CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
In addition to the director and executive compensation arrangements discussed above, this section describes transactions since October 1, 2018, to which we have been or will be a participant, in which the amount involved
exceeded or will exceed $120,000, and in which any of our directors, executive officers or holders of more than 5% of any class of our voting stock, or any member of the immediate family of, or person sharing the household with, any of these
individuals, had or will have a direct or indirect material interest.
Limited Liability Company Agreement of One Water Marine Holdings, LLC
In connection with our IPO, in February 2020, OneWater LLC amended and restated its limited liability company (the “OneWater LLC Agreement”) to, among other things provide for a single class of common units representing
ownership interests in OneWater LLC and provide for certain other rights as specified therein. The Company, our executive officers or entities controlled by our executive officers and certain of our non-executive directors (Jeffrey B. Lamkin,
Mitchell W. Legler, Keith R. Style and John G. Troiano) or entities controlled by such directors are party to the OneWater LLC Agreement.
Below is a summary of certain terms of the OneWater LLC Agreement.
Redemption Rights
Under the OneWater LLC Agreement, the holders of units in OneWater LLC (“OneWater Unit Holders”), subject to certain limitations, have the right (the “Redemption Right”), to cause OneWater LLC to acquire all or a portion
of their units in OneWater LLC (“OneWater LLC Units”) for, at OneWater LLC’s election, (i) shares of our Class A common stock at a redemption ratio of one share of Class A common stock for each OneWater LLC Unit redeemed, subject to conversion rate
adjustments for stock splits, stock dividends and reclassification or (ii) an equivalent amount of cash. Alternatively, upon the exercise of the Redemption Right, the Company (instead of OneWater LLC) has the call right (the “Call Right”) to acquire
each tendered OneWater LLC Unit directly from the OneWater Unit Holders for, at the Company’s election, (x) one share of Class A common stock or (y) an equivalent amount of cash. In addition, the Company has the right to require (i) upon the
acquisition by the Company. of substantially all of the OneWater LLC Units, certain minority unitholders, or (ii) upon a change of control of the Company, each OneWater Unit Holder (other than the Company), to exercise its Redemption Right with
respect to some or all of such unitholder’s OneWater LLC Units. As the OneWater Unit Holders cause their OneWater LLC Units to be redeemed, holding other assumptions constant, the Company’s membership interest in OneWater LLC will be correspondingly
increased, the number of shares of Class A common stock outstanding will be increased, and the number of shares of Class B common stock will be decreased.
Distributions and Allocations
Under the OneWater LLC Agreement, subject to the obligations of OneWater LLC to make tax distributions and to reimburse the Company for its corporate and other overhead expenses, the Company has the right to determine
when distributions will be made to the holders of OneWater LLC Units and the amount of any such distributions. If the Company authorizes a distribution, such distribution will be made to the holders of OneWater LLC Units generally on a pro rata basis
in accordance with their respective percentage ownership of OneWater LLC Units.
The holders of OneWater LLC Units, including the Company, will generally incur U.S. federal, state and local income taxes on their share of any net taxable income of OneWater LLC. Net income and losses of OneWater LLC
generally will be allocated to the holders of OneWater LLC Units on a pro rata basis in accordance with their respective percentage ownership of OneWater LLC Units, subject to requirements under U.S. federal income tax law that certain items of
income, gain, loss or deduction be allocated disproportionately in certain circumstances. To the extent OneWater LLC has available cash and subject to the terms of any current or future debt instruments, the OneWater LLC Agreement requires OneWater
LLC to make pro rata cash distributions to OneWater Unit Holders, including the Company, in an amount sufficient to allow the Company to pay its taxes and to make payments under the Tax Receivable Agreement (as defined below). In addition, the
OneWater LLC Agreement requires OneWater LLC to make non-pro rata payments to the Company to reimburse us for our corporate and other overhead expenses, which payments are not treated as distributions under the OneWater LLC Agreement.
Issuance of Equity
The OneWater LLC Agreement provides that, except as otherwise determined by us, at any time the Company issues a share of its Class A common stock or any other equity security, the net proceeds received by the Company
with respect to such issuance, if any, shall be concurrently invested in OneWater LLC, and OneWater LLC shall issue to the Company one OneWater LLC Unit or other economically equivalent equity interest. Conversely, if at any time, any shares of the
Company’s Class A common stock are redeemed, repurchased or otherwise acquired, OneWater LLC shall redeem, repurchase or otherwise acquire an equal number of OneWater LLC Units held by the Company, upon the same terms and for the same price, as the
shares of our Class A common stock are redeemed, repurchased or otherwise acquired.
Competition
Under the OneWater LLC Agreement, the members have agreed that affiliates of The Beekman Group (collectively, “Beekman”), and its respective affiliates are permitted to engage in business activities or invest in or
acquire businesses which may compete with our business or do business with our customers. Beekman is beneficially owned and controlled by John G. Troiano, one of our directors.
Dissolution
OneWater LLC will be dissolved only upon the first to occur of (i) the sale of substantially all of its assets or (ii) an election by us to dissolve the company. Upon dissolution, OneWater LLC will be liquidated and the
proceeds from any liquidation will be applied and distributed in the following manner: (a) first, to creditors (including to the extent permitted by law, creditors who are members) in satisfaction of the liabilities of OneWater LLC, (b) second, to
establish cash reserves for contingent or unforeseen liabilities and (c) third, to the members in proportion to the number of OneWater LLC Units owned by each of them.
Waiver of the OneWater LLC Agreement
In connection with our follow-on offering, which closed in September 2020, the Company, Beekman, Anthony Aisquith, certain affiliates of P. Austin Singleton and certain other OneWater Unit Holders entered into a waiver
agreement (the “Waiver”) to the OneWater LLC Agreement, pursuant to which the beneficial ownership limitation imposed on the Redemption Right of Special Situations Investing Group II, LLC (“Goldman”), as set forth in the OneWater LLC Agreement, was
be immediately raised to 19.99% on a one-time basis upon consummation of the offering. The Waiver applied only to a redemption in connection with such offering and did not amend the OneWater LLC Agreement or otherwise waive any other requirement of
the OneWater LLC Agreement.
Tax Receivable Agreement
In connection with our IPO, the Company entered into a tax receivable agreement with certain owners of OneWater LLC (the “Tax Receivable Agreement”), including certain affiliates of P. Austin Singleton, Anthony Aisquith,
certain entities controlled by Jeffrey B. Lamkin, Mitchell W. Legler, Beekman and Keith R. Style.
As described above under “Limited Liability Company Agreement of One Water Marine Holdings, LLC” the OneWater Unit Holders may cause their OneWater LLC Units to be redeemed for shares of Class A common stock or cash, as
applicable, in the future pursuant to the Redemption Right or the Call Right. OneWater LLC has made or intends to make for itself (and for each of its direct or indirect subsidiaries that is treated as a partnership for U.S. federal income tax
purposes and that it controls) an election under Section 754 of the Code, that will be effective for the taxable year of our IPO and each taxable year in which a redemption of OneWater LLC Units pursuant to the Redemption Right or the Call Right
occurs. Pursuant to the Section 754 election, the Company’s acquisition (or deemed acquisition for U.S. federal income tax purposes) of OneWater LLC Units pursuant to the Redemption Right or the Call Right are expected to result in adjustments to the
tax basis of the tangible and intangible assets of OneWater LLC. These adjustments will be allocated to the Company. Such adjustments to the tax basis of the tangible and intangible assets of OneWater LLC would not have been available to the Company.
absent its acquisition or deemed acquisition of OneWater LLC Units pursuant to the exercise of the Redemption Right or the Call Right. The anticipated basis adjustments are expected to increase (for tax purposes) the Company’s depreciation and
amortization deductions and may also decrease the Company’s gains (or increase its losses) on future dispositions of certain assets to the extent the increase in tax basis is allocated to those assets. Such increased deductions and losses and reduced
gains may reduce the amount of tax that the Company would otherwise be required to pay in the future.
The Company entered into the Tax Receivable Agreement with certain of the OneWater Unit Holders at the closing of our IPO. The Tax Receivable Agreement generally provides for the payment by the Company to such OneWater
Unit Holders of 85% of the net cash savings, if any, in U.S. federal, state and local income and franchise tax (computed using the estimated impact of state and local taxes) that the Company actually realizes (or is deemed to realize in certain
circumstances) in periods after the IPO as a result of, as applicable to each such OneWater Unit Holder, (i) certain increases in tax basis that occur as a result of the Company’s acquisition (or deemed acquisition for U.S. federal income tax
purposes) of all or a portion of such OneWater Unit Holder’s OneWater LLC Units pursuant to the exercise of the Redemption Right or the Call Right or that relate to prior transfers of OneWater LLC Units that will be available to the Company as a
result of its acquisition of those units and (ii) imputed interest deemed to be paid by the Company as a result of, and additional tax basis arising from, any payments the Company makes under the Tax Receivable Agreement. Under the Tax Receivable
Agreement the Company will retain the benefit of the remaining 15% of these net cash savings. Certain of the OneWater Unit Holders’ rights (including the right to receive payments) under the Tax Receivable Agreement are transferable in connection
with transfers permitted under the OneWater LLC Agreement of the corresponding OneWater LLC Units or, subject to the Company’s consent (not to be unreasonably withheld, conditioned, or delayed), after the corresponding OneWater LLC Units have been
acquired pursuant to the Redemption Right or Call Right.
The payment obligations under the Tax Receivable Agreement are the Company’s obligations and not obligations of OneWater LLC, and we expect that the payments the Company will be required to make under the Tax Receivable
Agreement will be substantial. Estimating the amount and timing of the Company’s realization of tax benefits subject to the Tax Receivable Agreement is by its nature imprecise. The actual increases in tax basis covered by the Tax Receivable
Agreement, as well as the amount and timing of the Company’s ability to use any deductions (or decreases in gain or increases in loss) arising from such increases in tax basis, are dependent upon significant future events, including but not limited
to the timing of the redemptions of OneWater LLC Units, the price of the Company’s Class A common stock at the time of each redemption, the extent to which such redemptions are taxable transactions, the amount of the redeeming unit holder’s tax basis
in its OneWater LLC Units at the time of the relevant redemption, the depreciation and amortization periods that apply to the increase in tax basis, the amount, character, and timing of taxable income the Company generates in the future, the timing
and amount of any earlier payments that The Company may have made under the Tax Receivable Agreement, the U.S. federal income tax rate then applicable, and the portion of The Company’s payments under the Tax Receivable Agreement that constitute
imputed interest or give rise to depreciable or amortizable tax basis. Accordingly, estimating the amount and timing of payments that may become due under the Tax Receivable Agreement is also by its nature imprecise. For purposes of the Tax
Receivable Agreement, net cash savings in tax generally will be calculated by comparing the Company’s actual tax liability (determined by using the actual applicable U.S. federal income tax rate and an assumed combined state and local income tax
rate) to the amount it would have been required to pay had it not been able to utilize any of the tax benefits subject to the Tax Receivable Agreement. Thus, the amount and timing of any payments under the Tax Receivable Agreement are also dependent
upon significant future events, including those noted above in respect of estimating the amount and timing of The Company’s realization of tax benefits.
We expect that if there were a redemption of all of the outstanding OneWater LLC Units (other than those held by the Company) immediately after this offering, and taking into account any redemptions that occur prior to
or in connection with this offering, the estimated tax benefits to the Company subject to the Tax Receivable Agreement would be approximately $35.0 million, based on certain assumptions, including but not limited to a $20.00 per share offering price
to the public, an estimated blended statutory U.S. federal, state and local corporate income tax rate of 24.6%, no material change in U.S. federal income tax law, and that the Company will have sufficient taxable income to utilize such estimated tax
benefits. If the Tax Receivable Agreement were terminated immediately after this offering and based on the same assumptions used to estimate the tax benefit, the estimated early termination payment would be approximately $26.0 million (calculated
using a discount rate equal to one-year LIBOR plus 100 basis points, applied against an undiscounted liability of approximately $29.8 million, representing an amount equal to 85% of the approximately $35.0 million of estimated tax benefits to the
Company that are subject to the Tax Receivable Agreement). The foregoing numbers are merely estimates and the actual tax benefits and early termination payments could differ materially.
A delay in the timing of redemptions of OneWater LLC Units, holding other assumptions constant, would be expected to decrease the discounted value of the amounts payable under the Tax Receivable Agreement as the benefit
of the depreciation and amortization deductions would be delayed and the estimated increase in tax basis could be reduced as a result of allocations of OneWater LLC taxable income to the redeeming unit holder prior to the redemption. Stock price
increases or decreases at the time of each redemption of OneWater LLC Units would be expected to result in a corresponding increase or decrease in the undiscounted amounts payable under the Tax Receivable Agreement in an amount equal to 85% of the
tax-effected change in price. The amounts payable under the Tax Receivable Agreement are dependent upon the Company having sufficient future taxable income to utilize the tax benefits on which it is required to make payments under the Tax Receivable
Agreement. If the Company’s projected taxable income is significantly reduced, the expected payments would be reduced to the extent such tax benefits do not result in a reduction of the Company’s future income tax liabilities.
The foregoing amounts are merely estimates and the actual payments could differ materially. It is possible that future transactions or events could increase or decrease the actual tax benefits realized and the
corresponding Tax Receivable Agreement payments as compared to the foregoing estimates. Moreover, there may be a negative impact on our liquidity if, as a result of timing discrepancies or otherwise, (i) the payments under the Tax Receivable
Agreement exceed the actual benefits the Company realizes in respect of the tax attributes subject to the Tax Receivable Agreement and/or (ii) distributions to the Company by OneWater LLC are not sufficient to permit the Company to make payments
under the Tax Receivable Agreement after it has paid its taxes and other obligations. Please read “Risk Factors—Risks Related to this Offering and Our Class A Common Stock—In certain cases, payments under the Tax Receivable Agreement may be
accelerated and/or significantly exceed the actual benefits, if any, the Company realizes in respect of the tax attributes subject to the Tax Receivable Agreement.” The payments under the Tax Receivable Agreement will not be conditioned upon a holder
of rights under the Tax Receivable Agreement having a continued ownership interest in either OneWater LLC or the Company.
In addition, although the Company is not aware of any issue that would cause the IRS or other relevant tax authorities to challenge potential tax basis increases or other tax benefits covered under the Tax Receivable
Agreement, the applicable OneWater Unit Holders will not reimburse the Company for any payments previously made under the Tax Receivable Agreement if such basis increases or other benefits are subsequently disallowed, except that excess payments made
to any such holder will be netted against future payments otherwise required to be made, if any, to such holder after the Company’s determination of such excess (which determination may be made a number of years following the initial payment and
after future payments have been made). As a result, in such circumstances, the Company could make payments that are greater than its actual cash tax savings, if any, and may not be able to recoup those payments, which could adversely affect the
Company’s liquidity.
The term of the Tax Receivable Agreement commenced upon the completion of the IPO and will continue until all tax benefits that are subject to the Tax Receivable Agreement have been utilized or expired, unless the
Company exercises its right to terminate the Tax Receivable Agreement. In the event that the Tax Receivable Agreement is not terminated, the payments under the Tax Receivable Agreement are anticipated to commence in 2022 and to continue for 20 years
after the date of the last redemption of the OneWater LLC Units. Accordingly, it is expected that payments will continue to be made under the Tax Receivable Agreement for more than 22 years. Payments will generally be made under the Tax Receivable
Agreement as the Company realizes actual cash tax savings in periods after this offering from the tax benefits covered by the Tax Receivable Agreement. However, if the Company experiences a change of control (as defined under the Tax Receivable
Agreement, which includes certain mergers, asset sales and other forms of business combinations) or the Tax Receivable Agreement terminates early (at the Company’s election or as a result of the Company’s breach), the Company would be required to
make an immediate payment equal to the present value of the anticipated future payments to be made by it under the Tax Receivable Agreement (determined by applying a discount rate equal to one-year LIBOR plus 100 basis points) and such early
termination payment is expected to be substantial. The calculation of anticipated future payments will be based upon certain assumptions and deemed events set forth in the Tax Receivable Agreement, including (i) that the Company has sufficient
taxable income to fully utilize the tax benefits covered by the Tax Receivable Agreement, and (ii) that any OneWater LLC Units (other than those held by the Company) outstanding on the termination date are deemed to be redeemed on the termination
date. Any early termination payment may be made significantly in advance of, and may materially exceed, the actual realization, if any, of the future tax benefits to which the early termination payment relates.
The Tax Receivable Agreement provides that in the event that the Company breaches any of its material obligations under it, whether (i) as a result of its failure to make any payment when due (including in cases where
the Company elects to terminate the Tax Receivable Agreement early, the Tax Receivable Agreement is terminated early due to certain mergers, asset sales, or other forms of business combinations or changes of control or the Company has available cash
but fails to make payments when due under circumstances where the Company does not have the right to elect to defer the payment, as described below), (ii) as a result of the Company’s failure to honor any other material obligation under it, or (iii)
by operation of law as a result of the rejection of the Tax Receivable Agreement in a case commenced under the U.S. Bankruptcy Code or otherwise, then the applicable OneWater Unit Holders may elect to treat such breach as an early termination, which
would cause all the Company’s payment and other obligations under the Tax Receivable Agreement to be accelerated and become due and payable applying the same assumptions described above.
As a result of either an early termination or a change of control, the Company could be required to make payments under the Tax Receivable Agreement that exceed its actual cash tax savings under the Tax Receivable
Agreement. In these situations, the Company’s obligations under the Tax Receivable Agreement could have a substantial negative impact on our liquidity and could have the effect of delaying, deferring or preventing certain mergers, asset sales, or
other forms of business combinations or changes of control that could be in the best interests of holders of Class A common stock or reducing the consideration paid in any such transaction to holders of Class A common stock. There can be no assurance
that the Company will be able to meet its obligations under the Tax Receivable Agreement.
Decisions we make in the course of running our business, such as with respect to mergers, asset sales, other forms of business combinations or other changes in control, may influence the timing and amount of payments
that are received by the applicable OneWater Unit Holders under the Tax Receivable Agreement. For example, the earlier disposition of assets following a redemption of OneWater LLC Units may accelerate payments under the Tax Receivable Agreement and
increase the present value of such payments, and the disposition of assets before a redemption of OneWater LLC Units may increase the applicable OneWater Unit Holders’ tax liability without giving rise to any rights of the applicable OneWater Unit
Holders to receive payments under the Tax Receivable Agreement. Such effects may result in differences or conflicts of interest between the interests of the applicable OneWater Unit Holders and other stockholders.
Payments generally are due under the Tax Receivable Agreement within 5 business days following the finalization of the schedule with respect to which the payment obligation is calculated. However, interest on such
payments will begin to accrue from the due date (without extensions) of the Company’s U.S. federal income tax return for the period to which such payments relate until such payment due date at a rate equal to one-year LIBOR plus 150 basis points.
Except in cases where the Company elects to terminate the Tax Receivable Agreement early or it is otherwise terminated as described above, generally the Company may elect to defer payments due under the Tax Receivable Agreement if the Company does
not have available cash to satisfy its payment obligations under the Tax Receivable Agreement or if the Company’s contractual obligations limit its ability to make these payments. Any such deferred payments under the Tax Receivable Agreement
generally will accrue interest from the due date for such payment until the payment date at a rate of one-year LIBOR plus 550 basis points. However, interest will accrue from the due date for such payment until the payment date at a rate of one-year
LIBOR plus 150 basis points if the Company is unable to make such payment as a result of limitations imposed by existing credit agreements. the Company has no present intention to defer payments under the Tax Receivable Agreement.
The Tax Receivable Agreement generally may be amended if approved in writing by the Company, the majority of holders of rights under the Tax Receivable Agreement and, so long as Goldman and Beekman hold rights under the
Tax Receivable Agreement, Goldman and Beekman. To the extent an amendment would disproportionately affect payments made to certain holders of rights under the Tax Receivable Agreement, such amendment would require the written consent of such holders.
Because the Company is a holding company with no operations of its own, its ability to make payments under the Tax Receivable Agreement is dependent on the ability of OneWater LLC to make distributions to the Company in an amount sufficient to cover
the Company’s obligations under the Tax Receivable Agreement. This ability, in turn, may depend on the ability of OneWater LLC’s subsidiaries to make distributions to it. The ability of OneWater LLC, its subsidiaries and other entities in which it
directly or indirectly holds an equity interest to make such distributions will be subject to, among other things, the applicable provisions of Delaware law (or other applicable jurisdiction) that may limit the amount of funds available for
distribution and restrictions in relevant debt instruments issued by OneWater LLC or its subsidiaries and/other entities in which it directly or indirectly holds an equity interest. To the extent that the Company is unable to make payments under the
Tax Receivable Agreement for any reason, such payments will be deferred and will accrue interest until paid.
Registration Rights Agreement
On February 11, 2020, in connection with the closing of our IPO, we entered into a registration rights agreement (the “Registration Rights Agreement”) with Goldman and Beekman, previously filed as Exhibit 4.1 to our
Current Report on Form 8-K, filed with the SEC on February 18, 2020. Pursuant to the Registration Rights Agreement, we agreed to register the sale of shares of Class A common stock under certain circumstances, as described below.
Subject to the certain limitations, any Holder(s) (as defined in the Registration Rights Agreement) has the right to require us to prepare and file a registration statement registering the offer and sale of a certain
number of Registrable Securities (as defined in the Registration Rights Agreement). Generally, we are required to file such registration statement within 45 business days of such Demand Notice (as defined in the Registration Rights Agreement); or, if
we are not then eligible to register the Registrable Securities for resale on Form S-3, within 60 business days of such Demand Notice. Subject to certain exceptions, we will not be obligated to effect a demand registration within 90 business days
after the closing of any underwritten offering of shares of Class A common stock requested by a Holder.
We are not obligated to file more than three demand registrations for each Holder or its affiliates. We are also not obligated to effect any demand registration, among other things, unless the Registrable Securities
requested to be included therein have an aggregate value of at least $7.5 million or consist of all of the Registrable Securities then held by the Holder(s) delivering the notice (the “Initiating Holder(s)”), as applicable.
In addition, any Initiating Holder(s) then able to effectuate a demand registration has the right, upon written notice to us to require us, subject to certain limitations, to effect a distribution of any or all of its
shares of Class A common stock by means of an underwritten offering; provided, that the Registrable Securities of such Initiating Holder(s) requested to be included in such underwritten offering have an aggregate value of at least equal to $7.5
million or consist of all of the Registrable Securities then held by such Initiating Holder as of such date.
Subject to certain exceptions, if at any time we propose to register an offering of Class A common stock or conduct an underwritten offering, whether or not for our own account, then we must notify each Holder of such
proposal reasonably in advance of the anticipated submission or filing date (in the case of a registration) or the commencement of the offering (in the case of an underwritten offering), to allow such Initiating Holder(s) to include a specified
number of their shares of Class A common stock in that registration statement or underwritten offering, as applicable.
These registration rights are subject to certain conditions and limitations, including the right of the underwriters to limit the number of shares to be included in a registration or offering and our right to delay or
withdraw a registration statement under certain circumstances. Subject to certain limitations, we will generally pay all registration expenses in connection with its obligations under the Registration Rights Agreement.
GS/BIP Credit Facility
On October 28, 2016, OneWater LLC and certain of our subsidiaries entered into the Credit and Guaranty Agreement with Beekman, as a lender, Goldman Sachs Specialty Lending Group,
L.P., as a lender, administrative agent and collateral agent, and various lender parties thereto (as amended, the “GS/BIP Credit Facility”). As amended terms of the GS/BIP Credit Facility immediately preceding the
IPO consisted of an up to $60.0 million multi-draw term loan facility and a $5.0 million revolving line of credit. The largest amount of principal outstanding (including accrued interest) during the term
of the GS/BIP Credit Facility was $64.8 million. As of September 30, 2019, we had $63.9 million of principal outstanding (including accrued interest) under the multi-draw term loan and no amount outstanding under the revolving line of credit. As of
September 30, 2018, we had $31.4 million principal (including accrued interest) outstanding under the multi-draw term loan and no amount outstanding under the revolving line of credit. All amounts owed were guaranteed by us and certain of our
subsidiaries.
The annual interest rate on the GS/BIP Credit Facility was equal to (i) the Applicable Cash Rate (as defined in the GS/BIP Credit Facility), which
was payable in cash, plus (ii) the Applicable PIK Rate (as defined in the GS/BIP Credit Facility), which was payable in kind by increasing the principal amount of the underlying loan, which rates are set forth below. Additionally, we paid a
commitment fee calculated based on the unused amount under the multi-draw term loan facility and revolving line of credit, times 0.50% per annum.
|
|
|
|
|
|
|
October 28, 2016 through October 31, 2018
|
|
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0.00
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%
|
|
|
10.00
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%
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November 1, 2018 through October 31, 2019
|
|
|
4.00
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%
|
|
|
6.00
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%
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November 1, 2019 through October 31, 2020
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|
|
6.00
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%
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|
|
4.00
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%
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November 1, 2020 through the maturity date and thereafter
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|
|
8.00
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%
|
|
|
2.00
|
%
|
The GS/BIP Credit Facility was replaced with the Term and Revolver Credit Facility (defined below), as further described below. At the time of execution of the Term and Revolver Credit Facility, we had $64.8 million outstanding under the GS/BIP Credit Facility (including accrued interest), which amount was refinanced and treated as outstanding under the Term and Revolver Credit Facility.
Term and Revolver Credit Facility
On February 11, 2020, in connection with the IPO, the Company entered into the Amended and Restated Credit and Guaranty Agreement, by and among the Company, OneWater LLC and its subsidiaries, with Goldman Sachs Specialty
Lending Group, L.P. (the “Term and Revolver Credit Facility”) which, among other things, modified the terms of the GS/BIP Credit Facility to (i) increase the revolving facility from $5.0 million to $10.0 million, (ii) increase the maximum available
under the multi-draw term loan from $60.0 million to $100.0 million, (iii) provide an uncommitted and discretionary Multi-Draw Term Loan accordion feature of up to $20.0 million, (iv) amend the repayment schedule of the Multi-Draw Term Loan to
commence on March 31, 2022 (v) amend the scheduled maturity date of the Revolving Facility and Multi-Draw Term Loan to be February 11, 2025 and (vi) remove OWM BIP Investor, LLC as a lender. The Term and Revolver Credit Facility bore interest at a
rate that is equal to, at the Company’s option, (a) LIBOR for such interest period (subject to a 1.50% floor) plus an applicable margin of up to 7.00%, subject to step-downs to be determined based on certain financial leverage ratio measures, or (b)
a base rate (subject to a 4.50% floor) plus an applicable margin of up to 6.00%, subject to step-downs to be determined based on certain financial leverage ratio measures. Interest was payable quarterly for base rate borrowings and up to quarterly
for LIBOR borrowings. The Term and Revolver Credit Facility included the option for the Company to defer cash payments of interest for twelve months and add the accrued interest to the outstanding principal of the note payable. The election of this
feature was made for the period ended March 31, 2020, and as a result, the interest rate would increase by 2.0% for the corresponding twelve months.
Immediately upon entering into the Term and Revolver Credit Facility, we borrowed an additional $35.3 million on the Multi-Draw Term Loan to bring our total indebtedness to $100.0 million. The largest amount of principal
outstanding (including accrued interest) during the nine months ended June 30, 2020 under the Term and Revolver Credit Facility was $104.1 million. As of June 30, 2020, the outstanding balance (including accrued interest) under the Term and Revolver
Credit Facility was $104.1 million. Because we elected to defer cash interest payments, we did not make any interest payment during the nine months ended June 30, 2020 and such accrued interest was added to the outstanding principal. As of June 30,
2020, we had not drawn down on our Revolving Facility. We were in compliance with all covenants under the Term and Revolver Credit Facility as of September 30, 2020.
On July 22, 2020 the Company and certain of its subsidiaries terminated and repaid all indebtedness outstanding under the Term and Revolver Credit Facility. The total payment to terminate the Term and Revolver Credit
Facility was $109.0 million which included principal and accrued interest of $104.8 million as well as other fees associated with the extinguishment.
Opco Preferred Units
On October 28, 2016, Goldman and Beekman entered into a Subscription Agreement with certain of our subsidiaries, pursuant to which Goldman and Beekman purchased 45,000 and 23,000 preferred units (“Opco Preferred Units”)
in our subsidiary One Water Assets & Operations, LLC (“Opco”), representing 66.2% and 33.8% of the total Opco Preferred Units outstanding for purchase prices of approximately $44.4 million and $22.7 million, respectively. As holders of the Opco
Preferred Units, Goldman and Beekman were entitled to (i) a “preferred return” at a rate of 10% per annum, compounded quarterly, on (a) the aggregate amount of capital contributions made, minus any prior distributions (the “unreturned preferred
amount”), plus (b) any unpaid preferred returns for prior periods, and (ii) a “preferred target distribution” at a rate of 10% per annum on the unreturned preferred amount multiplied by (a) 40% for the calendar quarters ending December 31, 2018,
March 31, 2019, June 30, 2019 and September 30, 2019, (b) 60% for each calendar quarters ending December 31, 2019, March 31, 2020, June 30, 2020 and September 30, 2020, and (c) 80% for each calendar quarter thereafter. The preferred target
distribution proportionally adjusted the amount of capital contribution of each holder of Opco Preferred Units.
We used the net proceeds from our IPO, together with cash on hand and borrowings under the Term and Revolver Credit Facility, to redeem all of the shares of Opco Preferred Units held by Goldman and Beekman for an
aggregate redemption amount of $87.3 million, exclusive of $1.3 million in issuance costs.
OneWater LLC Warrants
Additionally, pursuant to the Subscription Agreement dated October 28, 2016, Goldman purchased warrants (“Goldman Warrants”) to acquire OneWater LLC Units, and Beekman purchased warrants (“Beekman Warrants,” and together
with the Goldman Warrants, the “LLC Warrants”) to acquire OneWater LLC Units, each under private placement exemptions.
Goldman purchased the Goldman Warrants for an aggregate purchase price of approximately $0.6 million, which warrants are exercisable for OneWater LLC Units that represent 16.6% of the OneWater LLC Units outstanding.
Beekman purchased the Beekman Warrants for an aggregate purchase price of approximately $0.3 million, which warrants are exercisable for OneWater LLC Units that represent 8.4% of the OneWater LLC Units outstanding. The LLC Warrants were exercisable
at a price of $0.0001 per OneWater LLC Unit. In connection with the Reorganization and IPO, the LLC Warrants were exercised in full for common units of OneWater LLC, which eliminated the liability accounting and fair value adjustments for the LLC
Warrants for all periods after the Reorganization. Goldman and Beekman received an aggregate of 2,148,806 OneWater LLC Units upon exercise of the LLC Warrants.
Personal Guarantees Under the Inventory Financing Facility
In connection with our Sixth Amended and Restated Inventory Financing Agreement with Wells Fargo Commercial Distribution Finance, LLC and various lender parties thereto (as amended, the “Inventory Financing Facility”),
in their individual capacities, (i) P. Austin Singleton, our Chief Executive Officer and Director, entered into that Third Amended and Restated Guaranty dated June 14, 2018, and (ii) Anthony Aisquith, our President, Chief Operating Officer and
Director entered into that Third Amended and Restated Guaranty dated June 14, 2018, for the benefit of Wells Fargo Commercial Distribution Finance, LLC, as Agent to the Inventory Financing Facility. Mr. Singleton and Mr. Aisquith have each personally
guaranteed $124.0 million and $225.4 million as of September 30, 2020 and 2019 respectively, of the amounts due under the Inventory Financing Facility. Mr. Aisquith’s guarantee is limited to circumstances involving fraud or disposal of collateral
without payment to the lenders. In connection with the personal guarantee, we paid Mr. Singleton a guarantee fee in the amount of $296,775 in fiscal year 2020 and $690,950 in fiscal year 2019. No guarantee fees were paid by us to Mr. Aisquith in the
last two fiscal years.
Leases
We entered into store leases, as listed below, with certain related parties for which we incurred an aggregate of $2.0 million and $1.9
million in lease expense in the fiscal years ended September 30, 2020 and 2019, respectively. We currently lease the following retail facilities with the following related parties:
|
|
|
|
Fiscal Year 2020
Lease Amount
|
|
|
Fiscal Year 2019
Lease Amount
|
|
Alabama
|
|
|
|
|
|
|
|
|
Dadeville and Equality
|
|
P. Austin Singleton
|
|
$
|
302,250
|
|
|
$
|
279,000
|
|
Florida
|
|
|
|
|
|
|
|
|
|
|
Destin
|
|
Peter and Teresa Bos
|
|
$
|
645,572
|
|
|
$
|
638,510
|
|
Panama City Beach (Location No. 1)
|
|
Peter and Teresa Bos
|
|
$
|
124,811
|
|
|
$
|
125,016
|
|
Panama City Beach (Location No. 2)
|
|
Peter and Teresa Bos
|
|
$
|
363,257
|
|
|
$
|
363,854
|
|
Georgia / Texas
|
|
|
|
|
|
|
|
|
|
|
Buford, GA
|
|
P. Austin Singleton
|
|
$
|
175,500
|
|
|
$
|
162,000
|
|
Fortson, GA and Conroe, TX
|
|
P. Austin Singleton
|
|
$
|
342,875
|
|
|
$
|
316,500
|
|
Peter and Teresa Bos hold more than 10% of the voting power of the Company. P. Austin Singleton currently serves as a Director and as our Chief Executive Officer and holds more than 10% of the voting
power of the Company.
Consignment Inventory
We currently have an inventory consignment relationship with Global Marine Finance, LLC, an entity in which P. Austin Singleton, our Chief Executive Officer and a Director, and Anthony
Aisquith, our President, Chief Operating Officer and a Director, maintain ownership interests. Under the inventory consignment arrangements, we display certain boats and yachts for sale in our stores, and once we enter into a retail sales agreement
with a customer, we purchase the consigned boats or yachts from Global Marine Finance, LLC. We made payments to Global Marine Finance, LLC in the amounts of $60.7 million and $30.7 million in fiscal years
2020 and 2019, respectively.
Maintenance, Repair and Other Services
We have entered into various arrangements with related parties for the purchase and sale of new and pre-owned boats and for maintenance, repair and
other services. The related party, nature of the transaction, and the amounts involved are set forth in the table below:
|
|
|
|
Amount for the Fiscal Years Ended
September 30,
|
|
|
|
|
|
|
|
|
|
|
Peter and Teresa Bos, through Legendary Boating Club, LLC
|
|
Boat purchases and repair services
|
|
$
|
451,483
|
|
|
$
|
266,018
|
|
P. Austin Singleton and Anthony Aisquith, through Diverse Offerings, LLC
|
|
Financing for boat purchases by customers paid to the Company
|
|
$
|
5,969
|
|
|
$
|
2,236,107
|
|
Peter and Teresa Bos through Friend*Ship, LLC
|
|
Boat purchase and repair services
|
|
$
|
213,935
|
|
|
$
|
—
|
|
Peter and Teresa Bos hold more than 10% of the voting power of the Company. P. Austin Singleton currently serves as a Director and as our Chief
Executive Officer and holds more than 10% of the voting power of the Company. Anthony Aisquith is our President, Chief Operating Officer and a Director.
Corporate Reorganization
In connection with the corporate reorganization (the “Reorganization”) undertaken in connection with our IPO, the Company and our affiliates engaged in certain transactions with certain
affiliates and the members of OneWater LLC. In addition to entering into the OneWater LLC Agreement, Registration Rights Agreement and Tax Receivable Agreement, and redeeming the Opco Preferred Units and
exercising the LLC Warrants, all as described above, the Company and/or its affiliates also entered into the following transactions with related parties:
|
●
|
The Company contributed all of the net proceeds of our IPO to OneWater LLC in exchange for OneWater LLC Units. OneWater LLC used the net proceeds, cash on hand and borrowings under the Term & Revolver Credit Facility (i) to pay $3.2
million to one member of OneWater LLC (an entity in which certain of our related parties have an interest, including Peter and Teresa Bos and Mr. Legler) in exchange for the surrender of a preferred
distribution right and (ii) to contribute cash to Opco in exchange for additional units therein, with Opco using such cash to fully redeem the preferred interest in the subsidiary held by Goldman and Beekman. Additionally, the Company
provided certain of the existing owners of OneWater LLC, including Goldman and Beekman and certain members of the Company’s management team, the right to receive a tax distribution to cover taxable income arising as a result of OneWater LLC’s
operating income through the period ending on the date of the closing of the IPO.
|
|
●
|
Certain OneWater Unit Holders, including our executive officers and certain of our non-executive directors (Messrs. Lamkin, Legler, Style and Troiano), or entities controlled by such directors, exchanged their existing membership interests
in OneWater LLC for OneWater LLC Units;
|
|
●
|
Certain owners of OneWater LLC, including Beekman, contributed, directly or indirectly, their OneWater LLC Units to the Company in exchange for shares of Class A common stock; and
|
|
●
|
Each OneWater Unit Holder received a number of shares of Class B common stock equal to the number of OneWater LLC Units held by such OneWater Unit Holder following the IPO.
|
Domain Purchase Agreement
On August 22, 2020, we entered into the Domain Purchase Agreement with Boats4Sale. Pursuant to the Purchase Agreement, Opco purchased the website
domain name “Boatsforsale.com” (including all related goodwill) from Boats4Sale in exchange for cash consideration of $396,769. The Purchase Agreement includes customary representations, warranties and covenants by Opco and Boats4Sale.
The Company’s Chief Executive Officer, P. Austin Singleton, and President and Chief Operating Officer, Anthony Aisquith, are the controlling members of the entity that holds a 95% interest in Boats4Sale
and that serves as its sole manager. Jeffrey Lamkin, a director of the Company, is the sole manager of an entity that holds a 2.5% interest in Boats4Sale. The transaction was approved in accordance with the Company’s Related Party Transactions
Policy.
Related Persons Transaction Policy
A “Related Party Transaction” is a transaction, arrangement or relationship in which we or any of our subsidiaries was, is or will be a participant, the amount of which involved exceeds $120,000, and in which any related
person had, has or will have a direct or indirect material interest. A “related person” means:
|
●
|
any person who is, or at any time during the applicable period was, one of our executive officers or one of our directors;
|
|
●
|
any person who is known by us to be the beneficial owner of more than 5.0% of any class of our voting securities;
|
|
●
|
any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of a director,
executive officer or a beneficial owner of more than 5.0% of our Class A common stock, and any person (other than a tenant or employee) sharing the household of such director, executive officer or beneficial owner of more than 5.0% of our
Class A common stock; and
|
|
●
|
any firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a 10.0% or greater beneficial ownership interest.
|
Our Board of Directors has adopted a written related party transactions policy. Pursuant to this policy, our nominating and governance committee will review all material facts of all Related Party Transactions and either
approve or disapprove entry into the Related Party Transaction, subject to certain limited exceptions. In determining whether to approve or disapprove entry into a Related Party Transaction, our nominating and governance committee will take into
account, among other factors, the following: (i) whether the Related Party Transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and (ii) the extent of the
related person’s interest in the transaction. Furthermore, the policy requires that all Related Party Transactions required to be disclosed in our filings with the SEC be so disclosed in accordance with applicable laws, rules and regulations.
Additionally, any amounts due under advances or loans that we have entered into with our directors, executive officers or principal stockholders were retired or repaid in full prior to the public filing of the
registration statement relating to our IPO with the SEC.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the beneficial ownership of our Class A common stock and our Class B common stock as of January 4, 2021, by:
|
●
|
each of our named executive officers;
|
|
●
|
all of our directors and executive officers as a group; and
|
|
●
|
each person, or group of affiliated persons, known by us to beneficially own more than 5% of our outstanding shares of Class A common stock or Class B common stock.
|
Beneficial ownership is determined in accordance with the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power. Shares of common stock issuable under
options or warrants that are exercisable within 60 days after January 4, 2021, are deemed beneficially owned and such shares are used in computing the percentage ownership of the person holding the options or warrants but are not deemed outstanding
for the purpose of computing the percentage ownership of any other person. The information contained in the following table is not necessarily indicative of beneficial ownership for any other purpose, and the inclusion of any shares in the table
does not constitute an admission of beneficial ownership of those shares.
Unless otherwise indicated below, to our knowledge, and subject to applicable community property laws, all persons named in the table have sole voting and dispositive power with respect to their shares of common stock,
except to the extent authority is shared by spouses under community property laws.
Our calculation of the percentage of beneficial ownership is based on 10,867,291 shares of Class A common stock and 4,108,007 shares of our Class B common stock outstanding as of January 4, 2021.
Unless otherwise indicated below, the address of each beneficial owner listed in the table below is c/o OneWater Marine Inc., 6275 Lanier Islands Parkway, Buford, Georgia 30518.
|
|
Number of Shares of Common
Stock Beneficially Owned
|
|
|
Percentage of Shares of Common
Stock Beneficially Owned
|
|
|
Percentage of
Voting Power(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5% Stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Entities affiliated with Peter and Teresa Bos(2)
|
|
|
847,378
|
|
|
|
1,145,044
|
|
|
|
7.8
|
%
|
|
|
27.9
|
%
|
|
|
13.3
|
%
|
Entities affiliated with P. Austin Singleton(3)
|
|
|
138,360
|
|
|
|
1,336,312
|
|
|
|
1.3
|
%
|
|
|
32.5
|
%
|
|
|
9.8
|
%
|
Anthony Aisquith(4)
|
|
|
6,333
|
|
|
|
1,039,101
|
|
|
|
0.1
|
%
|
|
|
25.3
|
%
|
|
|
7.0
|
%
|
Entities affiliated with Beekman(5)
|
|
|
488,052
|
|
|
|
222,025
|
|
|
|
4.5
|
%
|
|
|
5.4
|
%
|
|
|
4.7
|
%
|
Royce & Associates, LP(6)
|
|
|
846,115
|
|
|
|
−
|
|
|
|
7.8
|
%
|
|
|
−
|
|
|
|
5.7
|
%
|
Gilder, Gagnon, Howe & Co. LLC(7)
|
|
|
635,823
|
|
|
|
−
|
|
|
|
5.9
|
%
|
|
|
−
|
|
|
|
4.2
|
%
|
American Century Capital Portfolios, Inc. (8)
|
|
|
1,353,382
|
|
|
|
−
|
|
|
|
12.6
|
%
|
|
|
−
|
|
|
|
9.0
|
%
|
Directors and Executive Officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P. Austin Singleton(3)
|
|
|
138,360
|
|
|
|
1,336,312
|
|
|
|
1.3
|
%
|
|
|
32.5
|
%
|
|
|
9.8
|
%
|
Anthony Aisquith(4)
|
|
|
6,333
|
|
|
|
1,039,101
|
|
|
|
*
|
|
|
|
25.3
|
%
|
|
|
7.0
|
%
|
Jack Ezzell(9)
|
|
|
12,500
|
|
|
|
−
|
|
|
|
*
|
|
|
|
*
|
|
|
|
*
|
|
Christopher Bodine(10)
|
|
|
6,250
|
|
|
|
−
|
|
|
|
*
|
|
|
|
*
|
|
|
|
*
|
|
Bari A. Harlam(11)
|
|
|
2,227
|
|
|
|
−
|
|
|
|
*
|
|
|
|
*
|
|
|
|
*
|
|
Jeffrey Lamkin(12)
|
|
|
31,250
|
|
|
|
300,000
|
|
|
|
*
|
|
|
|
7.3
|
%
|
|
|
2.2
|
%
|
Mitchell Legler(13)
|
|
|
63,639
|
|
|
|
−
|
|
|
|
*
|
|
|
|
*
|
|
|
|
*
|
|
John Schraudenbach(14)
|
|
|
14,350
|
|
|
|
−
|
|
|
|
*
|
|
|
|
*
|
|
|
|
*
|
|
Keith Style(15)
|
|
|
29,153
|
|
|
|
−
|
|
|
|
*
|
|
|
|
*
|
|
|
|
*
|
|
John Troiano(5)
|
|
|
488,052
|
|
|
|
222,025
|
|
|
|
4.5
|
%
|
|
|
5.4
|
%
|
|
|
4.7
|
%
|
All executive officers and directors as a group (10 persons)
|
|
|
792,115
|
|
|
|
2,897,438
|
|
|
|
7.3
|
%
|
|
|
70.5
|
%
|
|
|
24.6
|
%
|
*
|
Represents beneficial ownership of less than one percent (1%) of the outstanding common stock or voting power, as applicable.
|
(1) Represents percentage of voting power of our Class A common stock and Class B common stock voting together as a single class. The OneWater Unit Holders hold one share of Class B common stock for each OneWater LLC Unit.
(2) Includes (a) 847,378 shares of Class A common stock and 204,858 shares of Class B common stock held by Peter H. Bos, Jr. and Teresa D. Bos as tenants in the entirety and (b) 940,186 shares of Class B common stock held by Legendary
Investments LLC, which is controlled by Peter H. Bos, Jr. and Teresa D. Bos. The mailing address of these individuals and entities is 4471 Legendary Drive, Destin, Florida 32541. Peter H. Bos, Jr. and Teresa D. Bos are affiliated with Legendary
Marine, which combined with Singleton Marine in 2014 to form OneWater LLC.
(3) Includes (a) 134,027 shares of Class A common stock and 514,373 shares of Class B common stock directly owned by Auburn OWMH, LLLP, (b) 345,678 shares of Class B common stock directly owned by the Philip Singleton Irrevocable Trust, dated
December 24, 2015 (the “12/24 Trust”), (c) 476,261 shares of Class B common stock directly owned by the Austin Singleton Irrevocable Trust, dated December 30, 2015 (the “12/30 Trust”) and (d) 4,333 shares of Class A common stock underlying restricted
stock units granted to Mr. Singleton that are scheduled to vest within 60 days after January 4, 2021. The general partner of Auburn OWMH, LLLP is Singleton Asset Management, LLC, for which P. Austin
Singleton is the sole manager. Singleton Asset Management, LLC has sole voting and investment control over shares held by Auburn OWMH, LLLP. The 12/24 and 12/30 Trusts have third-party trustees, but Mr. Singleton may be deemed a beneficial owner of
the shares held by the trusts. In connection with a personal loan to Mr. Singleton, the 12/30 Trust has entered into a pledge agreement, pursuant to which the 12/30 Trust has granted to the lender a security interest in 476,261 LLC Units and shares
of Class B common stock held by the 12/30 Trust.
(4) Includes (a) 2,000 and 693,423 shares of Class A common stock and Class B common stock, respectively, held directly by Mr. Aisquith, (b) 345,678 shares of Class B common stock held by the 12/24 Trust, a selling stockholder for which Mr.
Aisquith is a co-trustee and in which he has no pecuniary interest and (c) 4,333 shares of Class A common stock underlying restricted stock units granted to Mr. Aisquith that are scheduled to vest within 60 days after January 4, 2021.
(5) Includes (a) 67,275 shares of Class A common stock directly owned by Beekman Investment Partners AIV III-OWM, L.P., (b) 414,527 shares of Class A common stock directly owned by Beekman Investment Partners III, LP, (c) 222,025 shares of Class B
common stock directly owned by OWM BIP Investor, LLC, and (d) 6,250 shares of Class A common stock underlying restricted stock units granted to Mr. Troiano that are scheduled to vest within 60 days after January 4, 2021. Beekman Investment Partners
III, L.P. is an investment fund managed by a general partner, Beekman Investment Group III, LLC (“BIG III”). Beekman Investment Partners AIV III-OWM, L.P. (“AIV III”) is an investment fund that is managed by a general partner, BIG III. OWM BIP
Investor, LLC is an investment vehicle wholly owned by AIV III. Mr. Troiano is the sole manager of BIG III. The mailing address for AIV III, Beekman Investment Partners III, LP and OWM BIP Investor, LLC is c/o The Beekman Group, 530 Fifth Avenue,
23rd Floor, New York, New York 10036.
(6) Based on information obtained from a Schedule 13G/A filed with the SEC on December 2, 2020 by Royce & Associates, LP. Royce & Associates, LP reported that, as of December 2, 2020, it had sole voting and dispositive power with respect
to 846,115 shares of our Class A common stock. The mailing address of Royce & Associates, LP is 745 Fifth Avenue, New York, NY 10151.
(7) Based on information obtained from a Schedule 13G filed with the SEC on April 10, 2020 by Gilder, Gagnon, Howe & Co. LLC (“Gilder”). Gilder reported that as of March 31, 2020, it had shared dispositive power with respect to 635,823 shares
of our Class A common stock, which shares are held in customer accounts over which partners and/or employees of Gilder have discretionary authority to dispose of or direct the disposition of the shares. The mailing address of Gilder, Gagnon, Howe
& Co. LLC is 475 10th Avenue, New York, NY 10018.
(8) Based on information obtained from a Schedule 13G/A filed with the SEC on December 8, 2020 by American Century Capital Portfolios, Inc. (“ACCP”), American Century Investment Management, Inc. (“ACIM”), American Century Companies, Inc. (“ACC”)
and Stowers Institute For Medical Research, solely in its capacity as control entity of ACC (“Stowers”). As reported in the Schedule 13G, as of December 8, 2020, ACCP had sole voting and dispositive power with respect to 1,048,771 shares of our Class
A common stock, and each of ACIM, ACC and Stowers had sole dispositive power with respect to 1,353,382 shares of our Class A common stock. The mailing address of ACCP, ACIM, ACC and Stowers is 4500 Main Street, 9th Floor, Kansas City, Missouri 64111.
(9) Includes 12,500 shares of Class A common stock underlying restricted stock units granted to Mr. Ezzell that are scheduled to vest within 60 days after January 4, 2021.
(10) Includes 6,250 shares of Class A common stock underlying restricted stock units granted to Mr. Bodine that are scheduled to vest within 60 days after January 4, 2021.
(11) Includes 2,227 shares of Class A common stock underlying restricted stock units granted to Ms. Harlam that are scheduled to vest within 60 days after January 4, 2021.
(12) Includes (a) 25,000 shares of Class A common stock directly owned by Nantahala Legacy Partners LLC, (b) 150,000 shares of Class B common stock directly owned by L13, LLLP, (c) 150,000 shares of Class B common stock directly owned by JBL
Investment Holdings, LLLP and (d) 6,250 shares of Class A common stock underlying restricted stock units granted to Mr. Lamkin that are scheduled to vest within 60 days after January 4, 2021. Sea Oats Management, LLC is the manager of Nantahala
Legacy Partners LLC, for which Mr. Lamkin serves as sole manager and has sole voting and investment control over such shares held by Nantahala Legacy Partners LLC. The general partner of both L13, LLLP and JBL Investment Holdings, LLLP is Sea Oats
Management, LLC, for which Mr. Lamkin serves as sole manager and has sole voting and investment control over shares held by L13, LLLP and JBL Investment Holdings, LLLP. The mailing address of Nantahala Legacy Partners LLC, L13, LLLP and JBL
Investment Holdings, LLLP is 1023 State Highway 361, Suite C, #218, Port Aransas, Texas 78373.
(13) Includes 6,250 shares of Class A common stock underlying restricted stock units granted to Mr. Legler that are scheduled to vest within 60 days after January 4, 2021.
(14) Includes 6,250 shares of Class A common stock underlying restricted stock units granted to Mr. Schraudenbach that are scheduled to vest within 60 days after January 4, 2021.
(15) Includes 6,250 shares of Class A common stock underlying restricted stock units granted to Mr. Style that are scheduled to vest within 60 days after January 4, 2021.
Stockholder proposals intended to be included in the proxy materials for the 2022 annual meeting of stockholders pursuant to Rule 14a-8 under the Exchange Act must be received
by the Secretary of the Company no later than September 15, 2021, or otherwise as permitted by applicable law. The form and substance of these proposals must satisfy the requirements established by the Company’s amended and restated bylaws and the
SEC.
Additionally, stockholders seeking to recommend a director candidate or who intend to present a stockholder proposal at the 2022 annual meeting of stockholders not intended to be included in the proxy materials must
provide the Secretary of the Company with written notice of the proposal no earlier than 120 days before the anniversary of the preceding year’s annual meeting of stockholders and no later than 90 days before the anniversary of the preceding year’s
annual meeting of stockholders (provided, however, that if the date of the annual meeting is more than 30 days before or more than 60 days after the anniversary of the preceding year’s annual meeting, then written notice must be received by the
Company not later than the 10th day following the day on which the date of the 2022 annual meeting of stockholders is first publicly announced by the Company). A
stockholder nomination or written notice of a stockholder proposal at the 2022 annual meeting of the stockholders not intended to be included in the proxy materials must be provided no earlier than October 26, 2021 and no later than November 25,
2021. Notice must be tendered in the proper form prescribed by our amended and restated bylaws. Proposals not meeting the requirements set forth in our amended and restated bylaws will not be entertained at the annual meeting.
Any stockholder seeking to recommend a director candidate or any director candidate who wishes to be considered by the nominating and governance committee, the committee that recommends nominees to the Board for election
at each annual meeting, must provide the Secretary of the Company with the information required by our amended and restated bylaws, which includes, but is not limited to: (a) all information relating to such nominee that would be required to be
disclosed in a proxy statement for the election of such nominee as a director in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder and such nominee’s written consent to serve as a
director if elected; (b) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among such
stockholder and such nominee, if any, and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and the proposed nominee, and his respective affiliates and associates, or others acting in concert
therewith, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if the stockholder making the nomination and any beneficial owner on whose
behalf the nomination is made, if any, or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant; (c) a
representation that such nominee intends to serve a full term, if elected as director; and (d) such other information as the Company may reasonably require to determine the eligibility of the proposed nominee to serve as a director of the Company or
that the Company believes could be material to a reasonable stockholder’s understanding of the independence (both from management and from the stockholders or, if the proposal is made on behalf of a beneficial owner other than the stockholder of
record, from such beneficial owner) or qualifications of such nominee. The nominating and governance committee is not required to consider director candidates received after the applicable date or without the required information. The nominating
and governance committee will consider all director candidates who comply with these requirements and will evaluate these candidates using the criteria described above under the caption “Proposal No. 1—Election of Directors—Nomination of Directors.”
Director candidates who are then nominated by the Board will be included in the Company’s proxy statement for that annual meeting.
DELIVERY OF PROXY MATERIALS
Our 2020 annual report to stockholders for the fiscal year ended September 30, 2020, including audited financial statements, accompanies this proxy statement.
Our Annual Report on Form 10-K for the fiscal year ended September 30, 2020, and other information may be obtained without charge upon written request addressed to OneWater Marine Inc.,
6275 Lanier Islands Parkway, Buford, Georgia 30518 or by telephone at (678) 541-6300, in each case Attention: Chief Financial Officer.
EACH STOCKHOLDER IS URGED TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT IN THE POSTAGE-PREPAID ENVELOPE PROVIDED.
ONEWATER MARINE INC.
2021 EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I
PURPOSE, SHARE COMMITMENT AND INTENT
1.1
Purpose. The purpose of the
OneWater Marine Inc. 2021 Employee Stock Purchase Plan (the “Plan”) is to provide Employees of OneWater Marine Inc., a Delaware corporation (the
“Company”), and its Related Corporations that are selected by the Company to participate in the Plan pursuant to Article IX an opportunity to
purchase shares of Stock through periodic offerings of options to purchase shares of Stock and thereby motivate Employees to work for the continued success of the Company and its Related Corporations.
1.2
Share Commitment. The
aggregate number of shares of Stock authorized to be sold pursuant to Options granted under the Plan is 299,505, subject to adjustment as provided in Section 4.7. On October 1 of each year (provided the Plan has not otherwise been terminated prior
to such date), the aggregate number of shares of Stock authorized to be sold pursuant to Options granted under the Plan will increase by (i) 149,752 or (ii) such lesser of number of shares (including zero) that the Administrative Committee
determines for purposes of the annual increase for that fiscal year, subject to adjustment as provided in Section 4.7. The shares of Stock authorized to be sold pursuant to Options granted under the Plan may be unissued shares or reacquired shares,
including shares bought on the open market or otherwise for purposes of the Plan. In computing the number of shares of Stock available for grant, any shares of Stock relating to Options which are granted, but which subsequently lapse, are cancelled
or are otherwise not exercised by the final date for exercise, shall be available for future grants of Options.
1.3
Intent. It is the Company’s
intention that the Plan qualify as an “employee stock purchase plan” under Section 423 of the Code. Therefore, the provisions of the Plan are to be construed and interpreted in a manner that is consistent with the requirements of Section 423 of
the Code. Notwithstanding this Section 1.3, a particular Offering to a Participating Corporation may be made on terms that are not intended to satisfy the requirements of Section 423 of the Code.
The words and phrases defined in this Article shall have the meaning set out in these definitions throughout the Plan, unless the context in which any word or phrase appears reasonably requires a
broader, narrower, or different meaning.
2.1 “Account” means the bookkeeping account
maintained by the Administrative Committee that reflects the amount of payroll deductions credited on behalf of a Participant under the Plan.
2.2
“Administrative Committee” means a committee of officers and/or employees of the Company appointed by the Compensation Committee to administer the Plan or the Compensation Committee should such committee determine it will instead administer the
Plan.
2.3 “Authorized Leave of Absence” means a bona fide
leave of absence from service with the Company or a Related Corporation if the period of the leave does not exceed 90 days, or, if longer, so long as the individual’s right to reemployment with the Company or a Related Corporation is guaranteed
either by statute or contract.
2.4
“Base Compensation” means regular, straight-time earnings or base salary, excluding payments for overtime, shift differentials, incentive compensation, bonuses, and other special payments, fees, allowances or extraordinary compensation.
2.5
“Beneficiary” means the person who is entitled to receive amounts under the Plan upon the death of a Participant as determined under Section 11.13.
2.6
“Board” means the board of directors of the Company.
2.7
“Code” means the United States Internal Revenue Code of 1986, as amended from time to time.
2.8
“Company” means OneWater Marine Inc., a Delaware corporation.
2.9
“Compensation Committee” means the Compensation Committee of the Board or a successor committee appointed by the Board.
2.10 “Corporation” has the meaning prescribed by
Section 7701(a)(3) of the Code and Department of Treasury Regulation § 301.7701-2(b). For example, the term “Corporation” includes a foreign corporation (as defined in Section 7701(a)(5) of the Code) and a limited liability company that is treated
as a corporation for all United States Federal income tax purposes.
2.11
“Employee” means any person who is a common-law employee of a Participating Corporation.
2.12
“Employer Corporation” means a Corporation that is, at the time the Option is granted, the employer of the Employee and a Participating Employer.
2.13
“Exercise Date” means the last Trading Day of each Offering Period, which is the day that all Options that eligible Employees have elected to exercise are to be exercised.
2.14
“Fair Market Value” of one share of Stock as of a particular date means, if listed on any established stock exchange or a national market system, including, without limitation, the New York Stock Exchange or the NASDAQ Stock Exchange,
the closing price of the Stock on the composite tape on that date, or if no prices are reported on that date, on the last preceding date on which such prices of the Stock are so reported; provided, however, the Administrative Committee may elect to
use any other definition of Fair Market Value that complies with the requirements of Treasury Regulation § 1.421-1(e). If the Stock is traded over the counter at the time a determination of its fair market value is required to be made hereunder,
its fair market value shall be deemed to be equal to the average between the reported high and low prices of Stock on the most recent date on which the Stock was publicly traded. In the event Stock is not publicly traded at the time a determination
of its value is required to be made hereunder, the determination of fair market value shall be made by the Administrative Committee in such manner as it deems appropriate and in accordance with Code Section 409A and Treasury Regulation §
1.421-1(e).
2.15 “Five Percent Owner” means an owner of more
than five percent of the outstanding stock of the Employer Corporation or of any Related Corporation or stock possessing more than 5 percent of the total combined voting power of all stock of the Employer Corporation or of any Related Corporation.
For purposes of determining whether an Employee is a Five Percent Owner, an Employee is considered to own stock that the Employee may purchase under outstanding options (including incentive stock options, nonqualified stock options, options granted
under the Plan or any other stock options). Further, for purposes of determining whether an Employee is a Five Percent Owner, the rules of Section 424 of the Code (relating to attribution of stock ownership) shall apply. Accordingly, for purposes
of determining whether an Employee is a Five Percent Owner, (i) the Employee is considered as owning the stock owned, directly or indirectly, by or for the Employee’s brothers or sisters (whether by the whole or half blood), spouse, ancestors and
lineal descendants and (ii) stock owned, directly or indirectly, by or for a corporation, partnership, estate or trust is considered as being owned proportionately by or for its shareholders, partners, or beneficiaries. The determination of the
percentage of the total combined voting power of all classes of stock of the Company or any Related Corporation that is owned by an individual is made by comparing the voting power or value of the shares owned (or treated as owned) by the
individual to the aggregate voting power of all shares actually issued and outstanding immediately after the grant of the Option to the individual. The aggregate voting power or value of all shares actually issued and outstanding immediately after
the grant of the Option does not include the voting power or value of treasury shares or shares authorized for issue under outstanding options held by the individual or any other person.
2.16
“Grant Date” means the first day of each Offering Period, which is the day all eligible Employees are granted an Option under the Plan.
2.17
“Highly Compensated Employee” has the meaning specified in Section 414(q) of the Code.
2.18
“Offering” means a given offering of Options under this Plan.
2.19
“Offering Period” means, with respect to a given Offering, the period beginning on the Grant Date and ending on the Exercise Date. The Offering Periods shall begin and end at such times as are specified by the Administrative
Committee. Unless and until the Administrative Committee specifies different Offering Periods in writing, there shall be two Offering Periods during a calendar year, the first of which commences on January 1 and ends on June 30 and the second of
which begins on July 1 and ends on December 31. In no event shall an Offering Period exceed 27 months.
2.20
“Option” means an option granted under the Plan to purchase shares of Stock at the Option Price on the Exercise Date.
2.21
“Option Price” means the price per share of Stock to be paid by each Participant upon exercise of an Option, which, subject to the following sentence, shall be 85 percent of the lesser of (i) the Fair Market Value of a share of
Stock on the Grant Date or (ii) the Fair Market Value of a share of Stock on the Exercise Date. Prior to the commencement of an Offering Period, the Board, the Compensation Committee or the Administrative Committee may, in lieu of the Option Price
specified in the preceding sentence, establish in writing an Option Price for an Offering that is greater than the amount specified in the preceding sentence. The Option Price may be stated as either a percentage of Fair Market Value or as a dollar
amount. The Option Price shall be subject to adjustment under Section 4.7.
2.22
“Parent Corporation” means any Corporation (other than the Company) in an unbroken chain of Corporations ending with the Company if, at the time of the granting of the Option, each of the Corporations other than the Company owns stock
possessing 50 percent or more of the total combined voting power of all classes of stock in one of the other Corporations in such chain.
2.23
“Participant” means a person who is eligible to be granted an Option under the Plan for the applicable Offering.
2.24
“Participating Corporation” means the Company and/or any of its Related Corporations that is selected for participation in the applicable Offering pursuant to Article IX.
2.25
“Plan” means the OneWater Marine Inc. Employee Stock Purchase Plan, as set out in this document and as it may be amended from time to time.
2.26
“Qualified Employee Stock
Purchase Plan” means a stock purchase plan to the extent that Section 423 of the Code applies to the plan.
2.27
“Related Corporation” means a Corporation that is either a Parent Corporation or a Subsidiary Corporation with respect to the Company on the Grant Date of an Option.
2.28
“Stock” means the Class A common stock of the Company, $0.01 par value per share, or, in the event that the outstanding shares of common stock are later changed into or exchanged for a different class of shares or securities
of the Company or another corporation, that other share or security. Shares of Stock, when issued, may be represented by a certificate or by book or electronic entry.
2.29
“Subsidiary Corporation” means any Corporation (other than the Company) in an unbroken chain of Corporations beginning with the Company if, at the time of the granting of the Option, each of the Corporations other than the last Corporation in
the unbroken chain owns stock possessing 50 percent or more of the total combined voting power of all classes of stock in one of the other Corporations in the chain.
2.30
“Trading Day” means a day on which the principal securities exchange on which the shares of Stock are listed is open for trading.
3.1
General Requirements. Subject
to Section 3.3, each Employee of each Participating Corporation who is not excluded from participation pursuant to Section 3.2 is eligible to participate in a given Offering if the individual is in the employ of a Participating Corporation on the
Grant Date. For purposes of this Section 3.1, the existence of the employment relationship between an individual and a Participating Corporation will be determined under Department of Treasury Regulation § 1.421-1(h). Participation in the Plan by
any Employee is voluntary.
3.2
Exclusions from Participation.
Subject to Section 3.3, under each Offering, Options will be granted to all participating Employees of all Participating Corporations, except that one or more of the following categories of Employees may be excluded from coverage under an Offering:
(a) Persons Employed Less Than Two Years. Employees who have been employed
less than two years (or lesser period of time as may be specified in writing by the Administrative Committee) as of the Grant Date may be excluded from an Offering provided that the exclusion is applied in an identical manner to all Employees of
every Participating Corporation whose Employees are granted Options under the Offering.
(b) Persons Customarily Employed 20 Hours Or Less Per Week. Employees
whose customary employment is 20 hours or less per week (or a lesser number of hours per week as may be specified in writing by the Administrative Committee) as of the Grant Date may be excluded from an Offering provided that the exclusion is
applied in an identical manner to all Employees of every Participating Corporation whose Employees are granted Options under the Offering.
(c) Persons Customarily Employed for Not More Than Five Months During a Calendar Year. Employees whose customary employment is for not more than five months in any calendar year (or a lesser number of months as may be specified in writing by the Administrative Committee) as of the Grant Date may be excluded from an
Offering, provided that the exclusion is applied in an identical manner to all Employees of every Participating Corporation whose Employees are granted Options under the Offering.
(d) Persons Who Are Highly Compensated Employees. Employees who are
Highly Compensated Employees as of the Grant Date may be excluded from an Offering. Alternatively, Employees who are Highly Compensated Employees with compensation above a certain level as of the Grant Date may be excluded from an Offering.
Alternatively, Employees who are both Highly Compensated Employees and officers or subject to the disclosure requirements of Section 16(a) of the Securities Exchange Act of 1934 as of the Grant Date may be excluded from an Offering. Any exclusion
relating to Highly Compensated Employees must be applied in an identical manner to all Highly Compensated Employees of all Participating Corporations.
(e) Certain Residents of Foreign Jurisdictions. Employees who are
residents of a foreign jurisdiction (without regard to whether they are also citizens of the United States or resident aliens within the meaning of Section 7701(b)(1)(A) of the Code) may be excluded from an Offering if (1) the grant of an Option
under the Offering to a citizen or resident of the foreign jurisdiction is prohibited under the laws of such jurisdiction or (2) compliance with the laws of the foreign jurisdiction would cause the Offering to violate the requirements of Section
423 of the Code.
(f) Default Exclusions from Participation. Unless the Administrative
Committee specifies in writing that different exclusions are applicable with respect to a given Offering, the following persons shall be excluded from participation in an Offering: (1) Employees who have been employed less than one year from the
Grant Date, and (2) Employees who are residents of a foreign jurisdiction (without regard to whether they are also citizens of the United States or resident aliens within the meaning of Section 7701(b)(1)(A) of the Code) if (A) the grant of an
Option under the Offering to a citizen or resident of the foreign jurisdiction is prohibited under the laws of such jurisdiction or (B) compliance with the laws of the foreign jurisdiction would cause the Offering to violate the requirements of
Section 423 of the Code.
(g) Use of Exclusions Other Than Default Exclusions from Participation.
If the Administrative Committee determines to apply exclusions from participation with respect to a given Offering that are different than the default exclusions specified in paragraph (f) of this Section 3.2, such exclusions shall be specified in
writing. Any such exclusions from participation shall be consistent with the provisions of this Section 3.2.
3.3
Limitations upon Participation by Certain Stockholders. No Employee shall be granted an Option to the extent that the Option would cause the Employee to be a Five Percent Owner immediately after the grant. Accordingly, an Employee who is a Five Percent Owner immediately
prior to the Date of Grant for an Offering shall not be granted an Option for such Offering. An Employee who would become a Five Percent Owner immediately after the grant of an Option only as a result of the grant of the Option shall be granted an
Option to purchase no more than the number of whole shares of Stock as would not cause him to become a Five Percent Owner.
4.1
Terms of an Offering. The terms
of an Offering shall be established by the Administrative Committee. The terms shall be set forth in writing and communicated to eligible Employees prior to the Grant Date for the Offering. The terms of an Offering shall include (i) a designation
of the Participating Corporations, (ii) the identification of any exclusions from participation applicable to the Offering (which exclusions must be permitted under Section 3.2), (iii) the Offering Period, and (iv) the Option Price. Offerings may
be consecutive and overlapping, and the terms of each Offering need not be identical provided that the terms of the Plan and the Offering together satisfy the requirements of this Section 4.1 and Department of Treasury Regulations issued under
Section 423 of the Code.
4.2
Grant of Option. Effective as
of the Grant Date of each Offering, the Company shall grant an Option to each Participant which shall be exercisable on the Exercise Date through funds accumulated by the Participant through payroll deductions made during the Offering Period. Each
Option grant is subject to the availability of a sufficient number of shares of Stock reserved for purchase under the Plan. In the event there is an insufficient number of shares reserved for purchase under the Plan, the number of shares purchased
shall be adjusted as provided in Section 4.8.
4.3 Maximum Number of Shares Subject to Option. An Option granted to an Employee for any
Offering shall be for that number of whole shares of Stock equal to the least of the number of whole shares of Stock that may be purchased during the Offering Period (i) at the Option Price with the amount credited to the Participant’s Account on
the Exercise Date, (ii) under limitations established by the Administrative Committee pursuant to Section 4.4, (iii) under the limitation set forth in Section 4.5 or (iv) without causing the Employee to become a Five Percent Owner. The number of
shares of Stock that may be purchased under an Option shall be subject to adjustment under Sections 4.7 and 4.8.
4.4
Formula or Specific Share Limitation Established by the Company. The Administrative Committee shall establish and announce to Participants prior to an Offering a maximum number of shares of Stock that may be purchased by a Participant during the Offering Period. The Administrative
Committee may specify that the maximum amount of Stock that a Participant may purchase under an Offering is determined on the basis of a uniform relationship to the total compensation or the Base Compensation, of all Employees. Notwithstanding any
other provision of the Plan, unless the Administrative Committee, with the advance approval of the Compensation Committee, determines otherwise with respect to an Offering, the maximum number of shares of Stock that that a Participant shall be
permitted to purchase during an Offering Period is 10,000 shares.
4.5
Annual $25,000 Limitation. No
Employee will be permitted to purchase shares of Stock under all Qualified Employee Stock Purchase Plans of the Employer Corporation and its Related Corporations at a rate which exceeds $25,000 in Fair Market Value of the shares of Stock
(determined at the time the Option is granted) for each calendar year in which any option granted to the Employee is outstanding at any time. This limitation shall be applied taking into account the rules set forth in Department of Treasury
Regulation § 1.423-2(i) (or a successor regulation).
4.6
Equal Rights and Privileges.
All Employees who are granted Options under an Offering must have equal rights and privileges within the meaning of Section 423 of the Code and Department of Treasury Regulation § 1.423-2(f). An Offering will not fail to satisfy the requirements
of this Section 4.6 if, in order to comply with the laws of a foreign jurisdiction, the terms of an Option granted under the Offering to citizens or residents of such foreign jurisdiction (without regard to whether they are also citizens of the
United States or resident aliens within the meaning of Section 7701(b)(1)(A) of the Code) are less favorable than the terms of Options granted under the Offering to Employees who are resident in the United States.
4.7
Adjustments of Options In the
event of any stock dividend, split-up, stock split, reverse stock split, recapitalization, reorganization, merger, consolidation, spin-off, repurchase, combination or exchange of shares, or the like, as a result of which shares shall be issued in
respect of the outstanding shares of Stock, or the shares of Stock shall be converted into the same or a different number of the same or another class of stock, the total number of shares of Stock authorized to be committed to the Plan, the number
of shares of Stock subject to each outstanding Option, the Option Price applicable to each Option, and/or the consideration to be received upon exercise of each Option shall be appropriately adjusted by the Administrative Committee. In addition,
the Compensation Committee shall, in its sole discretion, have authority to provide for (i) the acceleration of the Exercise Date of outstanding Options or (ii) the conversion of outstanding Options into cash or other property to be received in
certain of the transactions specified in this paragraph above upon the completion of the transaction.
4.8 Insufficient Number of Shares. If the number of shares of Stock reserved for purchase
for any Offering Period is insufficient to cover the number of shares which Participants elect to purchase during such Offering Period, then the number of shares of Stock which each Participant has a right to purchase on the Exercise Date shall be
reduced to the number of shares of Stock which the Administrative Committee shall determine by multiplying the number of shares of Stock reserved under the Plan for such Offering Period by a fraction, the numerator of which shall be the number of
shares of Stock which the Participant elected to purchase during the Offering Period and the denominator of which shall be the total number of shares of Stock which all Participants elected to purchase during such Offering Period.
ARTICLE V
PAYROLL DEDUCTIONS
5.1
Authorization of Payroll Deductions. For an Employee to participate during a given Offering Period, he or she must elect to participate in the Offering by authorizing deductions from his or her Base Compensation prior to the beginning of the Offering Period in accordance with
procedures established by the Administrative Committee. An Employee may authorize payroll deductions from his or her pay check in an amount equal to at least 1%, but not more than 75% of his or her Base Compensation on each pay day occurring
during an Offering Period (or such other maximum percentage as the Administrative Committee may establish from time to time before an Offering Period begins). A Participant’s payroll deductions shall commence on the first pay date following the
Grant Date and shall continue through the last pay date prior to the Exercise Date unless the Participant otherwise withdraws or modifies his or her payroll deduction election in accordance with Sections 5.2 or 6.1. A Participant may not make
additional payments to the Participant’s Account. An Employee who does not authorize payroll deductions from his or her Base Compensation with respect to a given Offering shall be deemed to have elected to not participate in the Offering.
5.2
Right to Stop or Change Payroll Deductions. A Participant shall have the right to discontinue or modify his or her payroll deduction authorization in accordance with procedures established by the Administrative Committee.
5.3
Accounting for Funds. As of
each payroll deduction period, the Participating Corporation shall cause to be credited to the Participant’s Account in a ledger established for that purpose the funds withheld from and attributable to the Participant’s Base Compensation for that
period. No interest shall be credited to the Participant’s Account at any time. Notwithstanding anything to the contrary herein, the obligation of the Participating Corporation to the Participant for this Account shall be a general corporate
obligation and shall not be funded through a trust nor secured by any assets which would cause the Participant to be other than a general creditor of the Participating Corporation.
5.4 Participating Corporation’s Use of Funds. All payroll deductions received or held by a
Participating Corporation may be used by the Participating Corporation for any corporate purpose, and the Participating Corporation shall not be obligated to segregate such payroll deductions.
5.5
Return of Funds. Except as
specified herein, as soon as administratively practicable after the expiration of an Offering Period, payroll deductions that are not used to purchase Stock during such Offering Period will be refunded to the Participants without interest.
ARTICLE VI
IN SERVICE WITHDRAWAL, TERMINATION OR DEATH
6.1
In Service Withdrawal. A
Participant may, at any time on or before 15 days prior to the Exercise Date, or such other date as shall be selected by the Administrative Committee from time to time, elect to withdraw all of the funds then credited to the Participant’s Account
by giving notice in accordance with the rules established by the Administrative Committee. The amount elected to be withdrawn by the Participant shall be paid to the Participant as soon as administratively feasible. Any election by a Participant
to withdraw all of the Participant’s cash balance under the Plan terminates the Participant’s right to exercise the Participant’s Option on the Exercise Date and the Participant’s entitlement to elect any further payroll deductions for the
then-current Offering Period. If the Participant wishes to participate in any future Offering Period, he or she must file a new payroll deduction election within the time frame required by the Administrative Committee for participation for that
Offering Period.
6.2
Termination of Employment Prior to the Exercise Date. If a Participant’s employment with the Company and all Related Corporations is terminated for any reason (including death) prior to the Exercise Date, the Options granted to the Participant for that Offering Period
shall lapse. If a Participant is on an Authorized Leave of Absence, for purposes of the Plan, the Participant’s employment with the Company and all Related Corporations shall be deemed to be terminated on the later of the 91st day of such leave or
the date through which the Participant’s employment is guaranteed either by statute or contract. The Participant’s funds then credited to the Participant’s Account at the time of such termination or deemed termination shall be returned to the
Participant or Beneficiary, as applicable, as soon as administratively feasible thereafter.
ARTICLE VII
EXERCISE OF OPTION
7.1
Purchase of Shares of Stock.
Subject to the provisions of the Plan, on the Exercise Date of the applicable Offering Period for an Offering, each Participant’s Account shall be used to purchase the maximum number of whole shares of Stock that can be purchased at the Option
Price for that Offering. Fractional shares are not permitted under the Plan. As described in Section 4.8, if in any Offering the total number of shares of Stock to be purchased by all Participants exceeds the number of shares of Stock committed
to the Plan, then each Participant shall be entitled to purchase only the Participant’s pro rata portion of the shares of Stock remaining available under the Plan based on the balances in each Participant’s Account as of the Exercise Date. After
the purchase of all shares of Stock available on the Exercise Date, all Options granted for the Offering to the extent not used are terminated because no Option shall remain exercisable after the Exercise Date.
7.2 Accounting for Shares of Stock. After the Exercise Date of each Offering, a report shall
be given to each Participant stating the amount of the Participant’s Account, the number of shares of Stock purchased and the Option Price.
7.3
Issuance of Shares of Stock.
The Administrative Committee may determine in its discretion the manner of delivery of the shares of Stock purchased under the Plan, which may be by book or electronic account entry into new or existing accounts, delivery of Stock certificates or
any other means as the Administrative Committee, in its discretion, deems appropriate. The Administrative Committee may, in its discretion, hold the certificates for any shares of Stock or cause such certificates to be legended in order to comply
with the laws of any applicable jurisdiction, or, should the shares of Stock be represented by book or electronic account entry rather than a certificate, the Administrative Committee may take such actions to restrict transfer of the shares of
Stock as the Administrative Committee considers necessary or advisable to comply with applicable law.
ARTICLE VIII
ADMINISTRATION
8.1
Powers. The Administrative
Committee has the responsibility for the general administration of the Plan, and has all powers necessary to accomplish that purpose, including the following rights, powers, and authorities:
(a) to make rules for administering the Plan so long as they are not inconsistent with the terms of the Plan;
(b) to construe all provisions of the Plan;
(c) to correct any defect, supply any omission, or reconcile any inconsistency which may appear in the Plan;
(d) to select, employ, and compensate at any time any consultants, accountants, attorneys, and other agents the Administrative Committee believes
necessary or advisable for the proper administration of the Plan;
(e) to determine all questions relating to eligibility, Fair Market Value, Option Price and all other matters relating to benefits or Participants’
entitlement to benefits;
(f) to determine all controversies relating to the administration of the Plan, including any differences of opinion arising between a Participating
Corporation and a Participant, and any questions it believes advisable for the proper administration of the Plan; and
(g) to delegate any clerical or recordation duties of the Administrative Committee as the Administrative Committee believes is advisable to properly
administer the Plan.
8.2
Quorum and Majority Action. A
majority of the Administrative Committee constitutes a quorum for the transaction of business. The vote of a majority of the members present at any meeting shall decide any question brought before that meeting. In addition, the Administrative
Committee may decide any question by a vote, taken without a meeting, of a majority of its members via telephone, computer, fax or any other medium of communication.
8.3
Standard of Judicial Review of Committee Actions. The Administrative Committee has full and absolute discretion in the exercise of each and every aspect of its authority under the Plan. Notwithstanding anything to the contrary and other than with respect to the Company, any
action taken, or ruling or decision made by the Administrative Committee in the exercise of any of its powers and authorities under the Plan shall be final and conclusive as to all parties, including all Participants and their beneficiaries,
regardless of whether the Administrative Committee or one or more of its members may have an actual or potential conflict of interest with respect to the subject matter of the action, ruling, or decision. No final action, ruling, or decision of
the Administrative Committee shall be subject to de novo review in any judicial proceeding; and no final action, ruling, or decision of the Administrative Committee may be set aside unless it is held to have been arbitrary and capricious by a final
judgment of a court having jurisdiction with respect to the issue.
ARTICLE IX
PARTICIPATION IN PLAN BY OTHER RELATED CORPORATIONS
9.1
Participation Procedure. The
Company, acting through the Administrative Committee, shall designate the Related Corporations of the Company that may participate in a given Offering. A Related Corporation that is selected to participate in an Offering shall provide the Company
all information required by the Company in order to administer the Plan.
9.2
No Joint Venture Implied.
Neither the participation in the Plan or an Offering by a Related Corporation nor any act performed by it in relation to the Plan shall create a joint venture or partnership relation between it and the Company or any other Related Corporation.
ARTICLE X
TERMINATION AND AMENDMENT OF THE PLAN
10.1
Termination of the Plan.
Unless, earlier terminated in accordance with this Section 10.1, the plan will terminate on the 20th anniversary of the date the Plan is adopted by the Board. The Company may, by action of the Board or the Compensation Committee, terminate the Plan
at any time and for any reason. The Plan shall automatically terminate upon the purchase by Participants of all shares of Stock committed to the Plan, unless the number of shares of Stock committed to the Plan is increased by the Board and
approved by the stockholders of the Company. No Options may be granted under the Plan after it is terminated. As soon as administratively feasible following the termination of the Plan there shall be refunded to each Participant the remaining
funds in the Participant’s Account. The termination of the Plan shall not affect the current Options already outstanding under the Plan to the extent there are shares of Stock committed to the Plan available, unless the Participants agree
otherwise or except as expressly provided in the Plan or as necessary to comply with applicable laws or regulatory guidance or to ensure that the Plan and/or rights granted thereunder comply with the requirements of Section 423 of the Code.
10.2 Amendment or Suspension. The Board or the Compensation Committee has the right to modify,
alter or amend the Plan at any time and from time to time to any extent that it deems advisable, including, without limiting the generality of the foregoing, any amendment to the Plan deemed necessary to ensure compliance with Section 423 of the
Code. The Board or the Compensation Committee may suspend the operation of the Plan for any period as it may deem advisable by determining not to commence a new Offering Period following any Exercise Date; provided, that the Board or the
Administrative Committee may subsequently determine to end any suspension period and commence a new Offering Period, subject to and to the extent permitted by the requirements of applicable laws or regulatory guidance, including Section 423 of the
Code, and the terms of the Plan. However, no amendment or suspension shall operate to reduce any amounts previously allocated to a Participant’s Account, reduce a Participant’s rights with respect to shares of Stock previously purchased and held
on the Participant’s behalf under the Plan or adversely affect the current Options a Participant already has outstanding under the Plan without the Participant’s agreement. Any amendment changing the aggregate number of shares of Stock to be
committed to the Plan and any other change for which stockholder approval is required under regulations issued by the Department of Treasury or an applicable stock exchange must be approved by the stockholders of the Company in order to be
effective.
11.1
Plan Not An Employment Contract.
The adoption and maintenance of the Plan is not a contract between any Participating Corporation and its Employees which gives any Employee the right to be retained in its employment. Likewise, it is not intended to interfere with the rights of
any Participating Corporation to discharge any Employee at any time or to interfere with the Employee’s right to terminate the Employee’s employment at any time.
11.2
Options Are Not Transferable.
No Option granted to a Participant under the Plan is transferable by the Participant, and must be exercisable only by the Participant. In the event any Participant attempts to violate the terms of this Section, any Option held by the Participant
shall be terminated by the Company and, upon return to the Participant of the remaining funds in the Participant’s Account, all of the Participant’s rights under the Plan will terminate.
11.3
Voting of Shares of Stock.
Shares of Stock held under the Plan for the account of each Participant shall be voted by the holder of record of those shares of Stock in accordance with the Participant’s instructions.
11.4 No Rights of Stockholder. No eligible Employee or Participant shall by reason of
participation in the Plan have any rights of a stockholder of the Company until he or she acquires shares of Stock as provided in the Plan.
11.5
Governmental Regulations. The
obligation to sell or deliver the shares of Stock under the Plan is subject to the approval of all governmental authorities required in connection with the authorization, purchase, issuance or sale of the shares of Stock.
11.6
Notices. All notices and other
communication in connection with the Plan shall be in the form specified by the Administrative Committee and shall be deemed to have been duly given when sent to the Participant at the Participant’s last known address or to the Participant’s
designated personal representative or beneficiary, or to the Participating Corporation or its designated representative, as the case may be.
11.7
Indemnification of the Administrative Committee, the Compensation
Committee and the Board. In addition to all other rights of indemnification as they may have as directors or as members of the Administrative Committee or the Compensation Committee, the members of the
Administrative Committee and the Compensation Committee shall be indemnified by the Company, in all cases to extent permitted by applicable law, against the reasonable expenses, including attorneys’ fees, actually and necessarily incurred in
connection with the defense of any action, suit or proceeding, or in connection with any appeal, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan or any Option granted
under the Plan, and against all amounts paid in settlement (provided the settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any action, suit or proceeding, as such expenses
become due and payable.
11.8
Tax Withholding. At the time a
Participant’s Options are granted or exercised or at the time a Participant disposes of some or all of the shares of Stock purchased under the Plan, the Participant must make adequate provision for the Participating Corporation’s federal, state,
foreign or other tax withholding obligations, if any, which arise upon the grant or exercise of the Option or the disposition of the shares of Stock. At any time, the Participating Corporation may, but shall not be obligated to, withhold from the
Participant’s compensation the amount necessary for the Participating Corporation to meet applicable withholding obligations.
11.9
Interpretation. Headings are
given to the sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof. Words
in the masculine gender shall include the feminine gender, and, where appropriate, the plural shall include the singular and the singular shall include the plural. The use herein of the word “including” following any general statement, term or
matter shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as “without limitation”,
“but not limited to”, or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or
matter. References herein to any agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and not
prohibited by the Plan.
11.10 Data Privacy. By participating in the Plan, each Participant agrees to the collection,
processing, use and transfer of personal information by the Participating Corporation that employs the Participant, the Company and the Administrative Committee in order to administer the Plan.
11.11
Notice of Disposition. By
becoming a Participant in the Plan, each Participant agrees to promptly give the Administrative Committee or its delegate notice of any shares of Stock disposed of by the Participant. The notice shall include the number of shares of Stock disposed
of, the Exercise Date and the Date of Grant for the Stock.
11.12
Dispositions in Compliance with Securities Laws. By becoming a Participant in the Plan, each Participant agrees that any dispositions of shares of Stock by such Participant shall be in compliance with the provisions of federal, state and foreign securities laws, including the
provisions of Section 16(b) of the Securities Exchange Act of 1934.
11.13
Beneficiaries. At the time of
the Participant’s or former Participant’s death, (i) any cash in the Plan or (ii) any cash and shares of Stock in the Account shall be distributed to such Participant’s or former Participant’s (a) executor or administrator or (b) his or her heirs
at law, if there is no administration of such Participant’s or former Participant’s estate. The Participant’s or former Participant’s executor or administrator or heirs at law, if there is no administration of such Participant’s or former
Participant’s estate, shall be such Participant’s or former Participant’s Beneficiaries. Before any distribution is made, the Administrative Committee may require appropriate written documentation of (1) the appointment of the personal
representative of the Participant’s estate or (2) heirship.
11.14
Severability. Each provision of
this Agreement may be severed. If any provision is determined to be invalid or unenforceable, that determination shall not affect the validity or enforceability of any other provision.
11.15
Binding Effect. This Agreement
shall be binding upon any successor of the Company.
11.16
Limitation on Liability. Under
no circumstances shall the Company incur liability for any indirect, incidental, consequential or special damages (including lost profits) of any form incurred by any person, whether or not foreseeable and regardless of the form of the act in which
such a claim may be brought, with respect to this Plan or the Company’s role as Plan sponsor.
11.17 Arbitration. Any controversy arising out of or relating to the Plan, including any and
all disputes, claims (whether in tort, contract, statutory or otherwise) or disagreements concerning the interpretation or application of the provisions of the Plan, Employer Corporation’s employment of Participant and the termination of that
employment, shall be resolved by arbitration in accordance with the Employee Benefit Plan Claims Arbitration Rules of the American Arbitration Association (the “AAA”) then in effect. Within ten business days of the initiation of arbitration
hereunder, the Company and the Participant will each separately designate an arbitrator, and within 20 business days of selection, the appointed arbitrators will appoint a neutral arbitrator from the AAA National Panel of Employee Benefit Plan
Claims Arbitrators. The arbitrators shall issue their written decision (including a statement of finding of facts) within 30 days from the date of the close of the arbitration hearing. The decision of the arbitrators selected hereunder will be
final and binding on both parties. This arbitration provision is expressly made pursuant to and shall be governed by the Federal Arbitration Act, 9 U.S.C. Sections 1–16 (or any replacement or successor statute). Pursuant to Section 9 of the
Federal Arbitration Act, the Company and any Participant agrees that any judgment of the United States District Court for the District in which the headquarters of the Company is located at the time of initiation of arbitration hereunder shall be
entered upon the award made pursuant to the arbitration. Nothing in this Section 11.17 shall be construed, in any way, to limit the scope and effect of Article 8. In any arbitration proceeding full effect shall be given to the rights, powers, and
authorities of the Administrative Committee under Article 8.
11.18
Governing Law; Submission to Jurisdiction. All questions arising with respect to the provisions of the Plan and Awards shall be determined by application of the laws of the State of Delaware, without giving effect to any conflict of law provisions thereof, except to the extent
Delaware law is preempted by federal law. With respect to any claim or dispute related to or arising under the Plan, the Participating Corporation and each Participant hereby consent to the exclusive jurisdiction, forum and venue of the state and
federal courts located in Texas.
ONEWATER MARINE INC.
C/O BROADRIDGE CORPORATE ISSUER SOLUTIONS
PO BOX 1342
BRENTWOOD, NY 11717
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VOTE BY INTERNET
Before The Meeting - Go to www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or
meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
During The Meeting - Go to www.virtualshareholdermeeting.com/ONEW2021
You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the
instructions.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy
card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way,
Edgewood, NY 11717.
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ONEWATER MARINE INC. C/O BROADRIDGE CORPORATE ISSUER SOLUTIONS PO BOX 1342 BRENTWOOD, NY 11717 VOTE BY INTERNET Before The Meeting - Go to
www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the
web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/ONEW2021 You may attend the meeting via the Internet and vote during the
meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time
the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it
to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D28984-P47870 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND
RETURN THIS PORTION ONLY ONEWATER MARINE INC. The Board of Directors recommends you vote FOR the following: 1. Election of Directors Nominees: 1a. Austin Singleton 1b. Mitchell W. Legler 1c. John F. Schraudenbach For Withhold ! ! ! ! ! ! The Board
of Directors recommends you vote FOR proposals 2 and 3. 2. Approval of the Company’s 2021 Employee Stock Purchase Plan. 3. Ratification of the appointment of Grant Thornton LLP as the Company’s independent registered public accounting firm for the
fiscal year ending September 30, 2021. NOTE: The transaction of such other business as may properly come before the meeting or any adjournment thereof. For Against Abstain ! ! ! ! ! ! Please sign exactly as your name(s) appear(s) hereon. When
signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by
authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
OneWater Marine Inc. Annual Meeting of Stockholders February 23, 2021 9:00 AM, EST This proxy is solicited by the Board of Directors. The undersigned hereby appoints Austin Singleton, Anthony Aisquith and Jack Ezzell, or any of them, as proxies,
each with full power of substitution and revocation, and hereby authorizes them to represent and to vote, as designated on the reverse side of this form, all of the shares of Class A common stock and Class B common stock of OneWater Marine Inc.
that the undersigned is entitled to vote at the Annual Meeting of Stockholders to be held in a virtual-meeting format only via live webcast at 9:00 AM, EST on February 23, 2021, accessible at www.virtualshareholdermeeting.com/ONEW2021, and at any
adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed by the undersigned. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations,
and at the discretion of the proxy holders with regard to any other matter that may properly come before the meeting or any adjournment or postponement thereof. Continued and to be signed on reverse side