Tollgrade shareholder Ramius pushes for replacement of board members

By Lisa Kerner

Charlotte, N.C., July 23 - Tollgrade Communications, Inc. shareholder Ramius, LLC fired back at the company on Thursday, accusing Tollgrade of making misleading statements in its Tuesday news release.

While touting the experience of its two new directors, Charles E. Hoffman and Edward H. Kennedy, Tollgrade "completely ignores the real issues up for consideration" in its election contest with Ramius, the shareholder said.

"This election contest is about the replacement of three incumbent directors - James J. Barnes, David S. Egan and Brian C. Mullins - who have an average tenure of over ten years on the Tollgrade board, who have presided over massive losses in stockholder value, and who have no relevant industry experience," Ramius said in a news release.

Tollgrade "has spent $116 million of cash in the past five years, or $9.15 per share, with little to show for it," Ramius said.

Ramius believes its independent nominees, Scott Chandler and Ed Meyercord, are "highly qualified to serve as both an audit committee financial expert and to chair Tollgrade's audit committee." The shareholder also nominated Jeffrey Solomon for election.

It was previously reported that Ramius said the current Tollgrade board members continue to "reward themselves handsomely with generous annual director compensation packages averaging over $105,000 for each director, or $635,000 of aggregate director compensation for 2008."

Tollgrade, in a July 16 letter to shareholders, expressed concern that Ramius' nominees, if elected, would "eventually become a disruptive and destabilizing influence" on the board.

The company has also accused Ramius of making false and misleading statements about Tollgrade's board.

According to Tollgrade, Ramius chose to ignore the extensive telecom expertise that exists on Tollgrade's board to distract shareholders from focusing on the progress the company has made in enhancing the board's composition.

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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