Ramius asks Tollgrade shareholders to support its nominees at meeting

By Lisa Kerner

Charlotte, N.C., July 30 - Ramius LLC once again urged fellow Tollgrade Communications, Inc. shareholders to vote for its director nominees at Tollgrade's annual meeting, which is scheduled for Wednesday.

The shareholder has nominated Scott Chandler, Ed Meyercord and Jeffrey Solomon for election to Tollgrade's board of directors.

Chandler founded a telecom consulting practice in 2001. Meyercord was most recently president, chief executive officer and director of privately held Cavalier Telecom. Solomon is a managing member of Ramius.

Both Chandler and Meyercord have been CEOs and chief financial officers of public companies, said Ramius.

In a letter to shareholders on Thursday, Ramius said it believes the election of its nominees would bring several key attributes to the board that are currently lacking, including "extensive telecom industry experience and a large vested financial interest in the future performance of Tollgrade."

The incumbent directors up for election - James Barnes, David Egan and Brian Mullins - are ill-equipped to oversee the company's turnaround, the letter said.

Barnes and Egan are attorneys from the same law firm, and Mullins is a retired packaging executive with no relevant telecom industry experience, said Ramius.

According to Ramius, the trio owns a total of less than 20,000 shares of Tollgrade, representing a market value of less than $100,000. None of the three has bought Tollgrade stock in the past two years despite each collecting annual board fees of about $100,000 per year, the letter said.

Tollgrade fired back with its own letter to shareholders on Thursday, accusing Ramius of seeking to replace the board's entire audit committee.

Such a move is "counter to best practices in corporate governance" and should trouble shareholders, Tollgrade said in the letter.

The company believes Ramius may want to have Chandler, who has a public accounting background, replace audit committee chairman Brian C. Mullins and be the committee's financial expert.

Proxy firms weigh in

Ramius reminded shareholders that RiskMetrics Group/ISS and Proxy Governance, Inc. have recommended that Tollgrade shareholders vote in favor of Meyercord and Solomon.

As previously reported, RiskMetrics and Proxy Governance advised Tollgrade shareholders to withhold their votes for Chandler.

Glass, Lewis & Co., recommended that Tollgrade shareholders vote for all of the company's director nominees at the annual meeting, a prior Tollgrade news release said.

Cheswick, Pa.-based Tollgrade makes test system and status-monitoring hardware and software products for the U.S. telecommunications and cable industries.

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