Attached files
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| EX-99.2 - WLG INC | v188937_ex99-2.htm |
| EX-99.1 - WLG INC | v188937_ex99-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of
Report (Date of Earliest Event Reported): June 1, 2010
WLG
INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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333-113564
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20-0262555
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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920
East Algonquin Road
Suite
120
Schaumburg,
IL 60173 USA
(Address
of Principal Executive Offices/Zip Code)
(224)
653-2800
(Registrant's
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General
Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(B))
o Pre-commencement
communications pursuant to Rule 13e-4(c)) under the Exchange Act (17 CFR
240.13e-4c))
Amendment
to Employment Agreement with Andrew Jillings
As
reported in the Current Report on Form 8-K filed with the Securities and
Exchange Commission (the “SEC”) of WLG, Inc. (the “Company” or “WLG”), on March
4, 2010, Andrew Jillings became the Chief Executive Officer of WLG
effective March 1, 2010, pursuant to the terms of an employment
agreement (the “Employment Agreement”) dated as of October 28,
2009. A copy of the Employment Agreement was attached as Exhibit
10.20 to WLG’s Annual Report on Form 10-K for the year ended December 31, 2009,
filed with the SEC on March 31, 2010 (the “Form 10-K”).
Pursuant
to the terms of the Employment Agreement, Mr. Jillings is to receive the
following compensation and other benefits:
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1.
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Annual
compensation of approximately $535,742 (all dollar amounts set forth
herein are in United States dollars and are based upon an exchange rate of
HK$7.75 to US$1.00 - all amounts in the Employee Agreement are
expressed in Hong Kong dollars);
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2.
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Full
reimbursement for all medical insurance premiums for
Jillings;
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3.
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Full
reimbursement for all automobile parking and gasoline
expenses;
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4.
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Provision
of a company car;
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5.
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Full
reimbursement of all business expenses including all telephone
expenses;
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6.
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Vacation
pay for 30 working days for each 12 months of employment;
and
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7.
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Payment
of subscription fees for a country club
membership.
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Mr.
Jillings shall, subject to prior approval by WLG’s shareholders and the Board of
Directors also receive:
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1.
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Payment
of school fees for Mr. Jillings’ two children;
and
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2.
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Paid
air tickets for Mr. Jillings and family annually to travel to South Africa
and return to Hong Kong.
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Mr.
Jillings also is eligible to receive stock awards under the Company’s 2005 Stock
Incentive Plan, or any other plan adopted by the Company, as determined from
time to time in the discretion of WLG’s Board of Directors based on annual
benchmarks to be set by WLG’s Board of Directors and agreed to by Mr.
Jillings.
During
the initial 22 months of the Employment Agreement, either WLG or Mr. Jillings
may terminate the Employment Agreement at any time upon one month’s prior
written notice. Thereafter, the Employment Agreement may be
terminated by either party upon nine (9) month’s prior written
notice. The Employment Agreement may be terminated by WLG for cause
in the case of Mr. Jillings’ dishonesty, failure to discharge his duties, or
failure to comply with WLG’s disciplinary rules.
The
Employment Agreement also contains provisions covering confidentiality and use
of WLG’s trade secrets and financial information following termination of the
employment.
Pursuant
to discussions between WLG and Mr. Jillings, WLG and Mr. Jillings have agreed to
amend the Employment Agreement, effective as of June 1, 2010, as
follows:
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1.
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Of
the annual compensation per the Employment Agreement of $535,732,
approximately $380,000 shall be paid on at the rate of $31,667 per month;
and;
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2.
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The
remainder of Mr. Jillings’ annual salary of $155,732 shall be deferred and
paid at a time to be decided between WLG and Mr. Jillings, with such joint
decision to be based on the financial position of the
Company;
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3.
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Either
party may terminate the Employment Contract at any time upon three month’s
prior written notice until the year ending December 31, 2011, and
thereafter by giving nine (9) month’s prior written
notice.
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The
foregoing description of the Employment Agreement and the amendment are summary
descriptions only, are not complete and are qualified in their entirety by
reference to the full text of such Employment Agreement filed as Exhibit 10.20
to the Form 10-K and Amendment No 1 to Employment Agreement attached as Exhibit
99.1 hereto.
Deferral
of Principal Payments and Waiver of Interest Payable on Note and Waiver of
Dividends Payable on Series B Preferred Stock Issued to Christopher
Wood
Christopher
Wood, the beneficial owner of 39.24% of the issued and outstanding common stock
of WLG as of June 1, 2010 (which includes shares of WLG’s convertible preferred
stock owned by Mr. Wood) and WLG’s former Chief Executive Officer and a current
director of WLG, owns a 12% $600,000 aggregate principle amount promissory note
issued by WLG to Mr. Wood on July 1, 2008 (the “CW Note”). A copy of
the CW Note was attached as Exhibit 4.3 to WLG’s Quarterly Report on Form 10-Q
for the quarter ended June 30, 2008, filed with the SEC on August 14,
2008. The principal amount of the CW Note is payable in 12
consecutive monthly installments of $50,000 each, which payments were to
commence on January 31, 2009. As of June 1, 2010, the aggregate
unpaid principal amount outstanding on the CW Note was $570,000.
Pursuant
to an Amendment and Waiver Agreement dated as of June 1, 2010, between Mr. Wood
and WLG (the “Waiver Agreement”), Mr. Wood and WLG have agreed that commencing
(i) June 1, 2010, and until December 31, 2011, WLG may defer making principal
payments to Mr. Wood under the CW Note, and (ii) commencing June 1, 2010, and
extending through December 31, 2011, the annual interest rate on the CW Note
shall be reduced from 12% to 0%.
Mr. Wood
beneficially owns 1.7 million shares of WLG’s convertible Series B Preferred
Stock (the “Series B Preferred Stock”), issued by WLG to Mr. Wood pursuant to a
Conversion Agreement, dated as of June 30, 2008 (the “Conversion Agreement”), as
reported in WLG’s Current Report on Form 8-K filed with the SEC on July 3,
2008. Copies of the Conversion Agreement and the Certificate of
Designations, Preferences and Rights of Series B Preferred Stock (the
“Certificate of Designation”) were filed as Exhibits to such Current Report on
Form 8-K. Among other terms, the Series B Preferred Stock pays an
annual dividend of 12% and provides Mr. Wood with the right to require WLG to
redeem all or a portion of the Series B Preferred Stock commencing on or after
July 1, 2010, at a redemption price of $1.00 per share ($1,700,000 in the
aggregate).
In the
event that Mr. Wood elects to exercise his redemption right for all of his
shares of Series B Preferred Stock, WLG would be required to pay Mr. Wood $1.7
million. WLG, however, does not have the funds to pay such redemption
amount.
The
Company and Mr. Wood have agreed, pursuant to the Waiver Agreement, to waive
certain terms of the Series B Preferred Stock so that commencing effective as of
June 1, 2010, and extending through December 31, 2011, the annual dividend rate
on the Series B Preferred Stock is reduced from 12% to 8.0%.
The
foregoing description of the Waiver Agreement is a summary description only, is
not complete and is qualified in its entirety by reference to the full text of
such Waiver Agreement attached as Exhibit 99.2 hereto.
Item
9.01 Financial Statements and Exhibits.
(d) Exhibits
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Exhibit Number
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Description
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99.1
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Amendment
No. 1 to Employment Agreement dated as of June 1, 2010, between WLG and
Andrew Jillings
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99.2
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Amendment
and Waiver Agreement dated as of June 1, 2010, between WLG and Christopher
Wood
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This
Current Report on Form 8-K may contain, among other things, certain
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, including, without limitation, statements with
respect to the Company's plans, objectives, expectations and intentions and
other statements identified by words such as may, could, would, should,
believes, expects, anticipates, estimates, intends, plans or similar
expressions. These statements are based upon the current beliefs and
expectations of the Company's management and are subject to significant risks
and uncertainties. Actual results may differ from those set forth in the
forward-looking statements. These forward-looking statements involve certain
risks and uncertainties that are subject to change based on various factors
(many of which are beyond the Company's control).
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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WLG
INC.
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Date: June
29, 2010
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By:
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/s/ Christopher Wood
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Name: Christopher
Wood
Title: Chairman
of the Board of
Directors
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