<PAGE>
================================================================================
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.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(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):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] 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:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
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Notes:
<PAGE>
[WEST MARINE, INC. LOGO APPEARS HERE]
500 WESTRIDGE DRIVE
WATSONVILLE, CALIFORNIA 95076-4100
----------------
NOTICE OF THE 1998 ANNUAL MEETING OF STOCKHOLDERS
WEDNESDAY, MAY 20, 1998, 10:30 A.M.
----------------
TO THE STOCKHOLDERS:
Notice is hereby given that the 1998 Annual Meeting of Stockholders of West
Marine, Inc. will be held at the office of the Company, 500 Westridge Drive,
Watsonville, California, on Wednesday, May 20, 1998, at 10:30 A.M. for the
following purposes:
(1)To elect eight directors.
(2)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.,
April 3, 1998, will be entitled to vote at the meeting and any adjournment
thereof.
Dated: April 10, 1998
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.
<PAGE>
[WEST MARINE, INC. LOGO APPEARS HERE]
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 1998 Annual Meeting of Stockholders on
May 20, 1998, 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 April 10, 1998.
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.,
April 3, 1998, will be entitled to vote at the Annual Meeting.
As of the close of business on April 3, 1998, there were outstanding
16,848,560 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. With regard to the 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.
1
<PAGE>
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, or any adjournment thereof, the proxies will vote for such
substitute nominee as shall be designated by the proxies. 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.
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE DURING PAST SERVED AS
NOMINEES FOR DIRECTOR AGE FIVE YEARS AND OTHER INFORMATION DIRECTOR SINCE
---------------------- --- ------------------------------------ --------------
<C> <C> <S> <C>
Randolph K. Repass.... 54 Chairman of the Board. Mr. Repass 1968
has 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. 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.
Crawford L. Cole, Jr.. 39 President and Chief Executive 1990
Officer since April 1995. From
August 1993 to April 1995, Mr. Cole
was a self-employed business
consultant. Mr. Cole was the
Company's President from July 1990
to August 1993. Mr. Cole is a
Director of JDA Software Services, a
software company.
Richard E Everett..... 45 Executive Vice President and Chief 1994
Operating Officer since April 1995.
Mr. Everett served as Senior Vice
President of Store Operations from
1990 to April 1995, and has held a
variety of positions since joining
the Company in 1983.
James P. Curley....... 42 President and Chief Executive 1994
Officer 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 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.
Geoffrey A. Eisenberg. 45 Senior consultant to the Company 1977
since 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......... 55 Western Region President and 1996
Corporate Vice President, Circuit
City Stores, Inc. Responsible for 8
Western States and Hawaii since
1994. Prior to 1994, Mr. McComas was
General Manager of Circuit City
Stores, Inc. Mr. McComas is a
powerboater and has over 30 years of
store management and operations
experience.
Walter Scott.......... 72 Chairman of Scott, Woolf & 1995
Associates, a management consulting
firm, since 1982. Previously, Mr.
Scott held general management
positions in industry and for 25
years taught management at American
Management Association courses for
presidents and senior executives.
Henry Wendt........... 64 Chairman of Global Health Care 1997
Partners of DLJ Merchant Banking
Partners since 1996. In 1994, Mr.
Wendt retired as Chairman of
SmithKline Beecham. 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. Mr. Wendt is a
life long sailor, and is the author
of Global Embrace, a book about
international business strategies.
</TABLE>
2
<PAGE>
FURTHER INFORMATION CONCERNING
THE BOARD OF DIRECTORS
COMMITTEES OF THE BOARD
During 1997, 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. 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 1997.
The members of the Compensation Committee are Walter Scott and David
McComas. Among the functions performed by this committee are to review and
make recommendations to the Board of Directors concerning the compensation of
the key management employees of the Company and to administer the Company's
equity incentive plan. The Compensation Committee held three meetings during
1997.
ATTENDANCE AT MEETINGS
During 1997, 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 $1,000 for each Audit Committee and Compensation
Committee meeting attended, as applicable, that is not held on the same day as
a Board meeting. In addition, directors who are not employees of the Company
also receive annual grants of nonqualified stock options at an exercise price
equal to the fair market value at the date of grant. For 1997, Messrs. Curley,
Scott, Wendt and McComas received grants of nonqualified stock options under
the Company's Nonemployee Director Stock Option Plan to purchase 4,035, 4,035,
3,510 and 3,510 shares, respectively, at the fair market value of the shares
on the date of grant.
3
<PAGE>
EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
The compensation paid to the Company's Chief Executive Officer and each of
its other executive officers for services in all capacities to the Company and
its subsidiaries during fiscal 1995, 1996 and 1997 is set forth below. Columns
regarding "Restricted Stock Awards," "Long-Term Incentive Plan [LTIP] Payouts"
and "All Other Compensation" are excluded because no such payments were made
to such executive officers in fiscal 1995, 1996 and 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION(1) AWARDS
----------------------- ------------
SECURITIES
UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#)
--------------------------- ---- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Crawford Cole.............. 1997 $ 199,231 $ -- 47,959
President and Chief
Executive 1996 199,999 55,491 58,824
Officer 1995(2) 132,307 54,118 480,000
Randolph K. Repass......... 1997 $ 100,000 -- --
Chairman of the Board 1996 100,000 -- --
1995 139,616 -- --
Richard E Everett.......... 1997 $ 164,365 $ 12,328 24,297
Executive Vice President
and 1996 159,086 57,147 29,412
Chief Operating Officer 1995 153,846 58,182 200,000
Robert Hebeler............. 1997 $ 148,077 $ 11,511 16,897
Senior Vice President of 1996(3) 125,461 26,808 62,000
Merchandising 1995(3) -- -- --
John Zott.................. 1997 $ 147,500 $ 3,880 18,431
Senior Vice President, 1996 140,768 22,610 16,000
Chief Financial Officer 1995 127,116 33,625 15,000
</TABLE>
- --------
(1) While the named executive officers enjoy certain perquisites, for fiscal
year 1995, 1996 and 1997 these did not exceed the lesser of $50,000 or 10%
of each officer's salary and bonus. Accordingly, the column regarding
"Other Annual Compensation" is excluded.
(2) Mr. Cole rejoined the Company as President and Chief Executive Officer in
April 1995. Amounts presented represent compensation received by Mr. Cole
from April 1995 through December 1995.
(3) Mr. Hebeler joined the Company in January 1996.
4
<PAGE>
STOCK OPTION GRANTS AND EXERCISES
The following table sets forth certain information regarding stock options
granted during fiscal 1997 to the executive officers named in the foregoing
Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM(6)
------------------------------------------------ -----------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED FISCAL YEAR ($/SH)(4) DATE(5) 5% 10%
---- ---------- ------------- ----------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Crawford Cole........... 33,670(1) 6.42% $27.88 01/27/07 $ 590,250 $ 1,495,809
4,730(2) 0.90 27.77 02/26/07 82,595 209,311
3,230(2) 0.62 26.00 04/30/07 52,815 133,842
1,819(2) 0.35 20.75 08/08/07 23,737 60,155
4,510(2) 0.86 18.63 11/14/07 52,826 133,872
Randolph K. Repass...... -- -- -- -- -- --
Richard E Everett....... 16,835(3) 3.21% $27.88 01/27/07 $ 295,125 $ 747,904
1,965(2) 0.37 27.77 02/26/07 34,313 86,955
2,630(2) 0.50 26.00 04/30/07 43,004 108,980
995(2) 0.19 20.75 08/08/07 12,984 32,905
1,872(2) 0.36 18.63 11/14/07 21,927 55,567
Robert Hebeler.......... 11,785(3) 2.25% $27.88 01/27/07 $ 206,596 $ 523,555
830(2) 0.16 27.77 02/26/07 14,493 36,729
900(2) 0.17 26.00 04/30/07 14,716 37,294
676(2) 0.13 20.75 08/08/07 8,822 22,355
2,706(2) 0.52 18.63 11/14/07 31,696 80,323
John Zott............... 11,785(3) 2.25% $27.88 01/27/07 $ 206,596 $ 523,555
2,050(2) 0.39 27.77 02/26/07 35,797 90,716
1,875(2) 0.36 26.00 04/30/07 30,659 77,695
1,387(2) 0.26 20.75 08/08/07 18,100 45,868
1,334(2) 0.25 18.63 11/14/07 15,625 39,598
</TABLE>
- --------
(1) Of these options granted in fiscal 1997, 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 Plan, the Committee retains discretion,
subject to plan limits, to modify the terms of outstanding options.
(2) All of these options granted in fiscal 1997 are exercisable six months
from the date of grant. Under the terms of the Plan, the Committee retains
discretion, subject to plan limits, to modify the terms of outstanding
options.
(3) These options granted in fiscal 1997 are exercisable in annual increments
of 20%, commencing one year from date of grant. Under the terms of the
Plan, the Committee retains discretion, subject to plan limits, to modify
the terms of outstanding options.
(4) All options were granted at fair market value at date of grant, as
determined by the Board of Directors.
(5) All options granted in fiscal 1997 were granted for a term of ten years.
(6) 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.
5
<PAGE>
The following table sets forth certain information with respect to option
exercises during fiscal 1997 and stock options held by each of the Company's
listed executive officers as of January 3, 1998.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN
LAST FISCAL YEAR AND FY-END OPTION VALUES
---------------------------------------------------
VALUE OF UNEXERISED
IN-THE-
NUMBER OF UNEXERCISED MONEY OPTIONS AT FY
SHARES VALUE OPTIONS AT FY-END(#) END($)(1)
ACQUIRED REALIZED ------------------------- -------------------------
NAME ON EXERCISE(#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Crawford Cole........... -- -- 415,212 175,571 $4,127,699 $1,437,158
Randolph K. Repass...... -- -- -- -- -- --
Richard E Everett....... -- -- 108,759 167,950 $1,219,215 $1,708,135
Robert Hebeler.......... -- -- 14,130 64,767 $ 80,600 $ 335,760
John Zott............... -- -- 46,125 40,556 $ 712,437 $ 334,462
</TABLE>
- --------
(1) Based on a price per share of $23.00, which was the price of a share of
Common Stock on the Nasdaq National Market at the close of business on
January 3, 1998.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee during fiscal 1997 consisted of Messrs. Scott and
McComas.
CERTAIN TRANSACTIONS
Due to the closely-held nature of the Company prior to its initial public
offering, it has engaged in a number of transactions with its officers,
directors, stockholders and affiliates. The Company believes these
transactions were on terms no less favorable to the Company than could have
been obtained from unaffiliated third parties. All future transactions, if
any, between the Company and its officers, directors, principal stockholders
and affiliates will be approved by a majority of the Company's independent
directors and will be on terms no less favorable to the Company than can be
obtained from unaffiliated third parties.
The Company has entered into a lease with Randolph K. Repass relating to the
Palo Alto, California store. In addition, the Company has entered into leases
with three partnerships, of which Mr. Repass is a general partner, relating to
the Corporate headquarters and the Santa Cruz, California and Braintree,
Massachusetts stores. Pursuant to these leases, the Company paid rent to Mr.
Repass or such partnerships in the aggregate amount of $1,065,000 in fiscal
1997.
Mr. Repass is Chairman of the board of directors 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 1997, the Company paid
$5,200,000 to New England Ropes, Inc. for purchased products.
6
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
To the Board of Directors:
The independent directors named below were elected to the Compensation
Committee at the May 8, 1997 Board of Directors meeting.
As members of the 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 CEO to submit recommendations regarding all three
components of officer compensation.
. The Committee reviewed last year's compensation report, in addition to an
updated peer group study covering cash and stock compensation levels as
reported by proxy statements. The updated peer group study included a
comparison of base compensation, annual incentives and stock option
programs between the peer group and West Marine. The CEO submitted a
revised list of Proposed Executive Pay Ranges including base salary and
bonus levels for all officers.
COMPENSATION FOR EXECUTIVE OFFICERS
In the area of base salary, we feel that executive officers' salaries have
been targeted 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 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
7
<PAGE>
The Company's fiscal 1997 improved over 1996 with an increase in net sales
of 28.4% and a comparable store net sales increase of 5.0%. In addition,
operating earnings increased approximately 37% and EPS increased 26%. Although
the earnings figures are good, when adjusted for the one time charge in 1996
for the integration of E&B Marine, the EPS increase is only 10%.
Stock options are the Company's primary long-term incentives 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 holds
7,138,958 shares or 42.4% 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
President and CEO Mr. Crawford Cole's 1997 compensation package included
three components: a Base Salary of $199,231, a Bonus that consisted of 9,559
stock options and an Annual Stock Options Grant. The CEO's compensation plan
awards stock options on shares with a cumulative market value of $1,000,000 to
be granted annually during the first quarter of each year through the year
2000, subject to the Company achieving 30% earnings per share growth for the
prior fiscal year. During 1996 the Company's earnings grew over 30% when one
time merger integration costs were excluded. This resulted in a grant of
33,670 shares. For 1997 earnings per share grew only 10% with the one time
1996 merger integration costs excluded from 1996 results and 26% with the one
time costs included in 1996 results. The Committee, based on discussions with
the management group, CEO, and Chairman of the Board decided to grant full
options for 1997 based on improving performance trends and a vesting schedule
that allows time for performance to be proven.
COMPENSATION FOR THE CHAIRMAN OF THE BOARD
1997 Base Salary of Founder and Chairman of the Board, Mr. Randy Repass, was
$100,000. Mr. Repass has not been granted any stock options since the
Company's initial public offering and receives no bonus.
March 24, 1998
1997 Compensation Committee
Walter Scott
David McComas
8
<PAGE>
PERFORMANCE GRAPH
The following graph compares the percentage change in the Company's
cumulative total stockholder return on its Common Stock for the period from the
Company's initial public offering on November 19, 1993 to January 3, 1998 with
the cumulative total return of the Nasdaq Market Index and the MG Industry
Group 529, a peer group index consisting of 106 importers, wholesalers and
retailers.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG WEST MARINE, INC.,
NASDAQ MARKET INDEX AND MG GROUP INDEX
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
WEST MG NASDAQ
Measurement Period MARINE, GROUP MARKET
(Fiscal Year Covered) INC. INDEX INDEX
- --------------------- --------------- --------- ----------
<S> <C> <C> <C>
Measurement Pt-11/19/1993 $100.00 $100.00 $100.00
FYE 12/1993 $105.63 $102.58 $103.36
FYE 12/1994 $137.50 $105.17 $108.52
FYE 12/1995 $233.21 $131.35 $140.76
FYE 12/1996 $385.71 $152.02 $174.92
FYE 1/1998 $396.43 $152.02 $174.92
</TABLE>
ASSUMES $100 INVESTED ON NOV. 19, 1993
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING JAN. 3, 1998
9
<PAGE>
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 28,
1998.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY
OWNED AS OF
FEBRUARY 28, 1998
---------------------
NUMBER OF
BENEFICIAL OWNER SHARES PERCENT
- ---------------- --------- -------
<S> <C> <C>
Randolph K. Repass (1)................................... 7,417,958(2) 44.0%
Franklin Resources, Inc. (3)............................. 1,544,640(3) 9.2%
77 Mariners Island Blvd.,
San Mateo, CA 94404
Crawford L. Cole, Jr..................................... 645,352(4) 3.7
Geoffrey A. Eisenberg.................................... 519,400(5) 3.0
Richard E Everett........................................ 204,721(6) 1.2
James P. Curley.......................................... 24,035(7) *
Robert Hebeler........................................... 29,763(8) *
David McComas............................................ 6,510(9) *
Walter Scott............................................. 30,035(10) *
Henry Wendt.............................................. 10,110(11) *
John Zott................................................ 66,319(12) *
All directors and executive officers as a group (10
persons)................................................ 8,954,203(13) 50.2%
</TABLE>
- --------
*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 18,000 shares. Mr. Repass disclaims beneficial ownership of all
of such shares. Also includes 8,500 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, 1997. These shares are
beneficially owned by one or more open or closed-end investment companies
or other managed accounts which are advised by direct and indirect
investment advisory subsidiaries of Franklin Resources, Inc. Such
investment advisory subsidiaries may be deemed to be the beneficial owner
of the shares as they are granted all investment and/or voting power over
the shares owned by such advisory clients pursuant to their advisory
contracts. In addition, Charles B. Johnson and Rupert H. Johnson may be
deemed the beneficial owners of such shares based upon their share
ownership of Franklin Resources, Inc. Franklin Resources, Inc., Charles
B. Johnson, Rupert H. Johnson and each of the advisory subsidiaries of
Franklin Resources, Inc. disclaim any economic interest or benefical
ownership in any of these shares.
(4) Includes employee stock options exercisable within 60 days to purchase
451,352 shares.
(5) Includes employee stock options exercisable within 60 days to purchase
303,000 shares. Also includes 1,640 shares held by Mr. Eisenberg's minor
children.
(6) Includes employee stock options exercisable within 60 days to purchase
121,721 shares.
(7) Includes stock options exercisable within 60 days to purchase 22,035
shares granted under the Nonemployee Director Stock Option Plan.
(8) Includes employee stock options exercisable within 60 days to purchase
29,563 shares.
(9) Includes stock options exercisable within 60 days to purchase 5,510
shares granted under the Nonemployee Director Stock Option Plan.
(10) Includes stock options exercisable within 60 days to purchase 15,035
shares granted under the Nonemployee Director Stock Option Plan.
(11) Includes stock options exercisable within 60 days to purchase 3,510
shares granted under the Nonemployee Director Stock Option Plan.
(12) Includes employee stock options exercisable within 60 days to purchase
55,319 shares.
(13) Includes stock options exercisable within 60 days to purchase 1,025,045
shares. See also notes (2) and (5) above.
10
<PAGE>
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
December 29, 1996 to January 3, 1998 all filing requirements applicable to its
officers, directors and greater than ten-percent beneficial owners were
complied with, except that Mr. Wendt, a director, did not timely file a Form 4
with respect to purchases of the Company's Common Stock he made in September
1997.
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
1999 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 December 11, 1998. Proposals should be
addressed to the Company at 500 Westridge Drive, Watsonville, California
95076-4100, Attention: Corporate Secretary.
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: April 10, 1998.
By Order of the Board of Directors
John Zott, Secretary
11
<PAGE>
[RECYCLED LOGO APPEARS HERE]
RECYCLED PAPER
1243-PS-98
<PAGE>
PROXY
WEST MARINE, INC.
PROXY FOR 1998 ANNUAL MEETING OF STOCKHOLDERS MAY 20, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Randolph K. Repass, Crawford L. Cole, Jr. and
Richard E Everett, or any of them, each with the power of substitution, as
proxies of the undersigned, to attend the 1998 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 20, 1998, at 10:30 A.M., and any
adjournment 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.
- --------------------------------------------------------------------------------
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE>
[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.
<TABLE>
<S> <C> <C>
1. THE ELECTION OF 2. In their discretion, upon any and all [ ] FOR [ ] AGAINST [ ] ABSTAIN
EIGHT DIRECTORS such other matters as may properly come
before the meeting or any adjournment thereof
Nominees: Randolph K. Repass, Crawford L. Cole, Jr.,
Richard E Everett, James P. Curley, Geoffrey A. Eisenberg,
David McComas, Walter Scott and Henry Wendt
[ ] FOR [ ] WITHHELD
[ ] ----------------------------------------------- MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, INSERT SUCH NOMINEE'S NAME ON THE LINE ABOVE. STOCKHOLDERS ARE URGED TO MARK, DATE, SIGN AND
RETURN THIS PROXY PROMTLY 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:
----------------------------------- ----------------- ---------------------------- -----------
</TABLE>
