<PAGE>
MAKO MARINE INTERNATIONAL, INC.
4355 N.W. 128TH STREET
MIAMI, FLORIDA 33054
INFORMATION STATEMENT PURSUANT TO SECTION 14(f)
OF THE SECURITIES EXCHANGE ACT OF 1934
This Information Statement is being mailed on or about December 13, 1996 to
holders of record on December 12, 1996 of shares of common stock, par value $.01
per share ("Common Stock") of Mako Marine International, Inc., a Florida
corporation ("Mako"). It is being furnished in connection with the designation
by Tracker Marine, L.P., a Missouri limited partnership ("Tracker"), of persons
who will begin service as Directors of Mako as of a date which is not less than
ten days after the date of its mailing. Upon taking office as Directors,
Tracker's designees will constitute a majority of the Board of Directors of
Mako. Tracker's designation of persons to Mako's Board of Directors is pursuant
to a Stock Purchase Agreement dated December 4, 1996 ("Stock Purchase
Agreement") between Mako and Tracker described below. See "Change in
Control-Transaction with Tracker."
No action is required by the public shareholders of Mako in connection with
the appointment of persons designated by Tracker to Mako's Board of Directors.
However, Section 14(f) of the Securities Exchange Act of 1934, as amended
("Exchange Act"), requires Mako to mail to the holders of its Common Stock the
information set forth in this Information Statement at least ten days before the
change in a majority of its Directors.
NO PROXIES ARE BEING SOLICITED AND YOU ARE REQUESTED NOT TO SEND MAKO A
PROXY.
As of the close of business on December 12, 1996, Mako had outstanding
2,655,000 shares of Common Stock and outstanding warrants and options to
purchase 3,622,900 shares of Common Stock, including 3,100,000 publicly traded
Redeemable Common Stock Purchase Warrants ("Public Warrants").
CHANGE IN CONTROL
BACKGROUND
In its 1996 Annual Report Mako indicated that, as a result of continuing
losses, in order to meet its cash requirements and to continue as a going
concern, Mako would be required to achieve profitable operations and/or obtain
additional debt or equity financing. At that time Management's stated plans
included the review of potential transactions to gain market share and to absorb
additional overhead, and continued efforts to arrange debt and equity financing
to improve Mako's cash flow and capital positions. During the early months of
fiscal 1997, Mako continued to experience negative cash flows which, if not
remedied, will result in its inability to continue operations as anticipated. On
October 17, 1996, Mako entered into a non-binding letter of intention with
Tracker, which contemplated the sale of a controlling block of equity securities
of Mako in exchange for an infusion of cash and the contribution by Tracker of
certain assets related to its saltwater fishing boat manufacturing business.
TRANSACTION WITH TRACKER
Tracker, a privately-owned company based in Springfield, Missouri, is a
substantial manufacturer of freshwater fishing and pontoon boats. Tracker has a
network of more than 400 dealers in the United States and Canada, currently
offering numerous models of aluminum and fiberglass freshwater fishing boats.
Tracker conducts saltwater boat manufacturing operations under its Silver King
and SeaCraft brands, from a facility in Punta Gorda, Florida. See "Security
Ownership of Certain Beneficial Owners and Management" for information
concerning the beneficial ownership of Tracker.
Mako believes that the alliance with Tracker not only offers an opportunity
for Mako to obtain a needed infusion of cash and assets, but to take advantage
of Tracker's marketing and management expertise and distribution network.
The Stock Purchase Agreement provides that Tracker will purchase 6,400,000
newly issued shares of Common Stock ("Mako Shares") from Mako for a purchase
price consisting primarily of cash in the amount of $4,140,000 and assets
relating to Tracker's saltwater boat business, including exclusive rights over a
five-year period to advertise Mako's saltwater boat products in the "Offshore
Angler" catalog published by an affiliate of Tracker. It is anticipated that the
transaction, under applicable accounting
<PAGE>
principles, will result in an increase in Mako's capital of approximately $9.4
million. Mako has been advised by Tracker that the cash required for the
acquisition of the Mako Shares will be provided from internally generated funds.
The Stock Purchase Agreement also provides that during the period beginning
on the closing date and ending 90 business days following the exercise,
redemption or expiration date of the Public Warrants, Mako will issue to Tracker
an additional 1,800,000 shares, if the market price of Mako's Common Stock is $5
or more during a period of ten consecutive trading days; an additional 1,800,000
shares, if the price of the Common Stock is $6 or more during a period of ten
consecutive trading days; and an additional 3,629,000 shares if the price of the
Common Stock is $7 or more during a period of ten consecutive trading days. The
expiration date of the Public Warrants is August 23, 2000.
On December 4, 1996 Tracker and CreditAmerica Venture Capital, Inc. ("CAVC")
entered into an agreement ("CAVC Agreement") pursuant to which Tracker agreed to
purchase 930,000 shares of Mako's Common Stock ("CAVC Shares") from CAVC at a
price of $2 per share. The closing of the purchase of each of the Mako Shares
and the CAVC Shares will take place contemporaneously, CAVC is a venture capital
firm and Mako's principal shareholder. Douglas W. Baena, Mako's Chairman,
President and Chief Executive Officer, and Joseph J. Messina, a director of
Mako, are principal shareholders of CAVC. See "Security Ownership of Certain
Beneficial Owners and Management." Tracker has agreed to indemnify Mako's
officers and directors and CAVC and its officers, directors and controlling
persons against certain matters in respect of the sale of the CAVC Shares.
Upon its contemporaneous acquisition of the Mako Shares and the CAVC Shares,
Tracker will own of record and beneficially 7,330,000 shares of Mako Common
Stock, representing approximately 80.9% of the outstanding shares of Mako Common
Stock. Prior to the execution of the Stock Purchase Agreement and the CAVC
Agreement, Tracker advised the parties that it required, for business and
Federal income tax reasons, the initial and continued ownership of at least 80%
of the outstanding shares of Mako Common Stock. CAVC agreed to the sale of the
CAVC Shares in order to enable the prompt investment by Tracker in Mako.
The Stock Purchase Agreement also provides Tracker with an option to acquire
additional shares of Mako Common Stock at $1.50 per share. The option is
designed to permit Tracker to maintain an 80% interest in Mako to the extent
that outstanding options and warrants are exercised in the future. There are
currently outstanding options and warrants to purchase 3,622,900 shares of
Common Stock, which expire at varying dates through 2001.
The foregoing transactions are subject to certain conditions, including
certain consents, waivers and approvals. It is anticipated that closing of these
transactions will occur by December 31, 1996, although there can be no assurance
that such will be the case.
CHANGE IN MANAGEMENT
Upon Tracker's acquisition of the Mako Shares and the CAVC Shares, a change
of control of Mako will occur. Pursuant to the Stock Purchase Agreement, Tracker
will have the right to designate a majority of the Board of Directors. As a
result, at that time, the Board of Directors will be fixed at seven persons; and
Ken Burroughs, Joe C. Greene, Susie Henry and Larry Mueller, each of whom is a
designee of Tracker, will be appointed Directors. In addition, Douglas W. Baena,
Bruce Foerster and Joseph J. Messina will continue as Directors, and Jeffrey
Bleustein will resign. See "Directors." Mako has not been advised whether any
changes in the executive officers of Mako will occur.
EFFECT OF TRANSACTION ON MAKO'S CONTINUED LISTING ON THE NASDAQ SMALLCAP
MARKET
On October 3, 1996, Mako received notice from the Nasdaq Stock Market, Inc.,
that unless Mako could demonstrate its ability to meet Nasdaq's $1 million
minimum capital requirement for continued listing, Nasdaq would delist Mako's
Common Stock and Public Warrants from trading. After a hearing on November 21,
1996 before a Nasdaq Listing Qualifications Panel, Nasdaq granted Mako a
conditional exception to the capital requirement, primarily on the basis of the
proposed transaction with Tracker. The
2
<PAGE>
exception requires that Mako (i) provide Nasdaq with a copy of the definitive
contract with Tracker on or before December 4, 1996, (ii) close the transaction
with Tracker on or before December 31, 1996, (iii) file a public document with
the SEC and Nasdaq that evidences compliance with the criteria necessary for
initial listing on Nasdaq, and (iv) file an initial inclusion application with
Nasdaq by December 16, 1996. In the event these requirements are not met, or if
Mako's application is not accepted, Mako's Common Stock and Public Warrants may
be delisted from the Nasdaq SmallCap Market. In such event, it is anticipated
that Mako's securities would be traded on the Nasdaq Bulletin Board.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
At the close of business on December 12, 1996, Mako had outstanding
2,655,000 shares of Common Stock, each of which entitles the holder to one vote.
Voting is not cumulative.
The following table provides information, at December 12, 1996 and after
giving effect to the transactions with Tracker, with respect to (i) any person
known to Mako to be the beneficial owner of five percent or more of the
outstanding shares of Common Stock of Mako, (ii) each Director and certain
executive officers of Mako, and (iii) all Directors and executive officers as a
group. For the purpose of computing the percentage of the shares of Common Stock
owned by each person or group listed in this table, any shares not outstanding
which are subject to options or warrants exercisable within 60 days have been
deemed to be outstanding and owned by such person or group, but have not been
deemed to be outstanding for the purpose of computing the percentage of the
shares of Common Stock owned by any other person. Except as otherwise indicated
below, each of the persons named below is believed by Mako to possess sole
voting and investment power with respect to the shares of Common Stock
beneficially owned by such person.
<TABLE>
<CAPTION>
UPON CLOSING OF
AS OF DECEMBER 12, 1996 TRANSACTIONS WITH TRACKER
--------------------------------------- -------------------------------------
<S> <C> <C> <C> <C>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP AMOUNT AND NATURE
OF PERCENT OF OF BENEFICIAL PERCENT OF
NAME AND ADDRESS OF SHARES OF CLASS OWNERSHIP OF SHARES CLASS
BENEFICIAL OWNER COMMON STOCK OUTSTANDING OF COMMON STOCK OUTSTANDING
- --------------------------------- ---------------------- --------------- ------------------- ----------------
CAVC............................. 930,000(1) 35.0% None *
7358 Pine Forest Circle
Lake Worth, FL 33463
Douglas W. Baena................. 982,500(1)(2) 36.7% 52,500(2) *
3530 Magellan Circle
Aventura, FL 33180
Joseph J. Messina................ 967,500(1)(3) 36.4% 37,500(3) *
44 Madison Avenue
New York, NY 10017
Jeffrey Bleustein................ 7,000(4) * 7,000(4) *
3700 W. Juneau Avenue
Milwaukee, WI 53201
Bruce Foerster................... 3,000(5) * 3,000(5) *
4045 Sheridan Avenue
Suite 432
Miami Beach, FL 33140
Gerritt Walsh.................... 1,333(5) * 1,333(5) *
4355 N.W. 128th Street
Miami, FL 33054
Tracker Marine, L.P.............. None * 7,330,000(6) 80.9%
1915-C South Campbell
Springfield, MO 65804
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
UPON CLOSING OF
AS OF DECEMBER 12, 1996 TRANSACTIONS WITH TRACKER
--------------------------------------- -------------------------------------
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP AMOUNT AND NATURE
OF PERCENT OF OF BENEFICIAL PERCENT OF
NAME AND ADDRESS OF SHARES OF CLASS OWNERSHIP OF SHARES CLASS
BENEFICIAL OWNER COMMON STOCK OUTSTANDING OF COMMON STOCK OUTSTANDING
- --------------------------------- ---------------------- --------------- ------------------- ----------------
<S> <C> <C> <C> <C>
All Directors and executive
officers as a group
(nine persons)................. 1,097,667 41.3% 94,333 1%
</TABLE>
- ------------------------
* less than one percent.
(1) CAVC was the sole shareholder of Mako prior to its August 1995 public
offering. By reason of an agreement among the shareholders of CAVC, Douglas
W. Baena and Joseph J. Messina have the right to vote the 930,000 shares of
Common Stock of Mako owned by CAVC on all matters submitted to shareholders
and, accordingly, have shared voting power with respect to all such shares.
As a result of their respective stock interests in CAVC, each of the persons
listed below is the indirect beneficial owner of a portion of such 930,000
shares in the amounts indicated: Brett Schwebke--266,489 shares (10.0% of
the issued and outstanding); each of Douglas W. Baena and Harry
Bresky--200,400 shares (7.5%); BuyAmerica, Inc. (of which Paul Lavor is the
controlling shareholder)--136,443 shares (5.1%); and Wilmont Holdings Corp.
(of which Joseph J. Messina is the sole shareholder)--51,166 shares (1.9%).
Pursuant to the terms of the CAVC shareholders' agreement, each shareholder
of CAVC has agreed to elect and retain Mr. Baena and Mr. Messina as the sole
members of the board of directors of CAVC; provided that if Mr. Baena or Mr.
Messina ceases to be a shareholder of CAVC, no other shareholder will be
obligated to vote for such former shareholder as a director. No shareholder
of CAVC may transfer its shares without the consent of all other CAVC
shareholders. CAVC has outstanding warrants to purchase shares of CAVC
common stock. Such warrants are exercisable at any time until August 23,
1998. The aggregate of the exercise prices of all of such warrants is
approximately $690,000. If such warrants were exercised in full, as a result
of their respective interests in CAVC, each of the persons listed below
would be the indirect beneficial owner of a portion of such 930,000 shares
in the amounts indicated: Douglas W. Baena--254,084 shares (9.6%); Harry
Bresky--217,530 shares (8.2%); Brett Schwebke--134,389 shares (5.1%);
BuyAmerica Inc.--140,123 shares (5.3%); and Wilmont Holdings Corp.--108,586
shares (4.1%).
(2) Includes 12,500 shares that may be purchased upon exercise of Public
Warrants; 5,000 shares, of which 2,500 shares may be purchased upon exercise
of Public Warrants held by Mr. Baena's former wife (as to which he disclaims
beneficial ownership); and 20,000 shares, of which 10,000 shares may be
purchased upon exercise of Public Warrants held in trust for the benefit of
Mr. Baena's children.
(3) Includes 5,000 shares that may be purchased upon exercise of Public Warrants
and 25,000 shares that may be purchased upon exercise of an option granted
by Mako's Board of Directors.
(4) Includes 3,000 shares that may be purchased upon exercise of options granted
under Mako's 1995 Stock Option Plan and 2,000 shares that may be purchased
upon exercise of Public Warrants.
(5) Consists of shares that may be purchased upon exercise of options granted
under Mako's 1995 Stock Option Plan.
(6) Consists of shares to be acquired by Tracker. See "Change in Control."
Tracker is a Missouri limited partnership whose sole general partner is JLM
Management Company ("JLM"), a privately-held Missouri corporation. John L.
Morris, of Springfield, Missouri, is the sole director of JLM and, through a
revocable trust, the indirect beneficial owner of all of the outstanding
capital stock of JLM. Accordingly, Mr. Morris and JLM may also be considered
the beneficial owners of these shares. None of Kenneth Burroughs, Joe C.
Greene, Susie Henry or Larry Mueller, Tracker's designees for directors of
Mako, is the beneficial owner of any shares of Mako Common Stock.
Mr. Morris is engaged, through Bass Pro, L.P., Springfield, Missouri, a
privately-held Missouri limited partnership controlled by him, in the
businesses of retail and wholesale sporting goods sales, catalog sales of
sporting goods and the ownership and operation of a resort in Branson,
Missouri. Through his control of Tracker, discussed above, Mr. Morris is
also engaged in the fishing and family pontoon boat business.
4
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on a review of copies of forms filed under Section 16(a) of the
Exchange Act furnished to Mako and written representations from Mako's executive
officers and Directors, Mako believes that all Section 16(a) filing requirements
for the period ended June 29, 1996 applicable to its executive officers,
Directors and greater than 10% beneficial owners were satisfied.
DIRECTORS
Mako's bylaws provide that the number of Directors may be fixed within the
range of two to seven persons by the Board of Directors or the shareholders, if
not fixed by the Board. The number is currently fixed at four. Vacancies in the
Board may be filled by a vote of the remaining Directors.
CURRENT DIRECTORS
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
- --------------------------------------------- --- ------------------------------------------- ---------------
<S> <C> <C> <C>
Douglas W. Baena............................. 54 Chief Executive Officer, Chairman of the June 1994
Board and President of Mako
Jeffrey Bleustein............................ 57 President of Harley-Davidson Motor Company August 1995
Bruce S. Foerster............................ 55 President and Chief Executive Officer of January 1996
South Beach Capital Markets Advisory
Corporation
Joseph J. Messina............................ 41 Employee and owner of Ameristar Leasing June 1994
Company
</TABLE>
The following persons will assume office as Directors upon Tracker's
acquisition of the Mako Shares and the CAVC Shares. It is anticipated that such
persons will begin service on or prior to December 31, 1996, but in any event
more than ten days after the mailing of this Information Statement. The term of
office for each director will run until the 1997 Annual Meeting of Shareholders
and until their respective successors shall have been elected and shall have
qualified.
TRACKER'S DESIGNEES TO MAKO'S BOARD OF DIRECTORS
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION
- --------------------------------------------- --- ------------------------------------------------------------
<S> <C> <C>
Kenneth Burroughs............................ 41 President, Tracker Marine, L.P.
Joe C. Greene................................ 60 Attorney, Greene & Curtis, L.L.P.
Susie Henry.................................. 45 Executive Vice President, Bass Pro, L.P.
Larry Mueller................................ 50 Private Investor
</TABLE>
Susie Henry is the sister, and Larry Mueller is the brother-in-law, of John
L. Morris. See footnote (6) to table under the caption "Security Ownership of
Certain Beneficial Owners and Management."
Each of the current Directors and Tracker's designees for Directors of Mako
is a United States citizen. During the past five years, none of the current
Directors or Tracker designees (i) has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) was a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
that resulted in a final judgment, decree or final order enjoining further
violations of, or prohibiting activity subject to, federal or state securities
laws or finding any violations of such laws.
BUSINESS HISTORIES OF DIRECTORS
Douglas W. Baena has been Chairman of the Board and Chief Executive Officer
of Mako since its inception in June 1994 and its President from inception to
January 1995 and from July 1996 to the present.
5
<PAGE>
Since 1989, Mr. Baena has been a private investor. He is the President, a
Director and significant shareholder of CAVC and the sole shareholder of
CreditAmerica, Inc. ("CreditAmerica"), an equipment leasing and finance company.
Since January 1993, Jeffrey Bleustein has been the President of
Harley-Davidson Motor Company, the largest manufacturer of motorcycles in the
United States, and for more than five years prior thereto, he held various other
executive positions with Harley-Davidson. Mr. Bleustein is also a Director of
Rexworks, Inc., a manufacturer of waste disposal equipment.
Since January 1995, Bruce S. Foerster has been the President and Chief
Executive Officer of South Beach Capital Markets Advisory Corporation, a firm
which he founded that provides investment advisory, venture capital and public
relations services. Between June 1992 and December 1994, Mr. Foerster served as
Managing Director, US Equity Syndicate, for Lehman Brothers. For more than five
years prior thereto, he was the Managing Director, Equity Transactions
Group/Equity Syndicate, for Paine Webber Incorporated. Mr. Foerster also serves
as a Director and Trustee of eight mutual funds of the Pilgrim America Group.
Joseph J. Messina was Mako's President and Chief Operating Officer from
January 1995 to June 1996. Between April 1978 and January 1992 Mr. Messina was
employed by Vendor Funding Co., Inc., an equipment leasing company. Since
January 1992, he has been employed by Ameristar Capital Corporation, an
equipment leasing company which he owns. Mr. Messina is an officer, Director and
shareholder of CAVC.
BUSINESS HISTORIES OF TRACKER DESIGNEES
Since August 1994, Kenneth Burroughs has been president of JLM, the sole
general partner of Tracker. For more than five years prior thereto, he was
president of Skeeter Products, Inc., a Kilgore, Texas company engaged in the
manufacture and sale of freshwater fishing boats. Mr. Burroughs also serves on
the Board of Directors of the National Association of Boat Manufacturers.
Joe C. Greene is the Managing Partner of Greene & Curtis, L.L.P., a Missouri
limited liability partnership, and has been engaged in the practice of law in
Springfield, Missouri for more than 30 years. He is also the general counsel of
Bass Pro, L.P. and Tracker. Mr. Greene is also a Director of O'Reilly
Automotive, Inc. (engaged in the auto parts sales business), the President and a
Director of the Missouri Sports Hall of Fame, a Director of Commerce Bank, N.A.,
and the Secretary and a Director of BASSGEC Management Company.
Since December 1993, Susie Henry has been the Executive Vice President of
Bass Pro, L.P. and JLM. For more than five years prior thereto she served as
Vice President of Bass Pro Shops, Inc., the predecessor of Bass Pro, L.P. Ms.
Henry also serves on the Board of Directors of BASSGEC Management Company.
For more than the past five years, Larry Mueller has been a private investor
and the President of Springfield Credit, L.L.C., a Missouri limited liability
company owned by him, which is engaged in the finance business. Mr. Mueller also
serves on the Boards of Directors of Commerce Bank, N.A. and BASSGEC Management
Company.
BOARD OF DIRECTOR AND COMMITTEE MEETINGS
During the fiscal year ended June 29, 1996, there were eight meetings of the
Board of Directors. Each Director attended not less than 75% of the meetings of
the Board held while he was a Director.
The Board of Directors of Mako does not have a nominating committee.
The Board of Directors of Mako has a compensation committee consisting of
Jeffrey Bleustein and Bruce S. Foerster, who are non-employee Directors, and
Douglas W. Baena, an employee Director. The
6
<PAGE>
compensation committee is authorized and empowered to review and approve
management compensation. The compensation committee was established in April
1996 and met once in respect of the fiscal year ended June 29, 1996, subsequent
to the fiscal year end.
The Board of Directors established an audit committee in April 1996 to
oversee and advise the Board on matters regarding internal controls, the work of
internal auditors and the annual independent audit. The audit committee is
composed of two Directors, Bruce S. Foerster and Jeffrey Bleustein. The audit
committee met once in respect of the fiscal year ended June 29, 1996, subsequent
to the fiscal year end.
The Board of Directors has not yet established which Directors will serve on
Mako's audit and compensation committees subsequent to the closing of the
transactions with Tracker.
DIRECTOR COMPENSATION
Each non-employee Director is entitled to receive a director's fee of $2,500
per quarter, plus expenses. Prior to June 21, 1996, each non-employee Director
was entitled to receive a fee of $1,000 per meeting plus expenses. Compensation
of each non-employee Director of Mako during the fiscal year ended June 29, 1996
is set forth in the table below. Compensation of each employee Director is set
forth below in the section entitled "Executive Officers."
<TABLE>
<CAPTION>
CASH COMPENSATION SECURITY GRANTS
------------------- -------------------
<S> <C> <C>
NUMBER OF
SECURITIES
NAME ANNUAL RETAINER FEE UNDERLYING OPTIONS
- ------------------------------------------------------------------------ ------------------- -------------------
Jeffrey Bleustein....................................................... $ 3,500 15,000(1)
Bruce S. Foerster....................................................... 2,500 15,000(1)
</TABLE>
- ------------------------
(1) Stock options were granted to Mr. Bleustein and Mr. Foerster under Mako's
1995 Stock Option Plan. The exercise price of Mr. Bleustein's options is
$1.00 per share, and the exercise price of Mr. Foerster's options is $4.00
per share. The options are exercisable in increments of 20% per year.
7
<PAGE>
EXECUTIVE OFFICERS
BUSINESS HISTORIES OF EXECUTIVE OFFICERS
Information concerning Douglas W. Baena, Mako's President, Chairman of the
Board and Chief Executive Officer, and Joseph J. Messina, its President and
Chief Operating Officer until his resignation in June 1996, are set forth above
under the caption "Directors."
Lawrence Tierney, age 50, has been the Chief Financial Officer of Mako since
March 1995. From August 1986 to March 1995 he was employed by Chris-Craft Boats,
a manufacturer of fiberglass powerboats, including as its Chief Financial
Officer from June 1993 to March 1995, its Chief Operating Officer from June 1991
to June 1993 and a Vice President of Finance from August 1986 to June 1991.
Hugh L. Russ, age 56, has been a Vice President of Mako since its inception,
its Secretary and Treasurer since March 1995, and its Executive Vice President
and Chief Operating Officer since June 1996. From June 1974 to August 1994, he
was a Vice President of Mako Marine, Inc. ("Old Mako"), whose assets were
acquired by Mako in 1994.
Edward Kunuty, age 55, has been Vice President, Marketing and Sales, of Mako
since June 1995. From October 1991 until June 1995 he was the President of
Aquarius Health & Fitness Instruments, Inc., a manufacturer of aquatic exercise
and rehabilitation equipment.
Gerritt Walsh, age 43, has been an employee of Mako since its inception and
Vice President, Florida Sales, since September 1994. He was an employee of Old
Mako from June 1992 to August 1994. From December 1990 to June 1992 he was
Director of sales and marketing for Luhrs Corporation, a boat manufacturer.
Brett Schwebke, age 31 was a Vice President of Mako from August 1994 until
his resignation in March 1996. From May 1986 to August 1994, he was an employee
of Old Mako.
Daniel Chips, age 39, was Vice President, Manufacturing, of Mako from July
1995 until his resignation in June 1996. From February 1987 until June 1995 he
was a production manager of Wellcraft Marine, Inc., a boat manufacturer.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth certain summary information concerning all
cash and non-cash compensation, for the fiscal year ended June 29, 1996 and the
eleven months ended July 1, 1995, of Mako's Chief Executive Officer and of its
other executive officers who earned over $100,000 in compensation during each
such period.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM
COMPENSATION
--------------------- -------------
<S> <C> <C> <C>
SECURITIES
UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY ($) OPTIONS (#)
- ------------------------------------------------------------------------------- --------- ---------- -------------
Douglas W. Baena............................................................... 1996 $ 170,000 --
Chairman of the Board, 1995 84,000
President, Chief Executive Officer
Joseph J. Messina.............................................................. 1996 110,000 25,000
President, Chief Operating Officer
Gerritt Walsh.................................................................. 1996 129,454 4,000
Vice President, Florida Sales
</TABLE>
8
<PAGE>
Mako has no long-term incentive plans or stock appreciation rights plans.
Mako adopted its 1995 Stock Option Plan in June 1995.
The following table sets forth, for Joseph J. Messina and Gerritt Walsh,
information regarding options granted to them by Mako during the fiscal year
ended June 29, 1996. No options or other rights to acquire Common Stock were
granted by Mako to Douglas W. Baena during the fiscal year.
OPTION GRANTS TO EXECUTIVE OFFICERS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NUMBER OF % OF TOTAL
SECURITIES OPTIONS GRANTED EXERCISE
UNDERLYING OPTIONS TO EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED FISCAL YEAR ($ PER SHARE) DATE
- ------------------------------------------------ ------------------- ------------------- ------------- -----------
<S> <C> <C> <C> <C>
Joseph J. Messina............................... 25,000(1) 19.1% $ 4.25 6/28/01
Gerritt Walsh................................... 4,000(2) 3.1 4.00 8/23/00
</TABLE>
- ------------------------
(1) Options granted outside Mako's 1995 Stock Option Plan, which become
exercisable in full on December 28, 1996.
(2) Options granted under Mako's 1995 Stock Option Plan, one-third of which
became exercisable in August 1996. The balance is exercisable over a two
year period, commencing in August 1997.
The following table sets forth, for the named executive officers, the number
of shares of Common Stock that may be acquired under options held as of June 29,
1996, and the value of such options as of that date. No named executive officer
exercised options for Common Stock during the fiscal year.
AGGREGATED FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF
UNEXERCISED OPTIONS UNEXERCISED IN-THE-MONEY
AT YEAR-END (#) OPTIONS AT YEAR-END (1)
----------------------------- -------------------------
<S> <C> <C>
EXERCISABLE (E)/ EXERCISABLE/
NAME UNEXERCISABLE (U) UNEXERCISABLE
- --------------------------------------------------------- ----------------------------- -------------------------
Joseph J. Messina........................................ 25,000(U) --
Gerritt Walsh............................................ 1,333(E) $ 333
2,667(U) 667
</TABLE>
- ------------------------
(1) The fiscal year-end market price of Mako's Common Stock was $4.25 per share.
OTHER AGREEMENTS WITH EXECUTIVE OFFICERS
Douglas W. Baena is employed as Mako's Chairman of the Board and Chief
Executive Officer pursuant to an employment agreement that expires in August
1998. Mr. Baena is entitled to receive a salary of $170,000 per year, subject to
annual cost of living increases. In addition, Mr. Baena is entitled to receive
an annual bonus of not less than three quarters of one percent of Mako's net
revenues for the prior fiscal year in excess of $20 million; provided that the
bonus is payable only if Mako earns pre-tax profits, and then only up to 10% of
the pre-tax profits for such year. To date no bonus has been paid. Mako is
obligated to provide Mr. Baena with the use of a late model automobile and an
allowance for housing in Florida, the cost of which housing shall not exceed
$3,000 per month.
Joseph J. Messina was employed as Mako's President and Chief Operating
Officer until June 28, 1996. Pursuant to his employment agreement he received an
annual salary of $114,000. Mr. Messina's employment agreement was in all other
respects identical to Mako's agreement with Mr. Baena. On June 28, 1996 Mr.
Messina resigned as an employee of Mako and entered into a one-year consulting
agreement pursuant
9
<PAGE>
to which he will receive $50,000. In addition, Mako granted Mr. Messina an
option to purchase 25,000 shares of its Common Stock. See "Executive
Officers--Compensation of Executive Officers."
Lawrence Tierney is party to an employment agreement with Mako that expires
on March 1, 1998, pursuant to which he is employed as Mako's Chief Financial
Officer at an annual salary of $100,000. Mr. Tierney has agreed not to compete
with the business of Mako for a period of one year following termination of his
employment. Upon a sale of control of Mako, in certain circumstances the
agreement may be terminated and Mr. Tierney would be entitled to one year's base
salary as severance pay.
Edward Kunuty is party to an employment agreement with Mako that expires on
May 9, 1998, pursuant to which he is employed as Mako's Vice President,
Marketing and Sales at an annual salary of $100,000. In addition, he is entitled
to receive an annual bonus equal to one quarter of one percent of boat sales in
excess of $8 million per year, adjusted for discounts. If Mako is sold, in
certain circumstances, he would be entitled to six months' severance pay.
Brett Schwebke was employed as a Vice President of Mako pursuant to an
employment agreement that provided for an annual salary of $100,000. Effective
March 29, 1996 Mr. Schwebke resigned from his position with Mako. At such time,
he entered into a two year non-competition agreement for which he will be paid
$100,000, payable in 16 equal monthly installments, the first of which was paid
on April 15, 1996.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Commencing in February 1994, a group of investors formed CAVC and from time
to time thereafter provided it with an aggregate of $1.9 million. The members of
such group, each of whom may be deemed to be a "promoter" of Mako, consist of
Douglas W. Baena; H. Harry Bresky; BuyAmerica, Inc., a company controlled by
Paul Lavor; Wilmont Holdings Corp., a company wholly owned by Joseph J. Messina;
Joseph O'Sullivan; Robert Sponheimer; and Brett Schwebke. See "Security
Ownership of Certain Beneficial Owners and Management." In February 1994, CAVC
agreed to provide Old Mako with working capital advances and, upon certain
conditions, to acquire Old Mako's defaulted bank debt. Thereafter, CAVC acquired
such defaulted debt by paying the bank $500,000 in cash and giving the bank a
promissory note in the principal amount of $1.5 million. On August 2, 1994, CAVC
foreclosed the defaulted bank debt and acquired substantially all of the boat
manufacturing assets of Old Mako, consisting primarily of property and
equipment, patents and trademarks, accounts and inventory. Concurrently, CAVC
indemnified Robert Schwebke, the founder of Old Mako and the father of Brett
Schwebke, to the extent of approximately $816,400, against certain
pre-acquisition tax liabilities of Old Mako and liabilities in connection with a
Small Business Administration loan to Old Mako. CAVC also assumed liabilities of
Old Mako for certain product liability claims and accrued vacation pay in the
amount of approximately $281,000 and incurred other transactional-related
liabilities in the amount of approximately $783,000. CAVC then conveyed the
acquired assets of Old Mako to Mako in exchange for (a) 930,000 shares of Mako's
Common Stock, (b) $900,000 of purchase money debt from Mako ("CAVC Debt"), (c)
the assumption by Mako of CAVC's $1.5 million note payable to the bank ("Bank
Debt"), (d) CAVC's indemnity obligations to Robert Schwebke, and (e) CAVC's
assumed or incurred liabilities of Old Mako.
The CAVC Debt bears interest at nine percent per annum, is repayable in 24
equal monthly installments, commencing in November, 1997, and is secured by
Mako's inventory, accounts receivable, property and equipment. CAVC's security
interest is junior to the security interest collateralizing the Bank Debt;
however, the bank subordinated its security interest in accounts receivable and
inventory until August 31, 1996. In August, 1996, the bank agreed to extend the
date of its subordination until August 31, 1997, in exchange for Mako's
extension of the exercise period of the bank's warrants to purchase 70,000
shares of Mako's Common Stock until August 31, 1997.
From time to time, CreditAmerica has made revolving credit advances to Mako
for working capital purposes. Upon completion of Mako's initial public offering,
$236,000 was outstanding. Thereafter, during the balance of fiscal 1996,
CreditAmerica advanced to Mako an additional $150,000, of which $85,000 was
10
<PAGE>
subsequently repaid. The outstanding principal balance, together with interest
at nine percent per annum, is payable on demand. CreditAmerica's advances to
Mako are secured by Mako's accounts receivable and inventory.
Each of the CAVC and CreditAmerica has agreed that any other indebtedness
owing from Mako to either of them would not be repaid until November 1997, and
thereafter would be paid in equal monthly installments over a two-year period
with interest at nine percent per annum.
Mako's manufacturing facility is leased under a triple net lease that
expires on July 31, 2001, from Robert Schwebke. Mako pays an annual aggregate
base rental of $542,400 and is responsible for taxes associated with the
property. The lease also provides for two seven-year renewal options. Mako
believes that the terms of the lease are at a market rate. The lease is
encumbered by mortgages in the aggregate amount of approximately $2.4 million.
Payments by Mako under the lease approximate payments required for debt service
and real estate taxes. Both before and after the acquisition of the assets of
Old Mako, there have been, and continue to be, defaults relating primarily to
payment of real estate taxes under the mortgages. The holder of the first
mortgage has agreed to forbear from exercising its remedies (including
foreclosure) until February, 1997 so long as no further events of default occur.
At such time consideration will be given to reinstatement of the original
maturity date of February 1999. The holder of the second mortgage for which the
last payment is owed in June 2000, has not waived past defaults consisting
primarily of the failure to pay Old Mako's real estate taxes.
In April 1995, as a condition to the bridge financing obtained in connection
with Mako's public offering, CAVC agreed (a) to lend to Mako funds necessary to
cure the past real estate tax payment defaults relating to its manufacturing
facility prior to any loss by Mako of its leasehold interest therein, (b) to
indemnify Robert Schwebke with respect to certain payroll tax payment defaults,
and (iii) to indemnify Mako from any losses in excess of $150,000 arising out of
claims against Mako for liabilities of Old Mako that were not assumed in August
1994.
By Order of the Board of Directors,
DOUGLAS W. BAENA
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
Miami, Florida
December 13, 1996
11
