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493 NIXON ROAD, CHESWICK, PENNSYLVANIA 15024
(1) | The election of three directors to serve for one-year terms and until their respective successors shall have been selected and qualified; | ||
(2) | The ratification of the appointment of PricewaterhouseCoopers LLP as Tollgrade’s independent registered public accounting firm for the year ending December 31, 2008; and | ||
(3) | Such other matters as may properly be brought before the annual meeting or any postponement or adjournment of the annual meeting. |
(1) | Visit the website noted on your proxy card to vote via theInternet; | ||
(2) | Use the telephone number on your proxy card to vote bytelephone; | ||
(3) | Sign, date and return your proxy card in the enclosed envelope to vote bymail; or | ||
(4) | Attend the meeting to votein person. |
General Counsel and Corporate Secretary
April 14, 2008
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Cheswick, Pennsylvania 15024
ANNUAL MEETING OF SHAREHOLDERS
(1) | The election of three directors to serve for one-year terms and until their respective successors shall have been selected and qualified; | ||
(2) | The ratification of the appointment of PricewaterhouseCoopers LLP (“PwC”) as Tollgrade’s independent registered public accounting firm for the year ending December 31, 2008; and | ||
(3) | Such other matters as may properly be brought before the Annual Meeting or any postponement or adjournment of the Annual Meeting. |
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ELECTION OF DIRECTORS
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NAME | DIRECTOR SINCE | PRINCIPAL OCCUPATION; OTHER DIRECTORSHIPS; AGE | ||||
Nominees for election as directors with a term expiring in 2009: | ||||||
Daniel P. Barry | 1995 | Chairman of our Board of Directors since 2005; private investor; formerly, director of AMSCO International, a manufacturer of medical equipment, from January 1990 until 1996 and Vice Chairman from July 1995 until May 1996; President and Chief Executive Officer of AMSCO from October 1994 until July 1995; and Senior Vice President, Finance and Administration at AMSCO from June 1991 until February 1993; Chairman, Corporate Governance Committee and Nominating Sub-Committee; Age 60. | ||||
David S. Egan | 1998 | Chief Marketing Officer, Reed Smith LLP, a law firm, since January 2002; prior thereto, President, Clubcom, Inc., a provider of communication devices to private broadcast networks, from September 2000 until January 2002; prior thereto, Vice President, Blattner Brunner, an advertising firm, from June 2000 until September 2000; prior thereto, President, Egan/St. James, Inc., an advertising firm, from June 1999 until June 2000; prior thereto, President, Ketchum Advertising; Age 51. | ||||
Joseph A. Ferrara | 2007 | Chief Executive Officer, President and Board Member of Tollgrade since November 2007; Senior Vice President, Sales and Marketing of Tollgrade from August 2007 until November 2007; prior thereto General Manager Data Networks Division of Ericsson, Inc. from January 2006 until July 2007 following Ericsson’s acquisition of Marconi’s product divisions; Chief Executive Officer of Marconi Corporation plc’s North American operations from June 2005 until January 2006; Vice President of Business Operations of Marconi’s Data Networks Division from February until June of 2005 and July 2000 until April 2004; and Vice President of Marketing of Marconi’s Data Networks Division from April 2004 until February 2005; Age 41. |
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NAME | DIRECTOR SINCE | PRINCIPAL OCCUPATION; OTHER DIRECTORSHIPS; AGE | ||||
Continuing directors with a term expiring in 2010: | ||||||
Richard H. Heibel, M.D. | 1996 | Professor of Internal Medicine, Lake Erie College of Osteopathic Medicine of Bradenton, a medical school, since July 2004; Board member of ChemDAQ Inc. since May 2006; Treasurer of ENVIE since January 2006; co-owner of R&A Associates since 2001; formerly, Board-certified cardiologist with the firm Consultants in Cardiology and an original founding investor in Tollgrade prior to the initial public offering; Chairman, Investment Committee; Age 61. | ||||
Robert W. Kampmeinert | 1995 | Chairman and Executive Vice President, Janney Montgomery Scott LLC, an investment firm, since July 2005; prior thereto, Chairman, President and Chief Executive Officer and Director, Parker/Hunter Incorporated, an investment firm; Age 64. | ||||
Continuing directors with a term expiring in 2009: | ||||||
James J. Barnes | 1997 | Managing Partner of Pittsburgh office of Reed Smith LLP, a law firm, since January 2007 and partner and attorney of Reed Smith LLP since February 2002; prior thereto, shareholder and attorney at Buchanan Ingersoll, PC, a law firm; Chairman, Compensation Committee; Age 46. | ||||
Brian C. Mullins | 2002 | Retired; formerly, Senior Vice President, Chief Financial Officer and Treasurer at SCA North America, Packaging Division, formerly called Tuscarora Incorporated, a manufacturer of protective packaging and material-handling products, since 1976; Chairman, Audit Committee; Age 67. |
• | affirm that the role of the Board is to represent the shareholders’ interest in the success of Tollgrade through the Board’s active oversight and monitoring of management, | ||
• | provide that the Board consist of at least a majority of independent directors, | ||
• | confirm that the Board maintain standing committees including an Audit Committee, Compensation Committee, Corporate Governance Committee, Investment Committee, |
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Nominating Sub-Committee of the Corporate Governance Committee, and that each of the committees will consist solely of independent directors, | |||
• | provide for an annual evaluation by the Corporate Governance Committee of the performance and procedures of the Board, with the goal of increasing the effectiveness of the Board, and | ||
• | provide that the independent members of the Board conduct executive sessions without the presence of any of our employees at least two times each year. |
• | Any nominee for election as a director in an uncontested election who receives a greater number of votes “withheld” than votes “for” will promptly tender his or her resignation following certification of the shareholder vote. | ||
• | The Board will act on the recommendation of the Corporate Governance Committee whether to accept or reject the resignation within 90 days of certification of the shareholder vote. | ||
• | The Board will disclose via press release its decision on whether to accept or reject the tender of resignation. |
• | Our chief executive officer, chief financial officer, controller, and any other senior executive or financial officers performing similar functions are subject to our Code of Ethics for Senior Executive and Financial Officers (the “Code of Ethics”), which requires that the individuals carry out their jobs in an honest and ethical manner, in compliance with laws, avoiding conflicts of interest, while implementing and maintaining Tollgrade’s public communication and disclosure reporting systems. The Code of Ethics constitutes a “code of ethics” within the meaning of Item 406 of the SEC’s Regulation S-K. A copy of the Code of Ethics is available on our website at www.tollgrade.com under the tab “Public & Investors/Ethics.” | ||
• | Our directors and employees, including those subject to the Code of Ethics, are subject to our Code of Business Conduct and Ethics (the “Code of Business Conduct”). The Code of Business Conduct covers issues generally applicable to all of our employees, such as conducting business honestly and ethically, avoiding conflicts of interest, complying with all laws, prohibiting insider trading and loans to our executive officers and directors, and protecting our confidential information. The Code of Business Conduct obligates directors and employees to report any conduct that they believe in good faith to be apparent violations of the Code. All employees, without exception, are required to read and certify their continued compliance with the Code of Business Conduct. A copy of the Code of Business Conduct, which is a “code of conduct” as required by Nasdaq listing standards, is available on our website at www.tollgrade.com under the tab “Public & Investors/Ethics.” |
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• | Shareholders and other interested persons may communicate with the chairpersons of the Corporate Governance Committee, Nominating Sub-Committee of the Corporate Governance Committee, Audit Committee or Compensation Committee or with the non-management directors as a group by e-mail to investor_relations@tollgrade.com or by mail to Investor Relations Department, Tollgrade Communications, Inc., 493 Nixon Road, Cheswick, PA 15024. The correspondence should specify the intended recipient of the communication. | ||
• | All communications received in accordance with these procedures will be reviewed initially by Tollgrade’s Investor Relations Department. The Investor Relations Department will relay all communications of this type to the appropriate director or directors unless the Investor Relations Department determines that the communication: |
• | does not relate to the business or affairs of Tollgrade or the functioning or constitution of the Board or any of its committees, | ||
• | relates to routine or insignificant matters that do not warrant the attention of the Board, | ||
• | is an advertisement or other commercial solicitation or communication; | ||
• | is frivolous or offensive, or | ||
• | is otherwise inappropriate for delivery to directors. |
• | The director or directors who receive any communication of this type will have discretion to determine whether the subject matter of the communication should be brought to the attention of the full Board or one or more of its committees and whether any response to the person sending the communication is appropriate. Any response will be made through Tollgrade’s Investor Relations Department and only in accordance with our policies and procedures and applicable laws and regulations relating to the disclosure of information. | ||
• | The Investor Relations Department will retain copies of all communications received pursuant to these procedures for a period of at least one year. | ||
• | The Corporate Governance Committee will review the effectiveness of these procedures from time to time and, if appropriate, recommend changes to the Board. |
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• | select and recommend to the Board director nominees for election at each annual meeting of shareholders, as well as director nominees to fill vacancies arising between annual meetings of shareholders, | ||
• | if deemed necessary, select and retain an executive search firm to identify qualified candidates to serve as members of the Board, considering effectiveness, responsiveness and other relevant factors, and approve the fees and other compensation to be paid to the executive search firm, | ||
• | determine requirements for, and means of, director orientation and training, and | ||
• | review the charter of the Sub-Committee and assess the performance of the members of the Sub-Committee at least annually and recommend updates and changes to the Board as warranted. |
• | have a reputation for industry, integrity, honesty, candor, fairness and discretion, | ||
• | be an acknowledged expert in his or her chosen field of endeavor, which area of expertise should have some relevance to Tollgrade’s business, | ||
• | be knowledgeable, or be willing and able to become so quickly, in the critical aspects of Tollgrade’s business and operations, and | ||
• | be experienced and skillful in serving as a competent overseer of, and trusted advisor to, senior management of a corporation. |
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• | align our named executive officers’ interests with those of our shareholders by awarding equity compensation that rewards increases in the value of Tollgrade’s common stock, | ||
• | provide compensation that is competitive with other technology companies, and | ||
• | attract, retain and motivate named executive officers of outstanding ability and encourage excellence in the performance of individual responsibilities. |
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• | the form and amount of equity compensation, most notably returning to the Company’s historical practice of granting non-qualified stock options, | ||
• | further amendment to the MICP to ensure affordability of the payout, while still motivating employees with the possibility of a payout should the Company’s performance objectives be achieved, including regular updates of the Company’s status in attaining these performance objectives, | ||
• | adoption of a severance policy for all employees, and | ||
• | changes in practices in connection with change-in-control agreements. |
• | base salary, | ||
• | possibility of bonus payments pursuant to MICP, | ||
• | long-term equity compensation pursuant to the 2006 Amended and Restated Long-Term Incentive Compensation Plan (“2006 LTIP”), | ||
• | possible payments and benefits in the event of termination related to a change-in-control, and | ||
• | an additional long-term disability policy and related gross-up payment and other benefits generally available to all employees. |
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1 | The peer group consisted of the following companies: Agilent Technologies, Inc.; Aware, Inc.; Broadcom Corp.; C-Cor Inc.; Emerson Electric Co.; Micromuse, Inc.; Nortel Networks Corp.; Porta Systems Corp.; Scientific-Atlanta, Inc.; Teradyne, Inc.; and Texas Instruments Inc. | |
2 | The peer group consisted of the following companies: ADC Telecommunications, Inc.; Catapult Communications Corp.; C-Cor Inc.; Ditech Communications Corp.; EMRISE Corp.; Harmonic Inc.; Inter-Tel, Inc.; Ixia; Micromuse, Inc.; NMS Communications Corp.; Porta Systems Corp.; Universal Security Instruments, Inc.; and Vodavi Technology, Inc. |
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3 | The report included the following companies: Boston Communications Group, Inc.; Emerson Electric Co.; Internap Network Services, Corp.; Nanometrics, Inc.; Neoware Systems, Inc.; Nortel Networks Corp.; OpenTV Corp.; Pericom Semiconductor Corp.; Pinnacle Data Systems, Inc.; Proxim Corp.; Terremark Worldwide Inc.; Ulticom, Inc.; and Viisage Technology, Inc. These are companies in the communications industry in similar or comparable areas of business. This is the same peer group that was used in 2006 in connection with the review of the 2006 LTIP. |
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• | increase our profitability and growth in a manner that is consistent with the goals of the Company, its shareholders and its employees; | ||
• | provide executive compensation that is competitive with other technology companies and provide the potential for payment of meaningful cash awards; | ||
• | attract and retain personnel of outstanding ability and encourage excellence in the performance of individual responsibilities; | ||
• | motivate and reward those members of management who contribute to our success; and | ||
• | allow the Compensation Committee flexibility to administer the MICP to reflect the changing organizational goals and objectives. |
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• | optimize the profitability and growth of Tollgrade through incentives that are consistent with Tollgrade’s goals and that link the personal interests of participants to those of our shareholders, | ||
• | provide participants with an incentive for excellence in individual performance, | ||
• | promote teamwork among participants, and | ||
• | provide flexibility to Tollgrade in its ability to motive, attract and retain the services of participants who make significant contributions to Tollgrade’s success and to allow participants to share in our success. |
• | advice of outside consultants, if appropriate, based on market and other factors, | ||
• | management input (except as to the recipient’s own grants), | ||
• | individual recipient’s overall compensation, |
• | individual job performance data, | ||
• | corporate performance data, including LTIP data, and | ||
• | accounting and tax implications, including the expense of the grant. |
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• | more closely align the value obtained from equity awards with the performance of the Company, | ||
• | to address that many previous stock option grants were “under water” (i.e. the exercise price of exercisable options is above the fair market value of the common stock), which defeated retention goals, and | ||
• | a perception that restricted shares would be less dilutive to shareholders than stock options because less total shares would need to be granted to provide a similar financial benefit to award recipients due to the inherent value of restricted shares regardless of stock performance. |
• | Time-based component: 1/3rd vest on February 15, 2010. | ||
• | Performance-based component: 2/3rd vest on December 31, 2008 so long as Tollgrade meets or exceeds the defined cumulative performance measure. Half of this performance-based component was eligible to vest on February 15, 2008 if the Company met or exceeded an accelerated performance measure. |
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4 | The report included the same companies identified in footnote 1 that were used in the 2007 Compensation Benchmarking Report. |
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• | purchase and sell, or sell and purchase, our common stock within any six month period, | ||
• | make any short sales of our common stock, | ||
• | purchase or sell any puts or calls with respect to our common stock on any exchange or other organized market, or | ||
• | enter into hedging or monetized transactions with respect to our common stock, such as zero-cost collars or forward sale contracts, unless the proposed transaction has been pre-cleared by our General Counsel. |
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Stock | All Other | |||||||||||||||||||||||||||
Salary | Bonus | Awards | Option Awards | Compensation | Total | |||||||||||||||||||||||
Name/Principal Position (1) | Year | ($) | ($)(2) | ($)(3) | ($)(4) | ($) | ($) | |||||||||||||||||||||
Joseph A. Ferrara, | 2007 | $ | 116,154 | — | $ | 13,607 | $ | 8,835 | $ | 712 | $ | 139,308 | ||||||||||||||||
Chief Executive Officer and President (5) | (6) | (7) | ||||||||||||||||||||||||||
Mark B. Peterson, | 2007 | $ | 302,724 | — | $ | 46,552 | $ | 76,754 | $ | 765,377 | $ | 1,191,407 | ||||||||||||||||
(7)(9) | ||||||||||||||||||||||||||||
Former Chief Executive Officer and President (8) | 2006 | $ | 327,755 | $ | 14,175 | — | $ | 118,721 | $ | 9,270 | $ | 469,921 | ||||||||||||||||
(7)(9) | ||||||||||||||||||||||||||||
Samuel C. Knoch, | 2007 | $ | 212,781 | — | $ | 36,210 | $ | 19,306 | $ | 2,589 | $ | 270,886 | ||||||||||||||||
(7) | ||||||||||||||||||||||||||||
Chief Financial Officer and Treasurer | 2006 | $ | 205,995 | $ | 6,902 | — | $ | 24,904 | — | $ | 237,801 | |||||||||||||||||
Carol M. Franklin, | 2007 | $ | 199,576 | — | $ | 25,865 | $ | 19,306 | $ | 64,495 | $ | 309,242 | ||||||||||||||||
(7)(11) | ||||||||||||||||||||||||||||
Executive VP Research & Development (10) | 2006 | $ | 200,418 | $ | 14,716 | — | $ | 24,904 | — | $ | 240,038 | |||||||||||||||||
(12) | (13) | |||||||||||||||||||||||||||
Vijay Tulsiani, | 2007 | $ | 183,862 | — | $ | 20,687 | $ | 16,173 | $ | 742 | $ | 221,464 | ||||||||||||||||
(14) | (7) | |||||||||||||||||||||||||||
Executive Director of LoopCare Systems Engineering and Product Management | 2006 | $ | 173,906 | $ | 2,534 | — | $ | 20,148 | — | $ | 196,588 | |||||||||||||||||
Richard A. Bair, | 2007 | $ | 182,640 | — | $ | 20,687 | $ | 14,301 | $ | 849 | $ | 218,477 | ||||||||||||||||
(7) | ||||||||||||||||||||||||||||
Executive Director of Telecommunications Engineering | 2006 | $ | 176,815 | $ | 3,435 | — | $ | 18,097 | — | $ | 198,347 |
(1) | The material terms of Mr. Peterson’s employment agreement and separation and mutual release agreement, Mr. Ferrara’s severance agreement and Ms. Franklin’s separation and mutual release agreement are discussed under the heading “Employment Agreement, Separation of Employment and Change-in-Control Agreements”. | |
(2) | No bonus payments were payable pursuant to the MICP for our performance in 2006 or 2007. A discretionary bonus payment pursuant to the MICP was paid during 2006 for the 2005 award year. | |
(3) | Each named executive officer received a grant of restricted shares during 2007, the details of which are described in the “Grant of Plan-Based Awards” table. The amounts in this column reflect the dollar amount recognized for financial statement reporting purposes for the year ended December 31, 2007 in accordance with FAS 123(R). | |
(4) | Mr. Ferrara was the only named executive officer to receive a grant of options during 2007, the details of which are described in the “Grant of Plan-Based Awards” table. The amounts in this column reflect the dollar amount recognized for financial statement reporting purposes for the year ended December 31, 2007 in accordance with FAS 123(R). Assumptions used in the calculation of this amount are included in Note 2 to Tollgrade’s audited financial statements for the year ended December 31, 2007 included in our Annual Report on Form 10-K filed with the SEC on March 17, 2008. In connection with their terminations, Mr. Peterson forfeited 9,167 restricted shares on November 16, |
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2007; Ms. Franklin forfeited 5,042 restricted shares on December 31, 2007; and Mr. Tulsiani forfeited 3,991 restricted shares on February 6, 2008. | ||
(5) | Joseph A. Ferrara was appointed President and Chief Executive Officer of Tollgrade on November 16, 2007. Mr. Ferrara joined Tollgrade as Senior Vice President of Marketing and Sales on August 1, 2007. | |
(6) | Mr. Ferrara’s base salary as Chief Executive Officer and President is $350,000. | |
(7) | During 2007, payments for additional long-term disability premium and gross-up payments in connection therewith amounted to: $400 and $311 for Mr. Ferrara; $559 and $337 for Mr. Peterson; $1,615 and $974 for Mr. Knoch; $1,586 and $844 for Ms. Franklin; $476 and $266 for Mr. Tulsiani; and $545 and $304 for Mr. Bair. Mr. Peterson also received 5,783 for a supplemental long-term disability policy and a tax gross-up payment of $3,487 in connection with this policy in 2006 and 2007. | |
(8) | Mark B. Peterson resigned as President, Chief Executive Officer and as a director of Tollgrade on November 16, 2007. | |
(9) | In 2007, Mr. Peterson also received a separation payment of $755,211 in connection with his resignation, which consisted of two times his base salary, his average bonus payment over two years, unpaid and accrued vacation time and health benefits for two years pursuant to the terms of his employment agreement and as set forth in his separation and mutual release agreement. The break-down of the payment and material terms of these agreements are described in detail under the heading “Employment Agreement, Separation of Employment and Change-in-Control Agreements”. | |
(10) | Ms. Franklin employment with Tollgrade terminated effective as of December 31, 2007. | |
(11) | Ms. Franklin received a severance payment of $62,065 in connection with termination of her employment, which consisted of fourteen weeks of her base salary, unpaid and accrued vacation time, outplacement fees and benefits pursuant to the terms of a separation and mutual release agreement. The break-down of the payment and material terms of the agreement are described in detail under the heading “Employment Agreement, Separation of Employment and Change-in-Control Agreements”. | |
(12) | Base salary includes a special payment of $11,538 to Ms. Franklin for her additional job responsibilities with respect to the Sarasota office. | |
(13) | This amount consists of a $10,000 bonus payment in connection with a special short-term project and a $4,716 bonus payment paid during 2006 in connection with the discretionary MICP payout for the 2005 award year. | |
(14) | Base salary includes a one-time hazard payment of $4,465. |
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All Other | Grant | |||||||||||||||||||||||||||||||||||||||||||
Estimated Future Payouts | Stock | All Other | Exercise | Date Fair | ||||||||||||||||||||||||||||||||||||||||
Estimated Future Payouts Under | Under Equity Incentive | Awards: | Option | or Base | Value of | |||||||||||||||||||||||||||||||||||||||
Non-Equity Incentive Plan Awards | Plan Awards | No. of | Awards of | Price of | Stock and | |||||||||||||||||||||||||||||||||||||||
Thres- | Maxi- | Thres- | Maxi- | Shares of | Securities | Option | Option | |||||||||||||||||||||||||||||||||||||
Grant | hold | Target | mum | hold | Target | mum | Stock or | Underlying | Awards | Awards | ||||||||||||||||||||||||||||||||||
Name | Date | ($)(1) | ($)(2) | ($)(3) | (#) | (#) (4) | (#) | Units (5) | Options (#) | ($/Share) | (6) | |||||||||||||||||||||||||||||||||
Joseph A. Ferrara | 10/18/07 | 6,666 | 3,334 | $ | 98,600 | |||||||||||||||||||||||||||||||||||||||
12/13/07 | 150,000 | $ | 7.78 | $ | 538,905 | |||||||||||||||||||||||||||||||||||||||
(7) | ||||||||||||||||||||||||||||||||||||||||||||
— | $ | 8,407 | $ | 9,456 | $ | 12,609 | ||||||||||||||||||||||||||||||||||||||
(8) | (8) | (8) | ||||||||||||||||||||||||||||||||||||||||||
Mark B. Peterson | 02/15/07 | 6,666 | 3,334 | $ | 120,000 | |||||||||||||||||||||||||||||||||||||||
(9) | (10) | |||||||||||||||||||||||||||||||||||||||||||
— | $ | 26,544 | $ | 29,862 | $ | 39,817 | ||||||||||||||||||||||||||||||||||||||
(11) | (11) | (11) | ||||||||||||||||||||||||||||||||||||||||||
Samuel C. Knoch | 02/15/07 | 5,186 | 2,592 | $ | 93,336 | |||||||||||||||||||||||||||||||||||||||
— | $ | 13,115 | $ | 14,755 | $ | 19,673 | ||||||||||||||||||||||||||||||||||||||
Carol M. Franklin | 02/15/07 | 3,704 | 1,853 | $ | 66,684 | |||||||||||||||||||||||||||||||||||||||
(9) | (10) | |||||||||||||||||||||||||||||||||||||||||||
— | $ | 7,029 | $ | 7,908 | $ | 10,544 | ||||||||||||||||||||||||||||||||||||||
(11) | (11) | (11) | ||||||||||||||||||||||||||||||||||||||||||
Vijay Tulsiani | 02/15/07 | 2,962 | 1,482 | $ | 53,328 | |||||||||||||||||||||||||||||||||||||||
(9) | (10) | |||||||||||||||||||||||||||||||||||||||||||
— | $ | 6,319 | $ | 7,108 | $ | 9,478 | ||||||||||||||||||||||||||||||||||||||
(11) | (11) | (11) | ||||||||||||||||||||||||||||||||||||||||||
Richard A. Bair | 02/15/07 | 2,962 | 1,482 | $ | 53,328 | |||||||||||||||||||||||||||||||||||||||
— | $ | 6,433 | $ | 7,237 | $ | 9,649 |
(1) | Represents the amount payable under the MICP had the Company attained the minimum threshold of targeted net operating income during the 2007 award year. No awards were paid under the MICP for the 2007 award year. | |
(2) | Represents the amount payable under the MICP had the Company attained 75% of its targeted net operating income during the 2007 award year. No awards were paid under the MICP for the 2007 award year. | |
(3) | Represents the amount payable under the MICP had the Company attained 100% of its targeted net operating income during the 2007 award year. No awards were paid under the MICP for the 2007 award year. | |
(4) | The restricted shares will vest on December 31, 2008 based on Tollgrade’s performance over a two year period ending December 31, 2008 so long as Tollgrade meets or exceeds the defined cumulative performance measure. One-half of the number of restricted shares was eligible to but did not vest on the first anniversary of the grant date had Tollgrade met or exceeded an accelerated performance measure. | |
(5) | The restricted shares vest three years from the date of grant. | |
(6) | Based on SEC rules, the grant date fair value of each award is computed in accordance with FAS 123(R). | |
(7) | Mr. Ferrara received a grant of 150,000 stock options in connection with his appointment as Chief Executive Officer and President of Tollgrade. The option grants were made with an exercise price equal to the fair market value of our common stock on the date of grant, are exercisable in equal installments on |
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December 13, 2008, December 13, 2009 and December 13, 2010, and remain outstanding for a period of ten years. | ||
(8) | Mr. Ferrara became employed by Tollgrade on August 1, 2007. The amount included reflects the pro-rated portion of his potential Incentive Compensation Award under the MICP based upon his service from August 1, 2007. | |
(9) | Because the recipient is no longer employed by Tollgrade, the recipient is no longer eligible to receive these performance-based restricted shares. | |
(10) | Although the recipient is no longer employed by Tollgrade, the recipient is eligible to receive a pro-rata number of these time-based restricted shares based on the number of completed month’s service with Tollgrade. | |
(11) | A participant is not eligible for an award under the MICP if the participant is voluntarily or involuntarily terminated prior to the time of payment of any payout under the MICP. Therefore, as of December 31, 2007, Mr. Peterson and Ms. Franklin were not eligible to receive an award under the MICP even if the minimum threshold and individual objectives had been achieved. Mr. Tulsiani forfeited any award he would have been eligible to receive on February 6, 2008 in connection with termination of his employment. |
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Option Awards | Share Awards | |||||||||||||||||||||||||||||||||||
Equity | ||||||||||||||||||||||||||||||||||||
Equity | Inventive | |||||||||||||||||||||||||||||||||||
Incentive | Plan | |||||||||||||||||||||||||||||||||||
Plan | Equity | Awards: | ||||||||||||||||||||||||||||||||||
No. of | No. of | Awards: | Incentive | Market | ||||||||||||||||||||||||||||||||
Securities | Securities | No. of | Plan | or Payout | ||||||||||||||||||||||||||||||||
Underlying | Underlying | Securities | Market | Awards: | Value of | |||||||||||||||||||||||||||||||
Unexercised | Unexercised | Underlying | No. of | value of | No. of | Unearned | ||||||||||||||||||||||||||||||
Options (#) | Options (#) | Unexercised | Option | Option | Unvested | Unvested | Unearned | Unvested | ||||||||||||||||||||||||||||
Unearned | Exercise | Expiration | Shares | Shares | Unvested | Shares | ||||||||||||||||||||||||||||||
Name | Exercisable | Unexercisable | Options (#) | Price ($) | Date (1) | (#) | ($)(2) | Shares (#) | ($)(2) | |||||||||||||||||||||||||||
Joseph A. Ferrara | 3,334 | (3) | $ | 26,739 | ||||||||||||||||||||||||||||||||
6,666 | (5) | $ | 53,461 | |||||||||||||||||||||||||||||||||
150,000 | (4) | $ | 7.78 | 12/13/2013 | ||||||||||||||||||||||||||||||||
Mark B. Peterson | 833 | (6) | $ | 6,680 | ||||||||||||||||||||||||||||||||
10,000 | $ | 7.56 | 12/23/2008 | |||||||||||||||||||||||||||||||||
10,000 | $ | 7.69 | 06/22/2009 | |||||||||||||||||||||||||||||||||
3,000 | $ | 55.90 | 12/14/2010 | |||||||||||||||||||||||||||||||||
10,000 | $ | 38.00 | 01/25/2011 | |||||||||||||||||||||||||||||||||
2,000 | $ | 28.40 | 10/11/2011 | |||||||||||||||||||||||||||||||||
15,000 | $ | 32.90 | 12/19/2011 | |||||||||||||||||||||||||||||||||
5,000 | $ | 15.84 | 07/18/2012 | |||||||||||||||||||||||||||||||||
1,500 | $ | 9.49 | 10/24/2012 | |||||||||||||||||||||||||||||||||
3,500 | $ | 13.63 | 12/16/2012 | |||||||||||||||||||||||||||||||||
50,000 | $ | 8.85 | 07/21/2015 | |||||||||||||||||||||||||||||||||
27,250 | $ | 8.49 | 10/10/2015 | |||||||||||||||||||||||||||||||||
Samuel C. Knoch | 2,592 | (7) | $ | 20,788 | ||||||||||||||||||||||||||||||||
5,186 | (5) | $ | 41,592 | |||||||||||||||||||||||||||||||||
18,000 | $ | 9.81 | 01/29/2008 | |||||||||||||||||||||||||||||||||
30,000 | $ | 7.56 | 12/23/2008 | |||||||||||||||||||||||||||||||||
3,000 | $ | 55.90 | 12/14/2010 | |||||||||||||||||||||||||||||||||
2,000 | $ | 28.40 | 10/10/2011 | |||||||||||||||||||||||||||||||||
10,000 | $ | 32.90 | 12/19/2011 | |||||||||||||||||||||||||||||||||
1,500 | $ | 9.49 | 10/24/2012 | |||||||||||||||||||||||||||||||||
3,500 | $ | 13.63 | 12/16/2012 | |||||||||||||||||||||||||||||||||
13,760 | $ | 8.49 | 10/10/2015 | |||||||||||||||||||||||||||||||||
Carol M. Franklin | 514 | (8) | $ | 4,090 | ||||||||||||||||||||||||||||||||
3,704 | (10) | $ | 29,706 | |||||||||||||||||||||||||||||||||
15,000 | $ | 20.53 | 0/8/20/2011 | |||||||||||||||||||||||||||||||||
5,000 | $ | 15.84 | 07/18/2012 | |||||||||||||||||||||||||||||||||
1,500 | $ | 9.49 | 10/24/2012 | |||||||||||||||||||||||||||||||||
13,760 | $ | 8.49 | 10/10/2015 | |||||||||||||||||||||||||||||||||
Vijay Tulsiani | 1,482 | (9) | $ | 11,886 | (9) | |||||||||||||||||||||||||||||||
2,962 | (10) | $ | 23,755 | |||||||||||||||||||||||||||||||||
7,500 | $ | 28.40 | 10/11/2011 | |||||||||||||||||||||||||||||||||
2,500 | $ | 18.23 | 05/07/2012 | |||||||||||||||||||||||||||||||||
2,500 | $ | 15.84 | 07/18/2012 | |||||||||||||||||||||||||||||||||
5,000 | $ | 13.63 | 12/16/2012 | |||||||||||||||||||||||||||||||||
150 | $ | 12.55 | 03/20/2013 | |||||||||||||||||||||||||||||||||
10,000 | $ | 9.45 | 10/20/2015 |
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Option Awards | Share Awards | |||||||||||||||||||||||||||||||||||
Equity | ||||||||||||||||||||||||||||||||||||
Equity | Inventive | |||||||||||||||||||||||||||||||||||
Incentive | Plan | |||||||||||||||||||||||||||||||||||
Plan | Equity | Awards: | ||||||||||||||||||||||||||||||||||
No. of | No. of | Awards: | Incentive | Market | ||||||||||||||||||||||||||||||||
Securities | Securities | No. of | Plan | or Payout | ||||||||||||||||||||||||||||||||
Underlying | Underlying | Securities | Market | Awards: | Value of | |||||||||||||||||||||||||||||||
Unexercised | Unexercised | Underlying | No. of | value of | No. of | Unearned | ||||||||||||||||||||||||||||||
Options (#) | Options (#) | Unexercised | Option | Option | Unvested | Unvested | Unearned | Unvested | ||||||||||||||||||||||||||||
Unearned | Exercise | Expiration | Shares | Shares | Unvested | Shares | ||||||||||||||||||||||||||||||
Name | Exercisable | Unexercisable | Options (#) | Price ($) | Date (1) | (#) | ($)(2) | Shares (#) | ($)(2) | |||||||||||||||||||||||||||
Richard A. Bair | 1,482 | (7) | $ | 11,886 | ||||||||||||||||||||||||||||||||
2,962 | (5) | $ | 23,755 | |||||||||||||||||||||||||||||||||
2,500 | $ | 159.19 | 07/13/2010 | |||||||||||||||||||||||||||||||||
10,000 | $ | 117.34 | 08/16/2010 | |||||||||||||||||||||||||||||||||
3,000 | $ | 55.90 | 12/14/2010 | |||||||||||||||||||||||||||||||||
2,000 | $ | 28.40 | 10/11/2011 | |||||||||||||||||||||||||||||||||
5,000 | $ | 32.90 | 12/19/2011 | |||||||||||||||||||||||||||||||||
6,666 | $ | 8.49 | 10/10/2015 |
(1) | The option expiration date listed is based upon the terms in the initial award; however, options that are exercisable at the time of termination of employment must be exercised within one year from the date of termination. In the case of Mr. Peterson, Ms. Franklin and Mr. Tulsiani, exercisable options will expire November 16, 2008, December 31, 2008 and February 6, 2008, respectively, which is one year from the date of his or her termination with the Company | |
(2) | Based on SEC rules, the market valuation is based on $8.02, which was the closing price of Tollgrade’s common stock on December 31, 2007. | |
(3) | The restricted shares vest on October 18, 2010; however, if Mr. Ferrara is involuntarily terminated by Tollgrade without cause prior to that date, he will receive a pro-rated portion based on the number of months of service completed divided by thirty-six (36) multiplied by the number of restricted shares (3,334). | |
(4) | The option grants were made with an exercise price equal to the fair market value of our common stock on the date of grant, are exercisable in equal installments on December 13, 2008, December 13, 2009 and December 13, 2010, and remain outstanding for a period of ten years. The terms of this grant, other than the vesting dates, are consistent with our previous grants to executive officers. | |
(5) | The restricted shares will vest on December 31, 2008 if a performance target is met for the two year period ended December 31, 2008. If on December 31, 2007 an accelerated performance target had been met, a total of 3,333 restricted shares would have been eligible to vest on October 18, 2008. This target was not met on December 21, 2007, and therefore, vesting did not occur. | |
(6) | Mr. Peterson’s employment was terminated on November 16, 2007; therefore, Mr. Peterson’s restricted share award reflects the pro-rated number of restricted shares that he is eligible to receive on February 15, 2010 based on nine months of service with Tollgrade. | |
(7) | The restricted shares will vest on February 15, 2010; however, if the recipient is involuntarily terminated by Tollgrade without cause prior to that date, the recipient will receive a pro-rated portion based on the number of months of service completed divided by thirty-six (36) multiplied by the number of restricted shares subject to this time-based condition. | |
(8) | Ms. Franklin’s employment was terminated as of December 31, 2007; therefore, Ms. Franklin’s award reflects the pro-rated number of restricted shares that she is eligible to receive on February 15, 2010 based on ten months of service with Tollgrade. | |
(9) | Mr. Tulsiani was eligible for the full amount of the award reflected in the table as of December 31, 2007; however, Mr. Tulsiani’s employment was terminated on February 6, 2008; therefore, Mr. Tulsiani will be eligible to receive 453 restricted shares on February 15, 2010, based on eleven months of completed service, which would be valued at $3,617. | |
(10) | Because the recipient is no longer employed by Tollgrade, the recipient is not eligible to receive these performance-based restricted shares. |
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IN-CONTROL AGREEMENTS
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• | Any person (with certain exceptions) becomes the beneficial owner of more than thirty-five (35%) percent of our combined voting power, or | ||
• | Our shareholders approve a liquidation, sale or disposition or all or substantially all of our assets, a merger, consolidation or reorganization of Tollgrade with any other company unless the shareholders of Tollgrade immediately prior to the transaction will own at least sixty-five (65%) percent of the combined voting power of Tollgrade or the surviving or resulting entity immediately after the transaction. |
• | A restructuring, reorganization, merger or other change in the capitalization of Tollgrade in which the owners of Tollgrade immediately prior to the transaction will maintain more than sixty-five (65%) percent of the combined voting power of Tollgrade or the surviving or resulting entity immediately after the transaction, or | ||
• | A transaction in which Mr. Peterson is part of the purchasing group that causes a change-in-control of Tollgrade. |
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Base Salary ($335,157) x 3 | $ | 1,005,471 | ||
Average Bonus Payment for 2006 ($0) and 2007 ($0) x 3 | — | |||
Estimated Annual Benefits ($12,000) x 3 | $ | 36,000 | ||
Estimated Annual Outplacement Fees (15% of base salary) | $ | 50,274 | ||
Acceleration of Options Based on Closing Stock Price on December 31, 2007 and Number of Options Outstanding as of Fiscal Year End 2007 | — | |||
Annual Disability Premium ($5,783) x 3 plus Total Tax Gross-up Payment ($10,458) | $ | 27,807 | ||
Less Separation Payments | $ | (755,211 | ) | |
Total: | $ | 364,341 | ||
Unpaid portion of his full base salary through November 16, 2007 and all accrued but unused vacation time | $ | 31,013 | ||
Two (2) multiplied by base salary ($335,157) | $ | 670,314 | ||
Two (2) multiplied by the average annual cash award for 2005 and 2006 | $ | 14,176 | ||
Medical, dental, vision and long-term disability benefits and related gross-up payments for two years (estimate) | $ | 39,708 | ||
Total: | $ | 755,211 | ||
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• | acquire or offer to acquire more than five percent of Tollgrade’s common stock, | ||
• | have any involvement, directly or indirectly, in any merger, consolidation, business combination, asset purchase (other than routine purchases in the ordinary course of business) or other similar transaction with Tollgrade or its affiliates, | ||
• | solicit proxies and other similar activities, | ||
• | be involved in a partnership or “group” as defined in the Exchange Act with respect to Tollgrade’s common stock or otherwise act in any manner to influence the management, Board or policies of Tollgrade or seek a position on the Board, or | ||
• | other similar behavior. |
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• | Effective December 31, 2007, Ms. Franklin’s employment was terminated. In connection with her separation from Tollgrade, Ms. Franklin and Tollgrade entered into a separation and mutual release agreement dated as of January 7, 2008. | ||
• | Effective February 6, 2008, Mr. Tulsiani’s employment was terminated. In connection with his separation from Tollgrade, Mr. Tulsiani and Tollgrade entered into a separation and mutual release agreement dated as of February 15, 2008. |
Carol M. Franklin | Vijay Tulsiani | |||
14 weeks severance (base salary) | $53,765 | $48,328 | ||
Accrued but unused vacation time | $ 5,424 | $ 2,330 | ||
Medical, dental and vision insurance benefits | $ 1,376 (14 weeks) | $ 4,173 (until 6/30/08) | ||
Executive outplacement fees of up to $1,500 | $ 1,500 | $ 1,500 | ||
Total: | $62,065 | $56,331 |
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(i) | the named executive officer’s annual base salary at the time of the change-in-control, plus | ||
(ii) | the average annual cash award received by the named executive officer as incentive compensation or bonus for the two calendar years preceding the time of termination or change-in-control. |
Joseph A. | Samuel C. | Carol M. | Vijay Tulsiani | Richard A. | ||||||||||||||||
Ferrara | Knoch | Franklin (1) | (2) | Bair | ||||||||||||||||
Annual Base Salary as of December 31, 2007 multiplied by 2 | $ | 700,000 | $ | 425,823 | $ | 399,397 | $ | 359,006 | $ | 365,505 | ||||||||||
Average Bonus Payment for 2006 and 2007 multiplied by 2 | — | — | — | — | — | |||||||||||||||
Est. Annual Benefits ($12,000) multiplied by 2 | $ | 24,000 | $ | 24,000 | $ | 24,000 | $ | 24,000 | $ | 24,000 | ||||||||||
Est. Annual Executive Outplacement Fees (not to exceed 15% of base salary) | $ | 52,500 | $ | 31,937 | $ | 29,955 | $ | 26,925 | $ | 27,413 | ||||||||||
Acceleration of Options Based on Closing Stock Price on December 31, 2007 and Number of Options Outstanding as of Fiscal Year End 2007 | $ | 36,000 | — | — | — | — | ||||||||||||||
Total: | $ | 812,500 | $ | 481,760 | $ | 453,352 | $ | 409,931 | $ | 416,918 | ||||||||||
(1) | Ms. Franklin’s employment was terminated as of December 31, 2007. | |
(2) | Mr. Tulsiani’s employment was terminated on February 6, 2008. |
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Change in | ||||||||||||||||||||||||||||
Non- | Pension Value | |||||||||||||||||||||||||||
Fees | Equity | and | ||||||||||||||||||||||||||
Earned | Incentive | Nonqualified | All Other | |||||||||||||||||||||||||
or Paid | Stock | Option | Plan | Deferred | Compen- | |||||||||||||||||||||||
Non-Employee | in Cash | Awards | Awards | Compen- | Compensation | sation | ||||||||||||||||||||||
Director Name | Year | ($) | ($) | ($) | sation ($) | Earnings | ($) | |||||||||||||||||||||
James J. Barnes | 2007 | 72,000 | 20,009 | — | — | N/A | 92,009 | |||||||||||||||||||||
2006 | 52,687 | — | — | — | N/A | 52,687 | ||||||||||||||||||||||
Daniel P. Barry | 2007 | 111,500 | 40,017 | — | — | N/A | 151,517 | |||||||||||||||||||||
2006 | 85,211 | — | — | — | N/A | 85,211 | ||||||||||||||||||||||
David S. Egan | 2007 | 63,000 | 20,009 | — | — | N/A | 83,009 | |||||||||||||||||||||
2006 | 47,382 | — | — | — | N/A | 47,382 | ||||||||||||||||||||||
Richard H. Heibel, M.D. | 2007 | 72,500 | 20,009 | — | — | N/A | 92,509 | |||||||||||||||||||||
2006 | 51,048 | — | — | — | N/A | 51,048 | ||||||||||||||||||||||
Robert W. Kampmeinert | 2007 | 52,000 | 20,009 | — | — | N/A | 72,009 | |||||||||||||||||||||
2006 | 39,132 | — | — | — | N/A | 39,132 | ||||||||||||||||||||||
Brian C. Mullins | 2007 | 77,500 | 20,009 | — | — | N/A | 97,509 | |||||||||||||||||||||
2006 | 60,325 | — | — | — | N/A | 60,325 |
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PERCENTAGE OF | ||||||||
NAME AND ADDRESS OF | AMOUNT AND NATURE OF | COMMON STOCK | ||||||
BENEFICIAL OWNER (1) | BENEFICIAL OWNERSHIP (2) | OUTSTANDING (3) | ||||||
Richard A. Bair | 33,610 | (4)(5) | * | |||||
James J. Barnes | 41,129 | (4)(6) | * | |||||
Daniel P. Barry | 78,832 | (4)(6) | * | |||||
David S. Egan | 58,166 | (4)(6) | * | |||||
Joseph A. Ferrara | 10,000 | (5) | * | |||||
Carol M. Franklin | 35,774 | (4)(5) | * | |||||
Richard H. Heibel | 129,875 | (4)(6)(7) | * | |||||
Robert W. Kampmeinert | 74,666 | (4)(6)(8) | * | |||||
Samuel C. Knoch | 71,538 | (4)(5) | * | |||||
Brian C. Mullins | 28,216 | (4)(6)(9) | * | |||||
Mark B. Peterson | 138,353 | (4) | * | |||||
Vijay Tulsiani | 28,760 | (4)(5) | * | |||||
All directors and executive officers as a group (17 persons) | 831,487 | (4)(5) | 6.29 | % | ||||
Other Principal Shareholders: | ||||||||
Dimensional Fund Advisors LP | 1,148,826 | (10) | 8.69 | % | ||||
1299 Ocean Avenue Santa Monica, CA 90401 | ||||||||
Royce & Associates, LLC | 1,148,719 | (11) | 8.69 | % | ||||
1414 Avenue of the Americas New York, NY 10019 | ||||||||
Renaissance Technologies LLC | 759,000 | (12) | 5.74 | % | ||||
800 Third Avenue New York, NY 10022 |
* | Less than 1% | |
(1) | If not provided above, the address of listed shareholders is c/o Tollgrade Communications, Inc., 493 Nixon Road, Cheswick, Pennsylvania 15024. | |
(2) | Under regulations of the SEC, a person who has or shares voting or investment power with respect to a security is considered a beneficial owner of the security. Voting power is the power to vote or direct the voting of shares, and investment power is the power to dispose of |
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or direct the disposition of shares. Unless otherwise indicated in the other footnotes below, each person has sole voting power and sole investment power as to all shares listed opposite his name. The inclusion of any shares of stock deemed to be beneficially owned does not constitute an admission of beneficial ownership of those shares. | ||
(3) | In computing the percentage ownership of any person, the number of shares outstanding includes 13,219,705 shares of common stock outstanding as of January 31, 2008, plus any shares subject to outstanding stock options that were exercisable within 60 days after January 31, 2008, held by the person or persons in question. | |
(4) | Includes options that were exercisable on or within 60 days of January 31, 2008, issued to the following persons and for the following amounts: Richard A. Bair, 29,166; James J. Barnes, 30,000; Daniel P. Barry, 69,000; David S. Egan, 54,000; Carol M. Franklin, 35,260; Dr. Richard H. Heibel, 59,000; Robert W. Kampmeinert, 53,000; Samuel C. Knoch, 63,760; Brian C. Mullins, 25,000; Mark B. Peterson, 137,520; Vijay Tulsiani, 24,316; and all other executive officers as a group, 102,568. | |
(5) | Includes restricted shares that vest 1/3rd on February 15, 2010 and 2/3rds may vest on December 31, 2008 (of which half were eligible to, but did not vest, on February 15, 2008) if certain performance components are met to the following individuals in the following amounts: Bair, 4,444; Knoch, 7,778; Tulsiani, 4,444; and all other executive officers as a group 16,668. Mr. Ferrara received a grant of 10,000 restricted shares with the same vesting schedule, except that 1/3rd is eligible to vest on October 18, 2010 instead of February 15, 2008. Mr. Peterson and Ms. Franklin have 833 and 514 restricted shares, respectively, that will vest of February 15, 2010. A holder of restricted shares has the power to vote the shares but does not have dispositive power of the shares until they vest. | |
(6) | Includes restricted shares that vest on February 8, 2008 issued to the following individuals in the following amounts: Barnes, 1,666; Barry, 3,332; Egan, 1,666; Heibel, 1,666; Kampmeinert, 1,666; and Mullins, 1,666. Mr. Barnes also has 2,463 restricted shares that vest on January 28, 2009. A holder of restricted shares has the power to vote the shares but does not have dispositive power of the shares until they vest. | |
(7) | Includes 32,246 shares held by the spouse of Dr. Heibel, as to which shares Dr. Heibel shares voting and dispositive power. | |
(8) | Includes 15,000 shares held by Janney Montgomery & Scott LLC, of which Mr. Kampmeinert is Chairman; voting and disposition of such shares are administered by senior management and Mr. Kampmeinert has no authority to direct the voting or disposition of such shares and disclaims beneficial ownership thereof. | |
(9) | Includes 550 shares held by the spouse of Mr. Mullins, as to which shares Mr. Mullins has disclaimed beneficial ownership. | |
(10) | Information taken solely from the Schedule 13G/A filed with the SEC by Dimensional Fund Advisors LP (formerly Dimensional Fund Advisors Inc.) on February 6, 2008 reflecting ownership of our common stock as of December 31, 2007. The filing reflects that Dimensional Fund Advisors LP has sole voting and dispositive power over 1,148,826 shares. The filing also reflects that Dimensional Fund Advisors LP is an investment advisor that furnishes investment advice to four investment companies, which have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the securities held in their respective accounts. The filing also reflects that Dimensional disclaims beneficial ownership of all such securities. |
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(11) | Information taken solely from the Schedule 13G/A filed with the SEC on February 1, 2008 reflecting ownership of our common stock as of December 31, 2007. The filing reflects that Royce & Associates, LLC has sole voting and dispositive power over 1,148,719 shares. The filing also reflects that various accounts managed by Royce Associates, LLC have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of shares of the issuer. | |
(12) | Information taken solely from the Schedule 13G filed with the SEC on February 13, 2008 reflecting ownership of our common stock as of December 31, 2007. The filing indicates that it was filed pursuant to a joint filing agreement between Renaissance Technologies LLC (“RTC”) and James H. Simon. The filing reflects that RTC beneficially owns, by virtue of Mr. Simon’s position as a control person of RTC, 759,000 shares. RTC and Mr. Simon have sole voting power over 745,350 shares and sole dispositive power over 759,000 shares. |
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Applicable Fees | Year ended December 31, 2006 | Year ended December 31, 2007 | ||||||
Audit Fees | $ | 545,200 | $ | 683,800 | ||||
Audit-Related Fees | $ | 0 | $ | 145,000 | ||||
Tax Fees | $ | 21,650 | $ | 28,970 | ||||
All Other Fees | $ | 0 | $ | 0 | ||||
Total PwC Fees | $ | 566,850 | $ | 857,770 | ||||
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appointment of PwC as our independent registered public accounting firm for the year
ending December 31, 2008
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Please Mark Here for Address Change or Comments | o | |||||||||||||||||||
SEE REVERSE SIDE | ||||||||||||||||||||
FOR o | AGAINST o | ABSTAIN o | ||||||||||||||||||
1. | Election of directors for a term expiring in 2009: | FOR all nominees (except as indicated) o | WITHHOLD AUTHORITY to vote for all nominees o | 2. | Ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal year 2008. | |||||||||||||||
| 01 Daniel P. Barry 02 David S. Egan 03 Joseph A. Ferrara | 3. | In his or her discretion, the Proxy is authorized to vote upon such other business as may be properly brought before this meeting. | |||||||||||||||||
Check box if you plan to attend meeting. | o | |||||||||||||||||||
INSTRUCTION: To withhold authority to vote for any individual nominee(s), write the names of such nominee(s) in the space provided: | ||||||||||||||||||||
Signature | Signature | Date | , 2008 | |||||||||||||||||
Please date and sign exactly as name appears hereon. When signing as Attorney, Executor, Administrator, Trustee, Guardian, Corporate Official, etc. full title as such should be shown. For joint account, each joint owner should sign. |
Ù FOLD AND DETACH HEREÙ |
WE ENCOURAGE YOU TO TAKE ADVANTAGE OF INTERNET OR TELEPHONE VOTING,
BOTH ARE AVAILABLE 24 HOURS A DAY, 7 DAYS A WEEK.
the day prior to annual meeting day.
Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner
as if you marked, signed and returned your proxy card.
INTERNET http://www.proxyvoting.com/tlgd Use the internet to vote your proxy. Have your proxy card in hand when you access the web site. | OR | TELEPHONE 1-866-540-5760 Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call. |
If you vote your proxy by Internet or by telephone, you do NOT need to mail back your proxy card.
To vote by mail, mark, sign and date your proxy card and return it in the enclosed postage-paid envelope.
Choose MLinkSM for fast, easy and secure 24/7 online access to your future proxy materials, investment plan statements, tax documents and more. Simply log on to Investor ServiceDirect® at www.bnymellon.com/shareowner/isd where step-by-step instructions will prompt you through enrollment. |
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TOLLGRADE COMMUNICATIONS, INC. |
2008 ANNUAL MEETING OF SHAREHOLDERS
This proxy when properly executed will be voted in the manner directed herein by the undersigned shareholder. If no direction is made, this proxy will be voted FOR proposals 1 and 2.
This proxy is solicited on behalf of the Board of Directors of the Company.
(over)
Address Change/Comments (Mark the corresponding box on the reverse side) | ||
Ù FOLD AND DETACH HEREÙ |