Business Context and Reporting Period
This Form 8-K Current Report was filed by Wizard World, Inc. on September 16, 2014. The filing discloses the entry into a material definitive agreement: an Amended and Restated Employment Agreement with John Macaluso, the Company's President and Chief Executive Officer. The agreement term commences on September 16, 2014, and expires on March 18, 2018, with automatic one-year renewal terms unless notice of non-renewal is provided.
Key Financial Metrics and Compensation Structure
The filing details the compensation structure for the CEO but does not report the Company's current revenue, profit, cash flow, or debt levels.
- Base Salary: $41,666.67 per month.
- Car Allowance: $1,200 per month.
- Annual Bonus Structure (based on Adjusted EBITDA):
- 30% of Adjusted EBITDA between $1.00 and $1,000,000.
- 20% of Adjusted EBITDA between $1,000,001 and $2,000,000.
- 10% of Adjusted EBITDA exceeding $2,000,000.
- Stock Options: Grant of 2,700,000 options to purchase common stock.
- 900,000 options vesting quarterly from March 19, 2015, to March 18, 2016, at $1.00/share.
- 900,000 options vesting quarterly from March 19, 2016, to March 18, 2017, at $1.25/share.
- 900,000 options vesting quarterly from March 18, 2017, to March 18, 2018, at $1.50/share.
Material Changes and Agreements
The primary material change is the execution of the new employment contract and a concurrent Non-Compete, Non-Solicitation, and Non-Disclosure Agreement. Under the Non-Compete Agreement, Mr. Macaluso is prohibited from engaging in any business substantially similar to or in direct competition with Wizard World, Inc. within the United States during his employment and for the period following termination as defined in the agreement. He is also restricted from soliciting employees or clients.
Guidance, Outlook, and Risks
The filing does not provide financial guidance, outlook, or management commentary regarding future performance. The primary risk disclosed relates to the concentration of executive leadership and the specific financial obligations tied to the CEO's performance-based bonus structure. The filing notes that the descriptions of the agreements are qualified by the full text of the documents attached as Exhibit 10.1.
Investor Verification Checklist
- Verify the total potential cash bonus liability based on the Company's projected Adjusted EBITDA for the fiscal year.
- Review the full text of Exhibit 10.1 to understand specific termination clauses and severance provisions not detailed in the summary.
- Confirm the Company's current Adjusted EBITDA to assess the likelihood of triggering the tiered bonus thresholds.
- Assess the impact of the 2.7 million new stock options on potential dilution to existing shareholders.