CSM Update: Commodore's Annual Meeting

March 2, 1994

Nassau, Bahamas - "We are not a rubber stamp board of directors," replied
Commodore Chairman Irving Gould to an accusation by computer dealer,
Jeffrey Moscow.

By this time during the 1993/94 Annual Shareholder Meeting of Commodore
International, board members had been repeatedly questioned on counts of
inept management - for having led this NYSE issue to a net loss of $356
million for FY93.  Only two years earlier, Commodore enjoyed annual net
sales in excess of one billion dollars. Shareholder equity is now about
(negative) -10.78 per share and Commodore owes over $50 million to banks
in 18 different countries. The banks are putting the pressure on
Commodore to repay, and Commodore is trying to avoid legal actions.

The meeting, which was four months overdue, was held this March 2nd in
its usual location, the exclusive Lyford Cay Club in Nassau, Bahamas
where Commodore holds its incorporation.

There was no repeat of the scene of November, 1991 when a dissenting
shareholder was physically ejected from the meeting, but passions were
nonetheless running high.  At one point, Moscow asked General Alexander
Haig - one of Commodore's five directors - to encourage Irving Gould to
step down in the same way he had admirably done so with a certain US
President.  Someone has to take control, insisted Moscow; nothing is
going to improve under current management, he went on.

For about a half-hour, Gould, Moscow and shareholders parried comments on
Commodore's ailing situation and prospects for recovery. Commodore is an
international company which manufacturers the Amiga - the most popular
model home computer in Europe and the host to many professional video
products in the United States - for instance, the Video Toaster which has
revolutionized the video industry.  Commodore also recently introduced
CD32, a 32-bit game machine which is becoming a hit in Europe.

At the annual meeting, shareholders contended that perpetual mistakes,
including inadequate supply of products during consecutive Christmas
seasons, was responsible for the losses, while Commodore blamed the
effects of soft economic conditions in Europe, their largest market.

But whatever the cause of Commodore's problems, everyone at the meeting
agreed that something needed to be done - perhaps new management or a
grass-roots marketing campaign tapping into the enthusiasm of the
Commodore base of customers as suggested by Michael Levin.  Levin
described himself as a spokesperson for these customers - many of whom
have and are still actively becoming shareholders.  The only thing being
asked of Commodore was leadership. The lack of confidence in management
was demonstrated by the shareholder defeat of a proposed amendment to
Commodore's articles of association.  This amendment would eliminate
shareholder checks concerning large decisions such as mergers and sales
of company assets.

Another point raised at the meeting was Commodore's urgent need to
resolve its debt and recover credibility so that it can become a player
in the emerging interactive television market.  In this market, programs
and software will be downloaded by service providers into cable-box-like
devices sitting on top of peoples' televisions. Commodore, the
shareholders insist, must become the supplier of the boxes or the core
technology going into compatible boxes supplied by other manufacturers.

"On the surface, every one of our objectives was met for the meeting,"
stated Marc Rifkin, a shareholder attending the meeting with proof of the
thousands of customers and shareholders backing his cause.  "We don't
think our warning fell on deaf ears; we now have an open line to Irving
Gould, and he seems willing to listen.  That is the critical first step."

What happens next?  Rifkin replies that either Commodore starts taking
the steps necessary to survive, or they don't.  The first sign will be
whether Commodore brings in someone who can deal with the daunting
financial and marketing challenges, as well as working with the Board of
Directors.  Previous attempts to find such a turn-around artist have
ended in debacles, most notably, an ex-Pepsico executive, who cost
Commodore a $10 million lawsuit, and current president, Medhi Ali who led
Commodore during its recent decline.

Commodore Shareholder Movement Announcement, March 2, 1994

We were at the shareholder meeting, and we were not alone.  Various Amiga
dealers whose livelihood depends on Commodore's success were also in
attendance.  Some spoke with along with us while others silently observed
the proceedings.

Our message was clear; things are not rosy.  Consistent and basic
mistakes led Commodore to where it is, and as anyone can plainly see,
continuing these mistakes will lead to ruin.  They must not miss their
one chance to make a comeback through the interactive television market.
This relies on partnerships which Commodore has seemed unable to form.
The situation is urgent.  Commodore must leverage what resources it still
has, including the activities of those customers who still carry the
torch.

Irving Gould met with us after the meeting to discuss what might be done.
It seems that Gould is willing to listen and is concerned about the
message which is reaching the users.  If there is a solution to
Commodore's situation, it must start from the top.  We hope to offer
Gould a solution which he will find favorable and will best benefit the
interests of the Commodore shareholders and customers whom we represent.

Keep your letters coming.  Keep them concise and focus on what things you
might do to help.  Most importantly, spread the word.  The assumption is
that Commodore and its computers represent a tradition worth keeping.  We
can not do this alone.  Others must become active leaders in the cause.

Editor's Addendum

I talked at length with Mike Levin, of the Commodore Shareholder
Movement, after the Annual Meeting, since I wanted to hear first-hand how
he felt the "encounter with Gould" had gone.  First, the bad news.  Mike
said that there had been "no fundamental change" in Commodore's
situation. Cash is still scarce, and there are a number of banks banging
at Commodore's door.  However, Levin felt that the opening of a "channel
of communication" with Gould was the most important accomplishment.  The
next order of business was for CSM to recommend "new leadership" for
Commodore, in a meeting with Gould.  This has already happened. The
candidate that CSM has proposed is a computer industry veteran (his son
was an Amiga developer) who has experience in turning ailing companies
around.

As for the future, Levin pointed out that it isn't nearly as bad as the
financial reports indicate.  While it is true that Commodore's financials
are dismal, the likelihood is that the people to whom Commodore owes
money will step in and take control of the company, rather than liquidate
it. As long as Commodore has sales, they're worth more alive than dead.

So the current (and prospective) Amiga owner need not necessarily fear
that his or her computer is about to be an orphan.  However, the Amiga
community does have a say in the future of the Amiga, and can take an
active role.  Levin urged all Amiga owners to send letters to the CSM, to
"spread the word" of the Amiga's capabilities to potential Amiga
customers, and to "help Commodore through this current situation."

Levin repeatedly stressed the possibilities of licensing the Amiga's
chipset and operating system to third parties, particularly for use in
the forthcoming "interactive television" technology.  And, according to
Levin, Commodore has been approached by more than one company looking to
use Amiga technology in their products.

You can reach the Commodore Shareholder Movement at:

Commodore Shareholder Movement P.O. Box 8296 Philadelphia, PA 19101


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