Integral gets new CEO and chairman

Lanham company's Chamberlain quits

April 25, 2006|By STACEY HIRSH | STACEY HIRSH,SUN REPORTER

Embattled businessman Steven R. Chamberlain has resigned as chief executive officer, director and chairman of the board of Lanham-based satellite system provider Integral Systems Inc.

The resignation was made public in a document filed Friday evening with the Securities and Exchange Commission.

Discontented shareholders are calling for the company's sale, and Chamberlain faces legal troubles after being indicted in Howard County in February on charges of sexual misconduct involving a 14-year-old girl at his Columbia home. His trial is scheduled for July 24.

Chamberlain could not be reached for comment yesterday.

Integral Systems said in an SEC filing last year that Chamberlain maintains his innocence and would fight the charges.

Chamberlain will remain active at the company as it looks at "strategic options to maximize shareholder value, including a possible sale," Friday's SEC filing says.

Integral officials would not comment yesterday on the company's future, Chamberlain's resignation or whether he is employed by Integral.

Bonnie K. Wachtel, a longtime shareholder and Integral director who declined to seek re-election this year, said it is her understanding that Chamberlain still works at Integral. She also has pushed for a sale.

"Steve [Chamberlain] has said unequivocally to employees that he believes the company will be sold. He's done several e-mails to that effect," she said. "I believe he feels this furthers that agenda."

According to the SEC filing, Peter J. Gaffney, Integral's chief operating officer, replaced Chamberlain as CEO and an Integral director, R. Doss McComas, was named chairman of the board. All of the changes took effect at 5 p.m. Friday..

A month ago, Mickey Harley, chief executive officer and chief investment officer of Mellon HBV Alternative Strategies LLC and one of Integral's largest shareholders, demanded in a letter filed with the SEC that Integral executives hire an investment bank to sell the company.

In the letter, Harley also expressed frustration that Integral was strengthening ties with its current board members, rather than filling vacancies with Mellon's nominees. Harley has also said Chamberlain's personal and legal troubles could prove problematic for the company.

Mellon HBV Alternative Strategies is one of Integral Systems' two largest shareholders, with about 1.29 million shares, or nearly 12 percent of the company. Harley could not be reached yesterday.

Integral said this month in an SEC filing that it had hired BB&T Capital Markets/Windsor Group "to explore strategic alternatives, including a possible sale of the company, in order to maximize shareholder value."

Mellon said it has reached an agreement for one of its nominees to join Integral's board, according to a document it filed with the SEC this month. Mellon expects that the nominee, William F. Leimkuhler, will be approved by Integral's board of directors by the next meeting in May.

Charles M. Elson, director of the University of Delaware's Weinberg Center for Corporate Governance, said that in situations such as Integral's, the chief executive typically resigns because his personal problems affect his ability to run the company and they become identified with the company.

"It's something that becomes a distraction," Elson said. "Your job as CEO is 24 hours."

Shares of Integral Systems rose 35 cents, or 1.32 percent, to close at $26.84 in trading on the Nasdaq stock market yesterday.

stacey.hirsh@baltsun.com

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