SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 7, 2006
West Marine, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-22512 77-0355502
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(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification No.)
incorporation)
500 Westridge Drive
Watsonville, California 95076
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(Address of principal executive offices) (Zip Code)
(831) 728-2700
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(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
As described under Item 5.02 of this Form 8-K, Eric Nelson will leave his
position as Chief Financial Officer, Senior Vice President of Finance and
Secretary of West Marine effective today. In connection with this decision,
West Marine and Eric Nelson have entered into a release agreement. Pursuant to
the terms of this release agreement, Mr. Nelson will receive two weeks base
salary and a severance payment equal to twelve months of his current base
salary, payable ratably on West Marine's regularly scheduled pay dates, and
continued health insurance benefits, subject to Mr. Nelson's payment of any
portion of the cost required to be contributed by an employee. Mr. Nelson will
retain all vested West Marine stock options, but any options not exercised will
be forfeited 90 days after the termination of the 12 month severance period.
Mr.Nelson will not be entitled to receive a bonus for 2006. In consideration of
his benefits under the release agreement, Mr. Nelson has agreed to a
comprehensive release of claims against West Marine. Mr. Nelson has also agreed
not to disparage West Marine or its employees, to maintain the confidentiality
of certain West Marine information and, during the twelve-month period in which
he receives severance payments, to refrain from soliciting West Marine
employees. This summary of the material terms of the release agreement is
qualified in its entirety by reference to the full text of release agreement
filed as an exhibit to this report.
Item 5.02. Departure of Directors or Principal Officers; Election of
Directors; Appointment of Principal Officers.
Eric Nelson, Chief Financial Officer, Senior Vice President of Finance and
Secretary of West Marine, will leave his position effective today. West Marine
has launched a search for a new Chief Financial Officer, and on an interim
basis, Peter Van Handel, Chief Accounting Officer, Vice President of Finance
and Controller of West Marine, will take over Mr. Nelson's duties until a new
Chief Financial Officer is named. Pam Fields, General Counsel of West Marine,
will fulfill corporate secretary duties in her capacity as Assistant Secretary.
Mr. Nelson had no disagreement with West Marine on any matter relating to its
operations, policies or accounting practices.
Peter Van Handel, age 50, was appointed Chief Accounting Officer effective
today, and has been Vice President of Finance and Controller since March 2006.
Previously, he served as Assistant Vice President of Finance and Controller from
May 2003 to March 2006, and as Assistant Controller when he joined West Marine
in July 2000.
Item 9.01. Financial Statements and Exhibits.
(a) Not Applicable.
(b) Not Applicable.
(c) Exhibits:
10.1 Release Agreement, dated April 7, 2006, between West
Marine, Inc. and Eric Nelson (management contract or
compensatory plan or arrangement).
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WEST MARINE, INC.
Date: April 7, 2006 By: /s/ Peter Harris
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Peter Harris
Chief Executive Officer and President
Exhibit 10.1
RELEASE AGREEMENT
This Release Agreement (the "Agreement"), is entered into by Eric S.
Nelson ("Employee") and West Marine, Inc. and its subsidiaries (collectively,
the "Company"), hereafter collectively, the "Parties" and shall become
effective upon its signature by both Parties and the expiration of the seven
(7)day revocation period referred to in Paragraph 7 hereof without revocation
by the Employee during such period.
WHEREAS, Employee's employment with the Company is terminating on
April 7, 2006 (the "Termination Date"), at which time all employee compensation
and benefits shall cease, except as provided herein;
WHEREAS, the parties wish to resolve any and all disputes that the
parties may have, including those related to Employee's employment with and
separation from the Company;
NOW, THEREFORE, in consideration of the promises contained in this
Agreement, the parties agree as follows:
1. Consideration. In consideration of the execution of this Agreement and the
releases, promises, and representations included herein, the Company agrees as
follows:
(a) The Company shall pay Employee an amount equal
to two weeks of his current base salary, less applicable withholdings, payable
on Employee's Termination Date
(b) The Company shall pay Employee severance equal
to twelve (12) months of his current base salary, less applicable withholdings,
payable over the twelve (12) month period commencing on the Termination Date
("Severance Period") in substantially equal payments on the Company's regularly
scheduled payroll days.
(c) Employee will continue to receive health
insurance benefits only (i.e., medical, dental, optical, and mental health),
in all aspects significantly comparable to those in place from time to time
for Senior Vice Presidents of the Company, at the Company's cost, subject to
any portion of the costs required to be contributed by Employee.
(d) From and after the Termination Date, Employee
will not receive any further equity incentive awards
(including, without limitation, restricted stock and/or stock option grants).
Moreover, Employee's vesting of stock options will cease on the Termination
Date. Options which were vested at the Termination Date will be exercisable
according to the terms of Employee's stock option agreements with the Company,
except that Employee is entitled to exercise vested stock options under those
agreements during the Severance Period and for the
ninety (90) day period following expiration thereof. After such time, any
unexercised vested stock options automatically will be forfeited.
(e) Employee will not be entitled to receive any
bonus for fiscal year 2006 or thereafter.
2. Payment of Salary. Employee acknowledges and agrees that as of the
Termination Date, any and all earned salary and accrued paid time off were paid
to him. In light of the payment by the Company of all wages due, or to become
due to Employee, the parties acknowledge and agree that California Labor Code
section 206.5 is not applicable to the parties here. Said section provides in
pertinent part:
No employer shall require the execution of any release of any claim or
right on account of wages due, or to become due, or made as an advance
on wages to be earned, unless payment of such wages has been made.
3. General release. The Employee on behalf of his heirs, family members,
estate, executors, administrators, assigns, employers, agents, representatives,
insurers, attorneys, predecessors, and successors hereby forever releases and
fully discharges the Company and the Company's predecessors, successors,
assigns, parent companies, subsidiaries, affiliates and other related entities,
along with its and their current, former and future stockholders, investors,
principals, partners, members, employees, employers, directors, officers,
parents, subsidiaries, affiliates, agents, assigns, representatives, insurers,
attorneys, predecessors, successors, and the like, and its and their heirs,
estates, executors, administrators, assigns, agents, representatives, insurers,
attorneys, and the like (collectively, the "Releasees") from any and all
claims, actions, judgments, obligations, damages, demands, debts, liabilities,
and causes of action relating to any matters of any kind, whether presently
known or unknown, suspected or unsuspected, that he now owns or holds as of
the date the Employee signs this Agreement including, without limitation:
(a) any and all claims relating to or arising from the
Employee's employment with the Company, and the termination of that employment,
including but not limited to any and all claims for wrongful termination, sexual
harassment, breach of contract, breach of the covenant of good faith and fair
dealing, breach of fiduciary duty, promissory estoppel, negligence,
misrepresentation, interference with contract or prospective economic advantage,
unfair business practices, defamation, invasion of privacy, personal injury,
assault, battery, infliction of emotional distress, termination in violation of
public policy, false imprisonment, and conversion;
(b) any and all claims for violation of any
California, federal or other state, local or other equal employment opportunity
laws or regulations, or federal, state or local labor laws, including but not
limited to, the California Fair Employment and Housing Act, the Equal Pay Act
of 1963, California Labor Code Sections 201 et seq., 970 et seq., and 1197.5;
Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866, the
Age Discrimination in Employment Act of 1967, the Americans with Disabilities
Act, the Employee Retirement Income Security Act of
1974, the Worker Adjustment and Retraining Notification Act, the Older Workers
Benefit Protection Act, the California Labor Code, and the Fair Labor Standards
Act;
(c) any and all claims for violation of the federal or
any state constitution;
(d) any and all claims for loss, costs, damages or
expenses arising out of any dispute over the tax treatment of any of the
proceeds received by the Employee as a result of this Agreement; and
(e) any and all claims for attorneys' fees and costs.
Employee agrees that the release set forth in this paragraph 3 shall
be and remain in effect in all respects as a complete general release as to the
matters released. This release does not extend to any obligations incurred
under this Agreement or to any earned but unpaid "wages," as defined in Section
200 of the Labor Code of the State of California.
4. Waiver of Civil Code Section 1542. Employee represents that he is not aware
of any claim by him against any of the Releasees other than the claims that are
released by this Agreement. The Employee waives any and all rights and benefits
conferred by the provisions of Section 1542 of the Civil Code of the State of
California and any similar law of any state or territory of the United States
or other jurisdiction. This section provides as follows:
"A general release does not extend to claims which the
creditor does not know or suspect to exist in his/her favor
at the time of executing the release, which if known by
him/her must have materially affected his/her settlement
with the debtor."
Employee acknowledges that the release provided for in Paragraph 3 above shall
apply to all unknown and/or unanticipated claims as well as those known and/or
anticipated. The Employee understands and acknowledges that even if he should
eventually suffer additional damages arising out of the matters herein
released, he will not be able to make any claims for those damages.
5. No admissions. Employee understands and acknowledges that this Agreement
constitutes a compromise and settlement of actual or potential disputed claims.
No action taken by either party, either previously or in connection with this
Agreement, shall be deemed or construed to be (a) an admission of the truth or
falsity of any claims heretofore made; (b) an acknowledgment or admission by
either party of any fault or liability whatsoever to another party or to any
third party.
6. No prior claims or assignment; indemnity. Employee represents and warrants
that he has not filed any complaints or charges or lawsuits against the Company
or any other Releasee with any governmental agency, court, or other forum. The
Employee further represents and warrants that he has not heretofore assigned or
transferred, or purported to assign or transfer,
to any person or entity any claim or other matter herein released. In the event
that he shall have assigned or transferred, or purported to assign or transfer,
any claim or the matter herein released, he shall indemnify the Company and hold
it harmless from and against any loss, cost, claim or expense including but not
limited to all costs related to the defense of any action including reasonable
attorneys' fees based upon, arising out of or incurred as a result of any such
claim, assignment or transfer.
7. Acknowledgment of waiver of claims under ADEA. Employee acknowledges that he
is waiving and releasing any rights he may have under the Age Discrimination in
Employment Act of 1967 ("ADEA") and that this waiver and release is knowing and
voluntary. Employee and the Company agree that this waiver and release does not
apply to any rights or claims that may arise under ADEA after the date on which
Employee signs this Agreement. Employee acknowledges that the consideration
given for this waiver and release Agreement is in addition to anything of value
to which Employee was already entitled. Employee further acknowledges that he
has been advised by this writing that (a) he should consult with an attorney
prior to executing this Agreement; (b) he has twenty-one (21) days within which
to consider this Agreement before signing it; (c) he has seven (7) days
following the date he signs this Agreement to revoke the Agreement, by
providing written notice of revocation to the Company's General Counsel, by
midnight on the seventh day following the date on which he signs this
Agreement; and (d) this Agreement shall not be effective or enforceable, and
Employee shall not be entitled to any consideration under this Agreement or
otherwise (except for earned salary and benefits earned at the Termination
Date) until the revocation period has expired without Employee's revocation of
this Agreement.
8. Non-disparagement and non-solicitation. Employee agrees that he will not
disparage the Company or its employees, officers or directors in their personal
or business reputations. Moreover, in consideration of the benefits to be
provided to Employee under this Agreement, Employee agrees that prior to the
expiration of the Severance Period, Employee will not solicit or cause to be
employed or retained any person who is (or within the prior 6 months was) an
associate of the Company or its affiliates by any person or entity with whom or
which Executive becomes associated.
9. Continuing confidentiality obligations. Employee acknowledges having had
access to trade secrets and proprietary and confidential information of the
Company relating to the business of the Company and its affiliates. Employee
certifies that he has complied with and will continue to comply with all of his
obligations to preserve such information as confidential, which information
includes, without limitation, Company processes, systems, methods, materials,
research activities, prices, volume of sales, promotional methods, list of
names or classes of customers, personnel and financial information, vendor
names and information, product cost information, computer software of any type,
pricing and billing policies, data, forecasts, plans, and strategies for all
aspects of operations, marketing, and sales, and expansion and acquisition
strategies, including new store openings/closings.
10. Return of Company property. Employee agrees that, in addition to his
obligations to preserve the trade secrets and proprietary and confidential
information of the Company, upon his departure from the Company he will have
returned any documents containing or disclosing such information of the
Company, and copies thereof, and all other materials, equipment or other
property belonging to the Company. Notwithstanding the foregoing, Company
acknowledges that Employee may retain following equipment from and after the
Termination Date for his personal ownership and use: one (1) laptop computer
(provided that any Company information shall be removed therefrom at Company's
direction on or after April 21, 2006), and one (1) cell phone (with termination
from the Company account and conversion to an individual account on
June 1, 2006).
11. Costs and Attorneys' Fees. The Parties shall each bear their own costs,
attorneys' fees and other fees incurred in connection with this Agreement and
otherwise.
12. Authority. The Company represents and warrants that the undersigned has the
authority to act on behalf of the Company and to bind the Company and all who
may claim through it to the terms of this Agreement. Employee represents and
warrants that he has the capacity to act on his own behalf and on behalf of all
who might claim through him to bind him to the terms and conditions of this
Agreement.
13. Entire agreement. This Agreement contains the entire agreement between the
Parties pertaining to the subject matter contained in it and supersedes any and
all prior and/or contemporaneous oral or written negotiations, agreements,
representations, and understandings, except for the Parties' stock option
agreements, which shall remain in full force and effect, except as modified
herein. The Parties each understand that this Agreement is made without
reliance upon any inducement, statement, promise, or representation other than
those contained within this Agreement.
14. Attorneys' fees. If any legal or equitable action is necessary to enforce
the terms of this Agreement, the prevailing party shall be entitled to a
reasonable sum for attorneys' fees and costs which are reasonably incurred and
paid in addition to any other relief to which such party may be entitled.
15. Governing law. This Agreement shall be construed under and governed by the
laws of the State of California.
This Agreement shall be deemed to have been entered into in Santa Cruz
County, California and all questions of validity, interpretation or performance
of any of its terms or of any rights or obligations of the parties to this
Agreement shall be governed by California law. If any legal or equitable action
is necessary to enforce the terms of this Agreement, such action shall be
brought in the State of California.
16. Severability. If any provisions of this Agreement or the application
thereof to any person, place or circumstance shall be held by a court of
competent jurisdiction to be invalid, unenforceable, or void, the remainder of
this Agreement and such provision as applied to other persons, places, and
circumstances shall remain in full force and effect, provided, however, that if
the release provided for in Paragraph 3 above (or any part thereof) is found to
be invalid, the Parties shall negotiate a modification to such release to
ensure the maximum enforceability permitted by law.
17. Voluntary execution of Agreement. This Agreement is executed voluntarily
and without any duress or undue influence on the part or behalf of the Parties,
with the full intent of releasing all claims. The Parties acknowledge that:
(a) They have had a reasonable time within which to
consider whether to sign this Agreement;
(b) They have been represented in the preparation,
negotiation, and execution of this Agreement by legal counsel of their own
choice or that they have voluntarily declined to seek such counsel;
(c) They have read and understand the terms and
consequences of this Agreement and of the releases it contains;
(d) They are fully aware of the legal and binding
effect of this Agreement.
18. Counterparts. This Agreement may be executed in counterparts, each of
which, when so executed, shall be deemed to be an original, and such
counterparts together shall constitute one and the same instrument.
19. Modifications. The terms and provisions of this Agreement may be modified
or terminated only in a writing signed by both Parties.
20. Waivers. Any waiver of any term or provision of this Agreement must be in
writing and signed by the party granting the waiver. The failure of the Company
to insist on strict adherence to any term of this Agreement on one or more
occasions shall not be considered a waiver and shall not deprive the Company of
the right thereafter to insist on strict adherence to that term or any other
term of this Agreement. Any waiver by the Company of a breach of any provision
of the Agreement shall not operate as, or be construed to be, a waiver of any
other breach of such provision of this Agreement.
[Signatures Follow]
DATED: April 7, 2006 /s/ Eric S. Nelson
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Eric S. Nelson
West Marine, Inc.
DATED: April 7, 2006 /s/ Peter Harris
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By: Peter Harris
Its: Chief Executive Officer & President