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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934

Filed by the Registrant

Filed by a Party other than the Registrant 

Check the appropriate box:

 Preliminary Proxy Statement

 Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

 Definitive Additional Materials

 Soliciting Material Pursuant to §240.14a-12

MarineMax, Inc.

(Name of Registrant as Specified in its Charter)

 

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

No fee required.

 Fee paid previously with preliminary materials

 Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

 


 

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MARINEMAX, INC.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
February 22, 2024

The Annual Meeting of Shareholders of MarineMax, Inc., a Florida corporation, will be held at 8:00 a.m., local time, on Thursday, February 22, 2024, at our principal executive offices located at 2600 McCormick Drive, Suite 200, Clearwater, Florida 33759 for the following purposes:

1.
To elect four directors, each to serve for a three-year term expiring in 2027.
2.
To approve (on an advisory basis) our executive compensation (“say-on-pay”).
3.
To approve (on an advisory basis) the frequency of future non-binding advisory votes on the Company’s executive compensation.
4.
To ratify the appointment of KPMG LLP (“KPMG”), an independent registered public accounting firm, as the independent auditor of our Company for the fiscal year ending September 30, 2024.
5.
To transact such other business as may properly come before the meeting or any adjournment thereof.

The above items are more fully described in the proxy statement accompanying this notice.

Only shareholders of record at the close of business on December 18, 2023, are entitled to notice of and to vote at the meeting.

All shareholders are cordially invited to attend the meeting and vote in person. To ensure your representation at the meeting, however, we urge you to vote by proxy as promptly as possible over the Internet or by phone as instructed in the Notice of Internet Availability of Proxy Materials or, if you receive paper copies of the proxy materials by mail, you can also vote by mail by following the instructions on the proxy card. You may vote in person at the meeting even if you have previously returned a proxy.

Sincerely,

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Michael H. McLamb

Secretary

Clearwater, Florida

December 27, 2023

 


 

TABLE OF CONTENTS

 

 

Page

VOTING AND OTHER MATTERS

1

PROPOSAL ONE – ELECTION OF DIRECTORS

5

CORPORATE GOVERNANCE

8

COMPENSATION DISCUSSION AND ANALYSIS

16

EXECUTIVE COMPENSATION

23

SUMMARY COMPENSATION TABLE

23

GRANTS OF PLAN-BASED AWARDS

24

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

25

OPTION EXERCISES AND STOCK VESTING

25

EQUITY COMPENSATION PLAN INFORMATION

38

CERTAIN TRANSACTIONS AND RELATIONSHIPS

38

COMPENSATION COMMITTEE REPORT

39

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

40

DIRECTOR COMPENSATION

40

REPORT OF THE AUDIT COMMITTEE

41

SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS, DIRECTORS, AND OFFICERS

42

PROPOSAL TWO – ADVISORY VOTE ON EXECUTIVE COMPENSATION (“SAY-ON-PAY”)

44

PROPOSAL THREE – ADVISORY VOTE ON DETERMINING THE FREQUENCY OF SAY-ON-PAY

46

PROPOSAL FOUR – RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR

47

DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS

48

OTHER MATTERS

48

 

 

 


 

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MARINEMAX, INC.

2600 McCormick Drive, Suite 200

Clearwater, Florida 33759

 

PROXY STATEMENT

VOTING AND OTHER MATTERS

General

The accompanying proxy is solicited on behalf of MarineMax, Inc., a Florida corporation (except where the context otherwise requires, references in this proxy to “MarineMax,” “Company,” “we,” “our,” or “us” means MarineMax, Inc. and its subsidiaries), by the Board of Directors (the “Board”) for use at our Annual Meeting of Shareholders to be held at 8:00 a.m. on Thursday, February 22, 2024, or at any adjournment thereof, for the purposes set forth in this proxy statement and in the accompanying notice. The meeting will be held at our principal executive offices located at 2600 McCormick Drive, Suite 200, Clearwater, Florida 33759.

In accordance with rules adopted by the Securities and Exchange Commission (“SEC”) that allow companies to furnish their proxy materials over the Internet, we are mailing to most of our shareholders a Notice of Internet Availability of Proxy Materials instead of a paper copy of our proxy statement and our 2023 Annual Report. The Notice of Internet Availability of Proxy Materials contains instructions on how to access those documents and vote over the Internet. The Notice of Internet Availability of Proxy Materials also contains instructions on how to request a paper copy of our proxy materials, including our proxy statement, our 2023 Annual Report, and a form of proxy card. We believe this process will allow us to provide our shareholders the information they need in a more timely manner, while reducing the environmental impact and lowering our costs of printing and delivering the proxy materials.

These proxy solicitation materials were first distributed on or about December 27, 2023 to all shareholders entitled to vote at the meeting.

Record Date and Outstanding Shares

Shareholders of record at the close of business on December 18, 2023 (the “Record Date”) are entitled to notice of and to vote at the meeting. On the Record Date, there were issued and outstanding 22,289,919 shares of our common stock. Each holder of common stock voting at the meeting, either in person or by proxy, may cast one vote per share of common stock held on all matters to be voted on at the meeting.

If, at the close of business on December 18, 2023, your shares were registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, then you are a shareholder of record. As a shareholder of record, you may vote in person at the meeting. Alternatively, you may vote over the Internet as described above. Whether or not you plan to attend the meeting, we urge you to fill out and return the enclosed proxy card or vote by proxy over the telephone or on the Internet as instructed on the enclosed proxy card to ensure your vote is counted. Even if you have submitted a proxy before the meeting, you may still attend the meeting and vote in person.

If, at the close of business on December 18, 2023, your shares were held in an account at a brokerage firm, bank, or similar organization, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that organization. The organization holding your account is considered the shareholder of record for purposes of voting at the meeting. As a beneficial owner, you have the right to direct your broker, bank, or other nominee on how to vote the shares in your account. You should have received voting instructions with these proxy materials from that organization rather than from us. You should follow the instructions provided by that organization to submit your vote. You are also invited to attend the meeting in person. However, because you are not the shareholder of record, you may not vote your shares in person at the meeting unless you obtain a “legal proxy” from the broker, bank, or other nominee that holds your shares giving you the right to vote the shares at the meeting.

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Quorum

The presence, in person or by proxy, of the holders of a majority of the total number of shares entitled to vote constitutes a quorum for the transaction of business at the meeting.

Required Votes

For the election of the four director nominees for three-year terms expiring in 2027, our Bylaws provide that a nominee for director shall be elected to the Board of Directors if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election; provided, however, that directors shall be elected by a plurality of the votes cast at any meeting of shareholders for which: (1) the Secretary of the Company receives a notice that a shareholder has nominated a person for election to the Board of Directors in compliance with the advance notice requirements set forth in our Bylaws; or (2) the number of nominees otherwise exceeds the number of directors to be elected. If directors are to be elected by a plurality of the votes cast, shareholders shall not be permitted to vote against a nominee other than by voting for another nominee.

While the say-on-pay and frequency of say-on-pay votes are non-binding, our Board will consider the input of shareholders based on a majority of votes cast for the say-on-pay proposal and the say-on-frequency proposal alternative that receives the most votes cast.

For the votes to ratify the appointment of KPMG as the independent auditor of our Company for the fiscal year ending September 30, 2024, the affirmative vote of the holders of a majority of the votes cast is required (please see below under “Broker Non-Votes and Abstentions” for further discussion).

Votes cast by proxy or in person at the meeting will be tabulated by the election inspector appointed for the meeting who will determine whether a quorum is present. The election inspector will treat abstentions as shares that are present and entitled to vote for purposes of determining the presence of a quorum, but as unvoted for purposes of determining the approval of any matter submitted to the shareholders for a vote. If a broker indicates on the proxy that it does not have discretionary authority as to certain shares to vote on a particular matter, those shares will be considered as present and entitled to vote for purposes of determining the presence of a quorum, but as unvoted for purposes of determining the approval of any matter submitted to the shareholders for a vote.

Voting of Proxies

When a proxy is properly executed and returned, the shares it represents will be voted at the meeting as directed. If no specification is indicated, the shares will be voted: (1) “for” the election of each of the nominees for director set forth in this proxy statement; (2) “for” the say-on-pay vote; (3) “one year” on the frequency of future non-binding advisory votes on the Company’s executive compensation; (4) “for” the proposal to ratify the appointment of KPMG, an independent registered public accounting firm, as the independent auditor of our Company for the fiscal year ending September 30, 2024; and (5) as the persons specified in the proxy deem advisable on such other matters as may come before the meeting.

Broker Non-Votes and Abstentions

Brokers, banks, or other nominees that hold shares of common stock in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion if permitted by the stock exchange or other organization of which they are members. Brokers, banks, and other nominees are permitted to vote the beneficial owner’s proxy in their own discretion as to certain “routine” proposals when they have not received instructions from the beneficial owner, such as the ratification of the appointment of KPMG as the independent auditor of our Company for the fiscal year ending September 30, 2024. If a broker, bank, or other nominee votes such “uninstructed” shares for or against a “routine” proposal, those shares will be counted towards determining whether a quorum is present and are considered entitled to vote on the “routine” proposals. However, where a proposal is “non-routine,” a broker, bank, or other nominee is not permitted to exercise its voting discretion on that proposal without specific instructions from the beneficial owner. These non-voted shares are referred to as “broker non-votes” when the broker, bank, or other nominee has voted on other non-routine matters with authorization or voted on routine matters. These shares will be counted towards determining whether or not a quorum is present, but will not be considered entitled to vote on the “non-routine” proposals.

2


 

Please note that brokers, banks, and other nominees may not use discretionary authority to vote shares on the election of directors, the say-on-pay proposal, or the frequency of future non-binding advisory votes on the Company's executive compensation. For your vote to be counted in the above, you now will need to communicate your voting decisions to your broker, bank, or other nominee before the date of the meeting.

As provided in our Bylaws, a majority of the votes cast means that the number of votes cast “for” a proposal exceeds the number of votes cast “against” that proposal. Because, under our Bylaws, abstentions and broker non-votes do not represent votes cast “for” or “against” a proposal, broker non-votes and abstentions will have no effect on the proposal to elect directors, the say-on-pay proposal, the frequency of future non-binding advisory votes on the Company’s executive compensation, or the proposal to ratify the appointment of KPMG as the independent auditor of our Company for the fiscal year ending September 30, 2024, as each such proposal is determined by reference to the votes actually cast by the shares present or represented by proxy and entitled to vote.

In accordance with our Corporate Governance Guidelines, an incumbent candidate for director who does not receive the required votes for re-election is expected to tender his or her resignation to our Board of Directors. Our Board of Directors, or another duly authorized committee of our Board of Directors, will make a determination as to whether to accept or reject the tendered resignation generally within 90 days after certification of the election results of the shareholder vote. We will publicly disclose the decision regarding the tendered resignation and the rationale behind the decision in a filing of a Current Report on Form 8-K with the SEC.

Revocability of Proxies

Any shareholder giving a proxy may revoke the proxy at any time before its use by furnishing to us either a written notice of revocation or a duly executed proxy bearing a later date, or by attending the meeting and voting in person. Attendance at the meeting will not cause your previously granted proxy to be revoked unless you specifically so request.

Election Inspector

Votes cast by proxy or in person at the meeting will be tabulated by the election inspector appointed for the meeting, who will determine whether a quorum is present. The election inspector will treat broker non-votes and abstentions as shares that are present and entitled to vote for purposes of determining the presence of a quorum and, as described in the “Broker Non-Votes and Abstentions” section of this proxy statement for purposes of determining the approval of any matter submitted to the shareholders for a vote.

Solicitation

We will bear the cost of this solicitation. In addition, we may reimburse brokerage firms and other persons representing beneficial owners of shares for expenses incurred in forwarding solicitation materials to such beneficial owners. Proxies also may be solicited by certain of our directors and officers, personally or by telephone or e-mail, without additional compensation.

Annual Report and Other Matters

Our 2023 Annual Report on Form 10-K, which was made available to shareholders with or preceding this proxy statement, contains financial and other information about our Company, but, except as indicated therein, is not incorporated into this proxy statement and is not to be considered a part of these proxy materials or subject to Regulations 14A or 14C or to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The information contained in the “Compensation Committee Report” and the “Report of the Audit Committee” shall not be deemed “soliciting material” or “filed” with the SEC or subject to Regulations 14A or 14C or to the liabilities of Section 18 of the Exchange Act.

Through our website, www.MarineMax.com, we make available free of charge all of our SEC filings, including our proxy statements, our annual reports on Form 10-K, our quarterly reports on Form 10-Q, and our current reports on Form 8-K, as well as Form 3, Form 4, and Form 5 reports of our directors, officers, and principal shareholders, together with amendments to these reports filed or furnished pursuant to Sections 13(a), 15(d), or 16 of the Exchange Act.

We will provide, without charge, a printed copy of our Annual Report on Form 10-K for the fiscal year ended September 30, 2023, as filed with the SEC to each shareholder of record as of the Record Date that requests a copy in writing. Any exhibits listed in the Form 10-K report also will be furnished upon request at

3


 

the actual expense incurred by us in furnishing such exhibits. Any such requests should be directed to our Company’s Secretary at our executive offices set forth in this proxy statement.

4


 

PROPOSAL ONE

ELECTION OF DIRECTORS

Nominees

Our Articles of Incorporation and Bylaws provide that the number of directors shall be fixed from time to time by resolution of our Board of Directors. Currently, the number of directors is fixed at twelve and that number of directors is divided into three classes, with one class standing for election each year for a three-year term. The Board of Directors has nominated Mr. William H. McGill, Mr. Johnson, Mr. Oglesby, and Ms. White as Class II directors whose terms will expire in 2027.

Unless otherwise instructed, the proxy holders will vote the proxies received by them for each of the nominees named above. Mr. William H. McGill, Mr. Johnson, Mr. Oglesby, and Ms. White are currently directors of our Company. In the event that any nominee is unable or declines to serve as a director at the time of the meeting, the proxies will be voted for any nominee designated by the current Board of Directors to fill the vacancy. It is not expected that any of this year’s nominees will be unable or will decline to serve as directors.

The following table sets forth certain information regarding our directors.

Name

 

Age

 

Position

William H. McGill, Jr.

 

80

 

Executive Chairman of the Board, and Director

William Brett McGill

 

55

 

Chief Executive Officer, President and Director

Michael H. McLamb

 

58

 

Executive Vice President, Chief Financial

   Officer, Secretary, and Director

Clint Moore

 

76

 

Director (1)(2)(4)

George E. Borst

 

75

 

Director (1)(2)

Hilliard M. Eure III

 

87

 

Director (2)(3)

Evelyn V. Follit

 

77

 

Director (2)(3)

Adam M. Johnson

 

52

 

Director (1)

Charles R. Oglesby

 

77

 

Director (1)(3)

Mercedes Romero

 

57

 

Director (1)(3)

Joseph A. Watters

 

82

 

Director (1)(3)

Rebecca White

 

66

 

Director (1)(3)

 

(1)
Member of the Compensation Committee.
(2)
Member of the Audit Committee.
(3)
Member of Nominating/Corporate Governance Committee.
(4)
Lead Independent Director.

William H. McGill, Jr. has served as the Executive Chairman of the Board since October 2018 and as a director of our Company since March 1998. Mr. William H. McGill served as the Chief Executive Officer of our Company from January 1998 until October 2018. Mr. William H. McGill served as President of our Company from January 1998 until September 2000 and re-assumed that position from July 2002 to October 2017. Mr. William H. McGill was the principal owner and president of Gulfwind USA, Inc., one of our operating subsidiaries, from 1973 until its merger with our Company in March 1998. In December 2016, Mr. William H. McGill joined the Board of Directors of Joi Scientific, Inc., an energy company with which we have a licensing agreement. Mr. William H. McGill received a BS in Mechanical engineering from the University of Dayton in 1965 and worked for Pratt and Whitney Aircraft, Northrop Nortronics, and Colgate Palmolive prior to Gulfwind Marine. We believe Mr. William H. McGill’s service for more than 20 years as the Chief Executive Officer of our Company; his intimate knowledge and experience with all aspects of the business, operations, opportunities, and challenges of our Company; and his understanding of our culture, personnel, and strategies provide the requisite qualifications, skills, perspectives, and experience that make him well qualified to serve on our Board of Directors.

William Brett McGill has served as Chief Executive Officer since October 2018, as President since October 2017, and as a director since February 2019. Mr. W. Brett McGill served as President and Chief Operating Officer of our Company from October 2017 to October 2018. Mr. W. Brett McGill served as Executive Vice President and Chief Operating Officer of our Company from October 2016 to October 2017, Executive Vice President of Operations from October 2015 to September 2016, as Vice President of West Operations from May 2012 to September 2015, and was appointed as an executive officer by our Board of Directors in November 2012. Mr. W. Brett McGill served as one of the Company’s Regional Presidents from March 2006 to May 2012, as Vice President of Information Technology, Service and Parts from October 2004 to March 2006, and as Director of Information Services from March 1998 to October 2004. Prior to joining MarineMax in 1996, Mr. W. Brett McGill began his professional career with a software development firm, Integrated Dealer Systems. We believe Mr. W. Brett McGill’s service for more than 20 years with

5


 

our Company in various roles; his intimate knowledge and experience with all aspects of the business, operations, opportunities, and challenges of our Company; and his understanding of our culture, personnel, and strategies provide the requisite qualifications, skills, perspectives, and experience that make him well qualified to serve on our Board of Directors. We also believe that it is customary for the Chief Executive Officer of a Company to be on its Board of Directors. W. Brett McGill is the son of William H. McGill, Jr.

Michael H. McLamb has served as Executive Vice President of our Company since October 2002, as Chief Financial Officer since January 1998, as Secretary since April 1998, and as a director since November 2003. Mr. McLamb served as Vice President and Treasurer of our Company from January 1998 until October 2002. Mr. McLamb, a certified public accountant, was employed by Arthur Andersen LLP from December 1987 to December 1997, serving most recently as a Senior Manager. We believe Mr. McLamb’s long service as our Chief Financial Officer for more than 20 years, his knowledge of the financial and operational aspects of our business, and his experience in public accounting provide the requisite qualifications, skills, perspectives, and experience that make him well qualified to serve on our Board of Directors.

Clint Moore has served as a director of our Company since December 2014 and has served as the lead independent director since 2018. Mr. Moore served as President of Volvo Penta of the Americas, a supplier of engines and complete power systems for marine and industrial applications, from 1996 to 2012. His prior roles also include serving as President of the Bassett Boat Company of Florida from 1994 to 1996 and Glastron Boat Company and Larson Boat Company, both divisions of Genmar Corporation at the time, from 1989 to 1994. Mr. Moore began his career in the marine industry with Mercury Marine in 1974, where he ultimately served as Vice President of Sales, Marketing, and Service for all of North America. We believe that his senior management positions with leading companies in the marine industry provide the requisite qualifications, skills, perspectives, and experience that make him well qualified to serve on our Board of Directors. Mr. Moore qualifies as an audit committee financial expert.

George E. Borst has served as a director of our Company since May 2016. Mr. Borst served as President and Chief Executive Officer of the Americas Region of Toyota Financial Services from 2002 until 2013. He was responsible for all operational and financial activities in North and South America. Mr. Borst started his career with Toyota in 1985, serving in numerous roles within Toyota including marketing, product planning and strategy and was General Manager and Group Vice President of the Lexus Division, before he assumed the role of President and Chief Executive Officer of Toyota Financial Services in 2002. Since 2015, he has served on the Board of Trustees for PIMCO Funds. We believe Mr. Borst’s senior management positions with successful organizations and broad business experiences make him well-qualified to serve on our Board of Directors. Mr. Borst qualifies as an audit committee financial expert.

Hilliard M. Eure III has served as a director of our Company since December 2004 and served as the lead independent director from 2011 to 2018. Mr. Eure was Managing Partner of the Tampa Bay office of KPMG (formerly Peat, Marwick, Mitchell & Co.) from July 1977 until 1993. From July 1968 until June 1977, he served as an Audit Partner in the Greensboro, North Carolina and Atlanta offices of KPMG. From 1993 until 2003, he was a consultant for several companies, including serving as President of a beverage retailing company. Mr. Eure previously served as a director of WCI Communities, Inc., a homebuilder whose stock was listed on the New York Stock Exchange (“NYSE”). We believe Mr. Eure’s long career in public accounting, his financial, business, and accounting expertise, and his service as a public company director provide the requisite qualifications, skills, perspectives, and experience that make him well qualified to serve on our Board of Directors. Mr. Eure qualifies as an audit committee financial expert.

Evelyn V. Follit has served as a director of our Company since September 2015. Ms. Follit has been the President of Follit Associates, a corporate technology and executive assessment consulting firm since 2005. From 1997 to 2005, she was an executive of RadioShack Corporation, a consumer electronics retail company, where she held the positions of Senior Vice President, Chief Information Officer, and Chief Organizational Enabling Services Officer. Ms. Follit has over 20 years in leadership positions with major corporations including IBM and Dun & Bradstreet, in the areas of information technology, human resources and operations management. We believe Ms. Follit’s senior management positions and wealth of experience in information technology and human resources make her well-qualified to serve on our Board of Directors. Ms. Follit qualifies as an audit committee financial expert.

Adam M. Johnson has served as a director of our Company since September 2021. Mr. Johnson has served as the Chairman and Chief Executive Officer of NetJets, Inc. since June 2015. During his 25-year career with NetJets, a Berkshire Hathaway company, he has served in many senior leadership roles including: President of Global Sales, Marketing and Service; Senior Vice President of NetJets Administrative Services; Senior Vice President of Logistics; and Executive Director of the NetJets Aviation Flight Center. Mr. Johnson received a bachelor’s degree in business

6


 

management from Ohio State University and is a licensed pilot. We believe that Mr. Johnson’s executive leadership positions and extensive experience with Berkshire Hathaway, affording him deep insight into the strategic views of a world-class group of companies, results in perspectives, and experience that make him well qualified to serve on our Board of Directors.

Charles R. Oglesby has served as a director of our Company since June 2012. Mr. Oglesby served as President and Chief Executive Officer of Asbury Automotive Group, Inc. from March 2007 until February 2011 and as Executive Chairman from February 2011 until July 2011. Mr. Oglesby joined Asbury Automotive Group in February 2002 as President of North Point Automotive Group in Little Rock, Arkansas and in 2004 assumed the additional responsibility of Nalley Automotive Group. Prior to joining North Point, he was President of the San Francisco-based First America Automotive, a 36-dealership group. Asbury Automotive Group is one of the largest automobile retailers in the United States. We believe that Mr. Oglesby’s executive leadership positions and wealth of experience and expertise in growing a business model with strong similarities to our Company provide the requisite qualifications, skills, perspectives, and experience that make him well qualified to serve on our Board of Directors.

Mercedes Romero has served as a director of our Company since October 2022. Since August 2020, Ms. Romero has been the Global Chief Procurement Officer at Primo Water (NYSE/TSX: PRMW), a $2.2 billion water solutions company. She brings over 25 years of diverse experience across industries such as Food/Beverage (John B. Sanfilippo & Son (Nasdaq: JBBS) since October 2021 as an independent director), Transportation (Ryder from September 2019 and August 2020 as the VP of Sourcing and Supply Management), Campari from August 2017 to August 2019 as the VP of Procurement), Pharmaceutical (Teva from December 2016 to August 2017 as the Senior Director of Global Procurement), Spirits (Diageo from February 2013 to December 2016 as the VP of Global Procurement, Retail (Starbucks from July 2010 to January 2013 as the VP of Global Procurement), Clorox from January 2004 to August 2010 as the Global Strategic Sourcing Director), and Consumer Packaged Goods (Procter & Gamble from November 1995 to November 2003 as the Strategic Sourcing Department Manager. Ms. Romero has made meaningful contributions to the profitability of large organizations with complex supply chains through the identification and implementation of operational efficiencies, strategic planning, the management of supply failure risk and commodity fluctuation risk, and an innovative approach to gaining market share. She has led enterprise-wide digital transformations and ESG and DEI efforts. She currently serves as chair of the Sourcing Diversity and Supplier Relationship Management Committee at the Institute for Supply Management (ISM), where she has held several advisory roles since 2007. Ms. Romero also has cybersecurity oversight experience from her position at Primo Water, completion of the National Association of Corporate Directors governance and cybersecurity trainings (September 2021), and certifications from the Latino Corporate Directors Association (September 2021) and the Stanford Directors College (June 2021). We believe that Ms. Romero’s senior management positions with leading companies and her service as a director provide the requisite qualifications, skills, perspectives, and experience that make her well qualified to serve on our Board of Directors.

Joseph A. Watters has served as a director of our Company since October 2005. Mr. Watters is a private investor. Mr. Watters served as the Chairman of Oceania Cruises, a cruise line, from January 2003 to December 2007. Mr. Watters served as President and Chief Operating Officer of Crystal Cruises from 1994 to 2001. While at Crystal Cruises, Mr. Watters was a member of the International Council of Cruise Lines’ executive committee from 1999 to 2001 and Board of Directors from 1994 to 2001. He was also a member of the Cruise Line International Association’s executive committee from 1995 to 1996 and management committee from 1994 to 2001. Prior to Crystal Cruises, Mr. Watters served as President and Owner of The Watters Group, President of Royal Viking Line from 1985 to 1989, and President of Princess Cruises from 1981 to 1985. Mr. Watters began his cruise line career with Princess Cruises in 1977. We believe that Mr. Watters’ senior management positions with leading companies in the cruise industry, his experience as an investor, and his service as a director of multiple companies provide the requisite qualifications, skills, perspectives, and experience that make him well qualified to serve on our Board of Directors.

Rebecca White has served as a director of our Company since May 2018. Ms. White currently serves as Walter Chair of Entrepreneurship, Professor of Entrepreneurship and Director of the John P. Lowth Entrepreneurship Center at the University of Tampa where she has led the development of a top 20 nationally ranked entrepreneurship program. Prior to the University of Tampa, Ms. White taught at Northern Kentucky University from 1994 to 2009 and built a top 25 nationally ranked entrepreneurship program. She received an MBA and a Ph.D. from Virginia Tech. Her primary research and teaching interests are in opportunity recognition and developing an entrepreneurial mindset. She has served on a number of company, non-profit and industry association boards over the past 15 years and is an active member of the National Association of Corporate Directors and Women Corporate Directors. Ms. White has more than 25 years of experience in education, training, coaching and mentoring. We believe that Ms. White’s experience mentoring and helping business leaders achieve their strategic goals make her well qualified to serve on our Board of Directors.

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THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” EACH OF THE CLASS II NOMINEES LISTED ABOVE.

CORPORATE GOVERNANCE

Director Independence

Our Board of Directors has determined, after considering all the relevant facts and circumstances, that Messrs. Moore, Borst, Eure, Johnson, Oglesby, Watters, Ms. Follit, Ms. Romero, and Ms. White, are independent directors, as “independence” is defined by the listing standards of the NYSE, because they have no material relationship with us (either directly or as a partner, shareholder, or officer of an organization that has a relationship with us). Messrs. W. Brett McGill, William H. McGill, and McLamb are employee directors and accordingly, are not independent.

Classification of our Board of Directors

Our Board of Directors is divided into three classes, with one class standing for election each year for a three-year term. At each annual meeting of shareholders, directors of a particular class will be elected for three-year terms to succeed the directors of that class whose terms are expiring. Messrs. William H. McGill, Mr. Johnson, Mr. Oglesby, and Ms. White are Class II directors whose terms will expire at the meeting, but have been nominated by our Board of Directors for re-election for three-year terms expiring in 2027.

Mr. Borst, Mr. Eure, Mr. Watters, and Ms. Romero are Class III directors whose terms will expire in 2025. Messrs. W. Brett McGill, Mr. McLamb, Mr. Moore, and Ms. Follit are Class I directors whose terms will expire in 2026.
 

Committee Charters, Corporate Governance, and Code of Ethics

Our Board of Directors has adopted charters for the Audit Committee, Compensation Committee, and Nominating/Corporate Governance Committee describing the authority and responsibilities delegated to each committee by our Board of Directors. Our Board of Directors has also adopted Corporate Governance Guidelines, a Code of Business Conduct and Ethics, and a Code of Ethics for the CEO and Senior Financial Officers. We post on our website, at www.MarineMax.com, the charters of our Audit Committee, Compensation Committee, and Nominating/Corporate Governance Committee; our Corporate Governance Guidelines, Code of Business Conduct and Ethics, and Code of Ethics for the CEO and Senior Financial Officers, and any amendments or waivers thereto; and any other corporate governance materials contemplated by SEC or NYSE regulations. These documents are also available in print to any shareholder requesting a copy in writing from our corporate Secretary at our executive offices set forth in this proxy statement.

Executive Sessions

We regularly schedule executive sessions in which non-employee directors, meet without the presence or participation of management, with at least one of such sessions each year including only independent directors. The Lead Independent Director chairs the executive sessions.

Board Committees

Our Board of Directors has an Audit Committee, a Compensation Committee, and a Nominating/Corporate Governance Committee, each consisting entirely of independent directors.

The Audit Committee

The purpose of the Audit Committee is to assist the Board of Directors in fulfilling its responsibilities for oversight of the integrity of the financial statements of our Company, our Company’s compliance with legal and regulatory matters, the independent auditor’s qualifications and independence, and the performance of our Company’s independent auditor and internal audit function. The primary responsibilities of the Audit Committee are set forth in its charter and include various matters with respect to the oversight of our Company’s accounting and financial reporting process, our Company's internal audit function, and audits of the financial statements of our Company. The Audit Committee also selects the independent auditor to conduct the annual audit of the financial statements of our Company; reviews the proposed scope of such audit; reviews accounting and financial controls of our Company with

8


 

the independent auditor and our financial accounting staff; and reviews and approves transactions between us and our directors, officers, and their affiliates.

The Audit Committee currently consists of Messrs. Eure, Borst, Moore, and Ms. Follit, each an independent director of our Company under the NYSE rules as well as under rules adopted by the SEC pursuant to the Sarbanes-Oxley Act of 2002. Mr. Eure serves as the Chairman of the Audit Committee. The Board of Directors has determined that Messrs. Eure, Borst, Moore and Ms. Follit (whose backgrounds are detailed above) each qualify as an audit committee financial expert in accordance with applicable rules and regulations of the SEC.

The Compensation Committee

The purpose and responsibilities of the Compensation Committee include reviewing and approving corporate goals and objectives relevant to the compensation of our Chief Executive Officer, evaluating the performance of our Chief Executive Officer in light of those goals and objectives, and, either as a committee or together with the other independent directors (as directed by the Board of Directors), determining and approving the compensation level of our Chief Executive Officer based on this evaluation. The Compensation Committee also recommends to the Board of Directors, or as directed by the Board of Directors determines and approves, the compensation of our other executive officers, and considers the grant of stock-based awards to our executive officers under our stock-based compensation plans. The Compensation Committee may delegate any or all of its responsibilities to a subcommittee, which must comply with the applicable rules and regulations of the NYSE, the SEC and other regulatory bodies. The Compensation Committee currently consists of Messrs. Moore, Borst, Johnson, Oglesby, Watters, Ms. Romero, and Ms. White with Mr. Moore serving as Chairman of the Compensation Committee.

The Nominating/Corporate Governance Committee

The purpose and responsibilities of the Nominating/Corporate Governance Committee include the identification of individuals qualified to become Board members, the selection or recommendation to the Board of Directors of nominees to stand for election as directors at each election of directors, the development and recommendation to the Board of Directors of a set of corporate governance principles applicable to our Company, the oversight of the selection and composition of committees of the Board of Directors, and the oversight of the evaluations of the Board of Directors and management. The Nominating/Corporate Governance Committee currently consists of Messrs. Watters, Eure, Oglesby, Ms. Follit, Ms. Romero, and Ms. White with Mr. Watters serving as Chairman of the Nominating/Corporate Governance Committee. The Nominating/Corporate Governance Committee will consider director nominees suggested by the Nominating/Corporate Governance Committee members and other Board members, as well as management. Also, the Nominating/Corporate Governance Committee may, at its discretion, retain a third-party executive search firm to identify potential nominees. In addition, the Nominating/Corporate Governance Committee will consider persons recommended by shareholders for inclusion as nominees for election to our Board of Directors if the names, biographical data, and qualifications of such persons are submitted in writing in a timely manner consistent with our Bylaws and addressed and delivered to our Company’s Secretary at the address listed herein.

The Nominating/Corporate Governance Committee regularly reviews the composition of the Board, including the qualifications, expertise and characteristics that are represented in the current Board as well as the criteria it considers needed to support MarineMax’s long-term strategy. After an in-depth review of the candidates, the Nominating/Corporate Governance Committee recommends candidates to the Board in accordance with its Articles of Incorporation and Bylaws, our Corporate Governance Guidelines and the criteria adopted by the Board regarding director candidate qualifications. After careful review and consideration, the Board will nominate candidates for election, or re-election, at our annual meeting of shareholders. The Board may appoint a director to the Board during the course of the year to serve until the next meeting of shareholders.

The Nominating/Corporate Governance Committee identifies and evaluates nominees for our Board of Directors, including nominees recommended by shareholders, based on numerous factors it considers appropriate. The identification and selection of qualified directors is a complex and subjective process that requires consideration of many intangible factors and will be significantly influenced by the particular needs of the Board from time to time. As a result, there is no specific set of minimum qualifications, qualities or skills that are necessary for a nominee to possess, other than those that are necessary to meet U.S. legal, regulatory and NYSE listing requirements and the provisions of our Articles of Incorporation, Bylaws, Corporate Governance Guidelines and charters of the Board’s committees. However, the Nominating/Corporate Governance Committee and the Board have identified certain skills and qualifications as important criteria for membership on the Board, some of which include:

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strength of character;
mature judgment and integrity;
career specialization;
leadership experience as a chief executive officer, senior executive or leader of a significant business operation or function;
relevant technical skills;
diversity;
absence of potential conflicts with our interests;
the extent to which the nominee would fill a present need on our Board; and
career experiences.

As discussed above, the members of the Nominating/Corporate Governance Committee are independent, as that term is defined by the listing standards of the NYSE.

Risk Assessment of Compensation Policies and Practices

We have assessed the compensation policies and practices with respect to our employees, including our executive officers, and have concluded that they do not create risks that are reasonably likely to have a material adverse effect on our Company. This determination is based on the following factors intended to encourage our employees, including our executive officers, to not take unreasonable risks:

For cash incentive compensation, a broad array of performance metrics are used, including a mixture of consolidated and business-specific goals, as well as certain operational and financial metrics, with no single factor receiving an excessive weighting.
Relationships between performance metrics and the corresponding compensation payouts are intended to mitigate risk by avoiding significant changes in compensation payouts based on relatively small changes in the related performance.
A mix of performance-based cash awards and equity-based awards is intended to avoid having a relatively high percentage of compensation tied to one element. We believe that equity-based awards should reduce risky behavior because these awards are designed to retain employees and are earned over relatively long measurement periods, thereby discouraging risky behavior.
A mix of short-term and long-term compensation creates varied time periods for compensation purposes.
A reasonable degree of difficulty is set for performance targets for the cash incentive compensation, but not so difficult so as to encourage unreasonable risk taking.
Minimum stock ownership guidelines for our directors and executive officers to, among other things, encourage them to act in a more risk-averse manner to avoid a significant decrease in their net worth.
Our Compensation Committee and Board of Directors oversee our compensation programs. We believe this mitigates risk by empowering a group of independent directors with substantial experience and expertise who owe fiduciary duties to act in the best interests of our shareholders.
Advice is solicited from outside advisors who are knowledgeable regarding structuring various compensation policies and their associated risks.

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Any equity grant, any compensation award or any past or future compensation, other than base salary, paid to any officer is subject to “clawback” recovery in the event of a material restatement of our financial statements resulting from the fraudulent actions of any officer.

Board’s Role in Risk Oversight

Risk is inherent in every business. As is the case in virtually all businesses, we face a number of risks, including operational, economic, financial, legal, regulatory, health, cybersecurity, and competitive risks. The nature and effect of these risks vary in many ways, including our ability to anticipate and understand the risk, the types of negative impacts that could result if the risk manifests itself, the likelihood that an undesired event or a particular adverse impact would occur, and our ability to control the risk and reduce potential adverse impacts. While particular behaviors can avoid or mitigate certain risks, some risks are unavoidable as a practical matter. The potential adverse impact of some risks may be minor, and accordingly, as a matter of business judgment, allocating significant resources to avoid or mitigate such a minor potential adverse impact may not be prudent. In some cases, a higher degree of risk may be acceptable because of a greater perceived potential for reward. We engage in numerous activities seeking to align our voluntary risk-taking with Company strategy, and understand that projects and processes may enhance our business interests by encouraging innovation and appropriate levels of risk-taking. Our management is responsible for the day-to-day management of the risks we face. Our Board of Directors, as a whole and through its committees, has responsibility for the oversight of risk management.

In its oversight role, our Board of Directors’ involvement in our business strategy and strategic plans plays a key role in its oversight of risk management, its assessment of management’s risk appetite, and its determination of the appropriate level of enterprise risk. Our Board of Directors receives updates at least quarterly from senior management and periodically from outside advisors regarding the various risks we face, including operational, economic, financial, legal, regulatory, health, cybersecurity, and competitive risks. Our Board of Directors also reviews the various risks we identify in our filings with the SEC as well as risks relating to various specific developments, such as acquisitions, stock repurchases, debt and equity placements, and product introductions.

Our Board committees assist our Board of Directors in fulfilling its oversight role in certain areas of risk. Pursuant to its charter, the Audit Committee oversees the financial and reporting processes of our Company and the audit of the financial statements of our Company and provides assistance to our Board of Directors with respect to the oversight and integrity of the financial statements of our Company, our Company’s compliance with legal and regulatory matters, the independent auditor’s qualification and independence, and the performance of our independent auditor. The Compensation Committee considers the risks that our compensation policies and practices may have in attracting, retaining, and motivating valued employees and endeavors to ensure that it is reasonably unlikely that our compensation policies and practices would have a material adverse effect on our Company. Our Nominating/Corporate Governance Committee oversees governance related risks, such as Board independence, conflicts of interests, and management succession planning.

Board of Directors Experience and Skills

We seek diversity in experience, viewpoint, education, skill, and other individual qualities and attributes to be represented on our Board of Directors. Our Nominating/Governance Committee does not have a formal policy with regard to the consideration of diversity in identifying director nominees, but we affirm the value placed on diversity within our Company. We believe directors should have various qualifications, including individual character and integrity; business experience and leadership ability; strategic planning skills, ability, and experience; requisite knowledge of our industry and finance, accounting, and legal matters; communications and interpersonal skills; and the ability and willingness to devote time to our Company. We also believe the skill sets, backgrounds, and qualifications of our directors, taken as a whole, should provide a significant mix of diversity in personal and professional experience, background, viewpoints, perspectives, knowledge, and abilities. Nominees are not to be discriminated against on the basis of race, religion, national origin, gender, sexual orientation, disability, or any other basis prohibited by law. The assessment of directors is made in the context of the perceived needs of our Board of Directors from time to time.

All of our directors have held or currently hold high-level positions in business or professional service firms and have experience in dealing with complex issues. We believe that all of our directors are individuals of high character and integrity, are able to work well with others, and have committed to devote sufficient time to the business and affairs of our Company. In addition to these attributes, the description of each director’s background indicates the specific experience, qualifications, and skills necessary to conclude that each individual should continue to serve as a

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director of our Company. A summary of each director's specific experience, qualifications, and skills is shown in the following table:

 

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Marine

 

Manufacturing

 

Retail

 

 

 

Public

 

 

 

Risk

 

 

 

Technology/

 

 

 

Industry

 

Industry

 

Industry

 

Leadership

 

Board

 

Financial

 

Management

 

Marketing

 

Innovation

 

ESG (1)

William H. McGill, Jr.

.

 

.

 

.

 

.

 

.

 

.

 

.

 

.

 

.

 

.

W. Brett McGill

.

 

.

 

.

 

.

 

.

 

.

 

.

 

.

 

.

 

.

Michael H. McLamb

.

 

.

 

.

 

.

 

.

 

.

 

.

 

 

 

 

 

.

Clint Moore

.

 

.

 

.

 

.

 

.

 

.

 

.

 

.

 

.

 

.

George E. Borst

 

 

 

 

 

 

.

 

.

 

.

 

.

 

.

 

 

 

.

Hilliard M. Eure III

 

 

 

 

.

 

.

 

.

 

.

 

.

 

 

 

 

 

.

Evelyn V. Follit

 

 

 

 

.

 

.

 

.

 

.

 

.

 

 

 

.

 

.

Adam M. Johnson

 

 

 

 

.

 

.

 

.

 

.

 

.

 

.

 

 

 

.

Charles R. Oglesby

 

 

 

 

.

 

.

 

.

 

.

 

.

 

.

 

.

 

.

Mercedes Romero

 

 

.

 

.

 

.

 

.

 

.

 

.

 

 

 

.

 

.

Joseph A. Watters

 

 

 

 

.

 

.

 

.

 

.

 

.

 

.

 

.

 

.

Rebecca White

 

 

 

 

 

 

.

 

.

 

.

 

.

 

 

 

.

 

.

(1) Environmental (“E”), Social (“S”) and Governance (“G”) (collectively, “ESG”)

img241554359_3.jpg 

 

(1) Based on Independent Directors

(2) Ethnic diversity refers to an underrepresented minority which the Company defines as an individual who self-identifies in one or more of the following groups: Black or African American; Hispanic or Latino; American Indian or Alaska Native; Asian; Native Hawaiian or Other Pacific Islander; Two or More Races


 

Board Leadership Structure

We believe that effective board leadership structure can depend on the experience, skills, and personal interaction between persons in leadership roles as well as the needs of our Company at any point in time. Our Corporate Governance Guidelines support flexibility in the structure of the Board by not requiring the separation of the roles of Executive Chairman of the Board and Chief Executive Officer.

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The Board regularly considers the appropriate leadership structure for the Company and has concluded that, at this time, the Company and its shareholders are best served by separating the positions of Chief Executive Officer and Executive Chairman of the Board. In October 2018, the Board elected Mr. William H. McGill as Executive Chairman of the Board. The Board believes that separating the duties of Executive Chairman of the Board from the Chief Executive Officer improves the Board’s oversight of management and allows the Chief Executive Officer to focus on managing the Company’s business, while allowing the Executive Chairman of the Board to focus on more effectively leading the Board and supporting the initiatives of the Company and management. We believe that Mr. William H. McGill, our former Chief Executive Officer for over twenty years, is uniquely qualified to serve as Executive Chairman of the Board. The extensive knowledge of the Executive Chairman of the Board regarding our operations and industries and the markets in which we compete uniquely positions him to identify strategies and prioritize matters for board review and deliberation.

We believe that we have effective and active oversight by experienced independent directors and independent committee chairs, and the independent directors meet together in executive session at virtually every Board meeting. We also have established a position of Lead Independent Director who performs many of the duties that would be performed by an independent board chair. We currently select, on an annual basis, one of our independent directors to serve as Lead Independent Director for the year. Mr. Moore currently serves as our Lead Independent Director and he has extensive business experience which benefits him, as well as the Company, in this role.

The Executive Chairman of the Board provides guidance to the Board; facilitates an appropriate schedule for Board meetings; sets the agenda for Board meetings; presides over meetings of the Board; and facilitates the quality, quantity, and timeliness of the flow of information from management that is necessary for the Board to effectively and responsibly perform its duties.

The Chief Executive Officer is responsible for the day-to-day leadership of our Company and setting our Company’s strategic direction.

The Lead Independent Director’s duties include presiding over executive sessions of our independent directors; serving as a liaison between the non-employee directors, the Chief Executive Officer and the Executive Chairman of the Board; chairing meetings of the Board of Directors in the absence of the Executive Chairman of the Board; reviewing the agenda for each meeting of the Board of Directors; consulting with the Executive Chairman of the Board and the Chief Executive Officer on matters relating to corporate governance and the performance of the Board of Directors; and facilitating teamwork and communication between the non-employee directors and management.

Social & Environmental Responsibility

Our Board of Directors is committed to social and environmental responsibility. We strive to conduct our business in an ethical and socially responsible way, and are sensitive to the needs of the environment, our customers, our shareholders, our employees and our communities. We seek out, to the extent financially feasible, manufacturers committed to high levels of sustainability, environmental stewardship, and low-emissions. Further, we pride ourselves in supporting our local communities both on and off the water, which includes supporting Habitat for Humanity housing projects. In addition, we support humanitarian aid to countries in need through organizations such as the Red Cross. We also partner with the American Cancer Society to support Breast Cancer Awareness Month across all of our retail operations. These commitments from our Board of Directors and Officers are included in our Corporate Governance Guidelines, Code of Business Conduct and Ethics, and Code of Ethics for the CEO and Senior Financial Officers. Our Human Rights Policy and Environmental Policy can be found on the Corporate Governance section of our website at www.MarineMax.com under Governance Documents. These policies are reviewed by our Board of Directors on an annual basis or more frequently as needed.

Director and Officer Hedging and Pledging

We have a policy prohibiting all employees, officers, and directors from purchasing financial instruments (including prepaid forward contracts, equity swaps, collars, and exchange funds) designed to hedge or offset decreases in the market value of compensatory awards of our equity securities directly or indirectly held by them. Additionally, we have a policy prohibiting directors and officers from pledging of shares.

Director and Officer Stock Ownership Guidelines

Our Board of Directors believes that the alignment of directors’ and executive officers’ interests with those of our shareholders is strengthened when Board members and executive officers are also shareholders. Therefore, our

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Board of Directors has adopted minimum stock ownership guidelines under which directors and executive officers are expected to acquire shares of our Company’s common stock with a value at least equal to a multiple of one to five times the annual retainer paid for serving on the Board (if a director) or the base salary (if an executive officer). The directors and executive officers are expected to currently satisfy at least the minimum guidelines or beginning on the five year anniversary of the date the individual becomes a director or executive officer, as applicable. This program is designed to ensure that directors and executive officers acquire a meaningful ownership interest in our Company during their tenure with the Company. All of our directors and executive officers are expected to be in compliance with these minimum guidelines within the time period described above.

Compensation Committee Interlocks and Insider Participation

During the fiscal year ended September 30, 2023, our Compensation Committee consisted of Messrs. Moore, Borst, Johnson, Oglesby, Watters, Ms. Romero and Ms. White. None of these individuals had any contractual or other relationships with us during their terms as directors during the fiscal year except as directors.

Board and Committee Meetings

Our Board of Directors held a total of five meetings during the fiscal year ended September 30, 2023. No director attended fewer than 75% of the aggregate of: (i) the total number of meetings of the Board of Directors; and (ii) the total number of meetings held by all committees of the Board of Directors on which such director was a member.

During the fiscal year ended September 30, 2023, the Audit Committee held seven meetings; the Compensation Committee held four meetings; and the Nominating/Corporate Governance Committee held four meetings.

Annual Meeting Attendance

We encourage our directors to attend each annual meeting of shareholders. To that end, and to the extent reasonably practical, we generally schedule a meeting of our Board of Directors on the same day as our annual meeting of shareholders. All of our directors attended our annual meeting of shareholders last year.

Communications with Directors

Interested parties may communicate with our Board of Directors or specific members of our Board of Directors, including our independent directors and the members of our various Board committees, by submitting a letter addressed to the Board of Directors of MarineMax, Inc. at the address listed herein c/o any specified individual director or directors. Any such letters are forwarded to the relevant directors.

Annual Board Evaluations

We believe that the effectiveness of the Board and its Committees is important to the Company’s success. In an attempt to ensure its effectiveness, our Board undertakes an annual evaluation process using its external consultant, Boardspan, to evaluate the performance and efficacy of our Board, its Committees, and the individual directors. Board members reflect on their performance and share feedback, supported by an objective, confidential, and non-confrontational process of peer review.

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COMPENSATION DISCUSSION AND ANALYSIS

 

The Compensation Discussion and Analysis (“CD&A”) section describes the compensation program for the 2023 Named Executive Officers (“NEOs”) in the context of our executive compensation philosophy. The NEOs for 2023 included:

 

Name

 

Position

William H. McGill, Jr.

 

Executive Chairman of the Board

W. Brett McGill

 

Chief Executive Officer and President

Michael H. McLamb

 

Executive Vice President, Chief Financial Officer, and Secretary

Charles A. Cashman

 

Executive Vice President and Chief Revenue Officer

Kyle G. Langbehn.

 

Executive Vice President and President of Retail Operations

Executive Compensation Highlights

Our executive compensation program is designed to align the compensation outcomes of our executives with our corporate performance and shareholder outcomes. In line with our philosophy, the majority of the compensation for our NEOs is variable incentive compensation that fluctuates based on company performance. The following graphs set forth the target compensation mix for 2023 NEOs.

img241554359_4.jpg img241554359_5.jpg

For 2023, our cash incentive compensation was based on pre-established quarterly and/or full fiscal year goals related to pretax income, aged inventory targets, and net promoter score (customer rating).

 

 

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Overview and Compensation Philosophy

Our Board of Directors has appointed a Compensation Committee, consisting solely of independent members of the Board of Directors, to review and approve corporate goals and objectives relevant to the compensation of our Chief Executive Officer, evaluate the performance of our Chief Executive Officer in light of those goals and objectives, and determine or recommend to the Board of Directors the compensation of our Chief Executive Officer based on this evaluation. The Compensation Committee also recommends to the Board of Directors, or as directed by the Board of Directors determines and approves, the compensation of our other executive officers. The Compensation Committee strives to ensure that the compensation plan is consistent with our values and is aligned with our business strategy and goals, as they exist from time to time.

Our compensation program for executive officers consists primarily of a combination of base salaries, cash incentive bonuses, cash discretionary bonuses, and long-term incentives in the form of stock-based awards, which may include time-based or performance-based stock options, shares of restricted common stock, restricted stock units (“RSUs”), time-based RSUs (“TBRSUs”) or performance-based RSUs (“PBRSUs”). Executives also participate in various other benefit plans, including medical and retirement plans that generally are available to all of our employees. We consider each element of compensation collectively with other elements of compensation when establishing the various forms, elements, and levels of compensation.

Our philosophy is to pay competitive base salaries to executives at levels that help us to attract, motivate, and retain highly qualified executives. Our executive base salaries are generally at or below those of our peer companies taking into account the possibility of the receipt by our executives of cash performance-based incentive bonuses. Cash incentive bonuses are designed to reward individuals based on our Company’s financial results as well as the achievement of personal and corporate objectives designed to contribute to our long-term success in building shareholder value. Grants of stock-based awards are intended to result in limited rewards if the price of our common stock does not appreciate, but may provide substantial rewards to executives as our shareholders in general benefit from stock price appreciation. Total compensation levels reflect corporate positions, responsibilities, and achievement of goals. As a result of our performance-based compensation philosophy, pay levels may vary significantly from year to year and among our various executive officers. We expect the compensation level of our Chief Executive Officer will be higher than that of our other executive officers assuming relatively equal achievement of performance targets. See “Corporate Governance - Director and Officer Hedging and Pledging” for a full discussion of MarineMax’s hedging policy.

We believe that the overall compensation levels for our executive officers, including our named executive officers, are in alignment with our pay-for-performance philosophy and have been consistent with our performance. At our 2023 Annual Meeting of Shareholders, our shareholders overwhelmingly approved, on an advisory basis, the compensation of our named executive officers described in our proxy statement related to our 2022 Annual Meeting of Shareholders. Holders of approximately 17.0 million of our outstanding shares voted “for” such advisory say-on-pay proposal, representing approximately 97% of the votes cast on the say-on-pay proposal. Our Compensation Committee and our Board of Directors considered these final vote results and determined that, given the significant level of support and the overall effectiveness of our system, no material changes to our executive compensation philosophy, policies, and practices were necessary or desirable based on such vote results.

Role of the Compensation Committee and Chief Executive Officer

At the request of our Compensation Committee, our Chief Executive Officer generally attends a portion of our Compensation Committee meetings, including meetings at which select other members of management and our compensation consultants may be present. This enables our Compensation Committee to review the corporate and individual goals for the organization with the Chief Executive Officer. Our Compensation Committee also requests that our Chief Executive Officer assess the goals, objectives, and performance of the other executives. Although the participation of the Chief Executive Officer enables him to potentially influence, suggest and advise on goals, performance targets, and objectives, including his own, the Compensation Committee rather than our Chief Executive Officer makes all final determinations or Board recommendations regarding setting individual and corporate goals, targets, objectives, and performance against such goals and targets.

The Compensation Committee reviews and approves or recommends to our Board of Directors the compensation of our Chief Executive Officer and our other executive officers. Annually, our Compensation Committee evaluates the performance of our Chief Executive Officer and establishes or recommends to our Board of Directors the compensation of our Chief Executive Officer in light of the goals and objectives of our compensation program for that year. Our Compensation Committee together with our Chief Executive Officer annually assesses the

17


 

performance of our other executive officers. Based on recommendations from our Chief Executive Officer and the determinations of our Compensation Committee, our Compensation Committee approves or makes recommendations to our Board of Directors regarding the compensation of our other executive officers.

Compensation Surveys and Compensation Consultants

In determining compensation levels, we annually review compensation levels of companies that we deem to be similar to our Company, competitive factors to enable us to attract executives from other companies, and compensation levels that we deem appropriate to retain and motivate our executives. We use peer group information as a point of reference, but do not target our compensation levels against a specific percentile relative to our peer group.

On an annual basis, we retain the services of independent compensation consultants to review a wide variety of factors relevant to executive compensation, trends in executive compensation, and the identification of relevant peer companies. The Compensation Committee makes all determinations regarding the engagement, fees, and services of our compensation consultants; our compensation consultants report directly to our Compensation Committee; and our compensation consultants do not perform any other services for our Company. For this fiscal year, the Compensation Committee received advice from Compensation Advisory Partners (“CAP”). The Committee assesses CAP’s independence annually and believes that CAP is independent.

2023 Compensation Peer Group

As mentioned above, the Compensation Committee uses a peer group as a reference point in determining executive compensation levels. The peer group is also used when evaluating executive compensation design considerations. Our 2023 peer group was developed with the assistance of CAP based on the following criteria:

-
Company size, primarily defined by revenue (with consideration to market capitalization, total assets, and geography)
-
Companies that operate in similar businesses with a focus on specialty retail companies
-
Companies with similar products (e.g., high-ticket price durable products)

 

Polaris

H&E Equipment Services, Inc.

Malibu Boats, Inc.

Brunswick Corporation

Hibbett Sports, Inc.

Sportsman’s Warehouse Holdings, Inc.

Topgolf Callaway Golf Company

Kforce Inc.

Vail Resorts, Inc.

Cavco Industries, Inc.

LCI Industries

Winnebago Industries, Inc.

Big 5 Sporting Goods

M/I Homes, Inc.

OneWater Marine

Peloton Interactive

RH

 

 

 

18


 

Elements of Compensation

 

Pay Component

Type of Pay

Description

Base Salary

 

Fixed

Provides a stable source of income for NEOs
We set base salaries at a level we believe to be sufficient to attract, retain, and motivate our executives
Reviewed annually based on executive’s position, responsibilities, skills, and experience

Cash Incentive

 

Variable

Performance-based compensation intended to reward NEOs for corporate results and is intended to reflect our pay-for-performance philosophy
Performance criteria may include a wide range of factors, including pretax income for our consolidated Company or on a regional basis, customer satisfaction index, specific performance metrics, stock price performance, achievement of targeted results for various Company operations, expense management, market share, inventory management, earnings before interest, taxes, depreciation, and amortization, operating margin, working capital, cash, cash management, and debt-to-equity ratio
2023 plan based on pretax income, aged inventory targets, and net promoter score
Intended to align with shareholder interests

Stock-Based Awards

 

Variable

We strongly believe in utilizing our common stock to tie executive rewards directly to our long-term success and increases in shareholder value
Awards provide opportunities for wealth creation and stock ownership that aid in attracting, motivating, and retaining key talent
For 2023, equity awards granted in the form of 60% PBRSUs and 40% TBRSUs
2023 PBRSU awards vest based on pretax income percent and inventory aging targets
2023 TBRSUs vest annually over three years and PBRSUs have a one-year performance period with an additional two years of vesting

Other Benefits

Benefits

NEOs are eligible to participate in benefit programs designed for all of our full-time employees
Programs include medical insurance, a qualified retirement program allowed under Section 401(k) of the Internal Revenue Code (“IRC”), life insurance coverage, and Employee Stock Purchase Plan

Fiscal 2023 Compensation

Summary

We worked with our executive compensation consultants in connection with our fiscal 2023 incentive compensation program to maintain our long-standing pay-for-performance philosophy. Our base salaries for our named executive officers for fiscal 2023 generally were at or below the peer group 50th percentile. Excluding Mr. Langbehn who was not a named executive officer in fiscal 2022, the base salaries for our named executive officers increased in aggregate by approximately 12% from fiscal 2022 levels. Overall cash compensation for our remaining named executive officers decreased approximately 19% from fiscal 2022 levels. Our stock-based compensation for our named executive officers increased approximately 29% from fiscal 2022. The total compensation increases were largely the result of increases in stock-based compensation. These increases in stock-based compensation resulted from bringing our executives closer to competitive levels of comparable companies. The Compensation Committee believes that these increases were warranted given management's performance.

 

19


 

 

Base Salaries

Our named executive officers received base compensation for fiscal 2023 in accordance with their respective compensation plans as recommended by the Compensation Committee and approved by the Board of Directors.

 

Name

 

2022 Salary

 

 

2023 Salary

 

 

% Change

 

William H. McGill, Jr.

 

$

630,000

 

 

$

630,000

 

 

0%

 

W. Brett McGill

 

$

815,000

 

 

$

975,000

 

 

20%

 

Michael H. McLamb

 

$

500,000

 

 

$

550,000

 

 

10%

 

Charles A. Cashman

 

$

425,000

 

 

$

490,000

 

 

15%

 

Kyle G. Langbehn (1)

 

 

 

 

$

550,000

 

 

 

 

(1)
Mr. Langbehn's fiscal 2022 salary is not shown because he was not a named executive officer in fiscal 2022.

Cash Incentive Compensation

For fiscal 2023, we established individual cash incentive compensation awards for Messrs. William H. McGill, W. Brett McGill, McLamb, Cashman, and Langbehn. The cash compensation awards had targeted incentive cash compensation of 100%, 125%, 100%, 75%, and 100% of base salaries, respectively. The performance objectives for aged inventory targets relative to our industry (30% weighting), and net promoter score (20% weighting), are measured quarterly due to the seasonality aspect of our business. The performance objective for pretax income (50% weighting) is measured annually with estimates paid quarterly.

As indicated below, bonus payouts of 50% may be earned if performance is at least 85% of target for pretax income, net promoter score, and aged inventory targets. Performance below the 85% threshold results in no payout. A maximum bonus of 200% may be earned if 140% of the target for pretax income and net promoter score is achieved, or if 115% of the aged inventory targets are achieved. Payments for performance between threshold and target or between target and maximum are interpolated.

 

Metric

 

Threshold
(50% payout)

 

 

Target
(100% payout)

 

 

Maximum
(200% payout)

 

Pretax Income

 

 

85

%

 

 

100

%

 

 

140

%

Aged Inventory:

 

 

 

 

 

 

 

 

 

Tier 1

 

 

85

%

 

 

100

%

 

 

115

%

Tier 2

 

 

85

%

 

 

100

%

 

 

115

%

Net Promoter Score

 

 

85

%

 

 

100

%

 

 

140

%

The quarterly and annual pretax income bonus target objectives for the fiscal 2023 quarters ended December 31, March 31, and June 30, and the fiscal year ended September 30, were approximately $46.6 million, $71.1 million, $94.3 million, and $266.7 million, respectively. The quarterly net promoter score bonus target objective was 10% for each quarter in fiscal 2023. We have not disclosed more information than the quantitative quarterly performance target objectives of the aged inventory bonuses because we believe that such disclosure would cause us competitive harm in negotiating key business relationships. The target objectives were set based upon the rolling three month average aged inventory per quarter compared to the industry average in the same quarter. At the time of setting the target performance objectives for the aged inventory bonus, the Compensation Committee believed that achieving these objectives would be challenging.

For each of our named executive officers the quarterly performance objectives were satisfied as follows:

 

Metric (Weighting)

 

Q1

 

 

Q2

 

 

Q3

 

 

Q4

 

 

Full Fiscal Year

 

Pretax Income (50%)

 

 

 

 

 

 

 

 

 

 

Not Applicable

 

 

 

 

Aged Inventory:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 (15%)

 

 

200

%

 

 

200

%

 

 

200

%

 

 

200

%

 

Not Applicable

 

Tier 2 (15%)

 

 

200

%

 

 

200

%

 

 

200

%

 

 

200

%

 

Not Applicable

 

Net Promoter Score (20%)

 

 

200

%

 

 

200

%

 

 

200

%

 

 

200

%

 

Not Applicable

 

Therefore, our NEOs received the following cash bonuses: Mr. William H. McGill - $630,000; Mr. W. Brett McGill - $1,218,750; Mr. McLamb - $550,000; Mr. Cashman - $367,500; and Mr. Langbehn - $550,000.

Stock-Based Awards

For fiscal 2023, our stock-based incentive compensation grants for our named executive officers took the form of TBRSUs and PBRSUs, weighted 40% and 60%, respectively. The TBRSUs vest in three equal, annual

20


 

installments over a three-year period beginning on the date of grant and vesting on September 30 of each relevant year. The 2023 PBRSUs granted on November 18, 2022 included measurements for pretax earnings improvement and inventory aging targets, and were earned at the end of fiscal 2023. The awards fully vest on September 30, 2025.

For fiscal 2023, our Board of Directors granted TBRSUs and PBRSUs to the following NEOs:

 

Name

 

TBRSUs

 

 

2023 PBRSUs at Target Performance

 

William H. McGill, Jr.

 

 

14,922

 

 

 

22,383

 

W. Brett McGill

 

 

43,934

 

 

 

65,901

 

Michael H. McLamb

 

 

9,532

 

 

 

14,298

 

Charles A. Cashman

 

 

10,473

 

 

 

15,711

 

Kyle G. Langbehn

 

 

9,532

 

 

 

14,298

 

The 2023 PBRSUs above are the target amount of shares that may be earned under these awards, and the actual amount earned for the awards could range from 0% to 175% of the target number of shares. The actual amount earned for the 2023 PBRSUs based upon meeting certain inventory aging targets and leverage targets in fiscal 2023 was approximately 87.5% of the target amount of shares granted.

Deductibility of Executive Compensation

We take into account the tax effect of our compensation. Section 162(m) of the IRC, as modified by the passage of the Tax Cuts and Jobs Act legislation in December 2017 and the American Rescue Plan Act in March 2021, currently limits the deductibility for federal income tax purposes of compensation in excess of $1.0 million paid to each of any publicly held corporation’s chief executive officer, chief financial officer, and three other most highly compensated executive officers. We may deduct certain types of compensation paid to any of these individuals only to the extent that such compensation during any fiscal year does not exceed $1.0 million. We currently expect a portion of the compensation of our executive officers to exceed the deductibility threshold under Section 162(m) of the IRC. Our compensation arrangements with certain of our executive officers exceeded the limits on deductibility under Section 162(m) during our fiscal year ended September 30, 2023.

Accounting Considerations

We account for stock-based awards in accordance with the provisions of Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 718 “Compensation - Stock Compensation” (“ASC 718”). In determining stock-based awards, we consider the potential expense of those grants under ASC 718 and the impact on our earnings per share.

Policies for the Pricing and Timing of Stock-Based Grants

We set the price of all stock-based awards at the closing price of our stock on the NYSE on the date of grant. We grant the stock-based compensation at regularly scheduled meetings each year. In the case of new hires, we generally grant stock-based awards on start dates, which are determined by the date the employee reports for service.

Employment Agreements

Each of Messrs. William H. McGill, W. Brett McGill, McLamb, Cashman, and Langbehn is a party to an employment agreement with us, which provides for designated base salaries plus incentive compensation based on the performance of our Company and the employees as determined by our Board of Directors. Each of the employment agreements provides for benefits in the event of certain changes in control of our Company. These arrangements have no effect on our compensation arrangements absent a change in control. See “Executive Compensation - Employment Agreements” and “Executive Compensation - Potential Payments Upon Termination, Change of Control, Death or Disability.”

Clawback

Our Board has adopted a clawback policy, effective as of October 2, 2023, that complies with the NYSE’s clawback rules promulgated under SEC Rule 10D-1. Under this policy, in the event that the Company is required to prepare an accounting restatement of its financial statements due to the Company’s material noncompliance with any financial reporting requirement under the securities laws, the policy requires that the Compensation Committee, to the extent legally permitted and pursuant to the terms of the policy, recover from current and former Section 16 officers any incentive-based compensation, as defined in the NYSE’s clawback rules, received by such officers that exceeds

21


 

the amount of incentive-based compensation that otherwise would have been received had such incentive-based compensation been determined according to the applicable accounting restatement.

22


 

EXECUTIVE COMPENSATION

Summary of Cash and Other Compensation

The following table sets forth, for the fiscal years ended September 30, 2021, 2022, and 2023, information regarding compensation for services in all capacities to us and our subsidiaries received by our Chief Executive Officer, our Chief Financial Officer, and our three other most highly compensated executive officers whose aggregate cash compensation exceeded $100,000.

SUMMARY COMPENSATION TABLE

Name and Principal
Position

Year

Salary (1)

 

Bonus (2)

 

Stock
Awards (3)

 

Non-Equity
Incentive Plan
Compensation (4)

 

All Other
Compensation (5)

 

Total (6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

William H. McGill, Jr.

2023

$

630,000

 

$

62,738

 

$

1,291,499

 

$

630,000

 

$

9,873

 

$

2,624,110

 

   Executive Chairman of the

2022

$

630,000

 

$

-

 

$

976,544

 

$

1,151,799

 

$

8,570

 

$

2,766,913

 

   Board

2021

$

600,000

 

$

-

 

$

479,994

 

$

1,200,000

 

$

8,315

 

$

2,288,309

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

W. Brett McGill

2023

$

975,000

 

$

-

 

$

3,802,488

 

$

1,218,750

 

$

9,900

 

$

6,006,138

 

   Chief Executive Officer and

2022

$

815,000

 

$

-

 

$

2,771,009

 

$

1,862,532

 

$

9,150

 

$

5,457,691

 

   President

2021

$

740,000

 

$

-

 

$

1,442,985

 

$

1,776,000

 

$

13,000

 

$

3,971,985

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Michael H. McLamb

2023

$

550,000

 

$

20,582

 

$

824,995

 

$

550,000

 

$

9,900

 

$

1,955,477

 

   Executive Vice President,

2022

$

500,000

 

$

-

 

$

750,019

 

$

685,595

 

$

9,150

 

$

1,944,764

 

   Chief Financial Officer, and Secretary

2021

$

470,000

 

$

-

 

$

563,997

 

$

658,000

 

$

9,167

 

$

1,701,164

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Charles A. Cashman

2023

$

490,000

 

$

-

 

$

906,490

 

$

367,500

 

$

9,900

 

$

1,773,890

 

   Executive Vice President

2022

$

425,000

 

$

-

 

$

786,152

 

$

582,755

 

$

9,150

 

$

1,803,057

 

   and Chief Revenue Officer

2021

$

395,000

 

$

-

 

$

473,958

 

$

553,000

 

$

9,467

 

$

1,431,425

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kyle G. Langbehn (7)

2023

$

550,000

 

$

-

 

$

824,995

 

$

550,000

 

$

6,807

 

$

1,931,802

 

   Executive Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

   and President of Retail Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)
The base salaries set forth in this column reflect any base salary adjustments for fiscal 2021, 2022, and 2023 for each of the named executive officers.
(2)
A discretionary bonus was paid to Mr. McGill Jr. and Mr. McLamb in 2023 as gifts to commemorate their 50th and 25th anniversaries, respectfully, working for our Company. Mr. McGill Jr. and Mr. Mclamb's contributions have been instrumental to our Company's success.
(3)
The amounts shown in this column represent the grant date fair value of RSU awards determined in accordance with ASC 718 excluding the effects of forfeitures. The assumptions used in determining the grant date fair value of stock option and restricted stock awards are set forth in Note 14 to the Consolidated Financial Statements in our Form 10-K for the year ended September 30, 2023. Each named executive officer forfeits the unvested portion, if any, of the officer’s RSUs if the officer’s service to our Company is terminated for any reason, except upon death, as may otherwise be determined by the Board of Directors or as provided in an employment agreement.

For the PBRSUs in this column that were awarded in fiscal 2023, assuming that the highest level of performance conditions will be achieved, the grant date fair value for each named executive officer would be as follows:

 

Name

 

Maximum
Achievement Value ($)

 

William H. McGill, Jr.

 

$

1,356,074

 

W. Brett McGill

 

$

3,992,612

 

Michael H. McLamb

 

$

866,244

 

Charles A. Cashman

 

$

951,851

 

Kyle G. Langbehn

 

$

866,244

 

 

For further information on these awards, see the Grants of Plan-Based Awards table of this proxy statement.

(4)
The amounts shown in this column constitute payments made under our fiscal 2021, 2022, and 2023 executive incentive bonus program. See “Compensation Discussion and Analysis” and the Grants of Plan-Based Awards table for more information regarding our fiscal 2023 incentive compensation program.
(5)
Represents amounts paid to each named executive officer for the employer matching portion of our 401(k) plan.
(6)
The dollar value in this column for each named executive officer represents the sum of all compensation reflected in the previous columns.
(7)
Mr. Langbehn's fiscal 2020, 2021, and 2022 compensation is not shown because he was not a named executive officer in fiscal 2020, 2021, and 2022.

23


 

Grants of Plan-Based Awards

The following table sets forth certain information with respect to grants of plan-based awards to the named executive officers for the fiscal year ended September 30, 2023.

GRANTS OF PLAN-BASED AWARDS

 

 

 

 

Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards (1)

 

 

 

Estimated Future Payouts
Under Equity Incentive
Plan Awards (2)

 

 

All Other
Stock Awards:
Number
of Shares
of Stock

 

 

Grant Date
Fair Value
of Stock
and Option

 

Name

 

Grant Date

 

Threshold
($)

 

 

Target
($)

 

 

Maximum
($)

 

 

Type
(3)

 

Threshold
(#)

 

 

Target
(#)

 

 

Maximum
(#)

 

 

or Units
(#)

 

 

Awards
(4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

William H.

 

11/18/2022

 

$

315,000

 

 

$

630,000

 

 

$

1,260,000

 

 

PBRSU

 

 

 

 

 

22,383

 

 

 

39,170

 

 

 

 

 

$

774,899

 

   McGill, Jr.

 

 

 

 

 

 

 

 

 

 

 

 

TBRSU

 

 

 

 

 

 

 

 

 

 

 

14,922

 

 

$

516,600

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

W. Brett

 

11/18/2022

 

$

609,375

 

 

$

1,218,750

 

 

$

2,437,500

 

 

PBRSU

 

 

 

 

 

65,901

 

 

 

115,327

 

 

 

 

 

$

2,281,493

 

   McGill

 

 

 

 

 

 

 

 

 

 

 

 

TBRSU

 

 

 

 

 

 

 

 

 

 

 

43,934

 

 

$

1,520,995

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Michael H.

 

11/18/2022

 

$

275,000

 

 

$

550,000

 

 

$

1,100,000

 

 

PBRSU

 

 

 

 

 

14,298

 

 

 

25,022

 

 

 

 

 

$

494,997

 

   McLamb

 

 

 

 

 

 

 

 

 

 

 

 

TBRSU

 

 

 

 

 

 

 

 

 

 

 

9,532

 

 

$

329,998

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Charles A.

 

11/18/2022

 

$

183,750

 

 

$

367,500

 

 

$

735,000

 

 

PBRSU

 

 

 

 

 

15,711

 

 

 

27,494

 

 

 

 

 

$

543,915

 

   Cashman

 

 

 

 

 

 

 

 

 

 

 

 

TBRSU

 

 

 

 

 

 

 

 

 

 

 

10,473

 

 

$

362,575

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kyle G.

 

11/18/2022

 

$

275,000

 

 

$

550,000

 

 

$

1,100,000

 

 

PBRSU

 

 

 

 

 

14,298

 

 

 

25,022

 

 

 

 

 

$

494,997

 

   Langbehn

 

 

 

 

 

 

 

 

 

 

 

 

TBRSU

 

 

 

 

 

 

 

 

 

 

 

9,532

 

 

$

329,998

 

 

(1)
Represents potential threshold, target, and maximum performance-based compensation under our fiscal 2023 incentive compensation program. Under the terms of the 2021 Stock-Based Compensation Plan (the "2021 Plan"), the maximum amount that may be payable to any one participant as a performance award (payable in cash) is $5,000,000 per calendar year. Actual payments are reflected in the Summary Compensation table, and there are no future payouts related to these awards. Our fiscal 2023 executive incentive compensation program is discussed under “Compensation Discussion and Analysis - Fiscal 2023 Compensation – Cash Incentive Compensation.”
(2)
The “Estimated Future Payouts Under Equity Incentive Plan Awards” column shows the range of shares that may be earned in respect of PBRSUs granted in fiscal 2023. For additional information related to the performance period, performance measures and targets, see “Compensation Discussion and Analysis.”
(3)
The type of award refers to awards’ vesting criteria and related terms. “PBRSU” refers to performance-based RSU awards. “TBRSU” refers to time-based RSU awards.
(4)
The amounts shown in this column represent the grant date fair value for RSU awards granted to our named executive officers during the covered year calculated in accordance with ASC 718, excluding the effects of forfeitures. The assumptions used in determining the grant date fair value of these awards are set forth in the notes to our Consolidated Financial Statements, which are included in our Annual Report on Form 10-K filed with the SEC for the fiscal year ended September 30, 2023. We calculated the estimated value of each award based on the closing stock price of our common stock on the date of grant.

24


 

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth information with respect to outstanding equity-based awards held by our named executive officers as of September 30, 2023.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

 

 

Stock Awards

 

 

 

 

Number of
Shares or
Units of Stock
That Have

 

Market Value
of Shares or
Units of Stock
That Have

 

Name

Grant Date

Not Vested (1)

 

Not Vested (2)

 

 

 

11/18/2022

 

 

9,949

 

 

$

326,526

 

William H. McGill, Jr.

 

11/18/2022

 

 

19,585

 

 

$

642,780

 

 

 

11/19/2021

 

 

2,357

 

 

$

77,357

 

 

 

11/19/2021

 

 

18,558

 

 

$

609,074

 

 

 

11/18/2022

 

 

29,291

 

 

$

961,331

 

W. Brett McGill

 

11/18/2022

 

 

57,664

 

 

$

1,892,532

 

 

 

11/19/2021

 

 

6,688

 

 

$

219,500

 

 

 

11/19/2021

 

 

52,662

 

 

$

1,728,367

 

 

 

11/18/2022

 

 

6,355

 

 

$

208,571

 

Michael H. McLamb

 

11/18/2022

 

 

12,511

 

 

$

410,611

 

 

 

11/19/2021

 

 

1,811

 

 

$

59,437

 

 

 

11/19/2021

 

 

14,253

 

 

$

467,783

 

 

 

11/18/2022

 

 

6,983

 

 

$

229,182

 

Charles A. Cashman

 

11/18/2022

 

 

13,747

 

 

$

451,177

 

 

 

11/19/2021

 

 

1,898

 

 

$

62,292

 

 

 

11/19/2021

 

 

14,942

 

 

$

490,396

 

 

 

11/18/2022

 

 

6,355

 

 

$

208,571

 

Kyle G. Langbehn

 

11/18/2022

 

 

12,511

 

 

$

410,611

 

 

 

11/19/2021

 

 

1,268

 

 

$

41,616

 

 

 

11/19/2021

 

 

9,977

 

 

$

327,445

 

 

 

10/1/2021

 

 

3,092

 

 

$

101,479

 

 

 

10/1/2021

 

 

6,529

 

 

$

214,282

 

 

 

12/2/2020

 

 

3,000

 

 

$

98,460

 

 

 

10/8/2020

 

 

5,800

 

 

$

190,356

 

 

 

10/8/2020

 

 

5,800

 

 

$

190,356

 

 

 

12/3/2019

 

 

10,000

 

 

$

328,200

 

 

(1)
Represents TBRSUs and PBRSUs. The TBRSUs vest in three equal, annual installments over a three-year period beginning on the date of grant and vesting on September 30 of each relevant year. The PBRSUs granted on November 18, 2022, were earned in fiscal 2023 based upon meeting certain inventory aging targets and pretax income percent targets and vest on September 30, 2025. The PBRSUs granted on November 19, 2021, were earned in fiscal 2022 based upon meeting certain inventory aging and pretax income percent targets and vest on September 30, 2024.
(2)
The market value of shares or units of stock that have not vested as reported in the table above is determined by multiplying the closing market price of our common stock on the last trading day of fiscal 2023 of $32.82 by the number of shares or units of stock that have not vested.

Stock Vested

The following table describes, for the named executive officers, the number of shares acquired on the vesting of stock awards and the value realized on vesting of stock awards during fiscal 2023.

STOCK VESTING

 

 

 

Stock Awards

 

Name

 

Number of
Shares Acquired
on Vesting

 

 

Value
Realized on
Vesting (1)

 

William H. McGill, Jr.

 

 

25,115

 

 

$

824,241

 

W. Brett McGill

 

 

74,792

 

 

$

2,454,673

 

Michael H. McLamb

 

 

40,883

 

 

$

1,334,130

 

Charles A. Cashman

 

 

57,948

 

 

$

1,884,003

 

Kyle G. Langbehn

 

 

21,411

 

 

$

698,959

 

 

(1)
For stock awards, the value realized is computed as the market price on the later of the date the restrictions lapse or the delivery date times the number of shares vested.

25


 

Pension Benefits and Nonqualified Deferred Compensation

We do not offer a pension plan to any of our employees. We do not offer a nonqualified deferred compensation plan to any of our employees. Employees meeting certain requirements may participate in our 401(k) plan.

CEO Pay Ratio Disclosure

Under the rules requiring companies to disclose the ratio between the CEO total compensation to the total compensation of the median employee, the median-paid employee may be identified once every three years if there is no significant impact to the pay ratio disclosure. As there were no significant changes in our employee population or to the median-paid employee's compensation arrangements in 2023 that would significantly affect the pay ratio disclosure, the employee representing the median-paid employee is the same employee selected for the fiscal year 2023 proxy statement. The ratio of CEO pay ($6,006,138) to the median worker pay ($77,014) is approximately 78:1. The ratio is a reasonable estimate, calculated in a manner consistent with applicable SEC rules.

Previously, to determine the median employee, we completed the data gathering and analysis for our over 2,600 employees as of September 2021. We utilized a measurement date of September 30, 2021, and used a total compensation definition that consisted of actual base pay earnings, overtime earnings, and bonuses paid to all employees from the beginning of the fiscal 2021 year through the measurement date. We annualized pay for those who commenced work or were on an unpaid leave of absence during 2021. This data was gathered for our entire workforce to identify the median employee. We then calculated the median employee's final total compensation for the fiscal 2023 year utilizing the same methodology that is used for NEOs as set forth in the Summary Compensation Table to determine the ratio.

Pay versus Performance

Linking pay and performance is an important component of MarineMax's compensation philosophy and aligns to the interests of our shareholders. The Compensation Committee believes that the Company’s compensation plans and programs provide strong pay and performance alignment as demonstrated and described through the Compensation Discussion and Analysis section of this proxy statement. The following Pay versus Performance disclosure is calculated in a manner consistent with SEC rules.

As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following table, which sets forth information concerning the compensation of our Principal Executive Officer ("PEO") and Non-Principal Executive Officers ("Non-PEO NEOs") for each of the fiscal years ended September 30, 2021, 2022 and 2023, and our financial performance for each such fiscal year:

 

 

 

 

 

 

 

 

 

 

Value of Initial Fixed $100 Investment Based On (c):

 

 

 

 

Year (a)

 

Summary Compensation Table Total for PEO

 

Compensation Actually Paid to PEO (b)

 

Average Summary Compensation Table Total for Non-PEO NEOs

 

Average Compensation Actually Paid to non-PEO NEOs (b)

 

Total Shareholder Return (c)

 

Peer Group Total Shareholder Return (c)

Net Income attributable to MarineMax, Inc.

 

Company Selected Measure: Diluted net income per common share (d)

 

 

2023

 

 

6,006,138

 

 

5,900,178

 

 

2,071,320

 

 

2,101,614

 

$

127.85

 

98.36

 

109,282,000

 

$

4.87

 

 

2022

 

 

5,457,691

 

 

2,472,379

 

 

1,807,465

 

 

919,296

 

$

116.05

 

86.45

 

197,989,000

 

$

8.84

 

 

2021

 

 

3,971,985

 

 

8,516,604

 

 

1,514,094

 

 

3,081,533

 

$

189.01

 

114.29

 

154,979,000

 

$

6.78

 

(a) NEOs included in the compensation columns reflect the following:

Year

 

PEO

Non-PEO NEOs

 

 

 

 

 

2023

 

W. Brett McGill

William H. McGill, Jr., Michael H. McLamb, Charles A. Cashman, Kyle G. Langbehn

 

2022

 

W. Brett McGill

William H. McGill, Jr., Michael H. McLamb, Charles A. Cashman, Anthony E. Cassella, Jr.

 

2021

 

W. Brett McGill

William H. McGill, Jr., Michael H. McLamb, Charles A. Cashman, Anthony E. Cassella, Jr.

 

26


 

(b) The Summary Compensation Table totals reported for the PEOs and the average of the Non-PEO NEOs for each fiscal year were subject to the following adjustments per Item 402(v)(2)(iii) of Regulation S-K to calculate "Compensation Actually Paid”:

 

2023

 

 

2022

 

 

2021

 

 

PEO

 

Average for Non-PEO NEOs

 

 

PEO

 

Average for Non-PEO NEOs

 

 

PEO

 

Average for Non-PEO NEOs

 

Summary Compensation Table - Total Compensation

 

6,006,138

 

 

2,071,320

 

 

 

5,457,691

 

 

1,807,465

 

 

 

3,971,985

 

 

1,514,094

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deduction for amount reported under the “Stock Awards” and “Option Awards” Columns of the Summary Compensation Table

 

(3,802,488

)

 

(961,995

)

 

 

(2,771,009

)

 

(677,865

)

 

 

(1,442,985

)

 

(416,993

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase/deduction for the Inclusion of Item 402(v) Equity Values (e):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year End Fair Value of Equity Awards Granted in Fiscal Year and Unvested as of Fiscal Year End

 

2,853,863

 

 

722,007

 

 

 

1,967,242

 

 

481,257

 

 

 

2,886,212

 

 

834,071

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Fiscal Years

 

179,831

 

 

56,574

 

 

 

(1,001,343

)

 

(330,350

)

 

 

1,545,208

 

 

668,345

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Fiscal Year

 

480,583

 

 

121,573

 

 

 

199,206

 

 

48,707

 

 

 

292,236

 

 

84,437

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in Fair Value from Prior Fiscal Year End to Vesting Date of Equity Awards Granted in Prior Years that Vested in the Fiscal Year

 

182,251

 

 

92,135

 

 

 

(1,379,408

)

 

(409,918

)

 

 

1,263,948

 

 

397,579

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value at the End of the Prior Fiscal Year of Equity Awards Granted in Prior Fiscal Years that Failed to Meet Vesting Conditions in the Fiscal Year

 

-

 

 

-

 

 

 

-

 

 

-

 

 

 

-

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation in the Summary Compensation Table for the Fiscal Year

 

-

 

 

-

 

 

 

-

 

 

-

 

 

 

-

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Adjustments

 

(105,960

)

 

30,294

 

 

 

(2,985,312

)

 

(888,169

)

 

 

4,544,619

 

 

1,567,439

 

Compensation Actually Paid

 

5,900,178

 

 

2,101,614

 

 

 

2,472,379

 

 

919,296

 

 

 

8,516,604

 

 

3,081,533

 

(c) TSR and Peer Group TSR: Peer Group TSR reflects the Dow Jones US Retail Total Stock Market Index as reflected in our Annual Report on the Form 10-K pursuant to Item 201(e) of Regulation S-K for the fiscal year ended September 30, 2023. Each year of TSR and Peer Group TSR reflects what the cumulative value of $100 would be, if such amount were invested on October 1, 2020.

(d) The Company has identified diluted net income per common share as the company-selected measure for the pay versus performance disclosure, as it represents the most important financial performance measure used to link compensation actually paid to the PEO and the Non-PEO NEOs in 2023 to the Company’s performance.

(e) The amounts shown in this table represent the fair value of RSU awards determined in accordance with ASC 718. The assumptions used in determining the fair value of stock option and restricted stock awards are set forth in Note 14 to the Consolidated Financial Statements in our Form 10-K for the year ended September 30, 2023. Each named executive officer forfeits the unvested portion, if any, of the officer’s RSUs if the officer’s service to our

27


 

Company is terminated for any reason, except upon death, as may otherwise be determined by the Board of Directors or as provided in an employment agreement.

 

Narrative Disclosure to Pay Versus Performance Table

Relationship Between Financial Performance Measures

The graphs below compare the compensation actually paid to our PEO and the average of the compensation actually paid to our remaining NEOs, with (i) our net income, (ii) our diluted net income per common share, and (iii) our

cumulative TSR, as well as the relationship between our TSR and the Peer Group TSR, in each case, for the fiscal years ended September 30, 2021, 2022 and 2023.

 

img241554359_6.jpg 

 

img241554359_7.jpg 

 

img241554359_8.jpg 

 

 

28


 

Pay Versus Performance Tabular List

We believe diluted net income per common share represents the most important financial performance measure used by us to link compensation actually paid to our NEOs for the fiscal year ended September 30, 2023.

In the “Compensation Discussion and Analysis” section of this proxy statement, we provide greater detail on the elements of our executive compensation program and our “pay-for-performance” compensation philosophy. We believe the Company’s executive compensation program appropriately rewards our PEO and the Non-PEO NEOs for Company and individual performance, promotes retention of our senior leadership team and supports long-term value creation for our stockholders.

2021 Stock-Based Compensation Plan

In February 2023, our shareholders approved an amendment to our 2021 Plan. The terms of the 2021 Plan provide for the grant of stock options, stock appreciation rights, restricted stock, stock units, bonus stock, dividend equivalents, other stock related awards, and performance awards that may be settled in cash, stock, or other property.

The total number of shares of our common stock that may be subject to awards under the 2021 Plan is equal to 1,000,000 shares, plus: (i) any shares available for issuance and not subject to an award under the 2007 Incentive Compensation Plan (the “2007 Plan”) or the 2011 Stock-Based Compensation Plan (the “2011 Plan”), which was 545,729 in aggregate at the time of the approval of the 2021 Plan; (ii) the number of shares with respect to which awards granted under the 2021 Plan, the 2011 Plan or the 2007 Plan terminate without the issuance of the shares or where the shares are forfeited or repurchased; (iii) with respect to awards granted under the 2021 Plan, the 2011 Plan and the 2007 Plan, the number of shares that are not issued as a result of the award being settled for cash or otherwise not issued in connection with the exercise or payment of the award; and (iv) the number of shares that are surrendered or withheld in payment of the exercise price of any award or any tax withholding requirements in connection with any award granted under the 2021 Plan, the 2011 Plan or the 2007 Plan. As of September 30, 2023, there were 1,984,588 shares of common stock available for issuance under the 2021 Plan.

The 2021 Plan imposes individual limitations on certain awards. Under these limitations, no more than 50% of the total number of shares of our common stock reserved for issuance under the 2021 Plan may be granted to an individual during any fiscal year pursuant to awards granted under the 2021 Plan. The maximum amount that may be payable to any one participant as a performance award (payable in cash) is $5,000,000 per calendar year.

No outstanding options may be repriced without shareholder approval (that is, we cannot amend an outstanding option to lower the exercise price or exchange an outstanding option for a new option with a lower exercise price). In addition, the 2021 Plan prohibits us from exchanging an outstanding option with an exercise above the then current fair market value of our common stock for cash, other awards, or other property.

In the event that a stock dividend, forward or reverse split, merger, consolidation, combination, or other similar corporate transaction or event affects our common stock, then the plan administrator will substitute, exchange, or adjust any or all of the following in a manner that precludes the enlargement or dilution of rights and benefits: (1) the kind and number of shares available under the 2021 Plan; (2) the kind and number of shares subject to limitations on awards described in the preceding paragraph; (3) the kind and number of shares subject to all outstanding awards; (4) the exercise price, grant price, or purchase price relating to any award; and (5) any other affected terms of awards.

In the event that a dividend or other distribution (whether in cash or other property, but excluding a stock dividend), recapitalization, reorganization, spin-off, repurchase, share exchange, liquidation, dissolution, or other similar corporate transaction or event affects our common stock or our other securities or the securities of any other issuer, so that an adjustment, substitution, or exchange is determined to be appropriate by the plan administrator, then the plan administrator is authorized to adjust any or all of the following as the plan administrator deems appropriate: (1) the kind and number of shares available under the 2021 Plan; (2) the kind and number of shares subject to limitations on awards described in the preceding paragraph; (3) the kind and number of shares subject to all outstanding awards; (4) the exercise price, grant price, or purchase price relating to any award; and (5) any other affected terms of awards.

The persons eligible to receive awards under the 2021 Plan consist of officers, directors, employees, and independent contractors. However, incentive stock options may be granted under the 2021 Plan only to our employees, including our officers who are employees.

29


 

Our Board of Directors will administer the 2021 Plan unless it delegates administration of the 2021 Plan to one or more committees of our Board of Directors. Together, our Board of Directors and any committee(s) delegated to administer the 2021 Plan are referred to as the plan administrator. If a committee is delegated to administer the 2021 Plan, then the committee members may be “non-employee directors” as defined by Rule 16b-3 of the Securities Exchange Act, and independent as defined by the NYSE or any other national securities exchange on which any of our securities may be listed for trading in the future. Subject to the terms of the 2021 Plan, the plan administrator is authorized to select eligible persons to receive awards, determine the type and number of awards to be granted and the number of shares of our common stock to which awards will relate, specify times at which awards will be exercisable or may be settled (including performance conditions that may be required as a condition thereof), set other terms and conditions of awards, prescribe forms of award agreements, interpret and specify rules and regulations relating to the 2021 Plan, and make all other determinations that may be necessary or advisable for the administration of the 2021 Plan. The plan administrator may amend the terms of outstanding awards, in its discretion. Any amendment that materially adversely affects the rights of the award recipient, however, must receive the approval of such recipient.

The plan administrator, in its discretion, may accelerate the vesting, exercisability, lapsing of restrictions, or expiration of deferral of any award, including if we undergo a “change in control,” as defined in the 2021 Plan and all awards shall become fully vested, exercisable and all restrictions shall lapse upon a change in control that is not approved by our Board of Directors. In addition, the plan administrator may provide that the performance goals relating to any performance-based award will be deemed to have been met upon the occurrence of any change in control. The award agreement may provide for the vesting of an award upon a change of control, including vesting if a participant is terminated by us or our successor without “cause” or terminates for “good reason” as defined in the 2011 Plan.

To the extent we undergo a corporate transaction (as defined in the 2021 Plan), the 2021 Plan provides that outstanding awards may be assumed, substituted for, or continued in accordance with their terms. If the awards are not assumed, substituted for, or continued, to the extent applicable, such awards will terminate immediately prior to the close of the corporate transaction. The plan administrator may, in its discretion, either cancel the outstanding awards in exchange for a cash payment or vest all or part of the awards contingent on the corporate transaction. With respect to a corporate transaction which is not a change in control, awards under the 2011 Plan must be assumed, continued, or substituted for.

Our Board of Directors may amend, alter, suspend, discontinue, or terminate the 2021 Plan or the plan administrator’s authority to grant awards without further shareholder approval, except shareholder approval will be obtained for any amendment or alteration if such approval is deemed necessary or advisable by our Board of Directors or any amendment for which shareholder approval is required by law or the primary stock exchange on which our common stock trades. Unless earlier terminated by our Board of Directors, the 2021 Plan terminates in February 2031. Amendments to the 2021 Plan or any award require the consent of the affected participant if the amendment has a material adverse effect on the participant.

The 2021 Plan is not intended to be the exclusive means by which we may issue options or warrants to acquire our common stock, stock awards, or any other type of award. To the extent permitted by applicable law and NYSE requirements, we may issue any other options, warrants, or awards other than pursuant to the 2021 Plan with or without shareholder approval.

As of September 30, 2023, there were outstanding issued but unexercised options to acquire 54,750 shares of our common stock at an average exercise price of $20.96 per share under the 2021 Plan.

Employee Stock Purchase Plan

Our Board of Directors adopted and our shareholders approved the 2008 Employee Stock Purchase Plan (the “2008 ESPP”) in 2008 (shareholders have since approved amendments at our 2012 annual meeting and our 2019 annual meeting to increase the total number of shares available). Our 2008 ESPP is designed to qualify for favorable income tax treatment under Section 423 of the IRC and is intended to offer financial incentives for employees to purchase our common stock. The 2008 ESPP is administered by a committee of the Board of Directors. The 2008 ESPP will remain in effect until December 31, 2027.

We believe that the 2008 ESPP represents an important factor in attracting and retaining executive officers and other key employees and constitutes a significant part of our compensation program. The 2008 ESPP provides such individuals with an opportunity to acquire a proprietary interest in our Company and thereby align their interests

30


 

with the interests of our other shareholders and give them an additional incentive to use their best efforts for the long-term success of our Company.

The 2008 ESPP permits eligible employees to authorize payroll deductions that will be utilized to purchase shares of our common stock during a series of consecutive offering periods. Employees may purchase shares of common stock pursuant to the 2008 ESPP at a purchase price equal to the lower of: (i) 85% of the closing price of our common stock on the first day of the offering period or (ii) 85% of the closing price of our common stock on the last day of the applicable offering period. Each annual offering may, in the discretion of the Plan Committee, be divided into two six-month offerings commencing on October 1 and April 1, respectively, and terminating six months thereafter (March 31 or September 30, as the case may be).

Subject to adjustment upon changes in capitalization of our Company, the number of shares of common stock that may be issued under the 2008 ESPP initially was 552,837, consisting of 500,000 shares under the 2008 ESPP plus 52,837 shares that were reserved for issuance under the 1998 Employee Stock Purchase Plan (the “1998 ESPP”) that were not purchased as of the expiration of the 1998 ESPP. At our 2012 annual meeting, our shareholders approved an amendment to the 2008 ESPP to increase the total number of shares available for purchase under the 2008 ESPP from 552,837 to 1,052,837. At our 2019 annual meeting, our shareholders approved an amendment to the 2008 ESPP to increase the total number of shares available for purchase under the 2008 ESPP from 1,052,837 to 1,552,837. If any change is made in the stock subject to the 2008 ESPP or subject to any outstanding options under the 2008 ESPP (through reorganization, merger, recapitalization, reclassification, stock split, reverse stock split, or similar transaction), appropriate and proportionate adjustments may be made by the Plan Committee in the number and type of shares of common stock that are subject to purchase under outstanding options and to the option price applicable to such outstanding options.

An employee who has completed one year of service with our Company will be eligible to participate in the 2008 ESPP. An employee may not participate in the 2008 ESPP if: (i) immediately after the grant, such employee would own common stock, including outstanding options to purchase common stock under the 2008 ESPP, possessing 5% or more of the total combined voting power or value of our common stock or (ii) participation in the 2008 ESPP would permit such employee’s rights to purchase common stock under all of our employee stock purchase plans to exceed $25,000 in fair market value (determined at the time the option is granted) of the common stock for each calendar year in which such option is outstanding.

At the time an employee becomes a participant in the 2008 ESPP, the employee may elect payroll deductions of up to 10% of such employee’s compensation for each pay period during an offering. Participants may not reduce or increase future payroll deductions during an offering period. All payroll deductions made by each participant will be credited to an account set up for that participant under the 2008 ESPP. The Plan Committee may, prior to the beginning of an offering period, limit the percentage of compensation that an employee may contribute to his or her account.

Participation in the 2008 ESPP is voluntary and depends on each eligible employee’s election to participate and his or her determination as to the level of payroll deductions. Accordingly, future purchases under the 2008 ESPP are not determinable. Non-employee members of the Board of Directors are not eligible to participate in the 2008 ESPP.

A participant in the 2008 ESPP may withdraw all of the payroll deductions credited to such participant’s account under the 2008 ESPP by giving us written notice at any time prior to the last five days of an offering period. If a participant withdraws from an offering period, he or she may not participate in that offering but may participate in any succeeding offering under the 2008 ESPP or in any similar plan that we may adopt.

Upon termination of a participant’s employment for any reason, other than death or permanent disability (as defined in the IRC), the payroll deductions credited to such participant’s account will be returned to the participant. If the participant’s employment terminates due to death or permanent disability, the participant or the participant’s beneficiary will have the right to elect: (i) to withdraw all of the payroll deductions credited to the participant’s account under the 2008 ESPP or (ii) to exercise the participant’s option on the next offering termination date and purchase the number of shares of common stock that the accumulated payroll deductions in the participant’s account will purchase at the applicable option price. Any excess in the participant’s account will be returned to the participant or his or her beneficiary, without interest. In the event that we receive no notice of election from the participant or his or her beneficiary, the participant or his or her beneficiary will be deemed to have elected to exercise the participant’s option.

31