#C= Shareholder Movement
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of this communication is not to obtain proxy authority form
any shareholders, but rather to discuss why this shareholder
movement is likely to succeed, and to enlist the aid of any
persons or institutions willing to partake in the movement.
NEW SHAREHOLDER RIGHTS
For those interested in the new SEC regulations, you may
find a copy at many libraries which subscribe to the Federal
Register. This publication documents Federal regulations
soon after they are approved. "Communications Among
Shareholders" may be found in Volume 57, published October
22, 1992, beginning on page 48276. The Summary states this:
"The Securities and Exchange Commission today announces the
adoption of amendments to its proxy rules promulgated under
section 14(a) of the Securities and Exchange Act of 1934
("Exchange Act"). By removing unnecessary government
interference in discussions among shareholders of corporate
performance and other matters of direct interest to all
shareholders, these rules should reduce the cost of
regulation to both the government and to shareholders. The
amendments eliminate unnecessary regulatory obstacles to the
exchange of views and opinions by shareholders and others
concerning management performance and initiatives presented
for a vote of shareholders. The amendments also lower the
regulatory costs of conducting a regulated solicitation by
management, shareholders and others by minimizing regulatory
costs related to the dissemination of soliciting materials.
The rules also remove unnecessary limitations on
shareholders' use of their voting rights, and improve
disclosure to shareholders in the context of a solicitation
as well as in the reporting of voting results."
BACKGROUND
The people behind this effort were present at the 1991
Commodore Shareholders' Meeting. A prominent Philadelphia
attorney was thrown out of the meeting for raising a "point
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of order" that the meeting be moved to the United States
where shareholders could attend. This shareholder was
bodily removed from the meeting despite his clear assertion
that he did not want to leave. Such action is typical of
this well fortified and unresponsive Commodoreboard of
directors. Another shareholder, who worked for Commodore,
warned the Board of the impending crisis of the MS-DOS price
wars. The insufficient response on this point has, in great
part, landed Commodore in its current jeopardy. Commodore's
recent plummeting stock was not a result of unforseen
economic conditions in Europe as they would have you
believe, but rather a direct result of the Board's
unwillingness to respond to the changing realities of the
computer industry. Since the press coverage of the 1991
meeting, other people have joined the movement including
other shareholders and Commodore employees.
Similar attempts at affecting Commodore management have
failed in the past. But now, new SEC regulations have given
shareholders new abilities. The rules which previously
favored management now allow shareholders to vote for board
members that are not part of management's slate. With well
chosen candidates and a well run proxy contest, alternative
directors stand a good chance of usurping Irving Gould and
Alexander Haig this time around. Once succeeding in this
contest, the new directors can get to the business of
commencing Commodore's long overdue recovery.
FEASIBILITY
There is a total of 3700 shareholders. The latest Standard
NYSE Stock Report shows that Irving Gould owns only 19% of
Commodore's common stock. A total of 70 institutional
investors account for 20.6% of ownership, according to the
Nelson's Directory of Investment Research. According to the
new laws, these institutional investors may vote. Further,
the remaining 60.4% of Commodore shareholders may be reached
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through an official proxy campaign. That 81% majority of
votes may unite to elect independent directors. The three
year terms of both Irving Gould and Alexander Haig are up
for reelection this year.
THE CURRENT BOARD OF DIRECTORS
A community of people including shareholders, businesses and
customers have a stake in Commodore's survival. Irving
Gould, the Chairman of the Board and C.E.O. of Commodore
International Limited is the greatest barrier to Commodore's
survival. Gould has eroded the loyalty of their only
reliable revenue source (the customer base), driven
Commodore into debt, and brought the company to the edge of
collapse (1993 3rd quarter disclosure).
Meanwhile, Gould has compensated himself with annual
salaries of over 1.7 million dollars, plus stock options and
bonuses (1992 Proxy Statement 3). Shareholders who have
already lost a great deal of money stand to loose
everything. Commodore is also the sole source of Amiga
computers, a proprietary product in which many people have
invested. These customers will be abandoned and possibly
forced to buy products less suited to their needs. A top-
caliber engineering team will be broken up, many small
symbiotic companies will loose their market, and potentially
successful products will never be developed.
A NEW BOARD
The change of top-level management is believed to be
Commodore's only chance for survival. This can be
accomplished through the election of new Directors. The
upcoming 1993 shareholder meeting presents the chance to
break Gould's stranglehold on the company and to replace him
with dynamic leadership. A movement to nominate and elect
new directors is being organized.
Both Irving Gould and Al Haig are up for reelection to the
Board of Directors. All shareholders should vote for the
alternative candidates who will become known in the
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following months. Talks are being made with some very
exciting possible candidates. With Gould gone, Commodore
can start on its path to recovery, being led by capable new
Directors. Without Gould, the remaining Directors will
likely step down.
CANDIDATES
We are open to suggestions regarding persons who might run
against Irving Gould and Alexander Haig for the Commodore
Board of Directors, and are now talking with a few possible
candidates. These people must have the necessary abilities
and reputation to get elected. After elected, they must be
able to serve in a contentious environment until the
remaining directors are replaced. They will start to
correct Commodore's problems and move the company forward.
Until a candidate states to us their willingness to run, we
will not discuss their names. But the important thing is
that these candidates will not be part of management's
slate.
We are constantly writing letters, on the phone, and
communicating by e-mail with people adding their efforts to
the movement. We are in correspondence with the SEC and
Commodore's legal council. Currently, we await Commodore's
response to our request for the by-laws and shareholder
list.
PLANS
Our immediate strategy is to take advantage of the new SEC
regulations, and make our movement as publicly known as
possible. We hope to locate and join efforts with other
shareholders by working with magazines, newspapers, and
television. This public exposure should aid us in
pressuring Commodore to supply their governing by-laws and
shareholder list.
In order to nominate and elect new directors, we will
ultimately have to solicit proxy votes and attend the
shareholder meeting. This communication is not a
solicitation of proxy votes. To this end, we must first
complete the filing requirements with the SEC. At that
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time, all Commodore shareholders will be informed of the new
candidates for directors via proxy statement. Meanwhile, we
are allowed to talk about our intentions, and lay the
groundwork for popular support. Proxies will come out some
time in September this year, and the shareholder meeting
will be held some time in November. There is the
possibility of organizing a group-trip to the meeting,
larger than that which occurred in `91. We would like to
gauge shareholder's ability to participate in this.
INFORMATION FOR NON-STOCKHOLDERS
If the shareholder movement is successful, then Commodore
stock may have been a smart investment. Many companies have
come back from the brink. The purchase of stock will allow
you to cast a proxy vote in the upcoming election, or attend
the shareholder meeting (at your own expense). If you were
to wish to buy stock, you could contact a discount
stockbroker. There would be a transaction fee which
shouldn't be over $50. To expedite the proxy voting
process, you would ask for the stock certificate to be sent
to you. You might get your friends to buy stock, or ask for
it for your birthday. The process is easy and every vote
helps. Just remember the risk if the effort fails. You'll
at least have the satisfaction of being involved.
SPREAD THE WORD
If you buy or own any Commodore stock, contact us with your
address. Send a letter or e-mail (MarcR@cup.portal.com).
Let everyone who might care know what's going on. Bring it
up at the users' group meetings and write articles for the
newsletters. Re-post this announcement. Talk about it on
the electronic bulletin boards. Call talk radio shows.
Help us make Commodore's situation into a news story. Talk
about the company with the wonderful products and the
destructive management. Talk about how the shareholders and
users at long last are able to take the situation into their
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own hands. Use your imagination in thinking about
strategies for gaining exposure, and follow through!
Consider yourself our partners. Send a copy to anyone you
know who writes for financial or computer publications.
Accompany it with your own letter in order to validate the
topic of widespread concern. Watch for future
announcements, and keep sending us feedback.
Commodore Shareholder Movement
P.O. Box 8296 Philadelphia, PA 19101
Internet: MarcR@cup.portal.com
FAX: (215) 825-3966