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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
WEST MARINE, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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Notes:
[LOGO]
500 Westridge Drive
Watsonville, California 95076-4100
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NOTICE OF THE 1999 ANNUAL MEETING OF STOCKHOLDERS
Wednesday, May 5, 1999, 10:30 A.M.
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TO THE STOCKHOLDERS:
Notice is hereby given that the 1999 Annual Meeting of Stockholders of West
Marine, Inc. (the "Company") will be held at the office of the Company, 500
Westridge Drive, Watsonville, California, on Wednesday, May 5, 1999, at 10:30
A.M. for the following purposes:
(1) To elect nine directors.
(2) To approve the amendment of the Associates Stock Buying Plan to
increase the number of shares authorized for issuance thereunder by
200,000.
(3) To approve the amendment of the Amended and Restated Nonemployee
Director Stock Option Plan to increase the number of shares authorized
for issuance thereunder by 100,000.
(4) To approve the amendment of the 1993 Omnibus Equity Incentive Plan to
increase the number of shares authorized for issuance thereunder by
1,500,000.
(5) To transact such other business as may properly come before the Annual
Meeting.
Only stockholders of record on the books of the Company as of 5:00 P.M.,
March 19, 1999, will be entitled to vote at the meeting and any adjournment
thereof.
Dated: March 26, 1999
By Order of the Board of Directors
John Zott, Secretary
STOCKHOLDERS ARE REQUESTED TO MARK, DATE, SIGN AND RETURN THE ENCLOSED
PROXY AS PROMPTLY AS POSSIBLE.
[LOGO]
500 Westridge Drive
Watsonville, California 95076-4100
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of West Marine,
Inc. (the "Company") to be used at the Annual Meeting of Stockholders on May
5, 1999, and at any adjournment or postponement thereof (the "Annual
Meeting"), for the purposes set forth in the foregoing notice. This proxy
statement and the enclosed form of proxy were first sent to stockholders on or
about March 26, 1999.
If the enclosed form of proxy is properly signed and returned, the shares
represented thereby will be voted at the Annual Meeting in accordance with the
instructions specified thereon. If the proxy does not specify how the shares
represented thereby are to be voted, the proxy will be voted as recommended by
the Board of Directors. Any stockholder signing a proxy in the form
accompanying this Proxy Statement has the power to revoke it prior to or at
the Annual Meeting. A proxy may be revoked by a writing delivered to the
Secretary of the Company stating that the proxy is revoked, by a subsequent
proxy signed by the person who signed the earlier proxy, or by attendance at
the Annual Meeting and voting in person.
VOTING SECURITIES
Only stockholders of record on the books of the Company as of 5:00 P.M.,
March 19, 1999, will be entitled to vote at the Annual Meeting.
As of the close of business on March 19, 1999, there were outstanding
17,000,091 shares of Common Stock of the Company, entitled to one vote per
share. The holders of a majority of the outstanding shares of the Common Stock
of the Company, present in person or by proxy, will constitute a quorum for
the transaction of business at the Annual Meeting or any adjournment thereof.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the election inspectors appointed for the meeting and will determine whether
or not a quorum is present. The election inspectors will treat abstentions and
broker non-votes as shares that are present and entitled to vote for purposes
of determining the presence of a quorum. Regarding Item 1 (election of
directors), votes may be cast "For" or "Withhold Authority" for each nominee;
votes that are withheld will be excluded entirely from the vote and will have
no effect. Item 2 (approval of the amendment of the Associates Stock Buying
Plan), Item 3 (approval of the amendment of the Amended and Restated
Nonemployee Director Stock Option Plan) and Item 4 (approval of the amendment
of the 1993 Omnibus Equity Incentive Plan) each requires the affirmative vote
of a majority of shares present in person or by proxy and entitled to vote;
accordingly, abstentions on Items 2, 3 and 4 will have the effect of a
negative vote on those items. If a broker indicates on the proxy that it does
not have discretionary authority as to certain shares to vote on a particular
matter, those shares will not be considered as present and entitled to vote
with respect to that matter. A broker non-vote will have no effect with
respect to any item of this Proxy Statement.
1
ITEM 1--ELECTION OF DIRECTORS
The persons named below are nominees for director to serve until the next
Annual Meeting of Stockholders and until their successors shall have been
elected. The nominees constitute the present Board of Directors.
In the absence of instructions to the contrary, shares represented by the
proxy will be voted and the proxies will vote for the election of all such
nominees to the Board of Directors. If any of such persons is unable or
unwilling to be a candidate for the office of director at the date of the
Annual Meeting, the proxy will be voted for such substitute nominee as shall
be designated by the persons appointed in the proxy. The Company's management
has no reason to believe that any of such nominees will be unable or unwilling
to serve if elected a director. Set forth below is certain information
concerning the nominees which is based on data furnished by them.
Served as
Business Experience During Past Director
Nominees for Director Age Five Years and Other Information Since
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Randolph K. Repass..... 55 Chairman of the Board. Mr. Repass has 1968
been the Company's Chairman of the
Board since its founding in 1968 and
was the Company's Chief Executive
Officer from 1968 until April 1995 and
from August 1998 to November 1998. Mr.
Repass served as President of the
Company from 1968 to 1990 and from
August 1993 to March 1994. Mr. Repass
is on the Board of Directors of
Specialized Components, Inc. and is
President of American Sail
Advancement, a non-profit sailing
industry association. Mr. Repass is
also the Chairman of the Board of New
England Ropes.
John Edmondson......... 52 President and Chief Executive Officer, 1998
effective November 1998. Since 1992,
Mr. Edmondson held the roles of
Corporate Chief Operating Officer as
well as President and Chief Executive
Officer of Duty Free International,
Inc. Mr. Edmondson began his career
with Allied Store's Maas Bros./Jordan
Marsh and has held various senior
management positions with several
retailers. Prior to joining Duty Free
International, Inc., Mr. Edmondson was
General Manager of Marriott's Host
Airport Merchandise and their Sports
and Entertainment division.
Richard E Everett...... 46 President of Stores Division since 1994
August 1998 and Chief Operating
Officer since April 1995. Mr. Everett
served as Executive Vice President
from April 1995 to August 1998, and
has held various positions since
joining the Company in 1983.
James P. Curley........ 43 President and Chief Executive Officer 1994
of FGF Holdings, LLC, a specialty
retail and real estate development
company, since its founding in
February 1998. Mr. Curley was the
Chief Administrative Officer and a
Director of The Gymboree Corporation
from February 1996 to February 1998
and its Senior Vice President and
Chief Financial Officer from July 1992
to February 1998. Mr. Curley has held
senior financial positions in the
retail sector over the past ten years.
Jeanne Jackson......... 47 President and Chief Executive Officer 1998
of Banana Republic since May 1995. In
November 1998, Ms. Jackson assumed the
additional responsibility for the Gap
Inc. Direct division, including the
Banana Republic Catalog and Gap
Online. Prior to joining Banana
Republic, Ms. Jackson was Executive
Vice President and General Merchandise
Manager of Victoria's Secret of
Columbus, Ohio since February 1992.
Before that, she held a wide variety
of retail positions throughout her
career, including Senior Vice
President for Walt Disney Attractions
and Senior Vice President for Saks
Fifth Avenue.
Geoffrey A. Eisenberg.. 46 Senior consultant to the Company since 1977
January 1995. Mr. Eisenberg was Senior
Vice President from 1988 to 1994. Mr.
Eisenberg was responsible for
merchandising and marketing from 1991
to 1994.
David McComas.......... 56 President and Chief Operating Officer 1996
of Eye Care Centers of America, Inc.
responsible for 290 stores nationwide
since July 1998. Prior to joining Eye
Care Centers of America, Inc.,
Mr. McComas was with Circuit City
Stores, Inc. since June 1991 and
served as Western Region President and
Corporate Vice President, responsible
for eight Western States and Hawaii
and held several other senior
management positions with the company.
Mr. McComas is a powerboater and has
over 30 years of store management and
operations experience.
Walter Scott........... 73 Chairman of Scott, Woolf & Associates, 1995
a management consulting firm, since
1982. Previously, Mr. Scott held
general management and marketing
positions in industry and for 25 years
taught management at American
Management Association courses for
presidents and senior executives.
Henry Wendt............ 65 Chairman of Global Health Care 1997
Partners of DLJ Merchant Banking
Partners since 1997. Mr. Wendt is
currently Chairman of the Board of
Steri-Oss, Inc. and serves on the
Board of Directors of Allergan,
Atlantic Richfield and The Egypt
Investment Company and also as a
Trustee of the Trilateral Commission
and Trustee Emeritus of the American
Enterprise Institute. In 1994, Mr.
Wendt retired as Chairman of
SmithKline Beecham. Mr. Wendt is a
life long sailor, and is the author of
Global Embrace, a book about
international business strategies.
2
FURTHER INFORMATION CONCERNING
THE BOARD OF DIRECTORS
Committees of the Board
During 1998, the Board of Directors held four meetings and acted by
unanimous written consent on a number of occasions. In February 1994, after
consummation of its initial public offering in November 1993, the Company
established an Audit and Compensation Committee. In May 1997, the Company
dissolved the Audit and Compensation Committee and formed an Audit Committee
and a separate Compensation Committee. In May 1998, the Compensation Committee
was renamed the Organization and Compensation Committee. The Company does not
have a Nominating Committee.
The members of the Audit Committee are James P. Curley and Walter Scott.
Among the functions performed by this committee are to make recommendations to
the Board of Directors with respect to the engagement or discharge of
independent auditors, to review with the independent auditors the plan and
results of the auditing engagement, to review the Company's internal auditing
procedures and system of internal accounting controls and to make inquiries
into matters within the scope of its functions. The Audit Committee held three
meetings during 1998.
The members of the Organization and Compensation Committee are James P.
Curley, David McComas and Walter Scott. Among the functions performed by this
committee are to review and make recommendations to the Board of Directors
concerning the compensation of key management employees of the Company and to
administer the Company's equity incentive plan. The Organization and
Compensation Committee held four meetings during 1998.
Attendance at Meetings
During 1998, there were no members of the Board of Directors who attended
fewer than 75% of the meetings of the Board of Directors and all committees of
the Board on which they served.
Compensation of Directors
Directors who are not employees of the Company are paid directors fees
consisting of $1,000 for each Board meeting attended. Each Director also
receives an additional $1,000 for each Audit Committee and Organization and
Compensation Committee meeting attended, as applicable, that is not held on
the same day as a Board meeting. In addition, directors who are not employees
of the Company also receive an initial grant upon being elected or appointed
to the Board and annual grants of nonqualified stock options at an exercise
price equal to the fair market value at the date of grant. For 1998, Messrs.
Curley and Scott each received options to purchase 5,750 shares, Messrs. Wendt
and McComas each received options to purchase 5,000 shares and Ms. Jackson
received options to purchase 8,900 shares under the Company's Nonemployee
Director Stock Option Plan.
3
ITEM 2--PROPOSAL TO AMEND THE
ASSOCIATES STOCK BUYING PLAN
Effective November 1, 1994, the Company established the Associates Stock
Buying Plan (the "Plan"), pursuant to which an aggregate of 100,000 shares of
the Company's Common Stock were reserved for issuance to eligible employees of
the Company. In March 1999, the Board of Directors of the Company
conditionally amended the Plan, subject to stockholder approval at the Annual
Meeting, to increase the number of shares reserved for issuance under the Plan
by an additional 200,000. Set forth below is a summary of the principal
features of the Plan.
Purpose
The purpose of the Plan is to promote the success, and enhance the value, of
the Company, by providing eligible employees of the Company and its
participating subsidiaries with the opportunity to purchase Common Stock of
the Company through payroll deductions. The Plan is intended to qualify as an
employee stock purchase plan under Section 423 of the Internal Revenue Code of
1986, as amended.
Eligibility to Receive Awards
Employees of the Company and participating subsidiaries, who have been
employed as such for at least 60 consecutive days, are eligible to participate
in the Plan. However, if the employee is an executive officer of the Company
or owns, or has the right to acquire 5% or more of the voting stock of the
Company or any subsidiary of the Company, he or she is not eligible for the
Plan. Approximately 3,300 employees are currently eligible to participate in
the Plan.
Administration, Amendment and Termination
The Plan is administered by a committee (the "Committee") appointed by the
Chief Executive Officer of the Company. The members of the Committee serve at
the pleasure of the Chief Executive Officer and currently consist of the
Company's Chief Financial Officer, Vice President of Human Resources and the
Compensation and Benefits Director. A member of the Committee is not excluded
from participating in the Plan by virtue of such membership, but he or she
will not be entitled, as a member of the Committee, to act or pass upon any
matters pertaining specifically to his or her own account under the Plan. The
Committee may delegate one or more of its functions to any one of its members
or to any other person.
Subject to the terms of the Plan, the Committee has all discretion and
authority necessary or appropriate to control and manage the operation and
administration of the Plan. The Committee may make whatever rules,
interpretations, and computations, and take any other actions to administer
the Plan that it considers appropriate to promote the Company's best
interests, and for the benefit of all participants, to ensure that the Plan
remains qualified under Section 423 of the Internal Revenue Code.
The Company's Board of Directors, in its sole discretion, may amend or
terminate the Plan at any time and for any reason.
Enrollment and Contributions
Eligible employees elect whether or not to enroll in the Plan as of the
first day of May or November of any year. The enrollment period is twelve
months and eligible employees are re-enrolled automatically every 12 months;
provided, however, employees may cancel their enrollment at any time, in
accordance with the Plan rules.
Employee contributions to the Plan are made through payroll deductions.
Participating employees may contribute from 1% to 15% (in whole percentages)
of compensation through payroll deductions, and may increase or decrease the
contribution percentage as of the next May 1 or November 1 by submitting a new
enrollment form.
4
On the last business day of each October and April, the employee's payroll
deductions are used to purchase shares of the Company's Common Stock for the
employee. The price of the shares purchased will be the lower of (i) 85% of
the stock's market value on the employee's most recent enrollment date, or
(ii) 85% of the stock's market value on the purchase date. Shares purchased
for the employees will be deposited into individual brokerage accounts
established for each employee.
Participation in the Plan terminates when a participating employee's
employment with the Company ceases for any reason, the employee withdraws, or
the Plan is terminated or amended such that the employee is no longer eligible
to participate.
Number of Shares of Common Stock Available Under the Plan
There are 160 shares of Common Stock available for issuance pursuant to the
Plan as of January 2, 1999, which would increase to 200,160 if this proposal
is approved. The maximum aggregate purchases which an employee may make in a
single calendar year is $25,000, based on the stock's market price on the
employee's enrollment date.
Tax Aspects
The Plan is intended to qualify under Section 423 of the Internal Revenue
Code of 1986, as amended.
Based on management's understanding of current federal income tax laws, the
tax consequences of a purchase of shares of Common Stock under the Plan are as
follows:
(1) An employee will not have taxable income when the shares of Common
Stock are purchased for that employee, but the employee generally will
have taxable income when the employee sells or disposes of stock
purchased through the Plan.
(2) For shares which are not disposed of until more than 24 months after
the enrollment date under which the shares were purchased (the "24-
Month holding period"), gain up to the amount of the 15% discount from
the market price of the stock on the enrollment date is taxed as
ordinary income. Any additional gain above that amount is taxed at
long-term capital gain rates. If the employee sells the stock for less
than the purchase price after the 24-Month holding period, the
difference is a long-term capital loss. Shares sold within the 24-Month
holding period are taxed at ordinary income rates on the amount of
discount received from the stock's market price on the purchase date.
Any additional gain (or loss) is taxed to the stockholder as long-term
or short-term capital gain (or loss). The purchase date begins the
holding period for determining whether the gain (or loss) is short-term
or long-term.
(3) The Company receives a deduction for federal income tax purposes for
the ordinary income an employee must recognize when such employee
disposes of stock purchased under the Plan within the 24-Month holding
period. The Company does not receive such a deduction for shares
disposed of after the 24-Month holding period.
Required Vote
Adoption of the Plan is subject to the approval of a majority of the shares
of the Company's Common Stock which are present in person or by proxy and
entitled to vote at the Annual Meeting.
The Board of Directors Unanimously Recommends that Stockholders
Vote FOR this Proposal.
5
ITEM 3--PROPOSAL TO AMEND THE AMENDED AND RESTATED
NONEMPLOYEE DIRECTOR STOCK OPTION PLAN
At the Annual Meeting held in May 1995, the stockholders of the Company
adopted the Amended and Restated Nonemployee Director Stock Option Plan (the
"Director Stock Plan"), pursuant to which an aggregate of 100,000 shares of
the Company's Common Stock was reserved for issuance. In February 1997, the
Board of Directors approved an amendment of the Director Stock Plan to change
the manner in which options are allocated to Nonemployee Directors. In May
1998, the Board of Directors approved an amendment of the Director Stock Plan
to provide that a Nonemployee Director will receive a grant on the date such
nonemployee director first joins the Board of Directors, if such date is other
than the date of the Annual Meeting of Stockholders. In March 1999, the Board
of Directors approved an amendment of the Director Stock Plan, subject to
stockholder approval at the Annual Meeting, to increase the number of shares
authorized for issuance thereunder by 100,000.
As of January 2, 1999 there were 10,510 shares remaining for awards under
the Director Stock Plan, which would increase to 110,510 if this proposal were
approved. Set forth below is a summary of the principal features of the
Director Stock Plan.
Summary of Previous Amendments
The amendment in 1997 of the Director Stock Plan changed the formula for
granting stock options to the Company's Nonemployee Directors. The amended
Director Stock Plan provides that each person who is a Nonemployee Director on
the date of one of the Company's Annual Meetings of Stockholders,
automatically will receive an option to purchase that number of shares of the
Company's Common Stock determined by dividing $100,000 by the fair market
value of the Company's Common Stock on the date of grant. In addition, if the
nonemployee director is a chairperson of a regular, standing committee of the
Board of Directors, he or she will receive an option for an additional number
of shares determined by dividing $15,000 by the fair market value of the
Company's Common Stock on the date of grant.
The amendment in 1998 of the Director Stock Plan provided that if after
August 1, 1998, a Nonemployee Director is appointed to the Board of Directors
on a date other than the date of an Annual Meeting of Stockholders, such
Nonemployee Director will receive an option to purchase that number of shares
equal to the number such Nonemployee Director would have received if elected
at an Annual Meeting of Stockholders.
Purpose
The purpose of the Director Stock Plan is to promote the success, and
enhance the value, of the Company, by attracting, retaining and motivating
Nonemployee Directors of outstanding competence. The Plan also is designed to
further align the interests of the Nonemployee Directors with the interests of
the stockholders of the Company.
Eligibility to Receive Options
All Nonemployee Directors automatically receive grants of nonqualified stock
options under the Director Stock Plan. At present, the Company has five
Nonemployee Directors: James P. Curley, Jeanne Jackson, David McComas, Walter
Scott and Henry Wendt.
Administration, Amendment and Termination
The Director Stock Plan is administered by the Organization and Compensation
Committee of the Board of Directors of the Company (the "Compensation
Committee"). Members of the Compensation Committee are not eligible to receive
stock or options under any other plan sponsored by the Company or any
subsidiary. The Compensation Committee is charged with the general
administration of the Director Stock Plan in accordance with its provisions.
The Company's Board of Directors may alter, amend or terminate the Director
Stock Plan at any time and for any reason, except for certain material
amendments (for example, a significant increase in benefits) that must be
approved by stockholders.
6
Stock Options
On the date of each Annual Meeting of Stockholders, or such other time as a
Nonemployee Director is appointed to the Board of Directors, the Compensation
Committee will grant to each Nonemployee Director a nonqualified option to
purchase that number of shares of the Company's Common Stock determined by
dividing $100,000 by the fair market value of the Company's Common Stock on
the date of grant. (The size of the option grant is increased to that number
of shares determined by dividing $115,000 by the fair market value of the
Company's Common Stock on the date of grant if the Director is the chairperson
of a regular, standing committee of the Board.) The exercise price of the
option will equal 100% of the fair market value of the Common Stock on the
date of grant. All options become exercisable six months after the date of
grant and will terminate upon the earlier of (a) the expiration of ten years
from the date the option was granted, or (b) the expiration of one year from
the date of the grantee's termination of service as a director for any reason.
Tax Aspects
Based on management's understanding of current federal income tax laws, the
tax consequences of an option under the Director Stock Plan are as follows:
(1) A recipient of an option under the Director Stock Plan will not have
taxable income at the time of grant, but will have ordinary income upon
the exercise of such option in an amount equal to the excess of the
fair market value of the shares over the option price on the date of
exercise. Any gain or loss recognized upon any later disposition of the
shares generally will be a capital gain or loss.
(2) The Company will be entitled to a tax deduction in connection with an
option under the Plan only in an amount equal to the ordinary income
realized by the optionee and at the time such optionee recognizes such
income.
1999 Option Grants
Under the terms of the Director Stock Plan, options will be granted on May
5, 1999 to Messrs. Curley, McComas, Scott and Wendt and Ms. Jackson,
consisting of nonqualified options to purchase that number of shares of Common
Stock determined by dividing $100,000 ($115,000 in the case of Messrs. Curley
and Scott) by the fair market value on such date, at an exercise price equal
to the fair market value on such date. In 1998 under the Director Stock Plan,
Messrs. Curley and Scott each received options to purchase 5,750 shares,
Messrs. Wendt and McComas each received options to purchase 5,000 shares and
Ms. Jackson received options to purchase 8,900 shares of the Company's Common
Stock, all with an exercise price equal to the fair market value of the
Company's Common Stock on the date of grant of such options.
The Board of Directors Unanimously Recommends that Stockholders
Vote FOR this Proposal.
7
ITEM 4--PROPOSAL TO AMEND THE
1993 OMNIBUS EQUITY INCENTIVE PLAN
At the Annual Meeting held in May 1994, the stockholders of the Company
adopted the 1993 Omnibus Equity Incentive Plan (the "Equity Incentive Plan")
pursuant to which an aggregate of 1,350,000 shares of the Company's Common
Stock were originally reserved for issuance to key employees and consultants
of the Company and its subsidiaries. At the Annual Meeting held in May 1995,
the stockholders of the Company approved an amendment to the Equity Incentive
Plan to increase the number of shares authorized for issuance thereunder to
1,950,000. At the Annual Meeting held in May 1996, the stockholders of the
Company approved an amendment to the Equity Incentive Plan to increase the
number of shares authorized for issuance under the Equity Incentive Plan to
3,750,000. In March 1999, the Board of Directors of the Company amended the
Equity Incentive Plan, subject to stockholder approval at the 1999 Annual
Meeting, to increase the number of shares authorized for issuance under the
Equity Incentive Plan by an additional 1,500,000 shares.
The reason for this increase is to ensure that a sufficient number of shares
of the Company's Common Stock is available under the Equity Incentive Plan for
awards to attract, retain and motivate selected employees with outstanding
experience and ability. As of January 2, 1999, there were 453,476 shares
remaining for awards, which would increase to 1,953,476 if the proposal is
approved. Set forth below is a summary of the principal features of the Equity
Incentive Plan.
General
The Equity Incentive Plan provides for the granting of stock options, stock
appreciation rights ("SARs"), restricted stock awards, performance unit awards
and performance share awards (collectively, "Awards") to key employees and
consultants of the Company and its subsidiaries.
Purpose
The purpose of the Equity Incentive Plan is to promote the success, and
enhance the value, of the Company by linking the personal interests of
participating employees and consultants to those of the Company's stockholders
and by providing such employees and consultants with an incentive for
outstanding performance. The Equity Incentive Plan is further intended to
provide flexibility to the Company in its ability to motivate, attract and
retain the services of participating employees and consultants upon whose
judgment, interest and special efforts for which the Company is largely
dependent for the successful conduct of its operations.
Eligibility to Receive Awards
Key employees of the Company and its subsidiaries, and persons who provide
significant services to the Company or its subsidiaries, but who are neither
employees of the Company or its subsidiaries nor directors of the Company
("consultants") are eligible to be granted awards under the Equity Incentive
Plan. Incentive stock options may only be granted to employees. Randolph K.
Repass and Nonemployee Directors are not eligible to participate in the
Equity Incentive Plan.
Administration
The Plan is administered by the Compensation Committee of the Board of
Directors of the Company.
Options
The price of the shares of the Company's Common Stock subject to each option
(the "option price") is set by the Compensation Committee but may not be less
than 50% of the fair market value on the date of grant in the case of an
option that is not an incentive stock option (a "nonqualified stock option"),
and not less than 100% of the fair market value in the case of an incentive
stock option. In addition, the option price of an incentive stock option must
be at least 110% of the fair market value if (on the grant date) the
participant owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or any of its subsidiaries.
8
Options granted under the Equity Incentive Plan are exercisable at the times
and on the terms established by the Compensation Committee, provided that
options granted to officers who are subject to Section 16(b) of the Securities
and Exchange Act of 1934 (the "Exchange Act") may not be exercised until six
months following the date of grant. Subject to the forgoing limitation, the
Compensation Committee may accelerate the exercisability of any option.
The option price must be paid in full in cash or its equivalent at the time
of exercise. The Compensation Committee also may permit payment of the option
price by the tender of previously acquired shares of the Company's stock or
such other legal consideration which the Compensation Committee determines to
be consistent with the Equity Incentive Plan's purpose and applicable law.
Stock Appreciation Rights
The Equity Incentive Plan permits the grant of three types of SARs:
Affiliated SARs, Freestanding SARs, Tandem SARs, or any combination thereof.
An Affiliated SAR is an SAR that is granted in connection with a related
option and which will be deemed to automatically be exercised simultaneously
with the exercise of the related option. A Freestanding SAR is a SAR that is
granted independently of any options. A Tandem SAR is a SAR that is granted in
connection with a related option, the exercise of which requires a forfeiture
of the right to purchase a share under the related option (and when a share is
purchased under the option, the SAR is similarly cancelled).
The Compensation Committee has complete discretion to determine the number
of SARs granted to any optionee or recipient and the terms and conditions
pertaining to such SARs. However, the grant price must be at least equal to
the fair market value of a share of the Company's Common Stock on the date of
grant in the case of a Freestanding SAR and equal to the option price of the
related option in the case of an Affiliated or Tandem SAR. A SAR that is
granted to an officer who is subject to Section 16(b) of the Exchange Act
("Section 16(b)") may not be exercised until at least six months following the
date of grant.
Restricted Stock Awards
The Equity Incentive Plan permits the grant of restricted stock awards which
are restricted Common Stock bonuses that vest in accordance with terms
established by the Compensation Committee. Restricted Stock granted to an
officer subject to Section 16(b) may not vest prior to six months following
the date of its grant. The Compensation Committee may impose restrictions and
conditions on the shares, including, without limitation, restrictions based
upon the achievement of specific performance goals (company-wide, divisional
and/or individual), and/or restrictions under applicable federal or state
securities laws. The Compensation Committee may accelerate the time at which
any restrictions lapse, and/or remove any restrictions.
Performance Unit/Share Awards
The Equity Incentive Plan permits the grant of performance unit and
performance share awards which are bonuses credited to an account established
for the recipient and payable in cash, Common Stock, or a combination thereof.
Each performance unit has an initial value that is established by the
Compensation Committee at the time of its grant. Each performance share has an
initial value equal to the fair market value of a share of the Company's
Common Stock on the date of its grant. The number and/or value of performance
unit/shares that will be paid out to recipients will depend upon the extent to
which performance goals established by the Compensation Committee are
satisfied. The payment date for performance unit/share awards granted to
officers and directors subject to Section 16(b) may not be less than six
months from the date of grant.
After a performance unit/share award has vested, the recipient will be
entitled to receive a payout of the number of performance unit/shares earned
by the recipient, to be determined as a function of the extent to which the
corresponding performance goals have been achieved. The Compensation Committee
also may waive the achievement of any performance goals for such performance
unit/share.
9
Subject to the applicable award agreement, performance units/shares awarded
to recipients will be forfeited to the Company upon the earlier of the
recipient's termination of employment or the date set forth in the award
agreement.
Nontransferability of Awards
Awards granted under the Equity Incentive Plan may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will
or by the applicable laws of descent and distribution. However, an optionee or
recipient may designate one or more beneficiaries to receive any exercisable
or vested awards following his or her death.
Tax Aspects
Based on management's understanding of current federal income tax laws, the
tax consequences of participation in the Equity Incentive Plan are as follows:
(1) A recipient of a stock option or SAR will not have taxable income upon
the grant of the option. For options and SARs other than incentive
stock options, the recipient will recognize ordinary income upon
exercise in an amount equal to the excess of the fair market value of
the shares over the exercise price on the date of exercise. Any gain or
loss recognized upon any later disposition of the shares generally will
be capital gain or loss.
(2) Purchase of shares upon exercise of an incentive stock option will not
result in any taxable income to the recipient, except for purposes of
the alternative minimum tax. Gain or loss recognized by the recipient
on a later sale or other disposition will either be long-term capital
gain or loss or ordinary income depending upon whether the recipient
holds the shares transferred upon the exercise for a specified period.
Any ordinary income recognized will be in the amount, if any, by which
the lesser of the fair market value of such shares on the date of
exercise or the amount realized from the sale exceeds the option price.
(3) Unless the recipient elects to be taxed at the time of receipt of
restricted stock, the recipient will not have taxable income upon the
receipt of the Award, but upon vesting will recognize ordinary income
equal to the fair market value of the shares or cash at the time of
vesting.
(4) At the discretion of the Committee, the Equity Incentive Plan allows a
recipient to satisfy tax withholding requirements under federal and
state tax laws in connection with the exercise or receipt of an Award
by electing to have shares of common stock withheld, or by delivering
to the Company already-owned shares, having a value equal to the amount
required to be withheld.
(5) The Company will be entitled to a tax deduction in connection with an
Award under the Equity Incentive Plan only in an amount equal to the
ordinary income realized by the recipient and at the time the recipient
recognizes such income.
New Plan Benefits
Regulations adopted by the Securities and Exchange Commission require
disclosure of benefits to the executive officers of the Company named in the
summary compensation table and to certain other categories of award recipient,
if such benefits are determinable. In addition to the grants of stock options
set forth below, it is likely that substantial additional grants will be made
to such persons and others during the life of the Equity Incentive Plan, and
it is impossible to determine the amount and terms of such future grants.
10
The following table sets forth as of January 2, 1999 (a) the aggregate
number of shares of the Company's Common Stock subject to outstanding awards
granted under the Plan, and (b) the dollar value of such shares based on the
difference between $9.875 per share, the closing price for the shares of
Common Stock on December 31, 1998, and the exercise price at which such stock
options were granted.
Number Dollar Value
of Shares of Shares
Name of Individual or Group Granted Granted
--------------------------- --------- ------------
Randolph K. Repass.................................. -- --
John Edmondson...................................... 250,000 $ 515,625
Crawford Cole....................................... 356,348 (*)
Richard Everett..................................... 309,109 93,025
Robert Hebeler...................................... 110,897 33,000
John Zott........................................... 95,431 62,375
All executive officers, as a group.................. 1,121,785 704,275
All employees who are not executive officers, as a
group.............................................. 1,857,009 2,836,174
All directors who are not executive officers, as a
group.............................................. -- --
- --------
(*) The weighted average exercise price of the options was greater than the
closing price for the shares of the Company's Common Stock on the Nasdaq
National Market on December 31, 1998. Accordingly, the optionees could
not, as of such date, receive any profit from the exercise of such
options.
Required Vote
The affirmative vote of a majority of shares present in person or by proxy
at the Annual Meeting and entitled to vote is required to approve the proposed
amendment to the Equity Incentive Plan.
The Board of Directors Unanimously Recommends that Stockholders
Vote FOR this Proposal.
11
EXECUTIVE COMPENSATION
Compensation of Executive Officers
The compensation paid to the Company's Chief Executive Officer and each of
its other executive officers (the "Named Executive Officers") for services in
all capacities to the Company and its subsidiaries during fiscal 1996, 1997 and
1998 is set forth below. Columns regarding "Restricted Stock Awards," "Long-
Term Incentive Plan [LTIP] Payouts" and "All Other Compensation" are excluded
because no such payments were made to such executive officers in fiscal 1996,
1997 and 1998.
SUMMARY COMPENSATION TABLE
Long Term
Compensation
Annual Compensation(1) Awards(#)
--------------------------- ----------------------- ---
Restricted Securities
Stock Underlying
Name and Principal Position Year Salary($) Bonus($) Awards Options
- --------------------------- ---- ----------- ----------- ---------- ----------
John Edmondson........... 1998(2) $ 17,308 $ 100,000 $150,000(3) 250,000
President and Chief
Executive Officer
Crawford Cole............ 1998(4) $ 136,612 $ -- 5,467(5)
Former President and 1997 199,231 -- 47,959
Chief Executive Officer
1996 199,999 55,491 58,824
Randolph K. Repass....... 1998 $ 88,823(6) $ -- --
Chairman of the Board 1997 100,000 -- --
and Former Chief
Executive Officer 1996 100,000 -- --
Richard E Everett........ 1998 $ 229,675 $ -- 45,600
President of Stores 1997 164,365 12,328 24,297
Division and Chief
Operating Officer 1996 159,086 57,147 29,412
Robert Hebeler........... 1998 $ 168,461 $ -- 32,000
Senior Vice President of 1997 148,077 11,511 16,897
Merchandise Planning and 1996 125,461 26,808 62,000
Allocation
John Zott................ 1998 $ 168,461 $ -- 36,000
Senior Vice President, 1997 147,500 3,880 18,431
Chief Financial Officer 1996 140,768 22,610 16,000
- --------
(1) While the named executive officers enjoy certain perquisites, for fiscal
year 1996, 1997 and 1998 these did not exceed the lesser of $50,000 or 10%
of each officer's salary and bonus. Accordingly, the column regarding
"Other Annual Compensation" is excluded.
(2) Mr. Edmondson joined the Company as President and Chief Executive Officer
in November 1998. Amounts presented represent compensation earned by Mr.
Edmondson in December 1998.
(3) In February 1999, Mr. Edmondson received a grant of 14,634 shares of
restricted stock.
(4) Mr. Cole resigned as President and Chief Executive Officer in July 1998.
Amounts presented represent compensation received by Mr. Cole for January
1998 to July 1998 as President and Chief Executive Officer. Since July
1998, Mr. Cole continues to serve as a consultant to the Company.
(5) Mr. Cole was granted 45,558 options in 1998. Upon his resignation, 40,091
options were cancelled.
(6) Mr. Repass served as Chief Executive Officer of the Company from August
1998 to November 1998. Mr. Repass elected to forgo compensation for the
months of November and December 1998.
12
Stock Option Grants and Exercises
The following table sets forth certain information regarding stock options
granted during fiscal 1998 to the Named Executive Officers.
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
-------------------------------------------------
Potential Realizable
Value at Assumed
Number of Percent of Annual Rates of Stock
Securities Total Options Price Appreciation
Underlying Granted to Exercise or for Option Term(5)
Options Employees in Base Price Expiration ---------------------
Name Granted Fiscal Year ($/Sh)(3) Date(4) 5% 10%
- ---- ---------- ------------- ----------- ---------- ---------- ----------
John Edmondson.......... 250,000(1) 17.51% $ 7.81 11/4/08 $1,228,310 $3,112,778
Crawford Cole........... 5,467(2) 0.38% $24.19 2/10/08 $ 83,161 $ 210,745
Randolph K. Repass...... -- -- -- -- -- --
Richard E Everett....... 22,800(1) 1.6% $24.19 2/10/08 $ 346,820 $ 878,909
22,800(1) 1.6% 7.81 11/4/08 112,022 283,885
Robert Hebeler.......... 16,000(1) 1.12% $24.19 2/10/08 $ 243,382 $ 616,778
16,000(1) 1.12% 7.81 11/4/08 78,612 199,218
John Zott............... 20,000(1) 1.40% $24.19 2/10/08 $ 304,228 $ 770,973
16,000(1) 1.12% 7.81 11/4/08 78,612 199,218
- --------
(1) These options are exercisable in annual increments of 20%, commencing one
year from date of grant. Under the terms of the Equity Incentive Plan, the
Committee retains discretion, subject to plan limits, to modify the terms
of outstanding options.
(2) Of these options, 12% are exercisable commencing six months from the date
of grant, and thereafter at a rate of 2% per month. Under the terms of the
Equity Incentive Plan, the Committee retains discretion, subject to plan
limits, to modify the terms of outstanding options.
(3) All options were granted at fair market value at date of grant, as
determined by the Board of Directors.
(4) All options granted in fiscal 1998 were granted for a term of ten years.
(5) Realizable values are reported net of the option exercise price. The dollar
amounts under these columns are the result of calculations at the 5% and
10% rates (determined from the price at the date of grant, not the stock's
current market value) set by the Securities and Exchange Commission and
therefore are not intended to forecast possible future appreciation, if
any, of the Company's stock price. Actual gains, if any, on stock option
exercises are dependent on the future performance of the Common Stock as
well as the optionholder's continued employment through the vesting period.
The potential realizable value calculation assumes that the optionholder
waits until the end of the option term to exercise the option.
13
The following table sets forth certain information with respect to option
exercises during fiscal 1998 and stock options held by each of the Company's
Named Executive Officers as of January 2, 1999.
Aggregated Option Exercises in Last Fiscal Year
and FY-End Option Values
---------------------------------------------------
Value of Unexercised
Number of Unexercised In-the-Money Options at
Shares Options at FY-End(#) FY-End($)(1)
Acquired Value ------------------------- -------------------------
Name on Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ---- -------------- ----------- ----------- ------------- ----------- -------------
John Edmondson.......... -- -- -- 250,000 -- $515,625
Crawford Cole........... -- -- 360,348 -- -- --
Randolph K. Repass...... -- -- -- -- -- --
Richard E Everett....... -- -- 169,477 152,832 $111,030 $ 63,025
Robert Hebeler.......... -- -- 32,269 78,628 -- $ 33,000
John Zott............... 10,000 $60,667 52,853 59,828 $126,494 $ 42,250
- --------
(1) Based on a price per share of $9.875, which was the price of a share of
Common Stock on the Nasdaq National Market at the close of business on
December 31, 1998.
Organization and Compensation Committee Interlocks and Insider Participation
The Organization and Compensation Committee during fiscal 1998 consisted of
Messrs. Curley, McComas and Scott.
Employment Arrangements
The Company has agreed to employ Mr. Edmondson for a period of two years
from November 1998 at an annual salary of $450,000. Mr. Edmondson is entitled
to an annual bonus equal to 75% of his annual salary subject to adjustment
based on the Company achieving certain financial results. The actual bonus
amount is also subject to certain non-quantitative factors which focus on
management and long-term strategies. The cash bonus is capped at 225% of Mr.
Edmondson's annual salary. Any bonus received by Mr. Edmondson in excess of
50% of his annual salary is to be used to purchase the Company's Common Stock
on the open market. Mr. Edmondson received a $250,000 signing bonus, which was
comprised of $100,000 cash and $150,000 in restricted stock vesting in July
1999. Mr. Edmondson is entitled to receive annual stock option grants in
certain minimum amounts with a five year vesting schedule. If the Company
terminates Mr. Edmondson's employment, other than for cause, Mr. Edmondson
will be entitled to his salary and estimated bonus for the remainder of the
two-year term and all outstanding stock options will immediately vest and be
exercisable for the remainder of the term.
Certain Transactions
The Company leases its Palo Alto, California store from Randolph K. Repass.
In addition, the Company leases the Company's corporate headquarters and the
Santa Cruz, California and Braintree, Massachusetts stores from three
partnerships, of which Mr. Repass is a general partner. Pursuant to these
leases, the Company paid rent to Mr. Repass or such partnerships in the
aggregate amount of $1,161,000 in fiscal 1998.
Mr. Repass is Chairman of the Board and a stockholder of New England Ropes,
Inc., a major supplier of the Company. Mr. Repass' brother is the President
and his father is a member of the board of directors and a major stockholder
of New England Ropes, Inc. In fiscal 1998, the Company paid $6,338,000 to New
England Ropes, Inc. for purchased products.
14
ORGANIZATION AND COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION TO THE BOARD OF DIRECTORS:
The independent directors named below were elected to the Organization and
Compensation Committee at the May 20, 1998 Board of Directors meeting.
As members of the Organization and Compensation Committee, we are
responsible for reviewing and approving the Company's compensation policies
and the levels of compensation paid to executive officers.
Compensation Policy
The Company's compensation policies are intended to attract, motivate and
reward highly qualified executives for long-term strategic management and
enhancement of stockholder value. Additionally, they support a performance-
oriented environment directed towards specific Company goals and serve to
retain executives whose abilities are critical to the Company's long-term
success and competitiveness.
There are three main components in the Company's officer compensation
program:
. Base salary
. Annual bonus
. Stock options
Our Committee approached the review and approval of officer compensation in
the following manner:
. The Committee asked the Chief Executive Officer to submit
recommendations regarding all three components of officer compensation.
. The Committee reviewed last year's compensation analysis, in addition to
an updated peer group study covering salary and bonus levels as reported
by proxy statements. The updated peer group study included a comparison
of base compensation and annual incentives programs between the peer
group and the Company. The Chief Executive Officer submitted to the
Committee a revised list of Proposed Executive Pay Ranges including Base
Salary and bonus levels for all officers. The Committee reviewed and
ratified the Proposed Executive Pay Ranges.
Compensation for Executive Officers
In the area of base salary, we have targeted executive officers' salaries at
an average level for comparable companies. When included with the other forms
of compensation available, we believe these levels are adequate to attract and
retain key executives.
Annual bonuses for executive officers are intended to reflect the Company's
and the Committee's belief that a significant portion of the annual
compensation of each executive officer should be contingent upon performance
against pre-established objectives for the Company and the individual officer.
The Committee feels that the Company's bonus program closely ties the
executive officer rewards to the Company's overall earnings per share growth,
which in turn drives the share price. The Annual Bonuses received by officers
and other management personnel were determined by a formula, which takes into
account:
. The Company's Earnings Per Share Growth Rate
. The Individual Executive's Performance against Internal Management
Objectives
. Department Performance to budget
. Company-wide ratings by Associates on their Quality of Work Life
The Company's fiscal 1998 sales increased 8.2% and a comparable store net
sales increase of 1.2%, while EPS decreased to $.06 versus $.87 in 1997. Based
on the results for 1998 no bonuses were paid for 1998 to the executive
officers.
15
Stock options are the Company's primary long-term incentive to reward and
retain executive officers. The Committee believes that these incentives serve
to link management and stockholder interests and serve to motivate executive
officers to make long-term decisions that are in the best interests of the
stockholders. The Committee also believes that executive officers and other
key employees should have significant ownership of the Company's stock. Mr.
Repass is already a significant owner of West Marine and currently
beneficially owns 7,471,358 shares or approximately 44% of the Company's
outstanding Common Stock. We believe the current philosophy of stock option
grants provides West Marine executives with an adequate level of long-term
incentive to enhance stockholder value.
Amendments to Section 162(m) of the Internal Revenue Code have eliminated
the deductibility of most compensation over a million dollars in any given
year. The Committee believes that it is highly unlikely that any of the
Company's executive officers would be eligible at any time in the foreseeable
future to receive compensation of more than a million dollars. However, the
Committee believes that it is important to retain the flexibility to maximize
the Company's tax deductions. Accordingly, it will be the policy of this
Committee to consider the impact, if any, of Section 162(m) on the Company and
to document as necessary specific performance goals and take all other
reasonable steps in order to preserve the Company's tax deductions.
Compensation for the Chief Executive Officer
The Company had three Chief Executive Officers during 1998. Crawford Cole
began the year as Chief Executive Officer and stepped down in July 1998, Randy
Repass, the Company's Chairman, became interim Chief Executive Officer until
November 1998, when John Edmondson became President and Chief Executive
Officer.
Mr. Crawford Cole's 1998 compensation package included two components: Base
Salary of $250,000 and annual stock option grant to purchase 45,558 shares.
The annual option grant discontinued vesting when Mr. Cole resigned as Chief
Executive Officer and options to purchase 40,091 shares were cancelled. Mr.
Repass' compensation is discussed below.
Mr. Edmondson was paid a salary of $17,308 for 1998. Mr. Edmondson received
a $250,000 signing bonus, which was comprised of $100,000 cash and $150,000 in
restricted stock vesting after 6 months. See Employment Arrangements as
described on page 14 of the proxy statement.
Compensation for the Chairman of the Board
1998 Base Salary of Randy Repass was $100,000. Mr. Repass elected to forgo
compensation for the months of November and December 1998. Mr. Repass has not
been granted any stock options since the Company's initial public offering and
receives no bonus. Mr. Repass did not receive any additional pay for serving
as interim Chief Executive Officer between August 1998 and November 1998.
March 3, 1999
1998 Organization and Compensation
Committee
James P. Curley
David McComas
Walter Scott
16
PERFORMANCE GRAPH
The following graph compares the five-year cumulative total stockholder
return on the Company's Common Stock with the five-year cumulative total return
of (i) the NASDAQ market index and (ii) the MG Industry Group 745, a peer group
index consisting of approximately 60 specialty retailers.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
AMONG WEST MARINE, INC.,
NASDAQ MARKET INDEX AND SPECIALTY RETAIL, OTHER GROUP INDEX
PERFORMANCE GRAPH APPEARS HERE
WEST SPECIALTY NASDAQ
Measurement Period MARINE, RETAIL, MARKET
(Fiscal Year Covered) INC. OTHER INDEX
- --------------------- --------------- --------- ----------
Measurement Pt-12/31/1993 $100.00 $100.00 $100.00
FYE 12/30/1994 $130.51 $107.25 $104.99
FYE 12/29/1995 $211.86 $120.66 $136.18
FYE 12/27/1996 $366.10 $109.05 $169.23
FYE 01/02/1998 $311.86 $119.24 $207.00
FYE 12/31/1998 $133.90 $140.79 $291.96
17
OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table indicates, as to (i) each person who is known by the
Company to own beneficially more than 5% of the outstanding shares of Common
Stock, (ii) each director, (iii) each Named Executive Officer and (iv) all
directors and executive officers as a group, the number of shares and
percentage of the Company's Common Stock beneficially owned as of February 27,
1999.
Common Stock
Beneficially
Owned
as of February
27, 1999
--------------------
Number of
Beneficial Owner Shares Percent
- ---------------- --------- -------
Randolph K. Repass (1)................................... 7,471,358(2) 43.9%
Wellington Management Company, LLP (3)................... 1,210,500 7.1%
75 State Street
Boston, Massachusetts 02109
Crawford L. Cole, Jr..................................... 537,348(4) 3.0%
John Edmondson........................................... 14,634(5) *
Geoffrey A. Eisenberg.................................... 519,500(6) 3.1%
Richard E Everett........................................ 267,404(4) 1.6%
James P. Curley.......................................... 34,785(7) *
Robert Hebeler........................................... 51,426(4) *
Jeanne Jackson........................................... 8,900(7) *
David McComas............................................ 11,510(7) *
Walter Scott............................................. 38,785(7) *
Henry Wendt.............................................. 15,110(7) *
John Zott................................................ 83,210(4) *
All directors and executive officers as a group (11 9,053,970(8) 50.1%
persons)................................................
- --------
* Less than one percent.
(1) The address of Mr. Repass is 500 Westridge Drive, Watsonville, California
95076-4100. Mr. Repass may be deemed to be a "control person" of the
Company within the meaning of the rules and regulations of the Securities
and Exchange Commission by reason of his stock ownership and positions
with the Company.
(2) Includes 252,500 shares held by Mr. Repass' wife. Also includes employee
stock options, held by Mr. Repass' wife, exercisable within 60 days to
purchase 23,400 shares. Mr. Repass disclaims beneficial ownership of all
of such shares. Also includes 9,500 shares held by Mr. Repass' minor son.
(3) Based on a Schedule 13G filed with the Securities and Exchange Commission
reflecting beneficial ownership as of December 31, 1998. These shares are
beneficially owned by Wellington Management Company, LLP, in its capacity
as investment adviser for its clients. According to the Schedule 13G,
Wellington Management Company, LLP, has shared dispositive power with
respect to all such shares and shared voting power with respect to 625,500
of such shares. The Schedule 13G indicates that no client is known to
beneficially own more than 5% of the Company's Common Stock.
(4) Includes employee stock options exercisable within 60 days to purchase
shares as follows: Crawford L. Cole, Jr., 360,348 shares; Richard E
Everett, 185,404 shares; Robert Hebeler, 50,226 shares; and John Zott,
64,210 shares.
(5) Includes restricted stock award of 14,634 shares (restrictions lapse on
8/24/99).
(6) Includes employee stock options exercisable within 60 days to purchase
303,000 shares. Also includes 2,640 shares held by Mr. Eisenberg's minor
children.
(7) Includes stock options exercisable within 60 days to purchase shares
granted under the Nonemployee Director Stock Option Plan as follows: James
P. Curley, 27,785 shares; Jeanne Jackson, 8,900 shares; David McComas,
10,510 shares; Walter Scott, 20,785 shares; and Henry Wendt, 8,510 shares.
(8) See footnotes (2), (4), (5), (6) and (7).
18
SECTION 16(a) INFORMATION
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange
Commission. Officers, directors and greater than ten-percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that, during the period from
January 4, 1998 to January 2, 1999 all filing requirements applicable to its
officers, directors and greater than ten-percent beneficial owners were
complied with.
AUDITORS
Deloitte & Touche LLP, independent certified public accountants, serves as
the Company's principal accountants. Representatives of Deloitte & Touche LLP
will be present at the Annual Meeting with the opportunity to make a statement
if they desire to do so and will be available to respond to appropriate
questions.
OTHER MATTERS
As of the date of this Proxy Statement, there are no other matters which
management intends to present or has reason to believe others will present to
the meeting. If other matters properly come before the meeting, those who act
as proxies will vote in accordance with their judgment.
STOCKHOLDER PROPOSALS
If any stockholder intends to present a proposal for action at the Company's
2000 Annual Meeting and wishes to have such proposal set forth in management's
proxy statement, such stockholder must forward the proposal to the Company so
that it is received on or before November 27, 1999. Proposals should be
addressed to the Company at 500 Westridge Drive, Watsonville, California
95076-4100, Attention: Corporate Secretary.
The attached proxy card grants the proxy holders discretionary authority to
vote on any matter raised at the Annual Meeting. If a stockholder intends to
submit a proposal at the 2000 Annual Meeting of Stockholders of the Company,
which proposal is not intended to be included in the Company's proxy statement
and form of proxy relating to such meeting, the stockholder should give
appropriate notice no later than February 10, 2000. If a stockholder fails to
submit the proposal by such date, the Company will not be required to provide
any information about the nature of the proposal in its proxy statement and
the proxy holders will be allowed to use their discretionary voting authority
if the proposal is raised at the 2000 Annual Meeting of Stockholders of the
Company.
COST OF SOLICITATION
All expenses in connection with the solicitation of this proxy, including
the charges of brokerage houses and other custodians, nominees or fiduciaries
for forwarding documents to stockholders, will be paid by the Company.
Dated: March 26, 1999.
By Order of the Board of Directors
John Zott, Secretary
19
Recycled Paper
1243-PS-99
Appendix A
WEST MARINE, INC.
ASSOCIATES STOCK BUYING PLAN
(As amended as of January 20, 1999)
SECTION 1
PURPOSE
West Marine, Inc. hereby establishes the West Marine, Inc. Associates
Stock Buying Plan (the "Plan"), effective as of November 1, 1994, in order to
provide eligible employees of the Company and its participating Subsidiaries
with the opportunity to purchase Common Stock through payroll deductions. The
Plan is intended to qualify as an employee stock purchase plan under Section 423
of the Code.
SECTION 2
DEFINITIONS
2.1 "1934 Act" means the Securities Exchange Act of 1934, as amended.
--------
Reference to a specific Section of the 1934 Act or regulation thereunder shall
include such Section or regulation, any valid regulation promulgated under such
Section, and any comparable provision of any future legislation or regulation
amending, supplementing or superseding such Section or regulation.
2.2 "Board" means the Board of Directors of the Company.
-----
2.3 "Code" means the Internal Revenue Code of 1986, as amended.
----
Reference to a specific Section of the Code or regulation thereunder shall
include such Section or regulation, any valid regulation promulgated under such
Section, and any comparable provision of any future legislation or regulation
amending, supplementing or superseding such Section or regulation.
2.4 "Committee" shall mean the committee appointed by the Company's
---------
Chief Executive Officer to administer the Plan. The members of the Committee
shall serve at the pleasure of the Chief Executive Officer. As of the effective
date of the Plan, the members of the Committee shall consist of the Company's
Chief
Financial Officer, Director of Human Resources, and Compensation and Benefits
Manger. Any member of the Committee may resign at any time by notice in
writing mailed or delivered to the Secretary of the Company.
2.5 "Common Stock" means the common stock of the Company.
------------
2.6 "Company" means West Marine, Inc., a Delaware corporation.
-------
2.7 "Compensation" means a Participant's taxable compensation that is
------------
(or would be) payable to him or her in cash or its equivalent, calculated after
elected deferrals and deductions.
2.8 "Eligible Employee" means every Employee of an Employer, except
-----------------
(a) any Employee who is an officer of the Company (as defined in Rule 16a-1
promulgated under the 1934 Act), and (b) any Employee who, immediately after the
grant of an option under the Plan, would own stock and/or hold outstanding
options to purchase stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Company or of any
Subsidiary of the Company (including stock attributed to such Employee pursuant
to Section 424(d) of the Code).
2.9 "Employee" means an individual who is a common-law employee of
--------
any Employer, whether such employee is so employed at the time the Plan is
adopted or becomes so employed subsequent to the adoption of the Plan.
2.10 "Employer" or "Employers" means any one or all of the Company
-------- ---------
and those Subsidiaries which, with the consent of the Board of Directors, have
adopted this Plan.
2.11 "Enrollment Date" means each May 1 and November 1, and/or such
---------------
other dates determined by the Committee from time to time.
2.12 "Grant Date" means any date on which a Participant is granted an
----------
option under the Plan.
2.13 "Participant" means an Eligible Employee who (a) has become a
-----------
Participant in the Plan pursuant to Section 4.1 and (b) has not ceased to be a
Participant pursuant to Section 8 or Section 9.
2.14 "Plan" means the West Marine, Inc. Associates Stock Buying Plan,
----
as set forth in this instrument and as hereafter amended from time to time.
2.15 "Purchase Date" means the last business day of April and
-------------
October, or such other specific business days as may be established by the
Committee from time to time prior to an Enrollment Date for all options to be
granted on such Enrollment Date.
2.16 "Subsidiary" means any corporation (other than the Company) in
----------
an unbroken chain of corporations beginning with the Company if, at the time of
granting options under the Plan, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
SECTION 3
SHARES SUBJECT TO THE PLAN
3.1 Number Available. 372,789 shares of Common Stock are available
----------------
for issuance pursuant to the Plan. Shares sold under the Plan may be newly
issued shares or treasury shares.
3.2 Adjustments. In the event of any reorganization,
-----------
recapitalization, stock split, reverse stock split, stock dividend, combination
of shares, merger, consolidation, offering of rights or other similar change in
the capital structure of the Company, the Board may make such adjustment, if
any, as it deems appropriate in the number, kind and purchase price of the
shares available for purchase under the Plan and in the maximum number of shares
subject to any option under the Plan.
SECTION 4
ENROLLMENT
4.1 Participation. Each Eligible Employee may elect to become a
-------------
Participant by enrolling or re-enrolling in the Plan effective as of any
Enrollment Date. In order to enroll, an eligible employee must complete, sign
and submit to the Company an enrollment form in such form as may be specified by
the Committee from time to time. Any enrollment form received by the Company no
later than fourteen (14) calendar days before an Enrollment Date shall effective
on that Enrollment Date, provided that the Committee, in its discretion, may (on
a uniform and nondiscriminatory basis) specify an earlier or later deadline for
the submission of enrollment forms. Any Participant whose option expires and
who has not withdrawn from the Plan automatically will be re-enrolled in the
Plan on the Enrollment Date immediately following the Purchase Date on which his
or her option expired.
4.2 Payroll Withholding. On his or her enrollment form, each
-------------------
Participant must elect to make Plan contributions via payroll withholding from
his or her Compensation at a rate equal to any whole percentage from 1% to such
maximum percentage (not to exceed 15%) that the Committee may establish from
time to time for all options to be granted on any Enrollment Date. A
Participant may elect to increase or decrease his or her rate of payroll
withholding (effective as of any Enrollment Date) by submitting a new enrollment
form in accordance with such procedures as may be established by the Committee
from time to time. In order to be effective, the enrollment form must be
received by the Company no later than fourteen (14) calendar days before the
Enrollment Date elected for the change, provided that the Committee, in its
discretion, may (on a uniform and nondiscriminatory basis) specify an earlier or
later deadline for the submission of enrollment forms. Any Participant who is
automatically re-enrolled in the Plan will be deemed to have elected to continue
his or her contributions at the percentage last elected by the Participant.
SECTION 5
OPTIONS TO PURCHASE COMMON STOCK
5.1 Grant of Option. On each Enrollment Date on which the
---------------
Participant enrolls or re-enrolls in the Plan, he or she shall be granted an
option to purchase shares of Common Stock.
5.2 Duration of Option. Each option granted under the Plan shall
------------------
expire on the earliest to occur of (a) the completion of the purchase of shares
on the last Purchase Date occurring within 27 months of the Grant Date of such
option, (b) such shorter option period as may be established by the Committee
from time to time prior to an Enrollment Date for all options to be granted on
such Enrollment Date, or (c) the date on which the Participant ceases to be such
for any reason. Effective as of November 1 and until otherwise determined by
the Committee for all options to be granted on an Enrollment Date, the period
referred to in clause (b) in the preceding sentence shall mean the expiration of
12 months from the Grant Date.
5.3 Number of Shares Subject to Option. The number of shares
----------------------------------
available for purchase by each Participant under the option will be established
by the Committee from time to time prior to an Enrollment Date for all options
to be granted on such Enrollment Date. Notwithstanding the preceding, an option
(taken together with all other options then outstanding under this Plan and
under all other similar employee stock purchase plans of the Employers) shall
not give the Participant the right to purchase shares at a rate which accrues in
excess of $25,000 of fair
market value at the applicable Grant Dates of such shares (less the fair
market value at the applicable Grant Dates of any shares previously purchased
during such year under options which have expired or terminated) in any
calendar year during which such Participant is enrolled in the Plan at any
time.
5.4 Other Terms and Conditions. Each option shall be subject to the
--------------------------
following additional terms and conditions:
(a) payment for shares purchased under the option shall be made only
through payroll withholding under Section 3.2;
(b) purchase of shares upon exercise of the option will be
accomplished only in installments in accordance with Section 6.1;
(c) the price per share under the option will be determined as
provided in Section 6.1;
(d) the option in all respects shall be subject to such terms and
conditions (applied on a uniform and nondiscriminatory basis), as the
Committee shall determine from time to time in its discretion.
SECTION 6
PURCHASE OF SHARES
6.1 Exercise of Option. On each Purchase Date, the funds then
------------------
credited to each Participant's account shall be used to purchase shares of
Common Stock. The price of the shares purchased under any option shall be 85%
of the lower of:
(a) the closing price of Common Stock on the Grant Date for such
option on the National Association of Securities Dealers National Market
System; or
(b) the closing price of Common Stock on that Purchase Date on the
National Association of Securities Dealers National Market System.
6.2 Crediting of Shares. Shares purchased on any Purchase Date shall
-------------------
be delivered to a broker designated by the Committee for the benefit of the
Participant. As determined by the Committee from time to time, such shares
shall be delivered as physical certificates or by means of a book entry system.
Although the Participant may direct the broker to sell such shares at any time
(subject to applicable securities laws), the shares may not be transferred to
another broker or to any other person (including the Participant) until 24
months after the Grant Date of the option with which the shares were purchased.
6.3 Exhaustion of Shares. If at any time the shares available under
--------------------
the Plan are over-enrolled, enrollments shall be reduced proportionately to
eliminate the over-enrollment. Any funds that cannot be applied to the purchase
of shares due to over-enrollment shall be refunded to the Participants.
SECTION 8
WITHDRAWAL
8.1 Withdrawal. A Participant may withdraw from the Plan by
----------
submitting a completed enrollment form to the Company. A withdrawal will be
effective only if it is received by the Company at least fourteen (14) calendar
days before the proposed date of withdrawal, provided that the Committee, in its
discretion, may specify (on a uniform and nondiscriminatory basis) an earlier or
later deadline for the submission of enrollment forms. When a withdrawal
becomes effective, the Participant's payroll contributions shall cease and all
amounts then credited to the Participant's account shall be distributed to him
or her (without interest). Notwithstanding any contrary provision of the Plan,
a Participant who has withdrawn from the Plan pursuant to this Section 7 may not
re-enroll in the Plan until the next Enrollment Date after the date of his or
her withdrawal.
SECTION 9
CESSATION OF PARTICIPATION
9.1 Termination of Status as Eligible Employee. A Participant shall
------------------------------------------
cease to be a Participant immediately upon the cessation of his or her status as
an Eligible Employee (for example, because of his or her termination of
employment from all Employers for any reason). As soon as practicable after
such cessation, the Participant's payroll contributions shall cease and all
amounts then credited to the Participant's account shall be distributed to him
or her (without interest).
9.2 Leave of Absence. Unless a Participant voluntarily withdraws
----------------
from the Plan, shares will be purchased for that Participant's account on the
Purchase Date next following commencement of a leave of absence by such
Participant. However, the Participant will cease to be a Participant
immediately after such purchase of shares, provided that if and when he or she
returns from the leave, he or she may re-enroll under Section 4.1, if then
eligible.
SECTION 10
DESIGNATION OF BENEFICIARY
10.1 Designation. If permitted by the Committee, each Participant
-----------
may, pursuant to such procedures as the Committee may specify, designate one or
more Beneficiaries to receive any amounts credited to the Participant's account
at the time of his or her death.
10.2 Changes. A Participant may designate different Beneficiaries
-------
(or may revoke a prior Beneficiary designation) at any time by delivering a new
designation (or revocation of a prior designation) in like manner. Any
designation or revocation shall be effective only if it is received by the
Committee. However, when so received, the designation or revocation shall be
effective as of the date the notice is executed (whether or not the Participant
still is living), but without prejudice to the Committee on account of any
payment made before the change is recorded. The last effective designation
received by the Committee shall supersede all prior designations.
10.3 Failed Designations. If a Participant dies without having
-------------------
effectively designated a Beneficiary, or if no Beneficiary (primary or
secondary) survives the Participant, the Participant's Account shall be payable
to his or her estate.
SECTION 11
ADMINISTRATION
11.1 Plan Administrator. The Plan shall be administered by the
------------------
Committee. The Committee shall have the authority to control and manage the
operation and administration of the Plan.
11.2 Actions by Committee. Each decision of a majority of the
--------------------
members of the Committee then in office shall constitute the final and binding
act of the Committee. The Committee may act with or without a meeting being
called or held and shall keep minutes of all meetings held and a record of all
actions taken by written consent.
11.4 Powers of Committee. The Committee shall have all powers and
-------------------
discretion necessary or appropriate to supervise the administration of the Plan
and to control its operation in accordance with its terms, including, but not by
way of limitation, the following discretionary powers:
(a) To interpret and determine the meaning and validity of the
provisions of the Plan and the options and to determine any question
arising under, or in connection with, the administration, operation or
validity of the Plan
and the options;
(b) To determine any and all considerations affecting the eligibility
of any employee to become a Participant or remain a Participant in the
Plan;
(c) To cause an account or accounts to be maintained for each
Participant;
(d) To determine the time or times when, and the number of shares for
which, options shall be granted;
(e) To establish and revise an accounting method or formula for the
Plan;
(f) To determine the manner and form in which shares are to be
delivered to the designated broker;
(g) To determine the status and rights of Participants and their
Beneficiaries or estates;
(h) To employ such brokers, counsel, agents and advisers, and to
obtain such broker, legal, clerical and other services, as it may deem
necessary or appropriate in carrying out the provisions of the Plan;
(i) To establish, from time to time, rules for the performance of its
powers and duties and for the administration of the Plan;
(j) To adopt such procedures and subplans as are necessary or
appropriate to permit participation in the Plan by employees who are
foreign nationals or employed outside of the United States;
(k) To delegate to any one or more of its members or to any other
person, severally or jointly, the authority to perform for and on behalf of
the Committee one or more of the functions of the Committee under the Plan.
11.5 Decisions of Committee. All actions, interpretations, and
----------------------
decisions of the Committee shall be conclusive and binding on all persons, and
shall be given the maximum possible deference allowed by law.
11.6 Administrative Expenses. All expenses incurred in the
-----------------------
administration of the Plan by the Committee, or otherwise, including legal fees
and expenses, shall be paid and borne by the Employers, except any stamp duties
or transfer taxes applicable to the purchase of shares may be charged to the
account of each Participant. Any brokerage fees for the purchase of shares by a
Participant shall be paid by the Company, but brokerage fees for the resale of
shares by a Participant shall be borne by the Participant.
11.7 Eligibility to Participate. No member of the Committee who is
--------------------------
also an employee of an Employer shall be excluded from participating in the Plan
if otherwise eligible, but he or she shall not be entitled, as a member of the
Committee, to act or pass upon any matters pertaining specifically to his or her
own account under the Plan.
11.8 Indemnification. Each of the Employers shall, and hereby does,
---------------
indemnify and hold harmless the members of the Committee and the Board, from and
against any and all losses, claims, damages or liabilities (including attorneys'
fees and amounts paid, with the approval of the Board, in settlement of any
claim) arising out of or resulting from the implementation of a duty, act or
decision with respect to the Plan, so long as such duty, act or decision does
not involve gross negligence or willful misconduct on the part of any such
individual.
SECTION 12
AMENDMENT, TERMINATION, AND DURATION
12.1 Amendment, Suspension, or Termination. The Board, in its sole
-------------------------------------
discretion, may amend or terminate the Plan, or any part thereof, at any time
and for any reason. If the Plan is terminated, the Board may elect to terminate
all outstanding options either immediately or upon completion of the purchase of
shares on the next Purchase Date, or may elect to permit options to expire in
accordance with their terms (and participation to continue through such
expiration dates). If the options are terminated prior to expiration, all
amounts then credited to Participants' accounts that have not been used to
purchase shares shall be returned to the Participants (without interest) as soon
as administratively practicable.
12.2 Duration of the Plan. The Plan shall commence on the date
--------------------
specified herein, and subject to Section 12.1 (regarding the Board's right to
amend or terminate the Plan), shall remain in effect thereafter.
SECTION 13
GENERAL PROVISIONS
13.1 Participation by Subsidiaries. One or more Subsidiaries of the
-----------------------------
Company may become participating Employers by adopting the Plan and obtaining
approval for such adoption from the Board of Directors. By adopting the Plan, a
Subsidiary shall be deemed to agree to all of its terms, including (but not
limited to) the provisions granting exclusive authority (a) to the Board of
Directors to amend the Plan, and (b) to the Committee to administer and
interpret the Plan. Any Subsidiary may terminate its participation in the Plan
at any time. The liabilities incurred under the Plan to the Participants
employed by each Employer shall be solely the liabilities of that Employer, and
no other Employer shall be liable for benefits accrued by a Participant during
any period when he or she was not employed by such Employer.
13.2 Inalienability. In no event may either a Participant, a former
--------------
Participant or his or her Beneficiary, spouse or estate sell, transfer,
anticipate, assign, hypothecate, or otherwise dispose of any right or interest
under the Plan; and such rights and interests shall not at any time be subject
to the claims of creditors nor be liable to attachment, execution or other legal
process. Accordingly, for example, a Participant's interest in the Plan is not
transferable pursuant to a domestic relations order. The preceding shall not
affect the Participant's right to direct the sale or transfer of shares that
have been allocated to the Participant's account at the broker designated by the
Participant (subject to the provisions of the Plan).
13.3 Severability. In the event any provision of the Plan shall be
------------
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.
13.4 Requirements of Law. The granting of options and the issuance
-------------------
of shares shall be subject to all applicable laws, rules, and regulations, and
to such approvals by any governmental agencies or national securities exchanges
as the Committee may determine are necessary or appropriate.
13.5 No Enlargement of Employment Rights. Neither the establishment
-----------------------------------
or maintenance of the Plan, the granting of any options, the purchase or any
shares, not any action of any Employer or the Committee, shall be held or
construed to confer upon any individual any right to be continued as an employee
of the Employer nor, upon dismissal, any right or interest in any
specific assets of the Employers other than as provided in the Plan. Each
Employer expressly reserves the right to discharge any employee at any time,
with or without cause.
13.6 Apportionment of Costs and Duties. All acts required of the
---------------------------------
Employers under the Plan may be performed by the Company for itself and its
Subsidiary, and the costs of the Plan may be equitably apportioned by the
Committee among the Company and the other Employers. Whenever an Employer is
permitted or required under the terms of the Plan to do or perform any act,
matter or thing, it shall be done and performed by any officer or employee of
the Employer who is thereunto duly authorized by the board of directors of the
Employer.
13.7 Construction and Applicable Law. The Plan is intended to
-------------------------------
qualify as an "employee stock purchase plan" within the meaning of Section 423
of the Code. Any provision of the Plan which is inconsistent with Section 423
of the Code shall without further act or amendment by the Company or the Board
be reformed to comply with the requirements of Section 423. The provisions of
the Plan shall be construed, administered and enforced in accordance with such
Section and with the laws of the State of California (excluding California's
conflict of laws provisions).
13.8 Captions. The captions contained in and the table of contents
--------
prefixed to the Plan are inserted only as a matter of convenience and for
reference and in no way define, limit, enlarge or describe the scope or intent
of the Plan nor in any way shall affect the construction of any provision of the
Plan.
Appendix B
WEST MARINE, INC
NONEMPLOYEE DIRECTOR STOCK OPTION PLAN
(March 1999 Amendment and Restatement)
--------------------------------------
SECTION 1
ESTABLISHMENT, EFFECTIVE DATE AND DURATION
------------------------------------------
1.1 Establishment of the Plan. West Marine, Inc., a Delaware
-------------------------
corporation (the "Company"), having established the "West Marine, Inc.
Nonemployee Director Stock Option Plan" (the "Plan"), for the benefit of
nonemployee members of the Board of Directors of the Company ("Nonemployee
Directors") hereby amends and restates the Plan in its entirety.
1.2 Purpose of the Plan. The purpose of the Plan is to promote the
-------------------
success, and enhance the value, of the Company, by attracting, retaining and
motivating Nonemployee Directors of outstanding competence. The Plan also is
designed to further align the interests of the Nonemployee Directors with the
interests of the stockholders of the Company.
1.3 Effective Date. The Plan, as amended and restated, is
--------------
effective as of March 1999, subject to the approval by an affirmative vote, at
the next meeting of the stockholders of the Company, or any adjournment
thereof, of the holders of a majority of the outstanding shares of the common
stock of the Company, present in person or by proxy and entitled to vote at
such meeting.
1.4 Duration of the Plan. The Plan shall commence on the date
--------------------
specified in Section 1.3, and shall remain in effect thereafter, subject to
the right of the Board of Directors of the Company to terminate the Plan at
any time and for any reason pursuant to Section 7. In the event that on any
date of grant the number of shares to be subject to options granted to all
Nonemployee Directors exceeds the number of shares then available for grant
under the Plan, each Nonemployee Director shall share pro rata in the number
of shares that remain available for grant on such date.
SECTION 2
DEFINITIONS
-----------
For purposes of this Plan, the following terms shall have the meanings
indicated unless a different meaning is plainly required by the context:
2.1 "Board" shall mean the Board of Directors of the Company.
-----
2.2 "Code" shall mean the Internal Revenue Code of 1986, as amended.
----
Reference to a specific section of the Code shall include such section, any
valid regulation promulgated thereunder, and any comparable provision of any
future legislation amending, supplementing or superseding such section.
2.3 "Committee" shall mean the administrative committee appointed
---------
by the Board and charged with the general administration of the Plan pursuant to
Section 3.
2.4 "Company" shall mean West Marine, Inc., a Delaware corporation,
-------
or any successor thereto.
2.5 "Director" shall mean an individual who is a member of the Board.
--------
2.6 "Dollar Amount" shall mean, with respect to any Nonemployee
-------------
Director, the amount used in determining the number of Shares to be subject to
an Option granted to such Nonemployee Director. The Dollar Amount for each
director shall be determined in the discretion of the Board from time to time,
and may differ among Directors (for example, for the chairperson of a regular,
standing committee of the Board). Until otherwise determined by the Board, the
Dollar Amount for each Nonemployee Director shall be $100,000, provided that
if the Nonemployee Director is the chairperson of a regular, standing
committee of the Board, his or her Dollar Amount shall be $15,000.
2.7 "Exchange Act" shall mean the Securities Exchange Act of 1934,
------------
as amended from time to time, or any successor Act thereto. Reference to a
specific section of the Exchange Act shall include such section, any valid
regulation promulgated thereunder, and any comparable provision of any future
legislation amending, supplementing or superseding such section.
2.8 "Fair Market Value" shall mean the average of the highest and
-----------------
lowest quoted selling prices for Shares on the relevant date, or if there were
no sales on such date, the weighted average of the means between the highest
and lowest quoted selling prices on the nearest day before and the nearest day
after the relevant date, as determined by the Committee.
2.9 "Grant Date" shall mean the date of the Annual Meeting of
----------
Stockholders for a given calendar year or if the Nonemployee Director is
elected or appointed to the Board on a date other than the Annual Meeting of
Stockholders, such date such Nonemployee Director is first elected or
appointed to the Board. The first Grant Date is the date of the 1997 Annual
Meeting of Stockholders.
2.10 "Nonemployee Director" shall mean a Director who is an employee
--------------------
of neither the Company nor any Subsidiary.
2.11 "Option" means an option to purchase Shares which is not
------
intended to be an incentive stock option under section 422 of the Code.
2.12 "Participant" shall mean a Nonemployee Director to whom an
-----------
Option has been granted under the provisions of the Plan.
2.13 "Plan" shall mean the West Marine, Inc. Nonemployee Director
----
Stock Option Plan, as set forth in this instrument and as hereafter amended
from time to time.
2.14 "Shares" shall mean the shares of common stock of the Company,
------
$0.001 par value.
2.15 "Subsidiary" shall mean any corporation in which the Company owns
----------
directly, or indirectly through subsidiaries, at least fifty percent (50%) of
the total combined voting power of all classes of stock, or any other entity
(including, but not limited to, partnerships and joint ventures) in which the
Company owns at least fifty percent (50%) of the combined equity thereof.
SECTION 3
ADMINISTRATION OF THE PLAN
--------------------------
3.1 The Committee. The Plan shall be administered by the Committee,
-------------
which shall consist of not less than two (2) Directors. The members of the
Committee shall be appointed from time to time by, and shall serve at the
pleasure of, the Board.
3.2 Actions by Committee. Each decision of a majority of the
--------------------
members of the Committee then in office shall constitute the final and binding
act of the Committee. The Committee may act with or without a meeting being
called or held and shall keep minutes of all meetings held and a record of all
actions taken by written consent.
3.3 Duty and Powers of the Committee. It shall be the duty of the
--------------------------------
Committee to conduct the general administration of the Plan in accordance with
its provisions. The Committee shall have all discretion and powers necessary
or appropriate to administer the Plan and to control its operation in
accordance with its terms, including, but not by way of limitation, the
following powers:
(a) To interpret the provisions of the Plan and to determine, in its
sole discretion, any question arising under, or in connection with the
administration or operation
of, the Plan;
(b) To employ such counsel, agents and advisers, and to obtain such
legal, clerical and other services, as it may deem necessary or
appropriate in carrying out the provisions of the Plan; and
(c) To prescribe, amend and rescind rules and regulations relating
to the Plan, and to make all other determinations which may be necessary
or advisable for the administration of the Plan.
3.4 Decisions of Committee. All determinations and decisions
----------------------
made by the Committee pursuant to the provisions of the Plan and all related
orders or resolutions of the Board shall be final, conclusive and binding on
all persons, and shall be given the maximum deference permitted by law.
3.5 Administrative Expenses. All expenses incurred in the
-----------------------
administration of the Plan by the Committee, or otherwise, including legal
fees and expenses, shall be paid and borne by the Company.
3.6 Indemnification. Each person who is or shall have been a
---------------
member of the Committee, or of the Board, shall be indemnified and held
harmless by the Company against and from any loss, cost, liability, or expense
that may be imposed upon or reasonably incurred by him or her in connection
with or resulting from any claim, notion, suit, or proceeding to which he or
she may be a party or in which he or she may be involved by reason of any
action taken or failure to act under the Plan and against and from any and all
amounts paid by him or her in settlement thereof, with the Company's approval,
or paid by him or her in satisfaction of any judgment in any such action,
suit, or proceeding against him or her, provided he or she shall give the
Company an opportunity, at its own expense, to handle and defend the same
before he or she undertakes to handle and defend it on his or her own behalf.
The foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such persons may be entitled under the
Company's Articles of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold
them harmless.
SECTION 4
SHARES SUBJECT TO THE PLAN
--------------------------
4.1 Number of Shares. Subject to adjustment as provided in Section
----------------
4.2, the maximum number of Shares available for grant under the Plan may not
exceed 200,000. Such Shares may be either authorized but unissued Shares or
treasury Shares.
4.2 Adjustments in Authorized Shares. In the event of any merger,
--------------------------------
reorganization, consolidation, recapitalization, separation, liquidation, stock
dividend, split-up, Share combination, or other change in the corporate
structure or organization of the Company affecting the Shares, such adjustment
shall be made in the number and class of Shares which may be delivered under the
Plan, the size of the future grants under the Plan, and the number and class of
Shares subject to outstanding Options, as may be determined to be appropriate
and equitable by the Committee, in its sole discretion, to prevent dilution or
diminishment of Options; and provided that the number of Shares subject to any
Option always shall be a whole number.
SECTION 5
ELIGIBILITY
-----------
5.1 Eligibility. All Nonemployee Directors shall be eligible to
-----------
participate in the Plan.
5.2 Consideration for Grant of Option. Any Option under the Plan
---------------------------------
shall be made in consideration of the past services of the Participant.
SECTION 6
NONEMPLOYEE DIRECTOR OPTIONS
6.1 Granting of Options. Each Nonemployee Director who is such
-------------------
on a Grant Date, automatically will receive, on each such Grant Date, an Option
to purchase Shares. The number of Shares covered by such Option shall equal
the applicable Dollar Amount, divided by the Fair Market Value of a Share on
the Grant Date, rounded down to the nearest whole Share.
6.2 Terms of Options.
----------------
6.2.1 Option Agreement. Each Option shall be evidenced by
----------------
a written stock option agreement which shall be executed by the Optionee and
the Company.
6.2.2 Option Price. The price of the shares subject to
------------
each Option shall be 100% of the Fair Market Value for such Shares on the date
the Option is granted.
6.2.3 Exercisability. An Option granted pursuant to this
--------------
Section 6 shall become exercisable in full 6 months after the date the Option is
granted.
6.2.4 Expiration of Options. Each Option shall terminate
---------------------
upon the earlier of (a) the expiration of ten years
from the date the Option was granted, or (b) the expiration of one year from
the date of the Participant's termination of service as a Director for any
reason. Notwithstanding the preceding sentence, if a Participant ceases to be
a Director prior to the date that an Option held by him or her has become
exercisable, such Option shall terminate on the date of the Participant's
cessation of service as a Director.
6.2.5 Payment. Options shall be exercised by the
-------
Participant's delivery of a written notice of exercise to the Secretary of the
Company, setting forth the number of Shares with respect to which the Option is
to be exercised, accompanied by full payment for the Shares. The Option Price
upon exercise of any Option shall be payable to the Company in full in cash or
its equivalent.
As soon as practicable after receipt of a written notification of
exercise and full payment for the Shares purchased, the Company shall deliver
to the Participant Share certificates (in the Participant's name) representing
such Shares.
6.2.6 Restrictions on Share Transferability. The Committee
-------------------------------------
may impose such restrictions on any Shares acquired pursuant to the exercise of
an Option, as it may deem advisable, including, but not limited to, restrictions
related to applicable Federal securities laws, the requirements of any national
securities exchange or system upon which Shares are then listed and/or traded,
and/or under any blue sky or state securities laws.
6.2.7 Nontransferability of Options. No Option granted
-----------------------------
under the Plan may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will, the laws of descent and
distribution, or as provided in Section 7.2. All Options granted to a
Participant under the Plan shall be exercisable during his or her lifetime only
by such Participant.
SECTION 7
MISCELLANEOUS
-------------
7.1 Amendment or Termination of the Plan. The Board, in its sole
------------------------------------
discretion, may amend, alter, modify or terminate the Plan, in whole or in part,
at any time and for any reason. Neither the amendment, suspension, termination,
nor scheduled expiration of the Plan shall, without the consent of the
Participant, alter or impair any rights or obligations under any Option
theretofore granted. No Option may be granted during any period of suspension
nor after termination of the Plan.
7.2 Beneficiary Designation. Each Participant may name a
-----------------------
beneficiary or beneficiaries (who may be named contingently or successively)
to whom any benefit under the Plan is to be paid in case of the Participant's
death before he or she receives any or all of such benefit. Each such
designation shall revoke all prior designations by the same Participant and
must be in a form and manner acceptable to the Committee. In the absence of
any such designation, or if no beneficiary survives the Participant, benefits
remaining unpaid at the Participant's death shall be paid to the person or
persons entitled to such benefits under the Participant's will or, if the
Participant shall fail to make testamentary disposition of such benefits, his
or her legal representative. Any transferee must furnish the Company with (a)
written notice of his or her status as transferee, and (b) evidence
satisfactory to the Company to establish the validity of the transfer and
compliance with any laws or regulations pertaining to said transfer.
7.3 Captions. The captions contained herein and in the table of
--------
contents are provided as a matter of convenience only, and in no way define,
limit, enlarge or describe the scope or intent of the Plan. Such captions
shall not affect in any way the construction of any provision of the Plan.
7.4 Applicable Law; Severability. The Plan hereby created shall be
----------------------------
construed, administered and governed in all respects in accordance with the laws
of the State of California. If any provision of this instrument shall be held
invalid or unenforceable by a court of competent jurisdiction, the remaining
provisions hereof shall continue to be fully effective.
7.5 No Effect Upon Other Compensation Plans. The adoption of this
---------------------------------------
Plan shall not affect any other stock option, compensation or incentive plans
in effect for the Company or any Subsidiary, and this Plan shall not preclude
the Board from establishing any other forms of incentive or compensation for
Nonemployee Directors.
7.6 No Effect on Service. Nothing in the Plan shall interfere with
--------------------
or limit in any way the right of the Company to terminate any Participant's
service on the Board at any time, with or without cause.
7.7 Requirements of Law. The granting of Options and the issuance
-------------------
of Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
7.8 Rule 16b-3 Compliance. Transactions under this Plan are
---------------------
intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the Exchange Act. To the
extent any provision of the Plan or action by the Committee fails to so
comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Committee.
Appendix C
WEST MARINE, INC.
1993 OMNIBUS EQUITY INCENTIVE PLAN
(April 1996 Amendment and Restatement)
(As amended as of March 1999)
SECTION 1
ESTABLISHMENT, PURPOSE AND DURATION
1.1 Establishment of the Plan. West Marine, Inc., a Delaware
-------------------------
corporation (the "Company"), having established the "West Marine, Inc. 1993
Omnibus Equity Incentive Plan" (the "Plan"), hereby amends and restates the Plan
in its entirety. The Plan permits the grant of Nonqualified Stock Options,
Incentive Stock Options, SARs, Restricted Stock, Performance Units, and
Performance Shares. The Plan, as amended and restated, is effective as of March
1999, subject to the approval by an affirmative vote, at the next meeting of the
stockholders of the Company, or any adjournment thereof, of the holders of a
majority of the outstanding shares of the common stock of the Company, present
in person or by proxy and entitled to vote at such meeting.
1.2 Purpose of the Plan. The purpose of the Plan is to promote the
-------------------
success, and enhance the value, of the Company by linking the personal interests
of Participants to those of Company shareholders, and by providing Participants
with an incentive for outstanding performance.
The Plan is further intended to provide flexibility to the Company in
its ability to motivate, attract, and retain the services of Participants upon
whose judgment, interest, and special effort the successful conduct of its
operation largely is dependent.
1.3 Duration of the Plan. The Plan shall commence on the date
--------------------
specified in Section 1.1, and shall remain in effect, subject to the right of
the Board of Directors to terminate the Plan at any time pursuant to Section 13
until all Shares subject to the Plan have been purchased or acquired pursuant to
the provisions of the Plan. However, without further stockholder approval, no
Incentive Stock Option may be granted under the Plan on or after November 1,
2003.
SECTION 2
DEFINITIONS
The following terms shall have the meanings set forth below, unless
plainly required by the context:
2.1 "Affiliated SAR" means a SAR that is granted in connection with a
--------------
related Option, and which will be deemed to automatically be exercised
simultaneous with the exercise of the related Option.
2.2 "Award" means, individually or collectively, a grant under the
-----
Plan of Nonqualified Stock Options, Incentive Stock Options, SARs, Restricted
Stock, Performance Units, or Performance Shares.
2.3 "Award Agreement" means an agreement entered into by each
---------------
Participant and the Company, setting forth the terms and provisions applicable
to Awards granted to Participants under this Plan.
2.4 "Board" or "Board of Directors" means the Board of Directors of
-----
the Company.
2.5 "Code" means the Internal Revenue Code of 1986, as amended.
----
Reference to a specific section of the Code shall include such section, any
valid regulation promulgated thereunder, and any comparable provision of any
future legislation amending, supplementing or superseding such section.
2.6 "Committee" means the committee, as specified in Section 3,
---------
appointed by the Board to administer the Plan with respect to grants of Awards.
2.7 "Company" means West Marine, Inc., a Delaware corporation, or any
-------
successor thereto.
2.8 "Consultant" means any consultant, independent contractor, or
----------
other person who provides significant services to the Company or its
Subsidiaries, but who is neither an employee of the Company or its Subsidiaries,
nor a Director of the Company.
2.9 "Director" means any individual who is a member of the Board of
--------
Directors of the Company.
2.10 "Disability" means a permanent and total disability within the
----------
meaning of Code Section 22(e)(3).
2.11 "Employee" means any employee of the Company or of the Company's
--------
Subsidiaries, whether such employee is so employed at the time the Plan is
adopted or becomes so employed subsequent to the adoption of the Plan.
Directors who are not otherwise employed by the Company shall not be considered
Employees.
2.12 "Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended from time to time, or any successor Act thereto. Reference to a
specific section or regulation of the Exchange Act shall include such section or
regulation, any valid regulation promulgated thereunder, and any comparable
provision of any future legislation amending, supplementing or superseding such
section or regulation.
2.13 "Fair Market Value" means the average of the highest and lowest
-----------------
quoted selling prices for Shares on the relevant date, or if there were no sales
on such date, the weighted average of the means between the highest and lowest
quoted selling prices on the nearest day before and the nearest day after the
relevant date, as determined by the Committee.
2.14 "Freestanding SAR" means a SAR that is granted independently of
----------------
any Options.
2.15 "Incentive Stock Option" or "ISO" means an option to purchase
----------------------
Shares, which is designated as an Incentive Stock Option and is intended to meet
the requirements of Section 422 of the Code.
2.16 "Insider" shall mean an Employee who, on the relevant date, is a
-------
Company director, Company officer (within the meaning of Rule 16a-1 promulgated
under the Exchange Act), or beneficial owner of 10% or more of the Shares.
2.17 "Nonqualified Stock Option" or "NQSO" means an option to
-------------------------
purchase Shares which is not intended to be an Incentive Stock Option.
2.18 "Option" means an Incentive Stock Option or a Nonqualified Stock
------
Option.
2.19 "Option Price" means the price at which a Share may be purchased
------------
by a Participant pursuant to an Option, as determined by the Committee.
2.20 "Participant" means an Employee of the Company who has
-----------
outstanding an Award granted under the Plan.
2.21 "Performance Unit" means an Award granted to an Employee
----------------
pursuant to Section 9.
2.22 "Performance Share" means an Award granted to an Employee,
-----------------
pursuant to Section 9 herein.
2.23 "Period of Restriction" means the period during which the
---------------------
transfer of Shares of Restricted Stock is limited in some way (based on the
passage of time, the achievement of performance goals, or upon the occurrence of
other events as determined by the Committee, in its discretion), and the Shares
are subject to a substantial risk of forfeiture, as provided in Section 8.
2.24 "Restricted Stock" means an Award granted to a Participant
----------------
pursuant to Section 8.
2.25 "Retirement" shall have the meaning for each respective
----------
individual Participant ascribed to it in the pension plan of the Company
applicable to each such respective Participant.
2.26 "Shares" means the shares of common stock of the Company.
------
2.27 "Stock Appreciation Right" or "SAR" means an Award, granted
------------------------
alone or in connection with a related Option, designated as a SAR, pursuant to
the terms of Section 7.
2.28 "Subsidiary" means any corporation in which the Company owns
----------
directly, or indirectly through subsidiaries, at least fifty percent (50%) of
the total combined voting power
of all classes of stock, or any other entity (including, but not limited to,
partnerships and joint ventures) in which the Company owns at least fifty
percent (50%) of the combined equity thereof.
2.29 "Tandem SAR" means a SAR that is granted in connection with a
----------
related Option, the exercise of which shall require forfeiture of the right to
purchase a Share under the related Option (and when a Share is purchased under
the Option, a SAR shall similarly be cancelled).
2.30 "Window Period" means the period beginning on the third business
-------------
day following the date of public release of the Company's quarterly sales and
earnings information, and ending on the twelfth business day following such
date.
SECTION 3
ADMINISTRATION
3.1 The Committee. The Plan shall be administered by the Committee.
-------------
The Committee shall consist of not less than two (2) Directors. The members of
the Committee shall be appointed from time to time by, and shall serve at the
pleasure of, the Board of Directors. The Committee shall be comprised solely of
Directors who are "disinterested persons" under Rule 16b-3 under the Exchange
Act. Notwithstanding any contrary provision of the Plan, during the period
prior to the time when the Shares first are registered under Section 12 of the
Exchange Act, the Board (a) shall have all of the authority granted under the
Plan to the Committee, and (b) may exercise all of the powers of the Committee.
3.2 Authority of the Committee. The Committee shall have full
--------------------------
power, except as limited by law or by the Certificate of Incorporation or
Bylaws of the Company, and subject to the provisions herein, to determine the
size and types of Awards; to determine the terms and conditions of such Awards
in a manner consistent with the Plan; to construe and interpret the Plan and
any Award Agreement or instrument entered into under the Plan; to establish,
amend, or waive rules and regulations for the Plan's administration; and
(subject to the provisions of Section 13 herein) to amend the terms and
conditions of any outstanding Award to the extent such terms and conditions
are within the discretion of the Committee as provided in the Plan. Further,
the Committee shall make all other determinations, which may be necessary or
advisable for the administration of the Plan. As permitted by law, the
Committee may delegate its powers; provided, however, that only the Committee
may administer the Plan with respect to Insiders.
3.3 Decisions Binding. All determinations and decisions made by the
-----------------
Committee pursuant to the provisions of the Plan and all related orders or
resolutions of the Board of Directors shall be final, conclusive, and binding on
all persons, including the Company, its shareholders, Employees, Participants,
and their estates and beneficiaries, and shall be given the maximum deference
permitted by law.
SECTION 4
SHARES SUBJECT TO THE PLAN
4.1 Number of Shares. Subject to adjustment as provided in Section
----------------
4.3, the total number of Shares available for grant under the Plan may not
exceed 5,250,000. These 5,250,000 Shares may be either authorized but unissued
or reacquired Shares.
The following rules will apply for purposes of the determination of
the number of Shares available for grant under the Plan:
(a) While an Award is outstanding, it shall be counted against the
authorized pool of Shares, regardless of its vested status.
(b) The grant of an Option or Restricted Stock shall reduce the
Shares available for grant under the Plan by the number of Shares
subject to such Award.
(c) The grant of a Tandem SAR shall reduce the number of Shares
available for grant by the number of Shares subject to the
related Option (i.e., there is no double counting of Options and
their related Tandem SARs); provided, however, that, upon the
exercise of such Tandem SAR, the authorized Share pool shall be
credited with the appropriate number of Shares representing the
number of shares reserved for such Tandem SAR less the number of
Shares actually delivered upon exercise thereof or the number of
Shares having a Fair Market Value equal to the cash payment made
upon such exercise.
(d) The grant of an Affiliated SAR shall reduce the number of Shares
available for grant by the number of Shares subject to the SAR,
in addition to the number of Shares subject to the related
Option; provided, however, that, upon the exercise of such
Affiliated SAR, the authorized Share pool shall be credited with
the appropriate number of Shares representing the number of
shares reserved for such Affiliated SAR less the number of Shares
actually delivered upon exercise thereof or the number of Shares
having a Fair Market Value equal to the cash payment made upon
such exercise.
(e) The grant of a Freestanding SAR shall reduce the number of Shares
available for grant by the number of Freestanding SARs granted;
provided, however, that, upon the exercise of such Freestanding
SAR, the authorized Share pool shall be credited with the
appropriate number of Shares representing the number of shares
reserved for such Freestanding SAR less the number of Shares
actually delivered upon exercise thereof or the number of Shares
having a Fair Market Value equal to the cash payment made upon
such exercise.
(f) The Committee shall in each cash determine the appropriate number
of Shares to deduct from the authorized pool in connection with
the grant of Performance Units and/or Performance Shares.
(g) To the extent that an Award is settled in cash rather than in
Shares, the authorized Share pool shall be credited with the
appropriate number of Shares having a Fair Market Value equal to
the cash settlement of the Award.
4.2 Lapsed Awards. If any Award granted under this Plan is
-------------
cancelled, terminates, expires, or lapses for any reason (with the exception of
the termination of a Tandem SAR upon exercise of the related Option, or the
termination of a related Option upon exercise of the corresponding Tandem SAR),
any Shares subject to such Award again shall be available for the grant of an
Award under the Plan. However, in the event that prior to the Award's
cancellation, termination, expiration, or lapse, the holder of the Award at any
time received one or more "benefits of ownership" pursuant to such Award (as
defined by the Securities and Exchange Commission, pursuant to any rule or
interpretation promulgated under Section 16 of the Exchange Act), the Shares
subject to such Award shall not be made available for regrant under the Plan.
4.3 Adjustments in Authorized Shares. In the event of any merger,
--------------------------------
reorganization, consolidation, recapitalization, separation, liquidation, stock
dividend, split-up, Share combination, or other change in the corporate
structure of the Company affecting the Shares, such adjustment shall be made in
the number and class of Shares which may be delivered under the Plan, and in the
number and class of and/or price of Shares subject to outstanding Options, SARs,
and Restricted Stock granted under the Plan, as may be determined to be
appropriate and equitable by the Committee, in its sole discretion, to prevent
dilution or diminishment of Awards; and provided that the number of Shares
subject to any Award shall always be a whole number.
SECTION 5
ELIGIBILITY AND PARTICIPATION
5.1 Eligibility. Persons eligible to participate in this Plan
-----------
include all Employees and Consultants of the Company and its Subsidiaries, as
determined by the Committee, including Employees who are members of the Board,
but excluding Directors who are not Employees. Notwithstanding the preceding
sentence, Randolph K. Repass shall not be eligible to participate in the Plan.
5.2 Actual Participation. Subject to the provisions of the Plan, the
--------------------
Committee in its sole discretion, shall select from all eligible Employees and
Consultants, those to whom Awards shall be granted, and the Committee, in its
sole discretion, shall determine the nature and amount of each Award.
SECTION 6
STOCK OPTIONS
6.1 Grant of Options. Subject to the terms and provisions of the
----------------
Plan, Options may be granted to Employees and Consultants at any time and from
time to time as shall be determined by the Committee. The Committee shall have
discretion in determining the number
of Shares subject to Options granted to each Participant. The Committee may
grant ISOs, NQSOs, or a combination thereof.
6.2 Award Agreement. Each Option grant shall be evidenced by an
---------------
Award Agreement that shall specify the Option Price, the duration of the Option,
the number of Shares to which the Option pertains, the conditions of exercise of
the Options, and such other provisions as the Committee shall determine. The
Award Agreement also shall specify whether the Option is intended to be an ISO
or a NQSO.
6.3 Option Price. The Option Price for each grant of an Option shall
------------
be determined by the Committee in its sole discretion.
6.3.1 Nonqualified Stock Options. In the case of a Nonqualified
--------------------------
Stock Option, the Option Price shall be not less than fifty percent (50%) of the
Fair Market Value of a Share on the date that the Option is granted.
6.3.2 Incentive Stock Options. In the case of an Incentive
-----------------------
Stock Option, the Option Price shall be not less than one-hundred percent of
the Fair Market Value of a Share on the date that the Option is granted;
provided, however, that if at the time the Option is granted, the Employee
(together with persons whose stock ownership is attributed to the Employee
pursuant to Section 424(d) of the Code) owns stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company or any
of its Subsidiaries, the Option Price shall be not less than one-hundred and
ten percent (110%) of the Fair Market Value of a Share on the date that the
Option is granted.
6.4 Duration of Options. Each Option shall expire at such time as
-------------------
the Committee, in its sole discretion, shall determine; provided, however, that
no Incentive Stock Option may be exercised after the expiration of 10 years from
the date the Option was granted; provided, further, no Incentive Stock Option
granted to an Employee who, together with persons whose stock ownership is
attributed to the Employee pursuant to Section 424(d) of the Code, owns stock
possessing more than 10% of the total combined voting power of all classes of
the stock of the Company or any of its Subsidiaries, may be exercised after the
expiration of 5 years from the date the Option was granted. After the Option is
granted, the Committee, in its sole discretion, may extend the maximum term of
such Option.
6.5 Exercise of Options. Options granted under the Plan shall be
-------------------
exercisable at such times and be subject to such restrictions and conditions as
the Committee, in its sole discretion, shall determine. After an Option is
granted, the Committee, in its sole discretion, may accelerate the
exercisability of the Option. However, in no event may any Option granted to an
Insider be exercisable until six (6) months following the date of its grant.
6.6 Payment. Options shall be exercised by the Participant's
-------
delivery of a written notice of exercise to the Secretary of the Company,
setting forth the number of Shares with respect to which the Option is to be
exercised, accompanied by full payment for the Shares.
The Option Price upon exercise of any Option shall be payable to the
Company in full in cash or its equivalent. The Committee, in its sole
discretion, also may permit exercise (a) by tendering previously acquired Shares
having an aggregate Fair Market Value at the time of
exercise equal to the total Option Price (provided that the Shares which are
tendered must have been held by the Participant for at least six (6) months
prior to their tender to satisfy the Option Price), or (b) by any other means
which the Committee, in its sole discretion, determines to provide legal
consideration for the Shares, and to be consistent with the Plan's purpose and
applicable law.
As soon as practicable after receipt of a written notification of
exercise and full payment, the Company shall deliver to the Participant, in the
Participant's name, Share certificates in an appropriate amount based upon the
number of Shares purchased under the Option(s).
6.7 Restrictions on Share Transferability. The Committee may impose
-------------------------------------
such restrictions on any Shares acquired pursuant to the exercise of an Option
under the Plan, as it may deem advisable, including, without limitation,
restrictions under applicable Federal securities laws, under the requirements of
any national securities exchange or system upon which such Shares are then
listed and/or traded, and under any blue sky or state securities laws applicable
to such Shares.
6.8 Certain Additional Provisions for Incentive Stock Options.
---------------------------------------------------------
6.8.1 Exercisability. The aggregate Fair Market Value
--------------
(determined at the time the Option is granted) of the Shares with respect to
which Incentive Stock Options are exercisable for the first time by any
Employee during any calendar year (under all plans of the Company and its
Subsidiaries) shall not exceed $100,000.
6.8.2 Termination of Employment. No Incentive Stock Option
-------------------------
may be exercised more than three months after the Participant's termination of
employment for any reason other than Disability or death, unless (a) the
Participant dies during such three-month period, and (b) the Award Agreement
permits later exercise. No Incentive Stock Option may be exercised more than
one year after the Participant's termination of employment on account of
Disability, unless (a) the Participant dies during such one-year period, and (b)
the Award Agreement permits later exercise.
6.8.3 Employees Only. Incentive Stock Options may be granted
--------------
only to persons who are Employees at the time of grant. Consultants shall not
be eligible to receive Incentive Stock Options.
6.9 Nontransferability of Options. No Option granted under the Plan
-----------------------------
may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will, the laws of descent and distribution, or as
allowed under Section 10. All Options granted to a Participant under the Plan
shall be exercisable during his or her lifetime only by such Participant.
SECTION 7
STOCK APPRECIATION RIGHTS
7.1 Grant of SARs. Subject to the terms and conditions of the Plan,
-------------
a SAR may be granted to an Employee or Consultant at any time and from time to
time as shall be
determined by the Committee, in its sole discretion. The Committee may grant
Affiliated SARs, Freestanding SARs, Tandem SARs, or any combination thereof.
The Committee shall have complete discretion to determine the number
of SARs granted to any Participant, and consistent with the provisions of the
Plan, the terms and conditions pertaining to such SARs. However, the grant
price of a Freestanding SAR shall be at least equal to the Fair Market Value of
a Share on the date of grant of the SAR. The grant price of Tandem or
Affiliated SARs shall equal the Option Price of the related Option. In no event
shall any SAR granted to an Insider become exercisable within the first six (6)
months after the date it was granted.
7.2 Exercise of Tandem SARs. Tandem SARs may be exercised for all or
-----------------------
part of the Shares subject to the related Option upon the surrender of the right
to exercise the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable.
Notwithstanding any other provision of this Plan to the contrary, with
respect to a Tandem SAR granted in connection with an ISO: (i) the Tandem SAR
will expire no later than the expiration of the underlying ISO; (ii) the value
of the payout with respect to the Tandem SAR may be for no more than one hundred
percent (100%) of the difference between the Option Price of the underlying ISO
and the Fair Market Value of the Shares subject to the underlying ISO at the
time the Tandem SAR is exercised; and (iii) the Tandem SAR may be exercised only
when the Fair Market Value of the Shares subject to the ISO exceeds the Option
Price of the ISO.
7.3 Exercise of Affiliated SARs. Affiliated SARs shall be deemed to
---------------------------
be exercised upon the exercise of the related Options. The deemed exercise of
Affiliated SARs shall not necessitate a reduction in the number of related
Options.
7.4 Exercise of Freestanding SARs. Freestanding SARs shall be
-----------------------------
exercisable on such terms and conditions as shall be determined by the
Committee, in its sole discretion.
7.5 SAR Agreement. Each SAR grant shall be evidenced by an Award
-------------
Agreement that shall specify the grant price, the term of the SAR, the
conditions of exercise and such other provisions as the Committee, in its sole
discretion, shall determine.
7.6 Term of SARs. The term of a SAR granted under the Plan shall be
------------
determined by the Committee, in its sole discretion.
7.7 Payment of SAR Amount. Upon exercise of a SAR, a Participant
---------------------
shall be entitled to receive payment from the Company in an amount determined by
multiplying:
(a) The difference between the Fair Market Value of a Share on the
date of exercise over the grant price; times
(b) The number of Shares with respect to which the SAR is exercised.
At the discretion of the Committee, the payment upon SAR exercise may
be in cash, in Shares of equivalent value, or in some combination thereof.
7.8 Rule 16b-3 Requirements. Notwithstanding any other provision of
-----------------------
the Plan, the Committee may impose such conditions on exercise of a SAR
(including, without limitation, the right of the Committee to limit the time of
exercise to specified periods) as may be required to satisfy the requirements of
Rule 16b-3 promulgated under the Exchange Act.
For example, if the Participant is an Insider, the ability of the
Participant to exercise SARs for cash will be limited to the Window Periods
during each year. However, if the Committee determines that the Participant no
longer is an Insider, or if the Federal securities laws change to permit
Insiders greater freedom of exercise of SARs, then the Committee may permit
Insiders to exercise SARs at other times.
7.9 Nontransferability of SARs. No SAR granted under the Plan may be
--------------------------
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will, the laws of descent and distribution, or as permitted under
Section 10. Further, all SARs granted to a Participant under the Plan shall be
exercisable during his or her lifetime only by such Participant.
SECTION 8
RESTRICTED STOCK
8.1 Grant of Restricted Stock. Subject to the terms and provisions
-------------------------
of the Plan, the Committee, at any time and from time to time, may grant Shares
of Restricted Stock to eligible Employees and Consultants in such amounts as the
Committee, in its sole discretion, shall determine.
8.2 Restricted Stock Agreement. Each Restricted Stock grant shall be
--------------------------
evidenced by an Award Agreement that shall specify the Period (or Periods) of
Restriction, the number of Restricted Stock Shares granted, and such other terms
and conditions as the Committee, in its sole discretion, shall determine.
8.3 Transferability. Except as provided in this Section 8, Shares of
---------------
Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated until the end of the applicable Period of Restriction
established by the Committee and specified in the Award Agreement, or upon
earlier satisfaction of any other conditions, as specified by the Committee in
its sole discretion and set forth in the Award Agreement. However, in no event
may any Restricted Stock granted to an Insider become vested in a Participant
prior to six (6) months following the date of its grant. All rights with
respect to the Restricted Stock granted to a Participant under the Plan shall be
available during his or her lifetime only to such Participant.
8.4 Other Restrictions. The Committee, in its sole discretion, may
------------------
impose such other restrictions on any Shares of Restricted Stock as it may deem
advisable including, without limitation, restrictions based upon the achievement
of specific performance goals (Company-wide, divisional, and/or individual),
and/or restrictions under applicable Federal or state securities laws; and may
legend the certificates representing Restricted Stock to give appropriate notice
of such restrictions.
8.5 Certificate Legend. In addition to any legends placed on
------------------
certificates pursuant to Section 8.4, each certificate representing Shares of
Restricted Stock shall bear the following legend:
"The sale or other transfer of the shares of stock represented by this
certificate, whether voluntary, involuntary, or by operation of law,
is subject to certain restrictions on transfer as set forth in the
West Marine Products, Inc. 1992 Omnibus Equity Incentive Plan, and in
a Restricted Stock Agreement. A copy of the Plan and such Restricted
Stock Agreement may be obtained from the Secretary of West Marine
Products, Inc."
8.6 Removal of Restrictions. Except as otherwise provided in this
-----------------------
Section 8, Shares of Restricted Stock covered by each Restricted Stock grant
made under the Plan shall become freely transferable by the Participant after
the last day of the Period of Restriction. The Committee, in its discretion,
may accelerate the time at which any restrictions shall lapse, and/or remove any
restrictions. After the Shares are released from restrictions, the Participant
shall be entitled to have the legend or legends required by Section 8.4 and 8.5
removed from his or her Share certificate.
8.7 Voting Rights. During the Period of Restriction, Participants
-------------
holding Shares of Restricted Stock granted hereunder may exercise full voting
rights with respect to those Shares unless otherwise provided in the Award
Agreement.
8.8 Dividends and Other Distributions. During the Period of
---------------------------------
Restriction, Participants holding Shares of Restricted Stock granted hereunder
shall be entitled to receive all dividends and other distributions paid with
respect to those Shares while they are so held, unless otherwise provided in the
Award Agreement. If any such dividends or distributions are paid in Shares, the
Shares shall be subject to the same restrictions on transferability and
forfeitability as the Shares of Restricted Stock with respect to which they were
paid.
In the event that any dividend or distribution constitutes a
"derivative security" or an "equity security" pursuant to the rules promulgated
under Section 16 of the Exchange Act, such dividend or distribution shall be
subject to a vesting period equal to the longer of: (i) the remaining vesting
period of the Shares of Restricted Stock with respect to which the dividend or
distribution is paid; or (ii) six months. The Committee shall establish
procedures for the application of this provision.
8.9 Return of Restricted Stock to Company. Subject to the applicable
-------------------------------------
Award Agreement and Section 8.6, upon the earlier of (a) the Participant's
termination of employment, or (b) the date set forth in the Award Agreement, the
Restricted Stock for which restrictions have not lapsed shall revert to the
Company and, subject to Section 4.2, again shall become available for grant
under the Plan.
SECTION 9
PERFORMANCE UNITS AND PERFORMANCE SHARES
9.1 Grant of Performance Units/Shares. Subject to the terms of the
---------------------------------
Plan, Performance Units and Performance Shares may be granted to eligible
Employees and Consultants at any time and from time to time, as shall be
determined by the Committee, in its sole discretion. The Committee shall have
complete discretion in determining the number of Performance Units and
Performance Shares granted to each Participant.
9.2 Value of Performance Units/Shares. Each Performance Unit shall
---------------------------------
have an initial value that is established by the Committee at the time of grant.
Each Performance Share shall have an initial value equal to the Fair Market
Value of a Share on the date of grant. The Committee shall set performance
goals in its discretion which, depending on the extent to which they are met,
will determine the number and/or value of Performance Units/Shares that will be
paid out to the Participants. The time period during which the performance
goals must be met shall be called a "Performance Period." Performance Periods
of Awards granted to Insiders shall, in all cases, exceed six (6) months in
length.
9.3 Earning of Performance Units/Shares. After the applicable
-----------------------------------
Performance Period has ended, the holder of Performance Units/Shares shall be
entitled to receive a payout of the number of Performance Units/Shares earned by
the Participant over the Performance Period, to be determined as a function of
the extent to which the corresponding performance goals have been achieved.
Notwithstanding the preceding sentence, after the grant of a Performance
Unit/Share, the Committee, in its sole discretion, may waive the achievement of
any performance goals for such Performance Unit/Share.
9.4 Form and Timing of Payment of Performance Units/Shares. Payment
------------------------------------------------------
of earned Performance Units/Shares shall be made in a single lump sum, within
forty-five (45) calendar days following the close of the applicable Performance
Period. The Committee, in its sole discretion, may pay earned Performance
Units/Shares in the form of cash, in Shares (which have an aggregate Fair Market
Value equal to the value of the earned Performance Units/Shares at the close of
the applicable Performance Period) or in a combination thereof.
Prior to the beginning of each Performance Period, Participants may,
in the discretion of the Committee, elect to defer the receipt of any
Performance Unit/Share payout upon such terms as the Committee shall determine.
9.5 Cancellation of Performance Units/Shares. Subject to the
----------------------------------------
applicable Award Agreement, upon the earlier of (a) the Participant's
termination of employment, or (b) the date set forth in the Award Agreement, all
remaining Performance Units/Shares shall be forfeited by the Participant to the
Company, and subject to Section 4.2, the Shares subject thereto shall again be
available for grant under the Plan.
9.6 Nontransferability. Performance Units/Shares may not be sold,
------------------
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further a
Participant's rights under the Plan shall be exercisable during the
Participant's lifetime only by the Participant or the Participant's legal
representative.
SECTION 10
BENEFICIARY DESIGNATION
As provided in this Section 10, each Participant under the Plan may
name a beneficiary or beneficiaries (who may be named contingently or
successively) to whom any benefit under the Plan is to be paid in case of the
Participant's death before he or she receives any or all of such benefit and/or
who may exercise any vested Award under the Plan following the Participant's
death. Each such designation shall revoke all prior designations by the same
Participant and must be in a form and manner acceptable to the Committee. In
the absence of any such designation, benefits remaining unpaid at the
Participant's death shall be paid to the Participant's estate and, subject to
the terms of the Plan, any unexercised vested Award may be exercised by the
administrator or executor of the Participant's estate.
SECTION 11
DEFERRALS
The Committee, in its sole discretion, may permit a Participant to
defer such Participant's receipt of the payment of cash or the delivery of
Shares that would otherwise be due to such Participant by virtue of the exercise
of an Option or SAR, the lapse or waiver of restrictions with respect to
Restricted Stock, or the satisfaction of any requirements or goals with respect
to Performance Units/Shares. Any such deferral elections shall be subject to
such rules and procedures as shall be determined by the Committee from time to
time.
SECTION 12
RIGHTS OF EMPLOYEES
12.1 No Effect on Employment or Service. Nothing in the Plan shall
----------------------------------
interfere with or limit in any way the right of the Company to terminate any
Participant's employment or service at any time, with or without cause. For
purposes of the Plan, transfer of employment of a Participant between the
Company and any one of its Subsidiaries (or between Subsidiaries) shall not be
deemed a termination of employment.
12.2 Participation. No Employee or Consultant shall have the right to
-------------
be selected to receive an Award under this Plan, or, having been so selected, to
be selected to receive a future Award.
SECTION 13
AMENDMENT, SUSPENSION, OR TERMINATION
13.1 Amendment, Suspension, or Termination. The Board, in its sole
-------------------------------------
discretion, may alter, amend or terminate the Plan, or any part thereof, at any
time and for any reason; provided, however, that without further stockholder
approval, no such alteration or amendment shall (a) materially increase the
benefits accruing to participants under the Plan, (b) materially increase the
number of securities which may be issued under the Plan, or (c) materially
modify the requirements as to eligibility for participation in the Plan;
provided, further, that stockholder approval is not required if such approval is
not required in order to assure the Plan's continued qualification under Rule
16b-3 promulgated under the 1934 Act. Neither the amendment, suspension, nor
termination of the Plan shall, without the consent of the
Participant, alter or impair any rights or obligations under any Award
theretofore granted. No Award may be granted during any period of suspension
nor after termination of the Plan.
SECTION 14
WITHHOLDING
14.1 Tax Withholding. Prior to the delivery of any Shares of cash
---------------
pursuant to the Plan, the Company shall have the power and the right to deduct
or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state, and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect to
any Awards.
14.2 Shares Withholding. The Committee may, in its absolute
------------------
discretion, permit a Participant to satisfy such tax withholding obligation, in
whole or in part, by electing to have the Company withhold Shares having a value
equal to the amount required to be withheld or by delivering to the Company
already-owned shares to satisfy the withholding requirement. The amount of the
withholding requirement shall be deemed to include any amount which the
Committee agrees may be withheld at the time the election is made, not to exceed
the amount determined by using the maximum federal, state or local marginal
income tax rates applicable to the Participant with respect to the Award on the
date that the amount of tax to be withheld is to be determined (the "Tax Date").
The value of the Shares to be withheld or delivered will be based on their Fair
Market Value on the Tax Date. Such elections will be subject to the following
restrictions: (1) the election must be made on or before the Tax Date; (2) the
election will be irrevocable; and (3) the election will be subject to the
disapproval of the Committee. Each election by an Optionee or Grantee whose
transactions in shares of Common Stock are subject to Section 16(b) of the
Exchange Act will be subject to the following additional restrictions: (1) the
election may not be made within six months of the grant of the Award (except
that this limitation will not apply in the event the death or disability of the
Participant occurs prior to the expiration of the six-month period), and (2) the
election must be made either at least six months before the Tax Date or within a
Window Period.
SECTION 15
INDEMNIFICATION
Each person who is or shall have been a member of the Committee, or of
the Board, shall be indemnified and held harmless by the Company against and
from any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by him or her in connection with or resulting from any
claim, notion, suit, or proceeding to which he or she may be a party or in which
he or she may be involved by reason of any action taken or failure to act under
the Plan or any Award Agreement and against and from any and all amounts paid by
him or her in settlement thereof, with the Company's approval, or paid by him or
her in settlement thereof, with the Company's approval, or paid by him or her in
satisfaction of any judgment in any such action, suit, or proceeding against him
or her, provided he or she shall give the Company an opportunity, at its own
expense, to handle and defend the same before he or she undertakes to handle and
defend it on his or her own behalf. The foregoing right of indemnification
shall not be exclusive of any other rights of indemnification to which such
persons may be entitled under the Company's Articles of Incorporation or Bylaws,
as a matter of law, or otherwise, or any power that the Company may have to
indemnify them or hold them harmless.
SECTION 16
SUCCESSORS
All obligations of the Company under the Plan, with respect to Awards
granted hereunder, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.
SECTION 17
LEGAL CONSTRUCTION
17.1 Gender and Number. Except where otherwise indicated by the
-----------------
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular and the singular shall include the plural.
17.2 Severability. In the event any provision of the Plan shall be
------------
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.
17.3 Requirements of Law. The granting of Awards and the issuance of
-------------------
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
Notwithstanding any other provision set forth in the Plan, if required
by the then-current Section 16 of the Exchange Act, any "derivative security" or
"equity security" offered pursuant to the Plan to any Insider may not be sold or
transferred for at least six (6) months after the date of grant of such Award.
The terms "equity security" and "derivative security" shall have the meanings
ascribed to them in the then-current rules promulgated under Section 16 of the
Exchange Act.
17.4 Securities Law Compliance. With respect to Insiders,
-------------------------
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the
extent any provision of the Plan, Award Agreement or action by the Committee
fails to so comply, it shall be deemed null and void, to the extent permitted by
law and deemed advisable by the Committee.
17.5 Governing Law. The Plan and all Award Agreements hereunder,
-------------
shall be construed in accordance with and governed by the laws of the State of
California.
17.6 Captions. Captions are provided herein for convenience only, and
--------
are not to serve as a basis for interpretation or construction of the Plan.
PROXY
WEST MARINE, INC.
PROXY FOR 1999 ANNUAL MEETING OF STOCKHOLDERS MAY 5, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Randolph K. Repass, John Edmondson and
Richard E Everett, or any of them, each with power of substitution, as proxies
of the undersigned, to attend the 1999 Annual Meeting of Stockholders of WEST
MARINE, INC. to be held at the office of the Company at 500 Westridge Drive,
Watsonville, California, on May 5, 1999, at 10:30 A.M., and any adjournment or
postponement thereof, and to vote the number of shares the undersigned would be
entitled to vote if personally present on the following matters set forth on the
reverse side, and upon such other business as may properly come before such
meeting and any adjournment or postponement thereof.
- ------------- -------------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ------------- -------------
[X] Please mark
votes as in
this example
This proxy will be voted as directed, in the absence of contrary directions,
this proxy will be voted FOR the election of the directors listed below.
FOR AGAINST ABSTAIN
1. The election of nine directors. 2. The approval of the amendment of the [_] [_] [_]
Nominees: Randolph K. Repass, Associates Stock Buying Plan to increase
John Edmondson, Richard E. Everett, the number of shares authorized for
James P. Curley, Jeoffrey A. Eisenberg, insurance thereunder by 200,000.
Jeanne Jackson, David McComas, 3. The approval of the amendment of the [_] [_] [_]
Walter Scott and Henry Wendt Amended and Restated Nonemployee
Director Stock Option Plan to increase
FOR WITHHELD the number of shares authorized for
ALL [_] [_]FROM ALL issuance thereunder by 100,000.
NOMINEES NOMINEES 4. The approval of the amendment of the 1993 [_] [_] [_]
Omnibus Equity Incentive Plan to increase
[_] ________________________________________ the number of shares authorized for
For all nominees except as noted above issuance thereunder by 1,500,000.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [_]
STOCKHOLDERS ARE URGED TO MARK, DATE, SIGN AND RETURN THIS PROXY
PROMPTLY IN THE ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED
IN THE UNITED STATES.
The signature should correspond exactly with the name appearing on the
certificate evidencing your Common Stock. If more than one name
appears, all should sign. Joint owners should each sign personally.
Signature:____________________________________ Date:_________________ Signature:________________________________ Date:_____________