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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): October 2, 2023
MARATHON
DIGITAL HOLDINGS, INC.
(Exact
Name of Registrant as Specified in Charter)
Nevada |
|
001-36555 |
|
01-0949984 |
(State
or other jurisdiction |
|
(Commission |
|
(IRS
Employer |
of
incorporation) |
|
File
Number) |
|
Identification
No.) |
101
NE Third Avenue, Suite 1200 |
|
|
Fort
Lauderdale, FL |
|
33301 |
(Address
of principal executive offices) |
|
(Zip
Code) |
Registrant’s
telephone number, including area code: (800) 804-1690
(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:
☐ |
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)) |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
Common
Stock |
|
MARA |
|
The
Nasdaq Capital Market |
Item
8.01 Other Information
Prospective
Long Term Incentive Program Grants
On
October 2, 2023, Marathon Digital Holdings, Inc. (the “Company”) announced its Long Term Incentive Program (“LTIP”)
for 2022 to be established under its 2018 Equity Incentive Plan, conditioned upon shareholder approval of an increase in shares available
for issuance under the Plan.
Methodology
of the LTIP
The
methodology of the LTIP is to align its employees’ performance with its shareholders by comparing the Company’s total shareholder
return to an index of public Bitcoin mining companies (its peer group) and awarding equity based on comparing the Company’s performance
to the index.
The
Company’s peer group consists of other publicly traded Bitcoin miners, which may include, without limitation, the following (in
alphabetical order):
Applied
Digital Corporation (APLD)
Bitfarms
Limited (BITF)
Cipher
Mining, Inc. (CIFR)
CleanSpark,
Inc. (CLSK)
Hive
Digital Technologies Limited (HIVE)
Hut
8 Mining Corporation (HUT)
Iris
Energy Limited (IREN)
Riot
Platforms, Inc. (RIOT)
TeraWulf,
Inc. (WULF)
The
Company will grant the LTIP by comparing the Company’s stock price performance during the year versus the indexed peer group stock
price performance for the same period. The peer index is calculated by taking the product of the returns of the entire group and the
market capitalizations divided by the total market capitalization of the entire peer group.
Depending
on the Company’s stock price performance, the annual LTIP awards will range as follows, which will be applied to each employee’s
respective target award for that year:
|
|
|
Percentile
Range |
|
Payout |
85.0%
and above |
|
200.0% |
75%-84% |
|
175.0% |
65%-74% |
|
150.0% |
55%-64% |
|
125.0% |
45%-54% |
|
100.0% |
35%-44% |
|
75.0% |
25%-34% |
|
50.0% |
15%-24% |
|
25.0% |
Less
than 15% |
|
0.0% |
|
|
- |
For
example, in any year when the Company’s performance versus its peer group falls in a range of under 15%, then there is no LTIP
grant. Conversely, when the performance is at 85% or more, then the maximum payout is 200%.
Those
persons employed by the Company during 2022 will receive a grant of restricted stock units (“RSUs”). The LTIP is designed
to be a long-term incentive that will consist of an equity grant in the form of RSUs that will vest over a three-year period, with (i)
25% of the grant vesting immediately and (ii) the balance vesting ratably over the next 12 consecutive calendar quarters (6.25% per calendar
quarter). Those employees who joined the Company during the 2022 calendar year will receive a prorated grant based upon the proportion
of the year for which the employee was employed by the Company. It is important to note that the Company grants RSUs for other purposes
such as initial grants to new employees in keeping with its goal of attracting the best talent to join the Marathon Team.
Purpose
of the LTIP
The
purposes of the LTIP grants are (i) align the interests of the Company’s employees with those of its stockholders through peer
indexed performance-based awards, (ii) to encourage long-term employee retention through service-based awards of restricted stock units,
and (iii) to attract new and talented employees to the Company through a balanced and performance based compensation structure. By having
the Company’s Compensation Committee determine on an annual basis whether to put LTIP awards in place for its employees, the Company
will ensure that its program remains in coordination with its performance versus the performance of its peer group on a current basis.
The
2022 LTIPs will be awarded at 200% which is the top of the performance range. The formula grant under the LTIP shall be the product of:
(i) stock performance vs. peer group (200% for 2022) multiplied by (ii) the Company multiplier for each employee multiplied by (iii)
the employee’s annual base salary.
Each
LTIP award is subject to restrictions, including on transfer, and forfeiture until vested. The final number of restricted stock units
granted to each employee will be determined by the Company’s Compensation Committee.
Upon
shareholder approval of the increase in shares available under the Company’s 2018 Equity Incentive Plan, the Company will make
final calculations as to LTIP awards and disclose its grants to its Named Executive Officers on a further Current Report on Form 8-K.
Item
9.01 Exhibits
FORWARD-LOOKING
STATEMENTS
This
Form 8-K and other reports filed by Registrant from time to time with the Securities and Exchange Commission (collectively, the “Filings”)
contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available
to, Registrant’s management as well as estimates and assumptions made by Registrant’s management. When used in the Filings
the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,”
“plan” or the negative of these terms and similar expressions as they relate to Registrant or Registrant’s management
identify forward-looking statements. Such statements reflect the current view of Registrant with respect to future events and are subject
to risks, uncertainties, assumptions and other factors relating to Registrant’s industry, Registrant’s operations and results
of operations and any businesses that may be acquired by Registrant. Should one or more of these risks or uncertainties materialize,
or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated,
expected, intended or planned.
Although
Registrant believes that the expectations reflected in the forward-looking statements are reasonable, Registrant cannot guarantee future
results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the
United States, Registrant does not intend to update any of the forward-looking statements to conform these statements to actual results.
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 thereunto duly authorized.
Date:
October 2, 2023
|
MARATHON
DIGITAL HOLDINGS, INC. |
|
|
|
By: |
/s/
Salman Khan |
|
Name: |
Salman
Khan |
|
Title: |
Chief
Financial Officer |
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