UNITED STATES
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): December 10, 2007
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 (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
500 Westridge Drive
Watsonville, California 95076
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(Address of Principal Executive Offices, Including 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.
Please see "Compensation Arrangements for Geoffrey E. Eisenberg" under Item 5.02
below for information regarding a confidentiality and non-solicitation agreement
and an indemnification agreement that we have entered into with Geoffrey A.
Eisenberg.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
Departure of Peter L. Harris
Peter L. Harris has resigned as president and chief executive officer of the
company effective December 10, 2007. Mr. Harris also resigned as a director
as of December 10, 2007.
Appointment of Geoffrey E. Eisenberg as President and Chief Executive Officer
Also on December 10, 2007, the board of directors appointed Mr. Eisenberg as the
company's new president and chief executive officer, effective that day. Mr.
Eisenberg has served as a director of the company since 1977 and held several
executive positions with West Marine from 1976 until 1994. For more information
regarding Mr. Eisenberg's background, see our proxy statement filed on April 12,
2007.
Compensation Arrangements for Geoffrey E. Eisenberg
We have entered into a letter agreement, dated as of December 10, 2007, with Mr.
Eisenberg setting forth the terms of his employment. The letter agreement
provides for a three-year term and an annual base salary of $499,000. In
addition, beginning in 2008, Mr. Eisenberg will be eligible for an annual bonus
up to the amount of his annual base salary based on the achievement of the
business plan for that year and an additional bonus of up to $250,000 based on
progress made toward achieving strategic goals of the company under a 2008
incentive plan for senior management to be adopted by our board of directors.
This additional bonus is expected to be paid in either restricted stock or
deferred compensation.
Under the letter agreement, we will award Mr. Eisenberg an option to purchase
400,000 shares of our common stock under the terms of our Omnibus Equity
Incentive Plan, to the extent such shares are available under the plan. These
options will have a term of five years and vest in three annual installments of
33%, 33% and 34%, respectively. Pursuant to our equity award grant policy, the
grant date for these options will be January 15, 2008. In addition, for fiscal
years 2009 and 2010, Mr. Eisenberg will receive additional stock options to
purchase up to 50,000 shares of our common stock. Receipt of these additional
stock options will be based on achieving certain performance goals and vesting
for these options will be accelerated so that the options granted in 2009 will
vest over a two-year period (at annual installments of 50% each), and the
options granted in 2010 will fully vest after one year from the date of grant,
upon achieving other goals to be established by our board of directors.
Additionally, under the agreement, all stock options granted on or after
January 15, 2008 will immediately vest in the event of a change of control.
In the event Mr. Eisenberg is terminated without cause or resigns for good
reason or resigns within 180 days following a change of control, Mr. Eisenberg
is entitled to continued payment of his annual salary for a period of one year
from such termination (subject to a modification in the schedule of payments if
necessary to comply with Internal Revenue Service deferred compensation rules),
the annual bonus he would have been entitled to for the year in which he was
terminated, COBRA premiums for a period of no more than one year and a one-year
period from the date of his termination to exercise any vested options (provided
that such one-year period cannot extend beyond the expiration date of any stock
option). The agreement also provides for continuation of base salary for three
month and six months in the event of death or termination in connection with a
disability, respectively.
We have also entered into a confidentiality and non-solicitation agreement as
well as our standard indemnification agreement with Mr. Eisenberg. Under these
agreements, Mr. Eisenberg has agreed to keep certain West Marine information
confidential and to not solicit our employees or independent contractors to
terminate their relationship with us or interfere with any of our relationships
with customers and suppliers during his term of employment and for two years
thereafter, and we have agreed to indemnify Mr. Eisenberg against certain claims
that may arise from his service to us.
The foregoing is a summary of the material terms of the letter agreement, the
confidentiality and non-solicitation agreement and the indemnification
agreement. As a summary, it does not purport to be complete and is subject to,
and qualified in its entirety by, the full text of the agreements that are being
filed with or incorporated into this report as Exhibits 10.1, 10.2 and 10.3 and
are each incorporated herein by this reference.
Consistent with the company's director compensation policy, Mr. Eisenberg will
no longer be compensated for serving on the board of directors.
Item 9.01. Financial Statements and Exhibits.
(a) Not Applicable.
(b) Not Applicable.
(c) Not Applicable.
(d) Exhibits:
10.1* Letter Agreement, dated as of December 10, 2007,
between West Marine, Inc. and Geoffrey A. Eisenberg.
10.2 Confidentiality and Non-Solicitation Agreement,
dated as of December 14, 2007, between West Marine, Inc.
and Geoffrey A. Eisenberg.
10.3 Form of Indemnification Agreement between West Marine,
Inc. and its directors and officers (incorporated by
reference to Exhibit 10.1 to West Marine's Quarterly
Report on Form 10-Q for the quarter ended June 29, 2002).
* A management contract or compensatory arrangement within the meaning
of Item 601(b)(10)(iii) of Regulation S-K.
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: December 14, 2007 By: /s/ Pamela J. Fields
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Pamela J. Fields, Esq.
Secretary and General Counsel
Exhibit 10.1
[WEST MARINE LETTERHEAD]
December 10, 2007
Geoff Eisenberg
43 Hollins Drive
Santa Cruz, CA 95060
Dear Geoff:
I am pleased to provide you with this letter setting out our agreement regarding
your future employment with West Marine, Inc The entire Board of Directors and I
are most pleased that you have accepted our offer. Beginning December 10, 2007,
you will be employed as West Marine's President and Chief Executive Officer
(CEO). The term of this agreement is for a three year period through December
10, 2010, unless extended by further agreement or terminated, as provided in
this agreement.
Cash Compensation. You will be paid a base salary at a rate of $499,000 per
year. The Board may choose to grant you an increase in the rate of your base
salary, in connection with an annual review of your performance.
Beginning with calendar year 2008, you will also be eligible to earn an annual
bonus, under the terms of the bonus plan in effect at the time, in an amount
equal to your annual base salary, based on achievement of the business plan
approved by the Company's Board of Directors ( the "Board") for that year (the
"Annual Bonus").
In addition, you will develop, for Board review and approval, a long term
incentive plan for senior management for 2008. We have agreed that, under this
incentive plan, you will be eligible to earn an additional bonus, up to a
maximum of $250,000, based on progress made toward achieving the Company's
strategic goals as established by the Board, which would be paid in restricted
stock or deferred compensation.
Stock Options. Based upon the actions of the Governance and Compensation
Committee, taken on December 10, 2007, on the 10th business day of the calendar
month following December 10, 2007 (January 15, 2008), you will be awarded
options to purchase 400,000 shares of the Company's stock, under the terms of
the Omnibus Equity Incentive Plan, to the extent such options are available
under the Plan, subject to the terms and conditions of the Plan and applicable
stock option agreement. The options will have an exercise price per share equal
to 100% of the fair market value per share on the grant date, will have a term
of 5 years, and will vest in 3 annual installments of 33%, 33% and 34% provided
you remain employed under this Agreement. In addition, for calendar years 2009
and 2010 (provided that you remain employedas CEO under this agreement through
such anniversary dates and certain predetermined performance goals have been
met), you will receive an award of options to purchase an additional 50,000
shares of the Company's stock, under the terms the Plan. Vesting for these
options will be accelerated so that the options granted in 2009 will vest over
a two (2) year period (at annual installments of 50% each), and the options
granted in 2010 will fully vest after one (1) year from the date of grant,
based on achievement of certain non-financial and financial goals that the
Board will establish. Under the Company's current policy, these option grants
typically would made in the first week of June. Additionally, all options
granted on or after January 15, 2008 will immediately vest on a "Change of
Control" as defined below.
Benefits. During your employment under this agreement you will be eligible to
receive employee benefits under the terms of any employee benefit plan then in
effect for the Company's executive employees, including any such retirement
plan, and any such health, life and disability insurance plans. In addition, you
will be afforded twenty-five (25) days of paid time off each year.
The Company will reimburse you for any reasonable expenses incurred by you in
the course of performing your duties for the Company, in accordance with the
Company's policies regarding employee expense reimbursement in effect at the
time.
Termination. Should your employment with the Company terminate prior to December
10, 2010, as provided below, in the event of (i) your death; (ii) termination
due to disability; (iii) termination for cause; (iv) termination without cause;
(v) resignation for good reason; or (vi) resignation upon change of control, you
will be entitled to the following compensation.
Death. In the event of your death, the Company will continue to pay
your base salary, on the Company's regular pay dates, to the beneficiaries
designated by you under the Company's employee life insurance plan, for a period
of three months after your death.
Disability. The Company may terminate your employment due to your
disability, if you remain unable to perform the essential functions of your
position for a period of twelve weeks or more in any twelve month period. In the
event of the termination of your employment due to disability, the Company will
continue to pay you your base salary, for a period of six months following the
date of your termination (provided that, to comply with IRC Section 409A, the
aggregate amount of such salary continuation does not exceed 200% of the maximum
compensation taken into account under IRC Section 401(a)(17), which currently is
$225,000 and is annually adjusted for inflation; the "409A Limit").
Cause. The Company may terminate your employment for cause in the event
of: (a) your willful material violation of a material Company policy or your
gross negligence in the performance of your duties and responsibilities; (b)
your willful commission of an act that constitutes gross misconduct that is
materially injurious to the Company; (c) your willful material violation of a
material federal or state law or regulation applicable to the Company's
business, (d) your willful breach of a material provision of this Agreement; (e)
your willful act of material dishonesty (including fraud or embezzlement) in
connection with your employment with the Company, your duties or your title; or
(f) your conviction of, or your entry of a plea of guilty or nolo contendere to,
any crime involving moral turpitude or any felony.
Termination Without Cause. In the event that the Company chooses to
terminate your employment prior to December 10, 2010, for reasons other than
your death, disability or for cause as provided above, the Company will: (a)
continue to pay you your base salary for a period of one year after your
termination; (b) pay you a pro rata Annual Bonus, if earned, at the time when
Annual Bonuses are paid to other Company executives for the year in which your
termination occurred, calculated by multiplying the amount of the Annual Bonus
you would have earned had you remained employed through the end of the year by a
fraction, the numerator of which will be the number of days you were employed in
the applicable year prior to your termination and the denominator of which will
be 365; (c) pay the premiums to continue your Company health insurance coverage
under COBRA for a period of twelve months, or until you become eligible for
coverage under another employer's group health insurance plan, whichever is a
shorter period of time; and (d) extend, for a period of up to one year following
the date of your termination (but not beyond the expiration of the option,
generally 5 years from grant) your right to exercise any stock options that had
vested prior to your termination (even though the Plan generally requires the
options to be exercised within 90 days of your termination). Hereafter items
(a), (b), (c,) and (d) above are collectively referred to as a Separation
Package. Your receipt of the Separation Package under this Agreement is
contingent on your signing (and not revoking) a general release in a form
satisfactory to the Board. In the event the value of the salary continuation you
are scheduled to receive in the six month period following your separation from
service exceeds the 409A Limit, then the salary continuation shall be suspended
when it reaches such limit, and any suspended payments shall be paid in a lump
sum (without any interest) immediately following the expiration of six months
following your separation from service, and the remaining salary continuation
shall be paid over the remaining six months in accordance with this agreement.
Resignation for Good Reason. You may resign your employment for good
reason, in the event that the Company is in material breach of any of the
material terms of this agreement, provided that you have first notified the
Board of Directors, in writing, of your intent to terminate your employment for
good reason, within 90 days of the material breach, identifying specifically the
manner in which you believe the Company is in material breach of any material
term of this agreement and provided that the Company has not cured such breach
within thirty days after the Board has received this notice. In the event of
your resignation for good reason as provided above, you will be eligible to
receive a Separation Package.
Resignation Upon Change of Control. In the event that you resign your
employment within 180 days following a Change of Control you will be eligible to
receive a Separation Package. For purposes of this agreement, a "Change of
Control" means any transaction or series of related transactions that results in
one person, or more than one person acting as a group, acquiring ownership,
directly or indirectly, of more than 50% of the aggregate voting power of all
classes of equity securities of the Company, except if such person or entity is
(a) a subsidiary or parent of the Company; (b) the Company's equity-based
incentive compensation plan; (c) an entity formed to hold the Company's common
equity securities, provided the owners of such entity, on the date such entity
became the holder of the Company's common equity securities, are comprised of
substantially all of the equity owners of the Company immediately prior to that
date; or (d) Randy Repass, his family or a trust, partnership or other entity
that benefits primarily Mr. Repass or his family.
Payment/Benefits on Termination or Resignation of Employment. Upon
termination or resignation of your employment with the Company, at any time and
for any reason (including the expiration of the term of your employment under
this agreement), you will no longer receive any pay or benefits from the Company
except for: (a) the applicable payments and benefits outlined in the applicable
subsections of this Termination section; (b) payment of your base salary earned
through your termination date, but not yet paid; (c) payment of any bonus
earned, but not yet paid (in other words, where your termination date occurs
after the end of the applicable bonus year, but bonuses for the year have not
yet been paid); (d) reimbursement of any business expenses incurred prior to
your termination which had not yet been reimbursed, in accordance with Company
policies on the reimbursement of business expenses; and (e) any benefits for
which you may remain eligible following termination of employment under the
terms of applicable Company employee benefit plans.
Confidentiality and Non-Solicitation. As with all employees you will be subject
to all Company policies regarding protection of confidential information and
intellectual property and you will sign a separate agreement to memorialize the
same. Any matter or material created by you or made available to you in the
course of your employment under this agreement will be owned solely by the
Company and you will not have any ownership or other rights in that matter or
material regardless of your role in creating or procuring it.
Arbitration. With the exception of a suit for injunctive or equitable relief, in
the event that a dispute arises concerning the interpretation or enforcement of
this agreement, or any other related matter, the parties agree that any such
dispute shall be resolved by a three member arbitration panel in Santa Cruz,
California in accordance with the then prevailing commercial arbitration rules
of the American Arbitration Association. Executive therefore specifically waives
any right to jury trial on such disputes. Such decisions and awards rendered by
the arbitrator shall be final and conclusive and may be entered in any court
having jurisdiction thereof as a basis of judgment and of the issuance of a writ
for its collection. The Company shall pay the cost of the arbitrator, and unless
the arbitrator otherwise determines, each party shall be responsible for his or
its cost of the arbitration (e.g., attorneys fees). The parties shall keep
confidential the existence of the claim, controversy or disputes from third
parties (other than arbitrator(s)), and the determination thereof, unless
otherwise required by law. Nothing in this subsection shall be construed as
precluding the Company from bringing an action for injunctive relief or other
equitable relief for enforcement of any restrictive covenants in this agreement.
Other Terms. This agreement supersedes any prior representations or agreements,
whether written or oral, regarding your employment with the Company.
This letter may not be modified or amended, and no provision can be waived,
except by a written agreement, signed by you and a representative authorized by
the Board.
The terms of this letter will be governed by the laws of the State of
California.
Neither you nor the Company may assign this agreement without the prior written
consent of the other; provided that the Company may assign this agreement and
any and all rights under it, without your consent, to an entity acquiring all or
a substantial portion of the assets or the business of the Company, or an entity
controlling, controlled by, or under common control with the Company or such a
purchaser. This agreement will be binding on and inure to the benefit of both
you and the Company and our respective successors and permitted assigns.
Geoff, please indicate your acceptance of our offer, by signing and dating this
letter in the space provided below and return it to me.
Very truly yours,
West Marine, Inc.
By:/s/ Randy Repass
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Randy Repass
Chairman
Attachment
ACCEPTED AND AGREED:
/s/ Geoff Eisenberg December 14, 2007
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Geoff Eisenberg
Exhibit 10.2
CONFIDENTIALITY AND NON-SOLICITATION AGREEMENT
This confidentiality and non-solicitation agreement ("Agreement"), effective
as of December 10, 2007 ("Effective Date"), is intended to set forth in writing
my responsibility as an Associate of West Marine, Inc. and its subsidiaries
("West Marine"). In consideration for West Marine offering me employment in
accordance with the letter agreement dated December 10, 2007 (the "Employment
Agreement"), I acknowledge and agree that:
1. Confidentiality. I will maintain in confidence and will not disclose or use,
whether during or after the term of my employment any proprietary or
confidential information belonging to West Marine ("Confidential Information"),
whether or not in written form, except to the extent required to perform duties
on behalf of West Marine. Confidential Information refers to any information
which has commercial value and concerns the business of West Marine or its
customers or suppliers, which was disclosed to me by West Marine or its
customers or suppliers, or which was learned, discovered, developed, conceived,
originated or prepared by me in the scope of my employment with West Marine.
Such Confidential Information includes, but is not limited to, information
relating to West Marine's products, product mix, finances, suppliers,
customers, catalog mailing lists, sales and marketing plans, future business
plans and any other information which is identified as confidential by
West Marine. The obligations contained in this Section 1 shall not apply to
any information (i) which becomes generally known in the trade or industry not
as a result of a breach of this Agreement, or (ii) which was already known to
me prior to my commencing employment with West Marine, or (iii) which was
disclosed to me by a third party who does not owe a duty of confidentiality to
West Marine and to whom West Marine does not owe a duty of confidentiality.
2. West Marines Materials. Upon voluntary or involuntary termination of my
employment with West Marine or at any other time upon West Marine's request, I
will promptly deliver to West Marine, without retaining any copies, all
documents and other materials furnished to me by West Marine or prepared by me
for West Marine.
3. No Competitive Employment While Employed. During the term of my employment
with West Marine, I will not engage in any employment, consulting, or other
activity in any business competitive with West Marine without West Marine's
written consent.
4. Non-Solicitation. During the term of my employment with West Marine and
for a period of two (2) years thereafter, (i) I will not solicit, or cause
others to solicit, any employees or independent contractors of West Marine to
terminate their relationship with West Marine, and (ii) I will not knowingly or
intentionally interfere in any way with the contractual relationship between
West Marine and any supplier or customer of West Marine.
5. Survival. Notwithstanding the termination of my employment, Section 1
("Confidentiality") and 4 ("Non-Solicitation") shall survive such termination.
6. Specific Performance. A breach of any of the provisions of this Agreement
will cause irreparable damage to West Marine for which there will be no
adequate remedy at law, and West Marine shall be entitled to injunctive relief
and/or a decree for specific performance, and such other relief as may be
proper (including monetary damages if appropriate).
7. Severability. If any one or more of the provisions (or any put thereof)
contained in this Agreement should, for any reason, be held to be unenforceable
in any respect under the laws of the United States or any state thereof, such
unenforceability shall not affect any other provisions, and this Agreement
shall be construed in the applicable jurisdiction as if the unenforceable
provision had not been contained herein.
8. Reformation. In the event that provisions for Section 3 or 4 should ever
be deemed to exceed the scope, time or geographic limitations of applicable
law regarding restrictive covenants, then such provisions shall be reformed to
the maximum scope, time or geographic limitations, as the case may be,
permitted by applicable laws.
9. Entire Agreement. This Agreement, and the Employment Agreement, constitute
the entire agreement between the parties relating to this subject matter and
supersedes all prior or simultaneous representations, discussions,
negotiations, and agreements, whether written or oral. This Agreement may be
amended or modified, and a provision can be waived, only with the written
consent of both me and West Marine. No oral waiver, amendment or modification
will be effective under any circumstances whatsoever.
WEST MARINE, INC. ASSOCIATE
By:/s/ Randy Repass /s/ Geoff Eisenberg
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Randy Repass, Chairman Geoff Eisenberg
December 14, 2007