Tollgrade shareholder's nominees backed by proxy advisory firm

By Lisa Kerner

Charlotte, N.C., July 27 - RiskMetrics Group/ISS is recommending that Tollgrade Communications, Inc. shareholders vote for Ramius LLC director nominees Ed Meyercord and Jeffrey Solomon at the company's annual meeting on Aug. 5, Ramius announced on Monday.

According to Tollgrade, RiskMetrics recommended that shareholders withhold their votes for Ramius' third director nominee, Scott Chandler.

Tollgrade believes that Chandler is not qualified to be a director of the company and that his election "would jeopardize the substantial progress that Tollgrade has been making toward transforming the company to position it for long-term growth, future profitability, market leadership and increasing returns for investors," a Tollgrade news release said.

Chandler had leadership roles in now-defunct public telecom company Rhythms NetConnections, Inc., said Tollgrade.

On Friday Tollgrade announced that Proxy Governance, Inc. recommended that the company's shareholders withhold their votes for Chandler.

As previously reported, a third proxy advisory firm, Glass, Lewis & Co., recommended that Tollgrade shareholders vote for all of the company's director nominees at the annual meeting.

Proxy firm supports change

RiskMetrics, according to Ramius, said in its report, "Due to the sustained share price underperformance and the deteriorating financial metrics, especially since 2006, that have lead to significant loss of shareholder value relative to its peers, we conclude that change is warranted."

Ramius, a 15.9% Tollgrade shareholder, said RiskMetrics also believes "the dissident candidates are highly skilled and experienced as evidenced by over 55 years [of] combined business and finance experience including 35 years within the telecom industry."

Tollgrade said it recently appointed telecom industry veterans Charles E. Hoffman and Edward H. Kennedy to its board.

"We continue to believe that Ramius has neither demonstrated that their opposition slate is better qualified to oversee Tollgrade nor detailed a new or compelling different strategy for the company," Tollgrade chairman, president and chief executive officer Joseph A. Ferrara said in the release.

Ramius said previously that the Tollgrade election contest is about replacing incumbent directors James J. Barnes, David S. Egan and Brian C. Mullins. The shareholder said the three have presided over "massive losses in stockholder value" and lack relevant industry experience.

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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