MarineMax, Inc.
Shareholder Annual Meeting in a DEF 14A on 12/30/2020   Download
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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

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MarineMax, Inc.

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MARINEMAX, INC.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
February 25, 2021

An Annual Meeting of Shareholders of MarineMax, Inc., a Florida corporation, will be held at 8:00 a.m., local time, on Thursday, February 25, 2021, at our principal executive offices located at 2600 McCormick Drive, Suite 200, Clearwater, Florida 33759 for the following purposes:

 

1.

To elect three directors, each to serve for a three-year term expiring in 2024.

 

2.

To approve (on an advisory basis) our executive compensation (“say-on-pay”).

 

3.

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, 2021.

 

4.

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 21, 2020, 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,

Michael H. McLamb

Secretary

Clearwater, Florida

December 30, 2020

 


 

TABLE OF CONTENTS

 

 

Page

VOTING AND OTHER MATTERS

1

PROPOSAL ONE – ELECTION OF DIRECTORS

5

CORPORATE GOVERNANCE

7

COMPENSATION DISCUSSION AND ANALYSIS

13

EXECUTIVE COMPENSATION

20

SUMMARY COMPENSATION TABLE

20

GRANTS OF PLAN-BASED AWARDS

21

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

22

OPTION EXERCISES AND STOCK VESTING

23

EQUITY COMPENSATION PLAN INFORMATION

31

CERTAIN TRANSACTIONS AND RELATIONSHIPS

31

COMPENSATION COMMITTEE REPORT

32

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

33

DIRECTOR COMPENSATION

33

REPORT OF THE AUDIT COMMITTEE

35

SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS, DIRECTORS, AND OFFICERS

36

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

38

PROPOSAL THREE – RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR

40

DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS

41

OTHER MATTERS

41

 

 

 

 

 


 

 

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. together with its subsidiaries), by our Board of Directors for use at our Annual Meeting of Shareholders to be held at 8:00 a.m. on Thursday, February 25, 2021, 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, or the 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 2020 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 2020 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 30, 2020 to all shareholders entitled to vote at the meeting.

Record Date and Outstanding Shares

Shareholders of record at the close of business on December 21, 2020 (the “Record Date”) are entitled to notice of and to vote at the meeting.  On the Record Date, there were issued and outstanding 22,122,170 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 21, 2020, 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 21, 2020, 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,

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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.

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 three director nominees for three-year terms expiring in 2024, 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 vote is non-binding, our Board will consider the input of shareholders based on a majority of votes cast for the say-on-pay proposal.

For the votes to ratify the appointment of KPMG as the independent auditor of our Company for the fiscal year ending September 30, 2021, 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) “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, 2021; and (4) 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, 2021.  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.

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Please note that brokers, banks, and other nominees may not use discretionary authority to vote shares on the election of directors or the say-on-pay proposal.  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, or the proposal to ratify the appointment of KPMG as the independent auditor of our Company for the fiscal year ending September 30, 2021, 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 2020 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, or 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, 2020 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

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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.

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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 ten 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 William H. McGill Jr., Charles R. Oglesby, and Rebecca White for election as Class II directors for three-year terms expiring in 2024 or until their respective successors have been elected and qualified.

Unless otherwise instructed, the proxy holders will vote the proxies received by them for each of the nominees named above. Mr. McGill, 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.

 

77

 

Executive Chairman of the Board, and Director

William Brett McGill

 

52

 

Chief Executive Officer, President and Director

Michael H. McLamb

 

55

 

Executive Vice President, Chief Financial

   Officer, Secretary, and Director

Clint Moore

 

73

 

Director (1)(2)(4)

George E. Borst

 

72

 

Director (1)(2)

Hilliard M. Eure III

 

84

 

Director (2)(3)

Evelyn V. Follit

 

74

 

Director (2)(3)

Charles R. Oglesby

 

73

 

Director (1)(3)

Joseph A. Watters

 

79

 

Director (1)(3)

Rebecca White

 

63

 

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. McGill served as the Chief Executive Officer of our Company from January 1998 until October 2018. Mr. 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. 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. McGill joined the Board of Directors of Joi Scientific, Inc., an energy company with which we have a licensing agreement.  Mr. 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. 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 21, 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

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software development firm, Integrated Dealer Systems. We believe Mr. W. Brett McGill’s service for more than 20 years with 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.  He currently serves on the Board of Trustees for PIMCO Funds and as Executive Advisor to the global management consulting firm of McKinsey & Company. 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.  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.

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 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

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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.

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 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 a 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.

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

CORPORATE GOVERNANCE

Director Independence

Our Board of Directors has determined, after considering all the relevant facts and circumstances, that Messrs. Eure, Moore, Oglesby, Watters, Borst, Ms. Follit, and Ms. White, are independent directors, as “independence” is defined by the listing standards of the New York Stock Exchange, 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. Mr. McGill, 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 2024.

Messrs. Eure, Watters, and Borst are Class III directors whose terms will expire in 2022. Ms. Follit, Mr. W. Brett McGill, Mr. McLamb, and Mr. Moore are Class I directors whose terms will expire in 2023.

Committee Charters, Corporate Governance, and Code of Ethics

Our Board of Directors has adopted charters for the Audit, Compensation, and Nominating/Corporate Governance Committees 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, Compensation, and Nominating/Corporate Governance Committees;

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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 New York Stock Exchange 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 oversight of our Board of Directors 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 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 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, Moore, Borst, and Ms. Follit, each an independent director of our Company under the New York Stock Exchange 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, Moore, Borst, 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 2011 Stock-Based Compensation Plan.  The Compensation Committee currently consists of Messrs. Moore, Oglesby, Borst, Watters, and Ms. White with Mr. Moore serving as Chairman.

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. Eure, Oglesby, Watters, Ms. Follit, and Ms. White with Mr. Watters serving as Chairman. The Nominating/Corporate Governance Committee will consider director nominees suggested by Committee members and other Board members, as well as management.  Also, the 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

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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:

 

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 New York Stock Exchange.

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.

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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.

 

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 risks.  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 Diversity

We seek diversity in experience, viewpoint, education, skill, and other individual qualities and attributes to be represented on our Board of Directors.  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

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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 sets forth above indicates the specific experience, qualifications, and skills necessary to conclude that each individual should continue to serve as a director of our Company.

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.

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 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 of Directors. 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

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housing projects and supporting the ocean cleanup company 4ocean and its mission to end the world’s oceanic plastic pollution crisis. These commitments from our Board of Directors and Officers are included in our Corporate Governance Guidelines, a Code of Business Conduct and Ethics, and a Code of Ethics for the CEO and Senior Financial Officers. Our Human Rights Policy and Environmental policy can be found on the Investor Relations 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 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 satisfy at least the minimum guidelines beginning on the later of five years following: (i) the date the guidelines were adopted (September 27, 2017) or (ii) 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, 2020, our Compensation Committee consisted of Messrs. Moore, Oglesby, Borst, Watters, 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 seven meetings during the fiscal year ended September 30, 2020. 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, 2020, the Audit Committee held nine meetings; the Compensation Committee held five 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.

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COMPENSATION DISCUSSION AND ANALYSIS

 

The Compensation Discussion and Analysis (“CD&A”) section describes the compensation program for the 2020 Named Executive Officers (“NEOs”) in the context of our executive compensation philosophy. The NEOs for 2020 included:

Name

Title

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

Anthony E. Cassella, Jr.

Vice President and Chief Accounting Officer

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.

 

 

For 2020, our cash incentive compensation was based on pre-established quarterly and/or full fiscal year goals related to pretax income, aged inventory, and net promoter score (customer rating). Based on our performance in 2020, the achieved performance (as % of target) for the cash incentive was:

 

Metric (weighting)

 

Q1

 

 

Q2

 

 

Q3

 

 

Q4

 

 

Full Fiscal Year

 

Pretax Income (50%)

 

 

200

%

 

 

77

%

 

 

200

%

 

Not Applicable

 

 

 

200

%

Aged Inventory (30%)

 

 

88

%

 

 

165

%

 

 

0

%

 

 

0

%

 

Not Applicable

 

Net Promoter Score (20%)

 

 

200

%

 

 

200

%

 

 

200

%

 

 

200

%

 

Not Applicable

 

 


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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 makes every effort 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, or time-based or performance-based RSUs. 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.  Grants of stock-based awards also are intended to align compensation with the price performance of our common stock.  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 2020 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 2020 Annual Meeting of Shareholders.  Holders of approximately 18.0 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 performance of, and our goals and objectives for, 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

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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 periodically 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 Committee received advice from Compensation Advisory Partners (“CAP”).

2020 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 2020 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)

 

Brunswick Corporation

Sykes Enterprises, Incorporated

Big 5 Sporting Goods Corporation

LCI Industries

Kforce Inc.

Cavco Industries, Inc.

M/I Homes, Inc.

Callaway Golf Company

Sportsman’s Warehouse Holdings, Inc.

Vail Resorts, Inc.

H&E Equipment Services, Inc.

Ethan Allen Interiors Inc.

William Lyon Homes

Hibbett Sports, Inc.

Malibu Boats, Inc.

Winnebago Industries, Inc.

Sotheby’s

 

 


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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

2020 plan based on pretax income, aged inventory, 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 2020, equity awards granted in the form of 60% performance-based restricted stock units (“PBRSUs”) and 40% time-based restricted stock units (“TBRSUs”)

For 2020, we granted two types of PBRSUs:

o2020 PBRSU awards based on pretax income percent and inventory aging

oLong-Term PBRSU awards based on specific three to five year financial and operational performance targets

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, life insurance coverage, and Employee Stock Purchase Plan

Fiscal 2020 Compensation

Summary

We worked with our executive compensation consultants in connection with our fiscal 2020 incentive compensation program to maintain our long-standing pay-for-performance philosophy. Our base salaries for our named executive officers for fiscal 2020 generally were at the 50th percentile level or lower for our peer companies. The base salaries for our named executive officers increased in aggregate by approximately 7% from fiscal 2019 levels. Overall cash compensation for our named executive officers increased 14% from fiscal 2019 levels. Stock-based compensation for our named executive officers increased 43% from fiscal 2019. The total compensation increases were largely the result of certain performance objectives being earned at a higher threshold for fiscal 2020 as compared to fiscal 2019 and increased grants of PBRSUs for certain executives.


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Base Salaries

Our named executive officers received base compensation for fiscal 2020 in accordance with their respective compensation plans as recommended by the Compensation Committee and approved by the Board of Directors.

 

Name

2019 Salary

 

 

2020 Salary

 

 

% Change

 

 

William H. McGill Jr.

$

500,000

 

 

$

500,000

 

 

No Change

 

 

W. Brett McGill

$

520,000

 

 

$

650,000

 

 

25%

 

 

Michael H. McLamb

$

370,000

 

 

$

370,000

 

 

No Change

 

 

Charles A. Cashman

$

320,000

 

 

$

320,000

 

 

No Change

 

 

Anthony E. Cassella, Jr.

$

220,000

 

 

$

220,000

 

 

No Change

 

 

Cash Incentive Compensation

For fiscal 2020, we established individual cash incentive compensation awards for Messrs. William H. McGill, W. Brett McGill, McLamb, Cashman, and Cassella. The cash compensation awards had targeted incentive cash compensation of 100%, 100%, 70%, 70%, and 45% of base salaries, respectively.  The performance objectives for NEOs for aged inventory (30% weighting), and net promoter score (20% weighting), are measured quarterly due to the seasonality aspect of our business. The performance objective for NEOs 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. 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 target aged inventory is 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

 

 

85

%

 

 

100

%

 

 

115

%

Net Promoter Score

 

 

85

%

 

 

100

%

 

 

140

%

The quarterly and annual pretax income bonus target objectives for the fiscal 2020 quarters ended December 31, March 31, and June 30, and the fiscal year ended September 30, were approximately $6.5 million, $7.2 million, $25.8 million, and $50.8 million, respectively. The quarterly net promoter score bonus target objective was 10% for each quarter in fiscal 2020. We have not disclosed more information than the quantitative quarterly performance target objectives of the aged inventory bonus because we believe that such disclosure would cause us competitive harm in negotiating key business relationships. The target objectives were set based upon the prior year rolling three month average aged inventory per quarter which was historically low. 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%)

 

 

200

%

 

 

77

%

 

 

200

%

 

Not Applicable

 

 

 

200

%

Aged Inventory (30%)

 

 

88

%

 

 

165

%

 

 

0

%

 

 

0

%

 

Not Applicable

 

Net Promoter Score (20%)

 

 

200

%

 

 

200

%

 

 

200

%

 

 

200

%

 

Not Applicable

 

Therefore, our NEOs received the following cash bonuses: Mr. William H. McGill - $794,877; Mr. W. Brett McGill - $1,033,340; Mr. McLamb - $411,746; Mr. Cashman - $356,105; and Mr. Cassella - $157,386.

Stock-Based Awards

For fiscal 2020, 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 installments over a three year period beginning on the date of grant and vesting on September 30 of each relevant year. The 2020 PBRSUs granted on December 3, 2019 included measurements for pretax earnings improvement and inventory aging, and were earned at the end of fiscal 2020.  The awards fully vest on September 30, 2022. In addition, we granted Long-Term PBRSUs on December 3, 2019, which are based on specific three to five year financial and

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operational performance targets related to certain NEOs’ role and responsibilities, and as such the actual amount earned for the Long-Term PBRSUs has not yet been determined.

For fiscal 2020, our Board of Directors granted TBRSUs and PBRSUs to the following NEOs

Name

 

Time-Based RSUs

 

 

2020 PBRSUs at Target Performance

 

 

Long-Term PBRSUs at Target Performance

 

William H. McGill Jr.

 

 

9,656

 

 

 

14,484

 

 

Not Applicable

 

W. Brett McGill

 

 

31,382

 

 

 

47,073

 

 

Not Applicable

 

Michael H. McLamb

 

 

10,718

 

 

 

16,077

 

 

 

15,000

 

Charles A. Cashman

 

 

9,269

 

 

 

13,905

 

 

 

23,750

 

Anthony E. Cassella, Jr.

 

 

3,186

 

 

 

4,780

 

 

 

7,500

 

The 2020 PBRSUs and Long-Term 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 2020 PBRSUs based upon meeting certain inventory aging and leverage targets in fiscal 2020 was approximately 121% of the target amount of shares granted. The Long-Term PBRSUs are based on specific three to five year financial and operational performance targets related to the NEOs role and responsibilities, and as such the actual amount earned for the Long-Term PBRSUs has not been determined.

Deductibility of Executive Compensation

We take into account the tax effect of our compensation.  Section 162(m) of the Internal Revenue Code as modified by the Tax Reform Act of the passage of the Tax Cuts and Jobs Act legislation in December 2017, 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 Internal Revenue Code.

Accounting Considerations

We account for stock-based awards in accordance with the provisions of Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 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 New York Stock Exchange 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, and Michael H. McLamb 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 or Change in Control.”

Clawback

Our corporate governance guidelines include a “clawback” policy.  This policy provides that if any of our financial statements are required to be materially restated resulting from the fraudulent actions of any officer, our Board may direct that we recover all or a portion of any equity grant, any compensation award or any past or future compensation, other than base salary, from any such officer with respect to any year for which our financial results are adversely affected by such restatement.

Section 162(m)

18

 


 

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, 2020.

19

 


 

EXECUTIVE COMPENSATION

Summary of Cash and Other Compensation

The following table sets forth, for the fiscal years ended September 30, 2018, September 30, 2019, and September 30, 2020, 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

 

 

Stock

Awards (2)

 

 

Option

Awards

 

 

Non-Equity

Incentive Plan

Compensation (3)

 

 

All Other

Compensation (4)

 

 

Total (5)

 

 

William H. McGill Jr.

 

2020

 

$

500,000

 

 

$

0

 

 

$

400,000

 

 

$

0

 

 

$

794,877

 

 

$

7,125

 

 

$

1,702,002

 

 

Executive Chairman of the

 

2019

 

$

500,000

 

 

$

0

 

 

$

400,007

 

 

$

0

 

 

$

714,487

 

 

$

6,748

 

 

$

1,621,242

 

 

Board

 

2018

 

$

750,000

 

 

$

0

 

 

$

1,500,012

 

 

$

0

 

 

$

923,642

 

 

$

6,895

 

 

$

3,180,549

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

W. Brett McGill

 

2020

 

$

650,000

 

 

$

0

 

 

$

1,299,999

 

 

$

0

 

 

$

1,033,340

 

 

$

7,125

 

 

$

2,990,464

 

 

Chief Executive Officer and

 

2019

 

$

520,000

 

 

$

0

 

 

$

1,039,998

 

 

$

0

 

 

$

743,066

 

 

$

7,000

 

 

$

2,310,064

 

 

President

 

2018

 

$

396,000

 

 

$

0

 

 

$

594,007

 

 

$

0

 

 

$

390,146

 

 

$

6,938

 

 

$

1,387,091

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Michael H. McLamb

 

2020

 

$

370,000

 

 

$

0

 

 

$

692,543

 

 

$

0

 

 

$

411,746

 

 

$

7,000

 

 

$

1,481,289

 

 

Executive Vice President,

 

2019

 

$

370,000

 

 

$

0

 

 

$

444,001

 

 

$

0

 

 

$

370,104

 

 

$

7,000

 

 

$

1,191,105

 

 

Chief Financial Officer, and

 

2018

 

$

350,000

 

 

$

0

 

 

$

419,995

 

 

$

0

 

 

$

301,723

 

 

$

6,938

 

 

$

1,078,656

 

 

Secretary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Charles A. Cashman

 

2020

 

$

320,000

 

 

$

0

 

 

$

777,531

 

 

$

0

 

 

$

356,105

 

 

$

9,185

 

 

$

1,462,821

 

 

Executive Vice President

 

2019

 

$

320,000

 

 

$

0

 

 

$

383,994

 

 

$

0

 

 

$

320,089

 

 

$

7,000

 

 

$

1,031,083

 

 

and Chief Revenue Officer

 

2018

 

$

320,000

 

 

$

0

 

 

$

383,989

 

 

$

0

 

 

$

275,861

 

 

$

6,938

 

 

$

986,788

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Anthony E. Cassella, Jr.

 

2020

 

$

220,000

 

 

$

0

 

 

$

256,272

 

 

$

0

 

 

$

157,386

 

 

$

8,686

 

 

$

642,344

 

 

Vice President and Chief

 

2019

 

$

220,000

 

 

$

0

 

 

$

132,001

 

 

$

0

 

 

$

141,468

 

 

$

7,156

 

 

$

500,625

 

 

Accounting Officer

 

2018

 

$

220,000

 

 

$

0

 

 

$

131,947

 

 

$

0

 

 

$

121,921

 

 

$

5,938

 

 

$

479,806

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

The base salaries set forth in this column reflect any base salary adjustments for fiscal 2018, 2019, and 2020 for each of the named executive officers.

(2)

The amounts shown in this column represent the grant date fair value of RSU awards determined in accordance with FASB ASC Topic 718 “Compensation - Stock Compensation,” (“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 12 to the Consolidated Financial Statements in our Form 10-K for the year ended September 30, 2020. 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 2020, 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.

 

$

420,000

 

W. Brett McGill

 

$

1,365,000

 

Michael H. McLamb

 

$

714,750

 

Charles A. Cashman

 

$

1,231,700

 

Anthony E. Cassella Jr.

 

$

262,875

 

 

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

(3)

The amounts shown in this column constitute payments made under our fiscal 2018, 2019, and 2020 executive incentive bonus program. See “Compensation Discussion and Analysis” and the Grants of Plan-Based Awards table for more information regarding our fiscal 2020 incentive compensation program.

20

 


 

(4)

Represents amounts paid to each named executive officer for the employer matching portion of our 401(k) plan.

(5)

The dollar value in this column for each named executive officer represents the sum of all compensation reflected in the previous columns.

 

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, 2020.

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.

 

12/3/2019

 

$

250,000

 

 

$

500,000

 

 

$

1,000,000

 

 

PBRSU

 

 

 

 

 

 

14,484

 

 

 

25,347

 

 

 

 

 

 

$

240,000

 

McGill Jr.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TBRSU

 

 

 

 

 

 

 

 

 

 

 

 

 

9,656

 

 

$

160,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

W. Brett

 

12/3/2019

 

$

325,000

 

 

$

650,000

 

 

$

1,300,000

 

 

PBRSU

 

 

 

 

 

 

47,073

 

 

 

82,378

 

 

 

 

 

 

$

780,000

 

McGill

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TBRSU

 

 

 

 

 

 

 

 

 

 

 

 

 

31,382

 

 

$

520,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Michael H.

 

12/3/2019

 

$

129,500

 

 

$

259,000

 

 

$

518,000

 

 

PBRSU

 

 

 

 

 

 

31,077

 

 

 

43,135

 

 

 

 

 

 

$

514,946

 

McLamb

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TBRSU

 

 

 

 

 

 

 

 

 

 

 

 

 

10,718

 

 

$

177,597

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Charles A.

 

12/3/2019

 

$

112,000

 

 

$

224,000

 

 

$

448,000

 

 

PBRSU

 

 

 

 

 

 

37,655

 

 

 

74,334

 

 

 

 

 

 

$

623,943

 

Cashman

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TBRSU

 

 

 

 

 

 

 

 

 

 

 

 

 

9,269

 

 

$

153,587

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Anthony E.

 

12/3/2019

 

$

49,500

 

 

$

99,000

 

 

$

198,000

 

 

PBRSU

 

 

 

 

 

 

12,280

 

 

 

15,865

 

 

 

 

 

 

$

203,480

 

Cassella Jr.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TBRSU

 

 

 

 

 

 

 

 

 

 

 

 

 

3,186

 

 

$

52,792

 

 

 

(1)

Represents potential threshold, target, and maximum performance-based compensation under our fiscal 2020 incentive compensation program. As noted in our 2011 Stock-Based Compensation 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 2020 executive incentive compensation program is discussed under “Compensation Discussion and Analysis — Fiscal 2020 Compensation — 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 2020.  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, 2020. We calculated the estimated value of each award based on the closing stock price of our common stock on the date of grant.

21

 


 

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 at September 30, 2020.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

 

Option Awards

 

Stock Awards

 

 

 

 

Number of

Securities Underlying

Unexercised Options (1)

 

Option

Exercise

 

Option

Expiration

 

Number of

Shares or

Units of Stock

That Have

 

Market Value

of Shares or

Units of Stock

That Have

 

Name

Grant Date

Exercisable

 

Unexercisable

 

Price

 

Date

 

Not Vested (2)

 

Not Vested (3)

 

 

 

12/3/2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,438

 

 

$

165,263

 

William H. McGill Jr.

 

12/3/2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

17,588

 

 

$

451,484

 

 

 

11/29/2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,559

 

 

$

65,690

 

 

 

11/29/2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14,694

 

 

$

377,195

 

 

 

11/7/2013

 

 

39,690

 

 

 

 

 

$

15.80

 

 

11/7/2023

 

 

 

 

 

 

 

 

 

12/3/2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

20,923

 

 

$

537,093

 

W. Brett McGill

 

12/3/2019

 

 

 

 

 

 

 

 

 

 

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