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Share Name | Share Symbol | Market | Type |
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West Marine, Inc. | NASDAQ:WMAR | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 12.965 | 0.01 | 199,999.99 | 0 | 01:00:00 |
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Filed by the Registrant
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Filed by a Party other than the
Registrant
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Under Rule 14a-12
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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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.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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Date and Time
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May 26, 2016, 10:30 A.M. Pacific
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Place
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West Marine Support Center
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500 Westridge Drive
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Watsonville, California 95076
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Proposals to be Voted On
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(1) To elect eight directors named in our proxy statement for the Annual Meeting (this "Proxy Statement");
(2) To ratify the selection of PricewaterhouseCoopers LLP ("PwC") as our independent registered public
accounting firm for our 2016 fiscal year ending December 31, 2016 ("2016 Fiscal Year");
(3) To approve, on an advisory basis, the compensation of our named executive officers;
(4) To approve the West Marine, Inc. Amended and Restated Omnibus Equity Incentive Plan; and
(5) To conduct any other business properly brought before the Meeting.
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Eligibility to Vote
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Stockholders of record at the close of business on March 28, 2016 may vote at the Annual Meeting.
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Sincerely,
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/s/ Barbara L. Rambo
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Barbara L. Rambo
Board Chair
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Page
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II.
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III.
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IV.
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VI.
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VII.
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I.
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GENERAL INFORMATION
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•
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This Proxy Statement;
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Our Annual Report; and
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For those receiving printed versions, a proxy card.
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Board's Recommendation
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Votes Required
for Approval
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PROPOSAL 1:
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Election of our Board of Directors ("Board" or, each member individually, a "Director"), each of whose terms will expire in 2016
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FOR
each nominee
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Affirmative vote of the majority of the votes cast
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PROPOSAL 2:
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Ratification of our Audit and Finance Committee's selection of PwC as our independent registered public accounting firm ("Independent Auditors”) for our 2016 Fiscal Year
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FOR
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Affirmative vote of the majority of the votes cast
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PROPOSAL 3:
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Approval, on an advisory basis, of the compensation of our Named Executive Officers (or "NEOs")
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FOR
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Affirmative vote of the majority of the votes cast
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PROPOSAL 4:
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Approval of the West Marine, Inc. Amended and Restated Omnibus Equity Incentive Plan (the "Equity Incentive Plan")
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FOR
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Affirmative vote of the majority of the votes cast
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BY INTERNET
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BY PHONE
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BY MAIL
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ATTEND THE MEETING
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:
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(
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+
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?
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Go to
www.envisionreports.com/WMAR
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Call toll-free 1-800-652-8683
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Mark, date and sign your proxy card and return it by mail in the postage-paid envelope provided with the Proxy Materials.
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Attend the Annual Meeting in person. We will give you a ballot when you arrive.
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Our 2017 annual meeting of stockholders (“2017 Annual Meeting”) is anticipated to be held in May 2017. Any stockholders who intend to present proposals at, and who wish to have them included in the proxy statement for the 2017 Annual Meeting, must ensure that such proposals are addressed to West Marine at the address stated above and received no later than December 16, 2016. All such proposals will need to comply with our Bylaws and Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which list the requirements for the inclusion of stockholder proposals in Company-sponsored proxy materials.
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II. DIRECTOR MATTERS
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DIRECTOR REFRESH PRACTICES AND SUCCESSION PLANNING
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ANNUAL BOARD AND COMMITTEE EVALUATIONS
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DIRECTOR NOMINATION GUIDELINES AND PROCESS
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ANNUAL DIRECTOR TERMS
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DIRECTOR CANDIDATE CONSIDERATIONS
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DIRECTOR NOMINATION PROCESS AND PROCEDURES
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þ
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PROPOSAL #1: ELECTION OF DIRECTORS
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DIRECTOR QUALIFICATIONS AND EXPERIENCE; DIRECTOR NOMINEES
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Barbara L. Rambo
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West Marine
Director since:
2009
Age:
63
Independent Board Chair
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West Marine
Committee Service:
None
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Other Public Company Boards:
1
PG&E Corporation
Board Member
Chair - Finance Committee
Member - Compensation Committee
Member - Nominating and Governance Committee
Member - Executive Committee
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Employment Experience
Since October 2009, Ms. Rambo has served as the Chief Executive Officer of Taconic Management Services, a management consulting and services company. Prior to joining Taconic Management Services, she was Chief Executive Officer, Vice Chair and a director of Nietech Corporation (payments technology company) during the period 2001 to 2009, and Chief Executive Officer of OpenClose Technologies (financial services technology company) during the period 2000 to 2002. Ms. Rambo previously held various executive and management positions at Bank of America, including head of national commercial banking. She has developed skills in corporate finance, capital markets, sales, strategic planning, marketing, operations and executive management.
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Qualifications for Board Service
Ms. Rambo is being re-nominated as a Director because of the depth of her executive management and leadership experience with companies in the financial services and technology sectors. Prior to being appointed as the Board's Chair in May of 2015, Ms. Rambo previously served as West Marine's Lead Independent Director. Her experience in serving on other public company boards, as well as her wealth of knowledge in the areas of corporate finance, strategic planning, capital markets, governance and risk management, help guide the Board and management in the execution of West Marine's strategic objectives.
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Boating Experience
Ms. Rambo is a sculler and sails in San Francisco and the Caribbean.
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Matthew L. Hyde
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West Marine
Director since:
2012
Age:
53
CEO
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West Marine
Committee Service:
None
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Other Public Company Boards:
1
Zumiez Inc.
Board Member
Member - Governance/Nominating Committee
Member - Compensation Committee
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Employment Experience
Mr. Hyde has served as our Chief Executive Officer ("CEO") and President since June 2012. Previously, he was the Executive Vice President of Recreational Equipment Inc. (“REI”), a retailer and online merchant of outdoor gear and equipment. Beginning his career with REI in 1986, Mr. Hyde held various positions, and just prior to joining West Marine, as REI's Executive Vice President, he oversaw the marketing, e-commerce and direct sales, real estate, store development, retail and customer experience functions. Mr. Hyde previously led REI's online division, championing its award-winning omni-channel strategy.
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Qualifications for Board Service
Mr. Hyde's specialty retail background, along with his online retail, brand-building, marketing, merchandising and operational expertise, provide valuable insight to our Company and our Board. In addition, Mr. Hyde's service on the board of a leading omni-channel specialty retailer of action sports related apparel, footwear, equipment and accessories not only aligns well with West Marine's merchandise expansion strategy, but also provides comparative expertise for our operational plans as well as for our compensation and leadership development programs.
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Boating Experience
Mr. Hyde has been boating all of his life from fishing with his family on a wooden skiff, to kayaking, to an annual trek to Alaska to go salmon fishing. Mr. Hyde owns a sailboat and enjoys sailing on the Monterey Bay.
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West Marine
Director since:
2005
Age:
62
Independent Director
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West Marine
Committee Service:
Chair -
Nomination and Governance Committee
Member
- Audit and Finance Committee
Financial Expert
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Other Public Company Boards:
1
G&K Services, Inc.
Board Member
Chair - Audit Committee
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Employment Experience
Ms. Richter was a certified public accountant with KPMG LLP for 26 years, until her retirement in June 2001. She joined KPMG's Minneapolis office in 1975 and was admitted to the KPMG partnership in 1987. During her tenure at KPMG, Ms. Richter served as the National Industry Director of KPMG's U.S. Food and Beverage practice, had three years of international experience, and also served as a member of the Board of Trustees of the KPMG Foundation from 1991 to 2001.
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Qualifications for Board and Committee Service
Ms. Richter is being re-nominated as a Director because of her long career in public accounting and expertise in the accounting and finance areas, including a client-base in the retail industry, her experience in international operations, her service on another public company board, and her experience in reviewing internal controls, tax saving strategies, potential fraud, acquisitions and reorganizations. She possesses a keen understanding of complex financial accounting issues, which provides the Board with an overall business and financial leadership perspective. In addition, Ms. Richter has vast experience in financial planning and investment and capital structure strategies, along with risk management and compliance matters. In 2015, in connection with periodic rotation of our Committee structure, Ms. Richter was appointed Chair of our Nomination and Governance Committee, continues as a member of our Audit and Finance Committee, where she serves as a second financial expert along with Mr. Olsen. Ms. Richter also received her Board Leadership Fellow certification from the National Association of Corporate Directors.
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Boating Experience
Ms. Richter is an avid water skier and an enthusiastic angler - particularly for freshwater walleye. She is never far from a boat.
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Christiana Shi
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West Marine
Director since:
2011
Age:
56
Independent Director
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West Marine
Committee Service:
Member-
Compensation and Leadership Development Committee
Member
- Audit and Finance Committee
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Other Public Company Boards:
1
(as of January 2016)
Mondelez International
Board Member
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Employment Experience
Ms. Shi has been the President of NIKE Global Direct-to-Consumer since 2013. In this role, Ms. Shi leads all of NIKE's retail business around the world, including digital commerce, NIKE Stores, NIKE Factory Stores and partner retail. Prior to this, from April 2012 through June 2013, Ms. Shi served as Vice President and General Manager of NIKE, Inc. Global E-Commerce. In that role, she was responsible for the performance and growth of Nike.com around the world, including merchandising, experience design, consumer services, and digital commerce technology. From November 2010 through March 2012, Ms. Shi was the Vice President and Chief Operating Officer of NIKE's global direct-to consumer division. In this role, she was responsible for the division's global store, real estate, finance, information technology and supply chain operations. From 2000 to 2010, Ms. Shi was a director and senior partner of McKinsey & Company, Inc., a global management consulting firm, and she was a principal (partner) at McKinsey from 1994 to 2000. Prior to 1994, she held numerous positions throughout McKinsey. From 1981 to 1984, Ms. Shi held numerous positions at Merrill Lynch & Company, Inc.
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Qualifications for Board and Committee Service
Ms Shi is being renominated to the Board because of her eCommerce knowledge and extensive retail experience, including retail operations, finance, information technology and supply chain operations. As President of NIKE Global Direct-to-Consumer business, her past roles as Chief Operating Officer of NIKE's Direct-to-Consumer division, and as a former partner at McKinsey & Company, Ms. Shi has a unique global perspective acquired through 20 years of work on four continents across an extensive array of consumer brands and retail operations. Further, her expertise in category strategy, new concept development, store operations, inventory management, performance transformation and the direct/e-Commerce business makes her well-qualified to serve on our Board and as a member of our Audit and Finance and Compensation and Leadership Development Committees.
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Boating Experience
Ms. Shi is an enthusiastic sailor and boater.
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Robert D. Olsen
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West Marine
Director since:
2013
Age:
63
Independent Director
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West Marine
Committee Service:
Chair -
Audit and Finance Committee
Financial Expert
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Other Public Company Boards:
0
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Employment Experience
Between 2000 and his retirement in January 2013, Mr. Olsen worked in numerous roles at AutoZone, Inc. Most recently, Mr. Olsen served as Corporate Development Officer, Customer Satisfaction. In this role, he was responsible for the Mexico and ALLDATA businesses and strategic growth initiatives that included AutoZone's store expansion into Brazil and ALLDATA's entry into Europe. He previously served as Executive Vice President, Store Operations, Commercial, Mexico and ALLDATA from 2007 to 2009, as Executive Vice President, Supply Chain, IT, Mexico and Store Development from 2005 to 2007, as Senior Vice President, Mexico and Store Development from 2001 to 2005, and as Senior Vice President, Planning and Store Development from 2000 to 2001. Prior to that, Mr. Olsen was Executive Vice President and Chief Financial Officer for Leslie's Poolmart, a specialty retailer of swimming pool supplies and accessories from 1993 to 2000. From 1990 to 1993, he served as Executive Vice President and Chief Financial Officer of Tuneup Masters, a California-based chain of quick tuneup and lube outlets. Prior to that, he held various positions at AutoZone, including the role of Senior Vice President, Finance Administration and Chief Financial Officer, and at Pepsico.
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Qualifications for Board and Committee Service
Mr. Olsen is being re-nominated to our Board because, in addition to his broad-based retail operational experience, he brings a hard goods retailing perspective to the Board. Additionally, in 2015, in connection with periodic rotation of our Committee structure, Ms. Olsen was appointed Chair of our Audit and Finance Committee, where he serves as a second financial expert along with Ms. Richter. Mr. Olsen's prior experience in key strategic and operational roles, as well as his experience as a Chief Financial Officer, make him well qualified to serve on the Board and as the Chair of our Audit and Finance Committee.
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Boating Experience
Mr. Olsen enjoys pleasure boating and fishing with his family and friends on Pickwick Lake in Tennessee.
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BOARD AND COMMITTEE STRUCTURE AND PRINCIPLE FUNCTIONS
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ROLE OF THE BOARD; CORPORATE GOVERANCE PRINCIPLES
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BOARD AND COMMITTEE INDEPENDENCE
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◦
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Ms. Richter's son was hired in 2014 as an audit manager in PwC's Minneapolis, Minnesota offices. PwC serves as the Company’s Independent Auditors. In reviewing this relationship, the Board considered that Ms. Richter’s son is not a current partner, nor did he at any time work on West Marine's audit. As a result, the Board concluded that this relationship would not interfere with Ms. Richter's ability to exercise independent judgment in carrying out her responsibilities as a Director, Chair of the Nomination and Governance Committee and/or member of the Audit and Finance Committee.
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◦
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In 2015, our Company entered into an agreement with Hurley International, a division of Nike, Inc. The Company's merchandising department has been pursuing this brand for some time due to its surf apparel and accessories that appeal to a younger demographic. The negotiations were conducted at arms' length and Hurley signed West Marine's Standard Vendor Terms and Conditions offered to all merchandise vendors. As the contract was entered into in late December, there were $0 purchases of Hurley products by West Marine and therefore $0 payments were made to Hurley in our 2015 Fiscal Year. Moreover, although Ms. Shi is an executive officer of Hurley's parent company, she does not receive any payments from, nor does she have any other direct or indirect interest in, the merchandising transactions between Hurley and the Company. Accordingly, our Board concluded that this relationship would not interfere with Ms. Shi's ability to exercise independent judgment in carrying out her responsibilities as a Director, member of the Nomination and Governance Committee and/or member of the Audit and Finance Committee.
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BOARD, COMMITTEE AND STOCKHOLDER MEETING ATTENDANCE
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Meeting Type
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# of Meetings held in 2015
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% Attended in 2015
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Board of Directors
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5
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80%
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Audit and Finance Committee
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9
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89%
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Compensation and Leadership Development
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5
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80%
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Nomination and Governance
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4
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100%
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COMMITTEE STRUCTURE, PRINCIPLE FUNCTIONS AND CHARTERS
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•
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Pursuant to our Bylaws, our Board has established three standing Committees:
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Nomination and Governance Committee (comprised of our independent Directors who are seasoned West Marine Directors with experience in corporate governance matters, including refresh and succession planning practices);
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Audit and Finance Committee (comprised of our independent Directors who are financially literate with public audit committee and/or other relevant business experience); and
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Compensation and Leadership Development Committee (comprised of our independent Directors who are active executives and/or have other public company compensation committee experience).
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•
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Each Committee meets at least quarterly.
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Each Committee may retain and oversee the work of advisors it may deem appropriate:
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◦
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Our Audit and Finance Committee has determined the independence of, and selected PwC to serve as, our Independent Auditors for our 2016 Fiscal Year; and
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Our Compensation and Leadership Development Committee retained a compensation consultant ("Compensation Adviser") employed by Frederic W. Cook & Co., Inc. ("FW Cook"), who is independent of West Marine and management. The Compensation Adviser provides no services to West Marine other than consulting services provided to the Committee.
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The Board has adopted a written
Charter
for each Committee and each updated
Charter
was approved by our Board in March of 2016. The following table reflects the membership of each Committee for our 2015 Fiscal Year and a summary of each Committee's functions as set forth in its respective
Charter.
The full
Charters
can be accessed, free of charge, at http://www.westmarine.com under “Investor Relations - Corporate Governance” and are available in print to any stockholder who submits a written request to our Secretary at 500 Westridge Drive, Watsonville, California, 95076.
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III.
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CORPORATE GOVERNANCE
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KEY GOVERNANCE PRACTICES
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BOARD PRACTICES
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Independence
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* Independent Board Chair
* 75% of our Directors are independent
* 100% of our Committees are independent
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Board Diversity
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* 38% of our Board member are female
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No Director
Over-Boarding
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ü
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* West Marine Policy limits service on other public company boards:
* CEO limited to 1 other
* Board limited to 4 others
* Audit Committee limited to 3 others
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Board and Committee Evaluations
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ü
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* Our Board and each Committee conducts annual self-evaluations
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Board and Committee Refreshment
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* Appointed five new independent Directors over last seven years
* Appointed independent Board Chair and rotated Committee members in 2015
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Job Change
Resignation Policy
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* Director is required to submit an offer of resignation on change in principal employment
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Director Stock Ownership
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* Robust stock ownership requirements at 6x annual Director retainer
- All Directors with more than one year of service own stock
- Holding Requirement until threshold is met
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Annual Terms
No Age Limits
No Term Limits
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ü
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* Our Board is elected annually
* No classified or staggered Board
* No mandatory age or term limits
* Six-year average tenure of our Board (excluding Founder and Affiliated Director)
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Annual Board evaluations and one-year Director terms balance experience and corporate knowledge with fresh perspectives
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Risk Oversight
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* Board and Committees actively oversee enterprise risk matters
(See "Risk Management Oversight")
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No Director
Retirement Plans
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ü
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* No retirement or deferred compensation plans are offered to our Directors
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Separate CEO
and Board Chair Roles
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ü
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* Our Bylaws require separation of CEO and Board Chair roles
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Continuing Education
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* Directors attend continuing education programs at their own expense
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Director Succession
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* Infusion of new Directors in the last several years
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STOCKHOLDER RIGHTS
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Majority Standard for Director Elections
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ü
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* Majority of votes cast standard required for the election of our Director per our
Bylaws
- Director who fails to each majority vote must submit resignation for Board consideration
- None of our Director nominees have failed to receive a majority vote to date
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Other Stockholder Majority Voting
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ü
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* Bylaws have a simple majority of votes cast standard for all other matters, including:
- Bylaw and Charter amendments; actions by special meeting; mergers and acquisitions
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Stockholder Right to
Call Special Meeting
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ü
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* No material restriction on stockholders' right to call special meeting
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Unanimous
Written Consent
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ü
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* Stockholders may take action by written consent
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No Poison Pill
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ü
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* We do not have a poison pill in place
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Single Voting Stock
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* West Marine common stock is the only class of voting shares outstanding
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No Exclusive Venue
or Fee Splitting
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ü
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* No exclusive venue provision in Bylaws
* No mandated fee-shifting or arbitration provisions in Bylaws in the event of
stockholder litigation
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AUDIT MATTERS AND DISCLOSURE CONTROLS
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Audit and Non-Audit Fees Ratio
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ü
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* Non-audit-related services/fees are reasonable relative to audit and audit-related fees
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Financial Experts
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ü
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* Audit and Finance Committee has two financial experts
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Unqualified Auditor Opinion
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* Independent Auditors' report contained an unqualified opinion
* No Material Weakness in last two fiscal years
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Annual Review
of Auditor
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ü
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* Independent Auditor performance is reviewed annually by our Audit and Finance Committee
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Disclosure Controls
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ü
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* Our Disclosure Committee oversees i
nternal control over financial reporting and disclosure
controls and procedures
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Regulation FD and Insider Trading Policy
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ü
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* Our
West Marine Information Disclosure Policy
is
in compliance with Regulation FD
- Posted on our website for the investment community and our associates' reference
*
Our Insider Trading Policy:
- Pre-clearance required for trades in West Marine securities for our Directors, Executives and other key associates
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COMPENSATION PRACTICES
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Leading Compensation Practices
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ü
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* Our Executive compensation programs ("Executive Compensation Programs") support
our pay-for-performance philosophy and create strong alignment with our stockholders
(See "Compensation Discussion and Analysis - Key Features of Our Executive Compensation Programs")
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RISK MANAGEMENT OVERSIGHT
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Full Board
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Provides risk oversight by reviewing our strategic business plans, which includes evaluating the objectives of and risks associated with, these plans and their potential impact (e.g., competitive, industry, economic, financial and other operating risks); and
Reviews other significant risks, such as pending or threatened litigation, business development risks, brand reputation, competition, pricing, budgeting and overall policies and practices for enterprise risk management.
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Audit and Finance Committee
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Discusses with management compliance, strategic, regulatory, financial (including credit, tax and liquidity risks and risk of fraud) and operational risk exposures, financial statement, internal control and reporting risks, regulatory compliance risks, technology infrastructure and security risks, and risks related to supply chain operations, product quality and offshore sourcing) and the steps management has taken to monitor and control such risks;
Monitors risk related to our internal accounting staff, our Internal Auditor and our Independent Auditors;
Meets periodically with management to review reports on the status of and any changes to risk exposures, policies, procedures and practices and the steps management has taken to monitor and control such exposures;
Reviews and approves related party transactions;
Monitors our administration of our
Whistleblower Policy and Procedures
; and
Coordinates with the Nomination and Governance Committee on the oversight of other specific risks.
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Nomination and Governance Committee
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Coordinates the risk oversight activities of the Committees, including determination of which Committee has oversight responsibilities for specific enterprise risks;
Manages risks associated with corporate governance practices;
Monitors risks associated with Board leadership, structure, independence, performance and succession planning;
Monitors stockholder outreach efforts; and
Monitors compliance with our
Code of Ethics, Governance Principles
,
Policy on Executives Serving on Outside Boards
and
Policy on Board Members Serving on Outside Boards,
including risks associated with potential conflicts of interest affecting our Directors and Executives.
|
Compensation and Leadership Development Committee
|
Monitors risks arising from our compensation policies and programs, including incentive compensation to determine and monitor whether they encourage excessive risk-taking;
Oversees risks related to Executive recruitment, assessment, development, retention, performance management and succession planning to ensure that we attract and retain a pool of qualified associates to accommodate future growth; and
Monitors risks related to specific regulatory compliance matters relating to matters over which the Committee has oversight responsibility, including compliance with ERISA, HIPAA and labor laws, rules and regulations.
|
STOCKHOLDER ENGAGEMENT AND COMMUNICATIONS
|
Engagement Highlights
|
|||
* In 2015, our stockholder outreach efforts included active dialog with investors and proxy advisory firms on Company performance, corporate governance and Executive compensation issues.
|
|||
* We continued our annual “Say-on-Pay" vote and received overwhelming stockholder support of our Executive Compensation Programs.
|
|||
* We issue annual guidance and host quarterly earnings calls to discuss our results of operations and progress made on our strategic growth initiatives.
|
|||
* We maintain a Corporate Governance section on our website that provides current information regarding: our governance policies and practices; a link to real time filings with the SEC; and the ability for investors and other interested parties to receive automatic email notification of all such filings. See "Key Governance Practices" above.
|
|||
STOCKHOLDER COMMUNICATION POLICY AND PROCESS
|
GOVERNANCE PRINCIPLES AND CODE OF ETHICS
|
NO COMPENSATION COMMITTEE INTERLOCKS
|
ANTI-HEDGING AND ANTI-PLEDGING POLICIES
|
|
||||
IV.
|
AUDIT AND FINANCE COMMITTEE MATTERS
|
|
|
|
|
|
|
|
|
TRANSACTIONS WITH RELATED PARTIES
|
•
|
The nature and business purpose of the transaction, including its potential benefits to the Company;
|
•
|
Whether the transaction is proposed to be (or was) entered into on terms which are either more advantageous, or no less favorable, than terms that could have been reached with an unrelated third party;
|
•
|
The material terms of the transaction, such as the financial interest in, and the impact on, the related party involved, including impact on independence, if the related party is a Director;
|
•
|
The results of market comparables and/or independent appraisals of the value of the property or services, if available, which are subject of the related party transaction; and
|
•
|
The availability of other sources for comparable products or services.
|
Lease Location
|
Lease Amendment Date
|
Expiration
|
Comparable Property - Avg. Rental Rate %
|
Approximate Net Savings to West Marine
|
Watsonville Support Center
|
2009
|
2016
|
30% higher
|
$1.3 million
|
Adjacent Warehouse
|
2011
|
2016
|
Lease Location
|
Average Rent
|
% Savings over
Comparable Properties
|
Average Annual $ Savings
to West Marine
|
|
New Santa Cruz, CA Store
|
$23.38
(1)
|
20% savings
|
$.922 million annually
|
|
Comparable Properties
|
$29.20
(2)
|
WHISTLEBLOWER POLICY AND PROCEDURES
|
EVALUATION OF AUDITOR INDEPENDENCE
|
•
|
The Independent Auditors' historical and recent performance on the Company’s audit, including the results of an internal evaluation of the Independent Auditors' service and quality;
|
•
|
External data relating to audit quality and performance, including recent Public Company Accounting Oversight Board ("PCAOB") reports on the Independent Auditors and its peer firms;
|
•
|
The appropriateness of the Independent Auditors' fees, on both an absolute basis and as compared to its peer firms;
|
•
|
The Independent Auditors' tenure
and the impact on the Company of changing auditors.
|
•
|
The Independent Auditors' technical expertise, industry knowledge and communications with the Audit and Finance Committee;
|
•
|
The Independent Auditors' familiarity with retail operations and the capability and expertise in handling the breadth and complexity of our operations;
|
•
|
The professional qualifications and performance of the lead audit partner and those of his or her audit staff;
|
•
|
The Independent Auditors' independence from the Company and management and its independence program and processes for maintaining independence;
|
•
|
The level of fees approved for audit and non-audit services to ensure their compatibility with the Independent Auditors independence;
|
•
|
The quality of the Committee's and management's ongoing discussions with the Independent Auditors, including the professional resolution of accounting and financial reporting matters with the national office;
|
•
|
The Independent Auditors' understanding of the Company's business, accounting policies and practices and internal control over financial reporting; and
|
•
|
The scope of, and overall plans for, the annual audit.
|
PRE-APPROVAL OF INDEPENDENT AUDITOR SERVICES
|
•
|
We may engage our Independent Auditors to provide audit and permissible non-audit services that have been pre-approved by our Committee with monetary limits on each service, before the services are rendered, except that no services may be
|
•
|
Our Audit and Finance Committee has designated our CFO or PFO, as applicable, to monitor the performance of all services provided by our Independent Auditors and to determine whether such services are in compliance with the policy. Our CFO or PFO will report promptly to our Audit and Finance Committee Chair any non-compliance (or attempted non-compliance) with this policy of which our CFO or PFO becomes aware.
|
•
|
Before approving any services, our Committee considers the appropriate ratio between the total amount of fees for audit, audit-related and tax services and the total amount of fees for certain permissible non-audit fees paid to the Independent Auditors to ensure that they are not excessive.
|
•
|
Mr. Olsen, as Chair, has been delegated the authority, as necessary and appropriate between regularly scheduled Audit and Finance Committee meetings, to pre-approve additional services or increases in previously approved monetary limits for such services, provided that fees for such services do not exceed $50,000 per project.
|
•
|
Mr. Olsen is required to report any such interim approvals at the next regularly scheduled meeting for Audit and Finance Committee (or the Board) for ratification of such action.
|
FEES PAID TO OUR INDEPENDENT AUDITORS
|
($ in thousands)
|
|
2015 Fiscal Year
|
|
|
2014 Fiscal Year
|
|
||||
Audit Fees
|
|
$
|
797
|
|
(1)
|
|
$
|
825
|
|
(2)
|
Audit-Related Fees
(3)
|
|
5
|
|
|
|
5
|
|
|
||
Tax Fees
(4)
|
|
134
|
|
|
|
179
|
|
|
||
All Other Fees
|
|
—
|
|
|
|
—
|
|
|
|
(1)
|
Consists of fees billed to us by PwC for services rendered for the 2015 Fiscal Year audit.
|
(2)
|
Consists of fees billed to us by PwC for services rendered for the 2014 fiscal year audit. An additional $75,000 was paid in May 2015 for additional audit work performed related to our 2014 audit.
|
þ
|
PROPOSAL #2: SELECTION OF OUR INDEPENDENT AUDITORS
|
AUDIT AND FINANCE COMMITTEE REPORT
|
March 15, 2016
|
Audit and Finance Committee
|
|
|
Robert D. Olsen, Chair Alice M. Richter
Christiana Shi
|
|
|
||||
V.
|
EXECUTIVE COMPENSATION
|
|
|
|
|
|
|
|
|
OUR NAMED EXECUTIVE OFFICERS
|
•
|
Matthew L. Hyde, our CEO and President;
|
•
|
Jeffrey L. Lasher, our Chief Financial Officer, Executive Vice President - Finance and Assistant Secretary ("CFO");
|
•
|
Barry Kelley, our Executive Vice President - Stores and Wholesale; and
|
•
|
Paul Rutenis, our Executive Vice President - Merchandising, Replenishment and Logistics.
|
Name, Age, Hire Date and Position
|
Responsibilities, Work and Boating Experience
|
|
|
|
|
JEFFREY L. LASHER
Age
:
52
Hired
:
November 2015
Position
Chief Financial Officer, Executive Vice President-Finance and Assistant Secretary
|
Responsibilities
In his role as CFO, Mr. Lasher oversees all of West Marine's financial activities, including all accounting functions, preparation of financial statements, monitoring of expenditures and liquidity, managing investment and taxation issues and recommending the capital structure of the business.
Work Experience
Prior to joining West Marine, Mr. Lasher served as Senior Vice President and CFO for Crocs, Inc., a multi-national designer, marketer, retailer, and manufacturer of casual footwear, from April 2011 to November 2015. Mr. Lasher was named CFO in April 2011, after serving as Crocs’ Principal Accounting Officer and Interim Principal Financial Officer. Mr. Lasher additionally served as Crocs’ Corporate Controller and Chief Accounting Officer from June 2009 to April 2011. Prior to joining Crocs, Mr. Lasher held various finance and business leadership positions at Ford Motor Company, AutoNation, Inc. and Corporate Express, Inc., a publicly-held business supplies and equipment company which was acquired by Staples, Inc.
Boating Experience
Mr. Lasher and his family have an active water life along the California coast and at his family's Colorado lake house where they enjoy their pleasure boat and a variety of standup paddleboards and kayaks.
|
|
|
||
BARRY KELLEY
Age
:
53
Hired
:
1989
Position
Executive Vice President-Stores and Wholesale
|
Responsibilities
Mr. Kelley is responsible for the sales and operations of all of our retail stores in the U.S., Canada and Puerto Rico, our Port Supply division, which services our professional customers, and our real estate and visual merchandising departments.
Work Experience
Since December 2013, Mr. Kelley has held the position of Executive Vice President of Stores and Wholesale and in February 2015, Mr. Kelley assumed oversight responsibilities of the real estate and visual merchandising departments. Between July 2014 and December 2015, Mr. Kelley managed the logistics function, which transitioned to Mr. Rutenis in January 2016. Mr. Kelley joined West Marine in May 1989, and prior to his promotion to Executive Vice President of Stores and Wholesale in December 2013, he held the positions of Senior Vice President from May 2012 and Vice President of Port Supply from December 2007. Prior to December 2007, he was Southeast Regional Vice President, Southeast District Manager, Store Manager and various other store positions for West Marine.
Boating Experience
Mr. Kelley has been actively involved in the marine industry for more than 33 years, and has been a lifelong boater, equally enjoying a good day sailing or one spent offshore fishing.
|
|
|
|
|
PAUL RUTENIS
Age:
50
Hired
:
August 2015
Position
Executive Vice President - Merchandising, Replenishment and Logistics
|
Responsibilities
Mr. Rutenis oversees all of West Marine's merchandising and replenishment functions, including product procurement, development, and replenishment. In January 2016, oversight of the logistics department, which directs all supply chain and transportation activities, transitioned to Mr. Rutenis from Mr. Kelley.
Work Experience
Prior to joining West Marine, Mr. Rutenis served as the Senior Vice President and Chief Merchandising Officer for Radioshack Corporation from October 2013 until July 2015, where he was responsible for leading all retail categories, including the selection of private brand assortments. Mr. Rutenis served as Senior Vice President and General Merchandise Manager, Home and Vice President and Divisional Merchandise Manager for J.C. Penney Company, Inc. from 2011 through 2013 and from 2006 to 2011, Mr. Rutenis served as a Divisional Merchandise Manager for Dick’s Sporting Goods, Inc.
Boating Experience
Mr. Rutenis has a passion for the water and loves salt-water fishing. He has made many pilgrimages with his family to Grand Isle, LA to fish in some of the best waters the US can offer.
|
COMPENSATION DISCUSSION AND ANALYSIS
|
A. EXECUTIVE SUMMARY
|
New Top Leadership
|
v
|
In 2015, we filled two key positions: Jeffrey Lasher (CFO) and Paul Rutenis (EVP of Merchandising, Replenishment and Logistics), bringing over two decades of retail experience and a commitment to driving sales and profit growth.
|
||||||||
Executing on Key Growth Strategies
|
v
|
Our eCommerce, store optimization and merchandise expansion strategies are delivering improved financial performance and have repositioned our Company to appeal to a broader mix of customers who enjoy recreating in, on or around the water.
|
||||||||
Financial Growth through Strategies
|
v
|
2015 recorded year-over-year financial growth
(1)
:
- Net revenues
(2)
increase by 4.3%
- Comparable store sales
(3)
grew by 6% for the year
- Comparable store sales in the fourth quarter holiday season grew by 9.4%
- Pre-tax profitability
(4)
increased by 110%
- eCommerce grew to 9.5% of total sales vs. 7.7% in 2014
- Merchandise expansion products increased by 16.4% of total sales for 2015
- Core product sales increased by 2.8% in 2015, reversing a decline in sales of such products in prior
years
|
||||||||
Customer Growth
|
v
|
Our strategies have attracted new customers, with the number of new customers increasing by 12% over the last two years.
|
||||||||
Digital Growth
|
v
|
Enhanced digital capabilities have resulted in significant growth in our eCommerce business, up 32.5% in 2015.
|
||||||||
Increased
Service Levels
|
v
|
We launched ship-from-store to deliver products to our customers when and where they need them and to improve our inventory productivity and turns.
|
||||||||
Strong Liquidity Position
|
v
|
We remained debt-free at year end, with $105.3 million available on our revolving credit line.
|
||||||||
Focused Operations
|
v
|
Our decisions to focus on our key growth strategies, close under-performing stores, right-size operations and exit Canada have allowed us to concentrate our efforts and invest our capital and human resources in growth opportunities.
|
||||||||
Regional Relevance
|
v
|
We are defining category roles and re-establishing leadership in signature categories of core and lifestyle products, with more localized assortments online and in stores to provide our customers with the convenience of a differentiated, inspirational, one-stop-shopping experience.
|
||||||||
Reduced Costs
|
v
|
We are reducing the complexity of our business operations and controlling costs to create the capacity we need to invest in key priorities that will fuel our growth and return on capital ("ROC")
(5)
.
|
||||||||
Test and Learn Strategies
|
v
|
We are developing and testing new marketing, online offerings and in-store experiences to better serve our customers. We have experienced strong financial results through our modernized revitalized stores and our expanded online offerings.
|
||||||||
Store Optimization
|
v
|
We have reduced our store fleet to 261 stores through closure of underperforming stores, consolidation of smaller stores into larger, better stores and revitalization of traditional stores to waterlife stores.
|
|
|
|
|
|
|
|
|
|
|
|
EXECUTIVE COMPENSATION PROGRAM PRINCIPAL COMPONENTS
|
|||||||
|
|||||||
Pay Element
|
|
Performance Element
|
|
Link to Philosophy
|
|||
Base Salary
|
• Evaluated annually
• CEO base salary remains
unchanged since 2012
|
• Reflects job responsibilities
• Provides reasonable and competitive fixed pay to balance performance-
based risks
• Attracts and retains talented Executives to drive our success
• Targeted within the median of our peer group
|
|||||
|
|
|
|
||||
Annual Cash Incentive Awards
|
• Financial performance payout metrics
°
Total sales (30%)
°
Pre-tax profit (70%)
• Minimum threshold for bonus
eligibility
• Payout capped at 200%
|
• No payout unless pre-tax profit goal is achieved • Incentivizes performance at high end of ranges for financial performance
measures to drive meaningful profitable growth year-over-year
• Focuses on delivering strategic business objectives
• Target total cash (base salary + target bonus) designed to deliver cash
compensation within the median range of peers
• Upside rewards extraordinary performance
|
|||||
|
|
|
|||||
Long-Term Equity-Based
Incentive Awards
|
• LTIP award breakdown
°
33% PVUs
° 67% RSUs
• RSU value driven by appreciation in
stock price
• PVU value driven by Return on
Invested Capital ("ROIC")
(1)
in 2015
• Payout capped at 150%
|
• PVUs with ROIC metric added in 2014 based on stockholder/firms
feedback
• Aligns interests of Executives with stockholders and rewards
achievement of performance goals
• RSUs create direct, substantial exposure to West Marine's stock price
• PVUs link pay for performance creating alignment with stockholder interests
• Motivates Executives to deliver performance on strategic investments to
drive sustained long-term growth
• Target total direct compensation (base salary + target bonus + target long-
term incentives) falls within a reasonable range of the market median
• Upside rewards extraordinary performance
|
|||||
|
|
|
|||||
Health Benefits
|
• Same health benefits for Executives
and all other associates
|
• Provide competitive levels of benefits that promote health
and wellness
|
|||||
|
|
|
|||||
401(k) Plan
|
• Standard 401(k) offered to all
associates, including Executives
• No other defined benefit plan
|
• Provide competitive levels of benefits that promote financial
security
• Attract and retain talented Executives
|
|||||
|
|
|
|||||
Perquisites
|
• Limited to Executive life insurance
premiums
• No tax gross-ups
• Same health benefits for Executives
and all other associates
|
• Perquisites • Provide a business-related benefit to West Marine
• Assist in attracting and retaining Executives
• No tax gross-ups • Aligns with governance best practices
|
|||||
|
|
|
|
|
|||
Post-Employment Compensation
|
|
• No severance agreements;
Executives are covered under the
Top-Hat Severance Plan
• Contains mitigation provision on
new employment
• Double-trigger change-in-control
provisions
|
|
• Severance • Provides temporary levels of income following termination
of employment
• Attracts and retains talented Executives
• Provides competitive benefits • Double-trigger change-in-control • Aligns with governance best practices
|
|
•
|
Are competitive in the marketplace and provide total compensation necessary to attract and retain talented and experienced Executives with relevant retail experience, who enjoy recreating on and around the water, who are enthusiastic about our mission and culture, and who are serious about delivering financial returns;
|
•
|
Incorporate best governance practices and closely link pay for performance by tying a significant portion of our NEOs' compensation to the Company's financial performance; and
|
•
|
Appropriately motivate and reward our Executives to deliver high performance to our stockholders, customers and the communities in which we serve, and align our Executives’ interests with the long-term interests of our stockholders by providing a mix of performance and service-based equity awards.
|
|
|
|
|
|
|
|
|
|
2015 Target Total Direct Compensation
|
|
|
|
|
|
This chart reflects the TTDC mix for our 2015 Fiscal Year based on the aggregate target compensation for our NEOs.
(1)
Target compensation mix is not the same as actual compensation for elements that are subject to performance contingencies.
|
|
|
|
||
|
||
|
||
|
||
|
||
|
|
ASSUMPTIONS:
|
|
Bonus
: Each NEO's target bonus reflected in the SCT is equal to100% of his/her bonus potential, and the realizable value reflects the actual bonus earned for the performance period for which such individual served as an NEO, calculated as of December 31, 2015. Messrs Lasher and Rutenis and Ms. Ajeska did not serve as NEOs until 2015 and no annual bonuses were earned in fiscal year 2013 or 2014. For more information see "Elements of Executive Compensation-Short-Term Incentive Plan (Annual Bonus)" and the SCT.
|
||
Equity
:
As Messrs. Lasher and Rutenis and Ms. Ajeska did not serve as NEOs prior to 2015, their respective target and realizable amounts are for equity granted in 2015 only. Mr. Kelley's target and realizable amounts are for equity granted in 2014 and 2015 only, as he was not an NEO at the time his 2013 grants were made.The realizable value of the equity awarded to our NEOs between January 1, 2013 and December 31, 2015 is equal to the intrinsic value of stock options (i.e., in-the-money), RSUs and PVUs calculated based on the closing price per share of the Company's common stock of $8.49 as of December 31, 2015. This calculation is pre-tax and assumes that the NEOs held all RSUs and PVUs after vesting. The 2013 stock options and all PVUs granted in 2014 are estimated with no value, as the price at which the Company's common stock was trading on December 31, 2015 was below the option grant price and the performance metrics for the 2014 PVUs were not met. PVUs granted in our 2015 Fiscal Year were valued at 69.6% of target value based on the level of the Company's financial performance achieved. For more information, see "Elements of Executive Compensation-Long-Term Incentive Plan (Equity)" and the SCT.
|
||
B. ROLES AND RESPONSIBILITIES
|
C. DECISION MAKING PROCESS
|
D. ELEMENTS OF EXECUTIVE COMPENSATION
|
|
|
(1)
|
Pre-bonus, pre-tax profit is defined as net income before taxes adjusted to exclude expenses related to gain from foreign currency conversion, bonus accruals for all bonus-eligible stores, support center and distribution center associates and any unusual, non-operating items as approved by the Compensation and Leadership Development Committee (no such unusual or non-operating items were present in 2015).
|
|
(1)
|
Mr. Lasher's bonus was calculated based on the full 2015 Fiscal Year, not pro-rated from his date of hire, as part his recruitment package. This was not a guaranteed bonus as the Company was required to meet its pre-bonus, pre-tax profit threshold as a pre-condition to any bonus payout to bonus-eligible associates, including Mr. Lasher.
|
(2)
|
Mr. Rutenis received a pro-rated bonus for 2015, calculated from his date of hire.
|
(3)
|
Ms. Ajeska's bonus reflected an increase to her base salary during the time she served as PFO in 2015. As a result, a portion of her bonus was calculated at a lower base.
|
(4)
|
A portion of the sales for Mr. Kelley's bonus calculation was reduced as a result of his failure to properly identify and address an issue in one of his divisions. As a result, he received 55.4% of the 81.6% payout.
|
•
|
Strengthen the link among our financial performance, stockholder value and long-term incentive compensation;
|
•
|
Promote increased equity ownership by our Executives;
|
•
|
Encourage Executive retention through use of multiple-year vesting periods; and
|
•
|
Provide competitive levels of total compensation to our Executives.
|
Performance Level
|
FY 2015 Ending ROIC Performance Goal Target
|
PVU % Awarded If ROIC % was Achieved
|
2015 Actual ROIC Achieved
|
2015 - 2017 Actual PVUs Awarded
|
Threshold
|
5.05%
|
50%
|
5.32%
|
69.6%
|
Target
|
5.73%
|
100%
|
||
Maximum
|
6.5%
|
150%
|
|
(1)
|
PVUs and RSUs were granted to Messrs. Lasher and Rutenis on the 10th business day of the calendar month following their respective hire dates. The number of RSUs awarded was increased to attract and retain Messrs. Lasher and Rutenis in these key positions. With the intent of driving longer-term growth, these equity awards comprise a greater portion of their TTDC. For more information on the value of such awards see the SCT.
|
(2)
|
The number of PVUs and RSUs granted to Ms. Ajeska were the same as those awarded at the vice-presidential level versus the number she otherwise would have received at the divisional vice-presidential level, in recognition of her increased responsibilities as interim PFO during our 2015 Fiscal Year.
|
E. COMPENSATION RISK ANALYSIS
|
F. CLAWBACK POLICY
|
G. STOCK OWNWERSHIP AND RETENTION POLICY
|
•
|
Common stock
|
•
|
Shares purchased through our
Stock Buying Plan
(applicable only to Executives)
|
•
|
Time-vested RSUs (vested and unvested)
|
•
|
Shares retained upon exercise of stock options
|
•
|
Earned PVUs (i.e., after determination of achievement), whether or not vested
|
•
|
Unvested or vested stock options
|
•
|
Unearned PVUs
|
•
|
A one-year holding period for any stock purchased through our
Stock Buying Plan
;
|
•
|
Executives are required to hold shares until stock ownership requirements are met as follows:
|
◦
|
50% of the after-tax shares from exercised options and stock purchased under our
Stock Buying Plan
; and
|
◦
|
75% of the after-tax shares from RSUs and PVUs;
|
•
|
Executives must maintain the stock ownership threshold requirement for the term of his or her employment; and
|
•
|
Directors must maintain the stock ownership threshold for so long as they serve on our Board.
|
H. LIMITED PERQUISITES AND PERSONAL BENEFITS
|
Name
|
One-Time Sign-On Bonus
(1)
|
Relocation Expenses
(2)
|
Jeffrey Lasher
|
$136,154
|
$21,719
|
Paul Rutenis
|
$75,000
|
$33,724
|
•
|
Merchandise discounts
|
•
|
Use of Company-owned equipment (such as use of the Company-leased sailboat, kayaks and other equipment)
|
•
|
Ability to exchange for cash up to 80 hours of accrued paid time off per year
|
•
|
Participation in our
Stock Buying Plan
|
•
|
Group health, life and disability coverage
|
I. POST EMPLOYMENT AND SEVERANCE ARRANGEMENTS/NO CHANGE-IN-CONTROL AGREEMENTS
|
•
|
Cash severance payments equal to the weekly rate of base salary for the applicable severance period based on years of service as set forth in the chart below (“Cash Severance”).
|
POSITION
|
LESS THAN
1 YEAR
|
1 YEAR OR MORE BUT LESS THAN
5 YEARS
|
5 YEARS
OR MORE
|
Chief Executive Officer/President
|
52 weeks
|
60 weeks
|
78 weeks
|
Executive Vice President
|
35 weeks
|
40 weeks
|
52 weeks
|
Senior Vice President
|
27 weeks
|
31 weeks
|
40 weeks
|
Vice President / Regional Vice President
|
17 weeks
|
20 weeks
|
26 weeks
|
◦
|
Cash Severance, is payable in substantially equal installments over the severance period on regularly-scheduled payroll dates, subject to applicable deductions and withholdings, and commencing as of the first payroll date that is at least forty-five days following termination, with the first payment including all amounts due from the beginning of the severance period to the date of such first payment.
|
◦
|
Cash Severance is reduced by the amount of compensation earned or paid either as a result of new employment or serving as an independent consultant during the severance period. The Company is obligated to pay any shortfall.
|
•
|
If termination occurs during the first six months of a fiscal year, the Executive will not receive any cash bonus for that year. If termination occurs during the second half of a fiscal year, the Executive will receive a pro-rata bonus, if any.
|
•
|
An Executive may exercise his or her vested stock options in accordance with the terms of the applicable option award agreement (generally 90 days). Unexercised vested stock options and unvested stock options, RSUs and PVUs are automatically forfeited on termination.
|
•
|
All severance benefits immediately cease upon death.
|
•
|
Severance benefits terminate if the Executive is re-employed by West Marine.
|
•
|
We may withhold for payroll taxes and the Executive is responsible for all taxes.
|
•
|
Payments are subject to Section 409A of the Code for any Executive defined as a "specified employee" under the Code.
|
•
|
A cash severance payment of $360,256, an amount equal to fifty-two (52) weeks (“Severance Period”) of his annual base salary, payable in substantially equal installments over the Severance Period on the Company’s regularly-scheduled payroll dates, subject to applicable deductions and withholdings. The Company paid $173,200 of this severance amount as Mr. Moran obtained alternate employment on July 27, 2015, at which time severance payments by the Company ceased per the terms of the agreement;
|
•
|
All unvested stock options, RSUs and PVUs as of the termination date were forfeited and Mr. Moran was able to exercise any vested stock options only for a 90-day period following his employment termination date (see "Options Exercised and Stock Vested" below for the number of equity awards forfeited upon termination and options exercised within such 90-day window);
|
•
|
Mr. Moran did not receive any annual cash bonus for 2014 or 2015 or other benefits under the separation agreement, except that he was offered continued health care benefits required to be offered under Federal or state law (e.g., COBRA) which terminated on his re-employment date on September 30, 2015; and
|
•
|
Mr. Moran is bound by, among other provisions included in the separation agreement, a full release of all claims related to Mr. Moran’s employment with the Company, and non-solicitation, confidentiality, cooperation and non-disparagement covenants.
|
J. TAX DEDUCTIBILITY
|
COMPENSATION AND LEADERSHIP DEVELOPMENT COMMITTEE
REPORT ON EXECUTIVE COMPENSATION |
March 15, 2016
|
Compensation and Leadership Development Committee
|
|
|
Dennis F. Madsen, Chair
Christiana Shi
James F. Nordstrom, Jr.
|
|
þ
|
PROPOSAL #3: ADVISORY VOTE ON THE COMPENSATION OF OUR NEOs
|
þ
|
PROPOSAL #4: APPROVE THE WEST MARINE, INC. AMENDED AND
RESTATED OMNIBUS EQUITY INCENTIVE PLAN
|
•
|
Repricing is not allowed without stockholder approval
. Our
Equity Incentive Plan
prohibits the repricing of outstanding equity awards and the cancellation of any outstanding equity awards that have an exercise price or strike price greater than the current fair market value of our common stock in exchange for cash or other stock awards under our
Equity Incentive Plan
without prior stockholder approval.
|
•
|
Stockholder approval is required for additional shares
.
Our
Equity Incentive Plan
does not contain an annual “evergreen” provision. Our
Equity Incentive Plan
authorizes a fixed number of shares, so that stockholder approval is required to issue any additional shares, allowing our stockholders to have direct input on our equity compensation programs.
|
•
|
No tax gross ups.
Our
Equity Incentive Plan
prohibits the Company from paying or reimbursing any “gross-up” payments for taxes on the income recognized as a result of the grant, vesting, exercise or sale of any award.
|
•
|
Fungible share pool design
. Our
Equity Incentive Plan
has a fungible share pool design, which increases the rate at which the share reserve is depleted for stock awards other than stock options and stock appreciation rights, in order to minimize stockholder dilution. The number of shares available for issuance under our
Equity Incentive Plan
will be reduced by one share for each share of common stock subject to a stock option or stock appreciation right and by two shares for each share of common stock subject to any other type of award issued.
|
•
|
Fixed Grant Date
. Our
Equity Incentive Plan
fixes the dates on which awards are granted annually to our associates and non-employee Directors and for newly-hired or promoted associates to ensure independence with respect to equity grants.
|
•
|
Reasonable share counting provisions
. In general, when awards granted under our
Equity Incentive Plan
lapse or are canceled, the shares reserved for those awards will be returned to the share reserve and be available for future awards. However, shares of common stock tendered to us in payment of the exercise price of stock options or stock appreciation rights, or withheld by us to cover tax withholding obligations upon exercise of stock options or stock appreciation rights will not be returned to our share reserve.
|
•
|
Double-Trigger Change in Control provisions
. The definition of change in control in our
Equity Incentive Plan
requires the consummation of an actual transaction so that no vesting acceleration benefits may occur without an actual change in control transaction occurring. Our
Equity Incentive Plan
does not provide for single-trigger acceleration in the event of a change in control transaction.
|
•
|
No discounted stock options or stock appreciation rights
.
All stock options and stock appreciation rights must have an exercise price equal to or greater than 100% of the fair market value of our Common Stock on the date the stock option or stock appreciation right is granted.
|
•
|
Submission of amendments to our Equity Incentive Plan to stockholders
.
Our
Equity Incentive Plan
requires stockholder approval for material amendments to our
Equity Incentive Plan
, including, any increase in the number of shares reserved for issuance under our
Equity Incentive Plan
.
|
•
|
Flexibility in designing equity compensation scheme
.
Our
Equity Incentive Plan
allows us to provide a broad array of equity incentives, including traditional option grants, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stock awards, other stock awards and performance cash awards. By providing this flexibility, we can quickly and effectively react to trends in compensation practices and continue to offer competitive compensation arrangements to attract and retain the talent necessary for the success of our business.
|
•
|
Limit on equity awards
.
Our
Equity Incentive Plan
limits the number of shares of our common stock that may be granted to any one participant during any one fiscal year.
|
•
|
Burn rate and dilution within industry norms
.
We reduced broad equity distribution to reduce our stockholder dilution and burn rate, both of which are now within retail industry norms and well below advisory firm average.
|
•
|
Clawback.
Any Performance-Based Awards granted under our
Equity Incentive Plan
is subject to recoupment in accordance with the Company’s
Clawback Policy
.
|
•
|
Limited Term for options and SARs.
Our
Equity Incentive Plan
limits the term of options and stock appreciation rights to seven years.
|
Name of Individual or Group
|
Dollar Value ($)
|
|
RSU (#)
|
|
PVUs (#)
|
|
Matthew L. Hyde
(1)
|
—
|
|
—
|
|
—
|
|
Jeffrey L. Lasher
(1)
|
—
|
|
—
|
|
—
|
|
Barry Kelley
(1)
|
—
|
|
—
|
|
—
|
|
Paul Rutenis
(1)
|
—
|
|
—
|
|
—
|
|
Named Executive Officers, as a group
(1)
|
—
|
|
—
|
|
—
|
|
All director nominees who are not executive officers, as a group
(2)
|
350,000
|
|
38,290
|
(3)
|
—
|
|
|
|
Number of Shares Underlying RSUs Granted (#)
(1)
|
|
Number of Shares Underlying PVUs Granted (#)
(1)
|
|
Number of Shares Underlying Stock Options Granted (#)
(1)
|
|
Named Executive Officer Group (6 persons)
|
350,631
|
|
104,606
|
|
550,423
|
|
Current Executive Officer Group
(2)
(4 persons)
|
297,342
|
|
93,864
|
|
279,985
|
|
Current Non-Employee Director Group (7 persons)
|
129,930
|
|
—
|
|
14,191
|
|
Current Non-Executive Officer Associate Group
(2)
(895 persons)
|
577,923
|
|
135,727
|
|
1,709,646
|
|
|
(1)
|
The amount of awards granted under the
Equity Incentive Plan
to our executive officers and other eligible associates are discretionary and are not subject to set benefits or amounts under the terms of the
Equity Incentive Plan
. Accordingly, total awards that may be granted for the 2017 fiscal year are not determinable until the completion of this fiscal year. For more information, see footnote 1 to the table under “Awards to be Granted Under the Equity Incentive Plan” [above].
|
Summary
Compensation Table
|
Name and
Principal Position
|
Year
|
Salary
($)(5)
|
Sign-On Bonus ($)(6)
|
Stock Awards
|
Non-Equity Incentive Plan Compensation
($)(10)
|
All Other
Compensation
($)(11)
|
Total
($)
|
|||
RSU Awards
($)(7)
|
PVU Awards
($)(8)
|
Option
Awards
($)(9)
|
||||||||
Matthew L. Hyde
Chief Executive Officer
|
2015
|
600,000
|
—
|
305,070
|
152,530
|
—
|
489,780
|
5,940
|
1,553,320
|
|
2014
|
600,000
|
—
|
323,204
|
161,596
|
—
|
—
|
5,775
|
1,090,575
|
|
|
2013
|
600,000
|
—
|
311,737
|
—
|
108,850
|
—
|
6,042
|
1,026,629
|
|
|
Jeffrey Lasher
(1)
Chief Financial Officer
|
2015
|
48,462
|
136,154
|
181,720
|
45,430
|
—
|
205,708
|
25,732
|
643,206
|
|
Barry Kelley
Executive Vice President-Stores and Wholesale
|
2015
|
336,151
|
—
|
125,840
|
62,920
|
—
|
112,943
|
19,723
|
657,577
|
|
2014
|
320,000
|
—
|
133,320
|
66,660
|
—
|
—
|
18,258
|
538,238
|
|
|
2013
|
286,500
|
—
|
97,413
|
—
|
34,014
|
—
|
8,864
|
426,791
|
|
|
Paul Rutenis
(2)
Executive Vice President-Merchandising, Replenishment and Logistics
|
2015
|
146,154
|
75,000
|
184,580
|
46,145
|
—
|
71,583
|
41,796
|
565,258
|
|
Deborah Ajeska
(3)
Interim Principal Financial Officer
|
2015
|
238,186
|
—
|
76,270
|
38,130
|
—
|
78,571
|
4,265
|
435,422
|
|
Thomas R. Moran
(4)
Former Chief Financial Officer
|
2015
|
41,568
|
—
|
—
|
—
|
—
|
—
|
199,426
|
240,994
|
|
2014
|
358,240
|
—
|
133,320
|
66,660
|
—
|
—
|
8,589
|
566,809
|
|
|
2013
|
346,571
|
—
|
128,590
|
—
|
44,900
|
—
|
6,817
|
526,878
|
|
|
(1)
|
Mr. Lasher became the CFO effective November 7, 2015 and is paid an annual base salary of $420,000. Mr. Lasher received a one-time sign-on bonus of $136,154 and an annual equity award of 22,000 RSUs and 5,500 PVUs.
|
(2)
|
Mr. Rutenis became the Executive Vice President-Merchandising, Replenishment and Logistics on August 10, 2015 and is paid an annual base salary of $400,000. Mr. Rutenis received a one-time sign-on bonus of $75,000 and an annual equity award of 22,000 RSUs and 5,500 PVUs.
|
(3)
|
Ms. Ajeska, Divisional Vice President and Controller, was appointed PFO, on an interim basis, effective January 16, 2015 following the resignation of our former Chief Financial Officer, Thomas R. Moran, on the same day.
|
(4)
|
Mr. Moran remained employed as West Marine's CFO throughout the entire 2014 fiscal year and his annual base salary was $360,256. He resigned his position on January 16, 2015 and his last date of employment was January 30, 2015. All unvested equity awards were forfeited as of Mr. Moran's termination date. Mr. Moran was scheduled to receive $360,256 over a 52-week period, however, Mr. Moran received only $173,200 in severance payments during 2015 prior to obtaining alternative employment. For more information see "Compensation Discussion and Analysis–Post Employment and Severance Arrangements/No Change-in-Control Agreements."
|
(5)
|
Includes any employee contributions to our 401(k).
|
(6)
|
This represents the one-time sign-on bonus for Messrs. Lasher and Rutenis.
|
(7)
|
This column shows the aggregate grant date fair value of RSUs granted in each year presented. These amounts are used to calculate accounting expense and do not necessarily represent the actual value that will be realized by the NEOs. For a description of the methodology and assumptions used to determine the amounts recognized in 2015, see Note 2 to our consolidated financial statements set forth in our Annual Report (“2015 Financial Statements”).
|
(8)
|
This column shows the aggregate grant date fair value of PVUs granted in 2015. These amounts are used to calculate accounting expense and do not necessarily represent the actual value that will be realized by the NEOs. For a description of the methodology and assumptions used to determine the amounts recognized in 2015, see Note 2 to our 2015 Financial Statements. Assuming the highest level of the PVU awards granted in 2015, the grant date values would have been $228,800 for Mr. Hyde, $68,145 for Mr. Lasher, $94,380 for Mr. Kelley, $69,218 for Mr. Rutenis, and $57,200 for Ms. Ajeska. The performance metric for the PVUs granted in 2015 was met, and as a result PVUs were earned by our NEOs. For more information, see "Compensation Discussion and Analysis–Elements of Executive Compensation-Long-Term Incentive Plan (Equity)."
|
(9)
|
This column shows the aggregate grant date fair value of stock options granted in each year presented. No stock options were granted to our NEOs in 2014 or 2015. These amounts are used to calculate accounting expense and do not necessarily represent the actual value that will be realized by the NEOs. For a description of the methodology and assumptions used to determine the amounts recognized in 2015, see Note 2 to our 2015 Financial Statements.
|
(10)
|
Amounts for 2015 represent a performance cash bonus earned for our 2015 Fiscal Year, paid in 2016. No annual performance cash bonus was earned in 2014 or 2013. For more information see "Compensation Discussion and Analysis–Elements of Executive Compensation-Short-Term Incentive Plan (Annual Bonus)."
|
(11)
|
The amounts reported as All Other Compensation for 2015 consist of the following:
|
Name
|
401(k) Plan
Matching ($)
|
Executive Relocation ($)
|
Life Insurance
Premiums ($)
|
Payout of Accrued
Paid-Time-Off ($)
|
Post-Employment/ Severance Payments ($)
|
Matthew L. Hyde
|
5,940
|
—
|
—
|
—
|
—
|
Jeffrey L. Lasher
|
—
|
25,732
(a)
|
—
|
—
|
—
|
Barry Kelley
|
4,960
|
|
1,686
|
13,077
|
—
|
Paul Rutenis
|
—
|
39,686
(b)
|
2,110
|
—
|
—
|
Deborah Ajeska
|
3,330
|
—
|
935
|
—
|
—
|
Thomas R. Moran
|
842
|
—
|
—
|
25,384
(c)
|
173,200
|
|
(a)
|
On September 4, 2015, the Board approved Mr. Lasher's employment offer, which included reimbursement of reasonable relocation expenses for his move from Colorado to the greater Watsonville, California area.
|
(b)
|
On May 21, 2015, the Board approved Mr. Rutenis' employment offer, which included reimbursement of reasonable relocation expenses for his move from Fort Worth,Texas to the greater Watsonville, California area.
|
(c)
|
Reflects the payout of all accrued paid-time-off to Mr. Moran on his last date of employment of January 30, 2015.
|
Grants of Plan-Based Awards in 2015
|
Name
|
Estimated Future Payouts Under Non-Equity Incentive Plan Awards
(1)
|
Stock Awards
|
|||||||||
Equity Award Grant Date
|
Equity Award Date Approved
(2)
|
Estimated Future Payouts of PVUs Under Equity Incentive Plan Awards
(3)
|
Awards of RSUs Under
Equity Incentive
Plan (#Sh)
|
Grant Date
Fair Value of Stock
Awards ($)
(4)
|
|||||||
Threshold ($)
|
Target ($)
|
Maximum ($)
|
Threshold (#Sh)
|
Target (#Sh)
|
Maximum (#Sh)
|
||||||
Matthew L. Hyde
|
120,000
|
600,000
|
1,200,000
|
March 2, 2015
|
February 20, 2015
|
6,667
|
13,333
|
20,000
|
26,667
|
|
457,600
|
Jeffrey L. Lasher
|
50,400
|
252,000
|
504,000
|
December 14, 2015
|
September 4, 2015
|
2,750
|
5,500
|
8,250
|
22,000
|
|
227,150
|
Barry Kelley
|
40,338
|
201,691
|
403,381
|
March 2, 2015
|
February 20, 2015
|
2,750
|
5,500
|
8,250
|
11,000
|
|
188,760
|
Paul Rutenis
|
48,000
|
240,000
|
480,000
|
September 15, 2015
|
May 20, 2015
|
2,750
|
5,500
|
8,250
|
22,000
|
|
230,725
|
Deborah Ajeska
|
19,055
|
95,274
|
190,549
|
March 2, 2015
|
February 20, 2015
|
1,667
|
3,333
|
5,000
|
6,667
|
|
114,400
|
Thomas R. Moran
(5)
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|
—
|
|
(1)
|
The Company achieved threshold performance and, therefore, an annual performance bonus was earned in 2015. For more information, see "Compensation Discussion and Analysis–Elements of Executive Compensation-Short-Term Incentive Plan (Annual Bonus)."
|
(2)
|
The Compensation Committee met and approved the equity awards on February 20, 2015, but the awards were effective as of March 2, 2015 in accordance with the terms of our
Equity Incentive Plan
and
Equity Award Grant Policy
, with grant date fair value determined as of the effective date. Awards to newly-hired associates, Messrs. Lasher and Rutenis were granted equity awards effective as of the 10th business day of the calendar month following their date of hire.
|
(3)
|
Represents the number of PVU awards at the threshold, target and maximum levels equaling 50%, 100% and 150%, respectively. If the performance threshold is achieved, the PVUs vest in three annual installments of 33%, 33% and 34% on each anniversary of the grant date. The Company achieved the threshold performance target in 2015. For more information, see "Compensation Discussion and Analysis–Elements of Executive Compensation-Long-Term Incentive Plan (Equity)."
|
(4)
|
Represents the aggregate grant date fair value of the PVU and RSU awards. For a description of the methodology and assumptions used to determine the grant date fair market value, see Note 2 to the 2015 Financial Statements. The Company did not achieve the threshold performance targets and, therefore, no PVUs were earned in 2014. For more information, see "Compensation Discussion and Analysis–Elements of Executive Compensation-Long-Term Incentive Plan (Equity)."
|
(5)
|
Mr. Moran, our former Chief Financial Officer, resigned effective January 30, 2015 and, therefore, PVU and RSU awards were forfeited on Mr. Moran's termination date.
|
Outstanding Equity Awards at Fiscal Year-End
|
Name
|
Option Awards
|
Stock Awards
|
||||||
RSUs
|
PVUs
|
|||||||
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
Option
Exercise
Price
($)
|
Option
Expiration Date
|
Number of
Shares or Units of Stock
That Have
Not Vested
(#)
|
Market Value
of Shares or Units of Stock
That Have
Not Vested
($)
|
Number of Unearned PVUs
That Have
Not Vested
(#)
|
Market Value
of Unearned PVUs
That Have
Not Vested
($)
|
|
Matthew L. Hyde
|
—
|
—
|
—
|
—
|
26,667
(2)
|
226,403
|
13,333
(3)
|
152,530
(4)
|
—
|
—
|
—
|
—
|
17,867
(2)
|
151,691
|
—
|
—
|
|
17,600
|
9,067
(1)
|
11.69
|
June 3, 2020
|
9,067
(2)
|
76,979
|
—
|
—
|
|
100,000
|
—
|
11.84
|
July 16, 2019
|
—
|
—
|
—
|
—
|
|
Jeffrey L. Lasher
|
—
|
—
|
—
|
—
|
22,000
(2)
|
186,780
|
5,500
(3)
|
45,430
(4)
|
Barry Kelley
|
—
|
—
|
—
|
—
|
11,000
(2)
|
93,390
|
5,500
(3)
|
62,920
(4)
|
—
|
—
|
—
|
—
|
7,370
(2)
|
62,571
|
—
|
—
|
|
5498
|
2,835
(1)
|
11.69
|
June 3, 2020
|
2,835
(2)
|
24,069
|
—
|
—
|
|
Paul Rutenis
|
—
|
—
|
—
|
—
|
22,000
(2)
|
186,780
|
5,500
(3)
|
46,145
(4)
|
Deborah Ajeska
|
—
|
—
|
—
|
—
|
6,667
(2)
|
56,603
|
3,333
(3)
|
38,130
(4)
|
—
|
—
|
—
|
—
|
1,117
(2)
|
9,483
|
—
|
—
|
|
1,100
|
567
(1)
|
11.69
|
June 3, 2020
|
567
(2)
|
4,814
|
—
|
—
|
|
2,500
|
—
|
10.25
|
June 1, 2019
|
—
|
—
|
—
|
—
|
|
2,500
|
—
|
10.36
|
June 1, 2018
|
—
|
—
|
—
|
—
|
|
Thomas R. Moran
(5)
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|
(1)
|
These stock options vest in three installments of 33%, 33% and 34% on the anniversary of the grant date. The stock options are exercisable for a period of seven years from the date of grant, subject to earlier termination. See “Compensation Discussion and Analysis-Executive Summary-Post Employment and Severance Arrangements/No Change-in-Control Agreements" and “NEO Post-Employment Summary Payment Tables” for a description of earlier termination events.
|
(2)
|
RSU grants made in 2013, 2014 and 2015 vest in three installments of 33%, 33% and 34% on each anniversary of the grant date. Represents the grant date fair value of the RSU awards. For a description of the methodology and assumptions used to determine the grant date fair market value, see Note 2 to the 2015 Financial Statements. For more information, see "Compensation Discussion and Analysis–Elements of Executive Compensation-Long-Term Incentive Plan (Equity)."
|
(3)
|
Represents the number of PVU awards at target level. The threshold performance targets were met and PVUs were earned in 2015. For more information, see "Compensation Discussion and Analysis–Elements of Executive Compensation-Long-Term Incentive Plan (Equity)."
|
(4)
|
Represents the grant date fair value of the PVU awards. For a description of the methodology and assumptions used to determine the grant date fair market value, see Note 2 to the 2015 Financial Statements. The Company achieved the threshold performance targets and PVUs were earned in 2015. For more information, see "Compensation Discussion and Analysis–Elements of Executive Compensation-Long-Term Incentive Plan (Equity)."
|
(5)
|
Mr. Moran, our former Chief Financial Officer, resigned effective January 30, 2015. Mr. Moran was granted RSU and PVU awards on March 3, 2014, however, the RSU awards were forfeited on Mr. Moran's resignation date and the PVU awards were never earned. Mr. Moran exercised stock options for 27,390 shares of our common stock and sold the underlying shares in March 2015. For more information, see "Compensation Discussion and Analysis-Executive Summary-Post Employment and Severance Arrangements/No Change-in-Control Agreements" and “NEO Post-Employment Summary Payment Tables.”
|
Option Exercises and Stock Vested
|
|
(1)
|
Mr. Hyde was awarded 40,000 RSUs on July 16, 2012 with a vesting to occur in three equal installments, on July 16, 2013, July 16, 2014 and July 16, 2015. Mr. Hyde also was awarded 26,667 RSUs on June 3, 2013 with a vesting to occur in three equal installments, on June 3, 2014, June 3, 2015 and June 3, 2016. Mr. Hyde also was awarded 26,667 RSUs on March 3, 2014 with a vesting to occur in three equal installments, on March 3, 2015, March 3, 2016 and March 3, 2017.
|
(2)
|
Mr. Kelley was awarded 6,250 RSUs on June 1, 2012 with a vesting to occur in three equal installments, on June 1, 2013, June 1, 2014 and June 1, 2015. Mr. Kelley also was awarded 8,333 RSUs on June 3, 2013 with a vesting to occur in three equal installments, on June 3, 2014, June 3, 2015 and June 3, 2016. Mr. Kelley also was awarded 11,000 RSUs on March 3, 2014 with a vesting to occur in three equal installments, on March 3, 2015, March 3, 2016 and March 3, 2017.
|
(3)
|
Ms. Ajeska was awarded 1,250 RSUs on June 1, 2012 with a vesting to occur in three equal installments, on June 1, 2013, June 1, 2014 and June 1, 2015. Ms. Ajeska also was awarded 1,667 RSUs on June 3, 2013 with a vesting to occur in three equal installments, on June 3, 2014, June 3, 2015 and June 3, 2016. Ms. Ajeska also was awarded 1,667 RSUs on March 3, 2014 with a vesting to occur in three equal installments, on March 3, 2015, March 3, 2016 and March 3, 2017.
|
(4)
|
Mr. Moran exercised 27,390 stock options and sold the underlying shares in March 2015.
|
(5)
|
Based on a price per share of $9.85, which was the average share price of West Marine's common stock on the NASDAQ Global Market on July 16, 2015, the date the RSUs vested.
|
(6)
|
Based on a price per share of $9.58, which was the average share price of West Marine's common stock on the NASDAQ Global Market on June 1, 2015, the date the RSUs vested.
|
(7)
|
Based on a price per share of $9.975, which was the average share price of West Marine's common stock on the NASDAQ Global Market on June 3, 2015, the date the RSUs vested.
|
(8)
|
Based on a price per share of $11.17, which was the average share price of West Marine's common stock on the NASDAQ Global Market on March 3, 2015, the date the RSUs vested.
|
NEO POST-EMPLOYMENT SUMMARY PAYMENT TABLES
|
Matthew L. Hyde
|
Executive Benefit and Payments
Upon Termination
|
Voluntary
Termination
|
Involuntary
(Not for Cause
or Constructive)
Termination
|
For Cause
Termination
|
Change in
Control with Involuntary Termination
(1)
|
Death
|
||||||||||
Compensation:
|
||||||||||||||||
Base Salary
(1)
|
—
|
|
$
|
692,308
|
|
—
|
|
$
|
692,308
|
|
—
|
|
||||
Bonus
(2)
|
—
|
|
$
|
600,000
|
|
—
|
|
$
|
600,000
|
|
—
|
|
||||
Benefits and Perquisites:
|
||||||||||||||||
Accrued vacation pay
|
$
|
48,092
|
|
$
|
48,092
|
|
$
|
48,092
|
|
$
|
48,092
|
|
$
|
48,092
|
|
|
Total:
|
$
|
48,092
|
|
$
|
1,340,400
|
|
$
|
48,092
|
|
$
|
1,340,400
|
|
$
|
48,092
|
|
Jeffrey L. Lasher
|
Executive Benefit and Payments
Upon Termination
|
Voluntary
Termination
|
Involuntary
(Not for Cause
or Constructive)
Termination
|
For Cause
Termination
|
Change in
Control with Involuntary Termination
(1)
|
Death
|
||||||||||
Compensation:
|
||||||||||||||||
Base Salary
(1)
|
—
|
|
$
|
282,692
|
|
—
|
|
$
|
282,692
|
|
—
|
|
||||
Bonus
(2)
|
—
|
|
$
|
252,000
|
|
—
|
|
$
|
252,000
|
|
—
|
|
||||
Benefits and Perquisites:
|
||||||||||||||||
Accrued vacation pay
|
$
|
1,866
|
|
$
|
1,866
|
|
$
|
1,866
|
|
$
|
1,866
|
|
$
|
1,866
|
|
|
Total:
|
$
|
1,866
|
|
$
|
536,558
|
|
$
|
1,866
|
|
$
|
536,558
|
|
$
|
1,866
|
|
Barry Kelley
|
Executive Benefit and Payments
Upon Termination
|
Voluntary
Termination
|
Involuntary
(Not for Cause
or Constructive)
Termination
|
For Cause
Termination
|
Change in
Control with Involuntary Termination
(1)
|
Death
|
||||||||||
Compensation:
|
||||||||||||||||
Base Salary
(1)
|
—
|
|
$
|
340,000
|
|
—
|
|
$
|
340,000
|
|
—
|
|
||||
Bonus
(2)
|
—
|
|
$
|
204,000
|
|
—
|
|
$
|
204,000
|
|
—
|
|
||||
Benefits and Perquisites:
|
||||||||||||||||
Life insurance proceeds
|
—
|
|
—
|
|
—
|
|
—
|
|
$
|
750,000
|
|
|||||
Accrued vacation pay
|
$
|
27,188
|
|
$
|
27,188
|
|
$
|
27,188
|
|
$
|
27,188
|
|
$
|
27,188
|
|
|
Total:
|
$
|
27,188
|
|
$
|
571,188
|
|
$
|
27,188
|
|
$
|
571,188
|
|
$
|
777,188
|
|
Paul Rutenis
|
Executive Benefit and Payments
Upon Termination
|
Voluntary
Termination
|
Involuntary
(Not for Cause
or Constructive)
Termination
|
For Cause
Termination
|
Change in
Control with Involuntary Termination
(1)
|
Death
|
||||||||||
Compensation:
|
||||||||||||||||
Base Salary
(1)
|
—
|
|
$
|
269,231
|
|
—
|
|
$
|
269,231
|
|
—
|
|
||||
Bonus
(2)
|
—
|
|
$
|
240,000
|
|
—
|
|
$
|
240,000
|
|
—
|
|
||||
Benefits and Perquisites:
|
||||||||||||||||
Life insurance proceeds
|
—
|
|
—
|
|
—
|
|
—
|
|
$
|
750,000
|
|
|||||
Accrued vacation pay
|
$
|
30,770
|
|
$
|
30,770
|
|
$
|
30,770
|
|
$
|
30,770
|
|
$
|
30,770
|
|
|
Total:
|
$
|
30,770
|
|
$
|
540,001
|
|
$
|
30,770
|
|
$
|
540,001
|
|
$
|
780,770
|
|
Deborah Ajeska
|
Executive Benefit and Payments
Upon Termination
|
Voluntary
Termination
|
Involuntary
(Not for Cause
or Constructive)
Termination
|
For Cause
Termination
|
Change in
Control with Involuntary Termination
(1)
|
Death
|
||||||||||
Compensation:
|
||||||||||||||||
Base Salary
(3)
|
—
|
|
$
|
63,078
|
|
—
|
|
$
|
63,078
|
|
—
|
|
||||
Bonus
(4)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Benefits and Perquisites:
|
||||||||||||||||
Life insurance proceeds
|
—
|
|
—
|
|
—
|
|
—
|
|
$
|
500,000
|
|
|||||
Accrued vacation pay
|
$
|
9,858
|
|
$
|
9,858
|
|
$
|
9,858
|
|
$
|
9,858
|
|
$
|
9,858
|
|
|
Total:
|
$
|
9,858
|
|
$
|
72,936
|
|
$
|
9,858
|
|
$
|
72,936
|
|
$
|
509,858
|
|
|
|
||||
VI.
|
NON-EMPLOYEE AND AFFILIATED DIRECTOR COMPENSATION
|
|||
|
|
|
|
|
Non-Employee Director Compensation
|
DIRECTOR COMPENSATION ITEM
(1)
|
FY 2015 DIRECTOR COMPENSATION
|
Board Retainer
|
• $40,000
|
Board Meeting Fee
|
• No fees up to seven scheduled (plus two unscheduled) meetings
• $2,000 per any additional meeting |
Board Chair Retainer
(2)
|
• $50,000
(3)
|
Compensation and Leadership Development Committee Retainer
|
• Member: $7,500
• Chair: $15,000 |
Nomination and Governance Committee Retainer
|
• Member: $5,000
• Chair: $10,000 |
Audit and Finance Committee Retainer
|
• Member: $13,000
• Chair: $20,000 |
Annual Equity Grant
(4)
|
• $50,000
|
(1)
|
All annual Board and Committee retainers are paid in quarterly installments.
|
(2)
|
Randolph K. Repass' annual Board retainer from January through the date he stepped down as Board Chair effective as of the 2015 Annual Meeting date, was $115,000. From that date through 2015 Fiscal Year end, his retainer was reduced to the same $40,000 amount paid to other Board members. See "Non-Employee Director Summary Compensation Table" below for the total pro-rated annual retainer amount paid to Mr. Repass for Board service in 2015.
|
(3)
|
Ms. Rambo served as Lead Independent Director prior to assuming the role of Board Chair effective as of the 2015 Annual Meeting date. The annual retainer for service as Lead Independent Director was $15,000 and the amount of the annual retainer as Board Chair was increased to $50,000, at which time the Lead Independent Director position was eliminated. Therefore, the total pro-rated annual retainer amount paid to Ms. Rambo for Board leadership service in 2015 was $ 87,750.
|
(4)
|
All equity awards are granted in accordance with the following terms:
|
•
|
Granted on the date of each annual meeting.
|
•
|
Granted in the form of RSUs (except a Director may elect to receive up to 50% in the form of stock options).
|
•
|
RSUs, as full value shares, count as 2x the shares granted to every one stock option granted.
|
•
|
Options are granted with an exercise price equal to 100% of the fair market value of West Marine's common stock on the grant date and have a term of seven years.
|
•
|
All options and RSUs vest on the earlier of one year following the date of grant or the subsequent year's annual meeting date.
|
•
|
Prior to the date of the 2015 Annual Meeting, Mr. Repass did not receive an annual equity grant as a Board member. Following his decision to step down as Board Chair and in view of the reduction in his annual retainer, Mr. Repass received the same annual equity grant as other Board members as of the 2015 Annual Meeting Date. Mr. Repass beneficially owns 6,488,383 shares, or approximately 26.1%, of our outstanding common stock.
|
Expense Reimbursement
|
Non-Employee Director Summary Compensation Table
|
Name
|
Fees Earned or
Paid in Cash ($)
|
Stock
Awards ($)
(1)
|
Total ($)
|
Barbara L. Rambo
(2)
|
87,750
|
49,998
|
137,748
|
Randolph K. Repass
(3)
|
71,731
|
49,998
|
121,729
|
Dennis F. Madsen
|
60,000
|
49,998
|
109,998
|
James F. Nordstrom, Jr.
|
50,000
|
49,998
|
99,998
|
Robert D. Olsen
|
56,500
|
49,998
|
106,498
|
Alice M. Richter
|
64,000
|
49,998
|
113,998
|
Christiana Shi
|
60,500
|
49,998
|
110,498
|
|
(1)
|
This column shows the aggregate grant date fair value of RSUs granted in 2015 to our non-employee Directors. These amounts are used to calculate accounting expense and do not necessarily represent the actual value that will be realized by our non-employee Directors. For a description of the methodology and assumptions used to determine the amounts recognized in 2015, see Note 2 to the 2015 Financial Statements.
|
(2)
|
Reflects the total pro-rated annual retainer paid to Ms. Rambo in 2015 for Board service (i.e., as Lead Independent Director between January and May, 2015, and as a Board Chair between May and December, 2015).
|
(3)
|
Reflects the total pro-rated annual retainer paid to Mr. Repass in 2015 for Board service (i.e., between January and May, 2015, Mr. Repass served as Chairman of the Board, and between May and December, 2015 he served as a Director only) and the amount of restricted stock units granted to Mr. Repass in May, 2015. Previously Mr. Repass had not received equity awards while serving as Chair of the Board.
|
|
(1)
|
Based on a price per share of $8.49 which was the closing share price of our common stock on the NASDAQ Global Market on December 31, 2015 (i.e, the last trading day of the 2015 Fiscal Year as January 2, 2016 fell on a Saturday).
|
(2)
|
Prior to the date of the 2015 Annual Meeting, Mr. Repass did not receive an annual equity grant as a Board member. Following his decision to step down as chairman of the Board and in view of the reduction in his annual retainer, Mr. Repass received the same annual equity grant as other Board member as of the 2015 Annual Meeting.
|
|
||||
VII.
|
OTHER INFORMATION
|
|
|
|
|
|
|
|
|
|
(a)
|
(b)
|
(c)
|
||||||||||
Plan category
|
Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights
(#)
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
($)
|
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a)
(#)
|
||||||||||
Equity compensation plans/arrangements approved by securityholders
|
620,488
|
|
|
(1)
|
$
|
10.88
|
|
|
(1)
|
1,509,900
|
|
|
(2)
|
Equity compensation plans/arrangements not approved by securityholders
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
(1)
|
Pertains to stock options outstanding under the
Equity Incentive Plan
. Does not include 388,156 RSUs issued under the
Equity Incentive Plan
. Also does not include purchase rights accruing under the
Stock Buying Plan
as the number of shares issuable and the exercise price under that Plan will not be determinable until the end of the current offering period, April 30, 2016.
|
(2)
|
Consists of shares of common stock reserved for future issuance under the
Equity Incentive Plan
. Does not include 277,001 shares of common stock currently reserved for issuance under the
Stock Buying Plan
.
|
|
|
Common Stock Beneficially
Owned as of March 28, 2016
(1)
|
||||||
Beneficial Owner
|
|
Number of
Shares
|
|
Percent
|
||||
Randolph K. Repass
|
|
6,488,383
|
|
|
(2)
|
|
26.1
|
%
|
Matthew L. Hyde
|
|
198,319
|
|
|
(3)
|
|
*
|
|
Jeffrey L. Lasher
|
|
300
|
|
|
|
|
*
|
|
Barry Kelley
|
|
72,892
|
|
|
(4)
|
|
*
|
|
Paul Rutenis
|
|
—
|
|
|
|
|
*
|
|
Deborah Ajeska
|
|
12,060
|
|
|
(4)
|
|
*
|
|
Dennis F. Madsen
|
|
28,644
|
|
|
(5)
|
|
*
|
|
James F. Nordstrom, Jr.
|
|
14,122
|
|
|
(5)
|
|
*
|
|
Robert D. Olsen
|
|
14,122
|
|
|
(5)
|
|
*
|
|
Barbara L. Rambo
|
|
29,934
|
|
|
(5)
|
|
*
|
|
Alice M. Richter
|
|
32,310
|
|
|
(5)
|
|
*
|
|
Christiana Shi
|
|
22,029
|
|
|
(5)
|
|
*
|
|
All Directors and current executive officers as a group (12 persons)
|
|
6,913,115
|
|
|
(6)
|
|
27.8
|
%
|
Thomas R. Moran
|
|
43,931
|
|
|
|
|
*
|
|
Franklin Resources, Inc.
|
|
3,810,030
|
|
|
(7)
|
|
15.3
|
%
|
Dimensional Fund Advisors LP
|
|
2,031,252
|
|
|
(8)
|
|
8.2
|
%
|
Royce & Associates, LLC
|
|
2,024,503
|
|
|
(9)
|
|
8.2
|
%
|
BlackRock, Inc.
|
|
1,282,772
|
|
|
(10)
|
|
5.2
|
%
|
|
*
|
Less than one percent.
|
(1)
|
Except as otherwise noted, each person has sole voting and investment power over the common stock shown as beneficially owned, subject to community property laws where applicable. References to vest within 60 days are measured from March 28, 2016.
|
(2)
|
The address of Mr. Repass is 500 Westridge Drive, Watsonville, California 95076. Includes 234,600 shares held by Mr. Repass’ spouse, 277,715 shares held in trust for Mr. Repass’ younger adult son, 147,800 shares held in trust for Mr. Repass' older adult son, 40,400 shares held in trust for the benefit of Mr. Repass’ grandchildren, 1,500,000 shares held in a grantor retained annuity trust and 358,201 shares held by the Repass-Rodgers Family Foundation Inc. Mr. Repass has sole voting and dispositive power with respect to 5,424,560 shares and is deemed to have shared voting and dispositive power with respect to 234,600 shares. Includes 5,107 restricted stock units that vest on May 21, 2016. Mr. Repass disclaims beneficial ownership of all shares attributed to his spouse and all shares held by the Repass-Rodgers Family Foundation.
|
(3)
|
Includes stock options exercisable within 60 days to purchase 126,667 shares. Includes 69,618 RSUs that vest within 60 days.
|
(4)
|
Includes stock options exercisable within 60 days to purchase shares as follows: Barry Kelley, 30,833 shares; and Deborah Ajeksa, 6,667 shares. Includes RSUs that vest within 60 days as follows: Barry Kelley, 20,682 shares; and Deborah Ajeska, 4,852 shares.
|
(5)
|
Includes stock options exercisable within 60 days to purchase shares as follows: Dennis F. Madsen, 6,691 shares. Includes RSUs that vest on May 21, 2016 as follows: Dennis F. Madsen, 5,107 shares; James F. Nordstrom, Jr., 5,107 shares; Robert D. Olsen, 5,107 shares; Barbara L. Rambo, 5,107 shares; Alice M. Richter, 5,107 shares; and Christiana Shi, 5,107 shares.
|
(6)
|
Includes stock options exercisable within 60 days to purchase 170,858 shares. Includes 125,794 RSUs that vest within 60 days.
|
(7)
|
The information contained in the table and this footnote with respect to Franklin Resources, Inc. is based solely on a statement on Schedule 13G/A filed February 11, 2016 reporting beneficial ownership as of December 31, 2015 by Franklin Resources, Inc., Charles B. Johnson, Rupert H. Johnson, Jr., Franklin Templeton Investments Corp. and Franklin Advisory Services, LLC to the effect that (a) each (directly or indirectly) has dispositive and voting power over these shares to the extent disclosed therein and (b) these shares are held by investment companies or other managed accounts which are advised by subsidiaries of Franklin Resources, Inc. pursuant to investment management contracts which grant to such subsidiaries all investment and voting power over these shares. The business address for Franklin Resources, Inc., Charles B. Johnson and Rupert H. Johnson, Jr. is One Franklin Parkway, San Mateo, California 94403-1906. The business address for Franklin Templeton Investments Corp. is 200 King Street West, Suite 1500, Toronto, Ontario, Canada M5H 3T4 and the business address for Franklin Advisory Services, LLC is One Parker Plaza, Ninth Floor, Fort Lee, New Jersey 07024-2938.
|
(8)
|
The information contained in the table and this footnote with respect to Dimensional Fund Advisors LP is based solely on a statement on Schedule 13G/A filed February 9, 2016 reporting beneficial ownership as of December 31, 2015 by Dimensional Fund Advisors LP to the effect that (a) it has sole dispositive
|
(9)
|
The information contained in the table and this footnote with respect to Royce & Associates, LLC is based solely on a statement on Schedule 13G/A filed January 28, 2016 reporting beneficial ownership as of December 31, 2015 by Royce & Associates, LLC to the effect that it has sole dispositive and voting power over all of these shares. The business address for Royce & Associates, LLC is 745 Fifth Avenue, New York, New York 10151.
|
(10)
|
The information contained in the table and this footnote with respect to BlackRock, Inc. is based solely on a statement on Schedule 13G filed January 28, 2016 reporting beneficial ownership as of December 31, 2015 by BlackRock, Inc. to the effect that (a) it has sole dispositive power over all of these shares and (b) it has sole voting power over 1,250,791 shares. The business address for BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055.
|
|
By Order of the Board of Directors
|
|
|
/s/ Pamela J. Fields
|
|
|
Pamela J. Fields, Esq.
Secretary
|
|
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