COMMITMENTS AND CONTINGENCIES	12 Months Ended
Dec. 31, 2022
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES	NOTE 11: COMMITMENTS AND CONTINGENCIES Lawsuits — The Company is a defendant in certain lawsuits which allege that plaintiffs have been damaged as a result of the use of the Company’s products. The Company is vigorously contesting these actions. Management, after consultation with legal counsel, is of the opinion that the outcome of these lawsuits will not have a material adverse effect on the financial position, results of operations or liquidity of Marine Products. Dealer Floor Plan Financing — To assist dealers in obtaining financing for the purchase of its boats for inventory, the Company has entered into agreements with various dealers and selected third-party floor plan lenders to guarantee varying amounts of qualifying dealers’ debt obligations. The Company’s obligation under these guarantees becomes effective in the case of a default under the financing arrangement between the dealer and the third party lender. The agreements provide for the return of repossessed boats to the Company in new and unused condition subject to normal wear and tear as defined, in exchange for the Company’s assumption of specified percentages of the debt obligation on those boats, up to certain contractually determined dollar limits by lender. The Company had no repurchases of dealer inventory under contractual agreements during 2022 and 2021 as a result of dealer defaults. Management continues to monitor the risk of additional defaults and resulting repurchase obligations based in part on information provided by the third-party floor plan lenders and will adjust the guarantee liability at the end of each reporting period based on information reasonably available at that time. The Company currently has an agreement with one of the floor plan lenders whereby the contractual repurchase limit, subject to a minimum of $8.0 million, is based on a specified percentage of the amount of the average net receivables financed by the floor plan lender for our dealers less repurchases during the prior 12 month period, which was $8.0 million as of December 31, 2022. The Company has contractual repurchase agreements with additional lenders with an aggregate maximum repurchase obligation of approximately $4.3 million, with various expiration and cancellation terms of less than one year. Accordingly, the aggregate repurchase obligation with all financing institutions was approximately $12.3 million as of December 31, 2022. This repurchase obligation risk is mitigated by the value of the boat repurchased. Income Taxes — The amount of income taxes the Company pays is subject to ongoing audits by federal and state tax authorities, which often result in proposed assessments. Other long-term liabilities included the Company’s estimated liabilities for these probable assessments and totaled approximately $1,058,000 as of December 31, 2022 compared to $539,000 as of December 31, 2021. Employment Agreement — The Company has a contractual agreement with one employee, that provides for a monthly payment to the employee equal to a percentage of profits (defined as pretax income before goodwill adjustments and certain allocated corporate expenses) in addition to a base salary. As of June 1, 2022, this agreement was revised to seven percent of profits, as defined, compared to ten percent of profits in the prior periods. The expense in connection with this employment agreement was approximately $5,508,000 in 2022, $4,765,000 in 2021 and $3,586,000 in 2020 and is included in selling, general and administrative expenses in the accompanying consolidated statements of operations.

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2022

NOTE 11: COMMITMENTS AND CONTINGENCIES

Lawsuits — The Company is a defendant in certain lawsuits which allege that plaintiffs have been damaged as a result of the use of the Company’s products. The Company is vigorously contesting these actions. Management, after consultation with legal counsel, is of the opinion that the outcome of these lawsuits will not have a material adverse effect on the financial position, results of operations or liquidity of Marine Products.

Dealer Floor Plan Financing — To assist dealers in obtaining financing for the purchase of its boats for inventory, the Company has entered into agreements with various dealers and selected third-party floor plan lenders to guarantee varying amounts of qualifying dealers’ debt obligations. The Company’s obligation under these guarantees becomes effective in the case of a default under the financing arrangement between the dealer and the third party lender. The agreements provide for the return of repossessed boats to the Company in new and unused condition subject to normal wear and tear as defined, in exchange for the Company’s assumption of specified percentages of the debt obligation on those boats, up to certain contractually determined dollar limits by lender. The Company had no repurchases of dealer inventory under contractual agreements during 2022 and 2021 as a result of dealer defaults.

Management continues to monitor the risk of additional defaults and resulting repurchase obligations based in part on information provided by the third-party floor plan lenders and will adjust the guarantee liability at the end of each reporting period based on information reasonably available at that time.

The Company currently has an agreement with one of the floor plan lenders whereby the contractual repurchase limit, subject to a minimum of $8.0 million, is based on a specified percentage of the amount of the average net receivables financed by the floor plan lender for our dealers less repurchases during the prior 12 month period, which was $8.0 million as of December 31, 2022. The Company has contractual repurchase agreements with additional lenders with an aggregate maximum repurchase obligation of approximately $4.3 million, with various expiration and cancellation terms of less than one year. Accordingly, the aggregate repurchase obligation with all financing institutions was approximately $12.3 million as of December 31, 2022. This repurchase obligation risk is mitigated by the value of the boat repurchased.

Income Taxes — The amount of income taxes the Company pays is subject to ongoing audits by federal and state tax authorities, which often result in proposed assessments. Other long-term liabilities included the Company’s estimated liabilities for these probable assessments and totaled approximately $1,058,000 as of December 31, 2022 compared to $539,000 as of December 31, 2021.

Employment Agreement — The Company has a contractual agreement with one employee, that provides for a monthly payment to the employee equal to a percentage of profits (defined as pretax income before goodwill adjustments and certain allocated corporate expenses) in addition to a base salary. As of June 1, 2022, this agreement was revised to seven percent of profits, as defined, compared to ten percent of profits in the prior periods. The expense in connection with this employment agreement was approximately $5,508,000 in 2022, $4,765,000 in 2021 and $3,586,000 in 2020 and is included in selling, general and administrative expenses in the accompanying consolidated statements of operations.