<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 (S) 240.14a-11(c) or (S) 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:
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(5) Total fee paid:
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<PAGE>
[WEST MARINE, INC. LOGO]
500 Westridge Drive
Watsonville, California 95076-4100
----------------
NOTICE OF THE 2000 ANNUAL MEETING OF STOCKHOLDERS
Wednesday, May 10, 2000, 10:30 A.M.
----------------
TO THE STOCKHOLDERS:
Notice is hereby given that the 2000 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 10, 2000, at 10:30
A.M. for the following purposes:
(1) To elect eight directors.
(2) To approve the amendment of the Associates Stock Buying Plan to
increase the number of shares authorized for issuance thereunder by
400,000.
(3) 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 24, 2000, will be entitled to vote at the meeting and any adjournment
thereof.
Dated: March 31, 2000
By Order of the Board of Directors
Russell Solt, Secretary
STOCKHOLDERS ARE REQUESTED TO MARK, DATE, SIGN AND RETURN THE ENCLOSED
PROXY AS PROMPTLY AS POSSIBLE.
<PAGE>
{WEST MARINE, INC. 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
10, 2000 (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 31, 2000.
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 24, 2000, will be entitled to vote at the Annual Meeting.
As of the close of business on March 24, 2000, there were outstanding
17,201,874 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 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) requires the affirmative vote of a majority of the shares present in
person or by proxy and entitled to vote; accordingly an abstention on Item 2
will have the effect of a negative vote on that item. 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.
<PAGE>
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, or any adjournment thereof, the proxies will vote for such
substitute nominee as shall be designated by the proxies. The 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>
Served as
Business Experience During Past Director
Nominees for Director Age Five Years and Other Information Since
--------------------- --- -------------------------------------- ---------
<C> <C> <S> <C>
Randolph K. Repass..... 56 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 July 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 Chairman of the Board of New
England Ropes.
John Edmondson......... 53 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 CEO of Duty Free
International Inc. Mr. Edmondson began
his career with Allied Store's Maas
Bros./Jordan Marsh in 1965 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...... 47 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 a variety of positions since
joining the Company in 1983.
James P. Curley........ 44 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.
Geoffrey A. Eisenberg.. 47 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.......... 57 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........... 74 Chairman of Scott, Woolf & Associates, 1995
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............ 66 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.
</TABLE>
2
<PAGE>
FURTHER INFORMATION CONCERNING
THE BOARD OF DIRECTORS
Committees of the Board
During 1999, the Board of Directors held five meetings and acted by
unanimous written consent on a number of occasions. 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 four
meetings during 1999.
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 the key management employees of the Company and
to administer the Company's equity incentive plan. The Organization and
Compensation Committee held four meetings during 1999.
Attendance at Meetings
During 1999, 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 1999, Messrs.
Curley, Scott, Wendt and McComas and Ms. Jackson received grants of
nonqualified stock options under the Company's Nonemployee Director Stock
Option Plan to purchase 10,698, 10,698, 9,302, 9,302, 9,302 shares,
respectively, at the fair market value of the shares on the date of grant.
3
<PAGE>
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
(200,000 shares adjusted for the two-for-one stock split that was effective in
July 1996) of the Company's Common Stock were reserved for issuance to
eligible employees of the Company. In January 1999, the Company amended the
Plan to increase the number of shares reserved for issuance under the Plan by
an additional 200,000. In March 2000, 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 400,000. 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 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 3,100 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, Director of Human Resources and
Compensation and Benefits Manager. 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 (in whole percentages) from 1% to such
maximum percentage, as determined by the Committee (not
4
<PAGE>
to exceed 15%), 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. The Committee has currently set the maximum
percentage that may be contributed at 10% of compensation.
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.
There are 62,039 shares of Common Stock available for issuance pursuant to
the Plan as of January 1, 2000, which would increase to 462,039 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:
An employee will not have taxable income when the shares of Common Stock are
purchased for that employee, but income taxes will generally be due when the
employee sells or otherwise disposes of stock purchased through the Plan.
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. An
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.
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.
New Plan Benefit
Benefits under the Plan are not determinable because each participant may
decide within Plan limits how much compensation to contribute to the Plan and
the share price will ultimately affect how many shares are purchased under the
Plan.
5
<PAGE>
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.
6
<PAGE>
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 1997, 1998
and 1999 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 1997, 1998 and 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Long Term
Compensation(1) Compensation Awards
------------------ ---------------------
Restricted Securities
Stock Underlying
Name and Principal Position Year Salary($) Bonus($) Awards($) Options(#)
- --------------------------- ---- --------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
John Edmondson................ 1999 $450,009 -- -- 60,000
President and Chief Executive 1998(2) 17,308 100,000 150,913 250,000
Officer
Randolph K. Repass............ 1999 $100,000 -- -- --
Chairman of the Board 1998 88,823 -- -- --
1997 100,000 -- -- --
Richard E Everett............. 1999 $285,000 -- -- 41,200
President of Stores Division 1998 229,675 -- -- 45,600
and Chief Operating Officer 1997 164,365 12,328 -- 24,297
Michael Edwards............... 1999(3) $135,017 -- -- 100,000
Executive Vice President of
Merchandising Planning and
Allocation
Patrick Murphy ............... 1999(4) $186,058 $60,000 -- 64,000
Senior Vice President of
Distribution
</TABLE>
- --------
(1) While the named executive officers enjoy certain perquisites, for fiscal
year 1997, 1998 and 1999 these did not exceed the lesser of $50,000 or 10%
of each officer's salary and bonus. Accordingly, the column regarding
"Other Annual Compensation" is excluded.
(2) Mr. Edmondson joined the Company as President and Chief Executive Officer
in November 1998.
(3) Mr. Edwards joined the Company as Executive Vice President of
Merchandising Planning and Allocations in July 1999.
(4) Mr. Murphy joined the Company as Senior Vice President of Distribution in
March 1999.
7
<PAGE>
Stock Option Grants and Exercises
The following table sets forth certain information regarding stock options
granted during fiscal 1999 to the Named Executive Officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
-----------------------------------------------
Potential Realizable Value
Number of Percent of at Assumed Annual Rates
Securities Total Options of Stock Price Appreciation
Underlying Granted to Exercise or for Option Term(4)
Options Employees in Base Price Expiration ---------------------------
Name Granted(1) Fiscal Year ($/Sh)(2) Date(3) 5% 10%
- ---- ---------- ------------- ----------- ---------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
John Edmondson.......... 60,000 8.89% $9.94 05/04/2009 $ 374,978 $ 950,269
Randolph K. Repass...... -- -- -- -- -- --
Richard E Everett....... 41,200 6.10% $7.63 11/11/2009 $ 197,567 $ 500,674
Michael Edwards......... 100,000 14.81% $9.00 8/23/2009 $ 566,005 $ 1,434,368
Patrick Murphy.......... 60,000 8.89% $8.63 03/17/2009 $ 325,453 $ 824,762
4,000 0.59% $8.31 04/15/2009 $ 20,911 $ 52,992
</TABLE>
- --------
(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) All options were granted at fair market value at date of grant, as
determined by the Board of Directors.
(3) All options granted in fiscal 1999 were granted for a term of ten years.
(4) 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.
The following table sets forth certain information with respect to option
exercises during fiscal 1999 and stock options held by each of the Company's
Named Executive Officers as of January 1, 2000.
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year
and FY-End Option Values
---------------------------------------------------
Value of Unexercised In-
Number of Unexercised the-Money Options at
Shares Options at FY-End(#) FYEnd($)(1)
Acquired Value ------------------------- -------------------------
Name on Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John Edmondson.......... -- -- 50,000 260,000 $21,875 $87,500
Randolph K. Repass...... -- -- -- -- -- --
Richard E Everett....... -- -- 223,964 139,545 $61,575 $33,730
Michael Edwards......... -- -- -- 100,000 -- --
Patrick Murphy.......... -- -- -- 64,000 -- --
</TABLE>
- --------
(1) Based on a price per share of $8.250, which was the price of a share of
Common Stock on the Nasdaq National Market at the close of business on
January 1, 2000.
8
<PAGE>
Organization and Compensation Committee Interlocks and Insider Participation
The Organization and Compensation Committee during fiscal 1999 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. 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.
In August 1999, the Company entered into an Executive Termination and
Compensation Agreement with Mr. Everett. This agreement provides that if Mr.
Everett is terminated without cause he shall receive severance pay equal to
his base salary until he finds other employment or 18 months, whichever comes
first. In addition, in such case, the Company has agreed to retain Mr. Everett
as a consultant for a period of time after his termination.
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 $1,252,945 in fiscal 1999.
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 1999, the Company paid
$7,208,000 to New England Ropes, Inc. for purchased products.
9
<PAGE>
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 5, 1999 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 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 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 CEO submitted a revised list of Proposed
Executive Pay Ranges including Base Salary and bonus levels for all
officers. The Committee reviewed and ratified the proposed ranges.
Compensation for Executive Officers
1999 saw significant changes to the executive officer positions at West
Marine. In the area of base salary, we have targeted executive officers'
salaries at a competitive level for comparable companies. 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
The Company's fiscal 1999 sales increased 8.3% and comparable store net sales
increased 1.8%, while EPS increased to $0.50 versus $.06 in 1998. Based on the
results for 1999 no bonuses were paid for 1999 to the executive officers.
Although the 1999 results were substantially improved over 1998, they were
below the budgeted level and, as a result, no bonuses were paid to executive
officers.
10
<PAGE>
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
7,469,358 shares or 43% 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
Mr. Edmondson was paid $450,000 and was granted options to purchase 60,000
shares of common stock in 1999. Mr. Edmondson's compensation package includes
a salary of $450,000 with a potential bonus of 75% of salary based on EPS and
ROE results. The bonus has additional non-quantitative factors which focus on
management and long term strategies. The bonus is capped at three times a full
payout, and any bonus over 50% of salary is to be directed to purchasing stock
on the open market. In addition, Mr. Edmondson will be granted options to
purchase shares of common stock annually as recommended by the Committee.
Although the 1999 results were substantially improved over 1998, they were
below the budgeted level and, as a result, no bonus was paid to Mr. Edmondson.
Compensation for the Chairman of the Board
1999 Base Salary of 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.
February 29, 2000
1999 Organization and Compensation
Committee
James P. Curley
David McComas
Walter Scott
11
<PAGE>
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 56 specialty retailers.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
AMONG WEST MARINE, INC., MG GROUP INDEX
AND NASDAQ MARKET 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-1994 $100.00 $100.00 $100.00
FYE 1995 $162.34 $112.50 $129.71
FYE 1996 $280.52 $101.67 $161.18
FYE 1997 $238.96 $111.18 $197.16
FYE 1998 $102.60 $131.27 $278.08
FYE 1999 $ 85.71 $ 83.43 $490.46
</TABLE>
12
<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 29,
2000.
<TABLE>
<CAPTION>
Common Stock
Beneficially Owned
as of February 29, 2000
----------------------------
Number of
Beneficial Owner Shares Percent
- ---------------- -------------- ----------
<S> <C> <C>
Randolph K. Repass (1).......................... 7,469,358(2) 43.4%
Wellington Management Company, LLP (3) ......... 973,900 5.7%
75 State Street
Boston, Massachusetts 02109
John Edmondson.................................. 65,620(4) 0.4%
Michael Edwards................................. -- --
Geoffrey A. Eisenberg........................... 519,500(5) 3.0%
Richard E Everett............................... 332,904(6) 1.9%
James P. Curley................................. 48,483(7) *
Jeanne Jackson.................................. 18,202(7) *
David McComas................................... 25,812(7) *
Patrick Murphy.................................. 13,285(6) *
Walter Scott.................................... 49,803(7) *
Henry Wendt..................................... 24,412(7) *
All directors and executive officers as a group
(11 persons)................................... 8,567,379(8) 49.8%
</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 25,800 shares. Mr. Repass disclaims beneficial ownership of all
of such shares. Also includes 11,700 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, 1999. 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 629,900
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
50,000 shares.
(5) Includes employee stock options exercisable within 60 days to purchase
303,000 shares. Also includes 5,640 shares held by Mr. Eisenberg's minor
children.
(6) Includes employee stock options exercisable within 60 days to purchase
shares as follows: Richard E Everett, 243,773 shares; and Patrick Murphy,
12,800 shares.
(7) Includes stock options exercisable within 60 days to purchase shares
granted under the Nonemployee Director Stock Option Plan as follows: James
P. Curley, 38,483 shares; Jeanne Jackson, 18,202 shares; David McComas,
19,812 shares; Walter Scott, 31,483 shares; and Henry Wendt, 17,812
shares.
(8) See footnotes (2), (4), (5), (6), and (7).
13
<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
January 3, 1999 to January 1, 2000 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
2001 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 30, 2000. 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 13, 2001. 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 2001 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 31, 2000.
By Order of the Board of Directors
Russell Solt, Secretary
14
<PAGE>
Recycled Paper
1243-PS-2000
<PAGE>
APPENDIX A
WEST MARINE, INC.
ASSOCIATES STOCK BUYING PLAN
(As amended through March 23, 2000)
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
Manager. 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.
<PAGE>
2.8 "Eligible Employee" means every Employee of an Employer who has been
-----------------
employed for such period as the Committee may determine (up to two years),
except 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. 800,000 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
2
<PAGE>
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.
3
<PAGE>
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.
4
<PAGE>
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 7
WITHDRAWAL
7.1 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 8
CESSATION OF PARTICIPATION
8.1 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).
8.2 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 9
DESIGNATION OF BENEFICIARY
9.1 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.
9.2 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
5
<PAGE>
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.
9.3 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 10
ADMINISTRATION
10.1 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.
10.2 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.
10.3 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;
6
<PAGE>
(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.
10.4 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.
10.5 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 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.
10.6 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.
10.7 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 11
AMENDMENT, TERMINATION, AND DURATION
11.1 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'
7
<PAGE>
accounts that have not been used to purchase shares shall be returned to the
Participants (without interest) as soon as administratively practicable.
11.2 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 12
GENERAL PROVISIONS
12.1 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.
12.2 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).
12.3 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.
12.4 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.
12.5 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.
12.6 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
8
<PAGE>
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.
12.7 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).
12.8 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.
9
<PAGE>
DETACH HERE
PROXY
WEST MARINE, INC.
PROXY FOR 2000 ANNUAL MEETING OF STOCKHOLDERS MAY 10, 2000
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 2000 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 10, 2000, at 10:30 A.M., and any adjournment
or postponement thereof, and to vote the number of shares the undersigned
would be enitled 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.
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SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
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DETACH HERE
[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 and FOR The Proposals
listed below.
1. The election of eight directors.
Nominees: (01) Randolph K. Repass, (02) John Edmondson,
(03) Richard E Everett, (04) James P. Curley, (05) Geoffrey A. Eisenberg,
(06) David McComas, (07) Walter Scott and (08) Henry Wendt.
FOR WITHHELD
ALL [_] [_] FROM ALL
NOMINEES NOMINEES
[_] _______________________________________
For all nominees except as noted above
2. The approval of the amendment of the Associates FOR AGAINST ABSTAIN
Stock Buying Plan to increase the number of shares [_] [_] [_]
authorized for issuance thereunder by 400,000.
3. To transact such other business as may properly come before the Annual
Meeting.
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.
