.SEC.GOV.
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