THE HONOURABLE JUSTICE STEWART
SUPREME COURT OF BRITISH COLUMBIA
FINAL ORDER AND SPECIAL COMMITTEE
AS A MATTER OF RECORD said interim order and valuation pursuant to said Plan of Arrangement is false and fraudulent and will cause further serious irreparable shareholder injury.
The shareholders reallege their position as stated pursuant to the above and enclosed, including but not limited to the Dow Jones carried dissenting shareholder releases dated Aug 23, 26 and Sep 6 1996 and further allege that Richard Groome, Pyramid, American Brands (NYSE:AMB), McCarthy Tetrault et al, have engaged in consistent patterns of alleged fraudulent misrepresentation and concealment, undue influence, violation(s) of corporate opportunity, breach of fiduciary duty, misstatements, non-disclosure, materiality, reliance and causation and Rule 10b-5 'Controlling Shareholder' violations in an effort to enter into said 'Final Order' on Thursday, January 15, 1997. The shareholders further allege that American Brands AKA Pyramid, despite extending their tender offer pursuant to 9-10-96 14D-1 and then finally waiving their tender offer rights on September 20, 1996 pursuant to a failed tender, have allegedly engaged in documented patterns of misrepresentation, nondisclosure and breach of fiduciary duty.
The shareholders have enclosed the necessary documentation supportive of our position including previously legally submitted shareholder documents including but not limited to the British Columbia Securities Commission and the United States Securities and Exchange Commission seeking injunctive relief.
The shareholders allege that said consistent patterns of alleged fraudulent misrepresentation and concealment include but is not limited to the establishment of Gravis' current Board of Directors going back to the July 29, 1996 Annual General Meeting and the non arms-length establishment of said 'Special Committee' pursuant to said Plan of Arrangement. On July 29, 1996 the shareholders allege that through undue influence, fraudulent misrepresentation and concealment, American Brands through their Canadian legal counsel, McCarthy Tetrault, nominated and elected Gravis' new Board of Directors including Richard Groome as Gravis' Chairman. Gravis issued a news release evidencing the facts surrounding said allegation (enclosed) in addition to the Corporate Minutes of said AGM (enclosed). On October 8, 1996 Edward P. Smith, Chadbourne & Parke, American Brands' U.S. legal counsel and filer of said September 20, 1996 13D, denied any knowledge of said 13D including American Brands intent regarding taking Gravis private. Mr. Smith further stated he would immediately get back to the shareholders that day. The shareholders further allege that Mr. Smith, nor McCarthy Tetrault, nor Richard Groome et al i.e. no one associated with said Plan of Arrangement has ever returned any shareholder calls. The shareholders further allege that said 'special committee' was, in fact, comprised of all American Brands' appointees and accomplished through materiality non-disclosure, misrepresentation and concealment. On October 22, 1996 Gravis issued a material disclosure news release stating a(another) Board Restructuring including the immediate resignation(s) of Bob Smiley (McCarthy Tetrault) and Grant Furlane and that "...Pyramid (American Brands) exercised its right to appoint a majority of the Gravis Board including a new Chairman...". On October 31, 1996 Gravis issued another material disclosure release re: Gravis Board Forms Special Committee to Consider Pyramid Proposal "...The special committee will be comprised of board members independent of Pyramid and its parent, ACCO...Its duties will include...retaining a qualified independent valuer to prepare a formal valuation of Gravis' shares and, subject to board approval, implement any steps necessary to proceed with the arrangement...".
The Gravis board, as of October 31, 1996 was now comprised of Mike Cooper, Grant Russell, Richard Groome, David Campbell, Bruce Neapole and Peter Dupont making the special committee Mike Cooper, Grant Russell and Richard Groome. Furthermore, Richard Groome was nominated by Barry Fraser of McCarthy Tetrault to the Gravis board on July 29, 1996, which was on record and videotaped. However, the Notice of Extraordinary General Meeting of Holders of Common Shares to be held on January 14, 1997 -and- Information Circular Respecting a Proposed Plan of Arrangement Involving the Company and its Members, dated December 9, 1996, page 3, states "...On November 7, 1996, Grant Furlane...was re-appointed as a director and appointed as a member of the Special Committee. Mike Cooper, a director and CEO of Gravis and whom, on record at the Fiscal 1995 AGM stated that Gravis was undervalued at U.S$ 1.00/share due to its worldwide shelfspace alone, was conspicuously and maliciously excluded from said special committee. The shareholders allege that this move was in violation of securities disclosure laws regarding materiality and furthermore Grant Furlane, also, was nominated by McCarthy Tetrault on July 29, 1996. McCarthy Tetrault is American Brands and Pyramids Canadian legal counsel. The shareholders further allege that said special committee, was a result of collusion and fraudulent misrepresentation, concealment, undue influence, violations of corporate opportunity and breach of fiduciary duty. Furthermore, said special committee was responsible for said January 15, 1997 Final Order application. The shareholders allege that said special committee was in fact, American Brands nominated, elected and influenced.
VALUATION
The current valuation of Advanced Gravis as submitted now by Goepel Shields and Midland Walwyn are substantially flawed in that they both conspicuously fail to take into consideration Advanced Gravis' worldwide shelfspace, which, Mike Cooper , on record, stated was why Gravis was undervalued at $US 1.00/share at the Fiscal 1995 AGM in July 1995. Furthermore, Gravis has won every substantive industry hardware gaming award for both the Gravis GrIP and GamePad Pro for 1996 (enclosed in re: 1996 Annual Report pp. 9-10), including the unprecedented "Best Technical Achievement Award" for 1996 for the Gravis GrIP along with Microsoft for Windows 95 by the #1 gaming magazine, Computer Gaming World at the 1996 World Premier Electronic Entertainment Expo Awards in Los Angeles. Gravis also reported positive cash flow for Q3 fiscal '97 ending October 31, 1996 (attached).
The shareholders have furthermore submitted valuation on Thrustmaster, a direct competitor of Advanced Gravis. Said analysis was performed by RedChip Review whom has very recently been critically acclaimed as the top smallcap analysts in the United States. Thrustmaster is much smaller and was valued at approximate US$30,000,000 or approximately 5X American Brands' valuation of Gravis. Furthermore, Gravis, again, has won every gaming award for its GrIP multiplayer gaming standard.
In closing, there are some very disturbing facts surrounding said Final Order, as follows:
1) Mike Cooper stated company was undervalued at US$1 at Fiscal '95 AGM 2) Mike Cooper was secretly removed from 'special (valuation) committee' in November 3) Gravis removed its June 30 news release from its site as it confirms one: Yanion investment and not the ACCO investment was unanimously approved by the shareholders at the July 29, 1997 AGM and two) also confirms McCarthy Tetrault played the dominant role in establishing (NYSE:AMB) control of Gravis' Board of Directors 4) Grant Russell and Mike Cooper were about to be removed from the Board for cause pursuant to the Shareholder Information Circular (enclosed) in re: criminal gross negligence, insider trading, consistent patterns of shareholder value destruction, including representations by Richard Groome and Sagit Management, etc. and the Gravis shareholder site techstocks.com. However, pursuant to the alleged fraudulently engineered ACCO hostile takeover, Grant Russell and Mike Cooper are being hailed as superior management by American Brands in recent news releases 5) shareholders specifically and simply requested an independent company from the US to represent them in valuing Gravis which was blatantly disregarded.
Your Honour , Messrs. Armistead and McLucas, the shareholders urge simply that the attached substantive enclosures and issues of facts be reviewed and considered sufficient prima facie cause to obtain a permanent injunction against said 'Plan of Arrangement' going private transaction and Final Order.
/s/ BY ORDER OF THE SHAREHOLDERS
Encl: RedChip Review analyst report on valuation of Gravis direct competitor; Fiscal 1995, 1996 and Q3 '97 (positive cash flow) shareholder reports; Board Minutes from Stuart Morrow to the Law Society of British Columbia; Letter of Shareholder Complaint to Law Society of British Columbia in re: violation(s) of Rules of Professional Conduct against Davis & Company and Stuart Morrow and R. Swift; Sept 4, 1996 letter from dissenting shareholders to BCSC, SEC and OSC in re: 14(d) tender offer violations seeking injunctive relief; Shareholder Information Circular dtd July 25, 1996 in re: false and fraudulent proxy and denial of shareholder due process rights submitted to BCSC, SEC and OSC; August 19, 1996 certified letter to BCSC, OSC, SEC, Richard Groome, and the Gravis Board in re: false and fraudulent ACCO tender and irreparable shareholder injury; August 23, August 27 and September 6, 1996 dissenting Shareholder news releases carried by Dow Jones; July 30, 1996 Gravis press release re: Shareholder approval of Yanion investment and evidence of McCarthy Tetrault undue influence in Board restructuring and subsequent termination of Yanion investment with American Brands' ACCO fraudulent tender, Gravis press release listing evidencing conspicuous absence of July 30, 1996 evidence (http://www.gravis.com/); 1996 Corporate Minutes for 1996 Gravis AGM supplied by Davis & Company evidencing Yanion approved investment and not ACCO and also confirms McCarthy Tetrault Director elections undue influence and violations of the rules of professional conduct by implication; Valuation of direct competitor, Thrustmaster, by Redchip Review, Portland Oregon--critically acclaimed as leading national smallcap analysts; 2-17-95 Dow Jones newswire on Gravis' comments re: Gravis and Thrustmaster. |
