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Technology Stocks : MRV Communications (MRVC) opinions? -- Ignore unavailable to you. Want to Upgrade?

To: signist who wrote (10442)	8/29/1998 3:06:00 AM
From: Dee Jay	Read Replies (3) \| Respond to of 42804

John, there's a great deal of insight in what you've said here...and it has been hard on many of us. Dee Jay

To: signist who wrote (10442)	8/30/1998 12:57:00 AM
From: Steve Kemp	Respond to of 42804

Dear John, I'm new to the boards and it breaks my heart to see the hardship imposed upon investors by some in management, first tier investors and their lawyers. With all the market uncertainties that exist in business, one should be able to expect a certain level of ethical behavior. Seven years ago, I was asked to serve on the board of directors of a seed-capital medical startup. A year later I was informed by a letter from company counsel that I had been removed by shareholder action. I called the major common shareholders who had elected me and was told they knew nothing of it. Turns out, I had been removed from a board seat I had never been told I held -- an all-class seat to which I had been elected by majority written consent despite a company bylaw stating that any written consent of shareholders must be unanimous (I am a shareholder and did not so consent). The company's lawyers argued in court that such a provision is recognized by Delaware law only if it appears in the certificate of incorporation (and not in the bylaws). The court agreed, even though these same lawyers drafted the original documents which were provided to me, and ruled in favor of the single Class A shareholder who signed the consent (even though he signed in the wrong capacity and for the wrong organization and my name was butchered in this and two related consents none of which were disclosed to me until requested, but spelled correctly in a stock certificate "dated" the same day as the first consent--both prepared by the same lawfirm.) The court did not deem it significant that the Delaware statute cited in court requires prompt notice to those shareholders not consenting. Company counsel even had the gall to state "besides, your honor, Mr. Kemp did not prove he never received notice" (which we never sent him). My footing the bill for six years of litigation and the loss of time spent in my defense has essentially destroyed any professional fantasies I might have had in using my skills and experience in corporate management or governance at the board level. The sad thing is that this company has been essentilly stolen from a Bronze-star decorated Viet Nam war veteran and will ultimately be sold to an unsuspecting public. The SEC has been no help since the company is not public, although it regularly asks for and is granted Reg D exemptions for private placements. These private placements are always priced above the last and the majority buy any unsold shares thus eliminating any cause of action from an earlier investor now locked-in for the duration. The Delaware Attorney General's office is not interested in the bylaw-certificate trick, although a secretary told me that mine was the second such complaint that week. The New York Attorney General's office told me they were not interested even though I came upon evidence during trial discovery showing, among other things: (1) the intentional material misrepresentation on a blue-sky disclosure, (2) falsification of board minutes, (3) grant of stock options to a non-employee at a bargain price, (4) structured sale of preferred shares to investors who would otherwise qualify only for common shares and (5) various misrepresentations and non-representations of counsel. The reason I write this is that an honest, hard-working bloke like myself has little incentive to serve in corporate governance or management when the law is applied in such an abusive manner. (I had to leave out quite a few things, which I'd be happy to share with anyone in a position to lend a hand or who believes their investment in this operation or a cousin to be at risk). Please note: this matter is NOT about MRVC--I just thought your apparently big bet on one issue deserved this note of caution. Yours very truly, George (Steve)nson Kemp, III