MarineMax
Annual Report 2018

Plain-text annual report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Form 10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2018 Commission File Number 1-14173 MarineMax, Inc. (Exact Name of Registrant as Specified in Its Charter) Florida (State of Incorporation) 59-3496957 (I.R.S. Employer Identification No.) 2600 McCormick Drive Suite 200 Clearwater, Florida 33759 (727) 531-1700 (Address, including zip code, and telephone number, including area code, of principal executive offices) Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Common Stock, par value $.001 per share Name of Each Exchange on Which Registered New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities act. Yes ☐ No ☑ indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the act. Yes ☐ No ☑ indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities exchange act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐ indicate by check mark whether the registrant has submitted electronically every interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐ indicate by check mark if disclosure of delinquent filers pursuant to item 405 of Regulation S-K (§ 229.450 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part iii of this Form 10-K or any amendment to this Form 10-K. ☐ indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the exchange act. Large accelerated filer Non-accelerated filer ☐ ☐ accelerated filer Smaller reporting company emerging growth company ☑ ☐ ☐ if an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the exchange act. ☐ indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the act). Yes ☐ No ☑ The aggregate market value of common stock held by non-affiliates of the registrant (21,154,772 shares) based on the closing price of the registrant’s common stock as reported on the New York Stock exchange on March 30, 2018, which was the last business day of the registrant’s most recently completed second fiscal quarter, was $411,460,315. For purposes of this computation, all officers and directors of the registrant are deemed to be affiliates. Such determination should not be deemed to be an admission that such officers and directors are, in fact, affiliates of the registrant. as of November 26, 2018, there were outstanding 27,282,316 shares of the registrant’s common stock, par value $.001 per share. Documents Incorporated by Reference Portions of the registrant’s definitive proxy statement for the 2019 annual Meeting of Shareholders are incorporated by reference into Part iii of this report. MARINEMAX, INC. ANNUAL REPORT ON FORM 10-K Fiscal Year Ended September 30, 2018 TABLE OF CONTENTS PART I PART II business item 1 item 1a Risk Factors item 1b Unresolved Staff Comments item 2 item 3 item 4 Properties Legal Proceedings Mine Safety Disclosures Market for the Registrant’s Common equity, Related Stockholder Matters and issuer Purchases of equity Securities Management’s Discussion and analysis of Financial Condition and Results of Operations Selected Financial Data item 5 item 6 item 7 item 7a Quantitative and Qualitative Disclosures about Market Risk item 8 Financial Statements and Supplementary Data item 9 item 9a Controls and Procedures item 9b Other information Changes in and Disagreements with accountants on accounting and Financial Disclosure PART III item 10 item 11 item 12 item 13 item 14 Directors, executive Officers and Corporate Governance executive Compensation Security Ownership of Certain beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director independence Principal accountant Fees and Services item 15 exhibits, Financial Statement Schedules PART IV 1 22 36 36 39 39 39 42 43 52 52 52 52 55 56 56 56 56 57 57 Statement Regarding Forward-Looking Information The statements contained in this report on Form 10-K that are not purely historical are forward-looking statements within the meaning of applicable securities laws. Forward-looking statements include statements regarding our “expectations,” “anticipations,” “intentions,” “beliefs,” or “strategies” regarding the future. Forward-looking statements also include statements regarding revenue, margins, expenses, and earnings for fiscal 2019 and thereafter; our belief that our practices enhance our ability to attract more customers, foster an overall enjoyable boating experience, and offer boat manufacturers stable and professional retail distribution and a broad geographic presence; our assessment of our competitive advantages, including our hassle-free sales approach, prime retail locations, premium product offerings, extensive facilities, strong management and team members, and emphasis on customer service and satisfaction before and after a boat sale; our belief that our core values of customer service and satisfaction and our strategies for growth and enhancing our business, including without limitation, our acquisition strategies and pursuit of contract manufacturing and vertical integration, will enable us to achieve success and long-term growth as economic conditions continue to recover; and our belief that our retailing strategies are aligned with the desires of consumers. all forward-looking statements included in this report are based on information available to us as of the filing date of this report, and we assume no obligation to update any such forward-looking statements. Our actual results could differ materially from the forward-looking statements. among the factors that could cause actual results to differ materially are the factors discussed under item 1a, “Risk Factors.” Item 1. Business Our Company PART I Introduction We are the largest recreational boat and yacht retailer in the United States. Through 63 retail locations in alabama, Connecticut, Florida, Georgia, Maryland, Massachusetts, Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Rhode island, South Carolina and Texas, we sell new and used recreational boats, including pleasure and fishing boats, with a focus on premium brands in each segment. We also sell related marine products, including engines, trailers, parts, and accessories. in addition, we provide repair, maintenance, and slip and storage services; we arrange related boat financing, insurance, and extended service contracts; we offer boat and yacht brokerage sales; yacht charter services; and we operate a yacht charter business in the british Virgin islands. We are the nation’s largest retailer of Sea Ray and boston Whaler recreational boats and yachts which are manufactured by brunswick Corporation (“brunswick”). Sales of new brunswick boats accounted for approximately 40% of our revenue in fiscal 2018. Sales of new Sea Ray and boston Whaler boats, both divisions of brunswick, accounted for approximately 21% and 17%, respectively, of our revenue in fiscal 2018. brunswick is a world leading manufacturer of marine products and marine engines. We believe our sales represented approximately 12% of all brunswick marine sales, including approximately 42% of its Sea Ray boat sales, during our fiscal 2018. We have agreements with brunswick covering Sea Ray products and boston Whaler products and are the exclusive dealer of Sea Ray and boston Whaler boats in almost all of our geographic markets. We also are the exclusive dealer for Harris aluminum boats, a division of brunswick, in most of our geographic markets. We also are the exclusive dealer for italy-based azimut-benetti Group, or azimut, for azimut mega-yachts, yachts, and other recreational boats for the United States. Sales of new azimut boats and yachts accounted for approximately 11% of our revenue in fiscal 2018. additionally, we are the exclusive dealer for certain other premium brands that serve certain industry segments in our markets as shown by the table on page four. We commenced operations as a result of the March 1, 1998 acquisition of five previously independent recreational boat dealers. Since that time, we have acquired 28 additional previously independent recreational boat dealers, two boat brokerage operations, and two full-service yacht repair operations. We attempt to capitalize on the experience and success of the acquired companies in order to establish a high national standard of customer service and responsiveness in the highly fragmented retail boating industry. as a result of our emphasis on premium brand boats, our average selling price for a new boat in fiscal 2018 was approximately $203,000, a slight increase from approximately $195,000 in fiscal 2017, compared with the industry average selling price for calendar 2017 of approximately $48,000 based on industry data published by the National Marine Manufacturers association. Our stores that operated at least 12 months averaged approximately $19.9 million in annual sales in fiscal 2018. We consider a store to be one or more retail locations that are adjacent or operate as one entity. Our same-store sales increased 22% in fiscal 2016, increased 5% in fiscal 2017 and increased 10% in fiscal 2018. We attempt to adopt the best practices developed by us and our acquired companies as appropriate to enhance our ability to attract and retain more customers, foster an overall enjoyable boating experience, and offer boat manufacturers stable and professional retail distribution and a broad geographic presence. We believe that our full range of services, hassle free approach, prime retail locations, premium product offerings, extensive facilities, strong management and team members, and emphasis on customer service and satisfaction before and after a boat sale are competitive advantages that enable us to be more responsive to the needs of existing and prospective customers. We strive to provide superior customer service and support before, during, and after the sale. The U.S. recreational boating industry generated approximately $39.0 billion in retail sales in calendar 2017, which is down slightly from the peak of $39.5 billion in calendar 2006. Total powerboats sold in calendar 2017 were approximately 199,100 units as compared to 298,100 units sold in calendar 2006. The retail sales include sales of new and used boats; marine products, such as engines, trailers, equipment, and accessories; and related expenditures, such as fuel, insurance, docking, storage, and repairs. Retail sales of new and used boats, engines, trailers, and accessories accounted for approximately $29.8 billion of these sales in 2017 based on industry data from the National Marine Manufacturers association. The highly-fragmented retail boating industry generally consists of small dealers that operate in a single market and provide varying degrees of merchandising, professional management, and customer service. We believe that many small dealers find it increasingly difficult to make the managerial and capital commitments necessary to achieve higher customer service levels and upgrade systems and facilities as required by boat manufacturers and often demanded by customers. We also believe that many dealers lack an exit strategy for their owners. We believe these factors contribute to our opportunity to gain a competitive advantage in current and future markets, through market expansions and acquisitions. 1 Strategy Our goal is to enhance our position as the nation’s leading recreational boat and yacht retailer. Key elements of our operating and growth strategy include the following: • • • • • • • • • • • emphasizing customer satisfaction and loyalty by creating an overall enjoyable boating experience, beginning with a hassle-free purchase process, superior products, customer training, superior customer service, Company-led events called Getaways!®, and premier facilities; achieving efficiencies and synergies among our operations to enhance internal growth and profitability; promoting national brand name recognition and the MarineMax connection; offering additional marine products and services, including those with higher profit margins; expanding our internet marketing; pursuing strategic acquisitions to capitalize upon the consolidation opportunities in the highly fragmented recreational boat dealer industry by acquiring additional dealers and related operations and improving their performance and profitability through the implementation of our operating strategies, as well as pursuing contract manufacturing or vertical integration strategies as opportunities arise; opening additional retail facilities in our existing and new territories; emphasizing employee recruitment and retention through training, motivation, and development; emphasizing the best practices developed by us and our acquired dealers as appropriate throughout our dealerships; operating with a decentralized approach to the operational management of our dealerships; and utilizing common platform information technology throughout operations, which facilitates the interchange of information sharing and enhances cross-selling opportunities throughout our company. Development of the Company; Expansion of Business MarineMax was founded in January 1998. MarineMax itself, however, conducted no operations until the acquisition of five independent recreational boat dealers on March 1, 1998, and we completed our initial public offering in June 1998. Since the initial acquisitions in March 1998, we have acquired 28 additional recreational boat dealers, two boat brokerage operations, and two full-service yacht repair operations. acquired dealers operate under the MarineMax name. We continually attempt to enhance our business by providing a full range of services, offering extensive and high-quality product lines, maintaining prime retail locations, pursuing the MarineMax One Price hassle-free sales approach, and emphasizing a high level of customer service and satisfaction. We also from time to time evaluate opportunities to expand our operations by potentially acquiring recreational boat dealers to expand our geographic scope, expanding our product lines, opening new retail locations within or outside our existing territories, and offering new products and services for our customers and by potentially acquiring companies to pursue contract manufacturing or vertical integration strategies. 2 acquisitions of additional recreational boat dealers represent an important strategy in our goal to enhance our position as t he nation’s largest retailer of recreational boats. The following table sets forth information regarding the businesses that we have acquired and their geographic regions. Acquired Companies bassett boat Company of Florida Louis DelHomme Marine Gulfwind USa, inc. Gulfwind South, inc. Harrison’s boat Center, inc. and Harrison’s Marine Centers of arizona, inc. (1) Stovall Marine, inc. Cochran’s Marine, inc. and C & N Marine Corporation Sea Ray of North Carolina, inc. brevard boat Company Sea Ray of Las Vegas (2) Treasure Cove Marina, inc. Woods & Oviatt, inc. boating World Merit Marine, inc. Suburban boatworks, inc. Hansen Marine, inc. Duce Marine, inc. (2) Clark’s Landing, inc. (selected New Jersey locations and operations) associated Marine Technologies, inc. Gulfwind Marine Partners, inc. Seaside Marine, inc. (5) Sundance Marine, inc. (3) Killinger Marine Center, inc. and Killinger Marine Center of alabama, inc. emarine international, inc. and Steven Myers, inc. imperial Marine Port Jacksonville Marine Port arrowhead Marina, inc. Great american Marina (4) Surfside — 3 Marina, inc. Treasure island Marina, LLC bassett Marine, LLC Parker boat Company Ocean alexander Yachts bahia Mar Marina Russo Marine Hall Marine Group island Marine Center Tera Miranda bay Pointe Marina Acquisition Date March 1998 March 1998 March 1998 March 1998 Southeast Florida Dallas and Houston, Texas West Central Florida Southwest Florida Geographic Region March 1998 april 1998 Northern California and arizona Georgia July 1998 July 1998 September 1998 September 1998 September 1998 October 1998 February 1999 March 1999 april 1999 august 1999 December 1999 Minnesota North and South Carolina east Central Florida Nevada Northern Ohio Southeast Florida Dallas, Texas Southern New Jersey Central New Jersey Northeast Florida Utah april 2000 January 2001 april 2002 July 2002 June 2003 Northern New Jersey Southeast Florida West Florida Southern California Colorado September 2003 Northwest Florida and alabama October 2003 June 2004 June 2004 January 2006 February 2006 March 2006 February 2011 September 2012 March 2013 april 2014 January 2016 april 2016 January 2017 January 2018 april 2018 September 2018 Southeast Florida baltimore, Maryland Northeast Florida Missouri, Oklahoma West Florida Connecticut, Maryland, New York and Rhode island Florida Panhandle Connecticut, Rhode island, Western Massachusetts Central Florida eastern United States Florida Panhandle eastern Massachusetts and Rhode island North Carolina, South Carolina and Georgia New Jersey Oklahoma Massachusetts (1) We subsequently closed the Northern California operations of Harrison boat Center, inc. and Harrison’s Marine Centers of arizona, inc. (2) We subsequently closed the operations of Sea Ray of Las Vegas and Duce Marine, inc. (3) We subsequently sold the operations of Sundance Marine, inc. (4) initially a joint venture; full ownership acquired in February 2016. 3 (5) We subsequently sold the operations of Seaside Marine, inc. apart from acquisitions, we have opened 34 new retail locations in existing territories, excluding those opened on a temporary basis for a specific purpose. We also monitor the performance of our retail locations and close retail locations that do not meet our expectations. based on these factors and previous depressed economic conditions, we have closed 65 retail locations since March 1998, excluding those opened on a temporary basis for a specific purpose, including 26 in fiscal 2009 and a total of four during the last three fiscal years. as a part of our acquisition strategy, we frequently engage in discussions with various recreational boat dealers regarding their potential acquisition by us. in connection with these discussions, we and each potential acquisition candidate exchange confidential operational and financial information; conduct due diligence inquiries; and consider the structure, terms, and conditions of the potential acquisition. in certain cases, the prospective acquisition candidate agrees not to discuss a potential acquisition with any other party for a specific period of time, grants us an option to purchase the prospective dealer for a designated price during a specific time period, and agrees to take other actions designed to enhance the possibility of the acquisition, such as preparing audited financial information and converting its accounting system to the system specified by us. Potential acquisition discussions frequently take place over a long period of time and involve difficult business integration and other issues, including in some cases, management succession and related matters. as a result of these and other factors, a number of potential acquisitions that from time to time appear likely to occur do not result in binding legal agreements and are not consummated. in addition to acquiring recreational boat dealers and opening new retail locations, we also add new product lines to expand our operations. The following table sets forth certain of our current product lines that we have added to our existing locations during the years indicated. Product Line boston Whaler Hatteras Yachts Grady-White boston Whaler azimut & atlantis Grady-White azimut boston Whaler Harris Nautique by Correct Craft Harris Crest azimut Scout Sailfish Scarab Jet boats atlantis Ocean alexander Yachts Scout aquila Galeon Grady-White Sea Pro Yamaha Jet boats bennington Mastercraft NauticStar Tigé Geographic Regions West Central Florida, Stuart, Florida, Dallas, Texas Florida Houston, Texas North and South Carolina (2004), Houston, Texas (2005) Northeast United States from Maryland to Maine Pensacola, Florida (2006), Jacksonville, Florida (2010) Florida Southwest Florida (2009), Pompano beach, Florida (2012) Missouri, Minnesota, and New Jersey West Central Florida, Georgia, Minnesota, and Missouri, West Central Florida (2011), alabama (2012), North and Southwest Florida (2012), Wrightsville, North Carolina (2012), and Texas (2012) Georgia (2011), Oklahoma (2012), North Carolina and South Carolina (2012), New Jersey (2015), Florida (2018) United States other than where previously held Southeast Florida, Maryland, and New Jersey Connecticut, brevard and Jacksonville, Florida, the Florida panhandle, West Central Florida, New Jersey, New York, North Carolina, Ohio, Rhode island, and Texas all geographic regions in which we operate Florida eastern United States Texas, New York Worldwide, excluding China North america, Central america, and South america Miami, Florida Florida (2016), North Carolina (2017), and South Carolina (2017) Georgia, North Carolina, and South Carolina South Carolina South Carolina Panama City, Florida, Oklahoma, Missouri, Minnesota, North Carolina and South Carolina Orlando, Florida, Oklahoma, and Georgia Fiscal Year 1998 1999 2002 2004-2005 2006 2006-2010 2008 2009-2012 2010 2010 2011-2012 2011-2018 2012 2012 2013 2013 2013 2014 2014 2014 2015 2016 2016-2017 2017 2017 2018 2018 2018 4 We add brands with the intent to either offer a migration path for our existing customer base or fill a gap in our product offerings. as a result, we believe that new brands we offer are generally complementary and do not negatively impact the business generated from our other prominent brands. We also discontinue offering product lines from time to time, primarily based upon customer preferences. During the nine-year period from the commencement of our operations through our fiscal year ended September 30, 2007, our revenue increased from $291.0 million to approaching $1.2 billion. Our revenue and net income increased in seven of those nine years over the prior year revenue and net income. This period was marked by an increase in retail locations from 41 on September 30, 1998 to 88 on September 30, 2007, resulting from acquisitions and opening new stores in existing territories. Our growth was interrupted during the fiscal year ended September 30, 2007, primarily as a result of factors related to the deteriorating housing market and general economic conditions. The substantially deteriorating economic and financial conditions, reduced consumer confidence and spending, increased fuel prices, reduction of credit availability, financial market declines, and asset value deterioration all contributed to substantially lower financial performance in the fiscal years ended September 30, 2008 and 2009, including significant net losses, followed by pre-tax losses in the fiscal years ended September 30, 2010 and 2011. We returned to profitability in fiscal 2012 and have continued to be profitable through fiscal 2018. as industry conditions continue to recover, we strive to maintain our core values of high customer service and satisfaction and plan to continue to pursue strategies that we believe will enable us to achieve long-term success and growth. as noted in the earlier table, we have capitalized on a number of brand expansion opportunities in the markets in which we operate. We believe our expanded product offerings have strengthened our same-store sales growth. We plan to further expand our business through both acquisitions in new territories and new store openings in existing territories. in addition, we plan to continue to expand our other traditional services, including conducting used boat sales at our retail locations, at offsite locations, and on the internet; selling related marine products, including engines, trailers, parts, and accessories at our retail locations and at various offsite locations, and through our print catalog; providing maintenance, repair, and storage services at most of our retail locations; offering our customers the ability to finance new or used boats; offering extended service contracts; arranging insurance coverage, including boat property, credit-life, accident, disability, and casualty coverage; offering boat and yacht brokerage sales at most of our retail locations and at various offsite locations; and conducting our yacht charter business. Our expansion plans will depend, in large part, upon economic and industry conditions. We maintain our executive offices at 2600 McCormick Drive, Suite 200, Clearwater, Florida 33759, and our telephone number is (727) 531-1700. We were incorporated in the state of Delaware in January 1998 and then re-incorporated in Florida in March 2015. Unless the context otherwise requires, all references to “MarineMax” mean MarineMax, inc. prior to its acquisition of five previously independent recreational boat dealers in March 1998 (including their related real estate companies) and all references to the “Company,” “our company,” “we,” “us,” and “our” mean, as a combined company, MarineMax, inc. and the 28 recreational boat dealers, two boat brokerage operations, and two full-service yacht repair operations acquired to date (the “acquired dealers,” and together with the brokerage and repair operations, “operating subsidiaries,” or the “acquired companies”). Our website is located at www.MarineMax.com . Through our website, we make available free of charge our annual report on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K, our proxy statements, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities exchange act of 1934. These reports are available as soon as reasonably practicable after we electronically file those reports with the Securities and exchange Commission (the “SeC”). The SeC maintains an internet site, located at http://www.sec.gov, that contains reports, proxy and information statements and other information regarding the Registrant and other issuers that file electronically with the SeC. We also post on our website the charters of our audit, Compensation, and Nominating/Corporate Governance Committees; 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 the SeC or the regulations of the New York Stock exchange, or NYSe. These documents are also available in print to any stockholder requesting a copy from our corporate secretary at our principal executive offices. because our common stock is listed on the NYSe, our Chief executive Officer is required to make an annual certification to the NYSe stating that he is not aware of any violation by us of the corporate governance listing standards of the NYSe. Our Chief executive Officer made his annual certification to that effect to the NYSe on March 8, 2018. General Business We are the largest recreational boat and yacht retailer in the United States. Through 63 retail locations in alabama, Connecticut, Florida, Georgia, Maryland, Massachusetts, Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Rhode island, South Carolina and Texas, we sell new and used recreational boats, including pleasure boats (such as sport 5 boa ts, sport cruisers, sport yachts, and yachts), and fishing boats, with a focus on premium brands in each segment. We also offer the cha rter of power catamarans in the british Virgin islands. We are the nation’s largest retailer of Sea Ray and boston Whaler recreational boats and yachts, which are manufactured by brunswick Corporation, or brunswick. Sales of new brunswick boats accounted for approximately 40% of our revenue in fiscal 2018. Sales of new Sea Ray and boston Whaler boats, both divisions of brunswick, accounted for approximately 21% and 17%, respectively, of our revenue in fiscal 2018. brunswick is a world leading manufacturer of marine products and marine engines. We believe our sales represented approximately 12% of all brunswick marine sales, including approximately 42% of its Sea Ray boat sales, during our fiscal 2018. We have agreements with brunswick covering Sea Ray products and boston Whaler products and are the exclusive dealer of Sea Ray and boston Whaler boats in almost all of our geographic markets. We also are the exclusive dealer for Harris aluminum boats, a division of brunswick, in most of our geographic markets. We also are the exclusive dealer for italy-based azimut-benetti Group, or azimut, for azimut mega-yachts, yachts, and other recreational boats for the United States. Sales of new azimut boats and yachts accounted for approximately 11% of our revenue in fiscal 2018. additionally, we are the exclusive dealer for certain other premium brands that serve specific industry segments in our markets as shown by the table on page four. We also are involved in other boating-related activities. We sell used boats at our retail locations, online, and at various third-party marinas and other offsite locations; we sell marine engines and propellers, primarily to our retail customers as replacements for their existing engines and propellers; we sell a broad variety of parts and accessories at our retail locations and at various offsite locations, and through our print catalog; we offer maintenance, repair, and slip and storage services at most of our retail locations; we offer finance and insurance, or F&i, products at our retail locations and at various offsite locations and to our customers and independent boat dealers and brokers; we offer boat and yacht brokerage sales at most of our retail locations and at various offsite locations; and we conduct a yacht charter business in which we offer customers the opportunity to charter third-party and Company owned power yachts in exotic locations. U.S. Recreational Boating Industry The U.S. recreational boating industry generated approximately $39.0 billion in retail sales in calendar 2017, which is down slightly from the peak of $39.5 billion in calendar 2006. The retail sales include sales of new and used recreational boats; marine products, such as engines, trailers, parts, and accessories; and related boating expenditures, such as fuel, insurance, docking, storage, and repairs. Retail sales of new and used boats, engines, trailers, equipment, and accessories accounted for approximately $29.8 billion of such sales in calendar 2017. Total powerboats sold in calendar 2017 were approximately 199,100 units as compared to 298,100 units sold in calendar 2006. To provide historical perspective, annual retail recreational boating sales were $17.9 billion in 1988, but declined to a low of $10.3 billion in 1992 based on industry data published by the National Marine Manufacturers association. We believe this decline was attributable to several factors, including a recession, the Gulf War, and the imposition throughout 1991 and 1992 of a luxury tax on boats sold at prices in excess of $100,000. The luxury tax was repealed in 1993, and retail boating sales increased each year thereafter except for 1998, 2003, and 2007 through 2010. We believe recreational boating has a natural appeal to consumers, along with other outdoor activities, and will continue to grow in favorable economic conditions absent any unusual industry headwinds (see Risk Factors). The recreational boat retail market remains highly fragmented with little consolidation having occurred to date and consists of numerous boat retailers, most of which are small companies owned by individuals that operate in a single market and provide varying degrees of merchandising, professional management, and customer service. We believe that many boat retailers are encountering increased pressure from boat manufacturers to improve their levels of service and systems, increased competition from larger national retailers in certain product lines, and, in certain cases, business succession issues. Strategy Our goal is to enhance our position as the nation’s leading recreational boat and yacht retailer. Key elements of our operating and growth strategy include the following. Emphasizing Customer Satisfaction and Loyalty . We seek to achieve a high level of customer satisfaction and establish long-term customer loyalty by creating an overall enjoyable boating experience beginning with a hassle-free purchase process. We seek to further enhance and simplify the purchase process by helping to arrange financing and insurance at our retail locations with competitive terms and streamlined turnaround. We offer the customer a thorough in-water orientation of boat operations where available, as well as ongoing boat safety, maintenance, and use seminars and demonstrations for the customer’s entire family. We also continue our customer service after the sale by leading and sponsoring MarineMax Getaways!® group boating trips to various destinations, rendezvous gatherings, and on-the-water organized events to provide our customers with pre-arranged opportunities to enjoy the pleasures of the boating lifestyle. We also endeavor to provide superior maintenance and repair services, often through mobile service at the customer’s wet slip and with extended service department hours and emergency service availability, that minimize the hassles of boat maintenance. 6 Achieving Operating Efficiencies and Synergies . We strive to increase the operating efficiencies of and achieve certain synergies among our dealerships in order to enhance internal growth and profitability. We centralize various aspects of certain administrative functions at the corporate level, such as accounting, finance, insurance coverage, employee benefits, marketing, strategic planning, legal support, p urchasing and distribution, management information systems and cybersecurity . Centralization of these functions reduces duplicative e xpenses and permits the dealerships to benefit from a level of scale and expertise that would otherwise be unavailable to each dealership individually. We also seek to realize cost savings from reduced inventory carrying costs as a result of purchasing bo at inventories on a national level and directing boats to dealership locations that can more readily sell such boats; lower financing costs through our credit sources; and volume purchase discounts and rebates for certain marine products, supplies, and adv ertising. The ability of our retail locations to offer the complementary services of our other retail locations, such as offering customers MarineMax Getaways! ® excursions, providing maintenance and repair services at the customer’s boat location, and giv ing access to broader inventory selections, increases the competitiveness of each retail location. by centralizing these types of activities, our general managers have more time to focus on the customer and the development of their teams. Promoting Brand Name Recognition and the MarineMax Connection . We are promoting our brand name recognition to take advantage of our status as the nation’s largest recreational boat and yacht retailer. This strategy also recognizes that many existing and potential customers who reside in Northern markets and vacation for substantial periods in Southern markets will likely prefer to purchase and service their boats from the same well-known company. We refer to this strategy as the “MarineMax Connection.” as a result, our signage emphasizes the MarineMax name at each of our locations, and we conduct national advertising in various print and other media. Offering Additional Products and Services, Including Those Involving Higher Profit Margins . We plan to continue to offer additional product lines and services throughout our dealerships and, when appropriate, online and various offsite locations. We are increasingly offering throughout our dealerships product lines that previously have been offered only at certain of our locations. We also obtain additional product lines through the acquisition of distribution rights directly from manufacturers and the acquisition of dealerships with distribution rights. in either situation, such expansion is typically done through agreements that appoint us as the exclusive dealer for a designated geographic territory. We plan to continue to grow our financing and insurance, parts and accessories, service, and boat storage businesses to better serve our customers and thereby increase revenue and improve profitability of these higher margin businesses. We also have implemented programs to increase the generation of leads and sales of boats over the internet. in addition, we have established a yacht charter business and are conducting programs to sell used boats, offer F&i products, and sell boating parts and accessories at various offsite locations. Marketing over the Internet . Our web initiatives span across multiple websites, including our core site, www.MarineMax.com . The websites provide customers with the ability to learn more about our company and our products. Our website generates direct sales and provides our stores with leads to potential customers for new and used boats, brokerage sales, finance and insurance products, and repair and maintenance services. in addition, we utilize various feeder websites and social networking websites to drive additional traffic and leads for our various product and service offerings. as mentioned above, we also maintain multiple online storefronts for customers to submit an inquiry, purchase boats, and purchase a wide variety of boating parts and accessories. Pursuing Strategic Acquisitions . One of our strategies is to capitalize upon the significant consolidation opportunities available in the highly fragmented recreational boat dealer industry by acquiring independent dealers and improving their performance and profitability through the implementation of our operating strategies. The primary acquisition focus is on well-established, high-end recreational boat dealers in geographic markets not currently served by us, particularly geographic markets with strong boating demographics, such as areas within the coastal states and the Great Lakes region. We also may seek to acquire boat dealers that, while located in attractive geographic markets, have not been able to realize favorable market share or profitability and that can benefit substantially from our systems and operating strategies. We may expand our range of product lines, service offerings, and market penetration by acquiring companies that distribute recreational boat product lines or boating-related services different from those we currently offer. also, we may consider contract manufacturing or vertical integration strategies as opportunities arise. as a result of our considerable industry experience and relationships, we believe we are well positioned to identify and evaluate acquisition candidates and assess their growth prospects, the quality of their management teams, their local reputation with customers, and the suitability of their locations. We believe we are regarded as an attractive acquirer by boat dealers because of: (1) the historical performance and the experience and reputation of our management team within the industry; (2) our decentralized operating strategy, which generally enables the managers of an acquired dealer to continue their involvement in dealership operations; (3) the ability of management and employees of an acquired dealer to participate in our growth and expansion through potential stock ownership and career advancement opportunities; and (4) the ability to offer liquidity to the owners of acquired dealers through the receipt of common stock or cash. We have entered into an agreement regarding acquisitions with the Sea Ray Division of brunswick. Under the agreement, acquisitions of Sea Ray dealers will be mutually agreed upon by us and Sea Ray with reasonable efforts to be made to include a balance of Sea Ray dealers that have been successful and those that have not been. The agreement provides that Sea Ray will not unreasonably withhold its consent to any proposed acquisition of a Sea Ray dealer by us, subject to the conditions set forth in the agreement, as further described in “business — brunswick agreement Relating to acquisitions.” 7 Opening New Facilities . We will continue to establish additional retail facilities in our existing and new markets subject to conditions. We believe that the demographics of our existing geographic territories su pport the opening of additional facilities, and we have open ed 34 new retail facilities, excluding those opened on a temporary basis for a specific purpose, since our formation in January 1998. We continually monitor the performance of our retail location s and close retail locations that do not meet our expectations or that were opened for a specific purpose that is no longer relevant. based on these factors since March 1998, we have closed 6 5 retail locations, excluding those opened on a temporary basis for a specific purpos e, including 26 in fiscal 2009 and a total of four during the last three fisca l years . Emphasizing Employee Recruitment and Retention through Training, Motivation, and Development . We devote substantial efforts to recruit employees that we believe to be exceptionally well qualified for their position and to train our employees to understand our core retail philosophies, which focus on making the purchase of a boat and its subsequent use as hassle-free and enjoyable as possible. Through our MarineMax University, or MMU, we teach our retail philosophies to existing and new employees at various locations and online, through MMU-online. MMU is a modularized and instructor-led educational program that focuses on our retailing philosophies and provides instruction on such matters as the sales process, customer service, F&i, accounting, leadership, and human resources. Emphasizing Best Practices . We emphasize the best practices developed by us and our acquired dealers as appropriate throughout our locations. as an example, we have implemented a hassle-free approach at each of our dealerships. Under the MarineMax One Price hassle-free sales approach, we sell our boats at prices generally representing a discount from the manufacturer’s suggested retail price, thereby eliminating the anxieties of price negotiations that occur in most boat purchases. in addition, we adopt the best practices developed by us and our acquired dealers as applicable, considering location, design, layout, product purchases, maintenance and repair services (including extended service hours and mobile or dockside services), product mix, employee training, and customer education and services. Operating with Decentralized Management . We maintain a generally decentralized approach to the operational management of our dealerships. The decentralized management approach takes advantage of the extensive experience of local managers, enabling them to implement policies and make decisions, including the appropriate product mix, based on the needs of the local market. Local management authority also fosters responsive customer service and promotes long-term community and customer relationships. in addition, the centralization of certain administrative functions at the corporate level enhances the ability of local managers to focus their efforts on day-to-day dealership operations and the customers. Utilizing Technology Throughout Operations . We believe that our management information system, which currently is being utilized by each of our dealerships and was developed over a number of years through cooperative efforts with a common vendor, enhances our ability to integrate successfully the operations of our dealerships and future acquired dealers. The system facilitates the interchange of information and enhances cross-selling opportunities throughout our Company. The system integrates each level of operations on a Company-wide basis, including but not limited to purchasing, inventory, receivables, payables, financial reporting, budgeting, and sales management. The system also provides sales representatives with prospect and customer information that aids them in tracking the status of their contacts with prospects, automatically generates follow-up correspondence to such prospects, facilitates the availability of boats Company-wide, locates boats needed to satisfy particular customer requests, and monitors the maintenance and service needs of customers’ boats. Our representatives also utilize the computer system to assist in arranging customer financing and insurance packages. Our managers use a web-based tool to access essentially all financial and operational data from anywhere at any time. Products and Services We offer new and used recreational boats and related marine products, including engines, trailers, parts, and accessories. While we sell a broad range of new and used boats, we focus on premium brand products. in addition, we assist in arranging related boat financing, insurance, and extended service contracts; provide boat maintenance and repair services; offer slip and storage accommodations; provide boat and yacht brokerage sales; and conduct a yacht charter business. New Boat Sales We primarily sell recreational boats, including pleasure boats and fishing boats. a number of the products we offer are manufactured by brunswick, a leading worldwide manufacturer of recreational boats and yachts, including Sea Ray pleasure boats, boston Whaler fishing boats, and Harris aluminum boats. Sales of new brunswick boats accounted for approximately 40% of our revenue in fiscal 2018. Sales of new Sea Ray and boston Whaler boats, both divisions of brunswick, accounted for approximately 21% and 17%, respectively, of our revenue in fiscal 2018. We believe our sales represented approximately 12% of all brunswick marine sales, including approximately 42% of its Sea Ray boat sales, during our fiscal 2018. Certain of our dealerships also sell luxury yachts, fishing boats, and pontoon boats provided by other manufacturers, including italy-based azimut. Sales of new azimut 8 boats and yachts accounted for approximately 11 % of our revenue in fiscal 2018 . During fiscal 2018 , new boat sales accounted for approximately 71.2 % or $ 839 million of our revenue. We offer recreational boats in most market segments, but have a particular focus on premium quality pleasure boats and yachts as reflected by our fiscal 2018 average new boat sales price of approximately $203,000 a slight increase from approximately $195,000 in fiscal 2017, compared with an estimated industry average selling price for calendar 2017 of approximately $48,000 based on industry data published by the National Marine Manufacturers association. Given our locations in some of the more affluent, offshore boating areas in the United States and emphasis on high levels of customer service, we sell a relatively higher percentage of large recreational boats, such as mega-yachts, yachts, and sport cruisers. We believe that the product lines we offer are among the highest quality within their respective market segments, with well-established trade-name recognition and reputations for quality, performance, and styling. The following table is illustrative of the range and approximate manufacturer suggested retail price range of new boats that we currently offer, but is not all inclusive. Product Line and Trade Name Motor Yachts azimut Hatteras Motor Yachts Ocean alexander Yachts Convertibles Hatteras Convertibles Pleasure Boats Sea Ray atlantis aquila Galeon NauticStar Pontoon Boats Harris Crest bennington Fishing Boats boston Whaler Grady White Scout Sailfish Sea Pro Ski Boats Nautique by Correct Craft Tigé Mastercraft Jet Boats Scarab Yamaha Jet boats Overall Length 40’ to 120’+ 60’ to 100’+ 70’ to 155’+ 45’ to 77’+ 19’ to 65’ 43’ to 50’ 36’ to 48’ 30’ to 78’ 19’ to 28’ 16’ to 27’ 19’ to 25’ 17’ to 25’ 11’ to 42’ 18’ to 45’ 17’ to 53’ 19’ to 32’ 17’ to 24’ 20’ to 25’ 20’ to 23’ 20’ to 26’ 16’ to 26’ 19’ to 24’ Manufacturer Suggested Retail Price Range $600,000 to $12,000,000+ 2,000,000 to 10,000,000+ 3,500,000 to 35,000,000+ 2,000,000 to 7,000,000+ 25,000 to 3,500,000+ 450,000 to 2,300,000+ 480,000 to 1,200,000 400,000 to 3,600,000 25,000 to 125,000 15,000 to 150,000 20,000 to 150,000 20,000 to 150,000 12,000 to 1,000,000 40,000 to 1,000,000 20,000 to 1,750,000 35,000 to 300,000 30,000 to 120,000 70,000 to 190,000 70,000 to 160,000 70,000 to 190,000 20,000 to 80,000 30,000 to 75,000 Motor Yachts . Hatteras Yachts, Ocean alexander Yachts, and azimut are three of the world’s premier yacht builders. The motor yacht product lines typically include state-of-the-art designs with live-aboard luxuries. Hatteras offers a flybridge with extensive guest seating; covered aft deck, which may be fully or partially enclosed, providing the boater with additional living space; an elegant salon; and multiple staterooms for accommodations. azimut yachts are known for their americanized open layout with italian design and powerful performance. The luxurious interiors of azimut yachts are accented by windows and multiple accommodations that have been designed for comfort. Ocean alexander Yachts are known for their excellent engineering, performance, and functionality combined with luxuries typically found on larger mega yachts. Convertibles . Hatteras Yachts is one of the world’s premier convertible yacht builders and offers state-of-the-art designs with live-aboard luxuries. Convertibles are primarily fishing vessels, which are well equipped to meet the needs of even the most serious 9 tournament-class competitor. Hatteras features interiors that offer luxurious salon/galley arrangements, multiple staterooms with private heads, and a cockpit that includes a bait and tackle center, fishbox, and freezer. Pleasure Boats . Sea Ray pleasure boats target both the luxury and the family recreational boating markets and come in a variety of configurations to suit each customer’s particular recreational boating style. Sea Ray pleasure boats feature custom instrumentation that may include an electronics package; various hull, deck, and cockpit designs that can include a swim platform; bow pulpit and raised bridge; and various amenities, such as swivel bucket helm seats, lounge seats, sun pads, wet bars, built-in ice chests, and refreshment centers. Most Sea Ray pleasure boats feature Mercury or MerCruiser engines. We believe atlantis sport cruisers offer a unique-on-the-water experience with the azimut expertise expressed in a design concept that merges sportiness with the comfort and relative ease of navigation. Galeon specializes in luxury yacht and motor boats with over thirty years of experience. Galeon is one of europe’s leading and premier boat manufacturers. We believe Galeon yachts combine the latest technology, hand crafted excellence, unparalleled attention to detail, superb performance, and great innovative designs with modern styling and convenience. aquila power catamarans provide form, function, and offer practicality and comfort with trend setting innovation. We believe NauticStar provides sport deck boats that combine comfort, features, economy, and versatility that make NauticStar a popular choice among experienced boaters. Pontoon Boats . Harris is a pontoon industry leader and offers a variety of some of the most innovative, luxurious, and premium pontoon models to fit boaters’ needs. Harris is known for exceptional performance combined with a stable and safe platform. Crest provides a variety of pontoon models that are designed to provide extreme levels of quality, safety, style and comfort to meet family recreational needs. bennington offers what we believe to be industry leading design, meticulous craftsmanship, and a quiet, smooth, ride. With a variety of designs and options, the pontoon boats we offer appeal to a broad audience of pontoon boat enthusiasts and existing customers. Fishing Boats . The fishing boats we offer, such as boston Whaler, Grady-White, Scout, Sailfish, and Sea Pro, range from entry level models to advanced models designed for fishing and water sports in lakes, bays, and off-shore waters, with cabins with limited live-aboard capability. The fishing boats typically feature livewells, in-deck fishboxes, rodholders, rigging stations, cockpit coaming pads, and fresh and saltwater washdowns. Ski Boats . The ski boats we offer are Nautique by Correct Craft, Tigé, and Mastercraft, which range from entry level models to advanced models and all of which are designed to achieve an ultimate wake for increased skiing, surfing, and wakeboarding performance and safety. With a variety of designs and options, Nautique, Tigé, and Mastercraft ski boats appeal to the competitive and recreational user alike. Jet Boats . The Scarab jet boats we offer range from entry level models to advanced models, all of which are designed for performance and with exclusive design elements to meet family recreational needs. Yamaha jet boats are designed to offer a reliable, high performing, internal propulsion system with superior handling. With a variety of designs and options, the jet boats we offer appeal to a broad audience of jet boat enthusiasts and existing customers. Used Boat Sales We sell used versions of the new makes and models we offer and, to a lesser extent, used boats of other makes and models generally taken as trade-ins. During fiscal 2018, used boat sales accounted for 14.8% or approximately $174 million of our revenue, and 56.7% of the used boats we sold were brunswick models. Our used boat sales depend on our ability to source a supply of high-quality used boats at attractive prices. We acquire substantially all of our used boat inventory through customer trade-ins. We intend to continue to increase our used boat business as a result of the availability of quality used boats generated from our new boat sales efforts, the increasing number of used boats that are well-maintained through our service initiatives, our ability to market used boats throughout our combined dealership network to match used boat demand, and the experience of our yacht brokerage operations. additionally, substantially all of our used boat inventory is posted on our website, which expands the awareness and availability of our products to a large audience of boating enthusiasts. We also sell used boats at various marinas and other offsite locations throughout the country. To further enhance our used boat sales, we offer the brunswick Product Protection warranty plan available for used brunswick boats less than nine years old. The brunswick Product Protection plan applies to each qualifying used boat, which has passed a 48-point inspection, and provides protection against failure of most mechanical parts for up to three years. We believe this type of program enhances our sales of used boats by motivating purchasers of used boats to complete their purchases through our dealerships. 10 Marine Engines, Related Marine Equipment, and Boating Parts and Accessories We offer marine engines and equipment, predominantly manufactured by Mercury Marine, a division of brunswick, and Yamaha. We sell marine engines and propellers primarily to retail customers as replacements for their existing engines or propellers. Mercury Marine and Yamaha have introduced various new engine models that are designed to reduce engine emissions to comply with current environmental Protection agency requirements. See “business — environmental and Other Regulatory issues.” industry leaders, Mercury Marine and Yamaha, specialize in state-of-the-art marine propulsion systems and accessories. Many of our dealerships have been recognized by Mercury Marine as “Premier Service Dealers.” This designation is generally awarded based on meeting certain standards and qualifications. We also sell a broad variety of marine parts and accessories at our retail locations, at various offsite locations, and through our print catalog. These marine parts and accessories include marine electronics; dock and anchoring products, such as boat fenders, lines, and anchors; boat covers; trailer parts; water sport accessories, such as tubes, lines, wakeboards, and skis; engine parts; oils; lubricants; steering and control systems; corrosion control products and service products; high-performance accessories, such as propellers and instruments; and a complete line of boating accessories, including life jackets, inflatables, and water sports equipment. We also offer novelty items, such as shirts, caps, and license plates bearing the manufacturer’s or dealer’s logos. in all of our parts and accessories business, we utilize our industry knowledge and experience to offer boating enthusiasts high-quality products with which we have experience. The sale of marine engines, related marine equipment, and boating parts and accessories, which are all tangible products, accounted for approximately 3.6% or $42 million of our fiscal 2018 revenue. Maintenance, Repair, and Storage Services Providing customers with professional, prompt maintenance and repair services is critical to our sales efforts and contributes to our success. We provide maintenance and repair services at most of our retail locations, with extended service hours at certain of our locations. in addition, in many of our markets, we provide mobile maintenance and repair services at the location of the customer’s boat. We believe that this service commitment is a competitive advantage in the markets in which we compete and is critical to our efforts to provide a trouble-free boating experience. To further this commitment, in certain of our markets, we have opened stand-alone maintenance and repair facilities in locations that are more convenient for our customers and that increase the availability of such services. We also believe that our maintenance and repair services contribute to strong customer relationships and that our emphasis on preventative maintenance and quality service increases the potential supply of well-maintained boats for our used boat sales. We perform both warranty and non-warranty repair services, with the cost of warranty work reimbursed by the manufacturer in accordance with the manufacturer’s warranty reimbursement program. For warranty work, most manufacturers, including brunswick, reimburse a percentage of the dealer’s posted service labor rates, with the percentage varying depending on the dealer’s customer satisfaction index rating and attendance at service training courses. We derive the majority of our warranty revenue from brunswick products, as brunswick products comprise the majority of products sold. Certain other manufacturers reimburse warranty work at a fixed amount per repair. because boat manufacturers permit warranty work to be performed only at authorized dealerships, we receive substantially all of the warranted maintenance and repair work required for the new boats we sell. The third-party extended warranty contracts we offer also result in an ongoing demand for our maintenance and repair services for the duration of the term of the extended warranty contract. Our maintenance and repair services are performed by manufacturer-trained and certified service technicians. in charging for our mechanics’ labor, many of our dealerships use a variable rate structure designed to reflect the difficulty and sophistication of different types of repairs. The percentage markups on parts are similarly based on manufacturer suggested prices and market conditions for different parts. at many of our locations, we offer boat storage services, including in-water slip storage and inside and outside land storage. These storage services are offered at competitive market rates and include in-season and winter storage. Maintenance, repair, and storage services accounted for approximately 5.9% or $69 million of our revenue during fiscal 2018 of which, approximately 3.8% or $45 million related to repair services, approximately 0.9% or $10 million related to parts and accessories for repairs, and approximately 1.2% or $14 million related to income from storage service rentals. This includes warranty and non-warranty services. 11 F&I Products at each of our retail locations and at various offsite locations where applicable, we offer our customers the ability to finance new or used boat purchases and to purchase extended service contracts and arrange insurance coverage, including boat property, disability, undercoating, gel sealant, fabric protection, and casualty insurance coverage (collectively, “F&i”). We have relationships with various national marine product lenders under which the lenders purchase retail installment contracts evidencing retail sales of boats and other marine products that are originated by us in accordance with existing pre-sale agreements between us and the lenders. These arrangements permit us to receive a portion of the finance charges expected to be earned on the retail installment contract based on a variety of factors, including the credit standing of the buyer, the annual percentage rate of the contract charged to the buyer, and the lender’s then current minimum required annual percentage rate charged to the buyer on the contract. This participation is subject to repayment by us if the buyer prepays the contract or defaults within a designated time period, usually 0 to 180 days. To the extent required by applicable state law, our dealerships are licensed to originate and sell retail installment contracts financing the sale of boats and other marine products. We also offer third-party extended service contracts under which, for a predetermined price, we provide all designated services pursuant to the service contract guidelines during the contract term at no additional charge to the customer above a deductible. While we sell all new boats with the boat manufacturer’s standard hull and engine warranty, extended service contracts provide additional coverage beyond the time frame or scope of the manufacturer’s warranty. Purchasers of used boats generally are able to purchase an extended service contract, even if the selected boat is no longer covered by the manufacturer’s warranty. Generally, we receive a fee for arranging an extended service contract. Most required services under the contracts are provided by us and paid for by the third-party contract holder. We also are able to assist our customers with the opportunity to obtain property and casualty insurance. Property and casualty insurance covers loss or damage to the boat. We do not act as an insurance broker or agent or issue insurance policies on behalf of insurers. We do, however, provide marketing activities and other related services to insurance companies and brokers for which we receive marketing fees. One of our strategies is to generate increased marketing fees by offering more competitive insurance products. During fiscal 2018, fee income generated from F&i products accounted for approximately 2.4% or $29 million of our revenue. We believe that our customers’ ability to obtain competitive financing quickly and easily at our dealerships complements our ability to sell new and used boats. We also believe our ability to provide customer-tailored financing on a “same-day” basis gives us an advantage over many of our competitors, particularly smaller competitors that lack the resources to arrange boat financing at their dealerships or that do not generate sufficient volume to attract the diversity of financing sources that are available to us. Brokerage Sales Through employees or subcontractors that are licensed boat or yacht brokers where applicable, we offer boat or yacht brokerage sales at most of our retail locations. For a commission, we offer for sale brokered boats or yachts, listing them on various internet sites, advising our other retail locations of their availability through our integrated computer system, and posting them on our website, www.MarineMax.com . Often sales are co-brokered, with the commission split between the buying and selling brokers. We believe that our access to potential used boat customers and methods of listing and advertising customers’ brokered boats or yachts is more extensive than is typical among brokers. in addition to generating revenue from brokerage commissions, our brokerage sales also enable us to offer a broad array of used boats or yachts without increasing related inventory costs. During fiscal 2018, brokerage sales commissions accounted for approximately 1.8% or $21 million of our revenue. Our brokerage customers generally receive the same high level of customer service as our new and used boat customers. Our waterfront retail locations enable in-water demonstrations of an on-site brokered boat. Our maintenance and repair services, including mobile service, also are generally available to our brokerage customers. The purchaser of a boat brokered through us also can take advantage of MarineMax Getaways!® weekend and day trips and other rendezvous gatherings and in-water events, as well as boat operation and safety seminars. We believe that the array of services we offer are unique in the brokerage business. Yacht Charter in 2011 we launched a yacht charter business in which we offer customers the opportunity to charter power yachts in exotic destinations, starting with our initial location in the british Virgin islands (bVi). in this business, we sell specifically designed yachts to third parties for inclusion in our yacht charter fleet; enter into yacht management agreements under which yacht owners enable us to put their yachts in our yacht charter program for a period of several years for a fixed monthly fee payable by us; provide our services in storing, insuring, and maintaining their yachts; and charter these yachts to vacation customers at agreed fees payable to us. The yacht owners will be able to utilize the yachts for personal use for a designated number of weeks during the terms of the management agreement and take possession of their yachts following the expiration of the yacht management agreements. 12 in addition to the specific business we launched in the bVi, we also offer yacht charter services. For a fee, we assist yacht owners in the charter of their vessel by third-parties. During fiscal 2018 , the income from rentals of chartering power yachts and yacht charter fees, accounted for approximately 0.3 % or $ 3 million of our revenue. Our facilities in the british Virgin islands and yacht c harter fleet suffered damage from Hurricane irma in September of 2017. We maintain insurance for inventory damage, subject to deductibles. The yacht charter fleet resumed charters during fiscal 2018 on a limited basis as damage was repaired, and we expect the yacht charter fleet to return to full o perations in 2019. Offsite Sales We sell used boats, offer F&i products, and sell parts and accessories at various third-party offsite locations, including marinas. Retail Locations We sell our recreational boats and other marine products and offer our related boat services through 63 retail locations in alabama, Connecticut, Florida, Georgia, Maryland, Massachusetts, Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Rhode island, South Carolina and Texas. each retail location generally includes an indoor showroom (including some of the industry’s largest indoor boat showrooms) and an outside area for displaying boat inventories, a business office to assist customers in arranging financing and insurance, maintenance and repair facilities, and at certain retail locations boat storage services, including in-water slip storage and inside and outside land storage. Many of our retail locations are waterfront properties on some of the nation’s most popular boating locations, including the Norwalk Harbor and Westbrook Harbor in Connecticut; multiple locations on the intracoastal Waterway, the atlantic Ocean, boca Ciega bay, Caloosahatchee River, Naples bay, Tampa bay, Pensacola bay, and the Saint andrews bay in Florida; Lake Lanier and Wilmington River in Georgia; Chesapeake bay in Maryland; Lake Minnetonka, and the St. Croix River in Minnesota; Lake of the Ozarks and Table Rock Lake in Missouri; barnegat bay, Lake Hopatcong, Little egg Harbor bay, and the Manasquan River in New Jersey; Great South bay, the Hudson River, and Huntington Harbor in New York; Town River and Weymouth black River in Massachusetts; Masonboro inlet in North Carolina; Lake Wylie in South Carolina; Lake erie in Ohio; Grand Lake in Oklahoma; Newport Harbor and Greenwich bay in Rhode island; and Clear Lake and Lake Lewisville in Texas. Our waterfront retail locations, most of which include marina-type facilities and docks at which we display our yachts and boats, are easily accessible to the boating populace, serve as in-water showrooms, and enable the sales force to give customers immediate in-water demonstrations of various boat models. Most of our other locations are in close proximity to water. Operations Dealership Operations and Management We have adopted a generally decentralized approach to the operational management of our dealerships. While certain administrative functions are centralized at the corporate level, local management is primarily responsible for the day-to-day operations of the retail locations. each retail location is managed by a general manager, who oversees the day-to-day operations, personnel, and financial performance of the individual store, subject to the direction of a regional president or district president, who generally has responsibility for the retail locations within a specified geographic region. Typically, each retail location also has a staff consisting of an F&i manager, a parts manager, a service manager, sales representatives, maintenance and repair technicians, and various support personnel. We attempt to attract and retain quality employees by providing them with ongoing training to enhance sales professionalism and product knowledge, career advancement opportunities within a larger company, and favorable benefit packages. We maintain a formal training program, called MarineMax University or MMU, which provides training for employees in all aspects of our operations. Training sessions are held at our various regional locations covering a variety of topics. MMU-online offers various modules over the internet. Highly trained, professional sales representatives are an important factor to our successful sales efforts. These sales representatives are trained at MMU to recognize the importance of fostering an enjoyable sales process, to educate customers on the operation and use of the boats, and to assist customers in making technical and design decisions in boat purchases. The overall focus of MMU is to teach our core retailing values, which focus on customer service. Sales representatives receive compensation primarily on a commission basis. each general manager is a salaried employee with incentive bonuses based on the performance of the managed dealership. Maintenance and repair service managers receive compensation on a salary basis with bonuses based on the performance of their departments. Our management information system provides each store and department manager with daily financial and operational information, enabling them to monitor their performance on a daily, weekly, and monthly basis. We have a uniform, fully integrated management information system serving each of our dealerships. 13 Sales and Marketing Our sales philosophy focuses on selling the pleasures of the boating lifestyle. We believe that the critical elements of our sales philosophy include our appealing retail locations, no-hassle sales approach, highly trained sales representatives, high level of customer service, emphasis on educating the customer and the customer’s family on boating, and providing our customers with opportunities for boating through our MarineMax Getaways!®. We strive to provide superior customer service and support before, during, and after the sale. Our team and customers are United by Water®. each retail location offers the customer the opportunity to evaluate a variety of new and used boats in a comfortable and convenient setting. Our full-service retail locations facilitate a turn-key purchasing process that includes attractive lender financing packages, extended service agreements, and insurance. Many of our retail locations are located on waterfronts and marinas, which attract boating enthusiasts and enable customers to operate various boats prior to making a purchase decision. The brands we offer are diverse in size and use and are spread across our customer activities of leisure, fishing, watersports, luxury, and vacations. We believe the transformative qualities of the water should be shared by everyone, so we created our boat lineup accordingly. Our promise gives our brands meaning and reason to exist next to one another on our showroom floor. We sell our boats at posted MarineMax “One Price” that generally represent a discount from the manufacturer’s suggested retail price. Our sales approach focuses on customer service by minimizing customer anxiety associated with price negotiation. as a part of our sales and marketing efforts, our online marketing activity is important, with the majority of leads coming through our website, www.MarineMax.com , and emails used as the primary marketing tool for our stores to connect with their customers. Social media is a growing venue for customer engagement with stores and prospecting of new leads. We also participate in boat shows and in-the-water sales events at area boating locations, typically held in January, February, March, and toward the end of the boating season, in each of our markets and in certain locations in close proximity to our markets. These shows and events are normally held at convention centers or marinas, with area dealers renting space. boat shows and other offsite promotions are an important venue for generating sales orders. The boat shows also generate a significant amount of interest in our products resulting in boat sales after the show. We emphasize customer education through one-on-one education by our sales representatives and, at some locations, our delivery captains, before and after a sale, and through in-house seminars for the entire family on boating safety, the use and operation of boats, and product demonstrations. Typically, one of our delivery captains or the sales representative delivers the customer’s boat to an area boating location and thoroughly instructs the customer about the operation of the boat, including hands-on instructions for docking and trailering the boat. To enhance our customer relationships after the sale, we lead and sponsor MarineMax Getaways!® group boating trips to various destinations, rendezvous gatherings, and on-the-water organized events that promote the pleasures of the boating lifestyle. each Company-sponsored event, planned and led by a Company employee, also provides a favorable medium for acclimating new customers to boating, sharing exciting boating destinations, creating friendships with other boaters, and enabling us to promote new product offerings to boating enthusiasts. as a result of our relative size, we believe we have a competitive advantage within the industry by being able to conduct an organized and systematic advertising and marketing effort. Part of our marketing effort includes an integrated customer relationship management system that tracks the status of each sales representative’s contacts with a prospect, automatically generates follow-up correspondence, and facilitates Company-wide availability of a particular boat or other marine product desired by a customer. Suppliers and Inventory Management We purchase substantially all of our new boat inventory directly from manufacturers, which allocate new boats to dealerships based on the amount of boats sold by the dealership and their market share. We also exchange new boats with other dealers to accommodate customer demand and to balance inventory. We purchase new boats and other marine-related products from brunswick, which is a world leading manufacturer of marine products, including Sea Ray, boston Whaler, Harris, and Mercury Marine. We also purchase new boats and other marine related products from other manufacturers, including but not limited to, azimut, Hatteras, Grady-White, Galeon, Nautique, Scout, Sailfish, and aquila. in fiscal 2018, sales of new brunswick and azimut boats and yachts accounted for approximately 40% and 11% of our revenue, respectively. Sales of new Sea Ray and boston Whaler boats, both divisions of brunswick, accounted for approximately 21% and 17%, respectively, of our revenue in fiscal 2018. No purchases of new boats and other marine related products from any other manufacturer accounted for more than 10% of our revenue in fiscal 2018. We believe our Sea Ray boat purchases represented approximately 42% of Sea Ray’s new boat sales, and approximately 12% of all brunswick marine product sales during fiscal 2018. 14 in June 20 18, brunswick announced it would be disc ontinuing its Sea Ray sport yacht and yacht models , resulting in the wind down of yacht production in the third calendar quarter of 2018 . Sea Ray sport yacht and yacht mod els represented approximately 10 % of revenue during fiscal year 2018. We believe our brand and product diversification should allow us to replace the Sea Ray sport yacht and yacht revenue. We have entered into multi-year agreements with brunswick covering Sea Ray and boston Whaler. We also have a multi-year agreement with azimut- benetti Group for its azimut product line. We typically deal with each of our manufacturers, other than brunswick and azimut-benetti Group, under an annually renewable, non-exclusive dealer agreement. The dealer agreements do not restrict our right to sell any product lines or competing products provided that we are in compliance with the material obligations of our dealer agreements. The terms of each dealer agreement appoints a designated geographical territory for the dealer, which is exclusive to the dealer provided that the dealer is able to meet the material obligations of its dealer agreement. Manufacturers generally establish prices on an annual basis, but may change prices at their sole discretion. Manufacturers typically discount the cost of inventory and offer inventory financing assistance during the manufacturers’ slow seasons, generally October through March. To obtain lower cost of inventory, we strive to capitalize on these manufacturer incentives to take product delivery during the manufacturers’ slow seasons. This permits us to gain pricing advantages and better product availability during the selling season. arrangements with certain other manufacturers may restrict our right to offer some product lines in certain markets. We transfer individual boats among our retail locations to fill customer orders that otherwise might take substantially longer to fill from the manufacturer. This reduces delays in delivery, helps us maximize inventory turnover, and assists in minimizing potential overstock or out-of-stock situations. We actively monitor our inventory levels to maintain levels appropriate to meet current anticipated market demands. We are not bound by contractual agreements governing the amount of inventory that we must purchase in any year from any manufacturer, but the failure to purchase at agreed upon levels may result in the loss of certain manufacturer incentives or dealership rights. Inventory Financing Marine manufacturers customarily provide interest assistance programs to retailers. The interest assistance varies by manufacturer and may include periods of free financing or reduced interest rate programs. The interest assistance may be paid directly to the retailer or the financial institution depending on the arrangements the manufacturer has established. We believe that our financing arrangements with manufacturers are standard within the industry. We account for consideration received from our vendors in accordance with FaSb accounting Standards Codification 605-50, “Revenue Recognition‒ Customer Payments and incentives” (“aSC 605-50”). aSC 605-50 requires us to classify interest assistance received from manufacturers as a reduction of inventory cost and related cost of sales as opposed to netting the assistance against our interest expense incurred with our lenders. Pursuant to aSC 605-50, amounts received by us under our co-op assistance programs from our manufacturers are netted against related advertising expenses. accounting for consideration received is not expected to materially change with the adoption of aSU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, in fiscal 2019. We are party to an inventory Financing agreement (the “amended Credit Facility”) led by Wells Fargo Commercial Distribution Finance LLC (formerly Ge Commercial Distribution Finance Corporation). The amended Credit Facility provides a floor plan financing commitment of up to $400 million. The amended Credit Facility matures in October 2021 and the amended Credit Facility includes two additional one-year extension periods, with lender approval. The interest rate under the amended Credit Facility is 345 basis points above the one-month London inter-bank Offering Rate (“LibOR”). There is an unused line fee of ten basis points on the unused portion of the line. The amended Credit Facility has certain financial covenants. The covenants include provisions that our leverage ratio not exceed 2.75 to 1.0 and that our current ratio must be greater than 1.2 to 1.0. as of September 30, 2018, we were in compliance with all the covenants under the amended Credit Facility. The initial advance under the amended Credit Facility was used to pay off our prior credit facility. Subsequent advances have been, and will be, initiated by the acquisition of eligible new and used inventory or will be re-advances against eligible new and used inventory that has been partially paid-off. advances on new inventory will generally mature 1,080 days from the original invoice date. advances on used inventory will mature 361 days from the date we acquire the used inventory. each advance is subject to a curtailment schedule, which requires that we pay down the balance of each advance on a periodic basis starting after six months. The curtailment schedule varies based on the type of inventory and the value of the inventory. 15 The collateral for the amended Credit Facility is primarily the Company’s inventory that is financed through the amended Credit Facility and related accounts receivable. None of our real estate has been pledged for collateral for the amended Credit Facility. The amended Credit Facility contemplates that other lenders may be added by the Company to finance other inventory not financed under this Facili ty . as of September 30, 2018, we owed $212.9 million under the amended Credit Facility. Outstanding short-term borrowings accrued interest at a rate of 5.5% as of September 30, 2018, and the amended Credit Facility provided us with an additional net borrowing availability of approximately $71.6 million, based upon the outstanding borrowing base availability. We have no indebtedness associated with our real estate holdings. Management Information System We believe that our management information system, which is utilized by each of our dealerships and was developed over a number of years through cooperative efforts with a common vendor, enhances our ability to integrate successfully the operations of our dealerships and future acquisitions, facilitates the interchange of information, and enhances cross-selling opportunities throughout our company. The system integrates each level of operations on a Company-wide basis, including but not limited to purchasing, inventory, receivables, payables, financial reporting, budgeting, and sales management. The system enables us to monitor each dealership’s operations in order to identify quickly areas requiring additional focus and to manage inventory. The system also provides sales representatives with prospect and customer information that aids them in tracking the status of their contacts with prospects, automatically generates follow-up correspondence to such prospects, facilitates the availability of a particular boat Company-wide, locates boats needed to satisfy a particular customer request, and monitors the maintenance and service needs of customers’ boats. Company representatives also utilize the system to assist in arranging financing and insurance packages. We mitigate cybersecurity risks by employing a number of measures, including employee training, systems, monitoring and testing, and maintenance of protective systems and contingency plans. Brunswick Agreement Relating to Acquisitions We and the Sea Ray Division of brunswick are parties to an agreement that provides a process for the acquisition of additional Sea Ray boat dealers that we elect to acquire. The agreement extends through august 31, 2020, with automatic annual one-year extensions at each twelve month anniversary of the agreement, provided that our dealer agreements with the Sea Ray Division of brunswick are still then in effect. Under the agreement, acquisitions of Sea Ray dealers will be mutually agreed upon by us and Sea Ray with reasonable efforts to be made to include a balance of Sea Ray dealers that have been successful and those that have not been. The agreement provides that Sea Ray will not unreasonably withhold its consent to any proposed acquisition of a Sea Ray dealer by us, subject to the conditions set forth in the agreement. among other things, the agreement provides for us to provide Sea Ray with a business plan for each proposed acquisition, including historical financial and five-year projected financial information regarding the acquisition candidate; marketing and advertising plans; service capabilities and managerial and staff personnel; information regarding the ability of the candidate to achieve performance standards within designated periods; and information regarding the success of our previous acquisitions of Sea Ray dealers. The agreement also contemplates Sea Ray reaching a good faith determination whether the acquisition would be in its best interest based on our dedication and focus of resources on the Sea Ray brand and Sea Ray’s consideration of any adverse effects that the approval would have on the resulting territory configuration of adjacent or other dealers and the absence of any violation of applicable laws or rights granted by Sea Ray to others. Dealer Agreements with Brunswick We and the Sea Ray Division of brunswick and boston Whaler, inc. are parties to Sales and Service agreements relating to Sea Ray and boston Whaler products respectively, effective September 1, 2014 and extending through august 31, 2019 with automatic annual one-year extensions at each twelve-month anniversary of the agreement, provided that we are not in breach of a material term of the agreement, following written notice and expiration of applicable cure periods without cure (certain termination provisions are summarized below). The agreements appoint certain of our operating subsidiaries as a dealer for the retail sale, display, and servicing of all Sea Ray or boston Whaler products, parts, and accessories currently or in the future sold by Sea Ray or boston Whaler, as applicable. The agreements specify a designated geographical territory and dealer region or location for the dealer, which is exclusive to the dealer. The agreement also specifies retail locations, which the dealer may not close, change, or add to without the prior written consent of the relevant manufacturer, provided that such manufacturer may not unreasonably withhold its consent. The manufacturer reserves the right to modify the territory or appoint other dealers to sell, display, and service product from dealer locations within the territory at any time if we close a dealer location without prior written notice to Sea Ray and prior written approval by Sea Ray, which will not be unreasonably withheld or in the case of boston Whaler, in the event that a dealer location fails to meet performance standards while carrying competitive product following written notice and a period of 60 days to cure or six months for matters for which a cure cannot be completed in 60 days. The agreements also restrict the dealer from selling, advertising (other than in recognized and 16 established marine publications), soliciting for sale, or offering for resale any products outside its territory except as otherwise provided by the relevant manufacturer’s advertising policy or other applicab le policy as long as similar restrictions also apply to all domestic dealers selling comparable products. in addition, the agreements provide for the lowest product prices charged by the relevant manufacturer from time to time to other domestic dealers, su bject to the dealer meeting all the requirements and conditions of applicable programs and the right of the manufacturer in good faith to charge lesser prices to other dealers to meet existing competitive circumstances, for unusual and non-ordinary busines s circumstances, or for limited duration promotional programs. among other things, the dealer agreements require each dealer to achieve performance standards including inventory stocking levels, provision of annual sales forecasts, submission of orders pursuant to the manufacturer’s current buying program, unit retail sales, customer satisfaction and marketing support. The sales performance will be in accordance with fair and reasonable standards and sales levels established by the manufacturer in collaboration with the dealer based on factors such as population, sales potential, market share percentage of products sold in the territory compared with competitive products sold in the territory, product availability, local economic conditions, competition, past sales history, historical product mix and stocking practices, existing product inventory, number of retail locations, and other special circumstances that may affect the sale of the relevant products or the dealer, in each case established in a manner similar to those applied to domestic dealers selling comparable products. The dealer is also required to maintain at each retail location, or at another acceptable location, a service department that is properly staffed and equipped to service Sea Ray or boston Whaler products, as applicable, promptly and professionally and to maintain parts and supplies to service such products properly on a timely basis, to provide or arrange for warranty and service work for such products. Sea Ray and boston Whaler respectively have each agreed to indemnify us against any losses to third parties resulting from their respective negligent acts or omissions involving the design or manufacture of any of its products or any breach by it of the agreement. We have agreed to indemnify Sea Ray or boston Whaler respectively against any losses to third parties resulting from our negligent acts or omissions involving the dealer’s application, use, or repair of Sea Ray or boston Whaler products respectively, statements or representation not specifically authorized by the relevant manufacturer, the installation of any after-market components or any other modification or alteration of the products, and any breach by us of the agreement. The agreements may be terminated: • • • • • by the manufacturer, upon 60 days’ prior written notice, if we do not have an ability to purchase products via floor plan financing or self-financing or fail to meet our financial obligations as they become due to the relevant manufacturer or to our lenders; as to any dealer region, or in the case of boston Whaler, any dealer location, if we are failing to meet performance standards and begin selling, displaying or advertising products that are competitive with the products being sold under the agreement (other than products of another brunswick brand or new products currently carried), if we do not cure our failure within 90 days after written notice, or if we are meeting the performance standards and then start failing to meet performance standards after beginning selling, displaying or advertising products that are competitive with products sold under the agreement (other than products of another brunswick brand or new products currently carried) and do not cure our failure within six months after written notice, or with respect to boston Whaler and dealer’s locations in New York, in the event such dealer location fails to meet performance standards and does not cure such failure within 6 months after written notice; with respect to the Sea Ray agreements, by either party upon prior written notice to the other given within 60 days after the 6 th anniversary of the agreement, with termination effective at the end of the 7 th year, failing which the agreement will renew for a 3 year term beginning on the 7 th anniversary; with respect to the boston Whaler agreements, by either party upon prior written notice to the other given within 60 days after the 4th anniversary of the agreement, with termination effective at the end of the 5 th year, failing which the agreement will renew for a 2 year term beginning on the 5 th anniversary; with respect to Sea Ray, following the 7 th anniversary of the agreement, upon 24 months’ notice (or with respect to boston Whaler, following the 5 th anniversary of the agreement, upon 12 months’ notice), in the event of a material breach or default of any of the material obligations, performance standards, covenants, representations, warranties or duties imposed in the agreement or in the applicable manufacturer’s policies or programs applicable to domestic dealers which breach is not cured during the notice period and through the parties working in good faith to resolve any issue; by Sea Ray or boston Whaler, as applicable, or us upon 60 days’ written notice if the other makes a fraudulent misrepresentation that is material to the agreement or in the event of the insolvency, bankruptcy, or receivership of the other; 17 • • • by Sea Ray or boston Whaler, as applicable, in the event of the assignment of the agreement by the dealer without the prior written consent of Sea Ray or boston Whaler, as applicable; by Sea Ray or boston Whaler, as applicable, upon at least 60 days' prior written notice in the event of the commission by dealer of an act of fraud upon Sea Ray or boston Whaler, as applicable, or the commission by us or one of our officers of a felony or act of fraud which is materially detrimental to Sea Ray’s or boston Whaler’s respective reputation or business or which materially impairs our ability to perform our duties under the agreement or we fail to pay any lender financing products under the agreement after the sale of products by us; or upon the mutual consent of Sea Ray or boston Whaler, as applicable, and us. either party may elect to not extend the term at the expiration of each applicable 12 month period in the event of a material breach or default by the other of any of the material obligations, performance standards, covenants, representations, warranties, or duties imposed by the agreement or the manufacturer’s manual that is not remedied or cured following notice thereof. in the event of a remedy or cure, the additional 12 month period shall be added to the term. Dealer Agreements with Azimut We are parties to Dealership agreements with azimut benetti S.P.a. for the retail sale, display, and servicing of designated azimut products and parts sold by azimut. The Dealership agreements automatically renew each year provided that we are able to agree in good faith on acceptable retail sales goals. The Dealership agreements grant us the exclusive right to sell the azimut products and parts in designated geographical areas. among other things, each Dealership agreement requires the applicable dealer to: • • • • • • • • • • • • display the azimut products in the most appropriate and effective manner; maintain an adequate inventory of azimut products and meet mutually agreed upon minimum purchase requirements; use commercially reasonable best efforts to establish the best image for azimut and to promote the sales of the products; operate through at least one permanent office to ensure adequate promotion of the products; maintain adequate signage to show azimut at its offices or service yards; promote the products at various events and meetings; advertise and market the products in accordance with agreed upon marketing plans and budgets; attend boat shows and display a full range of boats; maintain appropriate and adequate after-sale service; provide assistance under warranty for all boats in the geographical area; comply with azimut’s warranty procedures; and perform maintenance services for azimut boats. azimut has agreed to indemnify each of our dealers against any losses resulting from an alleged breach of warranty or injury or damage caused by a defect in design, manufacture or assembly of a product. each of our dealers has agreed to indemnify azimut against any losses resulting from the dealer’s failure to comply with any material obligation with respect to a product or customer; any actual negligence, errors or omissions in connection with the sale, preparation, repairs, or service of products; any modification of products except as approved by azimut; a breach of any material agreement; or unauthorized warranties, misleading statements, misrepresentations or deceptive or unfair practices. each dealer agreement may be terminated upon 30 days prior written notice in event that the defaulting party has not remedied a default during such period, in the event of any of the following: • • • by azimut or dealer, for failure of the other to maintain a necessary license; by azimut or dealer, for the change, transfer, or attempted transfer by the other party of the whole or any part of the agreement other than to an affiliate as part of a corporate restructuring or any change in control without the prior consent of azimut; by azimut or dealer, for the knowing submission of an intentional fraudulent statement, application, request, refund, credit, or warranty claim; 18 • • • • • • • • by azimut or dealer, for the knowing use of a deceptive or fraudulent practice i n the sale of a product; by azimut or dealer, for the indictment for or conviction of a crime or violation of law which will have an adverse and material effect on the other’s reputation or operations; by azimut or dealer, for the other entering into an agreement or understanding to fix prices for the products; by dealer for azimut’s material and continuous failure to supply product or appointing another dealer in the territory or failure to fulfill warranty obligations; by azimut for dealer’s abandonment of operations or failure to maintain business as a going concern; by azimut for dealer’s material and continuous failure to represent, promote, sell, or service the products, achieve minimum yearly sales or comply with purchase orders as agreed by the parties considering various factors such as the economy, the euro impact, product availability, and growth potential; by azimut or dealer for the insolvency, bankruptcy, commencement of bankruptcy proceedings, appointment of a receiver or other officer with similar powers, levy under attachment, garnishment or execution, or similar process, which is not vacated or removed within ten days; and by mutual agreement of the dealer and azimut. Upon termination of the dealer agreements by azimut without cause, termination by dealer with cause and nonrenewal and expiration, azimut is required to repurchase unsold inventory within sixty days of termination. Employees as of September 30, 2018, we had 1,573 employees, 1,466 of whom were in store-level operations and 107 of whom were in corporate administration and management. We are not a party to any collective bargaining agreements. We consider our relations with our employees to be excellent. Trademarks and Service Marks We have registered trade names and trademarks with the U.S. Patent and Trademark Office for various names, including “MarineMax,” “MarineMax Getaways!®,” “MarineMax Care,” “MarineMax Delivering the boating Dream,” “Newcoast Financial Services,” “MarineMax boating Gear Center,” “boating Gear Center Powered by MarineMax,” “MarineMax Vacations,” “United by Water,” “Women on Water,” “MarineMax Maximizing Your enjoyment on the Water,” “Myboat.com,” “Nukleus,” and “Max Makeover.” We have registered the name “MarineMax” in the european Union, China, australia, brazil, india, and Cuba; “MarineMax Maximizing Your enjoyment on the Water” in the european Union, Cuba, india, and australia; and “United by Water” in the european Union, China, australia, india, and Cuba. We have trade names and trademarks registered in Canada for various names, including “MarineMax,” “Delivering the Dream,” “United by Water,” “The Water Gene,” “Myboat.com,” and “Nukleus.” We have various trade name and trademark applications outside of the United States for various marks, specifically “Nukleus” in india, and “United by Water” in brazil. There can be no assurance that any of these applications will be granted. Seasonality and Weather Conditions Our business, as well as the entire recreational boating industry, is highly seasonal, with seasonality varying in different geographic markets. Over the three-year period ended September 30, 2018, the average revenue for the quarters ended December 31, March 31, June 30, and September 30 represented approximately 20%, 22%, 33%, and 25%, respectively, of our average annual revenues. With the exception of Florida, we generally realize significantly lower sales and higher levels of inventories and related short-term borrowings, in the quarterly periods ending December 31 and March 31. The onset of the public boat and recreation shows in January generally stimulates boat sales and typically allows us to reduce our inventory levels and related short-term borrowings throughout the remainder of the fiscal year. Our business is also subject to weather patterns, which may adversely affect our results of operations. For example, prolonged winter conditions, drought conditions (or merely reduced rainfall levels) or excessive rain, may limit access to area boating locations or render boating dangerous or inconvenient, thereby curtailing customer demand for our products. in addition, unseasonably cool weather and prolonged winter conditions may lead to a shorter selling season in certain locations. Hurricanes and other storms could result in disruptions of our operations or damage to our boat inventories and facilities, as has been the case when Florida and other markets were affected by hurricanes, such as Hurricanes Harvey and irma in 2017. although our geographic diversity is likely to reduce the overall impact to us of adverse weather conditions in any one market area, these conditions will continue to represent potential, material adverse risks to us and our future financial performance. 19 Environmental and O ther Regulatory Issues Our operations are subject to extensive regulation, supervision, and licensing under various federal, state, and local statutes, ordinances, and regulations. While we believe that we maintain all requisite licenses and permits and are in compliance with all applicable federal, state, and local regulations, there can be no assurance that we will be able to maintain all requisite licenses and permits. The failure to satisfy those and other regulatory requirements could have a material adverse effect on our business, financial condition, and results of operations. The adoption of additional laws, rules, and regulations could also have a material adverse effect on our business. Various federal, state, and local regulatory agencies, including the Occupational Safety and Health administration, or OSHa, the United States environmental Protection agency, or ePa, and similar federal and local agencies, have jurisdiction over the operation of our dealerships, repair facilities, and other operations with respect to matters such as consumer protection, workers’ safety, and laws regarding protection of the environment, including air, water, and soil. The ePa has various air emissions regulations for outboard marine engines that impose more strict emissions standards for two-cycle, gasoline outboard marine engines. The majority of the outboard marine engines we sell are manufactured by Mercury Marine. Mercury Marine’s product line of low-emission engines, including the OptiMax, Verado, SeaPro, Pro XS, and other four-stroke outboards, have achieved the ePa’s mandated 2006 emission levels. any increased costs of producing engines resulting from ePa standards, or the inability of our manufacturers to comply with ePa requirements, could have a material adverse effect on our business. Certain of our facilities own and operate underground storage tanks, or USTs, and above ground storage tanks, or aSTs, for the storage of various petroleum products. The USTs and aSTs are generally subject to federal, state, and local laws and regulations that require testing and upgrading of tanks and remediation of contaminated soils and groundwater resulting from leaking tanks. in addition, if leakage from Company-owned or operated tanks migrates onto the property of others, we may be subject to civil liability to third parties for remediation costs or other damages. based on historical experience, we believe that our liabilities associated with tank testing, upgrades, and remediation are unlikely to have a material adverse effect on our financial condition or operating results. as with boat dealerships generally, and parts and service operations in particular, our business involves the use, handling, storage, and contracting for recycling or disposal of hazardous or toxic substances or wastes, including environmentally sensitive materials, such as motor oil, waste motor oil and filters, transmission fluid, antifreeze, freon, waste paint and lacquer thinner, batteries, solvents, lubricants, degreasing agents, gasoline, and diesel fuels. accordingly, we are subject to regulation by federal, state, and local authorities establishing requirements for the use, management, handling, and disposal of these materials and health and environmental quality standards, and liability related thereto, and providing penalties for violations of those standards. We are also subject to laws, ordinances, and regulations governing investigation and remediation of contamination at facilities we operate to which we send hazardous or toxic substances or wastes for treatment, recycling, or disposal. We do not believe we have any material environmental liabilities or that compliance with environmental laws, ordinances, and regulations will, individually or in the aggregate, have a material adverse effect on our business, financial condition, or results of operations. However, soil and groundwater contamination has been known to exist at certain properties owned or leased by us. We have also been required and may in the future be required to remove aboveground and underground storage tanks containing hazardous substances or wastes. as to certain of our properties, specific releases of petroleum have been or are in the process of being remedied in accordance with state and federal guidelines. We are monitoring the soil and groundwater as required by applicable state and federal guidelines. in addition, the shareholders of the acquired dealers have indemnified us for specific environmental issues identified on environmental site assessments performed by us as part of the acquisitions. We maintain insurance for pollutant cleanup and removal. The coverage pays for the expenses to extract pollutants from land or water at the insured property, if the discharge, dispersal, seepage, migration, release, or escape of the pollutants is caused by or results from a covered cause of loss. We also have additional storage tank liability insurance and “Superfund” coverage where applicable. in addition, certain of our retail locations are located on waterways that are subject to federal or state laws regulating navigable waters (including oil pollution prevention), fish and wildlife, and other matters. Three of the properties we own were historically used as gasoline service stations. Remedial action with respect to prior historical site activities on these properties has been completed in accordance with federal and state law. We, however, do not believe that these environmental issues will result in any material liabilities to us. additionally, certain states have required or are considering requiring a license in order to operate a recreational boat. While such licensing requirements are not expected to be unduly restrictive, regulations may discourage potential first-time buyers, thereby limiting future sales, which could adversely affect our business, financial condition, and results of operations. 20 Product Liability The products we sell or service may expose us to potential liabilities for personal injury or property damage claims relating to the use of those products. Historically, the resolution of product liability claims has not materially affected our business. Our manufacturers generally maintain product liability insurance, and we maintain third-party product liability insurance, which we believe to be adequate. However, we may experience legal claims in excess of our insurance coverage, and those claims may not be covered by insurance. Furthermore, any significant claims against us could adversely affect our business, financial condition, and results of operations and result in negative publicity. excessive insurance claims also could result in increased insurance premiums. Competition We operate in a highly competitive environment. in addition to facing competition generally from recreation businesses seeking to attract consumers’ leisure time and discretionary spending dollars, the recreational boat industry itself is highly fragmented, resulting in intense competition for customers, quality products, boat show space, and suitable retail locations. We rely to a certain extent on boat shows to generate sales. Our inability to participate in boat shows in our existing or targeted markets could have a material adverse effect on our business, financial condition, and results of operations. We compete primarily with single-location boat dealers and, with respect to sales of marine equipment, parts, and accessories, with national specialty marine stores, catalog and online retailers, sporting goods stores, and mass merchants. Competition among boat dealers is generally based on the quality of available products, the price and value of the products, and attention to customer service. There is significant competition both within markets we currently serve and in new markets that we may enter. We compete in each of our markets with retailers of brands of boats and engines we do not sell in that market. in addition, several of our competitors, especially those selling boating accessories, are large national or regional chains that have substantial financial, marketing, and other resources. However, we believe that our integrated corporate infrastructure and marketing and sales capabilities, our cost structure, and our nationwide presence enable us to compete effectively against these companies. Private sales of used boats represent an additional significant source of competition. Executive Officers The following table sets forth information concerning each of our executive officers as of November 29, 2018: Name William H. McGill Jr. William brett McGill Michael H. McLamb Charles a. Cashman anthony e. Cassella, Jr Age 74 50 53 55 49 Position executive Chairman of the board, and Director Chief executive Officer and President executive Vice President, Chief Financial Officer, Secretary, and Director executive Vice President and Chief Revenue Officer Vice President and Chief accounting Officer William H. McGill Jr . has served as the executive Chairman of the board since October 2018. Mr. McGill served as Chief executive Officer of our company from January 23, 1998 to September 30, 2018 and as the Chairman of the board and as a director of our company since March 6, 1998. Mr. McGill served as the President of our company from January 23, 1988 until September 8, 2000 and re-assumed the position from July 1, 2002 to October 1, 2017. Mr. McGill was the principal owner and president of Gulfwind USa, inc., one of our operating subsidiaries, from 1973 until its merger with us in 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. William Brett McGill has served as Chief executive Officer since October 2018, and as President since October 2017. Mr. McGill served as President and Chief Operating Officer of our company from October 2017 to October 2018. Mr. McGill served as executive Vice President and Chief Operating Officer from October 2016 to October 2017, executive Vice President Operations of our company from October 2015 to September 2016, as Vice President of West Operations of our company from May 2012 to September 2015, and was appointed as an executive officer by our board of Directors in November 2012. Mr. McGill served as one of our Regional Presidents from March 2006 to May 2012, as Vice President of information Technology, Service and Parts of our company from October 2004 to March 2006, and as Director of information Services from March 1998. Mr. McGill began his professional career with a software development firm, integrated Dealer Systems, prior to joining our company in 1996. William 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 23, 1998, as Secretary since april 5, 1998, and as a director since November 1, 2003. Mr. McLamb served as Vice President and Treasurer of our company from January 23, 1998 until October 22, 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. 21 Charles A. Cashman has served as executive Vice President and Chief Revenue Officer of our company since October 2016. Mr. Cashman served as executive Vice President Sales, Marketing, and Manufacturer Relations of our company from October 2015 to September 2016, served as Vice President of east Operations of our company from May 2012 to September 2015, and was appointed as an executive officer by our bo ard of Directors in November 2012. Mr. Cashman served as Regional President of east Florida from October 2008 to May 2012, and as District Manager of the east Coast of Florida from March 2007 to October 2008. Mr. Cashman served several other positions of increasing responsibility, including Sales Consultant, Sales Manager, and General Manager, since joining our company in 1992. Anthony E. Cassella, Jr. has served as Vice President of our company since February 2016, Chief accounting Officer of our company since October 2014, and Vice President of accounting and Shared Services of our company since February 2011. Mr. Cassella served as Director of Shared Services from October 2007 until February 2011 and Regional Controller from March 1999 until October 2007. Mr. Cassella was the Controller of Merit Marine which the Company acquired in March 1999. Mr. Cassella, a certified public accountant, worked in public accounting from June 1991 to February 1998, serving most recently as manager. Item 1A. Risk Factors General economic conditions and consumer spending patterns can have a material adverse effect on our business, financial condition, and results of operations. General economic conditions and consumer spending patterns can negatively impact our operating results. Unfavorable local, regional, national, or global economic developments or uncertainties regarding future economic prospects could reduce consumer spending in the markets we serve and adversely affect our business. economic conditions in areas in which we operate dealerships, particularly Florida in which we generated approximately 55%, 55%, and 51% of our revenue during fiscal 2016, 2017, and 2018, respectively, can have a major impact on our operations. Local influences, such as corporate downsizing, military base closings, and inclement weather such as hurricanes or other storms, environmental conditions, and specific events, such as the bP oil spill in the Gulf of Mexico in 2010, or Hurricanes Harvey and irma in 2017, also could adversely affect, and in certain instances have adversely affected, our operations in certain markets. in an economic downturn, consumer discretionary spending levels generally decline, at times resulting in disproportionately large reductions in the sale of luxury goods. Consumer spending on luxury goods also may decline as a result of lower consumer confidence levels, even if prevailing economic conditions are favorable. as a result, an economic downturn could impact us more than certain of our competitors due to our strategic focus on a higher end of our market. although we have expanded our operations during periods of stagnant or modestly declining industry trends, the cyclical nature of the recreational boating industry or the lack of industry growth could adversely affect our business, financial condition, or results of operations in the future. any period of adverse economic conditions or low consumer confidence has a negative effect on our business. Lower consumer spending resulting from a downturn in the housing market and other economic factors adversely affected our business in fiscal 2007, and continued weakness in consumer spending and depressed economic conditions had a substantial negative effect on our business for several years afterwards. Our revenue decreased from $1.2 billion in fiscal 2007, to $885.4 million in fiscal 2008, to $588.6 million in fiscal 2009, and to $450.3 million in fiscal 2010. Our earnings decreased from a net income of $20.1 million in fiscal 2007 to a net loss of $134.3 million in fiscal 2008 (including a $122.1 million goodwill impairment charge), a net loss of $76.8 million in fiscal 2009, net income of $2.5 million in fiscal 2010 (including a $19.2 million tax refund), and a net loss of $11.5 million in fiscal 2011. These substantially deteriorating economic and financial conditions had a greater impact on many other participants in the boating industry, with certain manufacturers and dealers ceasing business operations or filing for bankruptcy. Unfavorable economic conditions can cause us to reduce our acquisition program, delay new store openings, reduce our inventory purchases, engage in inventory reduction efforts, close a number of our retail locations, reduce our headcount, and amend and replace our credit facility. While we believe the steps we took enabled us to emerge from the economic environment of the severe recession as a stronger and more profitable company, we cannot predict whether unfavorable economic, financial, or industry conditions will return or the extent to which they would adversely affect our operating results if they returned nor can we predict the effectiveness of the measures we have taken to address this environment or whether additional measures will be necessary. a return of depressed economic or industry factors would have additional negative effects on our company, including interfering with our supply of certain brands by manufacturers, reduced marketing and other support by manufacturers, decreased revenue, additional pressures on margins, and our failure to satisfy covenants under our credit agreement. 22 The availability and costs of borrowed funds can adversely affect our ability to obtain adequate b oat inventory and the ability and willingness of our customers to finance boat purchases. The availability and costs of borrowed funds can adversely affect our ability to obtain and maintain adequate boat inventory and the holding costs of that inventory as well as the ability and willingness of our customers to finance boat purchases. as of September 30, 2018, we had no long-term debt. We rely on the amended Credit Facility led by Wells Fargo Commercial Distribution Finance LLC to purchase and maintain our inventory of boats. The amended Credit Facility provides a floor plan financing commitment of up to $400.0 million. The collateral for the amended Credit Facility is primarily the Company’s inventory that is financed through the amended Credit Facility and related accounts receivable. None of our real estate has been pledged as collateral for the amended Credit Facility. as of September 30, 2018, we were in compliance with all of the covenants under the amended Credit Facility and our additional available borrowings under the amended Credit Facility was approximately $212.9 million based upon the outstanding borrowing base availability. Our ability to borrow under the amended Credit Facility depends on our ability to continue to satisfy our covenants and other obligations under the amended Credit Facility and the ability for our manufacturers to be approved vendors under our amended Credit Facility. The variable interest rate under our amended Credit Facility will fluctuate with changing market conditions and, accordingly, our interest expense will increase as interest rates rise. a significant increase in interest rates could have a material adverse effect on our operating results. The aging of our inventory limits our borrowing capacity as defined provisions in the amended Credit Facility reduce the allowable advance rate as our inventory ages. Our access to funds under the amended Credit Facility also depends upon the ability of our lenders, to meet their funding commitments, particularly if they experience shortages of capital or experience excessive volumes of borrowing requests from others during a short period of time. Depressed economic conditions, weak consumer spending, turmoil in the credit markets, and lender difficulties, among other potential reasons, could interfere with our ability to maintain compliance with our debt covenants and to utilize the amended Credit Facility to fund our operations. accordingly, under such circumstances, it may be necessary for us to close stores, further reduce our expense structure, liquidate inventory below cost to free up capital, or modify the covenants with our lenders. any inability to utilize the amended Credit Facility or the acceleration of amounts owed, resulting from a covenant violation, insufficient collateral, or lender difficulties, could require us to seek other sources of funding to repay amounts outstanding under the amended Credit Facility or replace or supplement the amended Credit Facility, which may not be possible at all or under commercially reasonable terms. Similarly, decreases in the availability of credit and increases in the cost of credit adversely affect the ability of our customers to purchase boats from us and thereby adversely affect our ability to sell our products and impact the profitability of our finance and insurance activities. For example, tight credit conditions during each fiscal year beginning with fiscal 2008 and continuing through fiscal 2011 adversely affected the ability of customers to finance boat purchases, which had a negative effect on our operating results. Failure to implement strategies to enhance our performance or our strategies could have a material adverse effect on our business and financial condition. We are increasing our efforts to grow our financing and insurance, parts and accessories, service, yacht charter, brokerage, and boat storage businesses to better serve our customers and thereby increase revenue and improve profitability as a result of these higher margin businesses. in addition, we have implemented programs to increase the lead capture and sale over the internet of used boats, parts, accessories, and a wide range of boating supplies and products. These efforts and programs are designed to increase our revenue and reduce our dependence on the sale of new boats. in addition, we are pursuing strategic acquisitions to capitalize upon the consolidation opportunities in the highly fragmented recreational boat dealer industry by acquiring additional dealers and related operations and improving their performance and profitability through the implementation of our operating strategies, as well as pursuing contract manufacturing or vertical integration strategies as opportunities arise. These business initiatives have required, and will continue to require, us to add personnel, invest capital, enter businesses in which we do not have extensive experience, and encounter substantial competition. as a result, our strategies to enhance our performance may not be successful and we may increase our expenses or write off such investments if not successful. Our success depends to a significant extent on the well-being, as well as the continued popularity and reputation for quality of the boating products, of our manufacturers, particularly Brunswick’s Sea Ray and Boston Whaler boat lines and Azimut-Benetti Group’s Azimut products. The failure to obtain a high quality and desirable mix of competitively priced products that our customers demand could have a material adverse effect on our business, financial condition, and results of operations. approximately 40% of our revenue in fiscal 2018 resulted from sales of new boats manufactured by brunswick, including approximately 21% from brunswick’s Sea Ray division, 17% from brunswick’s boston Whaler division, and approximately 2% from brunswick’s other divisions. additionally, approximately 11% of our revenue in fiscal 2018 resulted from sales of new boats manufactured by azimut-benetti Group. The remainder of our fiscal 2018 revenue from new boat sales resulted from sales of products from a limited number of other manufacturers, none of which accounted for more than 10% of our revenue. 23 We depend on our manufacturers to provide us with products that compare favorably with competing products in terms of quality, perf ormance, safety, and advanced features, including the latest advances in propulsion and navigation systems. any adverse change in the production efficiency, product development efforts, technological advancement, expansion of manufacturing footprint, supp ly chain and third-party suppliers, marketplace acceptance, marketing capabilities, ability to secure adequate access to capital, and financial condition of our manufacturers, particularly brunswick and azimut-benetti Group given our reliance on Sea Ray, b oston Whaler, and azimut, would have a substantial adverse impact on our business. any difficulties encountered by any of our manufacturers, particularly brunswick and azimut-benetti Group, resulting from economic, financial, or other factors could advers ely affect the quality and amount of products that they are able to supply to us and the services and support they provide to us. in June 2018, brunswick announced it would be discontinuing its Sea Ray sport yacht and yacht models, resulting in the wind down of yacht production in the third calendar quarter of 2018. Sea Ray sport yacht and yacht models represented approximately 10% of revenue during fiscal year 2018. Failure to replace the Sea Ray sport yacht and yacht revenue could have a material adverse effect on our business, financial condition, and results of operations. Further, any interruption or discontinuance of the operations of brunswick, azimut-benetti Group, or other manufacturers, as experienced in June 2018 with brunswick, could cause us to experience shortfalls, disruptions, or delays with respect to needed inventory. although we believe in our brand, our product diversification and that adequate alternate sources would be available that could replace any manufacturer other than brunswick and azimut-benetti Group as a product source, those alternate sources may not be available at the time of any interruption, and alternative products may not be available at comparable quality and prices. We have dealer agreements with brunswick covering Sea Ray and boston Whaler products. each dealer agreement has a multi-year term and provides for the lowest product prices charged by the Sea Ray division of brunswick or boston Whaler, as applicable, from time to time to other domestic Sea Ray or boston Whaler dealers, as applicable. These terms are subject to: • • the dealer meeting all the requirements and conditions of the manufacturer’s applicable programs; and the right of brunswick in good faith to charge lesser prices to other dealers • • • to meet existing competitive circumstances; for unusual and non-ordinary business circumstances; or for limited duration promotional programs. each dealer agreement designates a specific geographical territory for the dealer, which is exclusive to the dealer provided that the dealer is able to meet the material obligations of its dealer agreement. in March 2006, we became the exclusive dealer for azimut-benetti Group’s azimut product line for the Northeast United States. Our geographic territory was expanded to include Florida in September 2008 and to the entire United States in July 2012. The azimut dealer agreement provides a geographic territory to promote the product line and to network with the appropriate clientele through various independent locations designated for azimut retail sales. Our dealer agreement is a multi-year term but requires us to be in compliance with its terms and conditions. as is typical in the industry, we generally deal with manufacturers, other than Sea Ray and boston Whaler (both divisions of brunswick) and azimut, under renewable annual dealer agreements. These agreements do not contain any contractual provisions concerning product pricing or required purchasing levels. Pricing is generally established on a model year basis, but is subject to change in the manufacturer’s sole discretion. any change or termination of these arrangements for any reason could adversely affect product availability and cost and our financial performance. Boat manufacturers exercise substantial control over our business. We depend on our dealer agreements. Through dealer agreements, boat manufacturers, including brunswick and azimut, exercise significant control over their dealers, restrict them to specified locations, and retain approval rights over changes in management and ownership, among other things. The continuation of our dealer agreements with most manufacturers, including brunswick and azimut, depends upon, among other things, our achieving stated goals for customer satisfaction ratings and market share penetration in the market served by the applicable dealership. Failure to meet the customer satisfaction, market share goals, and other conditions set forth in any dealer agreement could have various consequences, including the following: • • • the termination of the dealer agreement; the imposition of additional conditions in subsequent dealer agreements; limitations on boat inventory allocations; 24 • • • • reductions in reimbursement rates for warranty work performed by the dealer; loss of certain manufacturer to dealer incentives; denial of approval of future acquisitions; or the loss of exclusive rights to sell in the geographic territory. These events could have a material adverse effect on our competitive position and financial performance. The failure to receive rebates and other dealer incentives on inventory purchases or retail sales could substantially reduce our margins. We rely on manufacturers’ programs that provide incentives for dealers to purchase and sell particular boat makes and models or for consumers to buy particular boat makes or models. any eliminations, reductions, limitations, or other changes relating to rebate or incentive programs that have the effect of reducing the benefits we receive, whether relating to the ability of manufacturers to pay or our ability to qualify for such incentive programs, could increase the effective cost of our boat purchases, reduce our margins and competitive position, and have a material adverse effect on our financial performance. Fuel prices and supply may adversely affect our business. all of the recreational boats we sell are powered by diesel or gasoline engines. Consequently, an interruption in the supply, or a significant increase in the price or tax on the sale of fuel on a regional or national basis could have a material adverse effect on our sales and operating results. increases in fuel prices (such as those that occurred during fiscal 2008) negatively impact boat sales. at various times in the past, diesel or gasoline fuel has been difficult to obtain. The supply of fuels may be interrupted, rationing may be imposed, or the price of or tax on fuels may significantly increase in the future, adversely impacting our business. Our sales may be adversely impacted by a material increase in interest rates and adverse changes in fiscal policy or credit market conditions. Over the past several years, our economy has been positively impacted by historically unprecedented low interest rates. Such interest rates, driven by the policies of the Federal Reserve, are a political issue in the United States. although interest rates have risen in 2018 and are generally expected to continue to rise in fiscal 2019, the Federal Reserve continues to be somewhat ambiguous concerning the interest rate issues. The Federal Reserve has increased its benchmark interest rate this year and signaled that rates could continue to rise more quickly than previously expected. any such change or market expectation of such change may result in significantly higher long-term interest rates. Given that we sell products that are often financed, a material increase in interest rates and adverse changes in fiscal policy or credit market conditions, may negatively impact our customers’ willingness or desire to purchase our products. in addition, such an increase or adverse change could reduce the availability and/or increase the costs of obtaining new debt and refinancing existing indebtedness or negatively impact the market price of our common stock. Our sales may be adversely impacted by periods of economic or political instability or uncertainty. in times of political and economic uncertainty, consumers including high net worth individuals, may elect to defer expenditures for luxury items, which can adversely affect our financial performance. Consumer spending on luxury goods also may decline as a result of political uncertainty and instability, even if prevailing economic conditions are favorable. We cannot predict the timing of periods of political or economic uncertainty. The availability of boat insurance is critical to our success. The ability of our customers to secure reasonably affordable boat insurance that is satisfactory to lenders that finance our customers’ purchases is critical to our success. Historically, affordable boat insurance has been available. However, as a severe storm approaches land, insurance providers cease underwriting until the storm has passed. This loss of insurance prevents lenders from lending. as a result, sales of boats can be temporarily halted making our revenue difficult to predict and causing sales to be delayed or potentially cancelled. any difficulty of customers to obtain affordable boat insurance could impede boat sales and adversely affect our business. 25 Other recreational activities, poor industry perception, and pote ntial health risks from environmental conditions can adversely affect the levels of boat purchases. Other recreational activities, poor industry perception, real or perceived health risks, and environmental conditions can adversely affect the levels of boat purchases. Demand for our products can be adversely affected by competition from other activities that occupy consumers’ time, including other forms of recreation as well as religious, cultural and community activities. in addition, real or perceived health risks from engaging in outdoor activities and local environmental conditions in the areas in which we operate dealerships could adversely affect the levels of boat purchases. Further, as a seller of high-end consumer products, we must compete for discretionary spending with a wide variety of other recreational activities and consumer purchases. in addition, perceived hassles of boat ownership and customer service and customer education throughout the retail boat industry, which has traditionally been perceived to be relatively poor, represent impediments to boat purchases. Adverse federal or state tax policies can have a negative effect on us. Changes in federal and state tax laws, such as an imposition of luxury taxes on new boat purchases, increases in prevailing tax rates, and removal of certain interest deductions, also influence consumers’ decisions to purchase products we offer and could have a negative effect on our sales. For example, during 1991 and 1992, the federal government imposed a luxury tax on new recreational boats with sales prices in excess of $100,000, which coincided with a sharp decline in boating industry sales from a high of more than $17.9 billion in 1988 to a low of $10.3 billion in 1992. any increase in tax rates, including those on capital gains and dividends, particularly those on high-income taxpayers, could adversely affect our boat sales. In addition to our traditional repeat and referral business in our physical locations, digital channels are increasingly significant in serving our existing customer base and reaching new customers. Our continued expansion and success will be negatively impacted if we are not able to fully exploit these channels. Our digital channels are subject to a number of risks and uncertainties that are beyond our control, including the following: • • • • • • • • • • • changes in technology; changes in consumer willingness to conduct business electronically, including increasing concerns with consumer privacy and risk and changing laws, rules, and regulations, such as the imposition of or increase in taxes; technology or security impediments that may inhibit our ability to electronically market our products and services; changes in applicable federal, state and commercial regulation, such as the Federal Trade Commission act, the Fair Credit Reporting act, the Gramm-Leach-bliley act, purchasing card industry requirements, Office of Foreign assets Control regulations and similar types of international laws; failure of our service providers to perform their services properly and in a timely and efficient manner; failures in our infrastructure or by third parties, such as telephone or electric power service, resulting in website or application downtime or other problems; failure to adequately respond to customers, process orders or deliver services, which may negatively impact both future digital and/or in-store purchases by such customers; inability of our suppliers or service partners to fulfill customer orders, which may negatively impact customer satisfaction; our failure to assess and evaluate our digital product and service offerings to ensure that our products and services are desired by boating enthusiasts; the potential exposure to liability with respect to third-party information, including but not limited to copyright, trademark infringement, or other wrongful acts of third parties; false or erroneous information provided by third parties; or illegal activities by third parties, such as the sale of stolen boats or other goods; and cybersecurity risk. Further, we may also be vulnerable to competitive pressures from the growing electronic commerce activity in our market, both as they may impact our own on-line business, and as they may impact the operating results and investment values of our existing physical locations. Elements of our yacht charter business expose us to certain risks. Our yacht charter business entails the sale of specifically designed yachts to third parties for inclusion in our yacht charter fleet; a yacht management agreement under which yacht owners enable us to put their yachts in our yacht charter program for a period of 26 several years for a fixed monthly fee payable by us; our services in storing, insuring, and maintaining their yachts; and the charter by us of the se yachts to vacation customers at agreed fees payable to us. Our failure to find purchasers for yachts intended for our charter fleet will increase our boat inventory and related operating costs; lack of sales into our charter fleet may result in increas ed losses due to market adjustments of our yacht charter inventory; and our failure to generate a sufficient number of vacation charter customers will require us to absorb all the costs of the monthly fees to the yacht owners as well as other operating cos ts. Customers consider safety and reliability a primary concern in selecting a yacht charter provider. The yacht charter business may present a number of safety risks including but not limited to, catastrophic disaster, adverse weather and marine conditions, such as Hurricane irma in 2017, and mechanical failure and collision. if we are unable to maintain acceptable records for safety and reliability, our ability to retain current customers and attract new customers may be adversely affected. additionally, any safety issue encountered during a yacht charter may result in claims against us as well as negative publicity. These events could have a material adverse effect on the competitive position and financial performance of both our yacht charter business and our core retail sales business. The yacht charter business is also highly fragmented, consisting primarily of local operators and franchisees. Competition among charter operators is based on location, the type and size of yachts offered, charter rates, destinations serviced, and attention to customer service. Yacht charters also face competition from other travel and leisure options, including, but not limited to, cruises, hotels, resorts, theme parks, organized tours, land-based casino operators, and vacation ownership properties. We therefore risk losing business not only to other charter operators, but also to vacation operators that provide such alternatives. Our success depends, in part, on our ability to continue to make successful acquisitions at attractive or fair prices and to integrate the operations of acquired dealers and each dealer we acquire in the future. Since March 1, 1998, we have acquired 28 recreational boat dealers, two boat brokerage operations, and two full-service yacht repair facilities. each acquired dealer operated independently prior to its acquisition by us. Our success depends, in part, on our ability to continue to make successful acquisitions at attractive or fair prices that align with our culture and focus on customer service and to integrate the operations of acquired dealers, including centralizing certain functions to achieve cost savings and pursuing programs and processes that promote cooperation and the sharing of opportunities and resources among our dealerships. We may not be able to oversee the combined entity efficiently, realize anticipated synergies, or implement effectively our growth and operating strategies. To the extent that we successfully pursue our acquisition strategy, our resulting growth will place significant additional demands on our management and infrastructure. in addition, we are also pursuing contract manufacturing or vertical integration strategies as opportunities arise. To the extent we are successful in pursuing these strategies, we will face certain risks in addition to those that exist with acquisitions more closely related to our historical business, including potential inexperience in a line of business that is either new to us or that has become materially more significant to us as a result of a transaction, the potential difficulty of presenting a unified corporate image, greater uncertainties in the financial benefits and potential liabilities associated with this expanded base of acquisitions, different types of legal and operational risks, and different types of applicable financial metrics and goals. Our failure to pursue successfully our acquisition strategies or operate effectively the combined entity could have a material adverse effect on our rate of growth and operating performance. Unforeseen expenses, difficulties, and delays frequently encountered in connection with expansion through acquisitions could inhibit our growth and negatively impact our profitability. Our growth strategy of acquiring additional recreational boat dealers involves significant risks. This strategy entails reviewing and potentially reorganizing acquired business operations, corporate infrastructure and systems, and financial controls. Unforeseen expenses, difficulties, and delays frequently encountered in connection with rapid expansion through acquisitions could inhibit our growth and negatively impact our profitability. We may be unable to identify suitable acquisition candidates or to complete the acquisitions of candidates that we identify. increased competition for acquisition candidates or increased asking prices by acquisition candidates may increase purchase prices for acquisitions to levels beyond our financial capability or to levels that would not result in expected returns required by our acquisition criteria to be in the best interest of shareholders. acquisitions also may become more difficult or less attractive in the future as we acquire more of the most attractive dealers that best align with our culture and focus on customer service. in addition, we may encounter difficulties in integrating the operations of acquired dealers with our own operations, difficulties in retaining employees, create potential risks of losing customers, suppliers, or other business relationships, and encounter difficulties managing acquired dealers profitably without substantial costs, delays, or other operational or financial problems. We may issue common or preferred stock and incur substantial indebtedness in making future acquisitions. The size, timing, and integration of any future acquisitions may cause substantial fluctuations in operating results from quarter to quarter. Consequently, operating results for any quarter may not be indicative of the results that may be achieved for any subsequent quarter or for a full fiscal year. These fluctuations could adversely affect the market price of our common stock. 27 Our ability to continue to grow through the acquisition of additional dealers will depend upon various factors, including the following: • • • • • • the availability of suitable acquisition candidates at attractive purchase prices; the ability to compete effectively for available acquisition opportunities; the availability of cash on hand, borrowed funds or common stock with a sufficient market price to complete the acquisitions; the ability to obtain any requisite manufacturer or governmental approvals; the ability to obtain approval of our lenders under our current credit agreement; and the absence of one or more manufacturers attempting to impose unsatisfactory restrictions on us in connection with their approval of acquisitions. as a part of our acquisition strategy, we frequently engage in discussions with various recreational boat dealers regarding their potential acquisition by us. in connection with these discussions, we and each potential acquisition candidate exchange confidential operational and financial information, conduct due diligence inquiries, and consider the structure, terms, and conditions of the potential acquisition. in certain cases, the prospective acquisition candidate agrees not to discuss a potential acquisition with any other party for a specific period of time, grants us an option to purchase the prospective dealer for a designated price during a specific time period, and agrees to take other actions designed to enhance the possibility of the acquisition, such as preparing audited financial information and converting its accounting system to the system specified by us. Potential acquisition discussions frequently take place over a long period of time and involve difficult business integration and other issues, including in some cases, management succession and related matters. as a result of these and other factors, a number of potential acquisitions that from time to time appear likely to occur do not result in binding legal agreements and are not consummated. We may be required to obtain the consent of Brunswick and various other manufacturers prior to the acquisition of other dealers. in determining whether to approve acquisitions, manufacturers may consider many factors, including our financial condition and ownership structure. Manufacturers also may impose conditions on granting their approvals for acquisitions, including a limitation on the number of their dealers that we may acquire. Our ability to meet manufacturers’ requirements for approving future acquisitions will have a direct bearing on our ability to complete acquisitions and effect our growth strategy. There can be no assurance that a manufacturer will not terminate its dealer agreement, refuse to renew its dealer agreement, refuse to approve future acquisitions, or take other action that could have a material adverse effect on our acquisition program. We and the Sea Ray Division of brunswick have an agreement extending through august 31, 2020, with automatic annual one-year extensions at each twelve month anniversary of the agreement, provided that our dealer agreements with the Sea Ray Division of brunswick are still then in effect. The agreement provides a process for the acquisition of additional Sea Ray boat dealers that want to be acquired by us. Under the agreement, acquisitions of Sea Ray dealers will be mutually agreed upon by us and Sea Ray with reasonable efforts to be made to include a balance of Sea Ray dealers that have been successful and those that have not been. The agreement provides that Sea Ray will not unreasonably withhold its consent to any proposed acquisition of a Sea Ray dealer by us, subject to the conditions set forth in the agreement. among other things, the agreement requires us to provide Sea Ray with a business plan for each proposed acquisition, including historical financial and five-year projected financial information regarding the acquisition candidate; marketing and advertising plans; service capabilities and managerial and staff personnel; information regarding the ability of the candidate to achieve performance standards within designated periods; and information regarding the success of our previous acquisitions of Sea Ray dealers. The agreement also contemplates Sea Ray reaching a good faith determination whether the acquisition would be in its best interest based on our dedication and focus of resources on the Sea Ray brand and Sea Ray’s consideration of any adverse effects that the approval would have on the resulting territory configuration and adjacent or other dealers’ sales and the absence of any violation of applicable laws or rights granted by Sea Ray to others. Our growth strategy also entails expanding our product lines and geographic scope by obtaining additional distribution rights from our existing and new manufacturers. We may not be able to secure additional distribution rights or obtain suitable alternative sources of supply if we are unable to obtain such distribution rights. The inability to expand our product lines and geographic scope by obtaining additional distribution rights could have a material adverse effect on the growth and profitability of our business. Our growth strategy may require us to secure significant additional capital, the amount of which will depend upon the size, timing, and structure of future acquisitions and our working capital and general corporate needs. if we finance future acquisitions in whole or in part through the issuance of common stock or securities convertible into or exercisable for common stock, existing shareholders will experience dilution in the voting power of their common stock and earnings 28 per share could be negatively impacted. The extent to which we will be able and willing to use our common stock for acquisitions will depend on the market value of our common stock and the willingness of potential sellers to accept our common stock as full or par tial consideration. Our inability to use our common s tock as consideration, to generate cash from operations, or to obtain additional funding through debt or equity financings in order to pursue our acquisition program could materially limit our growth. any borrowings made to finance future acquisitions or for operations could make us more vulnerable to a downturn in our operating results, a downturn in economic conditions, or increases in interest rates on borrowings that are subject to interest rate fluctuations. if our cash flow from operations is insufficient to meet our debt service requirements, we could be required to sell additional equity securities, refinance our obligations, or dispose of assets in order to meet our debt service requirements. in addition, our credit arrangements contain financial covenants and other restrictions with which we must comply, including limitations on the incurrence of additional indebtedness. adequate financing may not be available if and when we need it or may not be available on terms acceptable to us. The failure to obtain sufficient financing on favorable terms and conditions could have a material adverse effect on our growth prospects and our business, financial condition, and results of operations. Our internal growth and operating strategies of opening new locations and offering new products involve risk. in addition to pursuing growth by acquiring boat dealers, we intend to continue to pursue a strategy of growth through opening new retail locations and offering new products in our existing and new territories. accomplishing these goals for expansion will depend upon a number of factors, including the following: • • • • • • our ability to identify new markets in which we can obtain distribution rights to sell our existing or additional product lines; our ability to lease or construct suitable facilities at a reasonable cost in existing or new markets; our ability to hire, train, and retain qualified personnel; the timely and effective integration of new retail locations into existing operations; our ability to achieve adequate market penetration at favorable operating margins without the acquisition of existing dealers; and our financial resources. Our dealer agreements with brunswick require brunswick’s consent to open, close, or change retail locations that sell Sea Ray or boston Whaler products as applicable, and other dealer agreements generally contain similar provisions. We may not be able to open and operate new retail locations or introduce new product lines on a timely or profitable basis. Moreover, the costs associated with opening new retail locations or introducing new product lines may adversely affect our profitability. as a result of these growth strategies, we expect to continue to expend significant time and effort in opening and acquiring new retail locations, improving existing retail locations in our current markets, and introducing new products. Our systems, procedures, controls, and financial resources may not be adequate to support expanding operations. The inability to manage our growth effectively could have a material adverse effect on our business, financial condition, and results of operations. Our planned growth also will impose significant added responsibilities on members of senior management and require us to identify, recruit, and integrate additional senior level managers. We may not be able to identify, hire, or train suitable additions to management. Our business, as well as the entire recreational boating industry, is highly seasonal, with seasonality varying in different geographic markets. Over the three-year period ended September 30, 2018, the average revenue for the quarterly periods ended December 31, March 31, June 30, and September 30 represented approximately 20%, 22%, 33%, and 25%, respectively, of our average annual revenue. With the exception of Florida, we generally realize significantly lower sales and higher levels of inventories and related short-term borrowings in the quarterly periods ending December 31 and March 31. The onset of the public boat and recreation shows in January stimulates boat sales and allows us to reduce our inventory levels and related short-term borrowings throughout the remainder of the fiscal year. Our business could become substantially more seasonal if we acquire dealers that operate in colder regions of the United States, which are generally closed or experience lower volume in the winter months. 29 Weather and environmental conditions may adversely impact our business. Weather and environmental conditions may adversely impact our operating results. For example, drought conditions, reduced rainfall levels, excessive rain and environmental conditions, such as the bP oil spill in the Gulf of Mexico in 2010 or recent hurricanes in the Gulf of Mexico and atlantic Ocean, may force boating areas to close or render boating dangerous or inconvenient, thereby curtailing customer demand for our products. While we traditionally maintain a full range of insurance coverage for any such events, there can be no assurance that such insurance coverage is adequate to cover losses that we sustain as a result of such disasters. in addition, unseasonably cool weather and prolonged winter conditions may lead to shorter selling seasons in certain locations. Many of our dealerships sell boats to customers for use on reservoirs, thereby subjecting our business to the continued viability of these reservoirs for boating use. although our geographic diversity and any future geographic expansion should reduce the overall impact on us of adverse weather and environmental conditions in any one market area, weather and environmental conditions will continue to represent potential material adverse risks to us and our future operating performance. in addition, hurricanes and other storms could result in the disruption of our operations and/or supply chain, including boat deliveries from manufacturers, or damage to our boat inventories and facilities as has been the case when Florida and other markets have been affected by hurricanes. While we traditionally maintain property and casualty insurance coverage for damage caused by hurricanes and other storms, there can be no assurance that such insurance coverage is adequate to cover losses that we may sustain as a result of hurricanes and other storms such as damage from Hurricane Sandy in 2012 or Hurricanes Harvey and irma in 2017. We maintain insurance for property damage and business interruption, subject to deductibles. We face intense competition. We operate in a highly competitive environment. in addition to facing competition generally from recreation businesses seeking to attract consumers’ leisure time and discretionary spending dollars, the recreational boat industry itself is highly fragmented, resulting in intense competition for customers, quality products, boat show space, and suitable retail locations. We rely to a certain extent on boat shows to generate sales. Our inability to participate in boat shows in our existing or targeted markets could have a material adverse effect on our business, financial condition, and results of operations. We compete primarily with single-location boat dealers and, with respect to sales of marine parts, accessories, and equipment, with national specialty marine parts and accessories stores, online catalog retailers, sporting goods stores, and mass merchants. Competition among boat dealers is based on the quality of available products, the price and value of the products, and attention to customer service. There is significant competition both within markets we currently serve and in new markets that we may enter. We compete in each of our markets with retailers of brands of boats and engines we do not sell in that market. in addition, several of our competitors, especially those selling marine equipment and accessories, are large national or regional chains that have substantial financial, marketing, and other resources. Private sales of used boats represent an additional source of competition. Due to various matters, including environmental concerns, permitting and zoning requirements, and competition for waterfront real estate, some markets in the United States have experienced an increased waiting list for marina and storage availability. in general, the markets in which we currently operate are not experiencing any unusual difficulties. However, marine retail activity could be adversely affected in markets that do not have sufficient marine and storage availability to satisfy demand. A significant amount of our boat sales are from the State of Florida. economic conditions, weather and environmental conditions, competition, market conditions, and any other adverse conditions impacting the State of Florida in which we generated approximately 55%, 55%, and 51% of our revenue during fiscal 2016, 2017, and 2018, respectively, could have a major impact on our operations. Timing of large boat and yacht sales and failure to adequately anticipate consumer preference and demand may have an adverse impact on our business. Forecasting optimal inventory levels is difficult to predict based on changes in economic conditions, consumer preferences, delivery of new models from manufacturers, and timing of large boat and yacht sales. Failure to adequately anticipate consumer demand and preferences could negatively impact our inventory management strategies, inventory carrying costs, and our operating margins. We depend on income from financing, insurance, and extended service contracts. a portion of our income results from referral fees derived from the placement or marketing of various finance and insurance, or F&i products, consisting of customer financing, insurance products, and extended service contracts, the most significant component of which is the participation and other fees resulting from our sale of customer financing contracts. 30 The availability of financing for our boat purchasers and the level of par ticipation and other fees we receive in connection with such financing depend on the particular agreement between us and the lender and the current rate environment. Lenders may impose terms in their boat financing arrangements with us that may be unfavor able to us or our customers, resulting in reduced demand for our customer financing programs and lower participation and other fees. Laws or regulations may be enacted nationally or locally which could result in fees from lenders being eliminated or reduc ed, materially im pact ing our operating results. if customer financing becomes more difficult to secure, it may adversely impact our business. Changes, including the lengthening of manufacturer warranties, may reduce our ability to offer and sell extended service contracts which may have a material adverse impact on our ability to sell F&i products. The Dodd-Frank act established a consumer financial protection bureau with broad regulatory powers. although boat dealers are generally excluded, the Dodd-Frank act could lead to additional, indirect regulation of boat dealers through its regulation of other financial institutions which provide such financing to our customers. The reduction of profit margins on sales of F&i products or the lack of demand for or the unavailability of these products could have a material adverse effect on our operating margins. Our operations are dependent upon key personnel and team members. Our success depends, in large part, upon our ability to attract, train, and retain, qualified team members and executive officers, as well as the continuing efforts and abilities of team members and executive officers. although we have employment agreements with certain of our executive officers and management succession plans, we cannot ensure that these or other executive personnel and team members will remain with us, or that our succession planning will adequately mitigate the risk associated with key personnel transitions. expanding our operations may require us to add additional executive personnel and team members in the future. as a result of our decentralized operating strategy, we also rely on the management teams of our dealerships. in addition, we likely will depend on the senior management of any significant businesses we acquire in the future. The loss of the services of one or more key employees before we are able to attract and retain qualified replacement personnel could adversely affect our business. additionally, our ability to manage our personnel costs and operating expenses is subject to external factors such as unemployment levels, prevailing wage rates, healthcare and other benefit costs, changing demographics, and our reputation and relevance within the labor markets where we are located. The products we sell or service may expose us to potential liability for personal injury or property damage claims relating to the use of those products. Manufacturers of the products we sell generally maintain product liability insurance. We also maintain third-party product liability insurance that we believe to be adequate. We may experience claims that are not covered by or that are in excess of our insurance coverage. The institution of any significant claims against us could subject us to damages, result in higher insurance costs, and harm our business reputation with potential customers. Environmental and other regulatory issues may impact our operations. Our operations are subject to extensive regulation, supervision, and licensing under various federal, state, and local statutes, ordinances, and regulations, such as those relating to finance and insurance, consumer protection, consumer privacy, escheatment, anti-money laundering, environmental, emissions, health or safety, and employment practices. With respect to employment practices, we are subject to various laws and regulations, including complex federal, state, and local wage and hour and anti-discrimination laws. The failure to satisfy those and other regulatory requirements could have a material adverse effect on our business, financial condition, and results of operations. in addition, failure to comply with U.S. trade sanctions, the U.S. Foreign Corrupt Practices act and other applicable laws or regulations could result in the assessment of damages, the imposition of penalties, changes to our processes, or a cessation of our operations, as well as damage to our image and reputation, all of which could have a material adverse effect on our business. Various federal, state, and local regulatory agencies, including the Occupational Safety and Health administration, or OSHa, the United States environmental Protection agency, or ePa, and similar federal and local agencies, have jurisdiction over the operation of our dealerships, repair facilities, and other operations, with respect to matters such as consumer protection, workers’ safety, and laws regarding protection of the environment, including air, water, and soil. The ePa promulgated emissions regulations for outboard marine engines that impose stricter emissions standards for two-cycle, gasoline outboard marine engines. The majority of the outboard marine engines we sell are manufactured by Mercury Marine. Mercury Marine’s product line of low-emission engines, including the OptiMax, Verado, SeaPro, Pro XS, and other four-stroke outboards, have achieved the ePa’s mandated 2006 emission levels. it is possible that environmental regulatory bodies may impose higher emissions standards in the future for these and other marine engines. any increased costs of producing engines resulting from current or potentially higher ePa standards in the 31 future could be passed on to our company, or could result in the inability or potential unfor eseen delays of our manufacturers to comply with current and future ePa requirements, and these potential consequences could have a material adverse effect on our business. Certain of our facilities own and operate underground storage tanks, or USTs, and above ground storage tanks, or aSTs, for the storage of various petroleum products. USTs and aSTs are generally subject to federal, state, and local laws and regulations that require testing and upgrading of tanks and remediation of contaminated soils and groundwater resulting from leaking tanks. in addition, we may be subject to civil liability to third parties for remediation costs or other damages if leakage from our owned or operated tanks migrates onto the property of others. Our business involves the use, handling, storage, and contracting for recycling or disposal of hazardous or toxic substances or wastes, including environmentally sensitive materials, such as motor oil, waste motor oil and filters, transmission fluid, antifreeze, freon, waste paint and lacquer thinner, batteries, solvents, lubricants, degreasing agents, gasoline, and diesel fuels. accordingly, we are subject to regulation by federal, state, and local authorities establishing investigation and health and environmental quality standards, and liability related thereto, and providing penalties for violations of those standards. We also are subject to laws, ordinances, and regulations governing investigation and remediation of contamination at facilities we operate or to which we send hazardous or toxic substances or wastes for treatment, recycling, or disposal. in particular, the Comprehensive environmental Response, Compensation and Liability act, or CeRCLa or “Superfund,” imposes joint, strict, and several liability on: • • • owners or operators of facilities at, from, or to which a release of hazardous substances has occurred; parties that generated hazardous substances that were released at such facilities; and parties that transported or arranged for the transportation of hazardous substances to such facilities. a majority of states have adopted Superfund statutes comparable to and, in some cases, more stringent than CeRCLa. if we were to be found to be a responsible party under CeRCLa or a similar state statute, we could be held liable for all investigative and remedial costs associated with addressing such contamination. in addition, claims alleging personal injury or property damage may be brought against us as a result of alleged exposure to hazardous substances resulting from our operations. in addition, certain of our retail locations are located on waterways that are subject to federal or state laws regulating navigable waters (including oil pollution prevention), fish and wildlife, and other matters. Soil and groundwater contamination has been known to exist at certain properties owned or leased by us. We have also been required and may in the future be required to remove aboveground and underground storage tanks containing hazardous substances or wastes. as to certain of our properties, specific releases of petroleum have been or are in the process of being remediated in accordance with state and federal guidelines. We are monitoring the soil and groundwater as required by applicable state and federal guidelines. We also may have additional storage tank liability insurance and Superfund coverage where applicable. environmental laws and regulations are complex and subject to frequent change. Compliance with amended, new, or more stringent laws or regulations, more strict interpretations of existing laws, or the future discovery of environmental conditions may require additional expenditures by us, and such expenditures may be material. Three of the properties we own were historically used as gasoline service stations. Remedial action with respect to prior historical site activities on these properties has been completed in accordance with federal and state law. While we do not believe that these environmental issues will result in any material liabilities to us, we cannot provide assurances that no such material liabilities will occur. additionally, certain states have required or are considering requiring a license in order to operate a recreational boat. These regulations could discourage potential buyers, thereby limiting future sales and adversely affecting our business, financial condition, and results of operations. Furthermore, the Patient Protection and affordable Care act, increased our annual employee health care costs that we fund, and significantly increased our cost of compliance and compliance risk related to offering health care benefits. Finally, new laws and regulations, particularly at the federal level, in other areas may be enacted, which could also materially adversely impact our business. adverse changes in labor policy could lead to increased unionization efforts, which could lead to higher labor costs, disrupt our store operations, and adversely affect our operating results. 32 The market price of our common stock could be subject to wide fluctuatio ns as a result of many factors. Factors that could affect the trading price of our common stock include the following: • • • • • • • • • • • • • • • variations in our operating results; the thin trading volume and relatively small public float of our common stock; our ability to continue to secure adequate levels of financing; variations in same-store sales; general economic, political, and market conditions; changes in earnings estimates published by analysts; changes in earnings estimates or management’s failure to provide earnings estimates; the level and success of our acquisition program and new store openings; the success of dealership integration; relationships with manufacturers; seasonality and weather conditions; governmental policies and regulations; the performance of the recreational boat industry in general; factors relating to suppliers and competitors; and timing and amount of our share repurchases. in addition, market demand for small-capitalization stocks, and price and volume fluctuations in the stock market unrelated to our performance could result in significant fluctuations in the market price of our common stock. The performance of our common stock could adversely affect our ability to raise equity in the public markets and adversely affect our acquisition program. The issuance of additional capital stock in the future, including shares that we may issue pursuant to stock-based grants, including grants of stock options, restricted stock awards and restricted stock units, and future acquisitions, may result in dilution in the net tangible book value per share of our common stock. Our board of directors has the legal power and authority to determine the terms of an offering of shares of our capital stock, or securities convertible into or exchangeable for these shares, to the extent of our shares of authorized and unissued capital stock. The issuance of additional common stock in the future, including shares that we may issue pursuant to stock-based grants, including grants of stock options, restricted stock awards and restricted stock units, and future acquisitions, may result in dilution in the net tangible book value per share of our common stock. The timing and amount of our share repurchases are subject to a number of uncertainties. in august 2017, the board of Directors approved a new stock repurchase plan authorizing the Company to purchase up to 2.0 million shares of its commons stock through September 30, 2019. There is no guarantee that our stock repurchase plans will be able to successfully mitigate the dilutive effect of stock options and stock-based grants. The success of our stock repurchase plans is based upon a number of factors, including the price and availability of the Company’s stock, general market conditions, the nature of other investment opportunities available to us from time to time, and the availability of cash. A substantial number of shares are eligible for future sale. as of September 30, 2018, there were 27,141,267 shares of our common stock outstanding. Substantially all of these shares are freely tradable without restriction or further registration under the securities laws, unless held by an “affiliate” of our company, as that term is defined in Rule 144 under the securities laws. Shares held by affiliates of our company, which generally include our directors, officers, and certain principal shareholders, are subject to the resale limitations of Rule 144. Outstanding shares of common stock issued in connection with the acquisition of any acquired dealers are available for resale beginning six months after the respective dates of the acquisitions, subject to compliance with the provisions of Rule 144 under the securities laws. 33 Through September 30, 2018 , we have issued options to purchase approximately 5,011,549 shares of common stock and 1,941,204 restricted stock awards, net of forfeitures and expirations, under our incentive stock plans, and we issued 860,535 shares of common stock under our employee stock purc hase plan. We have filed a registration statement under the securities laws to register the common stock to be issued under these plans. as a result, shares issued under these plans will be freely tradable without restriction unless acquired by affiliate s of our company, who will be subject to the volume and other limitations of Rule 144. We may issue additional shares of common stock or preferred stock under the securities laws as part of any acquisition we may complete in the future. if issued pursuant to an effective registration statement, these shares generally will be freely tradable after their issuance by persons not affiliated with us or the acquired companies. We do not pay cash dividends. We have never paid cash dividends on our common stock and we have no current intention to do so for the foreseeable future. Certain provisions of our restated articles of incorporation and bylaws and Florida law may make a change in the control of our company more difficult to complete, even if a change in control were in the shareholders’ interest or might result in a premium over the market price for the shares held by the shareholders. Our articles of incorporation and bylaws divide our board of directors into three classes of directors elected for staggered three-year terms. The articles of incorporation also provide that the board of directors may authorize the issuance of one or more series of preferred stock from time to time and may determine the rights, preferences, privileges, and restrictions and fix the number of shares of any such series of preferred stock, without any vote or action by our shareholders. The board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of common stock. The articles of incorporation also allow our board of directors to fix the number of directors and to fill vacancies on the board of directors. Our articles of incorporation contain provisions that adopt substantially all of the protections afforded under Florida's affiliated transactions statute (which provides that, with certain exceptions, a transaction with an "interested shareholder" must generally be approved by the affirmative vote of the holders of two-thirds of the voting shares (other than the shares owned by the interested shareholder)), except that our articles of incorporation define an "interested shareholder" as any person who holds 15% or more of our outstanding stock (rather than 10% as set forth in the statute). Certain of our dealer agreements could also make it difficult for a third party to attempt to acquire a significant ownership position in our company. Our sales of yachts produced by the Azimut-Benetti Group in Italy, yachts produced by Galeon in Poland, and power catamarans produced by Sino Eagle in China expose us to international political, economic, and other risks. Our sales of yachts produced by the azimut-benetti Group in italy, yachts produced by Galeon in Poland, and power catamarans for our charter fleet produced by Sino eagle in China expose us to international political, economic, and other risks. Protectionist trade legislation in the United States, the european Union, italy, Poland, or China, such as a change in current tariff structures, export or import compliance laws, or other trade policies could adversely affect our ability to import yachts from these foreign suppliers under economically favorable terms and conditions. There have been recent changes, and future, additional changes may occur, to United States and foreign trade and tax policies, including heightened import restrictions, import and export licenses, new tariffs, trade embargoes, government sanctions, or trade barriers. any of these restrictions could prevent or make it difficult or more costly for us to import yachts from foreign suppliers under economically favorable terms and conditions. increased tariffs could require us to increase our prices which likely could decrease demand for our products. in addition, other countries may limit their trade with the United States or retaliate through their own restrictions and/or increased tariffs which would affect our ability to export products and therefore adversely affect our sales. Many of these challenges are present in China, a market from which we purchase products. in particular, currently proposed tariffs could affect our Chinese suppliers. While such tariffs may be delayed or cancelled before coming into effect and we have taken steps to mitigate their potential effects, such tariffs would likely increase our costs for our Chinese suppliers. Our foreign purchase of yachts and power catamarans creates a number of logistical and communications challenges. The economic, political, and other risks we face resulting from these foreign purchases include the following: 34 • compliance with U.S. and local laws and regulatory requirements as well as changes in those laws and requirements; • transportation delays or interruptions and other effects of less developed infrastructures; • effects from the voter-approved exit of the United Kingdom from the european Union (often referred to as brexit), including any resulting deterioration in economic conditions, volatility in currency exchange rates, or adverse regulatory changes; • limitations on imports and exports; • foreign exchange rate fluctuations; • imposition of restrictions on currency conversion or the transfer of funds; • the effects of issued or threatened government sanctions, tariffs and duties, trade barriers or economic restrictions, including the tariffs recently proposed by the U.S. government on various imports from China and by the Chinese government on certain U.S. goods, the scope and duration of which, if implemented, remain uncertain; • maintenance of quality standards; • unexpected changes in regulatory requirements; • differing labor regulations; • potentially adverse tax consequences; • possible employee turnover or labor unrest; • the burdens and costs of compliance with a variety of foreign laws; and • political or economic instability. Increased cybersecurity requirements, vulnerabilities, threats and more sophisticated and targeted computer crime could pose a risk to our systems, networks, and data. Our business operations could be negatively impacted by an outage or breach of our informational technology systems or a cybersecurity event. Our business is dependent upon the efficient operation of our information systems. The systems facilitate the interchange of information and enhances cross-selling opportunities throughout our company. The systems integrate each level of operations on a Company-wide basis, including but not limited to purchasing, inventory, receivables, payables, financial reporting, budgeting, marketing, sales management, as well as to prepare our consolidated financial and operating data. The failure of our information systems to perform as designed or the failure to maintain and enhance or protect the integrity of these systems could disrupt our business operations, impact sales and the results of operations, expose us to customer or third-party claims, or result in adverse publicity. increased global cybersecurity vulnerabilities, threats and more sophisticated and targeted cyber-related attacks pose a risk to the security of our and our customers’, suppliers’ and third-party service providers’ products, systems and networks and the confidentiality, availability and integrity of our data. Unauthorized parties may also attempt to gain access to our systems or facilities, or those of third parties with whom we do business, through fraud, trickery, or other forms of deceiving our team members, contractors, vendors, and temporary staff. While we attempt to mitigate these risks by employing a number of measures, including employee training, systems, monitoring and testing, and maintenance of protective systems and contingency plans, we remain potentially vulnerable to additional known or unknown threats. We may also have access to sensitive, confidential or personal data or information that is subject to privacy, security laws, and regulations. Despite our efforts to protect sensitive, confidential or personal data or information, we may be vulnerable to security breaches, theft, misplaced or lost data, programming errors, employee errors and/or malfeasance that could potentially lead to the compromising of sensitive, confidential or personal data or information, improper use of our systems, unauthorized access, use, disclosure, modification or destruction of information, and operational disruptions. it is possible that we might not be aware of a successful cyber-related attack on our systems until well after the incident. in addition, a cyber-related attack could result in other negative consequences, including damage to our reputation or competitiveness, remediation or increased protection costs, litigation or regulatory action, and could adversely affect our business, financial condition, and results of operations. Depending on the nature of the information compromised, we may have obligations to notify customers and/or employees about the incident, and we may need to provide some form of remedy, such as a subscription to a credit monitoring service, for the individuals affected by the incident. 35 Changes in the assumptions used to calculate our acquisition related contingent consideration liabilities could have a material adverse impact on our financial results. Our recent acquisitions included contingent consideration liabilities relating to payments based on the future performance of the operations acquired. Under generally accepted accounting principles, we are required to estimate the fair value of any contingent consideration. Our estimates of fair value are based upon assumptions believed to be reasonable but which are uncertain and involve significant judgments. Changes in business conditions or other events could materially change the projection of future earnings used in the fair value calculations of contingent consideration liabilities. We reassess the fair value quarterly, and increases or decreases based on the actual or expected future performance of the acquired operations will be recorded in our results of operations. These quarterly adjustments could have a material effect on our results of operations. An impairment in the carrying value of long-lived assets and goodwill could negatively impact our financial results and net worth. Our long-lived assets, such as property and equipment, are required to be reviewed for impairment whenever events or changes in circumstance indicate that the carrying value of an asset may not be recoverable. as of September 30, 2018, we have approximately $139 million of property and equipment, net of accumulated depreciation, recorded on our consolidated balance sheet. Recoverability of an asset is measured by comparison of its carrying amount to undiscounted future net cash flows the asset is expected to generate. if such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds its fair market value. estimates of expected future cash flows represent our best estimate based on currently available information and reasonable and supportable assumptions. Our impairment loss calculations contain uncertainties because they require us to make assumptions and to apply judgment in order to estimate expected future cash flows. additionally, our goodwill is recorded at fair value at the time of acquisition and is not amortized, but reviewed for impairment at least annually or more frequently if impairment indicators arise. in evaluating the potential for impairment of goodwill, we make assumptions regarding industry conditions, our future financial performance, and other factors. Uncertainties are inherent in evaluating and applying these factors to the assessment of goodwill. While we do not believe there is a reasonable likelihood that there will be a change in the judgments and assumptions used in our assessments of goodwill and long-lived assets which would result in a material effect on our operating results, we cannot predict whether events or circumstances will change in the future that could result in non-cash impairment charges that could adversely impact our financial results and net worth. Our business could be negatively affected by the actions of activist shareholders Certain of our shareholders may from time to time advance shareholder proposals or otherwise attempt to effect changes or acquire control over our business. Such proposals or attempts are sometimes led by investors seeking to increase short-term shareholder value by advocating corporate actions such as financial restructuring, increased borrowing, special dividends, stock repurchases or even sales of assets or the entire company. Such an action focused on the short-term may be to the long-term detriment of our shareholders. if faced with actions by activist shareholders, we may not be able to respond effectively to such actions, which could be disruptive to our business. Item 1B. Unresolved Staff Comments Not applicable. Item 2. Properties We lease our corporate offices in Clearwater, Florida. We also lease 39 of our retail locations under leases, many of which contain multi-year renewal options and some of which grant us a first right of refusal to purchase the property at fair value. in most cases, we pay a fixed rent at negotiated rates. in substantially all of the leased locations, we are responsible for taxes, utilities, insurance, and routine repairs and maintenance. We own the property associated with 29 other retail locations we operate. additionally, we own four retail locations that are currently closed as noted below. a store is considered one or more retail locations that are adjacent or operate as one entity. 36 The following table reflects the status, approximate size, and facilities of the various retail locations we op erate as of the date of this report. Location Alabama Gulf Shores Connecticut Norwalk Westbrook Florida Cape Haze Clearwater Cocoa Dania Fort Lauderdale Fort Myers Jacksonville Key Largo Miami Miami Miami beach Naples North Palm beach Orlando Panama City Pensacola Pompano beach Pompano beach Sarasota St. Petersburg(3) Stuart Tampa(4) Venice Georgia buford (atlanta) Cumming (atlanta) Savannah Maryland baltimore Location Type Square Footage(1) Facilities at Property Company owned 4,000 Retail and service Third-party lease Third-party lease Company owned Company owned Company owned Company owned Third-party lease Company owned Third-party lease Third-party lease Company owned Company owned Third-party lease Company owned Third-party lease Third-party lease Third-party lease Company owned Company owned Company owned Third-party lease Company owned Company owned Company owned Company owned Company owned Third-party lease Third-party lease 9,000 4,200 Retail and service; 56 wet slips Retail and service 18,000 42,000 15,000 32,000 2,400 60,000 9,000 8,900 7,200 5,000 1,600 19,600 960 18,389 10,500 52,750 23,000 5,400 26,500 15,000 29,100 13,100 62,000 Retail, 8 wet slips Retail and service; 20 wet slips Retail and service Repair and service; 16 wet slips Retail only Retail, service, and storage; 64 wet slips Retail and service Retail and service; 6 wet slips Retail and service; 15 wet slips Service only; 11 wet slips Retail only Retail and service; 14 wet slips Retail only Retail and service Retail only; 8 wet slips Retail, service, and storage; 60 wet slips Retail and service; 16 wet slips Retail and service; 24 wet slips Retail, service, and storage; 15 wet slips Retail and service; 20 wet slips Retail and service; 66 wet slips Retail and service Retail, service, and storage; 90 wet slips 13,500 13,000 50,600 Retail and service Retail and service; 50 wet slips Retail, marina, service and storage; 36 wet slips Third-party lease 7,600 Retail and service; 17 wet slips 37 Operated Since(2) 1998 1994 1998 — 1973 1968 1991 1977 1983 2016 2002 1980 2005 2018 1997 2016 1984 2011 2016 1990 2005 1972 2006 2002 — 1972 2001 1981 2017 2005 Waterfront — Norwalk Harbor Westbrook Harbor intracoastal Waterway Tampa bay — Port everglades intracoastal Waterway Caloosahatchee River intracoastal Waterway Card Sound Little River Little River — Naples bay intracoastal Waterway — Saint andrews bay Pensacola bay intracoastal Waterway intracoastal Waterway Sarasota bay boca Ciega bay intracoastal Waterway — intracoastal Waterway — Lake Lanier Wilmington River baltimore inner Harbor Joppa(4) Kent island White Marsh(4) Massachusetts Danvers Hingham Quincy Minnesota bayport excelsior Rogers Missouri branson Lake Ozark Laurie(4) Osage beach New Jersey brant beach brick Lake Hopatcong Ship bottom Somers Point Ocean View North Somers Point New York Copiague Huntington Lindenhurst Manhattan North Carolina Lake Norman Southport Wrightsville beach Ohio Port Clinton Oklahoma afton Rhode Island Newport Warwick South Carolina Charleston Columbia Greenville Lake Wylie Company owned Third-party lease Company owned Third-party lease Third-party lease Company owned Third-party lease Third-party lease Company owned Third-party lease Company owned Company owned Company owned Third-party lease Company owned Company owned Third-party lease Third-party lease Third-party lease Third-party lease Retail, service, and storage; 294 wet slips Retail only Retail and service 28,400 8,300 19,800 1966 2013 — 32,000 2,000 14,700 Retail and service Retail only Retail, service, and storage; 247 wet slips 450 2,500 70,000 Retail only; 10 wet slips Retail only; 14 wet slips Retail, service, and storage 1,500 60,300 700 2,000 Retail only; 6 wet slips Retail, service, and storage; 300 wet slips Retail and service Retail and service 2016 2016 2018 1996 2013 1991 2000 1987 — 1987 Retail, service, and storage; 36 wet slips Retail, service, and storage; 225 wet slips Retail and service; 80 wet slips Retail and service Retail, service, and storage; 33 wet slips Retail, service, and storage Storage only 3,800 20,000 4,600 19,300 31,000 13,800 500 Third-party lease 15,000 Retail only Third-party lease Third-party lease Third-party lease Third-party lease Third-party lease Third-party lease 1,200 14,600 1,200 Retail and service Retail, marina, service, and storage; 370 wet slips Retail only; 75 wet slips 10,300 1,600 34,500 Retail only Retail only Retail, service, and storage Company owned 80,000 Retail, service and storage; 8 wet slips Third-party lease 3,500 Retail and service; 23 wet slips Third-party lease Third-party lease Third-party lease Third-party lease Third-party lease Third-party lease 700 4,400 Retail only Retail and service 14,800 7,200 24,500 76,400 Retail, service, and storage Retail, service, and storage Retail, service, and storage Retail, marina, service, and storage; 82 wet slips 38 Gunpowder River Kent Narrows — — Weymouth black River Town River St Croix River Lake Minnetonka — Table Rock Lake Lake of the Ozarks — — barnegat bay Manasquan River Lake Hopatcong — Little egg Harbor bay — Little egg Harbor bay — Huntington Harbor and Long island Sound Neguntatogue Creek to Great South bay Hudson River — Cape Fear River Masonboro inlet Lake erie Grand Lake Newport Harbor Greenwich bay — — — Lake Wylie 1965 1977 1998 1972 1987 2018 2018 1993 1995 1968 1996 2017 2008 1996 1997 2003 2011 1998 2017 2017 2017 2017 Texas Lewisville (Dallas) Seabrook British Virgin Islands Tortola Company owned Company owned 22,000 32,000 Retail and service Retail and service; 30 wet slips 2002 2002 — Clear Lake Third-party lease 2,550 Vacation Charters; 45 wet slips 2011 Nanny Cay (1) (2) (3) (4) Square footage is approximate and does not include outside sales space or dock or marina facilities. Operated since date is the date the facility was opened by us or opened prior to its acquisition by us. initially a joint venture; full ownership acquired in February 2016. Owned location that is currently closed. Item 3. Legal Proceedings We are party to various legal actions arising in the ordinary course of business. While it is not feasible to determine the actual outcome of these actions as of September 30, 2018, we do not believe that these matters will have a material adverse effect on our consolidated financial condition, results of operations, or cash flows. Item 4. Mine Safety Disclosures Not applicable. Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information, Holders Our common stock is listed on the New York Stock exchange under the symbol HZO. The following table sets forth high and low sale prices of the common stock for each calendar quarter indicated as reported on the New York Stock exchange. PART II 2016 Fourth quarter 2017 First quarter Second quarter Third quarter Fourth quarter 2018 First quarter Second quarter Third quarter Fourth quarter (through November 26, 2018) High Low 22.05 $ 15.10 23.50 $ 23.65 $ 20.02 $ 22.30 $ 24.30 $ 25.05 $ 23.75 $ 26.11 $ 17.70 17.60 13.80 15.05 18.30 17.30 16.40 18.71 $ $ $ $ $ $ $ $ $ On November 26, 2018, the closing sale price of our common stock was $21.33 per share. On November 26, 2018, there were approximately 100 record holders and approximately 7,600 beneficial owners of our common stock. Dividends We have never declared or paid cash dividends on our common stock. We currently plan to retain any earnings to finance the growth of our business rather than to pay cash dividends. Payments of any cash dividends in the future will depend on our financial condition, results of operations, statutory restrictions, loan covenants and capital requirements as well as other factors deemed relevant by our board of directors (such as market expectations). 39 Purchases of Equity Securities by the Issuer The following table presents information with respect to our repurchases of our common stock during the three months ended September 30, 2018. Period July 1, 2018 to July 31, 2018 august 1, 2018 to august 31, 2018 September 1, 2018 to September 30, 2018 Total Total Number of Shares Purchased (1)(2) Average Price Paid per Share — $ — $ 71,765 $ 71,765 $ - - 21.25 21.25 Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that may be Purchased Under the Plans or Programs — — — — — — 342,885 342,885 (1) (2) Under the terms of the program, the Company is authorized to purchase up to 2.0 million shares of its common stock through September 30, 2019. 71,765 shares reported in September 2018 are attributable to shares tendered by employees for the payment of applicable withholding taxes in connection with the vesting of restricted stock or restricted stock unit awards. 40 Performance Graph The following line graph compares cumulative total stockholder returns for the five years ended September 30, 2018 for (i) our common stock, (ii) the Russell 2000 index, and (iii) the Nasdaq Retail Trade index. The graph assumes an investment of $100 on September 30, 2013. The calculations of cumulative stockholder return on the Russell 2000 index and the Nasdaq Retail Trade index include reinvestment of dividends. The calculation of cumulative stockholder return on our common stock does not include reinvestment of dividends because we did not pay any dividends during the measurement period. The historical performance shown is not necessarily indicative of future performance. The performance graph above shall not be deemed “filed” for purposes of Section 18 of the Securities exchange act of 1934, as amended, or exchange act, or otherwise subject to the liability of that section. The performance graph above will not be deemed incorporated by reference into any filing of our company under the exchange act or the Securities act of 1933, as amended. 41 Item 6. Selected Financial Data The following table contains certain financial and operating data and is qualified by the more detailed consolidated financial statements and notes thereto included elsewhere in this report. The balance sheet and statement of operations data were derived from the consolidated financial statements and notes thereto that have been audited by KPMG LLP. The financial data shown below should be read in conjunction with the consolidated financial statements and the related notes thereto and "Management's Discussion and analysis of Financial Condition and Results of Operations" included elsewhere in this report. Statement of Operations Data: Revenue Cost of sales Gross profit Selling, general, and administrative expenses income from operations interest expense, net income before income tax provision (benefit) income tax provision (benefit) Net income Net income per share: Diluted Weighted average number of shares: Diluted Other Data (as of year-end): Number of retail locations (1) Sales per store (2) (4) Same-store sales growth (3) (4) Balance Sheet Data: Working capital Total assets Goodwill Total shareholders' equity 2014 Fiscal Year Ended September 30, 2016 (Amounts in thousands except share, per share, and retail location data) 2015 2017 624,692 462,872 161,820 146,433 15,387 4,024 11,363 91 11,272 $ $ $ 751,370 566,603 184,767 159,435 25,332 4,454 20,878 (27,414) $ 48,292 942,050 716,022 226,028 185,776 40,252 5,462 34,790 12,208 22,582 $ $ 1,052,320 787,005 265,315 220,026 45,289 7,481 37,808 14,261 23,547 $ $ 2018 1,177,371 879,138 298,233 235,050 63,183 9,903 53,280 13,968 39,312 0.46 $ 1.92 $ 0.91 $ 0.95 $ 1.71 $ $ $ 24,655,262 25,102,289 24,820,847 24,678,800 23,030,662 $ 54 12,658 $ 6% 53 15,320 $ 22% 56 18,539 $ 22% 62 18,364 $ 5% 63 19,873 10% 2014 2015 September 30, 2016 2017 2018 $ 126,126 $ 402,681 802 239,295 152,414 $ 467,622 802 283,645 159,232 $ 546,688 9,947 312,473 $ 139,069 639,990 25,942 302,198 179,276 640,538 27,428 353,092 (1) (2) (3) (4) includes only those retail locations open at period end. includes only those stores open for the entire preceding 12-month period. New and acquired stores are included in the comparable base at the end of the store's thirteenth month of operations. a store is one or more retail locations that are adjacent or operate as one entity. Sales per store and same-store sales growth is intended only as supplemental information and is not a substitute for revenue or net income presented in accordance with generally accepted accounting principles. 42 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following should be read in conjunction with Part i, including the matters set forth in the “Risk Factors” section of this report, and our Consolidated Financial Statements and notes thereto included elsewhere in this report. Overview We are the largest recreational boat and yacht retailer in the United States with fiscal 2018 revenue approaching $1.2 billion. Through our current 63 retail locations in 16 states (as of the filing of this annual Report on Form 10-K), we sell new and used recreational boats and related marine products, including engines, trailers, parts, and accessories. We also arrange related boat financing, insurance, and extended service contracts; provide boat repair and maintenance services; offer yacht and boat brokerage sales; yacht charter services; and, where available, offer slip and storage accommodations, as well as the charter of power yachts in the british Virgin islands. MarineMax was incorporated in January 1998 (and reincorporated in Florida in March 2015). We commenced operations with the acquisition of five independent recreational boat dealers on March 1, 1998. Since the initial acquisitions in March 1998, we have, as of the filing of this annual Report on Form 10- K, acquired 28 recreational boat dealers, two boat brokerage operations, and two full-service yacht repair facilities. as a part of our acquisition strategy, we frequently engage in discussions with various recreational boat dealers regarding their potential acquisition by us. Potential acquisition discussions frequently take place over a long period of time and involve difficult business integration and other issues, including, in some cases, management succession and related matters. as a result of these and other factors, a number of potential acquisitions that from time to time appear likely to occur do not result in binding legal agreements and are not consummated. We completed three acquisitions in the fiscal year ended September 30, 2016, one in the fiscal year ended September 30, 2017, and three acquisitions in the fiscal year ending September 30, 2018. General economic conditions and consumer spending patterns can negatively impact our operating results. Unfavorable local, regional, national, or global economic developments or uncertainties regarding future economic prospects could reduce consumer spending in the markets we serve and adversely affect our business. economic conditions in areas in which we operate dealerships, particularly Florida in which we generated approximately 55%, 55%, and 51% of our revenue during fiscal 2016, 2017, and 2018, respectively, can have a major impact on our operations. Local influences, such as corporate downsizing, military base closings, and inclement weather such as hurricanes and other storms, environmental conditions, and specific events, such as the bP oil spill in the Gulf of Mexico in 2010, also could adversely affect, and in certain instances have adversely affected, our operations in certain markets. in an economic downturn, consumer discretionary spending levels generally decline, at times resulting in disproportionately large reductions in the sale of luxury goods. Consumer spending on luxury goods also may decline as a result of lower consumer confidence levels, even if prevailing economic conditions are favorable. as a result, an economic downturn could impact us more than certain of our competitors due to our strategic focus on a higher end of our market. although we have expanded our operations during periods of stagnant or modestly declining industry trends, the cyclical nature of the recreational boating industry or the lack of industry growth may adversely affect our business, financial condition, and results of operations. any period of adverse economic conditions or low consumer confidence is likely to have a negative effect on our business. Lower consumer spending resulting from a downturn in the housing market and other economic factors adversely affected our business in fiscal 2007, and continued weakness in consumer spending and depressed economic conditions had a substantial negative effect on our business and industry for several years after fiscal 2007. These conditions caused us to substantially reduce our acquisition program, delay new store openings, reduce our inventory purchases, engage in inventory reduction efforts, close a number of our retail locations, reduce our headcount, and amend and replace our credit facility. acquisitions and new store openings remain important strategies to our company, and we plan to accelerate our growth through these strategies as industry conditions continue to improve. However, we cannot predict the length of unfavorable economic or industry conditions or the extent to which they could adversely affect our operating results nor can we predict the effectiveness of the measures we have taken to address unfavorable economic or industry conditions. although past economic conditions have adversely affected our operating results, we believe we have capitalized on our core strengths to substantially outperform the industry, resulting in market share gains. Our ability to capture such market share supports the alignment of our retailing strategies with the desires of consumers. We believe the steps we have taken to address weak market conditions have yielded, and will yield in the future, an increase in revenue. We expect our core strengths and retailing strategies will position us to capitalize on growth opportunities as they occur and will allow us to emerge with greater earnings potential as industry conditions continue to recover. 43 Application of Critical Accounting Policies We have identified the policies below as critical to our business operations and the understanding of our results of operations. The impact and risks related to these policies on our business operations is discussed throughout Management's Discussion and analysis of Financial Condition and Results of Operations when such policies affect our reported and expected financial results. in the ordinary course of business, we make a number of estimates and assumptions relating to the reporting of results of operations and financial condition in the preparation of our financial statements in conformity with accounting principles generally accepted in the United States. We base our estimates on historical experiences and on various other assumptions (including future earnings) that we believe are reasonable under the circumstances. The results of these assumptions form the basis for making judgments about the carrying values of assets and liabilities, including contingent assets and liabilities such as contingent consideration liabilities from acquisitions, which are not readily apparent from other sources. actual results could differ significantly from those estimates under different assumptions and conditions. We believe that the following discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and require our most difficult, subjective, and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Revenue Recognition We recognize revenue from boat, motor, and trailer sales and parts and service operations at the time the boat, motor, trailer, or part is delivered to or accepted by the customer or the service is completed. We recognize deferred revenue from service operations and slip and storage services on a straight-line basis over the term of the contract as services are completed. We recognize commissions earned from a brokerage sale at the time the related brokerage transaction closes. We recognize commissions earned by us for placing notes with financial institutions in connection with customer boat financing when we recognize the related boat sales. We recognize marketing fees earned on credit, life, accident, disability, gap, and hull insurance products sold by third-party insurance companies at the later of customer acceptance of the insurance product as evidenced by contract execution or when the related boat sale is recognized. We recognize income from the rentals of chartering power yachts on a straight-line basis over the term of the contract as services are completed. We also recognize commissions earned on extended warranty service contracts sold on behalf of third-party insurance companies at the later of customer acceptance of the service contract terms as evidenced by contract execution or recognition of the related boat sale. Certain finance and extended warranty commissions and marketing fees on insurance products may be charged back if a customer terminates or defaults on the underlying contract within a specified period of time. based upon our experience of terminations and defaults, we maintain a chargeback allowance that was not material to our financial statements taken as a whole as of September 30, 2018. Should results differ materially from our historical experiences, we would need to modify our estimate of future chargebacks, which could have a material adverse effect on our operating margins. We do not believe there is a reasonable likelihood that there will be a change in the future estimates or assumptions we use to calculate our estimate of future chargebacks which would result in a material effect on our operating results. Vendor Consideration Received We account for consideration received from our vendors in accordance with FaSb accounting Standards Codification 605-50, “Revenue Recognition - Customer Payments and incentives” (“aSC 605-50”). aSC 605-50 requires us to classify interest assistance received from manufacturers as a reduction of inventory cost and related cost of sales as opposed to netting the assistance against our interest expense incurred with our lenders. Pursuant to aSC 605-50, amounts received by us under our co-op assistance programs from our manufacturers are netted against related advertising expenses. Our consideration received from our vendors contains uncertainties because the calculation requires management to make assumptions and to apply judgment regarding a number of factors, including our ability to collect amounts due from vendors and the ability to meet certain criteria stipulated by our vendors. We do not believe there is a reasonable likelihood that there will be a change in the future estimates or assumptions we use to calculate our vendor considerations which would result in a material effect on our operating results. accounting for consideration received is not expected to materially change with the adoption of aSU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, in fiscal 2019. 44 Inventories inventory costs consist of the amount paid to acquire inventory, net of vendor consideration and purchase discounts, the cost of equipment added, reconditioning costs, and transportation costs relating to acquiring inventory for sale. We state new and used boat, motor, and trailer inventories at the lower of cost, determined on a specific-identification basis, or net realizable value. We state parts and accessories at the lower of cost, determined on an average cost basis, or net realizable value. We utilize our historical experience, the aging of the inventories, and our consideration of current market trends as the basis for determining a lower of cost or net realizable value valuation allowance. Our lower of cost or net realizable value valuation allowance contains uncertainties because the calculation requires management to make assumptions and to apply judgment regarding the amount at which the inventory will ultimately be sold which considers forecasted market trends, model changes, and new product introductions. We do not believe there is a reasonable likelihood that there will be a change in the future estimates or assumptions we use to calculate our lower of cost or net realizable value valuation allowance which would result in a material effect on our operating results. as of September 30, 2017 and September 30, 2018, our lower of cost or net realizable value valuation allowance for new and used boat, motor, and trailer inventories was $1.8 million and $1.5 million, respectively. if events occur and market conditions change, causing the fair value to fall below carrying value, the lower of cost or net realizable value valuation allowance could increase. Goodwill We account for goodwill in accordance with FaSb accounting Standards Codification 350, “intangibles - Goodwill and Other” (“aSC 350”), which provides that the excess of cost over net assets of businesses acquired is recorded as goodwill. in January 2017, we purchased Hall Marine Group, a privately owned boat dealer in the Southeast United States with locations in North Carolina, South Carolina, and Georgia, resulting in the recording of $16.0 million in goodwill. in January 2018, we purchased island Marine Center, a privately owned boat dealer located in New Jersey resulting in the recording of $1.3 million in goodwill. in total, current and previous acquisitions have resulted in the recording of $27.4 million in goodwill. in accordance with aSC 350, we review goodwill for impairment at least annually and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Our annual impairment test is performed during the fourth fiscal quarter. if the carrying amount of goodwill exceeds its fair value we would recognize an impairment loss in accordance with aSC 350. as of September 30, 2018, and based upon our most recent analysis, we determined through our qualitative assessment that it is not “more likely than not” that the fair values of our reporting units are less than their carrying values. as a result, we were not required to perform a quantitative goodwill impairment test. The qualitative assessment requires us to make judgments and assumptions regarding macroeconomic and industry conditions, our financial performance, and other factors. We do not believe there is a reasonable likelihood that there will be a change in the judgments and assumptions used in our qualitative assessment which would result in a material effect on our operating results. Impairment of Long-Lived Assets FaSb accounting Standards Codification 360-10-40, “Property, Plant, and equipment - impairment or Disposal of Long-Lived assets” (“aSC 360-10- 40”), requires that long-lived assets, such as property and equipment and purchased intangibles subject to amortization, be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the asset is measured by comparison of its carrying amount to undiscounted future net cash flows the asset is expected to generate. if such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds its fair market value. estimates of expected future cash flows represent our best estimate based on currently available information and reasonable and supportable assumptions. Our impairment loss calculations contain uncertainties because they require us to make assumptions and to apply judgment in order to estimate expected future cash flows. any impairment recognized in accordance with aSC 360-10-40 is permanent and may not be restored. The analysis is performed at a regional level for indicators of permanent impairment given the geographical interdependencies among our locations. based upon our most recent analysis, we believe no impairment of long-lived assets existed as of September 30, 2018. We do not believe there is a reasonable likelihood that there will be a change in the future estimates or assumptions used to test for recoverability which would result in a material effect on our operating results. 45 Stock-Based Compensation We account for our stock-based compensation plans following the provisions of FaSb accounting Standards Codification 718, “Compensation — Stock Compensation” (“aSC 718”). in accordance with aSC 718, we use the black-Scholes valuation model for valuing all stock-based compensation and shares purchased under our employee Stock Purchase Plan. We measure compensation for restricted stock awards and restricted stock units at fair value on the grant date based on the number of shares expected to vest and the quoted market price of our common stock. We recognize compensation cost for all awards in operations, net of estimated forfeitures, on a straight-line basis over the requisite service period for each separately vesting portion of the award. Our valuation models and generally accepted valuation techniques require us to make assumptions and to apply judgment to determine the fair value of our awards. These assumptions and judgments include estimating the volatility of our stock price, expected dividend yield, employee turnover rates and employee stock option exercise behaviors. We do not believe there is a reasonable likelihood that there will be a change in the future estimates or assumptions we use to calculate our stock-based compensation which would result in a material effect on our operating results. Income Taxes We account for income taxes in accordance with FaSb accounting Standards Codification 740, “income Taxes” (“aSC 740”). Under aSC 740, we recognize deferred tax assets and liabilities for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which we expect those temporary differences to be recovered or settled. We record valuation allowances to reduce our deferred tax assets to the amount expected to be realized by considering all available positive and negative evidence. Pursuant to aSC 740, we must consider all positive and negative evidence regarding the realization of deferred tax assets. aSC 740 provides for four possible sources of taxable income to realize deferred tax assets: 1) taxable income in prior carryback years, 2) reversals of existing deferred tax liabilities, 3) tax planning strategies and 4) projected future taxable income. as of September 30, 2018, we have no available taxable income in prior carryback years, limited reversals of existing deferred tax liabilities or prudent and feasible tax planning strategies. Therefore, the recoverability of our deferred tax assets is dependent upon generating future taxable income. The determination of releasing valuation allowances against deferred tax assets is made, in part, pursuant to our assessment as to whether it is more likely than not that we will generate sufficient future taxable income against which benefits of the deferred tax assets may or may not be realized. Significant judgment is required in making estimates regarding our ability to generate income in future periods. in the fourth quarter of fiscal 2016, we reached the conclusion that it was appropriate to release the majority of our valuation allowance against our state net operating loss deferred tax assets due to our operating performance in fiscal 2016 being greater than projected at fiscal 2015 year end. We considered forecasts of future operating results and the utilization of net operating losses within the statutory mandated carryforward periods and determined it was more likely than not that the majority of our state net operating loss deferred tax assets would be realized. as a result of the release of a portion of our deferred tax asset valuation allowance, we recorded an approximately $1.1 million reduction in our income tax provision. a portion of the valuation allowance was retained based on particular jurisdictions. Specifically, the valuation allowance was retained for states with a shorter statutory carryforward periods and states where our economic presence, as defined by the jurisdiction’s tax laws, has been reduced. During the fourth quarter of fiscal 2017, the Company recorded a net tax benefit of $1.8 million primarily pertaining to a worthless stock deduction. The tax benefit of this deduction was primarily based on the write-off of the Company’s investment in its british Virgin islands subsidiary for US tax purposes. The Tax Cuts and Jobs act of 2017 (the “Tax act”) was signed into U.S. law on December 22, 2017. The Tax act contains provisions which impact the Company’s current and future income taxes including a reduction in U.S. Federal corporate income tax rate from 35% to 21%, effective January 1, 2018. in accordance with the Tax act, our blended statutory tax rate for fiscal year 2018 approximated 24.5% as a result of the reduced U.S. Federal corporate income tax rate. For fiscal year 2018, we recorded a non-cash adjustment to income tax expense of approximately $805,000 for the remeasurement of deferred taxes on the enactment date as a result of the change in tax law enacted by the Tax act. The application of income tax law is inherently complex. Laws and regulations in this area are voluminous and are often ambiguous. Under aSC 740, the impact of uncertain tax positions taken or expected to be taken on an income tax return must be recognized in the financial statements at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. an uncertain income tax position will not be recognized in the financial statements unless it is more likely than not of being sustained. as such, we are required to make subjective assumptions and judgments regarding our effective tax rate and our 46 income tax exposure. Our effective income tax rate is affected by changes in t ax law in the jurisdictions in which we currently operate, tax jurisdictions of new retail locations, our earnings, and the results of tax audits. We believe that the judgments and estimates discussed herein are reasonable. Recent Accounting Pronouncements in May 2014, the FaSb issued accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“aSU 2014-09”), a converged standard on revenue recognition. The new pronouncement requires revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also specifies the accounting for some costs to obtain or fulfill a contract with a customer, as well as enhanced disclosure requirements. aSU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. early adoption is permitted for annual reporting periods beginning after December 15, 2016. While we have not completed the implementation process, we currently do not believe the adoption of this standard will have a material impact on our consolidated financial statements, or will cause a significant change to our current accounting policies or internal control over financial reporting for revenue recognition on boat, motor, and trailer sales, brokerage commissions, slip and storage services, charter rentals, yacht charter services, and fee income generated from finance and insurance products. However, the timing of revenue recognition for certain parts and service operations will be accelerated, as we have determined these performance obligations are satisfied over time under the new standard. We currently anticipate adopting the standard using the modified retrospective approach applied only to contracts not completed as of the date of adoption, with no restatement of comparative periods. We are finalizing our cumulative effect adjustment and currently expect that all changes to our revenue recognition methods as a result of adopting the new standard will result in a net, after-tax cumulative effect adjustment to increase retained earnings as of October 1, 2018 in the range of $200,000 to $800,000. We plan to adopt aSU 2014-09 in fiscal 2019. in February 2016, the FaSb issued aSU 2016-02, “Leases (Topic 842)” (“aSU 2016-02”). This update requires organizations to recognize lease assets and lease liabilities on the balance sheet and also disclose key information about leasing arrangements. aSU 2016-02 is effective for annual reporting periods beginning on or after December 15, 2018, and interim periods within those annual periods. earlier application is permitted for all entities as of the beginning of an interim or annual period. While we are continuing to evaluate the impact of the adoption of aSU 2016-02 on our consolidated financial statements, we believe the adoption of aSU 2016-02 will have a significant and material impact to our consolidated balance sheet given our current lease agreements for our leased retail locations. We are continuing to evaluate the impact the adoption of aSU 2016-02 will have on our other consolidated financial statements. based on our current assessment, we expect that most of our operating lease commitments will be subject to the new guidance and recognized as operating lease liabilities and right-of- use assets upon adoption, resulting in a material increase in the assets and liabilities recorded on our consolidated balance sheet. We expect to elect the majority of the standard’s available practical expedients on adoption . We are continuing our assessment, which may identify additional impacts this standard will have on our consolidated financial statements and related disclosures and internal control over financial reporting. We plan to adopt aSU 2016-02 in fiscal 2020. in January 2017, the FaSb issued aSU 2017-04, “Simplifying the Test for Goodwill impairment (Topic 350)” (“aSU 2017-04”). This update removes the requirement to compare the implied fair value of goodwill with its carrying amount as part of step 2 of the goodwill impairment test. as a result, under aSU 2017- 04, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the impairment loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This guidance is effective prospectively for fiscal years beginning after December 15, 2019. early adoption is permitted for interim or annual goodwill impairment tests performed after January 1, 2017. We elected to early adopt the new guidance in the fourth quarter of fiscal 2018. The adoption of aSU 2017-04 did not have an impact on the Company’s consolidated financial position, results of operations, or internal controls. 47 Results of Op erations The following table sets forth certain financial data as a percentage of revenue for the periods indicated: Revenue Cost of sales Gross profit Selling, general, and administrative expenses income from operations interest expense income before income taxes income tax provision Net income 2016 942,050 716,022 226,028 185,776 40,252 5,462 34,790 12,208 22,582 $ $ Fiscal Year Ended September 30, 2017 (Amounts in thousands) 2018 100.0% $ 1,052,320 787,005 76.0% 265,315 24.0% 220,026 19.7% 45,289 4.3% 7,481 0.6% 37,808 3.7% 14,261 1.3% 23,547 2.4% $ 100.0% $ 1,177,371 879,138 298,233 235,050 63,183 9,903 53,280 13,968 39,312 74.8% 25.2% 20.9% 4.3% 0.7% 3.6% 1.4% 2.2% $ 100.0% 74.7% 25.3% 20.0% 5.3% 0.8% 4.5% 1.2% 3.3% Fiscal Year Ended September 30, 2018, Compared with Fiscal Year Ended September 30, 2017 Revenue . Revenue increased $125.1 million, or 11.9%, to approximately $1.177 billion for the fiscal year ended September 30, 2018 from $1.052 billion for the fiscal year ended September 30, 2017. Of this increase, $100.3 million was attributable to a 10% increase in comparable-store sales and an approximate $24.8 million net increase related to stores opened or closed that were not eligible for inclusion in the comparable-store base. The increase in our comparable-store sales was primarily due to incremental increases in new and used boat sales and incremental increases in brokerage sales, storage services, finance and insurance products, service revenue, and parts revenue. improving industry conditions resulting from improved economic conditions contributed to our comparable-store sales growth. Gross Profit . Gross profit increased $32.9 million, or 12.4%, to $298.2 million for the fiscal year ended September 30, 2018 from $265.3 million for the fiscal year ended September 30, 2017. Gross profit as a percentage of revenue increased to 25.3% for the fiscal year ended September 30, 2018 from 25.2% for the fiscal year ended September 30, 2017. The increase in gross profit as a percentage of revenue was primarily the result of improved margins on boat sales and our higher margin service, parts and accessories products, and storage services. The increase in gross profit dollars was primarily attributable to the increase in our gross margins and increased boat sales. Selling, General, and Administrative Expenses. Selling, general, and administrative expenses increased $15.0 million, or 6.8%, to $235.0 million for the fiscal year ended September 30, 2018 from $220.0 million for the fiscal year ended September 30, 2017. Selling, general, and administrative expenses for the fiscal year ended September 30, 2018, included $1.4 million of adjustments related to contingent consideration obligations, which reduced expenses, partially offset by a $1.2 million increase in non-recurring unusual costs. additionally, selling, general, and administrative expenses for the fiscal year ended September 30, 2017 included $2.9 million of expenses as a result of losses from Hurricane irma. excluding these items and making both years comparable, selling, general, and administrative expenses increased $18.1 million, or 8.4%, to $235.3 million and as a percentage of revenue decreased to 20.0% for the fiscal year ended September 30, 2018, from 20.6% for the fiscal year ended September 30, 2017 . The increase in selling, general, and administrative expenses was primarily attributable to increased commissions resulting from increased new and used boat sales, increased compensation due to improved performance, and increased health care costs due to rising claims . The decrease in selling, general, and administrative expenses as a percentage of revenue was driven by increased efficiencies and operating leverage in the business. Interest Expense . interest expense increased $2.4 million, or 32.4%, to $9.9 million for the fiscal year ended September 30, 2018, from $7.5 million for the fiscal year ended September 30, 2017. interest expense as a percentage of revenue increased to 0.8% for the fiscal year ended September 30, 2018, from 0.7% for the fiscal year ended September 30, 2017. The increase in interest expense was primarily the result of increased borrowings and increases in interest rates. Income Taxes . income tax expense decreased $293,000, or 2.1%, to $14.0 million for the fiscal year ended September 30, 2018 from $14.3 million for the fiscal year ended September 30, 2017. Our effective income tax rate decreased to 26.2% for fiscal year ended September 30, 2018, from 37.7% for fiscal year ended September 30, 2017. The decrease was mainly due to the passage of the Tax Cuts and Jobs act legislation in December 2017, which lowered the federal corporate tax rate from 35% to 21%, and the utilization of Hurricane irma and Hurricane Harvey employee Retention Credits, partially offset by the re- measurement of our beginning deferred tax assets and liabilities which resulted in an additional charge to income tax expense for the period of $805,000. Fiscal Year Ended September 30, 2017, Compared with Fiscal Year Ended September 30, 2016 48 Revenue . Revenue increased $110.3 million, or 11.7%, to $1.052 billion for the fiscal year ended September 30, 2017 from $942.1 million for the fiscal year ended September 30, 2016. Of this increase, $50.2 million was attributable to a 5% increase in comparable-store sales and an approxi mate $60.1 million net increase related to stores opened or closed that were not eligible for inclusion in the comparable-store base. The increase in our comparable-store sales was primarily due to incremental increases in new boat sales and incremental i ncreases in brokerage sales, storage services, finance and insurance products, service revenue, parts revenue, and charter rentals. improving industry conditions resulting from improved economic conditions contributed to our comparable-store sales growth. Gross Profit . Gross profit increased $39.3 million, or 17.4%, to $265.3 million for the fiscal year ended September 30, 2017 from $226.0 million for the fiscal year ended September 30, 2016. Gross profit as a percentage of revenue increased to 25.2% for the fiscal year ended September 30, 2017, from 24.0% for the fiscal year ended September 30, 2016. The increase in gross profit as a percentage of revenue was primarily the result of improved margins on new and used boat sales. The increase in gross profit dollars was primarily attributable to the increase in our gross margins and increased boat sales. additionally, our higher margin service, parts and accessories products, storage, and charter services increased as a percentage of revenue, contributing to our overall margins increasing accordingly. Selling, General, and Administrative Expenses. Selling, general, and administrative expenses increased $34.3 million, or 18.4%, to $220.0 million for the fiscal year ended September 30, 2017 from $185.8 million for the fiscal year ended September 30, 2016. Selling, general, and administrative expenses for the fiscal year ended September 30, 2017 included $2.9 million of expenses as a result of losses from Hurricane irma. excluding this item and making both years comparable, selling, general, and administrative expenses increased $31.4 million, or 16.9%, to $217.1 million and as a percentage of revenue increased to 20.6% for the fiscal year ended September 30, 2017, from 19.7% for the fiscal year ended September 30, 2016. The increase in selling, general, and administrative expenses was primarily attributable to recent acquisitions. Interest Expense . interest expense increased $2.0 million, or 37.0%, to $7.5 million for the fiscal year ended September 30, 2017, from $5.5 million for the fiscal year ended September 30, 2016. interest expense as a percentage of revenue increased to 0.7% for the fiscal year ended September 30, 2017, from 0.6% for the fiscal year ended September 30, 2016. The increase in interest expense was primarily the result of increased borrowings and increases in interest rates. Income Taxes . income tax expense increased $2.1 million, or 16.8%, to $14.3 million for the fiscal year ended September 30, 2017, from $12.2 million for the fiscal year ended September 30, 2016. Our effective income tax rate was 37.7% for the fiscal year ended September 30, 2017, which included a net benefit of $1.8 million primarily pertaining to a worthless stock deduction. Our effective income tax rate was 35.1% for the fiscal year ended September 30, 2016, which included a deferred tax asset valuation allowance reversal of $1.1 million. Quarterly Data and Seasonality Our business, as well as the entire recreational boating industry, is highly seasonal, with seasonality varying in different geographic markets. With the exception of Florida, we generally realize significantly lower sales and higher levels of inventories, and related short-term borrowings, in the quarterly periods ending December 31 and March 31. The onset of the public boat and recreation shows in January stimulates boat sales and typically allows us to reduce our inventory levels and related short-term borrowings throughout the remainder of the fiscal year. Our business could become substantially more seasonal if we acquire dealers that operate in colder regions of the United States or close retail locations in warm climates. Our business is also subject to weather patterns, which may adversely affect our results of operations. For example, prolonged winter conditions, drought conditions (or merely reduced rainfall levels) or excessive rain, may limit access to area boating locations or render boating dangerous or inconvenient, thereby curtailing customer demand for our products and services. in addition, unseasonably cool weather and prolonged winter conditions may lead to a shorter selling season in certain locations. Hurricanes and other storms could result in disruptions of our operations or damage to our boat inventories and facilities, as has been the case when Florida and other markets were affected by hurricanes. although we believe our geographic diversity is likely to reduce the overall impact to us of adverse weather conditions in any one market area, these conditions will continue to represent potential, material adverse risks to us and our future financial performance. 49 Liquidity and Capital Resources Our cash needs are primarily for working capital to support operations, including new and used boat and related parts inventories, off-season liquidity, and growth through acquisitions and new store openings. acquisitions and new store openings remain important strategies to our Company, and we plan to accelerate our growth through these strategies as more robust economic conditions return. However, we cannot predict the return of or length of unfavorable economic or financial conditions. We regularly monitor the aging of our inventories and current market trends to evaluate our current and future inventory needs. We also use this evaluation in conjunction with our review of our current and expected operating performance and expected business levels to determine the adequacy of our financing needs. These cash needs have historically been financed with cash generated from operations and borrowings under the amended Credit Facility. Our ability to utilize the amended Credit Facility to fund operations depends upon the collateral levels and compliance with the covenants of the amended Credit Facility. Turmoil in the credit markets and weakness in the retail markets may interfere with our ability to remain in compliance with the covenants of the amended Credit Facility and therefore our ability to utilize the amended Credit Facility to fund operations. as of September 30, 2018, we were in compliance with all covenants under the amended Credit Facility. We currently depend upon dividends and other payments from our dealerships and the amended Credit Facility to fund our current operations and meet our cash needs. as 100% owner of each of our dealerships, we determine the amounts of such distributions subject to applicable law, and currently, no agreements exist that restrict this flow of funds from our dealerships. For the fiscal years ended September 30, 2018, 2017, and 2016, cash provided by operating activities approximated $70.4 million, $4.7 million, and $22.9 million, respectively. For the fiscal year ended September 30, 2018, cash provided by operating activities was primarily related to our net income adjusted for non- cash expenses and gains such as depreciation and amortization expense, deferred income tax provision, stock-based compensation expense, gains on insurance settlements, gain on contingent acquisition consideration, decreases in inventory driven by inventory optimization efforts, insurance proceeds received as a result of Hurricane irma, and increases in accrued expenses and other long-term liabilities , partially offset by increases in accounts receivable and decreases in accounts payable and customer deposits. For the fiscal year ended September 30, 2017, cash provided by operating activities was primarily related to net income adjusted for non-cash expenses such as depreciation and amortization expense, income tax expense, stock based compensation expense, increases in accounts payable and accrued expenses, partially offset by an increase in inventory driven by the expansion of current and new brands, and decreases in customer deposits. For the fiscal year ended September 30, 2016, cash provided by operating activities was primarily related to net income adjusted for non-cash expenses such as depreciation and amortization expense, income tax expense, stock based compensation expense, increases in customer deposits and accrued expenses, partially offset by an increase in inventory driven by the expansion of current and new brands, decreases in accounts payable, and increases in accounts receivable. For the fiscal years ended September 30, 2018, 2017, and 2016, cash used in investing activities was approximately $23.3 million, $32.1 million, and $29.7 million, respectively. For the fiscal year ended September 30, 2018, cash used in investing activities was primarily used to purchase property and equipment associated with improving existing retail facilities, purchase property and equipment associated with business acquisitions, and capital improvements as a result of Hurricane irma . For the fiscal year ended September 30, 2017, cash used in investing activities was primarily used to purchase property and equipment associated with business acquisitions and property and equipment associated with improving existing retail facilities. For the fiscal year ended September 30, 2016, cash used in investing activities was primarily used to purchase property and equipment associated with business acquisitions and property and equipment associated with improving existing retail facilities. For the fiscal year ended September 30, 2018 cash used in financing activities was approximately $40.2 million, and for the fiscal years ended 2017 and 2016 cash provided by financing activities was approximately $30.7 million and $12.9 million, respectively. For the fiscal year ended September 30, 2018, cash used in financing activities was primarily attributable to a decrease in net short-term borrowings as a result of decreased inventory levels, contingent consideration payments from acquisitions, and repurchase of common stock under the share repurchase program, partially offset by proceeds from the issuance of common stock from our stock based compensation plans. For the fiscal year ended September 30, 2017, cash provided by financing activities was primarily attributable to net short-term borrowings as a result of increased inventory levels and proceeds from the issuance of common stock from our stock based compensation plans, partially offset by the repurchase of common stock under the share repurchase program. For the fiscal year ended September 30, 2016, cash provided by financing activities was primarily attributable to net short-term borrowings as a result of increased inventory levels and proceeds from the issuance of common stock from our stock based compensation plans, partially offset by the repurchase of common stock under the share repurchase program. in October 2018, we amended and restated our inventory Financing agreement (the “amended Credit Facility”), originally entered into in June 2010, as subsequently amended, with Wells Fargo Commercial Distribution Finance LLC (formerly Ge Commercial Distribution Finance Corporation). The October 2018 amendment and restatement extended the maturity date of the Credit Facility to October 2021, and the amended Credit Facility includes two additional one-year extension periods, with lender 50 approval. The October 2018 amendment and restatement, among othe r things, modified the amount of borrowing availability and maturity date of the Credit Facility. The amended Credit Facility provides a floor plan fi nancing commitment of up to $400 .0 million, an increas e from the previous limit of $35 0.0 million, subject to borrowing base availability resulting from the amount and aging of our inventory. The amended Credit Facility has certain financial covenants as specified in the agreement. The covenants include provisions that our leverage ratio must not exceed 2.75 to 1.0 and that our current ratio must be greater than 1.2 to 1.0. The interest rate for amounts outstanding under the amended Credit Facility is 345 basis points above the one-month London inter-bank Offering Rate (“LibOR”). There is an unused line fee of ten basis points on the unused portion of the amended Credit Facility. advances under the amended Credit Facility are initiated by the acquisition of eligible new and used inventory or are re-advances against eligible new and used inventory that have been partially paid-off. advances on new inventory will generally mature 1,080 days from the original invoice date. advances on used inventory will mature 361 days from the date we acquire the used inventory. each advance is subject to a curtailment schedule, which requires that we pay down the balance of each advance on a periodic basis starting after six months. The curtailment schedule varies based on the type and value of the inventory. The collateral for the amended Credit Facility is primarily the Company’s inventory that is financed through the amended Credit Facility and related accounts receivable. None of our real estate has been pledged for collateral for the amended Credit Facility. as of September 30, 2018, our indebtedness associated with financing our inventory and working capital needs totaled approximately $212.9 million. as of September 30, 2017 and 2018, the interest rate on the outstanding short-term borrowings was approximately 4.7% and 5.5%, respectively. as of September 30, 2018, our additional available borrowings under our amended Credit Facility were approximately $71.6 million based upon the outstanding borrowing base availability. The aging of our inventory limits our borrowing capacity as defined curtailments reduce the allowable advance rate as our inventory ages. except as specified in this "Management's Discussion and analysis of Financial Condition and Results of Operations" and in the attached condensed consolidated financial statements, we have no material commitments for capital for the next 12 months. We believe that our existing capital resources will be sufficient to finance our operations for at least the next 12 months, except for possible significant acquisitions. Commitments and Commercial Commitments The following table sets forth a summary of our material contractual obligations and commercial commitments as of September 30, 2018: Year Ending September 30, 2019 2020 2021 2022 2023 Thereafter Total Short-Term Borrowings (1) Other Liabilities (2) (Amounts in thousands) Operating Leases (3) $ $ 212,949 — — — — — 212,949 $ 2,055 493 — — — — 2,548 $ 7,296 $ 7,077 6,077 4,961 4,835 25,361 55,607 $ Total 222,300 7,570 6,077 4,961 4,835 25,361 271,104 (1) (2) (3) estimates of future interest payments for short-term borrowings have been excluded in the tabular presentation. amounts due are contingent upon the outstanding balances and the variable interest rates. as of September 30, 2018, the interest rate on our short-term borrowings was approximately 5.5%. The amounts included in other liabilities consist primarily of gross unrecognized tax benefits, our estimated liability for claims on certain workers’ compensation insurance policies, and estimated future contingent consideration payments. amounts for operating lease commitments do not include certain operating expenses such as maintenance, insurance, and real estate taxes. These amounts are not a material component of operating expenses. Off-Balance Sheet Arrangements We do not have any transactions, arrangements, or other relationships with unconsolidated entities that are reasonably likely to affect our financial condition, liquidity, or capital resources. We have no special purpose or limited purpose entities that provide off- 51 balance sheet financing, liquidity, or market or credit risk suppor t; we do not engage in hedging or research and development services; and we do not have other relationships that expose us to liability that is not reflected in t he financial statements. Item 7A. Quantitative and Qualitative Disclosures about Market Risk Interest Rate Risk as of September 30, 2018, all of our short-term debt bore interest at a variable rate, tied to LibOR as a reference rate. Changes in the underlying LibOR interest rate on our short-term debt could affect our earnings. For example, a hypothetical 100 basis point increase in the interest rate on our short-term debt would result in an increase of approximately $2.1 million in annual pre-tax interest expense. This estimated increase is based upon the outstanding balance of our short- term debt as of September 30, 2018 and assumes no mitigating changes by us to reduce the outstanding balances and no additional interest assistance that could be received from vendors due to the interest rate increase. Foreign Currency Exchange Rate Risk Products purchased from european-based and Chinese-based manufacturers are transacted in U.S. dollars. Fluctuations in the U.S. dollar exchange rate may impact the retail price at which we can sell foreign products. accordingly, fluctuations in the value of other currencies compared with the U.S. dollar may impact the price points at which we can profitably sell such foreign products, and such price points may not be competitive with other products in the United States. Thus, such fluctuations in exchange rates ultimately may impact the amount of revenue, cost of goods sold, cash flows, and earnings we recognize for such foreign products. We cannot predict the effects of exchange rate fluctuations on our operating results. in certain cases, we may enter into foreign currency cash flow hedges to reduce the variability of cash flows associated with forecasted purchases of boats and yachts from european-based and Chinese-based manufacturers. We are not currently engaged in foreign currency exchange hedging transactions to manage our foreign currency exposure. if and when we do engage in foreign currency exchange hedging transactions, there can be no assurance that our strategies will adequately protect our operating results from the effects of exchange rate fluctuations. Item 8. Financial Statements and Supplementary Data Reference is made to the financial statements, the notes thereto, and the report thereon, commencing on page F-1 of this report, which financial statements, notes, and report are incorporated herein by reference. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable. Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures that are designed to ensure that material information required to be disclosed by us in Securities exchange act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including the Chief executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our Chief executive Officer and Chief Financial Officer have evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities exchange act of 1934) as of the end of the period covered by this report. based on such evaluation, such officers have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective at the reasonable assurance level. Changes in Internal Controls During the quarter ended September 30, 2018, there were no changes in our internal control over financial reporting that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting. 52 Limitations on the Effectiveness of Controls Our management, including our Chief executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures and internal control over financial reporting will prevent all errors and all fraud. a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. although our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, a control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. CEO and CFO Certifications exhibits 31.1 and 31.2 are the Certifications of the Chief executive Officer and Chief Financial Officer, respectively. The Certifications are required in accordance with Section 302 of the Sarbanes-Oxley act of 2002 (the “Section 302 Certifications”). This item of this report, which you are currently reading is the information concerning the evaluation referred to in the Section 302 Certifications and this information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented. Management’s Report on Internal Control over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Securities exchange act of 1934. Under the supervision and with the participation of our management, including our Chief executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of September 30, 2018 as required by the Securities exchange act of 1934 Rule 13a-15(c). in making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in internal Control — integrated Framework (2013). based on its evaluation, our management concluded that its internal control over financial reporting was effective as of September 30, 2018. Our internal control over financial reporting as of September 30, 2018 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report which appears herein. 53 Report of Independent Registered Public Accounting Firm To the Shareholders and board of Directors MarineMax, inc.: Opinion on Internal Control Over Financial Reporting We have audited MarineMax, inc. ’s and subsidiaries’ (the Company) internal control over financial reporting as of September 30, 2018, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, 2018, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. We also have audited, in accordance with the standards of the Public Company accounting Oversight board (United States) (PCaOb), the consolidated balance sheets of the Company as of September 30, 2018 and 2017, the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the years in the three-year period ended September 30, 2018, and the related notes (collectively, the consolidated) financial statements, and our report dated November 29, 2018 expressed an unqualified opinion on those consolidated financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting . Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCaOb and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and exchange Commission and the PCaOb. We conducted our audit in accordance with the standards of the PCaOb. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting a company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. a company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ KPMG LLP Tampa, Florida November 29, 2018 Certified Public accountants 54 Item 9B. Other information Employment Agreement – William H. McGill, Jr. The Company and Mr. W. McGill, Jr. entered into an amended employment agreement, dated November 29, 2018 (the “amended employment agreement”). The amended employment agreement provides that: • • • • • Mr. W. McGill, Jr.’s salary will be reduced to $500,000 per year; The payment of $1.0 million to Mr. W. McGill, Jr.’s estate in the event of his death will be reduced to $750,000; in the event of the Company’s termination of Mr. W. McGill, Jr. ’s employment without Good Cause (as defined in the amended employment agreement) or Mr. W. McGill, Jr. terminates his employment with Good Reason (as defined in the amended employment agreement), all restricted stock or restricted stock units (or other comparable forms of equity compensation, if any) which are subject to performance conditions for vesting, shall be fully vested and treated as if the performance conditions for such award had been fully met at target and shall not be subject to any risk of forfeiture or repurchase as of the date of termination; The age at which Mr. W. McGill, Jr. may retire from his services to the Company and begin receiving certain retirement benefits has increased from the age of 75 to the age of 80. Medicare supplemental medical coverage for life for Mr. W. McGill, Jr. will no longer be included as a retirement benefit; and in the event of a Change in Control (as such term is defined in the amended employment agreement) or if Mr. W. McGill, Jr. terminates the amended employment agreement as a result of a Change in Control, any payment received by Mr. W. McGill, Jr. as a result of such termination will be capped at such amount as to not incur any excise tax payments under Section 4999 of the internal Revenue Code of 1986, as amended (the “Code”). The other terms of the amended employment agreement remain substantially the same as Mr. W. McGill, Jr.’s prior employment agreement, which was filed as an exhibit to the Periodic Report on Form 8-K, dated June 13, 2006. For further information regarding the terms and conditions of the amended employment agreement, reference is made to the complete text thereof which is filed as an exhibit to this Form 10-K. Employment Agreement – Michael H. McLamb The Company and Mr. Michael H. McLamb entered into an amended employment agreement, dated November 29, 2018 (the “amended employment agreement”). The amended employment agreement provides that: • • Mr. McLamb’s salary will be increased to $375,000 per year; and in the event of the Company’s termination of Mr. McLamb’s employment without Good Cause (as defined in the amended employment agreement) or Mr. McLamb terminates his employment with Good Reason (as defined in the amended employment agreement), all of his restricted stock or restricted stock units (or other comparable forms of equity compensation, if any) which are subject to performance conditions for vesting, shall be fully vested and treated as if the performance conditions for such award had been fully met at target and shall not be subject to any risk of forfeiture or repurchase as of the date of termination. The other terms of the amended employment agreement remain substantially the same as Mr. McLamb’s prior employment agreement, which was filed as an exhibit to the Periodic Report on Form 8-K, dated June 13, 2006. For further information regarding the terms and conditions of the amended employment agreement, reference is made to the complete text thereof which is filed as an exhibit to this Form 10-K. Employment Agreement – Brett McGill The Company entered into an employment agreement with Mr. b. McGill, dated November 29, 2018 (the “employment agreement”), which sets forth the terms of Mr. b. McGill’s service as the Company’s President and Chief executive Officer. Pursuant to the employment agreement, the Company will pay Mr. b. McGill a base salary of at least $520,000 annually (subject to annual review by the board (or a committee of the board)). Mr. b. McGill will be eligible to receive a bonus or other incentive compensation as may be determined by the board or a committee of the board based upon such factors as the board or such committee may consider 55 in its sole discretion. in addition, the employment agreement contains customary covena nts regarding confidentiality, non-competition, non-solicitation, and non- interference. The Company and Mr. b. McGill may each terminate his employment at any time. if the Company terminates Mr. b. McGill’s employment without “good cause” or he terminates his employment with “good reason” or upon a “change in control” of the Company that is not approved by at least two-thirds of our directors or does not provide him with the same position he had with the Company immediately prior to the change of control, as such terms are defined in the agreement, Mr. b. McGill will receive an amount equal to the average of his base salary and bonus in the two fiscal years prior to termination (in a lump sum in the event of a change in control), for a period of thirty months after the effective date of termination; his stock options will vest and be exercisable for up to their full term (or for such shorter period of time that would not cause Mr. b. McGill any adverse tax consequences); his restricted stock and/or restricted stock units (or comparable forms of equity compensation, if any) will vest (at target), whether subject to performance conditions or not, and shall not be subject to any risk of forfeiture or repurchase as of the date of termination, and other stock-based compensation will not be subject to forfeiture or repurchase, subject in each case to certain exceptions. in the event of Mr. b. McGill’s death, the employment agreement provides for a payment of $1.0 million to his estate; for all stock options to vest and be exercisable for their full term; and for other stock-based compensation to vest and not be subject to forfeiture or repurchase, subject to certain exceptions. in the event of Mr. b. McGill’s disability, the employment agreement provides for the payment in a lump sum of the average of his base salary and bonus in the two fiscal years prior to disability for one year; for all stock options to vest and be exercisable for up to full term (or for such shorter period of time that would not cause the executive any adverse tax consequences); and for other stock-based compensation to vest and not be subject to forfeiture or repurchase, subject to certain exceptions. if any payments to Mr. b. McGill upon his termination are subject to the excise tax imposed under Section 4999 of the Code, then such payments shall be reduced in a manner determined by the Company that is consistent with the requirements of Section 409a of the Code until no amount payable to Mr. b. McGill will be subject to such excise taxes. For further information regarding the terms and conditions of the employment agreement, reference is made to the complete text thereof which is filed as an exhibit to this Form 10-K. PART III Item 10. Directors, Executive Officers and Corporate Governance The information required by this item relating to our directors and corporate governance is incorporated herein by reference to the definitive Proxy Statement (particularly under the caption “Corporate Governance”) to be filed pursuant to Regulation 14a of the exchange act for our 2019 annual Meeting of Shareholders (the “2019 Proxy Statement”). The information required by this item relating to our executive officers is included in “business — executive Officers.” We have adopted a code of ethics that applies to our principal executive officer, principal financial officer, and other senior accounting personnel. The “Code of ethics for the CeO and Senior Financial Officers” is located on our website at www.MarineMax.com in the investor Relations section under Corporate Governance. We intend to satisfy the disclosure requirement under item 5.05(c) of Form 8-K regarding any amendment to, or waiver from, a provision of this code of ethics by posting such information on our website, at the address and location specified above. Item 11. Executive Compensation The information required by this item is incorporated herein by reference to the 2019 Proxy Statement (particularly under the caption “executive Compensation”). Item 12. Security Ownership of Certain Bene ficial Owners and Management and Related Stockholder Matters The information required by this item is incorporated herein by reference to the 2019 Proxy Statement (particularly under the caption “Security Ownership of Principal Shareholders, Directors, and Officers”). Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this item is incorporated herein by reference to the 2019 Proxy Statement (particularly under the caption “Certain Relationships and Related Transactions”). 56 Item 14. Principal Accou ntant Fees and Services The information required by this item is incorporated herein by reference to the 2019 Proxy Statement (particularly under the caption “Ratification of appointment of independent auditor”). Item 15. Exhibits, Financial Statement Schedules PART IV (a) (1) (2) (3) Financial Statements and Financial Statement Schedules Financial Statements. Financial Statements are listed in the index to Consolidated Financial Statements on page F-1 of this report. Financial Statement Schedules. No financial statement schedules are included because such schedules are not applicable, are not required, or because required information is included in the consolidated financial statements or notes thereto. Exhibits. See item 15(b) below. (b) Exhibits Exhibit Number 2.1 3.1 3.2 4.1 10.3(h)* 10.3(i)* 10.3(j)* 10.5* 10.20 10.20(a) 10.20(b) 10.20(c)† 10.20(d)† 10.20(e)† 10.20(f)† 10.20(g)† 10.20(h)† 10.21† 10.21(a)† 10.21(b)† 10.21(c)† 10.21(d)† 10.21(e)† Exhibit agreement and Plan of Merger, dated February 25, 2015, by and between MarineMax, inc. and MarineMax Reincorporation, inc. (1) articles of incorporation of the Registrant.(2) bylaws of the Registrant. (2) Specimen of Common Stock Certificate. (2) employment agreement between Registrant and William H. McGill Jr., as amended employment agreement between Registrant and Michael H. McLamb, as amended employment agreement between Registrant and William brett McGill. 2008 employee Stock Purchase Plan, as amended. agreement Relating to acquisitions between Registrant and brunswick Corporation, dated December 7, 2005. (3) amendment, executed October 17, 2014, to agreement Relating to acquisitions between Registrant and brunswick Corporation, dated December 7, 2005. (4) Sea Ray Sales and Service agreement. (3) Sea Ray Sales and Service agreement, executed October 17, 2014, by and between MarineMax east, inc. and Sea Ray, a Division of brunswick Corporation. (4) Sea Ray Sales and Service agreement, executed October 17, 2014, by and between MarineMax Northeast, LLC, and Sea Ray, a Division of brunswick Corporation. (4) Sea Ray Sales and Service agreement, executed October 17, 2014, by and between MarineMax, inc. and Sea Ray, a Division of brunswick Corporation. (4) boston Whaler Sales and Service agreement, executed December 5, 2014, by and between MarineMax east, inc. and boston Whaler, a Division of brunswick Corporation. (5) boston Whaler Sales and Service agreement, executed December 5, 2014, by and between MarineMax Northeast, LLC, and boston Whaler, a Division of brunswick Corporation. (5) boston Whaler Sales and Service agreement, executed December 5, 2014, by and between MarineMax, inc. and boston Whaler, a Division of brunswick Corporation. (5) inventory Financing agreement executed on June 24, 2010, among MarineMax, inc. and its subsidiaries, as borrowers, and Ge Commercial Distribution Finance Corporation, as Lender. (6) Program Terms Letter executed on June 24, 2010, among MarineMax, inc. and its subsidiaries, as borrowers, and Ge Commercial Distribution Finance Corporation, as Lender. (6) amendment Number One to inventory Financing agreement, executed on December 17, 2010, among MarineMax, inc. and its subsidiaries, as borrowers, and Ge Commercial Distribution Finance Corporation, as Lender. (7) amendment Number One to Program Terms Letter, executed on December 17, 2010, among MarineMax, inc. and its subsidiaries, as borrowers, and Ge Commercial Distribution Finance Corporation, as Lender. (7) amendment Number Two to inventory Financing agreement, executed on June 1, 2011, among MarineMax, inc. and its subsidiaries, as borrowers, and Ge Commercial Distribution Finance Corporation, as Lender. (8) amendment Number Two to Program Terms Letter, executed on June 1, 2011, among MarineMax, inc. and its subsidiaries, as borrowers, and Ge Commercial Distribution Finance Corporation, as Lender. (8) 57 Exhibit Number 10.21(f) 10.21(g) † 10.21(h) † 10.21(i) † 10.21(j) † 10.21(k) † 10.21(l) † 10.21(m) † 10.21(n) † 10.21(o) † 10.21(p) † 10.21(q) † 10.22* 10.23 10.24(a)* 10.24(b)* 10.24(c)* 10.25* 10.26† 10.26(a) 10.26(b) 10.26(c) 10.27† 10.27(a) 10.27(b) 10.27(c) 10.27(d) 21 23.1 Exhibit amendment Number Three to inventory Financing agreement, executed on July 27, 2012, by and among MarineMax, inc. and its subsidiaries, as borrowers, and Ge Commercial Distribution Finance Corporation, as Lender. (9) amended and Restated inventory Financing agreement, executed on June 28, 2013, by and among MarineMax, inc. and its subsidiaries, as borrowers, and Ge Commercial Distribution Finance Corporation, as Lender. (10) amended and Restated Program Terms Letter, executed on June 28, 2013, among MarineMax, inc. and its subsidiaries, as borrowers, and Ge Commercial Distribution Finance Corporation, as Lender. (10) amendment Number Four to the amended and Restated inventory Financing agreement, executed on august 29, 2014, by and among MarineMax, inc. and its subsidiaries, as borrowers, and Ge Commercial Distribution Finance Corporation, as Lender. (4) Second amended and Restated Program Terms Letter, executed on august 29, 2014, among MarineMax, inc. and its subsidiaries, as borrowers, and Ge Commercial Distribution Finance Corporation, as Lender. (4) Second amended and Restated inventory Financing agreement, executed on October 30, 2015, among MarineMax, inc. and its subsidiaries, as borrowers, and Ge Commercial Distribution Finance LLC f/k/a Ge Commercial Distribution Finance Corporation, as Lender. (11) Third amended and Restated Program Terms Letter, executed on October 30, 2015, among MarineMax and its subsidiaries, as borrowers, and Ge Commercial Distribution Finance LLC f/k/a Ge Commercial Distribution Finance Corporation, as Lender. (11) First amendment to Second amended and Restated inventory Financing agreement, executed on March 31, 2016, among and its subsidiaries, as borrowers, and Ge Commercial Distribution Finance LLC f/k/a Ge Commercial Distribution Finance Corporation, as Lender. (12) Second amendment to Second amended and Restated inventory Financing agreement, First amendment to Third amended and Restated Program Terms Letter and First amendment to [***********], executed on June 9, 2016, by and among MarineMax, inc. and its subsidiaries, as borrowers, and Wells Fargo Commercial Distribution Finance LLC f/k/a Ge Commercial Distribution Finance Corporation, as Lender. (12) Third amendment to Second amended and Restated inventory Financing agreement and Second amendment to [**********], executed on October 22, 2016, by and among MarineMax, inc. and its subsidiaries, Wells Fargo Commercial Distribution Finance LLC, bank of the West, inc. and M&T bank. (13) Third amended and Restated inventory Financing agreement, executed on May 9, 2017, by and among MarineMax, inc. and its subsidiaries, as borrowers, and Wells Fargo Commercial Distribution Finance LLC, bank of the West, inc., M&T bank, and branch banking & Trust Company. (14) Fourth amended and Restated Program Terms Letter, executed on May 9, 2017, by and among MarineMax, inc. and its subsidiaries, as borrowers, and Wells Fargo Commercial Distribution Finance, LLC. (14) MarineMax, inc. 2007 incentive Compensation Plan (15) Director Fee Share Purchase Program (16) MarineMax, inc. 2011 Stock-based Compensation Plan, as amended (17) Form Stock Option agreement for 2011 Stock-based Compensation Plan (18) Form Restricted Stock Unit award agreement for 2011 Stock-based Compensation Plan (18) Severance Policy for Key executives (19) Dealership agreement dated September 1, 2008 by and between MarineMax Northeast, LLC and azimut benetti S.P.a. (20) First amendment dated June 22, 2010 to Dealership agreement dated September 1, 2008, by and between MarineMax Northeast, LLC and azimut benetti S.P.a. (20) Second amendment dated February 29, 2012 to Dealership agreement dated September 1, 2008, by and between MarineMax Northeast, LLC and azimut benetti S.P.a. (20) Third amendment dated July 21, 2012 to Dealership agreement dated September 1, 2008, by and between MarineMax Northeast, LLC and azimut benetti S.P.a. (20) Dealership agreement dated September 1, 2008 by and between MarineMax east, LLC and azimut benetti S.P.a. (20) First amendment dated June 22, 2010 to Dealership agreement dated September 1, 2008, by and between MarineMax east, inc. and azimut benetti S.P.a. (20) Second amendment dated February 29, 2012 to Dealership agreement dated September 1, 2008, by and between MarineMax east, inc. and azimut benetti S.P.a. (20) Third amendment dated July 21, 2012 to Dealership agreement dated September 1, 2008, by and between MarineMax east, inc. and azimut benetti S.P.a. (20) Fourth amendment dated august 21, 2013 to Dealership agreement dated September 1, 2008, by and between MarineMax east, inc. and azimut benetti S.P.a. (20) List of Subsidiaries . Consent of KPMG LLP. 58 Exhibit Number 31.1 31.2 32.1 32.2 101.iNS 101.SCH 101.CaL 101.DeF 101.Lab 101.PRe Exhibit Certification of Chief executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities exchange act of 1934, as amended. Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities exchange act of 1934, as amended. Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley act of 2002. Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley act of 2002. XbRL instance Document. XbRL Taxonomy extension Schema Document. XbRL Taxonomy extension Calculation Linkbase Document. XbRL Taxonomy extension Definition Linkbase Document. XbRL Taxonomy extension Label Linkbase Document. XbRL Taxonomy extension Presentation Linkbase Document. † * (1) (2) (3 ) (4 ) (5 ) (6 ) (7 ) (8 ) (9 ) (10 ) (11 ) (12 ) (13 ) (14 ) (15 ) (16 ) (17 ) (18 ) (19 ) (20 ) (c) (1) Certain information in this exhibit has been omitted and filed separately with the Securities and exchange Commission. Confidential treatment has been requested with respect to the omitted portions. Management contract or compensatory plan or arrangement. incorporated by reference to Registrant’s Form 8-K as filed February 26, 2015. incorporated by reference to Registrant’s Form 8-K as filed March 20, 2015. incorporated by reference to Registrant’s Form 8-K as filed on December 9, 2005. incorporated by reference to Registrant’s Form 10-K for the year ended September 30, 2014, as filed on December 11, 2014. incorporated by reference to Registrant’s Form 10-Q for the quarterly period ended December 31, 2014, as filed on February 5, 2015. incorporated by reference to Registrant’s Form 10-Q for the quarterly period ended June 30, 2010, as filed on august 9, 2010. incorporated by reference to Registrant’s Form 10-Q for the quarterly period ended December 31, 2010, as filed on February 8, 2011. incorporated by reference to Registrant’s Form 10-Q for the quarterly period ended June 30, 2011, as filed on august 5, 2011. incorporated by reference to Registrant’s Form 10-Q for the quarterly period ended June 30, 2012, as filed on august 3, 2012. incorporated by reference to Registrant’s Form 10-Q for the quarterly period ended June 30, 2013, as filed on august 6, 2013. incorporated by reference to Registrant’s Form 10-Q for the quarterly period ended December 31, 2015, as filed on February 4, 2016. incorporated by reference to Registrant’s Form 10-Q for the quarterly period ended June 30, 2016, as filed on august 3, 2016. incorporated by reference to Registrant’s Form 10-Q for the quarterly period ended December 31, 2016 as filed on February 2, 2017. incorporated by reference to Registrant’s Form 10-Q for the quarterly period ended June 30, 2017, as filed on July 25, 2017. incorporated by reference to Registrant’s Form 8-K as filed on March 6, 2007. incorporated by reference to Registrant’s Form S-8 (File No. 333-141657) as filed March 29, 2007. incorporated by reference to Registrant’s Form S-8 (File No. 333-177019) as filed on June 7, 2017. incorporated by reference to Registrant’s Form 8-K as filed on January 25, 2011. incorporated by reference to Registrant’s Form 8-K as filed on November 27, 2012. incorporated by reference to Registrant’s Form 10-K for the year ended September 30, 2013, as filed on December 6, 2013. Financial Statements Schedules See item 15(a) above. 59 Pursuant to the requirements of Section 13 or 15(d) of the Securities exchange act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SIGNATURES MARINEMAX, INC. /s/ W. brett McGill W. brett McGill Chief executive Officer and President Date: November 29, 2018 Pursuant to the requirements of the Securities exchange act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Date November 29, 2018 November 29, 2018 November 29, 2018 November 29, 2018 November 29, 2018 November 29, 2018 November 29, 2018 November 29, 2018 November 29, 2018 November 29, 2018 Signature /s/ W. brett McGill W. brett McGill /s/ Michael H. McLamb Michael H. McLamb Capacity Chief executive Officer and President, (Principal executive Officer) executive Vice President, Chief Financial Officer, Secretary, and Director (Principal accounting and Financial Officer) /s/ William H. McGill Jr. William H. McGill Jr. executive Chairman of the board, Director /s/ Clint Moore Clint Moore /s/ George e. borst George e. borst /s/ Hilliard M. eure iii Hilliard M. eure iii /s/ evelyn Follit evelyn Follit /s/ Charles R. Oglesby Charles R. Oglesby /s/ Joseph a. Watters Joseph a. Watters /s/ Rebecca White Rebecca White Director Director Director Director Director Director Director 60 MARINEMAX, INC. AND SUBSIDIARIES INDEX TO CONSOLIDATED FINANCIAL STATEMENTS CONSOLiDaTeD FiNaNCiaL STaTeMeNTS Report of independent Registered Public accounting Firm Consolidated balance Sheets Consolidated Statements of Operations Consolidated Statements of Shareholders’ equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements Page F-2 F-3 F-4 F-5 F-6 F-7 Report of Independent Regist ered Public Accounting Firm To the Shareholders and board of Directors MarineMax, inc.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of MarineMax, inc. and subsidiaries (the Company) as of September 30, 2018 and 2017, the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the years in the three‑year period ended September 30, 2018, and the related notes (collectively, the consolidated financial statements). in our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2018 and 2017, and the results of its operations and its cash flows for each of the years in the three‑year period ended September 30, 2018, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company accounting Oversight board (United States) (PCaOb), the Company’s internal control over financial reporting as of September 30, 2018, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated November 29, 2018 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCaOb and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and exchange Commission and the PCaOb. We conducted our audits in accordance with the standards of the PCaOb. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ KPMG LLP We have served as the Company’s auditor since 2013. Tampa, Florida November 29, 2018 Certified Public accountants F-2 MARINEMAX, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (amounts in thousands except share and per share data) ASSETS September 30, 2017 September 30, 2018 CURReNT aSSeTS: Cash and cash equivalents accounts receivable, net inventories, net Prepaid expenses and other current assets Total current assets Property and equipment, net Goodwill and other long-term assets, net Deferred tax assets, net Total assets LIABILITIES AND SHAREHOLDERS' EQUITY CURReNT LiabiLiTieS: accounts payable Customer deposits accrued expenses Short-term borrowings Total current liabilities Long-term liabilities Total liabilities COMMiTMeNTS aND CONTiNGeNCieS SHaReHOLDeRS' eQUiTY: Preferred stock, $.001 par value, 1,000,000 shares authorized, none issued or outstanding as of September 30, 2017 and 2018 Common stock, $.001 par value; 40,000,000 shares authorized, 26,314,066 and 27,141,267 shares issued and 21,887,579 and 22,670,536 shares outstanding as of September 30, 2017 and 2018, respectively additional paid-in capital Retained earnings Treasury stock, at cost, 4,426,487 and 4,470,731 shares held as of September 30, 2017 and 2018, respectively Total shareholders' equity Total liabilities and shareholders' equity $ $ $ $ 41,952 $ 24,661 401,301 5,842 473,756 127,160 30,305 8,769 639,990 $ 26,432 $ 21,032 33,046 254,177 334,687 3,105 337,792 48,822 34,003 377,074 5,392 465,291 138,716 33,123 3,408 640,538 23,134 17,006 32,926 212,949 286,015 1,431 287,446 — — 26 249,974 126,759 (74,561) 302,198 639,990 $ 27 262,250 166,071 (75,256) 353,092 640,538 See accompanying notes to consolidated financial statements. F-3 MARINEMAX, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (amounts in thousands except share and per share data) Revenue Cost of sales Gross profit Selling, general, and administrative expenses income from operations interest expense income before income tax provision income tax provision Net income basic net income per common share Diluted net income per common share Weighted average number of common shares used in computing net income per common share: basic Diluted 2016 For the Year Ended September 30, 2017 2018 942,050 $ 716,022 226,028 185,776 40,252 5,462 34,790 12,208 22,582 $ 0.93 $ 0.91 $ 1,052,320 $ 787,005 265,315 220,026 45,289 7,481 37,808 14,261 23,547 $ 0.98 0.95 $ 1,177,371 879,138 298,233 235,050 63,183 9,903 53,280 13,968 39,312 1.77 1.71 $ $ $ $ 24,203,947 24,820,847 23,966,611 24,678,800 22,269,378 23,030,662 See accompanying notes to consolidated financial statements. F-4 MARINEMAX, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (amounts in thousands except share data) baLaNCe, September 30, 2015 Net income adjustment to adopt aSU 2016-09 Purchase of treasury stock Shares issued pursuant to employee stock purchase plan Shares issued upon vesting of equity awards, net of minimum tax withholding Shares issued upon exercise of stock options Stock-based compensation baLaNCe, September 30, 2016 Net income Purchase of treasury stock Shares issued pursuant to employee stock purchase plan Shares issued upon vesting of equity awards, net of minimum tax withholding Shares issued upon exercise of stock options Stock-based compensation baLaNCe, September 30, 2017 Net income Purchase of treasury stock Shares issued pursuant to employee stock purchase plan Shares issued upon vesting of equity awards, net of minimum tax withholding Shares issued upon exercise of stock options Stock-based compensation baLaNCe, September 30, 2018 Common Stock Shares Amount   Additional Paid-in Capital Retained Earnings 25,562,994 $ — — — 26 $ — — — 234,478 $ — — — 75,433 $ 22,582 5,197 — Treasury Stock (26,292) $ — — (5,531) Equity 283,645 22,582 5,197 (5,531) Total Shareholders’ 68,495 — 823 — — 823 36,546 272,510 37,087 25,977,632 $ — — — — — 26 $ — — (362) 1,878 4,241 241,058 $ — — — — — 103,212 $ 23,547 — — — — (31,823) $ — (42,738) (362) 1,878 4,241 312,473 23,547 (42,738) 51,697 — 887 — — 887 56,539 184,931 43,267 26,314,066 $ — — — — — 26 $ — — (479) 2,271 6,237 249,974 $ — — — — — 126,759 $ 39,312 — — — — (74,561) $ — (695) (479) 2,271 6,237 302,198 39,312 (695) 67,187 — 950 — — 950 163,350 586,531 10,133 27,141,267 $ — 1 — 27 $ (1,643) 6,732 6,237 262,250 $ — — — 166,071 $ — — — (75,256) $ (1,643) 6,733 6,237 353,092 See accompanying notes to consolidated financial statements. F-5                       MARINEMAX, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (amounts in thousands) CaSH FLOWS FROM OPeRaTiNG aCTiViTieS: Net income adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization Deferred income tax provision Loss on sale of property and equipment and assets held for sale Gain on insurance settlements Proceeds from insurance settlements Gain on contingent acquisition consideration Stock-based compensation expense, net (increase) Decrease in — accounts receivable, net inventories, net Prepaid expenses and other assets (Decrease) increase in — accounts payable Customer deposits accrued expenses and long-term liabilities Net cash provided by operating activities CaSH FLOWS FROM iNVeSTiNG aCTiViTieS: Purchases of property and equipment Proceeds from insurance settlements Net cash used in acquisition of businesses Proceeds from sale of property and equipment and assets held for sale Net cash used in investing activities CaSH FLOWS FROM FiNaNCiNG aCTiViTieS: Net borrowings on short-term borrowings Net proceeds from issuance of common stock under incentive compensation, and employee purchase plans Contingent acquisition consideration payments Payments on tax withholdings for equity awards Purchase of treasury stock Net cash provided by (used in) financing activities NeT iNCReaSe iN CaSH aND CaSH eQUiVaLeNTS: CaSH aND CaSH eQUiVaLeNTS, beginning of period CaSH aND CaSH eQUiVaLeNTS, end of period Supplemental Disclosures of Cash Flow information: Cash paid for: interest income taxes Non-cash items: Held for sale assets classified as property and equipment accrued tax withholdings upon vesting of equity awards Contingent consideration liabilities from acquisitions adjustment to retained earnings and deferred tax assets to adopt aSU 2016-09 accrued acquisition of property and equipment exchange of equity interest for controlling interest 2016 For the Year Ended September 30, 2017 2018 $ 22,582 $ 23,547 $ 39,312 7,964 11,639 51 — — — 4,241 (5,436) (32,417) (1,517) (4,278) 16,625 3,409 22,863 (12,913) — (17,062) 228 (29,747) 9,364 12,306 306 — — — 6,237 266 (57,107) (1,710) 16,835 (9,341) 4,042 4,745 (14,367) — (18,725) 994 (32,098) 10,673 5,361 330 (1,082) 2,342 (1,440) 6,237 (11,279) 26,773 (996) (3,325) (4,065) 1,573 70,414 (13,804) 823 (10,524) 190 (23,315) 15,768 70,819 (43,383) 2,701 — (80) (5,531) 12,858 5,974 32,611 38,585 $ 3,158 (150) (369) (42,738) 30,720 3,367 38,585 41,952 $ 6,002 $ 855 8,482 $ 457 3,800 282 3,307 5,197 — 2,860 — 392 3,720 — 300 — 7,683 (3,324) (510) (695) (40,229) 6,870 41,952 48,822 12,021 9,424 — 1,525 — — 129 — $ $ See accompanying notes to consolidated financial statements F-6 MARINEMAX, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. COMPANY BACKGROUND AND BASIS OF PRESENTATION: We are the largest recreational boat and yacht retailer in the United States. We engage primarily in the retail sale, brokerage, and service of new and used boats, motors, trailers, marine parts and accessories and offer slip and storage accommodations in certain locations. in addition, we arrange related boat financing, insurance, and extended service contracts. We also offer the charter of power yachts in the british Virgin islands. as of September 30, 2018, we operated through 63 retail locations in 16 states, consisting of alabama, Connecticut, Florida, Georgia, Maryland, Massachusetts, Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Rhode island, South Carolina, and Texas. Our MarineMax Vacations operations maintain a facility in Tortola, british Virgin islands. We are the nation’s largest retailer of Sea Ray and boston Whaler recreational boats and yachts which are manufactured by brunswick Corporation (“brunswick”). Sales of new brunswick boats accounted for approximately 40% of our revenue in fiscal 2018. Sales of new Sea Ray and boston Whaler boats, both divisions of brunswick, accounted for approximately 21% and 17%, respectively, of our revenue in fiscal 2018. brunswick is a world leading manufacturer of marine products and marine engines. We believe we represented approximately 42% of brunswick’s Sea Ray boat sales, during our fiscal 2018. We have dealership agreements with Sea Ray, boston Whaler, Harris, and Mercury Marine, all subsidiaries or divisions of brunswick. We also have dealer agreements with italy-based azimut-benetti Group’s product line for azimut Yachts. These agreements allow us to purchase, stock, sell, and service these manufacturers’ boats and products. These agreements also allow us to use these manufacturers’ names, trade symbols, and intellectual properties in our operations. We have multi-year dealer agreements with brunswick covering Sea Ray products that appoint us as the exclusive dealer of Sea Ray boats in our geographic markets. We are the exclusive dealer for boston Whaler through multi-year dealer agreements for many of our geographic markets. in addition, we are the exclusive dealer for azimut Yachts for the entire United States through a multi-year dealer agreement. Sales of new azimut boats and yachts accounted for approximately 11% of our revenue in fiscal 2018. We believe non-brunswick brands offer a migration for our existing customer base or fill a void in our product offerings, and accordingly, do not compete with the business generated from our other prominent brands. as is typical in the industry, we deal with most of our manufacturers, other than Sea Ray, boston Whaler, and azimut Yachts, under renewable annual dealer agreements, each of which gives us the right to sell various makes and models of boats within a given geographic region. any change or termination of these agreements, or the agreements discussed above, for any reason, or changes in competitive, regulatory, or marketing practices, including rebate or incentive programs, could adversely affect our results of operations. although there are a limited number of manufacturers of the type of boats and products that we sell, we believe that adequate alternative sources would be available to replace any manufacturer other than Sea Ray and azimut as a product source. These alternative sources may not be available at the time of any interruption, and alternative products may not be available at comparable terms, which could affect operating results adversely. General economic conditions and consumer spending patterns can negatively impact our operating results. Unfavorable local, regional, national, or global economic developments or uncertainties regarding future economic prospects could reduce consumer spending in the markets we serve and adversely affect our business. economic conditions in areas in which we operate dealerships, particularly Florida in which we generated approximately 55%, 55%, and 51% of our revenue during fiscal 2016, 2017, and 2018, respectively, can have a major impact on our operations. Local influences, such as corporate downsizing, military base closings, inclement weather such as Hurricane Sandy in 2012 or Hurricanes Harvey and irma in 2017, environmental conditions, and specific events, such as the bP oil spill in the Gulf of Mexico in 2010, also could adversely affect, and in certain instances have adversely affected, our operations in certain markets. in an economic downturn, consumer discretionary spending levels generally decline, at times resulting in disproportionately large reductions in the sale of luxury goods. Consumer spending on luxury goods also may decline as a result of lower consumer confidence levels, even if prevailing economic conditions are favorable. as a result, an economic downturn could impact us more than certain of our competitors due to our strategic focus on a higher end of our market. although we have expanded our operations during periods of stagnant or modestly declining industry trends, the cyclical nature of the recreational boating industry or the lack of industry growth may adversely affect our business, financial condition, and results of operations. any period of adverse economic conditions or low consumer confidence has a negative effect on our business. F-7 MARINEMAX, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Lower consumer spending resulting from a downturn in the housing market and other eco nomic factors adversely affected our business in fiscal 2007, and continued weakness in consumer spending and depressed economic conditions had a substantial negative effect on our business and industry for several years after fiscal 2007. These condition s caused us to substantially reduce our acquisition program, delay new store openings, reduce our inventory purchases, engage in inventory reduction efforts, close a number of our retail locations, reduce our headcount, and amend and replace our credit fac ility. acquisitions and new store openings remain important strategies to our company, and we plan to accelerate our gro wth through these strategies as industry conditions continue to improve. However, we cannot predict the length of unfavorable economic or industry conditions or the exten t to which they could adversely affect our operating results nor can we predict the effectiveness of the measures we have t aken to address unfavorable economic or industry conditions . in order to provide comparability between periods presented, certain amounts have been reclassified from the previously reported consolidated financial statements to conform to the consolidated financial statement presentation of the current period. The consolidated financial statements include our accounts and the accounts of our subsidiaries, all of which are wholly owned. all significant intercompany transactions and accounts have been eliminated. 2. SIGNIFICANT ACCOUNTING POLICIES: Cash and Cash Equivalents We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. Vendor Consideration Received We account for consideration received from our vendors in accordance with FaSb accounting Standards Codification 605-50, “Revenue Recognition - Customer Payments and incentives” (“aSC 605-50”). aSC 605-50 requires us to classify interest assistance received from manufacturers as a reduction of inventory cost and related cost of sales as opposed to netting the assistance against our interest expense incurred with our lenders. Pursuant to aSC 605-50, amounts received by us under our co-op assistance programs from our manufacturers are netted against related advertising expenses. Further pursuant to aSC 605- 50, manufacturer incentives based upon cumulative volume of sales and purchases are recorded when the amounts are probable and reasonably estimable. accounting for consideration received is not expected to materially change with the adoption of aSU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, in fiscal 2019. Inventories inventory costs consist of the amount paid to acquire inventory, net of vendor consideration and purchase discounts, the cost of equipment added, reconditioning costs, and transportation costs relating to acquiring inventory for sale. We state new and used boat, motor, and trailer inventories at the lower of cost, determined on a specific-identification basis, or net realizable value. We state parts and accessories at the lower of cost, determined on an average cost basis, or net realizable value. We utilize our historical experience, the aging of the inventories, and our consideration of current market trends as the basis for determining a lower of cost or net realizable value valuation allowance. We do not believe there is a reasonable likelihood that there will be a change in the future estimates or assumptions we use to calculate our lower of cost or net realizable value valuation allowance which would result in a material effect on our operating results. as of September 30, 2017 and 2018, our lower of cost or net realizable value valuation allowance for new and used boat, motor, and trailer inventories was $1.8 million and $1.5 million, respectively. if events occur and market conditions change, causing the fair value to fall below carrying value, the lower of cost or net realizable value valuation allowance could increase. Property and Equipment We record property and equipment at cost, net of accumulated depreciation, and depreciate property and equipment over their estimated useful lives using the straight-line method. We capitalize and amortize leasehold improvements over the lesser of the life of the lease or the estimated useful life of the asset. Useful lives for purposes of computing depreciation are as follows: buildings and improvements Machinery and equipment Furniture and fixtures Vehicles F-8 Years 5-40 3-10 5-10 3-5 MARINEMAX, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS We remove the cost of property and equipment sold or retired and the related accumulated depreciation from the accounts at the time of disposition and include any resulting gain or loss in the consolidated statements of operations. We charge maintenance, repairs, and minor replacements to operations as incurred, and we capitalize and amortize major replacements and improvements over their useful lives. Goodwill We account for goodwill in accordance with FaSb accounting Standards Codification 350, “intangibles - Goodwill and Other” (“aSC 350”), which provides that the excess of cost over net assets of businesses acquired is recorded as goodwill. in January 2017, we purchased Hall Marine Group, a privately owned boat dealer in the Southeast United States with locations in North Carolina, South Carolina, and Georgia, resulting in the recording of $16.0 million in goodwill. in January 2018, we purchased island Marine Center, a privately owned boat dealer located in New Jersey resulting in the recording of $1.3 million in goodwill. in total, current and previous acquisitions have resulted in the recording of $27.4 million in goodwill. in accordance with aSC 350, we review goodwill for impairment at least annually and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Our annual impairment test is performed during the fourth fiscal quarter. if the carrying amount of goodwill exceeds its fair value we would recognize an impairment loss in accordance with aSC 350. as of September 30, 2018 , and based upon our most recent analysis, we determined through our qualitative assessment that it is not “more likely than not” that the fair values of our reporting units are less than their carrying values. as a result, we were not required to perform a quantitative goodwill impairment test . Impairment of Long-Lived Assets FaSb accounting Standards Codification 360-10-40, “Property, Plant, and equipment - impairment or Disposal of Long-Lived assets” (“aSC 360-10- 40”), requires that long-lived assets, such as property and equipment and purchased intangibles subject to amortization, be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the asset is measured by comparison of its carrying amount to undiscounted future net cash flows the asset is expected to generate. if such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds its fair market value. estimates of expected future cash flows represent our best estimate based on currently available information and reasonable and supportable assumptions. any impairment recognized in accordance with aSC 360- 10-40 is permanent and may not be restored. The analysis is performed at a regional level for indicators of permanent impairment given the geographical interdependencies amongst our locations. based upon our most recent analysis, we believe no further impairment of long-lived assets existed as of September 30, 2018. Customer Deposits Customer deposits primarily include amounts received from customers toward the purchase of boats. We recognize these deposits as revenue at the time of delivery or acceptance by the customers. Insurance We retain varying levels of risk relating to the insurance policies we maintain, most significantly workers’ compensation insurance and employee medical benefits. We are responsible for the claims and losses incurred under these programs, limited by per occurrence deductibles and paid claims or losses up to pre- determined maximum exposure limits. Our third-party insurance carriers pay any losses above the pre-determined exposure limits. We estimate our liability for incurred but not reported losses using our historical loss experience, our judgment, and industry information. Revenue Recognition We recognize revenue from boat, motor, and trailer sales, and parts and service operations at the time the boat, motor, trailer, or part is delivered to or accepted by the customer or the service is completed. We recognize deferred revenue from service operations and slip and storage services on a straight-line basis over the term of the contract as services are completed. We recognize commissions earned from a brokerage sale at the time the related brokerage transaction closes. We recognize income from the rentals of chartering power yachts on a straight-line basis over the term of the contract as services are completed. We recognize commissions earned by us for placing notes with financial institutions in connection with customer boat financing when we recognize the related boat sales. We recognize marketing fees earned on credit, life, accident, disability, gap, and hull insurance products sold by third-party insurance companies at the later of customer acceptance of the insurance product as evidenced by contract execution or when the F-9 MARINEMAX, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS related boat sale is recognized. Pursuant to negotiated agreements with financial and insurance institutions, we are charged back for a portion of these fees should the custome r terminate or default on the related finance or insurance contract before it is outstanding for a stipulated minimum period of time. We base the chargeback allowance, which was not material to the consolidated financial statements taken as a whole as of September 30, 2018 , on our experience with repayments or defaults on the related finance or insurance contracts. We also recognize commissions earned on extended warranty service contracts sold on behalf of third-party insurance companies at the later of customer acceptance of the service contract terms as evidenced by contract execution or recognition of the related boat sale. We are charged back for a portion of these commissions should the customer terminate or default on the service contract prior to its scheduled maturity. We determined the chargeback allowance, which was not material to the consolidated financial statements taken as a whole as of September 30, 2018, based upon our experience with terminations or defaults on the service contracts. The following table sets forth percentages of our revenue generated by certain products and services, for each of last three fiscal years. New boat sales Used boat sales Maintenance, repair, storage, and charter services Finance and insurance products Parts and accessories brokerage sales Total revenue 2016 2017 2018 68.5% 17.5% 6.0% 2.5% 3.5% 2.0% 100.0% 70.9% 14.9% 6.3% 2.4% 3.6% 1.9% 100.0% 71.2% 14.8% 6.2% 2.4% 3.6% 1.8% 100.0% Stock-Based Compensation We account for our stock-based compensation plans following the provisions of FaSb accounting Standards Codification 718, “Compensation — Stock Compensation” (“aSC 718”). in accordance with aSC 718, we use the black-Scholes valuation model for valuing all stock-based compensation and shares purchased under our employee Stock Purchase Plan. We measure compensation for restricted stock awards and restricted stock units at fair value on the grant date based on the number of shares expected to vest and the quoted market price of our common stock. We recognize compensation cost for all awards in operations, net of estimated forfeitures, on a straight-line basis over the requisite service period for each separately vesting portion of the award. Advertising and Promotional Cost We expense advertising and promotional costs as incurred and include them in selling, general, and administrative expenses in the accompanying consolidated statements of operations. Pursuant to aSC 605-50, we net amounts received by us under our co-op assistance programs from our manufacturers against the related advertising expenses. Total advertising and promotional expenses approximated $13.5 million, $16.2 million, and $16.5 million, net of related co-op assistance of approximately $730,000, $779,000, and $653,000, for the fiscal years ended September 30, 2016, 2017, and 2018, respectively. Income Taxes We account for income taxes in accordance with FaSb accounting Standards Codification 740, “income Taxes” (“aSC 740”). Under aSC 740, we recognize deferred tax assets and liabilities for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which we expect those temporary differences to be recovered or settled. We record valuation allowances to reduce our deferred tax assets to the amount expected to be realized by considering all available positive and negative evidence. Concentrations of Credit Risk Financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash and cash equivalents and accounts receivable. Concentrations of credit risk with respect to our cash and cash equivalents are limited primarily F-10 MARINEMAX, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS to amounts held with financial institutions. Concentrations of credit risk arising from our receivables are limited primarily to amounts due from manufacturers and financial institutions. Fair Value of Financial Instruments The carrying amount of our financial instruments approximates fair value resulting from either length to maturity or existence of interest rates that approximate prevailing market rates unless otherwise disclosed in these consolidated financial statements. Use of Estimates and Assumptions The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates made by us in the accompanying consolidated financial statements relate to valuation allowances, valuation of goodwill and intangible assets, valuation of long-lived assets, valuation of contingent consideration, and valuation of accruals. actual results could differ materially from those estimates. Segment Reporting We operate as one reporting segment in accordance with the FaSb accounting Standards Codification 280, “Segment Reporting”. The metrics used by our Chief executive Officer (as the Company’s chief operating decision maker or the “CODM”) to assess the performance of the Company are focused on viewing the business as a single integrated business. 3. NEW ACCOUNTING PRONOUNCEMENTS: in May 2014, the FaSb issued accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“aSU 2014-09”), a converged standard on revenue recognition. The new pronouncement requires revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also specifies the accounting for some costs to obtain or fulfill a contract with a customer, as well as enhanced disclosure requirements. aSU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. early adoption is permitted for annual reporting periods beginning after December 15, 2016. While we have not completed the implementation process, we currently do not believe the adoption of this standard will have a material impact on our consolidated financial statements, or will cause a significant change to our current accounting policies or internal control over financial reporting for revenue recognition on boat, motor, and trailer sales, brokerage commissions, slip and storage services, charter rentals, yacht charter services, and fee income generated from finance and insurance products. However, the timing of revenue recognition for certain parts and service operations will be accelerated, as we have determined these performance obligations are satisfied over time under the new standard. We currently anticipate adopting the standard using the modified retrospective approach applied only to contracts not completed as of the date of adoption, with no restatement of comparative periods. We are finalizing our cumulative effect adjustment and currently expect that all changes to our revenue recognition methods as a result of adopting the new standard will result in a net, after-tax cumulative effect adjustment to increase retained earnings as of October 1, 2018 in the range of $200,000 to $800,000. We plan to adopt aSU 2014-09 in fiscal 2019. in February 2016, the FaSb issued aSU 2016-02, “Leases (Topic 842)” (“aSU 2016-02”). This update requires organizations to recognize lease assets and lease liabilities on the balance sheet and also disclose key information about leasing arrangements. aSU 2016-02 is effective for annual reporting periods beginning on or after December 15, 2018, and interim periods within those annual periods. earlier application is permitted for all entities as of the beginning of an interim or annual period. While we are continuing to evaluate the impact of the adoption of aSU 2016-02 on our consolidated financial statements, we believe the adoption of aSU 2016-02 will have a significant and material impact to our consolidated balance sheet given our current lease agreements for our leased retail locations. We are continuing to evaluate the impact the adoption of aSU 2016-02 will have on our other consolidated financial statements. based on our current assessment, we expect that most of our operating lease commitments will be subject to the new guidance and recognized as operating lease liabilities and right-of- use assets upon adoption, resulting in a material increase in the assets and liabilities recorded on our consolidated balance sheet. We expect to elect the majority of the standard’s available practical expedients on adoption . We are continuing our assessment, which may identify additional impacts this standard will have on our consolidated financial statements and related disclosures and internal control over financial reporting. We plan to adopt aSU 2016-02 in fiscal 2020. F-11 MARINEMAX, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS in January 2017, the FaSb issued aSU 2017-04, “Simplifying the Test for Goodwill impairment (Topic 350)” (“aSU 2017-04”). This update removes the requirement to compare the implied fair value of goodwill with its carrying amount as part of step 2 of the goodwill impairment test. as a result, under aSU 2017- 04, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carryin g amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the impairment loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This guidance is effective prospectively for fiscal years beginning after December 15, 2019. early adoption is permitted for interim or annual goodwill impairment tests performed after January 1, 2017. We elected to early adopt the new guidance in the fo urth quarter of fiscal 2018. The adoption of aSU 2017-04 did not have an impact on the Company’s consolidated financial position, results of operations, or internal controls. 4. ACCOUNTS RECEIVABLE: Trade receivables consist primarily of receivables from financial institutions, which provide funding for customer boat financing and amounts due from financial institutions earned from arranging financing with our customers. We normally collect these receivables within 30 days of the sale. Trade receivables also include amounts due from customers on the sale of boats, parts, service, and storage. amounts due from manufacturers represent receivables for various manufacturer programs and parts and service work performed pursuant to the manufacturers’ warranties. The allowance for uncollectible receivables, which was not material to the consolidated financial statements as of September 30, 2017 or 2018, was based on our consideration of customer payment practices, past transaction history with customers, and economic conditions. When an account becomes uncollectable, we expense it as a bad debt and we credit payments subsequently received to the bad debt expense account. We review the allowance for uncollectible receivables when an event or other change in circumstances results in a change in the estimate of the ultimate collectability of a specific account. accounts receivable, net consisted of the following as of September 30, Trade receivables, net amounts due from manufacturers Other receivables 5. INVENTORIES: inventories, net, consisted of the following as of September 30, New boats, motors, and trailers Used boats, motors, and trailers Parts, accessories, and other 2017 2018 (Amounts in thousands) 15,860 $ 8,192 609 24,661 $ 18,864 14,343 796 34,003 2017 2018 (Amounts in thousands) 357,957 $ 35,211 8,133 401,301 $ 332,320 35,999 8,755 377,074 $ $ $ $ F-12 MARINEMAX, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 6. PROPERTY AND EQUIPMENT: Property and equipment consisted of the following as of September 30, Land buildings and improvements Machinery and equipment Furniture and fixtures Vehicles accumulated depreciation and amortization 2017 2018 (Amounts in thousands) 51,283 $ 100,284 33,278 3,938 7,862 196,645 (69,485) 127,160 $ 56,628 108,693 32,155 3,925 9,328 210,729 (72,013) 138,716 $ $ Depreciation and amortization expense on property and equipment totaled approximately $8.0 million, $9.4 million, and $10.7 million for the fiscal years ended September 30, 2016, 2017, and 2018, respectively. 7. GOODWILL AND OTHER ASSETS: in total, current and previous acquisitions have resulted in the recording of $25.9 million and $27.4 million in goodwill as of September 30, 2017 and 2018, respectively. During February 2006, we became party to a joint venture with brunswick that acquired certain real estate and assets of Great american Marina for an aggregate purchase price of approximately $11.0 million, of which we contributed approximately $4.0 million and brunswick contributed approximately $7.0 million. The terms of the agreement specified that we were to operate and maintain the service business and that brunswick was to operate and maintain the marina business. Simultaneously with the closing, the acquired entity became Gulfport Marina, LLC (“Gulfport”). We accounted for our investment in Gulfport in accordance with FaSb accounting Standards Codification 323, “investment – equity Method and Joint Venture”. accordingly, we adjusted the carrying amount of our investment in Gulfport to recognize our share of earnings or losses, based on the service business we operated. During February 2016, we acquired brunswick’s interest in the Gulfport joint venture. after the acquisition of brunswick’s interest, we reported the complete operations of Gulfport in our consolidated balance sheet as of September 30, 2017 and 2018, and consolidated statement of operations for the remainder of fiscal year 2016, fiscal year 2017, and fiscal year 2018 subsequent to the acquisition in accordance with FaSb accounting Standards Codification 805, “business Combinations”. 8. SHORT-TERM BORROWINGS: in October 2018, we amended and restated our inventory Financing agreement (the “amended Credit Facility”), originally entered into in June 2010, as subsequently amended, with Wells Fargo Commercial Distribution Finance LLC (formerly Ge Commercial Distribution Finance Corporation). The October 2018 amendment and restatement extended the maturity date of the Credit Facility to October 2021, and the amended Credit Facility includes two additional one-year extension periods, with lender approval. The October 2018 amendment and restatement, among other things, modified the amount of borrowing availability and maturity date of the Credit Facility. The amended Credit Facility provides a floor plan financing commitment of up to $400.0 million, an increase from the previous limit of $350.0 million, subject to borrowing base availability resulting from the amount and aging of our inventory. The amended Credit Facility has certain financial covenants as specified in the agreement. The covenants include provisions that our leverage ratio must not exceed 2.75 to 1.0 and that our current ratio must be greater than 1.2 to 1.0. The interest rate for amounts outstanding under the amended Credit Facility is 345 basis points above the one-month London inter-bank Offering Rate (“LibOR”). There is an unused line fee of ten basis points on the unused portion of the amended Credit Facility. advances under the amended Credit Facility are initiated by the acquisition of eligible new and used inventory or are re-advances against eligible new and used inventory that have been partially paid-off. advances on new inventory will generally mature 1,080 days from the original invoice date. advances on used inventory will mature 361 days from the date we acquire the used inventory. each advance is subject to a curtailment schedule, which requires that we pay down the balance of each advance on a periodic basis starting after six months. The curtailment schedule varies based on the type and value of the inventory. The collateral F-13 MARINEMAX, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the amended Credit Facility is primarily the Company’s inventor y that is financed through the a mended Credit Facility and related accounts receivable. None of our real estate has been ple dged for collateral for the amended Credit Facility. The amended Credit Facility contemplates that other lenders may be added by the Company to finance other inv entory not financed under this F acility. as of September 30, 2017 and 2018, our indebtedness associated with financing our inventory and working capital needs totaled approximately $254.2 million and $212.9 million, respectively. as of September 30, 2017 and 2018, the interest rate on the outstanding short-term borrowings was approximately 4.7% and 5.5%, respectively. as of September 30, 2018, our additional available borrowings under our amended Credit Facility were approximately $71.6 million based upon the outstanding borrowing base availability. as is common in our industry, we receive interest assistance directly from boat manufacturers, including brunswick. The interest assistance programs vary by manufacturer, but generally include periods of free financing or reduced interest rate programs. The interest assistance may be paid directly to us or our lender depending on the arrangements the manufacturer has established. We classify interest assistance received from manufacturers as a reduction of inventory cost and related cost of sales as opposed to netting the assistance against our interest expense incurred with our lenders. The availability and costs of borrowed funds can adversely affect our ability to obtain adequate boat inventory and the holding costs of that inventory as well as the ability and willingness of our customers to finance boat purchases. as of September 30, 2018, we had no long-term debt. However, we rely on our amended Credit Facility to purchase our inventory of boats. The aging of our inventory limits our borrowing capacity as defined curtailments reduce the allowable advance rate as our inventory ages. Our access to funds under our amended Credit Facility also depends upon the ability of our lenders to meet their funding commitments, particularly if they experience shortages of capital or experience excessive volumes of borrowing requests from others during a short period of time. Unfavorable economic conditions, weak consumer spending, turmoil in the credit markets, and lender difficulties, among other potential reasons, could interfere with our ability to utilize our amended Credit Facility to fund our operations. any inability to utilize our amended Credit Facility could require us to seek other sources of funding to repay amounts outstanding under the credit agreements or replace or supplement our credit agreements, which may not be possible at all or under commercially reasonable terms. Similarly, decreases in the availability of credit and increases in the cost of credit adversely affect the ability of our customers to purchase boats from us and thereby adversely affect our ability to sell our products and impact the profitability of our finance and insurance activities. Tight credit conditions during fiscal 2009, 2010, and 2011 adversely affected the ability of customers to finance boat purchases, which had a negative effect on our operating results. 9. INCOME TAXES: The components of our provision (benefit) from income taxes consisted of the following for the fiscal years ended September 30, Current provision (benefit): Federal State Total current provision Deferred provision (benefit): Federal State Total deferred provision Total income tax provision 2016 2017 (Amounts in thousands) 2018 $ $ $ 496 $ 73 569 $ 11,691 (52) 11,639 12,208 $ 2,321 $ (366) 1,955 $ 10,190 2,116 12,306 14,261 $ 8,055 195 8,250 4,205 1,513 5,718 13,968 F-14 MARINEMAX, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS During the fourth quarter of fiscal 2017, the Company recorded a net tax benefit of $1.8 million primarily pertaining to a worthless stock deduction. The tax benefit of this deduction was primarily based on the write-off of the Company’s investment in its british Virgin islands subsidiary for US tax purposes . On December 22, 2017, the Tax act was enacted which, among a number of its provisions, lowered the U.S. corporate tax rate from 35% to 21%, effective January 1, 2018. The Company's blended statutory tax rate for fiscal year 2018 will approximate 24.5% as a result of the change in statutory rates. For fiscal year 2018, we recorded a non-cash adjustment to income tax expense of $805,000 for the remeasurement of deferred taxes on the enactment date. below is a reconciliation of the statutory federal income tax rate to our effective tax rate for the fiscal years ended September 30, Federal tax provision State taxes, net of federal effect Worthless stock deduction Stock based compensation Valuation allowance Foreign rate differential effect of Federal Tax Reform Other effective tax rate 2016 2017 2018 35.0% 3.6% — (0.5)% (3.2)% 0.5% — (0.3)% 35.1% 35.0% 4.4% (4.8)% 0.2% (0.1)% 2.4% — 0.6% 37.7% 24.5% 4.1% — (2.0)% (0.3)% — 1.5% (1.6)% 26.2% Deferred income taxes reflect the impact of temporary differences between the amount of assets and liabilities recognized for financial reporting purposes and such amounts recognized for income tax purposes. The tax effects of these temporary differences representing the components of deferred tax assets as of September 30, Deferred tax assets: inventories accrued expenses Stock based compensation Tax loss carryforwards Other Valuation allowance Total long-term deferred tax assets Deferred tax liabilities: Depreciation and amortization Total long-term deferred tax liabilities Net deferred tax assets 2017 2018 (Amounts in thousands) $ $ $ 1,028 $ 521 4,121 3,901 593 (246) 9,918 (1,149) (1,149) $ 8,769 $ 588 644 2,258 3,910 580 (119) 7,861 (4,453) (4,453) 3,408 Pursuant to aSC 740, we must consider all positive and negative evidence regarding the realization of deferred tax assets. aSC 740 provides for four possible sources of taxable income to realize deferred tax assets: 1) taxable income in prior carryback years, 2) reversals of existing deferred tax liabilities, 3) tax planning strategies and 4) projected future taxable income. as of September 30, 2018, we have no available taxable income in prior carryback years, limited reversals of existing deferred tax liabilities or prudent and feasible tax planning strategies. Therefore, the recoverability of our deferred tax assets is dependent upon generating future taxable income. Since the fourth quarter of fiscal 2008, the Company had maintained a full valuation allowance against its deferred tax assets, having determined it was more likely than not that the deferred tax assets would not be realized. The determination of releasing valuation allowances against deferred tax assets is made, in part, pursuant to our assessment as to whether it is more likely than not that we will generate sufficient future taxable income against which benefits of the deferred tax assets may or may not be realized. Significant judgment is required in making estimates regarding our ability to generate income in future periods. F-15 MARINEMAX, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS in the fourth quarter of fiscal 2016 , we reached the conclusion that it was appropriate to release the majority of our valuation allowance against our state net operating loss deferred tax assets due to our operating performance in fiscal 2016 being greater than projected at fiscal 2015 year end. We considered forecasts of future operating results and the utilization of net operating losses within the statutory mandated carryforward periods and determined it was more likely than not that the majority of our state net operating loss deferred tax assets would be realized. as a result of the release of a portion of our deferred tax asset valuation allowance, we recorded approximately $1.1 million reduction in our income tax provision. a portion of the valuation allowance was retained based on particular jurisdictions. Specifically, states with a shorter statutory carryforward periods and states where our economic presence, as defined by the jurisdiction’s tax laws, has been reduced. as of September 30, 2017, we no longer had federal net operating loss (NOL) carryforwards for federal income tax purposes. as of September 30, 2018, the Company has state NOL carryforwards of approximately $83.5 million for state income tax purposes, which resulted in a deferred tax asset of $3.9 million, and expire at various dates from 2029 through 2032. Significant judgment is also required in evaluating our uncertain tax positions. although we believe our tax return positions are sustainable, we recognize tax benefits from uncertain tax positions in the financial statements only when it is more likely than not that the positions will not be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits and a consideration of the relevant taxing authority's administrative practices and precedents. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will impact the provision for income taxes in the period in which such determination is made. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate, as well as the related net interest and penalties. in fiscal 2017, the Company released a reserve for an uncertain tax position based on administrative practice in the applicable jurisdiction in the amount of $264,000 of which approximately $177,000 impacted the effective tax rate. as of September 30, 2017 and 2018, we had approximately $0 of gross unrecognized tax benefits. The reconciliation of the total amount recorded for unrecognized tax benefits at the beginning and end of the fiscal years ended September 30, 2017 and 2018 is as follows: Unrecognized tax benefits at the beginning of the year increases in tax positions for prior years Decreases in tax positions for prior years Unrecognized tax benefits at the end of the year 2017 2018 (Amounts in thousands) $ $ 254 $ 10 (264) - $ - - - - Consistent with our prior practices, we recognize interest and penalties related to uncertain tax positions as a component of income tax expense. as of September 30, 2017 and 2018, interest and penalties represented approximately $0 of the gross unrecognized tax benefits. We are subject to tax by both federal and state taxing authorities. Until the respective statutes of limitations expire, we are subject to income tax audits in the jurisdictions in which we operate. We are no longer subject to U.S. Federal tax assessments for fiscal years prior to 2014, and we are not subject to assessments prior to the 2013 fiscal year for the majority of the State jurisdictions. 10. SHAREHOLDERS’ EQUITY: in august 2017, our board of Directors approved a new share repurchase plan allowing our company to repurchase up to 2,000,000 shares of our common stock through September 30, 2019. Under the plan, we may buy back common stock from time to time in the open market or in privately negotiated blocks, dependent upon various factors, including price and availability of the shares, and general market conditions. Through September 30, 2018 we had purchased an aggregate of 4,470,731 shares of common stock under the current and historical share repurchase plans for an aggregate purchase price of approximately $75.3 million. as of September 30, 2018, approximately 342,885 shares remained available for future purchases under the share repurchase program. 11. STOCK-BASED COMPENSATION: We account for our stock-based compensation plans following the provisions of FaSb accounting Standards Codification 718, “Compensation — Stock Compensation” (“aSC 718”). in accordance with aSC 718, we use the black-Scholes valuation model for F-16 MARINEMAX, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS valuing all stock-based compensation and shares purchased under our employee Stock Purchase Plan. We measure compensation for restricted stock awards and restricted stock units at fair value on the grant date based on the number of shares expe cted to vest and the quoted market price of our common stock. We recognize compensation cost for all awards in operations, net of estimated forfeitures, on a straight-line basis over the requisite service period for each separately vesting portion of the award. Cash received from option exercises under all share-based compensation arrangements for the fiscal years ended September 30, 2016, 2017, and 2018 was approximately $2.7 million, $3.2 million, and $7.7 million, respectively. We currently expect to satisfy share-based awards with registered shares available to be issued. 12. THE INCENTIVE STOCK PLANS: During February 2017, our shareholders approved a proposal to amend the 2011 Stock-based Compensation Plan (“2011 Plan”) to increase the 2,200,456 share threshold by 1,000,000 shares to 3,200,456 shares. During January 2011, our shareholders approved a proposal to authorize our 2011 Plan, which replaced our 2007 incentive Compensation Plan (“2007 Plan”). Our 2011 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, stock units, bonus stock, dividend equivalents, other stock related awards, and performance awards (collectively “awards”), that may be settled in cash, stock, or other property. Our 2011 Plan is designed to attract, motivate, retain, and reward our executives, employees, officers, directors, and independent contractors by providing such persons with annual and long-term performance incentives to expend their maximum efforts in the creation of stockholder value. Subsequent to the February 2013 and the February 2017 amendment described above, the total number of shares of our common stock that may be subject to awards under the 2011 Plan is equal to 3,000,000 shares, plus: (i) any shares available for issuance and not subject to an award under the 2007 Plan, which was 200,456 shares at the time of approval of the 2011 Plan; (ii) the number of shares with respect to which awards granted under the 2011 Plan and 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 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 2011 Plan or the 2007 Plan. The 2011 Plan terminates in January 2021, and awards may be granted at any time during the life of the 2011 Plan. The date on which awards vest are determined by the board of Directors or the Plan administrator. The board of Directors has appointed the Compensation Committee as the Plan administrator. The exercise prices of options are determined by the board of Directors or the Plan administrator and are at least equal to the fair market value of shares of common stock on the date of grant. The term of options under the 2011 Plan may not exceed ten years. The options granted have varying vesting periods. To date, we have not settled or been under any obligation to settle any awards in cash. The following table summarizes option activity from September 30, 2017 through September 30, 2018: balance as of September 30, 2017 Options granted Options cancelled/forfeited/expired Options exercised Restricted stock awards granted Restricted stock awards forfeited additional shares of stock issued balance as of September 30, 2018 exercisable as of September 30, 2018 Shares Available for Grant 1,386,561 (5,000) 14,750 — (341,517) 61,925 (69,472) 1,047,247 Options Aggregate Intrinsic Value Outstanding (in thousands) Weighted Average Exercise Price 1,207,504 $ 5,000 (14,750) (586,531) — — — 611,223 $ 607,889 $ 5,737 $ — — — — — — 5,544 $ 5,537 $ 11.81 18.95 12.27 11.48 — — — 12.18 12.14 Weighted Average Remaining Contractual Life 5.3 4.4 4.4 The weighted-average grant date fair value of options granted during the fiscal years ended September 30, 2016 and September 30, 2018 was $6.88 and $8.42, respectively. No options were granted during the fiscal year ended September 30, 2017. The total intrinsic value of options exercised during the fiscal years ended September 30, 2016, 2017, and 2018 was approximately $3.6 million, $1.6 million, and $6.3 million, respectively. F-17 MARINEMAX, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as of September 30, 2017 and 2018 , there were approximately $ 200,000 and $ 100,000 , respectively, of unrecognized compensation costs related to non- vested options that are expected to be recognized over a weighted average period of 1.8 years . The total fair value of options vested during the fiscal years ended September 30, 2016 , 2017 , and 2018 was approximately $ 0.2 million , $ 2.5 million and $ 1.3 million, respectively. We used the black-Scholes model to estimate the fair value of options granted. The expected term of options granted is derived from the output of the option pricing model and represents the period of time that options granted are expected to be outstanding. Volatility is based on the historical volatility of our common stock. The risk-free rate for periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of grant. below are the weighted-average assumptions used for the fiscal years ended September 30, 2016 and 2018. No options were granted for the fiscal year ended September 30, 2017. Dividend yield Risk-free interest rate Volatility expected life 2016 0.0% 1.0% 48.2% 5.0 years 2017 — — — — 2018 0.0% 2.7% 45.4% 5.0 years 13. EMPLOYEE STOCK PURCHASE PLAN: During February 2012, our shareholders approved a proposal to amend our 2008 employee Stock Purchase Plan (“Stock Purchase Plan”) to increase the number of shares available under that plan by 500,000 shares. During February 2018, our board of Directors approved a proposal to amend the Stock Purchase Plan to extend it such that the final annual offering will be in 2027. The Stock Purchase Plan as amended provides for up to 1,000,000 shares of common stock to be available for purchase by our regular employees who have completed at least one year of continuous service. in addition, there were 52,837 shares of common stock available under our 1998 employee Stock Purchase Plan, which have been made available for issuance under our Stock Purchase Plan. The Stock Purchase Plan provides for implementation of up to 20 annual offerings beginning on the first day of October starting in 2008, with each offering terminating on September 30 of the following year. each annual offering may be divided into two six-month offerings. For each offering, the purchase price per share will be the lower of (i) 85% of the closing price of the common stock on the first day of the offering or (ii) 85% of the closing price of the common stock on the last day of the offering. The purchase price is paid through periodic payroll deductions not to exceed 10% of the participant’s earnings during each offering period. However, no participant may purchase more than $25,000 worth of common stock annually. We used the black-Scholes model to estimate the fair value of options granted to purchase shares issued pursuant to the Stock Purchase Plan. The expected term of options granted is derived from the output of the option pricing model and represents the period of time that options granted are expected to be outstanding. Volatility is based on the historical volatility of our common stock. The risk-free rate for periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of grant. The following are the weighted-average assumptions used for the fiscal years ended September 30, Dividend yield Risk-free interest rate Volatility expected life 2016 0.0% 0.2% 50.9% Six months 2017 0.0% 0.7% 40.9% Six months 2018 0.0% 1.5% 49.9% Six months as of September 30, 2018, we had issued 860,535 shares of common stock under our Stock Purchase Plan. 14. RESTRICTED STOCK AWARDS: We have granted non-vested (restricted) stock awards (“restricted stock”) and restricted stock units (“RSUs”) to employees and Officers pursuant to the 2011 Plan and the 2007 Plan. The restricted stock awards and RSUs have varying vesting periods, but generally become fully vested between two and four years after the grant date, depending on the specific award, performance targets met for performance based awards granted to Officers, and vesting period for time based awards. Officer performance based awards F-18 MARINEMAX, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS are granted at the target amount of shares that may be earned and the actual amount of the award earned generally could range from 0% to 200% of the target number of shares based on the actual specified performance target met. We accounted for the restr icted stock awards granted using the measurement and recognition provisions of aSC 718. accordingly, the fair value of the restricted stock awards, including performance based awards, is measured on the grant date and recognized in earnings over the requi site service period for each separately vesting portion of the award. The following table summarizes restricted stock award activity from September 30, 2017 through September 30, 2018: Non-vested balance as of September 30, 2017 Changes during the period awards granted awards vested awards forfeited Non-vested balance as of September 30, 2018 Shares/ Units Weighted Average Grant Date Fair Value 606,543 $ 16.53 341,517 $ (181,809) $ (61,925) $ 704,326 $ 20.13 16.55 17.15 17.61 as of September 30, 2018, we had approximately $6.3 million of total unrecognized compensation cost related to non-vested restricted stock awards. We expect to recognize that cost over a weighted-average period of 2.1 years. 15. NET INCOME PER SHARE: The following is a reconciliation of the shares used in the denominator for calculating basic and diluted net income per share for the fiscal years ended September 30, Weighted average common shares outstanding used in calculating basic income per share effect of dilutive options and non-vested restricted stock awards Weighted average common and common equivalent shares used in calculating diluted income per share 2016 2017 2018 24,203,947 23,966,611 22,269,378 616,900 712,189 761,284 24,820,847 24,678,800 23,030,662 During the fiscal years ended September 30, 2016, 2017, and 2018 there were 140,521, 18,526, and 1,288 weighted average shares of options outstanding, respectively, that were not included in the computation of diluted income per share because the options’ exercise prices were greater than the average market price of our common stock, and therefore, their effect would be anti-dilutive. 16. COMMITMENTS AND CONTINGENCIES: Lease Commitments We lease certain land, buildings, wet slips, machinery, equipment, and vehicles related to our dealerships under non-cancelable third-party operating leases. Certain of our leases include options for renewal periods and provisions for escalation. Rental expenses, including month-to-month rentals, were approximately $7.1 million, $8.3 million, and $8.4 million for the fiscal years ended September 30, 2016, 2017, and 2018, respectively. F-19 MARINEMAX, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Future minimum lease payments under non-cancelable operating leases as of September 30, 2018 , were as follows: 2019 2020 2021 2022 2023 Thereafter Total (Amounts in thousands) 7,296 7,077 6,077 4,961 4,835 25,361 55,607 $ Other Commitments and Contingencies We are party to various legal actions arising in the ordinary course of business. We believe that these matters should not have a material adverse effect on our consolidated financial condition, results of operations, or cash flows. in connection with certain of our workers’ compensation insurance policies, we maintain standby letters of credit for our insurance carriers in the amount of $1.4 million relating primarily to retained risk on our workers compensation claims. We are subject to federal and state environmental regulations, including rules relating to air and water pollution and the storage and disposal of gasoline, oil, other chemicals and waste. We believe that we are in compliance with such regulations. 17. EMPLOYEE 401(k) PROFIT SHARING PLANS: employees are eligible to participate in our 401(k) Profit Sharing Plan (the “Plan”) following their 90-day introductory period starting either april 1 or October 1, provided that they are 21 years of age. Under the Plan, we matched 25% of participants’ contributions, up to a maximum of 5% of each participant’s compensation, in fiscal 2016 and 2017, and 50% of participants’ contributions, up to a maximum of 5% of each participant’s compensation in fiscal 2018. We contributed, under the Plan, or pursuant to previous similar plans, approximately $713,000, $765,000, and $1.9 million for the fiscal years ended September 30, 2016, 2017, and 2018, respectively. F-20 MARINEMAX, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 18. QUARTERLY FINANCIAL DATA (UNAUDITED): The following table sets forth certain unaudited quarterly financial data for each of our last eight quarters. The information has been derived from unaudited financial statements that we believe reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of such quarterly financial information. Revenue Cost of sales Gross profit Selling, general, and administrative expenses income from operations interest expense income before income income tax provision income tax provision Net income Net income per share: Diluted Weighted average number of shares: Diluted December 31, 2016 March 31, 2017 $ 226,875 $ 173,737 53,138 245,018 $ 183,959 61,059 September 30, 2017 December 31, 2017 June 30, March 31, 2018 2017 (Amounts in thousands except share and per share data) 329,809 $ 245,017 84,792 236,921 $ 177,672 59,249 250,618 $ 184,292 66,326 270,605 $ 201,312 69,293 June 30, 2018 September 30, 2018 361,254 $ 270,567 90,687 308,591 229,587 79,004 47,095 54,781 59,557 58,593 50,246 58,659 64,089 62,056 6,043 1,569 6,278 2,045 25,235 1,897 7,733 1,970 9,003 2,542 10,634 2,840 26,598 2,499 16,948 2,022 4,474 4,233 23,338 5,763 6,461 7,794 24,099 14,926 1,831 2,643 $ 1,484 2,749 $ 9,094 14,244 $ 1,852 3,911 $ 2,249 4,212 $ 1,610 6,184 $ 6,723 17,376 $ 3,386 11,540 $ $ 0.11 $ 0.11 $ 0.57 $ 0.17 $ 0.19 $ 0.27 $ 0.75 $ 0.50 24,923,125 25,116,359 25,095,398 23,591,854 22,712,648 22,940,594 23,182,546 23,286,206 F-21 2018 AMENDED AND RESTATED EMPLOYMENT AGREEMENT THiS 2018 aMeNDeD aND ReSTaTeD eMPLOYMeNT aGReeMeNT (this “agreement”), is entered into this ___ day of November 2018, by and between MarineMax, inc., a Florida corporation (the “Company”), and William H. McGill, Jr. (“executive”), and amends any and all previously existing employment arrangements or agreements between the parties and is effective as of 1st day of October, 2018 (“effective Date”). Exhibit 10.3(h) RECITALS a. The Company is engaged primaril y in the business of selling, renting, leasing, and servicing boating, nautical, and other related lifestyle entertainment products and services, and related activities and executive has experience in such business. b. executive served as Chairman and Chief executive Officer of the Company. The Company desires to assure itself of the continued availability of executive in the role of executive Chairman. C. The Company desires to employ executive, and executive desires to accept such employment, pursuant to the terms and conditions set forth in this agreement. NOW, THeReFORe, in consideration of the mutual promises, terms, covenants, and conditions set forth herein and the AGREEMENT performance of each, it is hereby agreed as follows: 1. EMPLOYMENT AND DUTIES . (a) EMPLOYMENT . The Company hereby employs executive, and executive hereby agrees to act, as executive Chairman of the Company. as such, executive shall have responsibilities, duties, and authority reasonably accorded to, expected of, and consistent with executive’s position and executive shall report directly to the board of Directors of the Company (the “board”). executive hereby accepts this employment upon the terms and conditions herein contained and, subject to Section l(c) hereof, agrees to devote his best efforts and substantially all of his business time and attention to promote and further the business of the Company. (b) POLICIES . executive shall faithfully adhere to, execute, and fulfill all lawful policies established by the Company. (c) OTHER ACTIVITIES . executive shall not, during the period of his employment hereunder, be engaged in any other business activity pursued for gain, profit, or other pecuniary advantage if such activity interferes in any material respect with executive’s duties and responsibilities hereunder. The foregoing limitations shall not be construed as prohibiting executive from (i) making personal investments in such form or manner as will neither require his services in the operation or affairs of the companies or enterprises in which such investments are made nor subject executive to any conflict of interest with respect to his duties to the Company, (ii) serving on any civic or charitable boards or committees, (iii) delivering lectures or fulfilling speaking engagements, or (iv) serving, with the written approval of the board, as a director of one or more corporations, in each case so long as any such activities do not significantly interfere with the performance of executive’s responsibilities under this agreement. in addition, executive shall comply with the restrictions listed in Section 3 of this agreement. (d) PLACE OF PERFORMANCE . executive shall not be required by the Company or in the performance of his duties to relocate his primary residence. 2. COMPENSATION . For all services rendered by executive, the Company shall compensate executive as follows: (a) BASE SALARY . From the effective Date, the base salary payable to executive shall be Five Hundred Thousand Dollars ($500,000) per year, payable on a regular basis in accordance with the Company’s standard payroll procedures, but not less than monthly. On at least an annual basis, the board or a committee of the board shall review executive’s performance and may make increases to such base salary if, in its sole discretion, any such increase is warranted. (b) BONUS OR OTHER INCENTIVE COMPENSATION . executive shall be eligible to receive a bonus or other incentive compensation as may be determined by the board or a committee of the board based upon such factors as the board or such committee, in its sole discretion, may deem relevant, including, without limitation, the performance of executive and the Company; provided, however, that the board or a committee of the board shall establish for each fiscal year of the Company a bonus program in which executive shall be entitled to participate, which bonus program provides executive with a reasonable opportunity, based on the performance of the Company, the past compensation practices of the Company and executive’s then base salary, to maintain or increase executive’s total compensation compared to the previous fiscal year. (c) EXECUTIVE PERQUISITES, BENEFITS, AND OTHER COMPENSATION . executive shall be entitled to receive additional benefits and compensation from the Company in such form and to such extent as specified below: iNSURaNCe COVeRaGe . Payment of all premiums for coverage for executive and his dependent family members under all health, hospitalization, disability, dental, life, and other insurance plans that the Company may have in effect from time to time, with the benefits provided to executive to be on terms no less favorable than the benefits provided to other Company executive officers. ReiMbURSeMeNT FOR eXPeNSeS . The Company shall provide reimbursement to executive for business travel and other out-of-pocket expenses reasonably incurred by executive in the performance of his services under this agreement. all reimbursable expenses shall be appropriately documented in reasonable detail by executive upon submission of any request for reimbursement and shall be in a format and manner consistent with the Company’s expense reporting policy. Such expenses shall be submitted to the Company’s Chief Financial Officer for approval or to such other officer of the Company as the board may from time to time direct. except as expressly provided otherwise herein, no reimbursement payable to executive pursuant to any provisions of this agreement or pursuant to any plan or arrangement of the Company shall be paid later than the last day of the calendar year following the calendar year in which the related expense was incurred, and no such reimbursement during any calendar year shall affect the amounts eligible for reimbursement in any other calendar year, except, in each case, to the extent that the right to reimbursement does not provide for a “deferral of compensation” within the meaning of Section 409a of the internal Revenue Code of 1986, as amended (the “Section 409a”). 2 VACATION . Paid vacation in accordance with the applicable policy of the Company as in effect from time to time. executive shall be entitled to no less than four (4) weeks paid vacation per year; provided, however, executive may carryover up to, but not more than, two weeks of unused vacation time from one calendar year to the next succeeding calendar year. The maximum amount of vacation that may be accrued for any calendar year is six (6) weeks of paid vacation. No additional paid vacation shall accrue above the six (6) week limit. OTHeR eXeCUTiVe PeRQUiSiTeS . The Company shall provide executive with other executive perquisites as may be made available to or deemed appropriate for executive by the board or a committee of the board and participation in all other Company-wide employee benefits (including group insurance, pension, retirement, and other plans and programs) as are available to the Company’s executive officers from time to time. 3. NON-COMPETITION AGREEMENT . (a) NON-COMPETITION . executive shall not, during the period of his employment •by or with the Company, and during the Noncompete Period (as hereinafter defined) for any reason whatsoever, directly or indirectly, for himself or on behalf of or in conjunction with any other person: OTHeR aCTiViTieS contractor, consultant, advisor, or sales representative, in any Competitive business within the Restricted Territory; . engage, as an officer, director, shareholder, owner, principal, partner, lender, joint venturer, employee, independent SOLiCiTaTiON OF eMPLOYeeS . Call upon any person who is, at that time, within the Restricted Territory, an employee of the Company or any of its subsidiaries, in a managerial capacity for the purpose or with the intent of enticing such employee away from or out of the employ of the Company or any of its subsidiaries; SOLiCiTaTiON OF CUSTOMeRS . Call upon any person or entity that is, at that time, or that has been, within one (1) year prior to that time, a customer ‘of the Company or any of its subsidiaries, within the Restricted Territory for the purpose of soliciting or selling products or services in direct competition with the Company or any of its subsidiaries within the Restricted Territory; (iv) SOLiCiTaTiON OF aCQUiSiTiON CaNDiDaTeS . Call upon any prospective acquisition candidate (that is, a business that the Company may have an interest in acquiring), on executive’s own behalf or on behalf of any person, which candidate was, to executive’s knowledge after due inquiry, either called upon by the Company, or for which the Company made an acquisition analysis, for the purpose of acquiring such candidate. (b) CERTAIN DEFINITIONS . as used in this agreement, the following terms shall have the meanings ascribed to them: COMPeTiTiVe bUSiNeSS shall mean any Person that sells, rents, brokers, leases, stores, repairs, restores, or services recreational boats or other boating products or provides services relating to recreational boats or other boating products or any other business in which the Company is engaged; NONCOMPeTe PeRiOD shall mean the longer of (i) the two (2) year period immediately following the termination of executive’s employment with the Company or (ii) the time during which severance payments are being made by the Company to executive in accordance with this agreement; provided, however, that if the executive’s employment is terminated by the Company 3 without Good Cause, executive terminates his employment with Good Reason or, executive terminates his employment after a Change in Control pursuant to Section 4(b)(vii)(b), then the Noncompete Period shall be for the one (1) year period immediately following the termination of his employment with the Company. PeRSON shall mean any individual, corporation, limited liability company, partnership, firm, or other business of whatever nature; ReSTRiCTeD TeRRiTORY shall mean any state or other political jurisdiction in which, or any location within two hundred (200) miles of which, the Company or any subsidiary of the Company maintains any facilities; sells, rents, brokers, leases, stores, repairs, restores, or services recreational boats or other boating products; or provides services relating to recreational boats or other boating products; and SUbSiDiaRY and any other business organization in which the Company holds at least a fifty percent (50%) equity interest. shall mean the Company’s consolidated subsidiaries, including corporations, partnerships, limited liability companies, (c) ENFORCEMENT . because of the difficulty of measuring economic losses to the Company as a result of a breach of the foregoing covenants, and because of the immediate and irreparable damage that could be caused to the Company for which it would have no other adequate remedy, executive agrees that the foregoing covenants may be enforced by the Company in the event of breach by him, by injunctions and restraining orders. (d) REASONABLE RESTRAINT . it is agreed by the parties that the foregoing covenants in this Section 3 impose a reasonable restraint on executive in light of the activities and business of the Company (including the Company’s subsidiaries) on the effective Date and the current plans of the Company (including the Company’s subsidiaries); but it is also the intent of the Company and executive that such covenants be construed and enforced in accordance with the changing activities, business, and locations of the Company (including the Company’s subsidiaries) throughout the term of this covenant, whether before or after the date of termination of the employment of executive. For example, if, during the term of this agreement, the Company (including the Company’s subsidiaries) engages in new and different activities, enters a new business, or establishes new locations for its current activities or business in addition to or other than the activities or business enumerated above or the locations currently established therefore, then executive will be precluded from soliciting the customers or employees of such new activities or business or from such new location and from directly competing with such new business within the Restricted Territory through the term of these covenants. (e) OTHER ACTIVITIES . it is further agreed by the parties that, in the event that executive shall cease to be employed hereunder and enters into a business or pursues other activities not in competition with the Company (including the Company’s subsidiaries), or similar activities or business in locations, the operation of which, under such circumstances, does not violate this Section 3, and in any event such new business, activities, or location are not in violation of this Section 3 or of executive’s obligations under this Section 3, if any, executive shall not be chargeable with a violation of this Section 3 if the Company (including the Company’s subsidiaries) shall thereafter enter the same, similar, or a competitive (i) business, (ii) course of activities, or (iii) location, as applicable. (f) SEPARATE COVENANTS . The covenants in this Section 3 are severable and separate, and the unenforceability of any specific covenant shall not affect the provisions of any other covenant. Moreover, in the event any court of competent jurisdiction shall determine that the scope, time, or territorial restrictions set forth are unreasonable, then it is the intention of the parties that such 4 restrictions be enforced to the fullest extent that the court deems reasonable, and the agreement shall thereby be reformed. (g) INDEPENDENT AGREEMENT . all of the covenants in this Section 3 shall be construed as an agreement independent of any other provision in this agreement, and the existence of any claim or cause of action of executive against the Company, whether predicated on this agreement or otherwise, shall not constitute a defense to the enforcement by the Company of such covenants, except as provided in Section 4(d) below. it is specifically agreed that the Noncompete Period defined in this Section 3, during which the agreements and covenants of executive made in this Section 3 shall be effective, shall be computed by excluding from such computation any time during which executive is in violation of any provision of this Section 3. 4. AT-WILL EMPLOYMENT; TERMINATION; RIGHTS ON TERMINATION (a) AT WILL EMPLOYMENT . executive’s employment with the Company shall be at-will. The executive may terminate his employment at any time for any reason (subject to the notice requirements provided in this agreement) and the Company may terminate executive’s employment with the Company at any time and for any reason (subject to the severance provisions of this agreement). This at-will employment relationship cannot be changed except by written authorization by the board of Directors of the Company. (b) TERMINATION . executive’s employment under this agreement may be terminated in any one of the followings ways: DeaTH OF eXeCUTiVe . The employment of executive shall terminate immediately upon executive’s death provided that the Company shall pay to the estate of executive an amount equal to $750,000 and continue to pay for a period of 6 months all premiums for coverage for executive’s dependent family members under all health, hospitalization, disability, dental, life, and other insurance plans that the Company maintained at the time of executive’s death. in the event of such termination, all options to purchase Common Stock of the Company held by executive shall thereupon vest and shall be exercisable for the maximum period of time, up to their full term, that will not cause executive with respect to such options to be subject to any excise tax under Section 409a of the internal Revenue Code of 1986, as amended (“Section 409a”) notwithstanding the termination of employment. all restricted stock and/or restricted stock units (or comparable forms of equity compensation, if any) held by the executive which, as of the date of the death of executive, are not then subject to any performance conditions for vesting, shall be fully vested and shall not be subject to any risk of forfeiture or repurchase as of the date of executive’s death. The payment described in Section, if payable, shall be paid within ten (10) days after the executive’s death. DiSabiLiTY OF eXeCUTiVe . The Company may terminate executive’s employment in the event the executive is disabled. The executive shall be disabled if the executive is unable to engage in any substantial gainful activity by reason of a medically determined physical or mental impairment expected to last at least twelve consecutive months or result in death, or if applicable, for at least three (3) months the executive is receiving income replacement benefits under a Company sponsored plan by reason of any medically determined physical or mental impairment expected to last at least twelve (12) consecutive months or result in death, or if the executive is determined to be disabled under a Company disability plan with a similar definition of disability. in the event executive’s employment under this agreement is terminated as a result of executive’s disability, executive shall receive from the Company, in a lump-sum payment due within ten (10) days of the effective date of termination, an amount equal to the average of the base salary and bonus paid to executive for the two (2) prior full fiscal years, for one (1) year. in the event of such termination, all options to purchase Common 5 Stock of the Company held by executive shall thereupon vest and shall be exercisable for the maximum period of time, up to their full term, that will not cause executive with respect to such options to be subject to any excise tax under Section 409a notwithstanding the termination of employment. all restricted stock and/or restricte d stock units (or comparable form s of equity compensation, if any) held by the executive which, as of the date of the disability of executive, are not then subject to any performance conditions for vesting, shall be fully vested and shall not be subject to any risk of forfeiture .or repurchase as of the date of executive ’ s termination due to disability (as defined in this paragraph). TeRMiNaTiON bY THe COMPaNY FOR GOOD CaUSe . The Company may terminate executive’s employment upon ten (10) days prior written notice to executive for “Good Cause,” which shall mean any one or more of the following: (a) executive’s willful and material breach of this agreement which has not been cured by the executive within thirty (30) days following written notice of such breach from the Company; (b) executive’s gross negligence in the performance or intentional nonperformance (continuing for thirty (30) days after receipt of written notice of need to cure) of any of executive’s material duties and responsibilities hereunder; (C) executive’s willful dishonesty, fraud, or misconduct with respect to the business or affairs of the Company, which materially and adversely affects the operations or reputation of the Company; (D) executive’s conviction of a felony crime involving dishonesty or moral turpitude; or (e) a confirmed positive illegal drug test result. in the event of a termination by the Company for Good Cause, executive shall have no right to any severance compensation. TeRMiNaTiON bY THe COMPaNY WiTHOUT GOOD CaUSe OR bY eXeCUTiVe WiTH GOOD ReaSON . The Company may terminate executive’s employment without Good Cause upon the approval of a majority of the members of the board, excluding executive if executive is a member of the board. executive may terminate his employment under this agreement for Good Reason upon thirty (30) days prior notice to the Company. WiTH GOOD ReaSON ReSULT OF TeRMiNaTiON bY THe COMPaNY WiTHOUT GOOD CaUSe OR bY eXeCUTiVe . Should the Company terminate executive’s employment without Good Cause or should executive terminate his employment with Good Reason, the Company shall pay to executive for three (3) years after such termination, on such dates as would otherwise be paid by the Company, an amount equal to the average of the base salary and bonus paid to executive for the two (2) prior full fiscal years. The amounts payable under the preceding sentence and any amounts that are payable under Section 4(b)(vi)(a) shall commence on the first payroll date following executive’s “separation from service” from the Company within the meaning of Section 409a, and shall be treated as a series of separate payments under Treasury Regulations Section 1.409a-2(b)(2)(iii). Further, if the Company terminates executive’s employment without Good Cause or executive terminates his employment with Good Reason, (1) the Company shall make the family medical insurance premium payments contemplated by CObRa or provide comparable coverage for a period of three (3) years after such termination (2) all options to purchase Common Stock of the Company held by executive shall vest thereupon and shall be exercisable for the maximum period of time, up to their full term, that will not cause executive with respect to such options to be subject to any excise tax under Section 409a notwithstanding the termination of employment, (3) the Company shall maintain life insurance coverage, comparable to that provided immediately prior to termination, for a period of three (3) years thereafter with the beneficiary designated by executive, (4) all restricted stock and/or restricted stock units (or comparable forms of equity compensation, if any) held by executive which, as of the effective date of the termination of executive, are not then subject to any performance conditions for vesting, shall be fully vested and shall not be subject to any risk of forfeiture or repurchase as of the date of termination, (5) all restricted stock and/or restricted stock units (or comparable forms of equity compensation, if any) held by executive which, as of the effective date of the termination of executive, is subject to performance conditions for vesting, shall be fully vested and treated as if the performance 6 conditions for such award had been fully met at target and shall not be subject to any risk of forfeiture or repurchase as of the date of termination , and ( 6 ) executive shall be entitled to receive all other unpaid benefits due and owing through executive ’ s last day of employment. Further, any term ination by the Company without Good Cause or by executive for Good Reason shall operate to shorten the Noncompete Period set forth in Section 3 to one (1) year from the date of termination of employment. DeFiNiTiON OF GOOD ReaSON . executive shall have “Good Reason” to terminate employment upon occurrence of any of the following events without executive’s prior written approval: ( 1) executive suffers a material reduction in authority, responsibilities or duties as provided herein; (2) executive’s annual base salary for a fiscal year as determined pursuant to Section 2(a) is reduced to a level that is less than ninety percent (90%) of the base salary paid to executive during the prior contract year under this agreement; (3) the Company takes steps to deny executive a reasonable opportunity to maintain executive’s total compensation (i.e., base salary plus bonus and any other annual cash incentive compensation) compared to the previous fiscal year (provided total compensation may take into account performance of the Company and past compensation practices of the Company); or (4) the Company breaches a material provision of this agreement. in order for an event to justify termination for Good Reason, the executive must give written notice to the Company of such event within 90 days of its first occurrence and the Company must have 30 days to cure, if possible. ReSiGNaTiON bY eXeCUTiVe WiTHOUT GOOD ReaSON . executive may, without cause, and without Good Reason terminate his own employment under this agreement, effective thirty (30) days after written notice is provided to the Company or such earlier time as any such resignation may be accepted by the Company. if executive resigns or otherwise terminates his employment without Good Reason, executive shall receive no severance compensation. ReTiReMeNT . The Company (so long as executive does not have Good Reason to terminate his employment under this agreement) and executive (so long as the Company does not have Good Cause to terminate executive’s employment under this agreement) shall each have the right, upon not less than thirty (30) days prior written notice to the other, to elect that executive Retire from his services to the Company upon reaching the age of eighty (80) provided that, if requested by the Company prior to the end of the thirty (30) day notice period, executive shall defer his Retirement for a period of up to six (6) months from the date of the notice and continue his employment under this agreement. in the event of any such Retirement, executive shall make himself available for a period of thirty-six (36) months following the date of Retirement to render consulting services to the Company requiring not more than four (4) days per month and the Company shall in consideration for such retirement services (a) pay executive for each of two (2) years an amount equal to fifty percent (50%) of the average of the base salary and bonus paid to him for the two (2) full fiscal years immediately preceding such Retirement on the same date as salary would otherwise be paid by the Company, (b) maintain life insurance coverage comparable to that provided at the date of Retirement for a period of three (3) years with the beneficiary designed by executive, (C) vest all unvested options to the extent not previously vested and have such options be exercisable for the extent the maximum period of time, up to their full term, that will not cause executive with respect to such options to be subject to any excise tax under Section 409a notwithstanding the termination of employment and (D) all restricted stock and/or restricted stock units (or comparable forms of equity compensation, if any) held by executive which, as of the effective date of the retirement of executive, are not then subject to any performance conditions for vesting, shall be fully vested and shall not be subject to any risk of forfeiture or repurchase as of the date of termination. The Noncompete Period provided for in Section 3 shall equal the thirty-six (36) month consulting period and an additional two (2) year period thereafter. 7 CHANGE IN CONTROL OF THE COMPANY . POSSibiLiTY OF CHaNGe iN CONTROL . executive understands and acknowledges that the Company may be merged or consolidated with or into another entity and that such entity shall automatically succeed to the rights and obligations of the Company hereunder or that the Company may undergo another type of Change in Control. in the event such a merger or consolidation or other Change in Control is initiated prior to the end of the Term, then the provisions of this Section 4(b)(vii) shall be applicable. TeRMiNaTiON bY eXeCUTiVe . Subject to the exceptions set forth in Section 4(b)(vii)(e), if any Change of Control is initiated during executive’s employment hereunder, executive may, at his sole discretion, elect to terminate his employment under this agreement by providing written notice to the Company at least thirty (30) business days at any time beginning on the effective date of the Change in Control and ending one (1) year after the closing of the transaction giving rise to the Change in Control. in such case, the applicable provisions of Section 4(b)(iv) hereof will apply as though the Company had terminated executive’s employment without Good Cause; however, under such circumstances, the amount of the severance payments due to executive shall be paid in a lump sum, the Noncompete Period of Section 3 hereof shall be limited to a period of one (1) year from the effective date of termination, and executive shall make himself available, for a period of twelve (12) months following the date of his termination of employment, to render consulting services relating to the business and operations of the Company requiring not more than four (4) days a month. To the extent that executive shall be determined by a final and non-appealable determination of a court of competent jurisdiction to have willfully violated either the non­competition or consulting requirement, executive shall reimburse the Company for Five Hundred Thousand Dollars ($500,000) of the severance amount paid to him for either violation and One Million Dollars ($1,000,000) of the severance amount paid to him for a violation of both covenants. if any of the payments or benefits received or to be received by the executive (including, without limitation, any payments or benefits received in connection with a Change in Control or the executive’s termination of employment, whether pursuant to the terms of this agreement or any other plan, arrangement, or agreement, or otherwise) (all such payments collectively referred to herein as the “280G Payments”) constitute “parachute payments” within the meaning of Section 280G of the internal Revenue Code of 1986, as amended, (the “Code”) would, but for this Section 4 (b) (iv) (b), be subject to the excise tax imposed under Section 4999 of the Code (“excise Tax”), then such 280G Payments shall be reduced in a manner determined by the Company (by the minimum possible amounts) that is consistent with the requirements of Section 409a until no amount payable to the executive will be subject to the excise Tax. if two economically equivalent amounts are subject to reduction but are payable at different times, the amounts shall be reduced (but not below zero) on a pro rata basis. eFFeCTiVe DaTe OF CHaNGe iN CONTROL . For purposes of applying Section 4 hereof under the circumstances described in 4(b)(vii)(b) above, the effective date of the Change in Control will be the closing date of the transaction giving rise to the Change in Control and all compensation, reimbursements, and lump-sum payments due executive must be paid in full by the Company promptly following executive’s election to terminate his employment following such Change in Control. DeFiNiTiON OF CHaNGe iN CONTROL . a “Change of Control” shall mean the items in (1)-(4) below and a transaction that would be required to be reported in response to item 6(e) of Schedule 14a of Regulation 14a promulgated under the Securities exchange act of 1934 (“exchange act”), as amended, as in effect on the effective Date of this agreement, or if item 6(e) is no longer in effect, any regulations issued by the Securities and exchange Commission pursuant to the 8 exchange act, which serve similar purposes, provided that to constitute a Change in Control the transaction must satisfy the requirements of Treasury Regulation § l.409a-3(i)(5) relating to “ change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portion of the assets of a corporation ” : TURNOVeR OF bOaRD . The following individuals no longer constitute a majority of the members of the board: (a) the individuals who, as of the effective Date of this agreement, constitute the board (the “Current Directors”); (b) the individuals who thereafter are elected to the board and whose election, or nomination for election, to the board was approved by a vote of at least two-thirds (2/3) of the Current Directors then still in office (such directors becoming “additional Directors” immediately following their election); and (C) the individuals who are elected to the board and whose election, or nomination for election, to the board was approved by a vote of at least two- thirds (2/3) of the Current Directors and additional Directors then still in the office (such directors also becoming “additional Directors” immediately following their election); TeNDeR OFFeR the Company, and such offer is consummated for the equity securities of the Company representing thirty percent (30%) or more of the combined voting power of the Company’s then outstanding voting securities; . a tender offer or exchange offer is made where the intent of such offer is to take over control of MeRGeR OR CONSOLiDaTiON . The stockholders of the Company shall approve a merger, consolidation, recapitalization, or reorganization of the Company, a reverse stock split of outstanding voting securities, or consummation of any such transaction if stockholder approval is not obtained, other than any such transaction that would result in at least seventy five percent (75%) of the total voting power represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by the holders of outstanding voting securities of the Company immediately prior to the transaction, with the voting power of each such continuing holder relative to other such continuing holders not substantially altered in the transaction; or LiQUiDaTiON OR SaLe OF aSSeTS . The stockholders of the Company shall approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or a substantial portion of the Company’s assets to another person or entity, which is not a wholly owned subsidiary of the Company (i.e., fifty percent (50%) or more of the total assets of the Company). eXCePTiONS FROM CHaNGe iN CONTROL . a Change in Control shall not be considered to have taken place for purposes of this Section 4 in the event that both (1) the Change in Control shall have been specifically approved by at least two-thirds (2/3) of the Current and additional Directors (as defined above) and (2) the successor company assumes this agreement and appoints executive to the same position at the successor corporation as executive had with the Company immediately prior to the Change in Control; provided that if the successor corporation has a parent, the parent rather than the successor corporation must appoint executive to the position with the same title and responsibilities as executive had with the Company immediately prior to the Change in Control. Sales of the Company’s Common Stock issued, beneficially owned or controlled by the Company shall not be considered in determining whether a Change in Control has occurred. NOTiFiCaTiON . executive shall be notified in writing by the Company at any time that the Company anticipates that a Change in Control may take place. SPeCiFieD eMPLOYee defined in Section 409a of the . Notwithstanding any provision of this agreement to the contrary, if executive is a “specified employee” as 9 Code, executive shall not be entitled to any payments or benefits the right to which provides for a “ deferra l of compensation ” within the meaning of Section 409a, and which payment or provision is triggered by executive ’ s termination of employment (whether such payments or benefits are provided to executive under this agreement or under any other plan, program or arrangement of the Company), until the earlier of (i) the date which is the first business day following the six-month anniversary of executive ’ s “ separation from service ” (within the meaning of Section 409a of the Code) for any reason other than death or (ii) executive ’ s date of death, and such payments or benefits that, if not for the six-month delay described herein, would be due and payable prior to such date shall be made or provided to executive on such date. The Company shall make the determination as to whether executive is a “ specified employee ” in good faith in accordance with its general procedures adopted in accordance with Section 409a of the Code and, at the time of the executive ’ s “ separation of service ” will notify the executive whether or not he is a “ specified employee ” . if the continued benefits provided under Sections 4(b)(iv)(a) and 4(b)(vi) are required to be delayed pursuant to the provisions of this paragraph, the executive may continue to participate in any benefit during the period of such delay, provided that executive shall bear the full cost of such benefits during such delay period. Upon the date such benefits otherwise would commence pursuant to this Section, employer may reimburse executive employer ’ s share of the cost of such benefits, to the extent that such costs otherwise would have been paid by employer or to the extent that such benefits otherwise would have been provided by employer at no cost to executive, in each case had such benefits commenced immediately upon executive ’ s termination of employment. any remaining benefits shall be reimbursed or provided by employer in accordance with the schedule and procedures specified herein. (c) PAYMENTS TO TERMINATION DATE . Upon termination of executive’s employment under this agreement for any reason provided above, executive shall be entitled to receive all compensation earned and all benefits and reimbursements due through the effective date of termination. additional compensation subsequent to termination, if any, will be due and payable to executive only to the extent and in the manner expressly provided above. all other rights and obligations of the Company and executive under this agreement shall cease as of the effective date of termination, except that the Company’s obligations under Section 8 (relating to indemnification of executive) and executive’s obligations under Section 3 (relating to non-competition), Section 5 (relating to return of Company property), Section 6 (relating to inventions), Section 7 (relating to trade secrets), and Section 9 (relating to prior agreements) shall survive such termination in accordance with their terms. (d) FAILURE TO PAY EXECUTIVE . if termination of executive’s employment arises out of the Company’s failure to pay executive on a timely basis the amounts to which he is entitled under this agreement or as a result of any other breach of this agreement by the Company, as determined by a court of competent jurisdiction or pursuant to the provisions of Section 14, the Company shall pay all amounts and damages to which executive may be entitled as a result of such breach, including interest thereon and all reasonable legal fees and expenses and other costs incurred by executive to enforce his rights hereunder. Further, none of the provisions of Section 3 (relating to non-competition) shall apply in the event executive’s employment under this agreement is terminated as a result of a breach by the Company. (e) CONDITIONS PRECEDENT FOR PAYMENT OF SEVERANCE . in consideration for the Company’s obligations to make any payments to executive pursuant to Section 4, upon termination of executive’s employment with Company for any reason other than executive’s death, executive shall sign and not revoke a release in a form satisfactory to the Company (the “Release”). Company shall present the Release to executive within ten (10) days of termination, and executive shall have up to forty-five (45) days to consider whether to sign the Release; in the event executive executes the Release, executive shall have an additional eight (8) calendar days in which to expressly revoke executive’s execution of the Release in writing. in the event that executive fails to execute the Release 10 wi thin the forty-five (45) days following termination, or in the event executive formal ly revokes the executi ve ’ s Release within eight (8) calendar days of his signing of the Release, then executive shall not be entitled to any payments or benefits under Section 4 of this agreement. The Company sha ll make any payments to executi ve in accordance with the terms of Section 4 prior to executive ’ s fa ilure to execute the Release wi thin forty-five (45) days or prior to his revocation; provided that if executive does not sign the Release or if executive revokes the Release during any statutory revocation period, executive shall immediately reimburse Company for any and all such payments. Upon executive’s termination of employment for any reason other than executive’s death, executive, unless otherwise requested to continue by the Company’s board of directors, shall resign from the board of Directors (or the equivalent governing body) of the Company and of any subsidiaries of the Company on which he sits as of the date of the termination of his employment. (f) MITIGATION . The Company and executive have mutually agreed that it would be appropriate to mitigate the costs to the Company of any severance arrangements if executive accepts other employment, the Company secures insurance or other coverage at its cost, or executive can obtain coverage under any governmental program without expense to executive, subject in each case to providing comparable benefits to executive with no out-of-pocket cost to him. as a result, all medical, disability, and other similar benefits payable to executive following the termination of his employment under this agreement shall be reduced on a dollar-for-dollar basis by (i) any medical, disability, and other similar benefits received by or which may reasonably be receivable by executive from any subsequent employer, (ii) any governmental benefits available to executive upon premium payments made or reimbursed by the Company to or on behalf of executive, or (iii) any insurance, annuity, or comparable payments or coverage furnished by the Company at no cost to executive as an alternative to the benefits provided by this agreement. (g) DELAY IN SEVERANCE PAYMENTS . To the extent required under Section 409a, any severance payments due under this Section 4 shall be delayed until the first date such payment may be made in compliance with Section 409a(a)(2)(b). 5. RETURN OF COMPANY PROPERTY . all records, designs, patents, business plans, :financial statements, manuals, memoranda, lists, and other property delivered to or compiled by executive by or on behalf of the Company (or its subsidiaries) or its representatives, vendors, or customers that pertain to the business of the Company (or its subsidiaries) shall be and remain the property of the Company and be subject at all times to its discretion and control. Likewise, all correspondence, reports, records, charts, advertising materials, and other similar data pertaining to the business, activities, or future plans of the Company (or its subsidiaries) that is collected by executive shall be delivered promptly to the Company without request by it upon termination of executive’s employment. 6. INVENTIONS . executive shall disclose promptly to the Company any and all significant conceptions and ideas for inventions, improvements, and valuable discoveries, whether patentable or not, which are conceived or made by executive, solely or jointly with another, during the period of employment or within one (1) year thereafter, and which are directly related to the business or activities of the Company (or its subsidiaries) and which executive conceives as a result of his employment by the Company. executive hereby assigns and agrees to assign all his interests therein to the Company or its nominee. Whenever requested to do so by the Company, executive shall execute any and all applications, assignments, and other instruments that the Company shall deem necessary to apply for and obtain Letters Patent of the United States or any foreign country or to otherwise protect the Company’s interest therein. 11 7. TRADE SECRETS . executive agrees that he will not, during or after the period of employment under this agreement, disclose the specific terms of the Company’s relationships or agreements with its respective significant vendors or customers, or any other significant and material trade secret of the Company, whether in existence or proposed, to any person, firm, partnership, corporation, or business for any reason or purpose whatsoever. 8. INDEMNIFICATION . in the event executive is made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (other than an action by the Company against executive), by reason of the fact that he is or was performing services under this agreement, then the Company shall indemnify executive against all expenses (including attorneys’ fees), judgments, fines, and amounts paid in settlement, as actually and reasonably incurred by executive in connection therewith to the maximum extent permitted by applicable law; provided, however, the executive must deliver a written undertaking to the Company that if it is subsequently determined by a court of law in a final, non-appealable judgment that the executive was not entitled to indemnification under applicable law, then the executive will repay all amounts. The advancement of expenses shall be mandatory. in the event that both executive and the Company are made a party to the same third-party action, complaint, suit, or proceeding, the Company agrees to engage competent legal representation, and executive agrees to use the same representation, provided that if counsel selected by the Company shall have a conflict of interest that prevents such counsel from representing executive, executive may engage separate counsel and the Company shall pay all attorneys’ fees of such separate counsel. Further, while executive is expected at all times to use his best efforts to faithfully discharge his duties under this agreement, executive cannot be held liable to the Company for errors or omissions made in good faith if executive has not exhibited gross, willful, and wanton negligence and misconduct or performed criminal and fraudulent acts that materially damage the business of the Company. Notwithstanding this Section 8, the provision of any indemnification agreement applicable to the directors or officers of the Company to which executive shall be a party shall apply rather than this Section 8 to the extent inconsistent with this Section 8. 9. NO PRIOR AGREEMENTS . executive hereby represents and warrants to the Company that the execution of this agreement by executive and his employment by the Company and the performance of his duties hereunder will not violate or be a breach of any agreement with a former employer, client, or any other person or entity. Further, executive agrees to indemnify the Company for any claim, including, but not limited to, attorneys’ fees and expenses of investigation, by any such third party that such third party may now have or may hereafter come to have against the Company based upon or arising out of any non-competition, invention, or secrecy agreement between executive and such third party that was in existence as of the effective Date of this agreement 10. ASSIGNMENT; BINDING EFFECT . executive understands that he is being employed by the Company on the basis of his personal qualifications, experience, and skills. executive agrees, therefore, he cannot assign all or any portion of his performance under this agreement. Subject to the preceding two (2) sentences and the express provisions of Section 11 below, this agreement shall be binding upon, inure to the benefit of and be enforceable by the parties hereto and their respective heirs, legal representatives, successors, and assigns. 11. COMPLETE AGREEMENT . This agreement is not a promise of future employment. executive has no oral representations, understandings, or agreements with the Company or any of its officers, directors, or representatives covering the same subject matter as this agreement. This written agreement is the final, complete, and exclusive statement and expression of the agreement between the Company and executive and of all the terms of this agreement, and it cannot be varied, contradicted, or supplemented by evidence of any prior or contemporaneous oral or written agreements. This written agreement may not be later modified except by a further writing signed by a duly authorized officer of 12 the Co mpany and executive, and no term of this agreement may be waived except by writing signed by the party waiving the benefit of such term. This agreement hereby supersedes any other employment agreements or understandings, written or oral, between the Company and executive. 12. NOTICE . Whenever any notice is required hereunder, it shall be given in writing addressed as follows: To the Company: MarineMax, inc. 2600 McCormick Drive, Suite 200 Clearwater, Florida 33759 attention: Corporate Secretary With a copy to Holland & Knight LLP 100 North Tampa Street Suite 4100 Tampa, Florida 33602 attention: Robert J. Grammig, esq. To executive: William H. McGill, Jr. 10857 Reflection Lane Hideout, UT 84036 Notice shall be deemed given and effective when hand delivered or on the first business day after being deposited with a reputable, nationally recognized overnight delivery service or when actually received. either party may change the address for notice by notifying the other party of such change in accordance with this Section 12. 13. SEVERABILITY; HEADINGS . if any portion of this agreement is held invalid or inoperative, the other portions of this agreement shall be deemed valid and operative and, so far as is reasonable and possible, effect shall be given to the intent manifested by the portion held invalid or inoperative. The Section headings herein are for reference purposes only and are not intended in any way to describe, interpret, define or limit the extent or intent of the agreement or of any part hereof. 14. MEDIATION ARBITRATION . all disputes arising out of this agreement shall be resolved as set forth in this Section 14. if any party hereto desires to make any claim arising out of this agreement (“Claimant”), then such party shall first deliver to the other party (“Respondent”) written notice (“Claim Notice”) of Claimant’s intent to make such claim explaining Claimant’s reasons for such claim in sufficient detail for Respondent to respond. Respondent shall have ten (10) business days from the date the Claim Notice was given to Respondent to object in writing to the claim (“Notice of Objection”), or otherwise cure any breach hereof alleged in the Claim Notice. any Notice of Objection shall specify with particularity the reasons for such objection. Following receipt of the Notice of Objection, if any, Claimant and Respondent shall immediately seek to resolve by good faith negotiations the dispute alleged in the Claim Notice, and may at the request of either party, utilize the services of an independent mediator. if Claimant and Respondent are unable to resolve the dispute in writing within ten (10) business days from the date negotiations began, then without the necessity 13 of further agreement of Claimant or Respondent, the dispute set forth in the Claim Notice shall be submitted to binding arbitration (except for claims arising out of Sections 3 or 7 hereof), initiated by either Claimant or Respondent pursuant to this Section. Such arbitration shall be conducted before a panel of three (3) arbitrators in Tampa, Florida, in accordance with the National Rules for the Resolution of employment Disputes of the american arbitration association ( “ aaa ” ) then in effect provided that the parties may agree to use arbitrators other than those provided by the aaa The arbitra tors shall not have the authori ty to add to, detract from, or modify any provision hereof nor to award punitive damages to any injured party. The arbitrators shall have the authority to order back-pay, severance compensation, vesting of options (or cash compensation in lieu of vesting of options), vesting and the removal of restrictions on restricted stock and/or restricted stock units (or comparable forms of equity compensation, if any) that, as of the effective date of the termination of executive, are n ot then subject to any performance conditions for vesting, reimbursement of costs, including those incurred to enforce this agreement, and interest thereon in the event the arbitrators determine that executive was terminated without disability or without Good Cause, as defined in Sections 4(b) and 4(c) hereof, respectively, or that the Company has otherwise materially breached this agreement. a decision by a majority of the arbitration panel shall be final and binding. Judgment may be entered on the arbitrators ’ award in any court having jurisdiction. The direct expense of any mediation or arbitration proceeding and, to the extent executive prevails, all reasonable legal fees shall be borne by the Company. 15. NO PARTICIPATION IN SEVERANCE PLANS . except as contemplated by this agreement, executive acknowledges and agrees that the compensation and other benefits set forth in this agreement are and shall be in lieu of any compensation or other benefits that may otherwise be payable to or on behalf of executive pursuant to the terms of any severance pay arrangement of the Company or any affiliate thereof, or any other similar arrangement of the Company or any affiliates thereof providing for benefits upon involuntary termination of employment. 16. GOVERNING LAW . This agreement shall in all respects be construed according to the laws of the state of Florida, notwithstanding the conflict of laws provisions of such state. 17. COUNTERPARTS; FACSIMILE . This agreement may be executed by facsimile and in two (2) or more counterparts, each of which shall be deemed an original and all of which together shall constitute but one and the same instrument. 18. SECTION 409A . (a) This agreement is intended to satisfy the requirements of Section 409a of the Code with respect to amounts subject thereto, and shall be interpreted and construed consistent with such intent; provided that, notwithstanding the other provisions of this provision and the provision entitled, “Specified employee” above, with respect to any right to a payment or benefit hereunder (or portion thereof) that does not otherwise provide for a “deferral of compensation” within the meaning of Section 409a of the Code, it is the intent of the parties that such payment or benefit will not so provide. Furthermore, if either party notifies the other in writing that, based on the advice of legal counsel, one or more of the provisions of this agreement contravenes any regulations or Treasury guidance promulgated under Section 409a of the Code or causes any amounts to be subject to interest or penalties under Section 409a of the Code, the parties shall promptly and reasonably consult with each other (and with their legal counsel), and shall use their reasonable best efforts, to reform the provisions hereof to (a) maintain to the maximum extent practicable the original intent of the applicable provisions without violating the provisions of Section 409a of the Code or increasing the costs to the Company of providing the applicable benefit or payment and (b) to the extent practicable, to avoid the imposition of any tax, interest or other penalties under Section 409a of the Code upon executive or the Company. 14 (b) This agreement is intended, to the maximum extent possible, to meet the short term deferral exception and/or be a separation pay plan due to an involuntary separation from service under Treasury Regulation Sections 1.409a-1(b)(4) and 1.409a-l (b)(9)(iii) and therefore exempt from Code Section 409a. 15 iN WiTNeSS WHeReOF, the parties hereto have executed this agreement as of the day and year first above written. MaRiNeMaX, iNC. by: Michael H. McLamb Title: Vice President and Chief Financial Officer eXeCUTiVe: William H. McGill, Jr. 16 AMENDED AND RESTATED EMPLOYMENT AGREEMENT Exhibit 10.3(i) THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT executed on November ___, 2018 (this “agreement”), by and between MarineMax, inc., a Florida corporation (the “Company”), and Michael H. McLamb (“executive”) to amend and restate in its entirety any and all previously existing employment arrangements or agreements between the parties. RECITALS a. The Company is engaged primarily in the business of selling, renting, leasing, and servicing boating, nautical, and other related lifestyle entertainment products and services, and related activities and executive has experience in such business. b. executive currently serves as executive Vice President and Chief Financial Officer of the Company. The Company desires to assure itself of the continued availability of executive. C. The Company desires to employ executive, and executive desires to accept such employment, pursuant to the terms and conditions set forth in this agreement, which shall replace the existing employment agreement between the Company and executive. NOW, THEREFORE , in consideration of the mutual promises, terms, covenants, and conditions set forth herein and the AGREEMENT performance of each, it is hereby agreed as follows: 1. EMPLOYMENT AND DUTIES . (a) EMPLOYMENT . The Company hereby employs executive, and executive hereby agrees to act, as executive Vice President and Chief Financial Officer of the Company. as such, executive shall have responsibilities, duties, and authority reasonably accorded to, expected of, and consistent with executive’s position and executive shall report directly to the Chief executive Officer and to the board of Directors of the Company (the “board”). executive hereby accepts this employment upon the terms and conditions herein contained and, subject to Section l(c) hereof, agrees to devote his best efforts and substantially all of his business time and attention to promote and further the business of the Company. by the Company. (b) POLICIES . executive shall faithfully adhere to, execute, and fulfill all lawful policies established (c) OTHER ACTIVITIES . executive shall not, during the period of his employment hereunder (the “Term”), be engaged in any other business activity pursued for gain, profit, or other pecuniary advantage if such activity interferes in any material respect with executive’s duties and responsibilities hereunder. The foregoing limitations shall not be construed as prohibiting executive from (i) making personal investments in such form or manner as will neither require his services in the operation or affairs of the companies or enterprises in which such investments are made nor subject executive to any conflict of interest with respect to his duties to the Company, (ii) serving on any civic or charitable boards or committees, (iii) delivering lectures or fulfilling speaking engagements, or (iv) serving, with the written approval of the board, as a director of one or more corporations, in each case so long as any such activities do not significantly interfere with the performance of executive’s responsibilities under this agreement. in addition, executive shall comply with the restrictions listed in Section 3 of this agreement. performance of his duties to relocate his primary residence. (d) PLACE OF PERFORMANCE . executive shall not be required by the Company or in the 2. COMPENSATION . For all services rendered by executive, the Company shall compensate executive as follows: (a) BASE SALARY effective the date hereof, the base salary payable to executive shall be Three Hundred Seventy Thousand Dollars ($370,000) per year, payable on a regular basis in accordance with the Company’s standard payroll procedures, but not less than monthly. On at least an annual basis, the board or a committee of the board shall review executive’s performance and may make increases to such base salary if, in its sole discretion, any such increase is warranted. (b) BONUS OR OTHER INCENTIVE COMPENSATION . executive shall be eligible to receive a bonus or other incentive compensation as may be determined by the board or a committee of the board based upon such factors as the board or such committee, in its sole discretion, may deem relevant, including, without limitation, the performance of executive and the Company; provided, however, that the board or a committee of the board shall establish for each fiscal year of the Company a bonus program in which executive shall be entitled to participate, which provides executive with a reasonable opportunity, based on the performance of the Company, the past compensation practices of the Company and executive’s then base salary, to maintain or increase executive’s total compensation compared to the previous fiscal year. be entitled to receive additional benefits and compensation from the Company in such form and to such extent as specified below: (c) EXECUTIVE PERQUISITES, BENEFITS, AND OTHER COMPENSATION . executive shall (i) REIMBURSEMENT FOR EXPENSES . The Company shall provide reimbursement to executive for business travel and other out-of-pocket expenses reasonably incurred by executive in the performance of his services under this agreement. all reimbursable expenses shall be appropriately documented in reasonable detail by executive upon submission of any request for reimbursement and shall be in a format and manner consistent with the Company’s expense reporting policy. Such expenses shall be submitted to the Company’s Chief executive Officer for approval or to such other officer of the Company as the board may from time to time direct. except as expressly provided otherwise herein, no reimbursement payable to executive pursuant to any provisions of this agreement or pursuant to any plan or arrangement of the Company shall be paid later than the last day of the calendar year following the calendar year in which the related expense was incurred, and no such reimbursement during any calendar year shall affect the amounts eligible for reimbursement in any other calendar year, except, in each case, to the extent that the right to reimbursement does not provide for a “deferral of compensation” within the meaning of Section 409a. 2 (ii) VACATION . Paid vacation in accordance with the applicable policy of the Company as in effect from time to time. executive shall be entitled to no less than four (4) weeks paid vacation per year; provided, however, executive may carryover up to, but not more than, two weeks of unused vacation time from one calendar year to the next succeeding calendar year. The maximum amount of vacation that may be accrued for any calendar year is six (6) weeks of paid vacation. No additional paid vacation shall accrue above the six (6) week limit. (iii) OTHER EXECUTIVE PERQUISITES . The Company shall provide executive with other executive perquisites as may be made available to or deemed appropriate for executive by the board or a committee of the board and participation in all other Company-wide employee benefits (including group insurance, pension, retirement, and other plans and programs) as are available to the Company’s executive officers from time to time. 3. NON-COMPETITION AGREEMENT . (a) NON-COMPETITION . executive shall not, during the period of his employment by or with the Company, and during the Noncompete Period (as hereinafter defined) for any reason whatsoever, directly or indirectly, for himself or on behalf of or in conjunction with any other person: (i) OTHER ACTIVITIES . engage, as an officer, director, shareholder, owner, principal, partner, lender, joint venturer, employee, independent contractor, consultant, advisor, or sales representative, in any Competitive business within the Restricted Territory; (ii) SOLICITATION OF EMPLOYEES . Call upon any person who is, at that time, within the Restricted Territory, an employee of the Company or any of its subsidiaries, in a managerial capacity for the purpose or with the intent of enticing such employee away from or out of the employ of the Company or any of its subsidiaries; (iii) SOLICITATION OF CUSTOMERS . Call upon any person or entity that is, at that time, or that has been, within one (1) year prior to that time, a customer of the Company or any of its subsidiaries, within the Restricted Territory for the purpose of soliciting or selling products or services in direct competition with the Company or any of its subsidiaries within the Restricted Territory; . Call upon any prospective acquisition candidate (that is, a business that the Company may have an interest in acquiring), on executive’s own behalf or on behalf of any person, which candidate was, to executive’s knowledge after due inquiry, either called upon by the Company, or for which the Company made an acquisition analysis, for the purpose of acquiring such candidate. (iv) SOLICITATION OF ACQUISITION CANDIDATES meanings ascribed to them: (b) CERTAIN DEFINITIONS . as used in this agreement, the following terms shall have the stores, repairs, restores, or services recreational boats or other boating (i) COMPETITIVE BUSINESS shall mean any Person that sells, rents, brokers, leases, 3 products or provides services relating to recreational boats or other boating products or any other business in which the Company is engaged; firm, or other business of whatever nature; (ii) PERSON shall mean any individual, corporation, limited liability company, partnership, (iii) RESTRICTED TERRITORY shall mean any state or other political jurisdiction in which, or any location within two hundred (200) miles of which, the Company or any subsidiary of the Company maintains any facilities; sells, rents, brokers, leases, stores, repairs, restores, or services recreational boats or other boating products; or provides services relating to recreational boats or other boating products; and including corporations, partnerships, limited liability companies, and any other business organization in which the Company holds at least a fifty percent (50%) equity interest. consolidated subsidiaries, (iv) SUBSIDIARY mean the Company’s shall (v) NONCOMPETE PERIOD shall mean the longer of (i) the two (2) year period immediately following the termination of executive’s employment with the Company or (ii) the time during which severance payments are being made by the Company to executive in accordance with this agreement; provided, however, that if the executive’s employment is terminated by the Company without Good Cause, executive terminates his employment with Good Reason or, executive terminates his employment after a Change in Control pursuant to Section 4(b)(vi)(b), then the Noncompete Period shall be for the one (1) year period immediately following the termination of his employment with the Company. (c) ENFORCEMENT . because of the difficulty of measuring economic losses to the Company as a result of a breach of the foregoing covenants, and because of the immediate and irreparable damage that could be caused to the Company for which it would have no other adequate remedy, executive agrees that the foregoing covenants may be enforced by the Company in the event of breach by him, by injunctions and restraining orders. (d) REASONABLE RESTRAINT . it is agreed by the parties that the foregoing covenants in this Section 3 impose a reasonable restraint on executive in light of the activities and business of the Company (including the Company’s subsidiaries) on the date of the execution of this agreement and the current plans of the Company (including the Company’s subsidiaries); but it is also the intent of the Company and executive that such covenants be construed and enforced in accordance with the changing activities, business, and locations of the Company (including the Company’s subsidiaries) throughout the term of this covenant, whether before or after the date of termination of the employment of executive. For example, if, during the term of this agreement, the Company (including the Company’s subsidiaries) engages in new and different activities, enters a new business, or establishes new locations for its current activities or business in addition to or other than the activities or business enumerated above or the locations currently established therefor, then executive will be precluded from soliciting the customers or employees of such new activities or business or from such new location and from directly competing with such new business within the Restricted Territory through the term of these covenants. 4 (e) OTHER ACTIVITIES . it is further agreed by the parties that, in the event that executive shall cease to be employed hereunder and enters into a business or pursues other activities not in competition with the Company (including the Company’s subsidiaries), or similar activities or business in locations, the operation of which, under such circumstances, does not violate this Section 3, and in any event such new business, activities, or location are not in violation of this Section 3 or of executive’s obligations under this Section 3, if any, executive shall not be chargeable with a violation of this Section 3 if the Company (including the Company’s subsidiaries) shall thereafter enter the same, similar, or a competitive (i) business, (ii) course of activities, or (iii) location, as applicable. (f) SEPARATE COVENANTS . The covenants in this Section 3 are severable and separate, and the unenforceability of any specific covenant shall not affect the provisions of any other covenant. Moreover, in the event any court of competent jurisdiction shall determine that the scope, time, or territorial restrictions set forth are unreasonable, then it is the intention of the parties that such restrictions be enforced to the fullest extent that the court deems reasonable, and the agreement shall thereby be reformed. (g) INDEPENDENT AGREEMENT . all of the covenants in this Section 3 shall be construed as an agreement independent of any other provision in this agreement, and the existence of any claim or cause of action of executive against the Company, whether predicated on this agreement or otherwise, shall not constitute a defense to the enforcement by the Company of such covenants; except as provided in Section 4(d) below. it is specifically agreed that the Noncompete Period following termination of employment as defined in this Section 3, during which the agreements and covenants of executive made in this Section 3 shall be effective, shall be computed by excluding from such computation any time during which executive is in violation of any provision of this Section 3. 4. AT-WILL EMPLOYMENT; TERMINATION; RIGHTS ON TERMINATION . (a) AT-WILL EMPLOYMENT . executive’s employment with the Company shall be at-will. The executive may terminate his employment at any time for any reason (subject to the notice requirements provided in this agreement) and the Company may terminate executive’s employment with the Company at any time and for any reason (subject to the severance provisions of this agreement). This at-will employment relationship cannot be changed except by written authorization by the board of Directors of the Company. the followings ways: (b) TERMINATION . executive’s employment under this agreement may be terminated in any one of (i) DEATH OF EXECUTIVE . The employment of executive shall terminate immediately upon executive’s death provided that the Company shall pay to the estate of executive an amount equal to $550,000. in the event of such termination, all options to purchase Common Stock of the Company held by executive shall thereupon vest and shall be exercisable for the maximum period of time, up to their full term, that will not cause executive with respect to such options to be subject to any excise tax under Section 409a of the internal Revenue Code of 1986, as amended (“Section 409a”) notwithstanding the termination of employment. all 5 restricted stock and/or restricted stock units (or comparable forms of equity compensation, if any) held by the executive which, as of the date of the death of executive, are not then subject to any performance conditions for vesting, shall be fully vested and shall not be subject to any risk of forfeiture or repurchase as of the date of executive’s death. The payment described in this Section, if payable, will be paid within ten (10) days after the executive’s death. (ii) DISABILITY OF EXECUTIVE . The Company may terminate executive’s employment in the event the executive is disabled. The executive shall be disabled if the executive is unable to engage in any substantial gainful activity by reason of a medically determined physical or mental impairment expected to last at least twelve consecutive months or result in death, or if applicable, for at least three months the executive is receiving income replacement benefits under a Company sponsored plan by reason of any medically determined physical or mental impairment expected to last at least twelve consecutive months or result in death, or if the executive is determined to be disabled under a Company disability plan with a similar definition of disability. in the event executive’s employment under this agreement is terminated as a result of executive’s disability, executive shall receive from the Company, in a lump-sum payment due within ten (10) days of the effective date of termination, an amount equal to the average of the base salary and bonus paid to executive for the two (2) prior full fiscal years, for one (1) year. in the event of such termination, all options to purchase Common Stock of the Company held by executive shall thereupon vest and shall be exercisable for the maximum period of time, up to their full term, that will not cause executive with respect to such options to be subject to any excise tax under Section 409a notwithstanding the termination of employment. all restricted stock and/or restricted stock units (or comparable forms of equity compensation, if any) held by the executive which, as of the date of the disability of executive, are not then subject to any performance conditions for vesting, shall be fully vested and shall not be subject to any risk of forfeiture or repurchase as of the date of executive’s termination due to disability (as defined in this paragraph). (iii) TERMINATION BY THE COMPANY FOR GOOD CAUSE . The Company may terminate executive’s employment upon ten (10) days prior written notice to executive for “Good Cause,” which shall mean any one or more of the following: (a) executive’s willful and material breach of this agreement which has not been cured by the executive within thirty (30) days following written notice of such breach from the Company; (b) executive’s gross negligence in the performance or intentional nonperformance (continuing for thirty (30) days after receipt of written notice of need to cure) of any of executive’s material duties and responsibilities hereunder; (C) executive’s willful dishonesty, fraud, or misconduct with respect to the business or affairs of the Company, which materially and adversely affects the operations or reputation of the Company; (D) executive’s conviction of a felony crime involving dishonesty or moral turpitude; or (e) a confirmed positive illegal drug test result. in the event of a termination by the Company for Good Cause, executive shall have no right to any severance compensation. (iv) TERMINATION BY THE COMPANY WITHOUT GOOD CAUSE OR BY EXECUTIVE WITH GOOD REASON . The Company may terminate executive’s employment without Good Cause upon the approval of a majority of the members of the board, excluding executive if executive is a member of the board. executive may terminate his employment under this agreement for Good Reason upon thirty (30) days prior notice to the Company. 6 (a) RESULT OF TERMINATION BY THE COMPANY WITHOUT GOOD CAUSE OR BY EXECUTIVE WITH GOOD REASON . Should the Company terminate executive’s employment without Good Cause or should executive terminate his employment with Good Reason, the Company shall pay to executive for eighteen (18) months after such termination, on such dates as would otherwise be paid by the Company, an amount equal to the average of the base salary and bonus paid to executive for the two (2) prior full fiscal years. The amounts payable under the preceding sentence shall commence on the first payroll date following executive’s “separation from service” from the Company within the meaning of Section 409a of the internal Revenue Code of 1986, as amended (the “Code”), and shall be treated as a series of separate payments under Treasury Regulations Section 1.409a-2(b)(2)(iii). Further, if the Company terminates executive’s employment without Good Cause or executive terminates his employment with Good Reason, (1) all options to purchase Common Stock of the Company held by executive shall vest thereupon and shall be exercisable for the maximum period of time, up to their full term, that will not cause executive with respect to such options to be subject to any excise tax under Section 409a notwithstanding the termination of employment, (2) all restricted stock and/or restricted stock units (or comparable forms of equity compensation, if any) held by executive which, as of the effective date of the termination of executive, are not then subject to any performance conditions for vesting, shall be fully vested and shall not be subject to any risk of forfeiture or repurchase as of the date of termination, (3) all restricted stock and/or restricted stock units (or comparable forms of equity compensation, if any) held by executive which, as of the effective date of the termination of executive, is subject to performance conditions for vesting, shall be fully vested and treated as if the performance conditions for such award had been fully met at target and shall not be subject to any risk of forfeiture or repurchase as of the date of termination , and ( 4 ) executive shall be entitled to receive all other unpaid benefits due and owing through executive’s last day of employment. Further, any termination by the Company without Good Cause or by executive for Good Reason shall operate to shorten the Noncompete Period set forth in Section 3 to one (1) year from the date of termination of employment. (b) DEFINITION OF GOOD REASON . executive shall have “Good Reason” to terminate employment upon occurrence of any of the following events without executive’s prior written approval: (1) executive suffers a material reduction in authority, responsibilities or duties as provided herein; (2) executive’s annual base salary for a fiscal year as determined pursuant to Section 2(a) is reduced to a level that is less than ninety percent (90%) of the base salary paid to executive during the prior contract year under this agreement; (3) executive is required to render his or her primary employment services from a location more than 25 miles from the Company’s headquarters at the time executive began his employment with the Company; (4) the Company takes steps to deny executive a reasonable opportunity to maintain executive’s total compensation (i.e., base salary plus bonus and any other annual cash incentive compensation) compared to the previous fiscal year (provided total compensation may take into account performance of the Company and the past compensation practices of the Company); or (5) the Company breaches a material provision of this agreement. in order for an event to justify termination for Good Reason, the executive must give written notice to the Company of such event within 90 days of its first occurrence and the Company must have 30 days to cure, if possible. 7 (v) RESIGNATION BY EXECUTIVE WITHOUT GOOD REASON . executive may, without cause, and without Good Reason terminate his own employment under this agreement, effective thirty (30) days after written notice is provided to the Company or such earlier time as any such resignation may be accepted by the Company. if executive resigns or otherwise terminates his employment without Good Reason, executive shall receive no severance compensation. (vi) CHANGE IN CONTROL OF THE COMPANY . executive understands and acknowledges that the Company may be merged or consolidated with or into another entity and that such entity shall automatically succeed to the rights and obligations of the Company hereunder or that the Company may undergo another type of Change in Control. in the event such a merger or consolidation or other Change in Control is initiated prior to the end of the Term, then the provisions of this Section 4(b)(vi) shall be applicable. (a) POSSIBILITY OF CHANGE IN CONTROL . (b) TERMINATION BY EXECUTIVE . Subject to the exceptions set forth in Section 4(b)(vi)(e), if any Change of Control is initiated during executive’s employment hereunder, executive may, at his sole discretion, elect to terminate his employment under this agreement by providing written notice to the Company at least thirty (30) business days at any time beginning on the effective date of the Change in Control and ending one (1) year after the closing of the transaction giving rise to the Change in Control. in such case, the applicable provisions of Section 4(b)(iv) hereof will apply as though the Company had terminated executive’s employment without Good Cause during the Term; however, under such circumstances, the amount of the severance payments due to executive shall be paid in a lump sum and the Noncompete Period of Section 3 hereof shall be limited to one (1) year from the effective date of termination. if any of the payments or benefits received or to be received by the executive (including, without limitation, any payment or benefits received in connection with a Change in Control or the executive’s termination of employment, whether pursuant to the terms of this agreement or any other plan, arrangement, or agreement, or otherwise) (all such payments collectively referred to herein as the "280G Payments") constitute "parachute payments" within the meaning of Section 280G of the Code and would, but for this Section 4 (b) (vi) (b), be subject to the excise tax imposed under Section 4999 of the Code (the "excise Tax"), then such 280G Payments shall be reduced in a manner determined by the Company (by the minimum possible amounts) that is consistent with the requirements of Section 409a until no amount payable to the executive will be subject to the excise Tax. if two economically equivalent amounts are subject to reduction but are payable at different times, the amounts shall be reduced (but not below zero) on a pro rata basis. (C) EFFECTIVE DATE OF CHANGE IN CONTROL . For purposes of applying Section 4 hereof under the circumstances described in 4(b)(vi)(b) above, the effective date of the Change in Control will be the closing date of the transaction giving rise to the Change in Control and all compensation, reimbursements, and lump-sum payments due executive must be paid in full by the Company following such Change in Control promptly following executive’s election to terminate his employment. 8 (D) DEFINITION OF CHANGE IN CONTROL a “Change in Control” shall mean the items in (1)-(4) below and a transaction that would be required to be reported in response to item 6(e) of Schedule 14a of Regulation 14a promulgated under the Securities exchange act of 1934 (“exchange act”), as amended, as in effect on the date of this agreement, or if item 6(e) is no longer in effect, any regulations issued by the Securities and exchange Commission pursuant to the exchange act, which serve similar purposes, provided that to constitute a Change in Control the transaction must satisfy the requirements of Treasury Regulation §1.409a ‑3(i)(5) relating to “change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portion of the assets of a corporation”: . (1) TURNOVER OF BOARD . The following individuals no longer constitute a majority of the members of the board: (a) the individuals who, as of the date of this agreement, constitute the board (the “Current Directors”); (b) the individuals who thereafter are elected to the board and whose election, or nomination for election, to the board was approved by a vote of at least two-thirds (2/3) of the Current Directors then still in office (such directors becoming “additional Directors” immediately following their election); and (C) the individuals who are elected to the board and whose election, or nomination for election, to the board was approved by a vote of at least two-thirds (2/3) of the Current Directors and additional Directors then still in the office (such directors also becoming “additional Directors” immediately following their election); (2) TENDER OFFER . a tender offer or exchange offer is made where the intent of such offer is to take over control of the Company, and such offer is consummated for the equity securities of the Company representing thirty percent (30%) or more of the combined voting power of the Company’s then outstanding voting securities; (3) MERGER OR CONSOLIDATION . The stockholders of the Company shall approve a merger, consolidation, recapitalization, or reorganization of the Company, a reverse stock split of outstanding voting securities, or consummation of any such transaction if stockholder approval is not obtained, other than any such transaction that would result in at least seventy-five percent (75%) of the total voting power represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by the holders of outstanding voting securities of the Company immediately prior to the transaction, with the voting power of each such continuing holder relative to other such continuing holders not substantially altered in the transaction; or The stockholders of the Company shall approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or a substantial portion of the Company’s assets to another person or entity, which is not a wholly owned subsidiary of the Company (i.e., fifty percent (50%) or more of the total assets of the Company).” (4) LIQUIDATION OR SALE OF ASSETS . (e) EXCEPTIONS FROM CHANGE IN CONTROL . a Change in Control shall not be considered to have taken place for purposes of this Section 4 in the event that both (1) the Change in Control shall have been specifically approved by at least two-thirds (2/3) of the Current and additional Directors (as defined above) and (2) the successor company assumes this agreement and appoints executive to the same position at the 9 successor corporation as executive had with the Company immediately prior to the Change in Control; provided that if the successor corporation has a parent, the parent rather than the successor corporation must appoint executive to the position with the same title and responsibilities as executive had with the Company immediately prior to the Change in Control. Sales of the Company’s Common Stock issued, beneficially owned or controlled by the Company shall not be considered in determining whether a Change in Control has occurred. Company at any time that the Company anticipates that a Change in Control may take place. (F) NOTIFICATION . executive shall be notified in writing by the (G) SPECIFIED EMPLOYEE . Notwithstanding any provision of this agreement to the contrary, if executive is a “specified employee” as defined in Section 409a of the Code, executive shall not be entitled to any payments or benefits the right to which provides for a “deferral of compensation” within the meaning of Section 409a, and which payment or provision is triggered by executive’s termination of employment (whether such payments or benefits are provided to executive under this agreement or under any other plan, program or arrangement of the Company), until the earlier of (i) the date which is the first business day following the six-month anniversary of executive’s “separation from service” (within the meaning of Section 409a of the Code) for any reason other than death or (ii) executive’s date of death, and such payments or benefits that, if not for the six-month delay described herein, would be due and payable prior to such date shall be made or provided to executive on such date. The Company shall make the determination as to whether executive is a “specified employee” in good faith in accordance with its general procedures adopted in accordance with Section 409a of the Code and, at the time of the executive’s “separation of service” will notify the executive whether or not he is a “specified employee. (c) PAYMENTS TO TERMINATION DATE . Upon termination of executive’s employment under this agreement for any reason provided above, executive shall be entitled to receive all compensation earned and all benefits and reimbursements due through the effective date of termination. additional compensation subsequent to termination, if any, will be due and payable to executive only to the extent and in the manner expressly provided above. all other rights and obligations of the Company and executive under this agreement shall cease as of the effective date of termination, except that the Company’s obligations under Section 8 (relating to indemnification of executive) and executive’s obligations under Section 3 (relating to non- competition), Section 5 (relating to return of Company property), Section 6 (relating to inventions), Section 7 (relating to trade secrets), and Section 9 (relating to prior agreements) shall survive such termination in accordance with their terms. (d) FAILURE TO PAY EXECUTIVE . if termination of executive’s employment arises out of the Company’s failure to pay executive on a timely basis the amounts to which he is entitled under this agreement or as a result of any other breach of this agreement by the Company, as determined by a court of competent jurisdiction or pursuant to the provisions of Section 14, the Company shall pay all amounts and damages to which executive may be entitled as a result of such breach, including interest thereon and all reasonable legal fees and expenses and other costs incurred by executive to enforce his rights hereunder. Further, none of the provisions 10 of Section 3 (relating to non-competition) shall apply in the event executive’s employment under this agreement is terminated as a result of a breach by the Company. (e) CONDITIONS PRECEDENT FOR PAYMENT OF SEVERANCE . in consideration for the Company’s obligations to make any payments to executive pursuant to Section 4, upon termination of executive’s employment with Company for any reason other than executive’s death, executive shall sign and not revoke a release in a form satisfactory to the Company (the “Release”). Company shall present the Release to executive within ten (10) days of termination, and executive shall have up to forty-five (45) days to consider whether to sign the Release; in the event executive executes the Release, executive shall have an additional eight (8) calendar days in which to expressly revoke executive’s execution of the Release in writing. in the event that executive fails to execute the Release within the forty-five (45) days following termination, or in the event executive formally revokes the executive’s Release within eight (8) calendar days of his signing of the Release, then executive shall not be entitled to any payments or benefits under Section 4 of this agreement. The Company shall make any payments to executive in accordance with the terms of Section 4 prior to executive’s failure to execute the Release within forty-five (45) days or prior to his revocation; provided that if executive does not sign the Release or if executive revokes the Release during any statutory revocation period, executive shall immediately reimburse Company for any and all such payments. Upon executive’s termination of employment for any reason other than executive’s death, executive, unless otherwise requested to continue by the Company’s board of directors, shall resign from the board of Directors of the Company and of any subsidiaries of the Company on which he sits as of the date of the termination of his employment. . To the extent required under Section 409a, any severance payments due under this Section 4 shall be delayed until the first date such payment may be made in compliance with Section 409a(a)(2)(b). (f) DELAY IN SEVERANCE PAYMENTS 5. RETURN OF COMPANY PROPERTY . all records, designs, patents, business plans, financial statements, manuals, memoranda, lists, and other property delivered to or compiled by executive by or on behalf of the Company (or its subsidiaries) or its representatives, vendors, or customers that pertain to the business of the Company (or its subsidiaries) shall be and remain the property of the Company and be subject at all times to its discretion and control. Likewise, all correspondence, reports, records, charts, advertising materials, and other similar data pertaining to the business, activities, or future plans of the Company (or its subsidiaries) that is collected by executive shall be delivered promptly to the Company without request by it upon termination of executive’s employment. 6. INVENTIONS . executive shall disclose promptly to the Company any and all significant conceptions and ideas for inventions, improvements, and valuable discoveries, whether patentable or not, which are conceived or made by executive, solely or jointly with another, during the period of employment or within one (1) year thereafter, and which are directly related to the business or activities of the Company (or its subsidiaries) and which executive conceives as a result of his employment by the Company. executive hereby assigns and agrees to assign all his interests therein to the Company or its nominee. Whenever requested to do so by the Company, executive shall execute any and all applications, assignments, and other instruments that the 11 Company shall deem necessary to apply for and obtain Letters Patent of the United States or any foreign country or to otherwise protect the Company’s interest therein. 7. TRADE SECRETS . executive agrees that he will not, during or after the period of employment under this agreement, disclose the specific terms of the Company’s relationships or agreements with its respective significant vendors or customers, or any other significant and material trade secret of the Company, whether in existence or proposed, to any person, firm, partnership, corporation, or business for any reason or purpose whatsoever. 8. INDEMNIFICATION . in the event executive is made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (other than an action by the Company against executive), by reason of the fact that he is or was performing services under this agreement, then the Company shall indemnify executive against all expenses (including attorneys’ fees), judgments, fines, and amounts paid in settlement, as actually and reasonably incurred by executive in connection therewith to the maximum extent permitted by applicable law; provided, however, the executive must deliver a written undertaking to the Company that if it is subsequently determined by a court of law in a final, non-appealable judgment, that the executive was not entitled to indemnification under applicable law, then the executive will repay all amounts. The advancement of expenses shall be mandatory. in the event that both executive and the Company are made a party to the same third-party action, complaint, suit, or proceeding, the Company agrees to engage competent legal representation, and executive agrees to use the same representation, provided that if counsel selected by the Company shall have a conflict of interest that prevents such counsel from representing executive, executive may engage separate counsel and the Company shall pay all attorneys’ fees of such separate counsel. Further, while executive is expected at all times to use his best efforts to faithfully discharge his duties under this agreement, executive cannot be held liable to the Company for errors or omissions made in good faith if executive has not exhibited gross, willful, and wanton negligence and misconduct or performed criminal and fraudulent acts that materially damage the business of the Company. Notwithstanding this Section 8, the provision of any written indemnification agreement applicable to the directors or officers of the Company to which executive shall be a party shall apply rather than this Section 8 to the extent inconsistent with this Section 8. 9. NO PRIOR AGREEMENTS . executive hereby represents and warrants to the Company that the execution of this agreement by executive and his employment by the Company and the performance of his duties hereunder will not violate or be a breach of any agreement with a former employer, client, or any other person or entity. Further, executive agrees to indemnify the Company for any claim, including, but not limited to, attorneys’ fees and expenses of investigation, by any such third party that such third party may now have or may hereafter come to have against the Company based upon or arising out of any non-competition, invention, or secrecy agreement between executive and such third party that was in existence as of the date of this agreement. 10. ASSIGNMENT; BINDING EFFECT . executive understands that he is being employed by the Company on the basis of his personal qualifications, experience, and skills. executive agrees, therefore, he cannot assign all or any portion of his performance under this agreement. Subject to the preceding two (2) sentences and the express provisions of Section 11 12 below, this agreement shall be binding upon, inure to the benefit of and be enforceable by the parties hereto and their respective heirs, legal representatives, successors, and assigns. 11. COMPLETE AGREEMENT . This agreement is not a promise of future employment. executive has no oral representations, understandings, or agreements with the Company or any of its officers, directors, or representatives covering the same subject matter as this agreement. This written agreement is the final, complete, and exclusive statement and expression of the agreement between the Company and executive and of all the terms of this agreement, and it cannot be varied, contradicted, or supplemented by evidence of any prior or contemporaneous oral or written agreements. This written agreement may not be later modified except by a further writing signed by a duly authorized officer of the Company and executive, and no term of this agreement may be waived except by writing signed by the party waiving the benefit of such term. This agreement hereby supersedes any other employment agreements or understandings, written or oral, between the Company and executive. 12. NOTICE . Whenever any notice is required hereunder, it shall be given in writing addressed as follows: To the Company: MarineMax, inc. 2600 McCormick Drive, Suite 200 Clearwater, Florida 33759 attention: Chief executive Officer To executive: Michael H. McLamb 2600 McCormick Drive, Suite 200 Clearwater, Florida 33759 in either case with a copy to: Holland & Knight LLP 100 North Tampa Street Suite 4100 Tampa, Florida 33602 attention: Robert J. Grammig, esq. Notice shall be deemed given and effective when hand delivered on the first day after being deposited with a reputable nationally recognized overnight delivery service or when actually received. either party may change the address for notice by notifying the other party of such change in accordance with this Section 12. 13. SEVERABILITY; HEADINGS . if any portion of this agreement is held invalid or inoperative, the other portions of this agreement shall be deemed valid and operative and, so far as is reasonable and possible, effect shall be given to the intent manifested by the portion held 13 invalid or inoperative. The Section headings herein are for reference purposes only and are not intended in any way to describe, interpret, define or limit the extent or intent of the agreement or of any part hereof. 14. MEDIATION ARBITRATION . all disputes arising out of this agreement shall be resolved as set forth in this Section 14. if any party hereto desires to make any claim arising out of this agreement (“Claimant”), then such party shall first deliver to the other party (“Respondent”) written notice (“Claim Notice”) of Claimant’s intent to make such claim explaining Claimant’s reasons for such claim in sufficient detail for Respondent to respond. Respondent shall have ten (10) business days from the date the Claim Notice was given to Respondent to object in writing to the claim (“Notice of Objection”), or otherwise cure any breach hereof alleged in the Claim Notice. any Notice of Objection shall specify with particularity the reasons for such objection. Following receipt of the Notice of Objection, if any, Claimant and Respondent shall immediately seek to resolve by good faith negotiations the dispute alleged in the Claim Notice, and may at the request of either party, utilize the services of an independent mediator. if Claimant and Respondent are unable to resolve the dispute in writing within ten (10) business days from the date negotiations began, then without the necessity of further agreement of Claimant or Respondent, the dispute set forth in the Claim Notice shall be submitted to binding arbitration (except for claims arising out of Sections 3 or 7 hereof), initiated by either Claimant or Respondent pursuant to this Section. Such arbitration shall be conducted before a panel of three (3) arbitrators in Tampa, Florida, in accordance with the National Rules for the Resolution of employment Disputes of the american arbitration association (“aaa”) then in effect provided that the parties may agree to use arbitrators other than those provided by the aaa. The arbitrators shall not have the authority to add to, detract from, or modify any provision hereof nor to award punitive damages to any injured party. The arbitrators shall have the authority to order back-pay, severance compensation, vesting of options (or cash compensation in lieu of vesting of options), vesting and the removal of restrictions on restricted stock and/or restricted stock units (or comparable forms of equity compensation, if any) that, as of the effective date of the termination of executive, are not then subject to any performance conditions for vesting, reimbursement of costs, including those incurred to enforce this agreement, and interest thereon in the event the arbitrators determine that executive was terminated without disability or without Good Cause, as defined in Sections 4(b) and 4(c) hereof, respectively, or that the Company has otherwise materially breached this agreement. a decision by a majority of the arbitration panel shall be final and binding. Judgment may be entered on the arbitrators’ award in any court having jurisdiction. The direct expense of any mediation or arbitration proceeding and, to the extent executive prevails, all reasonable legal fees shall be borne by the Company. 15. NO PARTICIPATION IN SEVERANCE PLANS . except as contemplated by this agreement, executive acknowledges and agrees that the compensation and other benefits set forth in this agreement are and shall be in lieu of any compensation or other benefits that may otherwise be payable to or on behalf of executive pursuant to the terms of any severance pay arrangement of the Company or any affiliate thereof, or any other similar arrangement of the Company or any affiliates thereof providing for benefits upon involuntary termination of employment. 16. GOVERNING LAW . This agreement shall in all respects be construed according to the laws of the state of Florida, notwithstanding the conflict of laws provisions of such state. 14 17. COUNTERPARTS; FACSIMILE . This agreement may be executed by facsimile and in two (2) or more counterparts, each of which shall be deemed an original and all of which together shall constitute but one and the same instrument. 18. SECTION 409A . (a) This agreement is intended to satisfy the requirements of Section 409a of the Code with respect to amounts subject thereto, and shall be interpreted and construed consistent with such intent; provided that, notwithstanding the other provisions of this provision and the provision entitled, “Specified employee” above, with respect to any right to a payment or benefit hereunder (or portion thereof) that does not otherwise provide for a “deferral of compensation” within the meaning of Section 409a of the Code, it is the intent of the parties that such payment or benefit will not so provide. Furthermore, if either party notifies the other in writing that, based on the advice of legal counsel, one or more of the provisions of this agreement contravenes any regulations or Treasury guidance promulgated under Section 409a of the Code or causes any amounts to be subject to interest or penalties under Section 409a of the Code, the parties shall promptly and reasonably consult with each other (and with their legal counsel), and shall use their reasonable best efforts, to reform the provisions hereof to (a) maintain to the maximum extent practicable the original intent of the applicable provisions without violating the provisions of Section 409a of the Code or increasing the costs to the Company of providing the applicable benefit or payment and (b) to the extent practicable, to avoid the imposition of any tax, interest or other penalties under Section 409a of the Code upon executive or the Company. (b) This agreement is intended, to the maximum extent possible, to meet the short term deferral exception and/or be a separation pay plan due to an involuntary separation from service under Treasury Regulation Sections 1.409a- 1(b)(4) and 1.409a-1(b)(9)(iii) and therefore exempt from Code Section 409a. ” IN WITNESS WHEREOF , the parties hereto have executed this agreement as of the day and year first above written. MaRiNeMaX, iNC. by: William brett McGill Title: President, CeO eXeCUTiVe: Michael H. McLamb 15 EMPLOYMENT AGREEMENT Exhibit 10.3(j) THiS eMPLOYMeNT aGReeMeNT (this “agreement”), by and between MarineMax, inc., a Florida corporation (the “Company”), and William brett McGill (“executive”) is entered into and effective as of the _____ day of November, 2018. RECITALS a. The Company is engaged primarily in the business of selling, renting, leasing, and servicing boating, nautical, and other related lifestyle entertainment products and services, and related activities and executive has experience in such business. b. executive served as President and Chief Operating Officer of the Company. The Company desires to assure itself of the continued availability of executive to serve as President and Chief executive Officer. C. The Company desires to employ executive, and executive desires to accept such employment, pursuant to the terms and conditions set forth in this agreement. NOW, THeReFORe, in consideration of the mutual promises, terms, covenants, and conditions set forth herein and the AGREEMENT performance of each, it is hereby agreed as follows: 1. EMPLOYMENT AND DUTIES . (a) eMPLOYMeNT . The Company hereby employs executive, and executive hereby agrees to act, as President and Chief executive Officer of the Company. as such, executive shall have responsibilities, duties, and authority reasonably accorded to, expected of, and consistent with executive’s position and executive shall report directly to the board of Directors of the Company (the “board”). executive hereby accepts this employment upon the terms and conditions herein contained and, subject to Section l(c) hereof, agrees to devote his best efforts and substantially all of his business time and attention to promote and further the business of the Company. (b) POLiCieS . executive shall faithfully adhere to, execute, and fulfill all lawful policies established by the Company. (c) OTHeR aCTiViTieS . executive shall not, during the period of his employment hereunder (the “Term”), be engaged in any other business activity pursued for gain, profit, or other pecuniary advantage if such activity interferes in any material respect with executive’s duties and responsibilities hereunder. The foregoing limitations shall not be construed as prohibiting executive from (i) making personal investments in such form or manner as will neither require his services in the operation or affairs of the companies or enterprises in which such investments are made nor subject executive to any conflict of interest with respect to his duties to the Company, (ii) serving on any civic or charitable boards or committees, (iii) delivering lectures or fulfilling speaking engagements, or (iv) serving, with the written approval of the board, as a director of one or more corporations, in each case so long as any such activities do not significantly interfere with the performance of executive’s responsibilities under this agreement. in addition, executive shall comply with the restrictions listed in Section 3 of this agreement. (d) PLaCe OF PeRFORMaNCe . executive shall not be required by the Company or in the performance of his duties to relocate his primary residence. 2. COMPENSATION . For all services rendered by executive, the Company shall compensate executive as follows: (a) baSe SaLaRY . effective the date hereof, the base salary payable to executive shall be Five Hundred and Twenty Thousand Dollars ($520,000) per year, payable on a regular basis in accordance with the Company’s standard payroll procedures, but not less than monthly. On at least an annual basis, the board or a committee of the board shall review executive’s performance and may make increases to such base salary if, in its sole discretion, any such increase is warranted. (b) bONUS OR OTHeR iNCeNTiVe COMPeNSaTiON . executive shall be eligible to receive a bonus or other incentive compensation as may be determined by the board or a committee of the board based upon such factors as the board or such committee, in its sole discretion, may deem relevant, including, without limitation, the performance of executive and the Company; provided, however, that the board or a committee of the board shall establish for each fiscal year of the Company a bonus program in which executive shall be entitled to participate, which provides executive with a reasonable opportunity, based on the performance of the Company, the past compensation practices of the Company and executive’s then base salary, to maintain or increase executive’s total compensation compared to the previous fiscal year. (c) eXeCUTiVe PeRQUiSiTeS, beNeFiTS, aND OTHeR COMPeNSaTiON . executive shall be entitled to receive additional benefits and compensation from the Company in such form and to such extent as specified below: ReiMbURSeMeNT FOR eXPeNSeS . The Company shall provide reimbursement to executive for business travel and other out-of-pocket expenses reasonably incurred by executive in the performance of his services under this agreement. all reimbursable expenses shall be appropriately documented in reasonable detail by executive upon submission of any request for reimbursement and shall be in a format and manner consistent with the Company’s expense reporting policy. Such expenses shall be submitted to the Company’s Chief Financial Officer for approval or to such other officer of the Company as the board may from time to time direct. except as expressly provided otherwise herein, no reimbursement payable to executive pursuant to any provisions of this agreement or pursuant to any plan or arrangement of the Company shall be paid later than the last day of the calendar year following the calendar year in which the related expense was incurred, and no such reimbursement during any calendar year shall affect the amounts eligible for reimbursement in any other calendar year, except, in each case, to the extent that the right to reimbursement does not provide a for “deferral of compensation” within the meaning of Section 409a. VaCaTiON . Paid vacation in accordance with the applicable policy of the Company as in effect from time to time. executive shall be entitled to no less than four (4) weeks paid vacation per year; provided, however, executive may carryover up to, but not more than, two weeks of unused vacation time from one calendar year to the next succeeding calendar year. The maximum amount of vacation that may be accrued for any calendar year is six (6) weeks of paid vacation. No additional paid vacation shall accrue above the six (6) week limit. OTHeR eXeCUTiVe PeRQUiSiTeS appropriate for executive by the board or a committee of the board and participation in all other Company-wide employee benefits . The Company shall provide executive with other executive perquisites as may be made available to or deemed 2 (including group insurance, pension, retirement, and other plans and programs) as are available to the Company ’ s executive officers from time to time. 3. NON-COMPETITION AGREEMENT . (a) NON-COMPeTiTiON . executive shall not, during the period of his employment by or with the Company, and during the Noncompete Period (as hereinafter defined) for any reason whatsoever, directly or indirectly, for himself or on behalf of or in conjunction with any other person: OTHeR aCTiViTieS contractor, consultant, advisor, or sales representative, in any Competitive business within the Restricted Territory; . engage, as an officer, director, shareholder, owner, principal, partner, lender, joint venturer, employee, independent SOLiCiTaTiON OF eMPLOYeeS . Call upon any person who is, at that time, within the Restricted Territory, an employee of the Company or any of its subsidiaries, in a managerial capacity for the purpose or with the intent of enticing such employee away from or out of the employ of the Company or any of its subsidiaries; SOLiCiTaTiON OF CUSTOMeRS . Call upon any person or entity that is, at that time, or that has been, within one (1) year prior to that time, a customer of the Company or any of its subsidiaries, within the Restricted Territory for the purpose of soliciting or selling products or services in direct competition with the Company or any of its subsidiaries within the Restricted Territory; SOLiCiTaTiON OF aCQUiSiTiON CaNDiDaTeS . Call upon any prospective acquisition candidate (that is, a business that the Company may have an interest in acquiring), on executive’s own behalf or on behalf of any person, which candidate was, to executive’s knowledge after due inquiry, either called upon by the Company, or for which the Company made an acquisition analysis, for the purpose of acquiring such candidate. (b) CeRTaiN DeFiNiTiONS . as used in this agreement, the following terms shall have the meanings ascribed to them: COMPeTiTiVe bUSiNeSS shall mean any Person that sells, rents, brokers, leases, stores, repairs, restores, or services recreational boats or other boating products or provides services relating to recreational boats or other boating products or any other business in which the Company is engaged; PeRSON shall mean any individual, corporation, limited liability company, partnership, firm, or other business of whatever nature; ReSTRiCTeD TeRRiTORY shall mean any state or other political jurisdiction in which, or any location within two hundred (200) miles of which, the Company or any subsidiary of the Company maintains any facilities; sells, rents, brokers, leases, stores, repairs, restores, or services recreational boats or other boating products; or provides services relating to recreational boats or other boating products; and SUbSiDiaRY and any other business organization in which the Company holds at least a fifty percent (50%) equity interest. shall mean the Company’s consolidated subsidiaries, including corporations, partnerships, limited liability companies, 3 NONCOMPETE PERIOD shall mean the longer of (i) the two (2) year period immediately following the termination of executive’s employment with the Company or (ii) the time during which severance payments are being made by the Company to executive in accordance with this agreement; provided, however, that if the executive’s employment is terminated by the Company without Good Cause, executive terminates his employment with Good Reason or, executive terminates his employment after a Change in Control pursuant to Section 4(b)(vi)(b), then the Noncompete Period shall be for the one (1) year period immediately following the termination of his employment with the Company. (c) eNFORCeMeNT . because of the difficulty of measuring economic losses to the Company as a result of a breach of the foregoing covenants, and because of the immediate and irreparable damage that could be caused to the Company for which it would have no other adequate remedy, executive agrees that the foregoing covenants may be enforced by the Company in the event of breach by him, by injunctions and restraining orders. (d) ReaSONabLe ReSTRaiNT . it is agreed by the parties that the foregoing covenants in this Section 3 impose a reasonable restraint on executive in light of the activities and business of the Company (including the Company’s subsidiaries) on the date of the execution of this agreement and the current plans of the Company (including the Company’s subsidiaries); but it is also the intent of the Company and executive that such covenants be construed and enforced in accordance with the changing activities, business, and locations of the Company (including the Company’s subsidiaries) throughout the term of this covenant, whether before or after the date of termination of the employment of executive. For example, if, during the term of this agreement, the Company (including the Company’s subsidiaries) engages in new and different activities, enters a new business, or establishes new locations for its current activities or business in addition to or other than the activities or business enumerated above or the locations currently established therefor, then executive will be precluded from soliciting the customers or employees of such new activities or business or from such new location and from directly competing with such new business within the Restricted Territory through the term of these covenants. (e) OTHeR aCTiViTieS . it is further agreed by the parties that, in the event that executive shall cease to be employed hereunder and enters into a business or pursues other activities not in competition with the Company (including the Company’s subsidiaries), or similar activities or business in locations, the operation of which, under such circumstances, does not violate this Section 3, and in any event such new business, activities, or location are not in violation of this Section 3 or of executive’s obligations under this Section 3, if any, executive shall not be chargeable with a violation of this Section 3 if the Company (including the Company’s subsidiaries) shall thereafter enter the same, similar, or a competitive (i) business, (ii) course of activities, or (iii) location, as applicable. (f) SePaRaTe COVeNaNTS . The covenants in this Section 3 are severable and separate, and the unenforceability of any specific covenant shall not affect the provisions of any other covenant. Moreover, in the event any court of competent jurisdiction shall determine that the scope, time, or territorial restrictions set forth are unreasonable, then it is the intention of the parties that such restrictions be enforced to the fullest extent that the court deems reasonable, and the agreement shall thereby be reformed. (g) iNDePeNDeNT aGReeMeNT . all of the covenants in this Section 3 shall be construed as an agreement independent of any other provision in this agreement, and the existence of any claim or cause of action of executive against the Company, whether predicated on this agreement or otherwise, shall not constitute a defense to the enforcement by the Company of such covenants; except as provided in Section 4(d) below. it is specifically agreed that the Noncompete Period following termination of employment as defined in this Section 3, during which the agreements and covenants of 4 executive made in this Section 3 shall be effective, shall be computed by excluding from such computation any time during which executive is in violation of any provision of this Section 3. 4. AT-WILL EMPLOYMENT; TERMINATION; RIGHTS ON TERMINATION . (a) aT-WiLL eMPLOYMeNT . executive’s employment with the Company shall be at-will. The executive may terminate his employment at any time for any reason (subject to the notice requirements provided in this agreement) and the Company may terminate executive’s employment with the Company at any time and for any reason (subject to the severance provisions of this agreement). This at-will employment relationship cannot be changed except by written authorization by the board of Directors of the Company. (b) TeRMiNaTiON . executive’s employment under this agreement may be terminated in any one of the followings ways: DeaTH OF eXeCUTiVe . The employment of executive shall terminate immediately upon executive’s death provided that the Company shall pay to the estate of executive an amount equal to $1,000,000. in the event of such termination, all options to purchase Common Stock of the Company held by executive shall thereupon vest and shall be exercisable for the maximum period of time, up to their full term, that will not cause executive with respect to such options to be subject to any excise tax under Section 409a of the internal Revenue Code of 1986, as amended (“Section 409a”) notwithstanding the termination of employment. all restricted stock and/or restricted stock units (or comparable forms of equity compensation, if any) held by the executive which, as of the date of the death of executive, are not then subject to any performance conditions for vesting, shall be fully vested and shall not be subject to any risk of forfeiture or repurchase as of the date of executive’s death. The payment described in this Section, if payable, will be paid within ten (10) days after the executive’s death. DiSabiLiTY OF eXeCUTiVe . The Company may terminate executive’s employment in the event the executive is disabled. The executive shall be disabled if the executive is unable to engage in any substantial gainful activity by reason of a medically determined physical or mental impairment expected to last at least twelve consecutive months or result in death, or if applicable, for at least three months the executive is receiving income replacement benefits under a Company sponsored plan by reason of any medically determined physical or mental impairment expected to last at least twelve consecutive months or result in death, or if the executive is determined to be disabled under a Company disability plan with a similar definition of disability. in the event executive’s employment under this agreement is terminated as a result of executive’s disability, executive shall receive from the Company, in a lump-sum payment due within ten (10) days of the effective date of termination, an amount equal to the average of the base salary and bonus paid to executive for the two (2) prior full fiscal years, for one (1) year. in the event of such termination, all options to purchase Common Stock of the Company held by executive shall thereupon vest and shall be exercisable for the maximum period of time, up to their full term, that will not cause executive with respect to such options to be subject to any excise tax under Section 409a notwithstanding the termination of employment. all restricted stock and/or restricted stock units (or comparable forms of equity compensation, if any) held by the executive which, as of the date of the disability of executive, are not then subject to any performance conditions for vesting, shall be fully vested and shall not be subject to any risk of forfeiture or repurchase as of the date of executive’s termination due to disability (as defined in this paragraph). TeRMiNaTiON bY THe COMPaNY FOR GOOD CaUSe Cause,” which shall mean any one or more of the following: (a) executive’s willful and material breach . The Company may terminate executive’s employment upon ten (10) days prior written notice to executive for “Good 5 of this agreement which has not be en cured by the executive within thirty (30) days following written notice of such breach from the Company; (b) executive ’ s gross negligence in the performance or intentional nonperformance (continuing for thirty (30) days after receipt of written notice of need to cure) of any of executive ’ s material duties and responsibilities hereunder; (C) executive ’ s willful dishonesty, fraud, or misconduct with respect to the business or affairs of the Company, which materially and adversely affects the operations or reputation of the Company; (D) executive ’ s conviction of a felony crime involving dishonesty or moral turpitude; or (e) a confirmed positive illegal drug test result. in the event of a termination by the Company for Good Cause, executive shall have no right to any severance compensation. TeRMiNaTiON bY THe COMPaNY WiTHOUT GOOD CaUSe OR bY eXeCUTiVe WiTH GOOD ReaSON . The Company may terminate executive’s employment without Good Cause upon the approval of a majority of the members of the board, excluding executive if executive is a member of the board. executive may terminate his employment under this agreement for Good Reason upon thirty (30) days prior notice to the Company. WiTH GOOD ReaSON ReSULT OF TeRMiNaTiON bY THe COMPaNY WiTHOUT GOOD CaUSe OR bY eXeCUTiVe . Should the Company terminate executive’s employment without Good Cause or should executive terminate his employment with Good Reason, the Company shall pay to executive for thirty (30) months after such termination, on such dates as would otherwise be paid by the Company, an amount equal to the average of the base salary and bonus paid to executive for the two (2) prior full fiscal years. The amounts payable under the preceding sentence shall commence on the first payroll date following executive’s “separation from service” from the Company within the meaning of Section 409a of the internal Revenue Code of 1986, as amended (the “Code”), and shall be treated as a series of separate payments under Treasury Regulations Section 1.409a-2(b)(2)(iii). Further, if the Company terminates executive’s employment without Good Cause or executive terminates his employment with Good Reason, (1) all options to purchase Common Stock of the Company held by executive shall vest thereupon and shall be exercisable for the maximum period of time, up to their full term, that will not cause executive with respect to such options to be subject to any excise tax under Section 409a notwithstanding the termination of employment, (2) all restricted stock and/or restricted stock units (or comparable forms of equity compensation, if any) held by executive which, as of the effective date of the termination of executive, are not then subject to any performance conditions for vesting, shall be fully vested and shall not be subject to any risk of forfeiture or repurchase as of the date of termination, (3) all restricted stock and/or restricted stock units (or comparable forms of equity compensation, if any) held by executive which, as of the effective date of the termination of executive, is subject to performance conditions for vesting, shall be fully vested and treated as if the performance conditions for such award had been fully met at target and shall not be subject to any risk of forfeiture or repurchase as of the date of termination, and (4) executive shall be entitled to receive all other unpaid benefits due and owing through executive’s last day of employment. Further, any termination by the Company without Good Cause or by executive for Good Reason shall operate to shorten the Noncompete Period set forth in Section 3 to one (1) year from the date of termination of employment. DeFiNiTiON OF GOOD ReaSON . executive shall have “Good Reason” to terminate employment upon the occurrence of any of the following events, without executive’s written approval: (1) executive suffers a material reduction in authority, responsibilities, or duties as provided herein; (2) executive’s annual base salary for a fiscal year as determined pursuant to Section 2(a) is reduced to a level that is less than ninety percent (90%) of the base salary paid to executive during the prior contract year under this agreement; (3) executive is required to render his or her primary employment services from a location more than 25 miles from the Company’s headquarters at the time executive began his employment with the Company; (4) the Company takes steps to deny 6 executive a reasonable opportunity to maintain executive ’ s total compensation (i.e., base salary plus bonus and any other annual cash incentive compensation) compared to the previous fiscal year (provided total compensation may take into account performance of the Company and the past compensation practices of the Company) or (5) the Company breaches a material provision of this agreement. in order for an event to justify termination for Good Reason, the executive must give written notice to the Company of such event within 9 0 days of its first occurrence and the Company must have 30 days to cure, if possible ReSiGNaTiON bY eXeCUTiVe WiTHOUT GOOD ReaSON . executive may, without cause, and without Good Reason terminate his own employment under this agreement, effective thirty (30) days after written notice is provided to the Company or such earlier time as any such resignation may be accepted by the Company. if executive resigns or otherwise terminates his employment without Good Reason, executive shall receive no severance compensation. CHaNGe iN CONTROL OF THe COMPaNY . POSSibiLiTY OF CHaNGe iN CONTROL . executive understands and acknowledges that the Company may be merged or consolidated with or into another entity and that such entity shall automatically succeed to the rights and obligations of the Company hereunder or that the Company may undergo another type of Change in Control. in the event such a merger or consolidation or other Change in Control is initiated prior to the end of the Term, then the provisions of this Section 4(b)(vi) shall be applicable. TeRMiNaTiON bY eXeCUTiVe . Subject to the exceptions set forth in Section 4(b)(vi)(e), if any Change of Control is initiated during executive’s employment hereunder, executive may, at his sole discretion, elect to terminate his employment under this agreement by providing written notice to the Company at least thirty (30) business days at any time beginning on the effective date of the Change in Control and ending one (1) year after the closing of the transaction giving rise to the Change in Control. in such case, the applicable provisions of Section 4(b)(iv) hereof will apply as though the Company had terminated executive’s employment without Good Cause during the Term; however, under such circumstances, the amount of the severance payments due to executive shall be paid in a lump sum and the Noncompete Period of Section 3 hereof shall be limited to one (1) year from the effective date of termination. if any of the payments or benefits received or to be received by the executive (including, without limitation, any payment or benefits received in connection with a Change in Control or the executive’s termination of employment, whether pursuant to the terms of this agreement or any other plan, arrangement, or agreement, or otherwise) (all such payments collectively referred to herein as the "280G Payments") constitute "parachute payments" within the meaning of Section 280G of the Code and would, but for this Section 4 (b) (vi) (b), be subject to the excise tax imposed under Section 4999 of the Code (the "excise Tax"), then such 280G Payments shall be reduced in a manner determined by the Company (by the minimum possible amounts) that is consistent with the requirements of Section 409a until no amount payable to the executive will be subject to the excise Tax. if two economically equivalent amounts are subject to reduction but are payable at different times, the amounts shall be reduced (but not below zero) on a pro rata basis. eFFeCTiVe DaTe OF CHaNGe iN CONTROL . For purposes of applying Section 4 hereof under the circumstances described in 4(b)(vi)(b) above, the effective date of the Change in Control will be the closing date of the transaction giving rise to the Change in Control and all compensation, reimbursements, and lump-sum payments due executive must be paid in full by the Company following such Change in Control promptly following executive’s election to terminate his employment. 7 DEFINITION OF CHANGE IN CONTROL . a “Change in Control” shall mean the items in (1)-(4) below and a transaction that would be required to be reported in response to item 6(e) of Schedule 14a of Regulation 14a promulgated under the Securities exchange act of 1934 (“exchange act”), as amended, as in effect on the date of this agreement, or if item 6(e) is no longer in effect, any regulations issued by the Securities and exchange Commission pursuant to the exchange act, which serve similar purposes; provided that to constitute a Change in Control the transaction must satisfy the requirements of Treasury Regulation §1.409a-3(i)(5) relating to “change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portion of the assets of a corporation”: TURNOVeR OF bOaRD . The following individuals no longer constitute a majority of the members of the board: (a) the individuals who, as of the date of this agreement, constitute the board (the “Current Directors”); (b) the individuals who thereafter are elected to the board and whose election, or nomination for election, to the board was approved by a vote of at least two-thirds (2/3) of the Current Directors then still in office (such directors becoming “additional Directors” immediately following their election); and (C) the individuals who are elected to the board and whose election, or nomination for election, to the board was approved by a vote of at least two- thirds (2/3) of the Current Directors and additional Directors then still in office (such directors also becoming “additional Directors” immediately following their election); TeNDeR OFFeR the Company, and such offer is consummated for the equity securities of the Company representing thirty percent (30%) or more of the combined voting power of the Company’s then outstanding voting securities; . a tender offer or exchange offer is made where the intent of such offer is to take over control of MeRGeR OR CONSOLiDaTiON . The stockholders of the Company shall approve a merger, consolidation, recapitalization, or reorganization of the Company, a reverse stock split of outstanding voting securities, or consummation of any such transaction if stockholder approval is not obtained, other than any such transaction that would result in at least seventy-five percent (75%) of the total voting power represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by the holders of outstanding voting securities of the Company immediately prior to the transaction, with the voting power of each such continuing holder relative to other such continuing holders not substantially altered in the transaction; or LiQUiDaTiON OR SaLe OF aSSeTS . The stockholders of the Company shall approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or a substantial portion of the Company’s assets to another person or entity, which is not a wholly owned subsidiary of the Company (i.e., fifty percent (50%) or more of the total assets of the Company). eXCePTiONS FROM CHaNGe iN CONTROL . a Change in Control shall not be considered to have taken place for purposes of this Section 4 in the event that both (1) the Change in Control shall have been specifically approved by at least two-thirds (2/3) of the Current and additional Directors (as defined above) and (2) the successor company assumes this agreement and appoints executive to the same position at the successor corporation as executive had with the Company immediately prior to the Change in Control; provided that if the successor corporation has a parent, the parent rather than the successor corporation must appoint executive to the position with the same title and responsibilities as executive had with the Company immediately prior to the Change in Control. Sales of the Company’s Common Stock issued, beneficially owned or controlled by the Company shall not be considered in determining whether a Change in Control has occurred. 8 NOTiFiCaTiON . executive shall be notified in writing by the Company at any time that the Company anticipates that a Change in Control may take place. SPeCiFieD eMPLOYee . Notwithstanding any provision of this agreement to the contrary, if executive is a “specified employee” as defined in Section 409a of the Code, executive shall not be entitled to any payments or benefits the right to which provides for a “deferral of compensation” within the meaning of Section 409a, and which payment or provision is triggered by executive’s termination of employment (whether such payments or benefits are provided to executive under this agreement or under any other plan, program or arrangement of the Company), until the earlier of (i) the date which is the first business day following the six-month anniversary of executive’s “separation from service” (within the meaning of Section 409a of the Code) for any reason other than death or (ii) executive’s date of death, and such payments or benefits that, if not for the six-month delay described herein, would be due and payable prior to such date shall be made or provided to executive on such date. The Company shall make the determination as to whether executive is a “specified employee” in good faith in accordance with its general procedures adopted in accordance with Section 409a of the Code and, at the time of the executive’s “separation of service” will notify the executive whether or not he is a “specified employee.” (c) PaYMeNTS TO TeRMiNaTiON DaTe . Upon termination of executive’s employment under this agreement for any reason provided above, executive shall be entitled to receive all compensation earned and all benefits and reimbursements due through the effective date of termination. additional compensation subsequent to termination, if any, will be due and payable to executive only to the extent and in the manner expressly provided above. all other rights and obligations of the Company and executive under this agreement shall cease as of the effective date of termination, except that the Company’s obligations under Section 8 (relating to indemnification of executive) and executive’s obligations under Section 3 (relating to non-competition), Section 5 (relating to return of Company property), Section 6 (relating to inventions), Section 7 (relating to trade secrets), and Section 9 (relating to prior agreements) shall survive such termination in accordance with their terms. (d) FaiLURe TO PaY eXeCUTiVe . if termination of executive’s employment arises out of the Company’s failure to pay executive on a timely basis the amounts to which he is entitled under this agreement or as a result of any other breach of this agreement by the Company, as determined by a court of competent jurisdiction or pursuant to the provisions of Section 14, the Company shall pay all amounts and damages to which executive may be entitled as a result of such breach, including interest thereon and all reasonable legal fees and expenses and other costs incurred by executive to enforce his rights hereunder. Further, none of the provisions of Section 3 (relating to non-competition) shall apply in the event executive’s employment under this agreement is terminated as a result of a breach by the Company. (e) CONDiTiONS PReCeDeNT FOR PaYMeNT OF SeVeRaNCe . in consideration for Company’s obligations to make any payments to executive pursuant to Section 4, upon termination of executive’s employment with Company for any reason other than executive’s death, executive shall sign and not revoke a release in a form satisfactory to the Company (the “Release”). Company shall present the Release to executive within ten (10) days of termination, and executive shall have up to forty-five (45) days to consider whether to sign the Release; in the event executive executes the Release, executive shall have an additional eight (8) calendar days in which to expressly revoke executive’s execution of the Release in writing. in the event that executive fails to execute the Release within the forty-five (45) days following termination, or in the event executive formally revokes the executive’s Release within eight (8) calendar days of his signing of the Release, then executive shall not be entitled to any payments or 9 benefits under Section 4 of this agreement. The Company shall make any payments to executive in accordance with the terms of Section 4 prior to executive’s failure to execute the Release within forty-five (45) days or prior to his revocation; provided that if executive does not sign the Release or if executive revokes the Release during any statutory revocation period, executive shall immediately reimburse Company for any and all such payment s. Upon executive’s termination of employment for any reason other than executive’s death, executive, unless otherwise requested to continue by the Company’s board of directors, shall resign from the board of Directors of the Company and of any subsidiaries of the Company on which he sits as of the date of the termination of his employment. (f) DeLaY iN SeVeRaNCe PaYMeNTS . To the extent required under Section 409a, any severance payments due under this Section 4 shall be delayed until the first date such payment may be made in compliance with Section 409a(a)(2)(b). 5. RETURN OF COMPANY PROPERTY . all records, designs, patents, business plans, financial statements, manuals, memoranda, lists, and other property delivered to or compiled by executive by or on behalf of the Company (or its subsidiaries) or its representatives, vendors, or customers that pertain to the business of the Company (or its subsidiaries) shall be and remain the property of the Company and be subject at all times to its discretion and control. Likewise, all correspondence, reports, records, charts, advertising materials, and other similar data pertaining to the business, activities, or future plans of the Company (or its subsidiaries) that is collected by executive shall be delivered promptly to the Company without request by it upon termination of executive’s employment. 6. INVENTIONS . executive shall disclose promptly to the Company any and all significant conceptions and ideas for inventions, improvements, and valuable discoveries, whether patentable or not, which are conceived or made by executive, solely or jointly with another, during the period of employment or within one (1) year thereafter, and which are directly related to the business or activities of the Company (or its subsidiaries) and which executive conceives as a result of his employment by the Company. executive hereby assigns and agrees to assign all his interests therein to the Company or its nominee. Whenever requested to do so by the Company, executive shall execute any and all applications, assignments, and other instruments that the Company shall deem necessary to apply for and obtain Letters Patent of the United States or any foreign country or to otherwise protect the Company’s interest therein. 7. TRADE SECRETS . executive agrees that he will not, during or after the period of employment under this agreement, disclose the specific terms of the Company’s relationships or agreements with its respective significant vendors or customers, or any other significant and material trade secret of the Company, whether in existence or proposed, to any person, firm, partnership, corporation, or business for any reason or purpose whatsoever. 8. INDEMNIFICATION . in the event executive is made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (other than an action by the Company against executive), by reason of the fact that he is or was performing services under this agreement, then the Company shall indemnify executive against all expenses (including attorneys’ fees), judgments, fines, and amounts paid in settlement, as actually and reasonably incurred by executive in connection therewith to the maximum extent permitted by applicable law; provided, however, the executive must deliver a written undertaking to the Company that if it is subsequently determined by a court of law in a final, non-appealable judgment, that the executive was not entitled to indemnification under applicable law, then the executive will repay all amounts. The advancement of expenses shall be mandatory. in the event that both executive and the Company are made a party to the same third-party action, complaint, suit, or proceeding, the Company agrees to engage competent legal 10 representation, and executive agrees to use the same representation, provided that if counsel selected by the Company shall have a conflict of interest that prevents such counsel from representing executive, executive may engage separate counsel and the Company shall pay all attorneys ’ fees of such separate counsel. Further, while executive is expected at all times to use his best efforts to faithfully discharge his duties under this agreement, executive cannot be held liable to the Company for errors or omissions made in good faith if executive has not exhibited gross, willful, and wanton negligence and misconduct or performed criminal and fraudulent acts that materially damage the business of the Company. Notwithstanding this Section 8, the provision of any written indemnification agreement applicable to the directors or officers of the Company to which executive shall be a party shall apply rather than this Section 8 to the extent inconsistent with this Section 8. 9. NO PRIOR AGREEMENTS . executive hereby represents and warrants to the Company that the execution of this agreement by executive and his employment by the Company and the performance of his duties hereunder will not violate or be a breach of any agreement with a former employer, client, or any other person or entity. Further, executive agrees to indemnify the Company for any claim, including, but not limited to, attorneys’ fees and expenses of investigation, by any such third party that such third party may now have or may hereafter come to have against the Company based upon or arising out of any non-competition, invention, or secrecy agreement between executive and such third party that was in existence as of the date of this agreement. 10. ASSIGNMENT; BINDING EFFECT . executive understands that he is being employed by the Company on the basis of his personal qualifications, experience, and skills. executive agrees, therefore, he cannot assign all or any portion of his performance under this agreement. Subject to the preceding two (2) sentences and the express provisions of Section 11 below, this agreement shall be binding upon, inure to the benefit of and be enforceable by the parties hereto and their respective heirs, legal representatives, successors, and assigns. 11. COMPLETE AGREEMENT . This agreement is not a promise of future employment. executive has no oral representations, understandings, or agreements with the Company or any of its officers, directors, or representatives covering the same subject matter as this agreement. This written agreement is the final, complete, and exclusive statement and expression of the agreement between the Company and executive and of all the terms of this agreement, and it cannot be varied, contradicted, or supplemented by evidence of any prior or contemporaneous oral or written agreements. This written agreement may not be later modified except by a further writing signed by a duly authorized officer of the Company and executive, and no term of this agreement may be waived except by writing signed by the party waiving the benefit of such term. This agreement hereby supersedes any other employment agreements or understandings, written or oral, between the Company and executive. 12. NOTICE . Whenever any notice is required hereunder, it shall be given in writing addressed as follows: To the Company: MarineMax, inc. With a copy to: Holland & Knight LLP 100 North Tampa Street 2600 McCormick Drive, Suite 200 Clearwater, Florida 33759 attention: executive Chairman and Lead ind. Director Suite 4100 Tampa, Florida 33602 attention: Robert J. Grammig, esq. 11 To executive: Mr. William brett McGill 2600 McCormick Drive, Suite 200 Clearwater, Florida 33759 Notice shall be deemed given and effective when hand delivered or the first business day after being deposited with a reputable, nationally recognized overnight delivery service or when actually received. either party may change the address for notice by notifying the other party of such change in accordance with this Section 12. 13. SEVERABILITY; HEADINGS . if any portion of this agreement is held invalid or inoperative, the other portions of this agreement shall be deemed valid and operative and, so far as is reasonable and possible, effect shall be given to the intent manifested by the portion held invalid or inoperative. The Section headings herein are for reference purposes only and are not intended in any way to describe, interpret, define or limit the extent or intent of the agreement or of any part hereof. 14. MEDIATION ARBITRATION . all disputes arising out of this agreement shall be resolved as set forth in this Section 14. if any party hereto desires to make any claim arising out of this agreement (“Claimant”), then such party shall first deliver to the other party (“Respondent”) written notice (“Claim Notice”) of Claimant’s intent to make such claim explaining Claimant’s reasons for such claim in sufficient detail for Respondent to respond. Respondent shall have ten (10) business days from the date the Claim Notice was given to Respondent to object in writing to the claim (“Notice of Objection”), or otherwise cure any breach hereof alleged in the Claim Notice. any Notice of Objection shall specify with particularity the reasons for such objection. Following receipt of the Notice of Objection, if any, Claimant and Respondent shall immediately seek to resolve by good faith negotiations the dispute alleged in the Claim Notice, and may at the request of either party, utilize the services of an independent mediator. if Claimant and Respondent are unable to resolve the dispute in writing within ten (10) business days from the date negotiations began, then without the necessity of further agreement of Claimant or Respondent, the dispute set forth in the Claim Notice shall be submitted to binding arbitration (except for claims arising out of Sections 3 or 7 hereof), initiated by either Claimant or Respondent pursuant to this Section. Such arbitration shall be conducted before a panel of three (3) arbitrators in Tampa, Florida, in accordance with the National Rules for the Resolution of employment Disputes of the american arbitration association (“aaa”) then in effect provided that the parties may agree to use arbitrators other than those provided by the aaa. The arbitrators shall not have the authority to add to, detract from, or modify any provision hereof nor to award punitive damages to any injured party. The arbitrators shall have the authority to order back-pay, severance compensation, vesting of options (or cash compensation in lieu of vesting of options), vesting and the removal of restrictions on restricted stock and/or restricted stock units (or comparable forms of equity compensation, if any) that, as of the effective date of the termination of executive, are not then subject to any performance conditions for vesting, reimbursement of costs, including those incurred to enforce this agreement, and interest thereon in the event the arbitrators determine that executive was terminated without disability or without Good Cause, as defined in Sections 4(b) and 4(c) hereof, respectively, or that the Company has otherwise materially breached this agreement. a decision by a majority of the arbitration panel shall be final and binding. Judgment may be entered on the arbitrators’ award in any court having jurisdiction. The direct expense of any mediation or arbitration proceeding and, to the extent executive prevails, all reasonable legal fees shall be borne by the Company. 15. NO PARTICIPATION IN SEVERANCE PLANS . except as contemplated by this agreement, executive acknowledges and agrees that the compensation and other benefits set forth in this agreement are and shall be in lieu of any compensation or other benefits that may otherwise be payable to or on behalf of executive pursuant to the terms of any severance pay arrangement of the Company or any 12 affiliate thereof, or any other similar arrangement of the Company or any affiliates thereof providing for benefits upon involuntary termination of employment. 16. GOVERNING LAW . This agreement shall in all respects be construed according to the laws of the state of Florida, notwithstanding the conflict of laws provisions of such state. 17. COUNTERPARTS; FACSIMILE . This agreement may be executed by facsimile and in two (2) or more counterparts, each of which shall be deemed an original and all of which together shall constitute but one and the same instrument. 18. SECTION 409A . (a) This agreement is intended to satisfy the requirements of Section 409a of the Code with respect to amounts subject thereto, and shall be interpreted and construed consistent with such intent; provided that, notwithstanding the other provisions of this provision and the provision entitled, “Specified employee” above, with respect to any right to a payment or benefit hereunder (or portion thereof) that does not otherwise provide for a “deferral of compensation” within the meaning of Section 409a of the Code, it is the intent of the parties that such payment or benefit will not so provide. Furthermore, if either party notifies the other in writing that, based on the advice of legal counsel, one or more of the provisions of this agreement contravenes any regulations or Treasury guidance promulgated under Section 409a of the Code or causes any amounts to be subject to interest or penalties under Section 409a of the Code, the parties shall promptly and reasonably consult with each other (and with their legal counsel), and shall use their reasonable best efforts, to reform the provisions hereof to (a) maintain to the maximum extent practicable the original intent of the applicable provisions without violating the provisions of Section 409a of the Code or increasing the costs to the Company of providing the applicable benefit or payment and (b) to the extent practicable, to avoid the imposition of any tax, interest or other penalties under Section 409a of the Code upon executive or the Company. (b) This agreement is intended, to the maximum extent possible, to meet the short term deferral exception and/or be a separation pay plan due to an involuntary separation from service under Treasury Regulation Sections 1.409a-1(b)(4) and 1.409a-1(b)(9)(iii) and therefore exempt from Code Section 409a. ” iN WiTNeSS WHeReOF, the parties hereto have executed this agreement as of the day and year first above written. MaRiNeMaX, iNC. by: William H. McGill, Jr. Title: executive Chairman eXeCUTiVe: William brett McGill 13 Exhibit 10.5 MarineMax, Inc. 2008 Employee Stock Purchase Plan ARTICLE I PURPOSE 1.1 Name. This Stock Purchase Plan shall be known as the MarineMax 2008 employee Stock Purchase Plan (the “Plan”). 1.2 Purpose. The Plan is intended to provide a method whereby employees of MarineMax, inc., a Delaware corporation (the “Company”), and one or more of its Subsidiary Corporations will have an opportunity to acquire a proprietary interest in the Company through the purchase of shares of the Common Stock of the Company. 1.3 Qualification. it is the intention of the Company to have the Plan qualify as an “employee stock purchase plan” under Section 423 of the Code. The provisions of the Plan shall be construed so as to extend and limit participation in a manner consistent with the requirements of that section of the Code. 2.1 Base Pay. “base Pay” shall mean all annual cash compensation received by an employee. if any Offering is a six-month Offering, the base Pay shall be divided by one-half. ARTICLE II DEFINITIONS 2.2 Code. “Code” shall mean the internal Revenue Code, as amended. 2.3 Closing Price. “Closing Price” shall have the meaning set forth in Section 6.2. 2.4 Committee. “Committee” shall have the meaning set forth in Section 11.1. 2.5 Employee. “employee” shall mean any person who is customarily employed on a full-time or part-time basis by the Company and is regularly scheduled to work more than 20 hours per week. 2.6 Offering. “Offering” shall have the meaning set forth in Section 4.1. 2.7 Offering Commencement Date. “Offering Commencement Date” shall have the meaning set forth in Section 4.1. 2.8 Offering Termination Date. “Offering Termination Date” shall have the meaning set forth in Section 4.1. 2.9 Option. “Option” shall have the meaning set forth in Section 6.1. 2.10 Option Price. “Option Price” shall have the meaning set forth in Section 6.2. 2.11 Participating Company. “Participating Company” shall mean the Company and such Subsidiary Corporations as may be designated from time to time by the board of Directors of the Company. 2.12 Participant. “Participant” shall have the meaning set forth in Section 3.4. 2.13 Participation Amount. “Participation amount” shall have the meaning set forth in Section 5.1. 2.14 Stock. “Stock” shall mean the Common Stock of the Company, par value one-tenth of one cent ($.001 per share). 2.15 Subsidiary Corporation. “Subsidiary Corporation” shall mean any present or future corporation which would be a “subsidiary corporation” of the Company, as that term is defined in Code Section 424. ARTICLE III ELIGIBILITY AND PARTICIPATION 3.1 Initial Eligibility. any employee who shall have completed one year of continuous employment with a Participating Company and is employed by a Participating Company on the date such employee’s participation in the Plan is to become effective shall be eligible to participate in Offerings under the Plan that commence on or after such one-year employment period has concluded. any corporation that becomes a Subsidiary Corporation after the initial Offering Commencement Date shall become a Participating Company only upon the decision of the board of Directors of the Company to designate such Subsidiary Corporation as a Participating Company and to extend the benefits of the Plan to its eligible employees. 3.2 Leave of Absence. For purposes of participation in the Plan, a person on leave of absence shall be deemed to be an employee for the first 90 days of such leave of absence and such employee’s employment shall be deemed to have terminated at the close of business on the 90th day of such leave of absence unless such employee shall have returned to regular full-time or part-time employment (as the case may be) prior to the close of business on such 90th day. Termination by a Participating Company of any employee’s leave of absence, other than termination of such leave of absence on return to full time or part time employment, shall terminate an employee’s employment for all purposes of the Plan and shall terminate such employee’s participation in the Plan and right to exercise any Option. 3.3 Restrictions on Participation. Notwithstanding any provision of the Plan to the contrary, no employee shall be granted an Option to participate in the Plan: (a) if, immediately after the grant, such employee would own Stock, and/or hold outstanding Options to purchase Stock, possessing five percent or more of the total combined voting power or value of all classes of Stock of the Company (for purposes of this paragraph, the rules of Section 424(d) of the Code shall apply in determining Stock ownership of any employee); or (b) which permits such employee’s rights to purchase Stock under all employee stock purchase plans of the Company and all Participating Companies to accrue at a rate that exceeds $25,000 in fair market value of the Stock (determined at the time such Option is granted) for each calendar year in which such Option is outstanding. 3.4 Commencement of Participation. an eligible employee may become a participant (“Participant”) by completing the enrollment forms prescribed by the Committee (including a purchase agreement and a payroll deduction authorization) and filing such forms with the designated office of the Company prior to the Offering Commencement Date for the next scheduled Offering. Payroll deductions for a Participant shall commence on the next scheduled Offering Commencement Date when such Participant’s authorization for a payroll deduction becomes effective and shall continue in effect for the term of this Plan, except to the extent such payroll deduction is changed in accordance with this Section 3.4 or terminated in accordance with article 8. Subject to Section 5.4 , a Participant may, at any time, increase or decrease the rate of, or cease, the Participant’s payroll deductions by filing the appropriate form with the designated office of the Company and such change shall become effective as of the next applicable Offering Commencement Date. ARTICLE IV OFFERINGS 4.1 Annual Offerings. The Plan will be implemented by up to twenty annual offerings (“Offerings”) of the Company’s Stock beginning on the 1st day of October in each of the years 2008 through 2027, with each Offering terminating on September 30 of the next year; provided, however, that each annual Offering may, in the discretion of the Committee exercised prior to the commencement thereof, be divided into two six-month Offerings commencing respectively, on October 1 and april 1, and terminating six months thereafter. as used in the Plan, “Offering Commencement Date” means the October 1 or april 1, as the case may be, on which the particular Offering begins and “Offering Termination Date” means the March 31 or September 30, as the case may be, on which the particular Offering terminates. any decision of the Committee to adjust the number of shares of Stock in an Offering must be made prior to the Offering Commencement Date of that Offering. ARTICLE V PAYROLL DEDUCTIONS 5.1 Percentage of Participation. at the time an employee files authorization for payroll deductions and becomes a Participant in the Plan, the employee shall elect to have deductions made from the employee’s pay on each payday during the time the employee is a Participant in an Offering. Such deductions shall be an amount equal to the employee’s Participation amount divided by the number of payroll periods occurring during the Offering. an employee’s “Participation amount” shall equal the rate of 1, 2, 3, 4, 5, 6, 7, 8, 9 or 10 percent (as elected by the employee) times such employee’s base Pay in effect at the Offering Commencement Date of such Offering; provided, however, that prior to any Offering Commencement Date, the Committee shall have the discretion to limit deductions to less than 10 percent (but no less than 5 percent) for any Offering. 5.2 Calculation of Base Pay. an employee’s base Pay as of an Offering Commencement Date and whether an employee is “part-time” shall be determined in the discretion of the Committee based on the provisions of this Plan. in calculating an employee’s normal weekly rate of pay under this Section 5.2, retroactive adjustments occurring during an Offering that are retroactive to the last day prior to the Offering Commencement Date of that particular Offering shall be taken into account. in addition, if an employee’s base Pay includes commissions, the Committee may set such employee’s base Pay based upon commission averages and standards as determined in the discretion of the Committee. 5.3 Participant’s Account. all payroll deductions made for a Participant pursuant to this article 5 shall be credited to such Participant’s account under the Plan. a Participant may not make any separate cash payment into such account except when on leave of absence and then only as provided in Section 5.5. 5.4 Changes in Payroll Deductions. a Participant may discontinue participation in the Plan as provided in article 8, but no other change can be made during an Offering and, specifically, a Participant may not alter the amount of such Participant’s payroll deductions for that Offering. 5.5 Leave of Absence. if a Participant goes on a leave of absence, such Participant shall have the right to elect: (a) to withdraw the balance in such Participant’s account pursuant to Section 8.1 hereof, or (b) to discontinue contributions to the Plan but remain a Participant in the Plan, or remain a Participant in the Plan during such leave of absence, authorizing deductions to be made from payments by the Company to the Participant during such leave of absence and undertaking to make cash payments to the Plan at the end of each payroll period to the extent that amounts payable by the Participating Company to such Participant are insufficient to meet such Participant’s authorized Plan deductions. ARTICLE VI GRANTING OF OPTION 6.1 Number of Option Shares. On each Offering Commencement Date, a Participant shall be deemed to have been granted an option (“Option”) to purchase a maximum number of shares of Stock equal to the Participation amount with respect to such Participant, divided by the Option Price, determined as provided in Section 6.2 hereof. 6.2 Option Price. The “Option Price” of Stock for each Offering shall be the lower of (a) 85% of the Closing Price of the Stock on the Offering Commencement Date, or (b) 85% of the Closing Price of the Stock on the Offering Termination Date. The “Closing Price” of the Stock as to a particular day shall be the closing price of the Stock as reported for such day in the Wall Street Journal or in such other source as the Committee deems reliable. if the Stock is not traded on the New York Stock exchange or other principal exchange or market on which it is authorized or listed for trading on the Offering Commencement Date and/or Offering Termination Date, as the case may be, the Closing Price for the Stock as to either of such dates on which such trading did not occur shall be the Closing Price on the nearest prior business day on which trading did occur. ARTICLE VII EXERCISE OF OPTION 7.1 Automatic Exercise. Unless a Participant gives written notice to the Company as hereinafter provided, such Participant’s Option for the purchase of Stock granted under Section 6.1 hereof will be deemed to have been exercised automatically on the Offering Termination Date applicable to such Offering for the purchase of the number of full shares of Stock that the accumulated payroll deductions in such Participant’s account at that time will purchase at the applicable Option Price (but not in excess of the number of shares for which Options have been granted to the employee pursuant to Section 6.1 hereof). 7.2 Fractional Shares. Fractional shares will not be issued under the Plan and any accumulated payroll deductions that would have been used to purchase fractional shares will be, at the option of the Committee, either (a) returned (without interest) to the Participant promptly following the termination of an Offering, or (b) added to the Participation amount for such Participant and held for the purchase of Stock in connection with the next Offering; provided, however, that such amount (without interest) shall be refunded to any Participant who provides the Company with a written request for a refund prior to the use of such amount to purchase Stock at the end of the next Offering. 7.3 Transferability of Option. During a Participant’s lifetime, Options held by such Participant shall be exercisable only by such Participant. 7.4 Delivery of Stock. as promptly as practicable after the Offering Termination Date of each Offering, the Company will deliver to each Participant, as appropriate, the Stock purchased upon exercise of such Participant’s Option. all Stock delivered to each Participant will contain a restriction stating that such Stock is restricted from being transferred for a period of one year from the date of issuance unless the Committee otherwise consents. The Committee may withhold its consent to any such transfer in its absolute and sole discretion. any transfer in violation of the legend placed on each such stock certificate shall be void ab initio. in no event, however, shall Stock be forfeited for violation of the transfer restriction. ARTICLE VIII WITHDRAWAL 8.1 In General. at any time prior to the last five days of an Offering, a Participant may withdraw payroll deductions credited to such Participant’s account under the Plan by giving written notice to the designated office of the Company, which withdrawal notice shall be in form and substance as decided by the Committee. all of the Participant’s payroll deductions credited to the Participant’s account will be paid to the Participant promptly after receipt of such Participant’s notice of withdrawal, and no further payroll deductions will be made from the Participant’s pay during such Offering or during any subsequent Offering unless the Participant re-enrolls as provided in Section 8.2 hereof. The Company may, at its option, treat any attempt by a Participant to borrow on the security of such Participant’s accumulated payroll deductions as an election to withdraw such deductions. 8.2 Effect on Subsequent Participation. an employee’s withdrawal from any Offering will not have any effect upon such employee’s eligibility to participate in any succeeding Offering or in any similar plan that may hereafter be adopted by the Company. in order to be eligible for a subsequent Offering; however, an employee who has withdrawn from an Offering must satisfy the requirements of Section 3.4 hereof prior to the Offering Commencement Date of such subsequent Offering. 8.3 Termination of Employment. Upon termination of a Participant’s employment for any reason, including retirement (but excluding death or permanent disablement while in the employ of a Participating Company or continuation of a leave of absence for a period beyond 90 days), the payroll deductions credited to such Participant’s account will be returned to the Participant, or, in the case of the Participant’s death subsequent to the termination of such Participant’s employment, to the person or persons entitled thereto under Section 12.1 hereof. 8.4 Termination of Employment Due to Death. Upon termination of a Participant’s employment because of death or permanent disablement, the Participant or Participant’s beneficiary (as defined in Section 12.1 hereof) shall have the right to elect, by written notice given to the designated office of the Company prior to the earlier of the Offering Termination Date or the expiration of a period of 60 days commencing with the termination of the Participant’s employment, either: (a) to withdraw all of the payroll deductions credited to the Participant’s account under the Plan; or (b) to exercise the Participant’s Option on the next Offering Termination Date and purchase the number of full shares of Stock that the accumulated payroll deductions in the Participant’s account at the date of the Participant’s cessation of employment will purchase at the applicable Option Price, and any excess in such account will be returned to said beneficiary, without interest. in the event that no such written notice of election shall be duly received by the designated office of the Company, the beneficiary shall automatically be deemed to have elected, pursuant to paragraph (b), to exercise the Participant’s Option. 8.5 Leave of Absence. a Participant on leave of absence shall, subject to the election made by such Participant pursuant to Section 5.5 hereof, continue to be a Participant in the Plan so long as such Participant is on continuous leave of absence. a Participant who has been on leave of absence for more than 90 days and who therefore is not an employee for the purpose of the Plan shall not be entitled to participate in any Offering commencing after the 90th day of such leave of absence. Notwithstanding any other provisions of the Plan, unless a Participant on leave of absence returns to regular full time or part time employment with the Company at the earlier of: (a) the termination of such leave of absence, or (b) three months after the 90th day of such leave of absence, such Participant’s participation in the Plan shall terminate on whichever of such dates first occurs. 9.1 Payment of Interest. No interest will be paid or allowed on any money paid into the Plan or credited to the account of any Participant, including any interest paid on any and all money which is distributed to a Participant or such Participant’s beneficiary pursuant to the provisions of Sections 7.2, 8.1, 8.3, 8.4 and 10.1 hereof. ARTICLE IX INTEREST ARTICLE X STOCK 10.1 Maximum Shares. The maximum number of shares of Stock that shall be issued under the Plan, subject to adjustment upon changes in capitalization of the Company as provided in Section 12.4 hereof, shall be 1,000,000 shares plus the number of shares reserved for issuance under the Company’s 1998 employee Stock Purchase Plan (the “1998 Plan”) that are not purchased as of the expiration date of the 1998 Plan. if the total number of shares for which Options are exercised on any Offering Termination Date in accordance with article 6 exceeds the maximum number of shares for the applicable Offering, the Company shall make a pro rata allocation of the shares available for delivery and distribution in as nearly a uniform manner as shall be practicable and as the Committee shall determine to be equitable, and the balance of payroll deductions credited to the account of each Participant under the Plan shall be returned to such Participant as promptly as possible. 10.2 Participant’s Interest in Option Stock. a Participant will have no interest in Stock covered by such Participant’s Option until such Option has been exercised. 10.3 Issuance of Shares. The shares issued upon the exercise of any such Option may be, as the Committee may from time to time determine: (i) unissued shares of Stock, (ii) shares of Stock now held as treasury shares; or (iii) shares of Stock subsequently acquired by the Company, including, without limitation, shares of Stock purchased in the open market by the Company. 10.4 Registration of Stock. Stock to be delivered to a Participant under the Plan will be registered in the name of the Participant, or, if the Participant so directs by written notice to the designated office of the Company prior to the Offering Termination Date applicable thereto, in the names of the Participant and the Participant’s spouse, in the form and manner permitted by applicable law. 10.5 Restrictions on Exercise. The board of Directors may, in its discretion, require as conditions to the exercise of any Option that the shares of Stock reserved for issuance upon the exercise of the Option shall have been duly listed, upon official notice of issuance, upon the New York Stock exchange or other principal exchange or market on which the Common Stock is authorized or listed for trading, and that either: (a) a Registration Statement under the Securities act of 1933, as amended, with respect to said shares shall be effective; or (b) the Participant shall have represented at the time of purchase, in form and substance satisfactory to the Company, that it is such Participant’s intention to purchase the shares for investment and not for resale or distribution. ARTICLE XI ADMINISTRATION 11.1 Appointment of Committee. The board of Directors shall appoint a committee (“Committee”) to administer the Plan, which shall consist of no fewer than two (2) members of the board of Directors. Members of the Committee who are employees shall be eligible to purchase Stock under the Plan. 11.2 Authority of Committee. Subject to the express provisions of the Plan, the Committee shall have plenary authority in its discretion to interpret and construe any and all provisions of the Plan, to adopt rules and regulations for administering the Plan, and to make all other determinations deemed necessary or advisable for administering the Plan. The Committee’s determination regarding the foregoing matters shall be conclusive. The Committee may delegate its authority as it deems necessary or appropriate. 11.3 Rules Governing Administration of the Committee. The board of Directors may from time to time appoint members of the Committee in substitution for or in addition to members previously appointed and may fill vacancies, however caused, in the Committee. The Committee may select one of its members as its Chairman and shall hold its meetings at such times and places as it shall deem advisable and may hold telephonic meetings. a majority of its members shall constitute a quorum. all determinations of the Committee shall be made by a majority of its members. The Committee may correct any defect or omission or reconcile any inconsistency in the Plan, in the manner and to the extent it shall deem desirable. any decision or determination reduced to writing and signed by a majority of the members of the Committee shall be as fully effective as if it had been made by a majority vote at a meeting duly called and held. The Committee may appoint a secretary and shall make such rules and regulations for the conduct of its business as it shall deem advisable. ARTICLE XII MISCELLANEOUS 12.1 Designation of Beneficiary. a Participant may file a written designation of a beneficiary who is to receive any Stock and/or cash that such Participant would be entitled to under the Plan. Such designation of beneficiary may be changed by the Participant at any time by written notice to the designated office of the Company. Upon the death of a Participant and upon receipt by the Company of proof of identity and existence at the Participant’s death of a beneficiary validly designated by the Participant under the Plan, the Company shall deliver such Stock and/or cash to such beneficiary. in the event of the death of a Participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such Participant’s death, the Company shall deliver such Stock and/or cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such Stock and/or cash to the spouse or to any one or more dependents of the Participant as the Company may designate. No beneficiary shall, prior to the death of the Participant by whom he has been designated, acquire any interest in the Stock or cash credited to the Participant under the Plan. 12.2 Transferability. Neither payroll deductions credited to a Participant’s account nor any rights with regard to an Option granted under the Plan may be assigned, transferred, pledged, or otherwise disposed of in any way by the Participant, other than by will or the laws of descent and distribution. any such attempted assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an election to withdraw funds in accordance with article 8. 12.3 Use of Funds. all payroll deductions received or held by the Company under this Plan may be used by the Company for any corporate purpose and the Company shall not be obligated to segregate such payroll deductions. 12.4 Adjustment Upon Changes in Capitalization. (a) if, while any Options are outstanding, the outstanding shares of Stock of the Company have increased, decreased, changed into, or been exchanged for a different number or type of shares or securities of the Company through reorganization, merger, recapitalization, reclassification, stock split (whether or not effected in the form of a stock dividend), reverse stock split or similar transaction, equitable and proportionate adjustments shall be made by the Committee in the number and/or type of shares of Stock that are subject to purchase under outstanding Options and to the Option Price applicable to such outstanding Options. in addition, in any such event, the number and/or type of shares of Stock which may be offered in the Offerings described in article 4 hereof shall also be proportionately adjusted. (b) Upon the dissolution or liquidation of the Company, or upon a reorganization, merger or consolidation of the Company with one or more corporations as a result of which the Company is not the surviving corporation, or upon a sale of substantially all of the assets or stock of the Company to another corporation, the holder of each Option then outstanding under the Plan will thereafter be entitled to receive at the next Offering Termination Date upon the exercise of such Option for each share as to which such Option shall be exercised, as nearly as reasonably may be determined, the cash, securities and/or property which a holder of one share of Stock was entitled to receive upon and at the time of such transaction. The board of Directors shall take such steps in connection with such transactions as the board shall deem necessary to assure that the provisions of this Section 12.4 shall thereafter be applicable, as nearly as reasonably may be determined, in relation to the said cash, securities and/or property as to which such holder of such Option might thereafter be entitled to receive. 12.5 Amendment and Termination. The board of Directors shall have complete power and authority to terminate or amend the Plan; provided; however, that the board of Directors shall not, without the approval of the stockholders of the Company (a) increase the maximum number of shares that may be issued under the Plan (except pursuant to Section 12.4 hereof); or (b) amend the requirements as to the class of employees eligible to purchase Stock under the Plan. No termination, modification, or amendment of the Plan may, without the consent of a Participant then holding an Option under the Plan to purchase stock, adversely affect the rights of such Participant under such Option. 12.6 No Employment Rights. The Plan does not, directly or indirectly, create in any employee or class of employees any right with respect to continuation of employment by any Participating Company, and it shall not be deemed to interfere in any way with any Participating Company’s right to terminate, or otherwise modify, an employee’s employment at any time. 12.7 Effect of Plan. The provisions of the Plan shall, in accordance with its terms, be binding upon, and inure to the benefit of, all successors of each Participant, including, without limitation, such Participant’s estate and the executors, administrators or trustees thereof, heirs and legatees, and any receiver, trustee in bankruptcy or representative of creditors of such Participant. 12.8 Governing Law. The law of the State of Delaware will govern all matters relating to this Plan except to the extent it is superseded by the laws of the United States. LIST OF SUBSIDIARIES Name MarineMax east, inc. (1) MarineMax Services, inc. (2) MarineMax Northeast, LLC (2) boating Gear Center, LLC (2) US Liquidators, LLC (1) Newcoast Financial Services, LLC (2) My Web Services, LLC (1) MarineMax Charter Services, LLC (2) MarineMax Vacations, LTD (2) Gulfport Marina, LLC (2) (1) Wholly owned subsidiary of MarineMax, inc. (2) Wholly owned subsidiary of MarineMax east, inc. Exhibit 21 State or Jurisdiction of Incorporation or Organization Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware british Virgin islands Delaware Exhibit 23.1 Consent of Independent Registered Public Accounting Firm The board of Directors and Shareholders MarineMax, inc.: We consent to the incorporation by reference in the registration statements (No. 333-221933) on Form S-3 and (No. 333‑141657, 333‑83332, 333‑63307, 333‑156358, 333‑177019, 333‑218563 and 333‑218566) on Form S-8 of MarineMax, inc. and subsidiaries of our reports dated November 29, 2018, with respect to the consolidated balance sheets of MarineMax, inc. and subsidiaries as of September 30, 2018 and 2017, and the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the years in the three-year period ended September 30, 2018, and the related notes (collectively, the “consolidated financial statements”), and the effectiveness of internal control over financial reporting as of September 30, 2018, which reports appear in the September 30, 2018 annual report on Form 10‑K of MarineMax, inc. /s/ KPMG LLP Tampa, Florida November 29, 2018 Certified Public accountants Exhibit 31.1 i, W. brett McGill, certify that: 1. i have reviewed this report on Form 10-K of MarineMax, inc.; CERTIFICATION 2. based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and i are responsible for establishing and maintaining disclosure controls and procedures (as defined in exchange act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in exchange act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and i have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. Date: November 29, 2018 /s/ W. bReTT M C G iLL W. brett McGill Chief Executive Officer and President (Principal Executive Officer) Exhibit 31.2 i, Michael H. McLamb, certify that: 1. i have reviewed this report on Form 10-K of MarineMax, inc.; CERTIFICATION 2. based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and i are responsible for establishing and maintaining disclosure controls and procedures (as defined in exchange act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in exchange act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and i have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. Date: November 29, 2018 /s/ M iCHaeL H. M C L aMb Michael H. McLamb Chief Financial Officer (Principal Financial Officer) CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Exhibit 32.1 in connection with the annual Report on Form 10-K of MarineMax, inc. (the “Company”) for the year ended September 30, 2018, as filed with the Securities and exchange Commission on the date hereof (the “Report”), i, W. brett McGill, Chief executive Officer of the Company, certify, to my best knowledge and belief, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities exchange act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: November 29, 2018 /s/ W. bReTT M C GiLL W. brett McGill Chief executive Officer CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Exhibit 32.2 in connection with the annual Report on Form 10-K of MarineMax, inc. (the “Company”) for the year ended September 30, 2018, as filed with the Securities and exchange Commission on the date hereof (the “Report”), i, Michael H. McLamb, Chief Financial Officer of the Company, certify, to my best knowledge and belief, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities exchange act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: November 29, 2018 /s/ M iCHaeL H. M C L aMb Michael H. McLamb Chief Financial Officer 

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