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on 7 April which paved the way to a $235,000 line of credit
from the Toronto Dominion Bank, guaranteed by the same in-
itial group of outside shareholders which, in MCM documents,
is referred to as the “guarantors.” But to close the deal, Kutt
agreed to a number of concessions requested by the guarantors.
He agreed to vote his shares so that “a majority of the board
of directors shall be persons nominated by or acceptable to the
present shareholders of the Company who are not employees
or officers of the Company.” If there were any doubts about
the intended meaning of that assurance, they were dispersed by
the wording of the amendment to the 7 April agreement pro-
posed to Kutt in October. This time around, Kutt was to agree
to vote his shares so that “a majority of directors shall be nom-
inated by or acceptable to the majority of common shares held
by the 'outside shareholders' of the Company.” The document
also specifies who these “outside shareholders” were, and the
number of MCM 's common shares owned by each of the eight-
een members of the group. From that data, it had to be obvious
to Kutt that the MCM common shares owned by guarantors,
namely by Vermay Investments, Robertson, and Elliot, would,
if voted together, constitute such a majority of shares.
In all fairness, the proposed amendment offered ways to
withhold the assurance in question: go public with MCM , or
offer to buy the outside shareholders out for $20 per share and
$11 per right to purchase a share - both highly unlikely at that
stage of the company's development. To buy the shareholders
out, Kutt would have to deposit $528,410 in cash, almost twice
the amount of the line of credit backed by the guarantors. In
short, if Kutt agreed to the amendment, the board of directors
would be in the hands of the outside shareholders. He did agree,
not knowing that his signature endorsing the amended agree-
ment would cost him his presidency a few months later and the
company its leadership position in the emerging microcomputer
market.
 
 
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