UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): AUGUST 22, 2005
ADVANCED MATERIALS GROUP, INC.
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(Exact Name of Registrant as Specified in Its Charter)
NEVADA
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(State or Other Jurisdiction of Incorporation)
0-16401 33-0215295
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(Commission File Number) (IRS Employer Identification No.)
11420 MATHIS AVENUE, DALLAS, TEXAS 75234
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(Address of Principal Executive Offices) (Zip Code)
(972) 432-0602
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
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):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
Effective August 22, 2005, Advanced Materials Group, Inc. (OTC: ADMG.PK)
("ADMG") entered into Employment Agreements with William G. Mortensen
("Mortensen") and Michael Bowen ("Bowen"). Pursuant to these Employment
Agreements, Mortensen will serve as President and Chief Financial Officer of
ADMG and Bowen will serve as Executive Vice President of ADMG. The terms of
employment are at will; however, if either is terminated without cause (as
defined in the Employment Agreements), they receive severance pay equal to six
months' base salary if the termination occurs within the first year of the term,
and equal to three months' base salary if the termination occurs thereafter.
Mortensen's base annual salary is set at $120,000 and Bowen's base annual salary
is set at $135,000. Mortensen and Bowen are each entitled to bonuses calculated
by formulas based upon ADMG's income from continuing operations before taxes.
Bowen also received a grant of an incentive stock option to purchase up to
200,000 shares of ADMG's common stock for $0.20 per share. The option vests 20%
per year for five years, beginning one year from the date of the grant. If
Bowen's employment with ADMG terminates for any reason other than for cause or
his voluntary resignation, the option does not terminate and vesting continues.
Effective August 29 2005, ADMG entered into a Separation and Release
Agreement ("Separation Agreement") with Robert Delk ("Delk"), Delk Holdings,
Inc. ("Delk Holdings") and Delk Partners, Ltd. ("DELK Partners"). Pursuant to
the Separation Agreement, ADMG paid to Delk certain past due compensation,
repaying amounts loaned to ADMG by Delk, and reimbursing him for certain
expenses related to intellectual property being transferred by Delk Holdings to
ADMG as described below. Delk, Delk Holdings and Delk Partners have agreed not
to compete with ADMG, solicit employees, consultants or customers of ADMG, or
disclose any confidential information of ADMG for a period of one year. The
parties have agreed to release each other from all claims, whether known or
unknown, other than those arising under the Separation Agreement.
Effective August 29, 2005, ADMG entered into an Assignment and Assumption
of Intellectual Property ("Assignments") with each of Delk Holdings and Bowen.
Pursuant to the Assignments, Delk Holdings and Bowen have assigned to ADMG all
of their rights to patents, patent applications and related intellectual
property pertaining to certain products using flexible material components and
identified in the Assignment. ADMG has agreed to assume the obligations of Delk
Holdings and Bowen under certain agreements pertaining to the intellectual
property, including royalty obligations to inventors.
ITEM 3.02. UNREGISTERED SALES OF EQUITY SECURITIES
As described in Item 1.01 of this report, effective August 22, 2005, ADMG
granted an incentive stock option to Bowen to purchase up to 200,000 shares of
ADMG's common stock at $0.20 per share.
Effective August 22, 2005, ADMG also granted a non-qualified stock option
to Ricardo Brutocao ("Brutocao") to purchase up to 100,000 shares of ADMG's
common stock for $0.20 per share. The option vests 20% immediately, and the
remaining 80% in four 20% increments on each anniversary date of the grant. If
Brutocao ceases, for any reason, to provide consulting services to ADMG, vesting
ceases and the option expires 90 days thereafter.
On August 26, 2005, ADMG issued to each of the Lenawee Trust and Plus Four
Private Equities, L.P. 625,000 shares of ADMG's common stock for $0.20 per share
($125,000 each). The Lenawee Trust is an affiliate of Timothy R. Busch, the
Chairman of ADMG's Board of Directors.
ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF
DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS.
Effective August 22, 2005, Mortensen was appointed President of ADMG. As
such, he is the principal executive officer of ADMG, although he is not the
chief executive officer, which position is currently vacant. He continues as
ADMG's principal financial officer, a position he has held since June 1, 2004.
Mortensen was employed by Cingular Wireless LLC as Associate Director in
Finance, and before the Cingular joint venture he was with SBC, Inc. as a
manager of SBC Services supporting the SBC Wireless division since 1999. Before
joining SBC, Inc. Mortensen worked for Frito-Lay, Inc. as a manager of finance
and for over eight years with EDS, Inc. holding various financial positions.
Mortensen holds a BBA degree in Business Administration from Abilene Christian
University and has experience in the telecommunications, high-tech and
manufacturing industries. ADMG's Employment Agreement with Mortensen is
described in Item 1.01 of this report.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit
Number Description
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10.1 Employment Agreement between Advanced Materials Group, Inc. and
William G. Mortensen dated as of August 22, 2005 (#)
10.2 Employment Agreement between Advanced Materials Group, Inc. and
Michael Bowen dated as of August 22, 2005 (#)
10.3 Assignment and Assumption of Intellectual Property between
Advanced Materials Group, Inc. and Michael Bowen dated as of
August 22, 2005
10.4 Assignment and Assumption of Intellectual Property between
Advanced Materials Group, Inc. and Delk Holdings, Inc. dated as
of August 29, 2005
10.5 Separation and Release Agreement among Advanced Materials Group,
Inc., Robert Delk, Delk Holdings, Inc. and Delk Partners, Ltd.
dated as of August 29, 2005
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(#) Management contract or compensatory plan, contract or arrangement.
SIGNATURES
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.
Dated: August 30, 2005 ADVANCED MATERIALS GROUP, INC.
By: /s/ William G. Mortensen
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William G. Mortensen, President and
Chief Financial Officer
INDEX TO EXHIBITS FILED WITH THIS REPORT
Exhibit
Number Description
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10.1 Employment Agreement between Advanced Materials Group, Inc. and
William G. Mortensen dated as of August 22, 2005 (#)
10.2 Employment Agreement between Advanced Materials Group, Inc. and
Michael Bowen dated as of August 22, 2005 (#)
10.3 Assignment and Assumption of Intellectual Property between
Advanced Materials Group, Inc. and Michael Bowen dated as of
August 22, 2005
10.4 Assignment and Assumption of Intellectual Property between
Advanced Materials Group, Inc. and Delk Holdings, Inc. dated as
of August 29, 2005
10.5 Separation and Release Agreement among Advanced Materials Group,
Inc., Robert Delk, Delk Holdings, Inc. and Delk Partners, Ltd.
dated as of August 29, 2005
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(#) Management contract or compensatory plan, contract or arrangement.