Chapman Capital Seeks To Replace Vitesse Semi (VTSS) Board

Chapman Capital, a 7.2% holder of Vitesse Semiconductor Corp. (OTC: VTSS), said it has determined to seek nominees to replace all or part of the Board of Director of the company. Chapman said the company last allowed shareholders to elect Board Representatives some 18 months ago, which Chapman said is in clear non-compliance with Delaware law.

Chapman said it expects to file today with the SEC a Schedule DEFN14A initiating the process of soliciting proxies from shareholders of the Company

Chapman Capital Plans to Solicit Proxies To Replace Vitesse Semi (VTSS) Board

In an amended 13D filing on Vitesse Semiconductor (OTC: VTSS), 6.3% holder Chapman Capital informed the company's management that they intend to submit to the SEC a Schedule 14A commencing a process of soliciting proxies to replace the Board of Directors.

Chapman Demands Vitesse Semi (VTSS) Hold Annual Meeting To Elect Directors

In an amended 13D filing Friday afternoon on Vitesse Semiconductor (OTC: VTSS), 5.3% holder Chapman Capital demanded the company immediately schedule a Meeting of Stockholders to elect directors. Chapman also demanded Jim Cole, head of Vitesse's Corporate Governance Committee, resign from the Board immediately.

Robert L. Chapman, Jr., Managing Member of Chapman Capital, commented, "In breach of the most basic tenet of corporate governance, Vitesse's beleaguered owners, in a heightened state of distress following the Company's options backdating scandal and resultant nearly two year lapse of audited financial statements, were permitted last to elect directors to their company's Board of Directors on January 24, 2006, nearly 17 months ago. Jim Cole, perplexingly still head of Vitesse's Corporate Governance Committee despite being held responsible by major past and present owners for the Company's deep-seated problems, and who also holds a seat on Vitesse's Audit Committee that has failed to produce nearly two years of audited financials and Compensation Committee that appears to have stuffed the pockets of Mr. Cole's friends and business partners in their capacities as CEO, EVP of Finance, and Chief Financial Officer, must resign from the Board immediately."

Chapman Capital Liquidates More of its Vitess Semi (VTSS) Position

In an amended 13D filing after the close on Vitesse Semiconductor (OTC: VTSS), Chapman Capital disclosed a 2.5% (5.6 million shares) stake in the company. The is down from the 6.2% stake the firm disclosed in December.

The firm said based on the increased percentage of the Funds' capital being invested in semiconductor-related equities, they determined it prudent to reduce their long semiconductor sector exposure via sales of Common Stock.

In addition, the firm reduced their combined ownership position in the Issuer below the 5% threshold in order to relieve themselves of certain reporting requirements associated with Section 13D of the Securities Exchange Act of 1934

The firm noted that on December 12 they were informed that the company determined to replace Mr. Hassel as Chief Financial Officer, an action that Chapman Capital had advocated for several months.