Wednesday, August 03, 2005

Subject: Serious Business Matters
Date: Wed, 29 Jun 2005 20:31:54 +0900
From: Scott Jarkoff
To: Sotira Angelo
CC: McCann Andrew



Angelo,

I apologize for having to handle this via email rather than in
person. As you know, I wanted to discuss these serious business
matters with you while I was visiting Los Angeles however I was
unable to do so. It had been 6 years since I have seen much of my
family, and they are priority one, therefore it was rather difficult
to get away to handle matters of this nature. Certainly you
understand that.

In any event, on to why I am writing you now. There are some serious
deficiencies in how internal business matters have been handled with
respect to the structuring of the company among others.. Surely you
know what I am referring to as it was your hand that sculptured the
"behind the scenes" portion that I speak of. Since you have been
offered the ability to work without constraints, and essentially
unchecked by the way of standard corporate checks and balances, you
have run amok with *our* company.

Please take a look at all of the attached files. You will notice
that I have the *original* bylaws and the *original* Form 2553, among
others. You can clearly discern the pattern of behavior that you
have chosen to make use of once you compare our original company
documents with the more recent ones. Couple these documents with
your lack of ability to timely offer me the financial documentation
that I am legally entitled to (which I have been asking to see since
November of 2004 and you conveniently continue to purposely
withhold), as a shareholder in deviantART Inc., the underhanded
methodology you utilized in order to fill the board of directors, as
well as your many other esoteric moves, and it becomes quite obvious
that you are purposely acting in a bizarre manner for someone in your
position. deviantART is about *ART* and *ARTISTS*; it is not the
music industry that you continue to be so in love with.

You and I both know that there has been some serious misconduct on
your behalf. I would appreciate it if you merely own up to that fact
rather than trying to play games with me; the same games that you
have been playing for the better part of the last 14 months. While I
may be stupid I am not blind; I am quite capable of seeing what it is
that you have been doing.

The deviantART Staff, whether the individual be a paid employee or a
volunteer, has been diminishing quite rapidly as of late. Our staff
is leaving in droves, not because of time constraints or other
innocuous reasons that they put up in their public journals on
deviantART, but because they can not take working with and for you
any longer. Do I need to point out the true reasons behind why ****,
Kevin and various others have left? Do I need to remind you how you
*used me* in order to push Matt out so that you could obtain a larger
chunk of the deviantART pie?

If you have half the maturity that you claim then be humble enough to
step back and look at what *you* have done here. Ask yourself if
*YOUR* vision of deviantART is the one that the staff, both paid and
volunteer, believes in. Without these people you have nothing. Ask
yourself if you have really acted in a professional manner,
appropriately and with the integrity that all subordinates require of
their leaders.

I am certain that we both know the answer to that.

The corporate culture that you have built as the CEO is hardly what
anyone would believe to be healthy. You overwork the entire staff,
to the point where it violates state and federal law, and have not
properly prioritized projects which will help the site move forward
in to the areas that it *needs* to. Furthermore, your experience
within the entertainment industry has created a smoke-filled room
like aura; you appear to be more interested in keeping things behind
closed doors rather than open, honest and healthy discourse. It is
because of this reason that a great number of folks have already left
deviantART staff with even more standing in line to walk out the door
unless there is a drastic change in operating procedure that improves
company morale.

At this stage of the game I have enough information (pay close
attention to the attached documentation) to put a serious damper on
your activities as the deviantART, Inc. CEO. I seriously doubt that
the few remaining staff members that are loyal to you now would
continue to be if they were aware of the backstage politics and
machinations that you seem to involve yourself with on a daily
basis. As is, your arbitrary decisions about random things seem to
get thrown out in to the open with complete disregard for their long-
term effects or staff morale.

I have no desire to cause a ruckus at deviantART but truth appears to
have a way of coming out on its own. We both saw that with the
recent staff leaks. It is a fact of life - disgruntled employees,
especially those not being paid a dime for their hard work and
dedication, will leak. Happy staff do not. Do the math.

If you truly love deviantART the way that you say you do then stop
using it as an engine for your own career and your own glory. Come
back down to earth and realize that you have hurt a great many
people, stolen credit from others and made it your own. Be a man,
step up to the plate and lets get the problems fixed once and for all
before more people leave.

Along with the individuals that you see listed on the to: and cc:
lines I also bcc:'d certain people within the organization in order
to guard against your propensity for firing people who stand up to
you. A certain ex-employee named **** **** comes to mind.

We both know who's "brainchild" deviantART truly was. Do not think
there are not people here who do not remember what really happened in
order to give birth to this wonderful site.

I will make myself available to speak to you this week in the event
that you desire to do so. Please let me know ahead of time so that
the proper arrangements can be made.


Best Regards,

[s]
--
Scott Jarkoff (jark)
Co-Founder/Director of Community Development
deviantART, Inc.
http://www.deviantart.com/

Tuesday, August 02, 2005

Subject: The truth about deviantART. From a friend
Date: Tue, 2 Aug 2005 01:12:43 -0500
From: Engelbert Humperdink
Reply-To: Engelbert Humperdink
To: xxxxxxxxxxxxx

The new administration at deviantART has been given more than enough
time to respond to the current situation in a responsible and truthful
manner, and have proven that they would rather obfuscate the issue
than address it.

It is with this in mind that I pass along to you the following email,
which has been in my possession for quite some time. I have been
holding on to it in the hopes that Angelo Sotira would do the right
thing by our community - his journal entry of 31 July, 2005 has
convinced me that he has no such plans.

You are one of only four people who have been chosen to receive this
correspondence. I have always believed you to be a person of high
moral character, and I pass this along to you not in the interest of
causing more chaos, but rather of taking Angelo to task, publicly, for
the political wrangling and self-serving revisionism that has allowed
him to wrest control of deviantART away from Scott Jarkoff and Matthew
Stephens, in whose hands the control of this site truly does belong.

In the interest of promoting truth and knowledge above ignorance and
deceit, I send this to you now. I rest assured in the belief that you
will do with it what you feel is right.

I can offer you no guarantees save one - this email is legitimate. It
has not been edited in any way. This is but one piece of a much
larger paper trail that can be followed directly to one and only one
conclusion - Angelo Sotira is more interested in making deviantART
into his personal cashcow than he ever has been in the community whose
money he is so willing to take.

Sincerely,
A Friend

-----------------------------------------------------------------------

-----Original Message-----
From: Scott Jarkoff [mailto:scott@deviantart.com]
Sent: Tuesday, July 19, 2005 4:44 AM
To: Andrew McCann
Cc: Angelo Sotira
Subject: Re: Response to "Serious Business Matters"
Importance: High

Andrew,

Thank you for taking the time to read and ultimately respond to my email
entitled, "Serious Business Matters." I take these issues quite
seriously so I appreciate your reply.

What I do find frustrating is your use of this whole "Board of
Directors" bit. Let's be serious here for a moment, shall we?

The board consists of two people: you, and Angelo. And yet here you
are, addressing me in a manner that would be consistent with that of a
large corporate entity. I understand the wish for formality, but let's
be realistic. You and I both know that any decision the "board" makes
is simply a decision of Angelo's that you've been dragged along on.

Statements like, "since your emails have raised concerns about the
activities of Angelo in his role as CEO, the board of directors has
decided that I, and not Angelo, should respond," you may think you're
coming across as caring and open, but you're not. Your response seems
automated and canned.

Can we cut the semantics and be a little more open and intimate with
this discussion? After all, it is partially these unnecessary
formalities that Angelo has brought to the culture of deviantART, Inc.
that has made it such a horrible place for people to work. You might
think otherwise, but the cold truth is you're not in the dark like all
but a select few on staff are.

You state:

"* You appear to raise concerns about the composition of the board of
Directors. As you know, in the early stages of the deviantART's
existence, as a boot-strapped start-up we did not follow the necessary
corporate formalities and appropriately document corporate activities.
When we later got around to documenting corporate matters, we
established a board of directors consisting of Angelo and I, which I
thought you agreed to. If you do not like the composition of the board,
you are within your rights as a stockholder to request that deviantART
hold an annual meeting where the stockholders can elect new directors."

Unfortunately, here you are incorrect. We did, in fact, follow the
proper corporate formalities in the early days of deviantART. However,
Angelo decided after a *private* attorney consultation, that it would
better suit deviantART, Inc. if the company were restructured. Did he
consult you before doing this? He ultimately passed this information on
to me via phone call, but I later learned he had left some of the most
important facts out of the conversation.

The documents I provided explain this story in lucid detail. I
previously suggested that you read through them but I can only assume
based on your statements that you either failed to understand the
previously provided documentation, or you simply ignored them.

During a phone call between you and I in November of 2004, surrounding
the beginning of the "Performance Improvement Plan," I *explicitly* told
you that I was dissatisfied with the composition of the Board of
Directors. During that conversation I explained how I, as a shareholder
in deviantART, was never informed of the vote to add an additional board
member. You merely brushed aside my concerns by stating that my votes
would never have mattered due to the mathematics surrounding the
corporate structure. Mathematics aside, the fact remains that all
shareholders should have been notified of the desire for additional
board members. Why was I was left in the dark?

For the record, I have no problem with *your* placement on the board.
What I do take issue with is the way in which Angelo handled your
addition to the Board. Rather than do things ethically, by holding an
annual stockholders meeting for the sole purpose of placing a vote on
new Board members, he underhandedly went behind everyone's back and got
you added to the Board. At no time was I ever informed of such moves.

Do you consider that type of unethical and conniving behavior something
you want to be party to?

Ultimately, my issue here is not with the election of new Directors. It
is with the way in which it was handled.

From the inception of the company through September 2004 I served as
President of deviantART, Inc. Literally, one day I was just no longer
holding that position. Meanwhile, Angelo has somehow managed to make
himself both the CEO and the President. He claims both titles on all
legal company documentation; even though I was explicitly told
differently. Angelo constantly referred to me as the President of the
company in phone calls between the two of us; as well as with previous
deviantART, Inc. personnel. My e-mail signature prior to September 2004
was testament to this.

At what point was my presidency taken away, and for what reason? Why
was I denied a formal process? Why was I not notified *at the time*?

*How do you explain this sudden modification to the corporate structure
with no notification to the other involved parties?*

Out of all the issues I have, perhaps the most troubling is my issue
with share percentages between Angelo, you, and me.

In the original corporate documents, which list you, Ian, Angelo and
myself as stockholders, I have a 45% stake in deviantART, Inc. At the
time that Angelo had the founder agreements drafted, my "piece of the
pie" suddenly dropped to 35%. Unfortunately, at the time I was not able
to locate the original corporate documents to compare the numbers though
during a phone call in July of 2004 Angelo assured me that I had
*always* had a 35% stake in deviantART, Inc., and that nothing had changed.

How do you explain this dishonesty by Angelo, stating that my percentage
had always been 35%, when I have legal documentation proving otherwise?

You state:

"* You also appear to raise concerns about selecting Angelo as CEO.
When we began to document corporate matters in a more formal and
complete manner, we determined that Angelo was effectively operating as
the CEO already. We worked with you to find a role and title
appropriate for you given that you were working remotely and on a
part-time basis. Again, this is something that we have discussed and
that you have been aware of for quite a while, and that frankly I
thought was acceptable to you when you signed off on the founders
agreements and related formation documents."

During deviantART, Inc.'s initial stages of development it made sense to
have Angelo as the CEO. However, while site traffic has continued to
rise during his time at the helm, the site itself has remained stagnant;
with many important projects left uncompleted. Many of these projects
were at some point openly promised to the community, yet never delivered.

Angelo consistently places more emphasis on his own agenda than
furthering the site. I ask you to take an *honest* and *impartial* look
at the state that the site is in today. We have not completed groups or
collections, even though they have been in development for almost 2
years. Angelo claims that some of this is due to lack of funding.
Angelo has a number of Personal Assistants, as does Spot. *Why are we
continuing to hire people when we (according to Angelo) can't afford to
do what we've already promised the community*? We continue to waste
money in areas that are not important to the growth of deviantART, and
it shows in the site itself.

Angelo has consistently misappropriated deviantART funds, and continues
to do so. I believe that is the reason that he has withheld the
financial documentation that I have asked for since November 2004. His
young age has begun to shine through, and it shows that he is incapable
of properly running this company and getting it to the point that it
needs in order to truly be considered a "success."

Another issue is that even though I have been labeled as working on a
part-time basis, my involvement on the site is obviously anything but.
During a conversation between you, Angelo and myself in August 2004, I
expressed extreme dissatisfaction with my vesting schedule and part-time
status. My signature on the founder's agreement was based on a promise
between you, Angelo and myself that if I were to work full-time hours
then the agreement would be amended as such.

Since this was implemented I have been documenting the hours that I have
worked for deviantART, Inc. in order to accurately reflect the workload
that I have supported. I expect proper compensation for the added hours
worked.

Furthermore, my attorney has been instructed to contact deviantART, Inc.
in order to obtain the financial documents that I am legally entitled to.

You state:

"* You indicate a number of times that you have concerns about the
number of staff leaving deviantART. We are trying to establish a
positive and professional vision for deviantART that the employees of
the company believe in and support, which we hope will help the company
retain existing staff and attract new staff. But the reality is that
some people will not agree with or believe in that vision, and they will
leave the company, as has happened in some cases. While we're always
seeking ways to minimize turnover, we don't feel that the level of
attrition is a chronic problem."

It is unfortunate that you do not see that it is a chronic problem.
Considering how aware of Kevin's situation you were, I would be
surprised to find that you are aware of anything happening directly in
front of you. You can not deny that your remote location has proved
disastrous to your department; yet you continue to pull full-time pay
along with full-time status and a full-time vesting schedule.

My status, however many hours I work on the site, remains consistent at
part-time. *Why*?

You state:

"* Let me know if you have any additional concerns beyond those listed
above and, assuming you continue to have concerns on the above points,
how you would like to proceed in trying to amicably resolve your
concerns. If you want to discuss matters by phone further, let's
arrange a time to do so."

What I really find interesting are the various articles that are written
about deviantART that no one knows about beforehand except Angelo. In
every single press appearance, print, video or otherwise, that Angelo
has appeared in, not *once* has he ever given the impression that
deviantART was anything other than *HIS* concept, *HIS* creation, and
*HIS* labor of love. Do you have any idea how insulting that is to
those of us who actually did the work?

Now that I have outlined my concerns let me address resolution. The
following is a list of conditions that must be met no later than July
31, 2005 if Angelo is to avoid legal action:

1. The absolute first thing I want reconciled is a public statement
regarding the *real* history of deviantART. Angelo must post it
publicly as a Hot Topic that he was not, in fact, the "mastermind" of
deviantART. He must also apologize for misleading the community and the
media by claiming deviantART was his idea. After all, one of the major
catalysts to this relationship going sour is his constant riding of
coattails and taking all the credit for the hard work of others.

2. The full, complete and unedited corporate financials that I have been
asking for since November 2004 must be provided to me.

3. The structure of the company must be realigned to that of the
original setup. Angelo gets a 25% stake, you and Ian each have 15% and I
have my full 45%. Original company documentation that I provided
clearly outlines this structure, and it needs to be returned to that.

4. I must be reinstated in my position as President of deviantART, Inc.
and also be placed on the company Board of Directors.

5. There must be a modification to the existing founder's agreements to
reflect my status as a full-time employee and to depict my vested stock
as such since August 16, 2004 when the agreement was executed.
Furthermore, I expect back-pay dating to August 2004 for the extra hours
worked.

7. Angelo will no longer have sole control. While he may hold the
*title* of CEO his activities are to be restricted. *All* decisions
which affect the direction of the company *and* the website are to be
appointed to the Board as a whole. Furthermore, he may not have control
over the finances in the company. Responsibility for all financial
decisions will be appointed to the Board as a whole.

If these conditions are not met by July 31, 2005 then my attorney will
proceed on the course that we have charted.

In the event that you would like to discuss these conditions, or
anything else in this email, then feel free to contact me in order to
setup a time for us to have a private conversation.


Best Regards,

[s]
-- Scott Jarkoff Co-Founder/Director of Community Development
deviantART, Inc. http://www.deviantart.com/