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NETRO CORPORATION
(Name of Registrant as Specified in its Charter)
C. ROBERT COATES
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4) Date Filed: July 09, 2002
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Press Release
SOURCE: C. Robert Coates
C. Robert Coates Asks Netro Board to Act Now to Stop Shareholder Losses
LAKE FOREST, Ill., July 9 -- C. Robert Coates announced today that he was
asking the Netro Corporation (NASDAQ: NTRO) Board of Directors to act
immediately to stop the losses suffered by Netro shareholders. He said, "The
board is meeting on Tuesday, July 16. They need to remedy the financial harm
done to shareholders by their actions. How many Enron's and Worldcom's does it
take before the directors of American companies like Netro take their duties to
their shareholders seriously?"
"Netro's directors placed absolute power into the hands of the Netro CEO and
Chairman of the Board, Gideon Ben-Ephraim. They did so by agreeing to a poison
pill. This poison pill makes it virtually impossible for any interested party
to make an offer for Netro shares at higher prices. They hid this poison pill
from the shareholders when they asked the shareholders to change the state of
incorporation to Delaware from California. One Netro shareholder called this
'A clear case of fraud.'"
"Not content with a deadly poison pill, Netro's directors approved the
acquisition of Project Angel from AT&T Wireless (NYSE: AWE) for 8.2 million
shares of stock plus some cash. Netro was reportedly the high bidder for AT&T
Wireless' Project Angel. So why did the Netro directors use stock when it was
selling for so much less than its cash value? Why did they approve an
acquisition which resulted in an immediate decline in the market value of the
stock? Is it just coincidence that all those shares were voted for Netro's two
directors, Thomas Baruch and Irwin Federman, at the recent annual meeting?
Without AT&T Wireless, Netro's Baruch and Federman would have been defeated by
a huge majority of the shares voted. AT&T Wireless has lost over 38% of the
value of its Netro shares in five months, so it couldn't have been that they
were impressed by Netro's CEO and directors, could it?"
"Every day that goes by, shareowners are forced to sell shares of their Netro
stock at prices far below the cash value of the company. Every day, that cash
value drops as the company wastes more money trying to create a market where
none exists."
"At their meeting on July 16, Netro's directors need to revoke the poison pill
and agree to solicit offers for the company."
"They need to make a self tender for Netro's stock. They should immediately
tender for 30 million shares at $3.50. This would provide shareowners with
much needed liquidity to meet margin calls. It would also raise the cash value
and the market value of the remaining shares. With a self tender, shareholders
could maintain their proportional interest in the company."
"This self tender would leave the company with more than enough money to fund
all but the most egregious empire building by the current CEO."
"The directors also need to listen to somebody, almost anybody besides CEO
Gideon Ben-Ephraim, about the disaster in the telecom industry. No one can
create a market where none exists. Too many firms with far greater resources
have already gone bankrupt trying to do so."
"They need to hold the CEO accountable for his results for a change."
"The CEO needs to focus Netro's energy on its new technology, Project Angel,
before it loses its technological advantage and reduce costs elsewhere."
"The CEO needs to spend more time in China and sign an alliance. The CEO needs
to find a major channel partner to replace the lost Lucent. The CEO needs to
rebuild Netro's relationship with its largest shareholder and customer, Carlos
Slim Helu who did not vote for Baruch and Federman."
"Netro directors Baruch and Federman claim to have great credentials. They
certainly have great market timing abilities. They sold their shares at prices
ranging from $42.58 to $76.58 two years ago. Let's see them prove the value of
those credentials to their shareholders as opposed to themselves by increasing
the price of this stock now. Or let's hear why a self tender and removal of the
poison pill doesn't make sense for us shareholders."
"We ask Netro's directors to act now to stop the unnecessary losses by
shareholders. Set an example for directors at other American companies. Help
turn this market around by showing how it can be done at Netro. It is all too
easy. Just say no to the poison pill and yes to a self tender. Until Netro's
directors do this, we think they deserve a place in the Directors' Hall of
Shame."
SOURCE: C. Robert Coates