Coyote Network Systems (CYOE), Mixing It Up, IP and ATM Message Board

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Technology Stocks : Coyote Network Systems (CYOE), Mixing It Up, IP and ATM

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To: Mama Bear who wrote (345)	2/4/2000 11:39:00 AM
From: Q.	Read Replies (1) of 360

How do you like this: the new CEO paid his private companies 2 million shares of CYOE stock for consulting services. On top of that, the new leasing company was his, too. Amazing! The co. will have to write off something like $10 M against earnings for this; that's the apparent value of this gift to himself. Did this company pull out all the stops to enrich the new guy at shareholder expense, or what? In connection with his election to Coyote's Board, Mr. McCullough relinquished his 25% interest in First Venture Leasing LLC ... On January 26, 2000, the Company also entered into a Consulting Agreement with KRJ, LLC to provide strategic consulting services designed to enhance Coyote's position in the application service provider (ASP) market. The consulting agreement has been approved by Coyote Network Systems Board of Directors. Mr. McCullough has an approximately one-third interest in KRJ. The terms of the Company's agreement with KRJ were the result of arms' length negotiation in which Mr. McCullough did not participate. The balance of KRJ is owned by affiliates of First Venture. The Company issued to KRJ 2,000,000 shares of unregistered common stock, with no registration rights. In connection with the issuance of the shares to KRJ, the Company anticipates recording a one-time, non-cash charge to earnings of approximately $10 million in the fourth quarter of Fiscal 2000. On January 26, 2000, the Company entered into a financial services agreement with First Venture Leasing LLC, designed to provide a vendor lease facility for Coyote's customers. The terms of the Company's agreement with First Venture were the result of arms' length negotiation in which Mr. McCullough did not participate. The Agreement with First Venture was approved by Coyote Network Systems Board of Directors.

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