ITEM 5.02 Appointment of Director and Executive Officers
Effective March 31, 2022, Douglas Mellinger was appointed as a director to the
Board of Directors of Marathon Digital Holdings, Inc. (the "Company") to fill
the vacancy created by Merrick Okamoto's departure at the end of 2021.
Doug Mellinger is an active entrepreneur, philanthropist, impact investor, and
board member, with extensive experience building and leading public and private
companies in the technology and financial industries. Mellinger is a managing
director at Clarion Capital Partners, a lower middle market private equity and
structured credit asset management company. He currently serves on the board of
directors of Foundation Source, a leading provider of outsourced services and
technology for private foundations which he co-founded in 2000; the board of
directors of Campden Wealth and IPI (Institute for Private Investors), the
largest global membership organization for wealthy families and their family
offices; and the board of directors of International Education Corporation
(IEC), one of the nation's largest career education colleges. Prior to Clarion
Capital Partners, Mellinger was a partner at Palm Ventures and a managing
partner at Zeno Ventures. He founded and served as the chairman and CEO of
enherent Corp (NASDAQ: ENHT), a global software development and services company
that was listed as an Inc. 500 company twice and was featured on Deloitte &
Touche's Technology Fast 500 and Fast 50 lists. Throughout his career, Mellinger
has served on the boards of numerous companies and organizations, including
Edgar Online (NASDAQ: EDGR), Sequest Technologies, Producteev, Schiller
International, Young Entrepreneur's Organization (YEO), and Young President's
Organization (YPO), among others. He has also served on several advisory boards
and boards to government agencies, universities, and non-profit organizations
over the past 40 years. Mellinger holds a degree in entrepreneurial science from
Syracuse University.
Effective March 31, 2022, Hugh Gallagher was appointed Chief Financial Officer
of the Company, with Sim Salzman being appointed as the Company's Chief
Accounting Officer.
Mr. Gallagher is a seasoned C-level executive and board member who brings to
Marathon over 30 years of experience in capital markets, investment analysis,
treasury, investor relations, and financial and operational execution. Prior to
joining Marathon, Mr. Gallagher held several senior positions at UGI Corporation
and AmeriGas Propane, including chief strategy officer - Global LPG (2021-2022);
president and CEO of AmeriGas Propane (2018-2021); vice president finance and
CFO of AmeriGas Propane (2013-2018); treasurer (2011-2014) and director of
investor relations and treasury (2007-2011) at UGI Corporation; director of
corporate development (2004-2007); and director of financial planning
(2000-2004) at AmeriGas Propane. Mr. Gallagher also served in various roles of
increasing responsibility at both UGI and AmeriGas from 1990-2000. Mr. Gallagher
holds a CPA certification in the State of Pennsylvania and a bachelor of science
in accounting from Drexel University.
Effective the same date, the Company entered into an Executive Employment
Agreement with Mr. Gallagher. The Agreement has a term of three years and
automatically renews for successive one year terms unless either party provides
notice of nonrenewal at least 90 days prior to the end of the initial term or
any renewal term. Mr. Gallagher's annual base salary is $475,000 with annual 3%
cost of living increases and bonuses at the discretion of the Company's Board of
Directors. Mr. Gallagher has been provided with a grant of 150,000 restricted
stock units ("Initial Executive Award"), subject to the vesting schedule
displayed below ("Executive Vesting Schedule"). For avoidance of doubt: vesting
of the Compensation Shares shall vest 33.33% (50,000 restricted stock units
"rsus")) on March 31, 2023, and the remaining 100,000 rsus will vest 8.33%
(12,500 rsus) every three months, thereafter, for eight consecutive calendar
quarters. In the event of a Change of Control, the remaining unvested rsus will
vest immediately. Mr. Gallagher may also receive additional grants of restricted
stock units, and any such grant shall vest in four equal amounts on the date of
grant and the three successive three month anniversaries thereof. In the event
of a change in control, all RSUs vest immediately. Mr. Gallagher is entitled to
25 paid vacation days per year and is entitled to participate in all Company
benefit plans per standard Company policy.
Upon any termination of the Agreement, Mr. Gallagher is entitled to compensation
and reimbursement of expenses through the date of termination as well as payment
for any accrued and unpaid vacation days. If the termination is other than for
cause, Mr. Gallagher's outstanding RSUs shall immediately vest. Upon a
termination not for cause by the Company or by Mr. Gallagher with good reason or
within 180 days of a change in control, he shall receive the greater of his
remaining base salary for the remaining term of the Agreement and 12 months base
salary plus benefits. The Agreement contains customary and usual definitions of
termination for cause and good reason.
The Annual Bonus, and any and all stock based compensation (such as options and
equity awards) (collectively, the "Clawback Benefits") shall be subject to
"Clawback Rights" as follows: during the period that the Executive is employed
by the Company and upon the termination of the Executive's employment and for a
period of three (3) years thereafter, if there is a restatement of any financial
results from which any metrics were determined to be achieved which were the
basis of the granting and calculation of such Clawback Benefits to the
Executive, the Executive agrees to repay any amounts which were determined by
reference to any Company financial results which were later restated (as defined
below), to the extent the Clawback Benefits amounts paid exceed the Clawback
Benefits amounts that would have been paid, based on the restatement of the
Company's financial information.
Mr. Salzman's Executive Employment Agreement was amended to increase his annual
base salary to $275,000.
Mr. Gallagher's agreement is attached hereto as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
99.1 Executive Employment Agreement with Hugh Gallagher
104 Cover page interactive data file (embedded within the inline XBRL
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