MARATHON FUND
November 9, 2000
Board of Directors
VTEL Corporation
108 Wild Basin Road
Austin, Texas 78746
Ladies and Gentlemen:
We are writing to you today to formally request that you undertake
aggressive action to maximize the value of your shareholders' collective
investment in VTEL. The parties represented by us own approximately 5% of
the firm's stock. Many of the shareholders represented by us have patiently
owned shares for a number of years, but have realized no return on their
investment. It is time for the Board of Directors to pursue the following
course of action:
1. Begin a significant share repurchase program that takes advantage
of the low stock price. An authorization to purchase ten million
shares would, we believe, be a good starting point. The program
should be aggressively implemented, with at least one million
shares per quarter being purchased.
2. Initiate the sale of the hardware portion of the business, along
with the whole of the OnScreen and Campustream divisions. These
enterprises do not fit with the Company's business plan.
3. Expand the Board of Directors or replace the current Board. The
Board as presently constituted has proven itself to be incapable
of adding shareholder value.
If the Board is unable to take the above actions, we believe the
Company should begin orderly liquidation proceedings to return cash to
shareholders.
We have waited patiently for years for the Board of Directors to take
some meaningful action to increase shareholder value. We have run out of
patience. We would appreciate a response to our proposals by November 20,
2000.
Very truly yours,
Don Woodard, Jr. David A. Corbin, CFA
Marathon Fund Management, LP
6300 Ridglea Place/Suite 1111/Fort Worth, Texas 76116
Phone (817)335-8282/(800)490-9333
