Filing Summary
Business Context and Reporting Period
Marathon Bancorp, Inc. filed a Form 8-K dated April 14, 2021, reporting executive compensation and change-in-control arrangements at its wholly owned subsidiary, Marathon Bank. The filing does not report quarterly or annual operating results.
Key Financial and Compensation Terms
- Nicholas W. Zillges, President and Chief Executive Officer, entered into an employment agreement with an initial term ending December 31, 2021.
- Mr. Zillges’ initial base salary is $280,000. The Compensation Committee may increase, but not decrease, the salary; it will increase automatically by at least 5% annually beginning with the January 1, 2024 renewal term.
- Mr. Zillges is eligible for a short-term bonus with a target opportunity of at least 50% of base salary, in addition to employee benefits, perquisites, and specified business-expense reimbursements, including $1,500 per month for certain travel-related automobile expenses.
- Upon a qualifying termination unrelated to a change in control, severance equals two times the sum of base salary and the highest target bonus opportunity during the prior three performance periods. One-half is payable in cash immediately and one-half over 24 months, plus up to 12 months of COBRA reimbursement, including a tax gross-up.
- Upon a qualifying termination occurring on or within two years after a change in control, Mr. Zillges would receive three times the sum of base salary and the highest applicable target bonus opportunity, payable in a lump sum within 60 days, plus up to 18 months of COBRA reimbursement with a tax gross-up.
- Marathon Bank also entered into change-in-control agreements with four other executive officers, including Nora Spatz and Michelle Knopf. Upon a covered termination after a change in control, each would receive one times the sum of applicable base salary and the highest target bonus opportunity during the prior three performance periods, payable within 30 days, plus up to 12 months of COBRA reimbursement with a tax gross-up.
Material Changes Versus the Prior Comparable Period
The filing announces new employment and change-in-control agreements dated April 14, 2021. It does not provide prior-period compensation terms or quantify changes from earlier arrangements.
Guidance, Outlook, Risks, and Unusual Items
- The agreements automatically renew annually unless either party provides timely non-renewal notice.
- Mr. Zillges is subject to one-year non-competition and non-solicitation restrictions after termination, except in connection with a change in control.
- Each change-in-control agreement remains effective for at least one year beyond the effective date of a qualifying change in control if such a transaction occurs.
- The reorganization into a two-tier mutual holding company structure, or the conversion of Marathon MHC from mutual to stock form with a contemporaneous stock offering by a newly formed stock holding company, is not considered a change in control under these agreements.
- The filing provides no earnings, revenue, cash flow, margin, debt, liquidity, or management operating guidance.
Important Facts for Investors to Verify
- Review Exhibits 10.1, 10.2, and 10.3 for the complete contractual definitions of cause, good reason, change in control, termination rights, and payment mechanics.
- Assess the potential cost of severance, bonus eligibility, COBRA reimbursements, tax gross-ups, and other executive benefits if termination or a change in control occurs.
- Verify the timing and conditions of the automatic renewals and the stated salary escalation beginning in 2024.
- Confirm that the contemplated mutual-to-stock restructuring and related offering would not trigger change-in-control payments under these agreements.