Prior to the April 4th, 2007 conference call I had two objectives:
1.) Try to stop the sale of WLSA assets to New Look (or anyone else), since I thought it too risky to create a clean, empty shell with the hopes of acquiring some other unknown company. On the conference call I heard Mr. Simmonds state that even though there were potentially four offers, he thought that no sale would occur due to the Canadian tax rules. I didn't care what the reason was as long as the sale was called off, which it was one week later.
2.) To try to have a truly independent Board of Directors at WLSA. I recently proposed a combination of directors that I think would achieve this objective. This would include John Simmonds as Chairman of the Board, Allen Cowie (who would also be named the new CEO), a financial person who is not affiliated with John Simmonds, someone from New Look, and myself as representative of the independent investors.
Since my first objective was met, I felt it important to give Mr. Simmonds a few months to work on cleaning up the mess with Scotia Bank, Nokia, the landlords, the ex-employees, and mmwave. I feel that he is making excellent progress on many of these issues. As others have said, these issues don't go away overnight.
My second objective of an independent board is still open.
As far as New Look purchasing common shares, preferred shares and warrants from Barron Partners and the price that they were able to acquire these for, I say more power to them. My view of this is that it is very different having New Look be a shareholder of WLSA versus selling WLSA assets to New Look. By the way, I had previously contacted a few of the larger shareholders of WLSA to try to do the very same thing. Since I was unable to generate any interest in this, I never presented it as an idea to the Investor Village forum.
As far as the salary and perks for the WLSA CEO (whoever that might be), I would suggest that people provide facts of other CEO salaries of comparable public companies that have profitable sales of $24 million/year. Once that is done, we can discuss whether the salary and perks is out of line.
As far as a CEO bonus, I would have no problem if the terms of a reasonable bonus were spelled out now. The bonus would be based upon the stock price performance and nothing else.
As far as Mr. Simmonds backdating his salary for four months, I would have to agree with the dissenters. It is important that the management generate trust and confidence with the shareholders. I think that the backdating was a backstep in the recent progress that has been made in this regard.
Brad Herrin
