PITTSBURGH, July 27 /PRNewswire-FirstCall/ -- Tollgrade Communications, Inc.
(Nasdaq: TLGD) today announced that RiskMetrics Group -- ISS Governance Services, a
proxy voting advisory and risk management consulting firm to the global financial
community, has issued a recommendation to its clients that shareholders withhold
their votes for Scott C. Chandler who was
nominated by Ramius LLC for election to Tollgrade’s Board of Directors at the
Company’s Annual Meeting of Shareholders to be held on August
5, 2009. In addition, last week, PROXY Governance, Inc. and Glass Lewis &
Co. also recommended that shareholders not support the election of dissident
candidate, Scott C. Chandler, meaning that all
three of the leading proxy advisory firms have now advised Tollgrade’s
shareholders not to support the election of Mr. Chandler. The governance firms’ clients
include institutional investors, mutual funds, pension funds and other
fiduciaries. Tollgrade urges all shareholders to vote for their Board’s highly qualified
and very experienced nominees on the WHITE proxy card TODAY -- by
telephone, Internet, or by signing, dating and returning the
WHITE proxy card.
(Logo: http://www.new
scom.com/cgi-bin/prnh/20050603/CLF046LOGO )
In its report, Glass Lewis questioned the need for additional new
directors on the Tollgrade Board. "...[W]e do not believe that the dissident has
successfully shown that the Board requires new outside representation at this
time,” Glass Lewis said in its report. Glass Lewis also took note of the
Tollgrade Board’s appointment of distinguished telecom industry veterans Charles E. Hoffman and Edward H.
Kennedy to serve as its newest independent directors. “... [t]he Board
will likely benefit from the participation of the Company’s nominees given
their industry experience,” Glass Lewis said in its report.
In its report, PROXY Governance also noted how Tollgrade is likely to
benefit from the Tollgrade Board’s appointment of distinguished telecom industry
veterans Charles E. Hoffman and Edward H. Kennedy. “[W]e agree with the company that the
newest directors, Kennedy and Hoffman, should bring important perspective to the
board because of their industry experience,” said PROXY Governance in its
report.
Tollgrade continues to believe that Mr. Chandler does not have the
appropriate qualifications for serving as a director of Tollgrade 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.
As Tollgrade has previously noted, it has serious concerns about Mr.
Chandler’s past experience in serving in senior leadership positions in a public
telecom company, Rhythms NetConnections, Inc., which is now defunct, and
questions Ramius’ wisdom in proposing Mr. Chandler as a nominee given his role in the
demise of Rhythms, a business failure that ultimately attracted substantial
attention. Mr. Chandler was a member of the senior executive team of Rhythms, first
as Chief Financial Officer and then later as the Senior Vice President for
Global Business Development, during a period in which Rhythms reached an “internet
bubble” valuation of $9 billion, the company
was forced to file for bankruptcy that it would never emerge from and then, as
part of its liquidation, sold some of its assets to Worldcom, Inc. for only $40 million. Shareholders ultimately received NOTHING for
their shares following Rhythms’ collapse while, prior to the collapse of
Rhythms, Mr. Chandler sold shares in Rhythms for close to $2
million in proceeds.
While the Tollgrade Board is a strong proponent of adding independent
directors with telecom industry backgrounds, it does not believe that Mr.
Chandler’s experience at Rhythms is the type of telecom industry experience needed on
the Tollgrade Board. As Tollgrade has previously announced, it has recently
appointed distinguished telecom industry veterans, Charles
E. Hoffman and Edward H. Kennedy, both of
whom have close to three decades of experience in the telecom industry, as the
newest independent members of the Tollgrade Board. With the additions of Messrs.
Hoffman and Kennedy, one-third of the members of the Tollgrade Board have
extensive telecom industry backgrounds with leading telecom companies (e.g., Ericsson,
Inc., Marconi Corporation plc, Tellabs, Ocular Networks, Alcatel, Newbridge
Networks Corporation, Covad Communications Group, Inc., Rogers Wireless, Inc.,
Sprint PCS, AT&T and SBC ).
The actions taken by the Tollgrade Board over the past year to enhance
its telecom industry expertise by adding Messrs. Kennedy and Hoffman to the Board
underscores another milestone achieved in the execution of a comprehensive
strategic plan to transform Tollgrade and position it for sustainable growth. In
2008, the Board retained the investment banking firm of Needham & Company to help
evaluate a range of strategic alternatives to enhance shareholder value. From
this process, the Board developed a comprehensive strategic plan to refocus
Tollgrade’s business by emphasizing its service assurance offerings to the telecom
market and has already executed on a number of fronts to enhance shareholder
value, including selling off non-core assets such as Tollgrade’s cable product
line in May 2009 as it did not support the refocused
growth strategy. Other results from refocusing efforts to date include:
bolstering cash reserves, streamlining operations and reducing corporate overhead,
winning a new major multiyear managed services contract, and making key management
changes to strengthen the leadership and functional expertise needed to execute
Tollgrade’s growth strategy.
“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,” said Joseph A. Ferrara, Chairman of the Board, President and Chief Executive
Officer. “Accordingly, we believe our shareholders would be better served by
re-electing the slate of directors recommended by the Tollgrade Board and urge
all of our shareholders to vote their WHITE proxy card today.”
Shareholders that need assistance in voting their shares or have any
questions are urged to call the company’s proxy solicitor, The Altman Group,
Inc., Toll-Free at (866) 340-6685 or (201)
806-7300.
Important
Information
In connection with the
solicitation of proxies, Tollgrade Communications, Inc. has filed with the SEC and
mailed to shareholders on or about June 22, 2009 a
definitive proxy statement in connection with its 2009 Annual Meeting of
Shareholders. A supplement to this proxy statement was filed with the SEC and mailed to
shareholders on or about July 7, 2009 and it
amends, supplements and, to the extent inconsistent, supersedes the corresponding
information previously sent to the shareholders of Tollgrade. Tollgrade, its
directors, nominees for director and certain officers, employees and other persons are
deemed to be participants in the solicitation of proxies from shareholders in
connection with the 2009 Annual Meeting of Shareholders. Information regarding the
interests of such participants is included in the definitive proxy statement,
the supplement thereto and other relevant documents filed and to be filed by
Tollgrade with the SEC in connection with the proxy solicitation. WE URGE INVESTORS
TO READ THE DEFINITIVE PROXY STATEMENT (INCLUDING ANY SUPPLEMENTS THERETO) AND
ANY OTHER RELEVANT DOCUMENTS THAT TOLLGRADE WILL FILE WITH THE SEC WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Shareholders will
be able to obtain, free of charge, copies of the definitive proxy statement, the
supplement thereto and any other documents filed by Tollgrade with the SEC in
connection with the proxy solicitation at the SEC’s website at http://www.sec.gov and Tollgrade’s website at http://www.tollgrade.com.
About Tollgrade
Tollgrade Communications, Inc. is a leading provider of network service
assurance products and services for centralized test systems around the world.
Tollgrade designs, engineers, markets and supports centralized test systems,
test access and next generation network assurance technologies. Tollgrade’s
customers range from the top telecom providers, to numerous independent telecom and
broadband providers around the world. Tollgrade’s network testing, measurement
and monitoring solutions support the infrastructure of telecom companies, as
well as for power distribution companies. For more information, visit
Tollgrade’s web site at www.tollgrade.com.
Forward-Looking
Statements
The foregoing release contains “forward-looking statements”
regarding future events or results within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. The Company cautions readers that such “forward-looking
statements” are, in fact, predictions that are subject to risks and uncertainties and
that actual events or results may differ materially from those anticipated events
or results expressed or implied by such forward-looking statements. The Company
disclaims any current intention to update its “forward-looking statements,”
and the estimates and assumptions within them, at any time or for any reason.
Any number of factors that could cause actual events or results to differ
materially from those contained in the “forward-looking statements” is included in
the Company’s filings with the U.S. Securities and Exchange Commission (the
“SEC”) including, but not limited to, the Company’s Form 10-K for the year
ended December 31, 2008 and any subsequently filed
reports. All documents are also available through the SEC’s Electronic Data
Gathering Analysis and Retrieval system at www.sec.gov or from the Company’s website at www.tollgrade.com.
SOURCE Tollgrade Communications, Inc.