8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 FORM 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):  December 5, 2013

West Marine, Inc.

(Exact name of registrant as specified in its charter)

Delaware	0-22512	77-0355502
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

500 Westridge Drive

Watsonville, California 95076

(Address of Principal Executive Offices, Including Zip Code)

(831) 728-2700

(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Appointment of Barry Kelley as Executive Vice President – Stores and Wholesale

On December 5, 2013, after conducting a search, the Board of Directors (the “Board”) of West Marine, Inc. (the Company”) appointed Barry Kelley as the Company’s new Executive Vice President - Stores and Wholesale and concurrent with such appointment, deemed Mr. Kelley an “executive officer” within the meaning of Rule 3b-7 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and an “officer” for purposes of Section 16 of the Exchange Act.

Prior to this appointment, Mr. Kelley, age 51, spent most of his career at the Company, which he joined in 1989, holding a variety of positions as follows:

2012 – 2013                      Senior Vice President of Port Supply

2007 – 2012                      Vice President of Port Supply

1997 – 2007                      South East Regional Vice President

1993 – 1997                      South East District Manager

1990 – 1993                      Store Manager

1989 – 1990                      Various Store Positions

Mr. Kelley is not a member of any other public or private company boards.

Mr. Kelley is covered under the Company’s standard indemnification agreement, pursuant to which the Company has agreed to indemnify Mr. Kelley against certain claims that may arise in connection with his service to the Company.

Compensation Arrangements for Barry Kelley

Under the terms of his offer letter, Mr. Kelley will receive an annual base salary of $320,000.  In addition, Mr. Kelley’s target bonus will be up to 50% of his annual base salary, with the actual amount of any bonus determined on a sliding scale, depending on the Company’s financial performance.

Mr. Kelley also will receive equity awards consistent with those granted to other Executive Vice Presidents, to be granted under the terms of the Company’s Omnibus Equity Incentive Plan.

The amount and terms of the annual cash bonus and the equity awards will be approved by the Compensation and Leadership Development Committee of the Board (the “C&LDC”) as part of the normal course determination of bonuses and equity awards for Company executives.

The foregoing is a summary of the material terms of the offer letter.  As a summary, it does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the offer letter that is filed with this report as Exhibit 10.1.

Severance Arrangements for Certain Officers

On December 5, 2013 the C&LDC amended the Company’s Executive Officer Severance Plan (the “Severance Plan”) to add an arbitration provision and to make other administrative and ministerial changes. The Severance Plan covers Mr. Kelley in his new position as Executive Vice President—Stores and Wholesale, as well as Company officers, other than officers who have separate severance agreements with the Company, from the Vice President level up through and including the Chief Executive Officer (each a “Covered Executive”). Under the Severance Plan, in the event a Covered Executive is involuntarily

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terminated by the Company without "cause" or if he terminates his employment for “good reason” (both as defined in the Severance Plan), the Covered Executive would receive the following:

·   Cash severance payment payments equal to the Covered Executive’s weekly rate of base salary for the applicable severance period based on the Covered Executive’s position in the Company and years of service as set forth in the following chart, payable bi-weekly in substantially equal installments on the Company’s regularly-scheduled payroll dates, subject to applicable deductions and withholdings:

Position	Severance Period
	Less Than 1 Year of Service	1 But Less Than 5 Years of Service	5 or More Years of Service
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

·   The Covered Executive will be required to mitigate the bi-weekly severance payment by promptly seeking comparable employment after termination, and any compensation received from such employment will reduce the bi-weekly severance payments.

·   Under the terms of the Company’s Omnibus Equity Incentive Plan and the respective equity award agreements (collectively, the “Award Agreements”) the Covered Executive: (i) would forfeit any stock options and any restricted stock units that have not vested as of his employment termination date; and (ii) would be entitled to exercise any vested stock options under the Award Agreements for ninety (90) days following his employment termination date.

·   If the effective date of a Covered Executive’s employment termination occurs at any time after the first six (6) months of the Company’s then current fiscal year, the Covered Executive would receive a pro-rated annual bonus for the fiscal year in which the termination of employment occurs, conditioned upon the Company meeting or exceeding the financial performance threshold level for bonus payout for that fiscal year, payable at the time the Company normally pays such bonuses.

·   The Severance Plan also provides that each Covered Executive will be bound by, among other provisions, a full release of all claims related to each Covered Executive’s employment with the Company and the non-solicitation, confidentiality, cooperation and non-disparagement covenants contained in the Severance Plan.

·   Severance benefits terminate if the Covered Executive dies or is reemployed by the Company during the applicable severance period.

The foregoing description of the Severance Plan is qualified in its entirety by reference to the full text of the Severance Plan that is filed with this report as Exhibit 10.2.

Compensation Clawback Policy  

The C&LDC adopted a Policy Regarding Repayment or Forfeiture of Certain Compensation (the “Clawback Policy”) on December 5, 2013 to increase incentives to the Company’s “Executive Officers”

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within the meaning of Rule 3b-7 promulgated under the Exchange Act (each, a “Covered Officer”) to take full account of risks to the Company and its stockholders in their decision-making, and to reduce such risks wherever practicable.  Under the Clawback Policy, in the event of a material restatement of the Company’s financial statements (“Covered Event”), the C&LDC will, in its discretion, refer the matter and its recommendation as to an appropriate remedy to the full Board for consideration.  The Board may determine such action as it deems necessary with respect thereto, including the recovery of certain Performance-based Compensation paid to the Covered Officer, as set forth in the Clawback Policy.  Before the C&LDC or the Board determines to seek recovery pursuant to the Clawback Policy, the Covered Officer will be given the opportunity to be heard at a meeting of the C&LDC.  The C&LDC and the Board may terminate the employment of the Covered Officer.  In its discretion, the C&LDC or the Board may also decline to seek recovery under the Clawback Policy.

The foregoing description of the Clawback Policy is qualified in its entirety by reference to the Clawback Policy that is filed with this report as Exhibit 10.3.

Item 9.01.           Financial Statements and Exhibits.

(a)   Not Applicable.

(b)   Not Applicable.

(c)   Not Applicable.

(d)   Exhibits:

10.1	Offer Letter, dated November 25, 2013 and approved December 5, 2013, between West Marine, Inc. and Barry Kelley.*
10.2	West Marine, Inc. Executive Officer Severance Plan dated March 16, 2011, as amended on December 5, 2013.*
10.3	Policy Regarding Repayment or Forfeiture of Certain Compensation (“Clawback Policy”).*
10.4	Form of Indemnification Agreement between West Marine, Inc. and its directors and officers (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 29, 2002).*

_________________________

*Management compensatory plan or arrangement within the meaning of Item 601(b)(10)(iii) of Regulation S-K.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	WEST MARINE, INC.
Date:  December 6, 2013	By:	/s/  Pamela J. Fields
		Pamela J. Fields, Esq.
		Secretary and General Counsel
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EX-10.1

EXHIBIT 10.1

November 25, 2013

Barry Kelley

423 Pleasant Valley

Aptos, CA 95003

Dear Barry,

I am pleased to offer you the position of Executive Vice President - Stores and Wholesale for West Marine Inc. (the “Company”), subject to approval by the Company’s Board of Directors (“Board”) at its meeting scheduled on December 5, 2013 (“December Meeting”).  This letter serves to document the terms of our employment offer, if approved by the Board at its December meeting:

Position Title: Executive Vice President - Stores and Wholesale. Position located in Watsonville, CA.

Reports To: Matt Hyde – CEO and President.

Annual Salary:	This position offers a bi-weekly salary of $12,307.69 which is the equivalent of $320,000 on an annual basis.
Annual Bonus:	Target payout of up to 50% of annual base salary per department specifics.
Benefits:	As per company policy.
Equity Awards:	Equity to be granted per the terms of the Company’s equity award grant policy, the Omnibus Equity Incentive Plan and equity award agreements and other terms and criteria approved by the Compensation and Leadership Development Committee of the Board.
At-Will Employment:	This letter, your equity award agreements and your severance letter entered into in 2004 contain the entire agreement with respect to your employment and supersede all prior proposals and agreements regarding the terms of your engagement. The terms of this offer may only be changed in a signed writing, although the Company may from time to time, in its sole discretion, adjust the salaries and benefits paid to you and its other associates. Your employment with the Company is for no specific period and constitutes “at-will” employment.  As a result, you are free to terminate employment at any time, for any reason or for no reason. Similarly, the Company is free to terminate your employment at any time for any reason or no reason.
Start Date:	Thursday, December 5, 2013.
To indicate your acceptance of this offer if approved by the Board, on or after the date of the December Meeting, please sign, date and return this letter to me via fax at (831) 768-5223. Congratulations Barry! The entire team looks forward to working with you in your new role.
Sincerely, /s/ Matt Hyde Matt Hyde, CEO
I, Barry Kelley, officially accept the above offer of employment with West Marine.
/s/ Barry Kelley		12/5/2013
Signature		Date

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EX-10.2

EXHIBIT 10.2

WEST MARINE, INC. EXECUTIVE OFFICER SEVERANCE PLAN

 Effective as of March 16, 2011, as amended on December 5, 2013

PREAMBLE

West Marine, Inc. has established this Executive Officer Severance Plan (the “Plan”) with the intention of providing Severance Benefits to a select group of Eligible Executives in the event of their involuntary termination of employment by the Company without "Cause.”  The Plan is intended to be a “top-hat” welfare benefit plan under ERISA and an unfunded plan under the Code.

SECTION 1

DEFINITIONS

The following definitions shall apply to this Plan unless the context requires otherwise:

1.1Affiliate.  Any entity, directly or indirectly, controlled by, controlling or under common control with West Marine, Inc. or any successor to West Marine, Inc.

1.2Base Salary.  The Eligible Executive's weekly rate of base salary in effect on his or her Termination Date.

1.3Cause.  The Company shall have Cause to terminate an Eligible Executive’s employment, if the Eligible Executive:

1.3.1Has violated any Company policy; or

1.3.2Has been arrested for, convicted of, or has pled guilty or nolo contendere to, any felony or a misdemeanor involving moral turpitude (including forgery, fraud, theft or embezzlement);  or

1.3.3Has been arrested for, convicted of, or has pled guilty or nolo contendere to, any offense involving fraud, dishonesty, breach of trust or money laundering; or

1.3.4Has engaged in dishonesty or fraud in connection with the business of the Company, or stolen property or opportunities of the Company, or has assaulted or battered an Associate or Director of the Company; or

1.3.5Has failed substantially to perform his or her assigned duties with the Company (other than a failure resulting from the Eligible Executive's incapacity due to physical or mental illness or from the assignment to the Eligible Executive of duties that would constitute Good Reason); or

1.3.6Has engaged in willful malfeasance, gross negligence or misconduct demonstrably injurious to the Company.

1.3.7Notwithstanding anything to the contrary contained in this Section 1.3, the Company shall not have Cause to Terminate an Eligible Executive for Cause under Section 1.3.1 or 1.3.5 unless and until: (a) the Company has delivered to the Eligible Executive within sixty (60) days of the Administration Committee having actual knowledge of the event(s) giving rise to such alleged Cause a Notice of Termination signed by the Chief Executive Officer (or by a member of the CLDC if the Eligible Executive is the Chief Executive Officer/President), setting forth the Company’s intention to terminate his or her employment for Cause; and (b) the Eligible Executive has failed to cure the alleged failure within ten  (10) business days following receipt of such notice.

1.4Code.  The Internal Revenue Code of 1986, as amended, and any successor statute thereto.

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1.5Confidentiality Agreement.  A written agreement to use his or her best efforts and utmost diligence to guard and protect, and to retain in confidence, any secret or confidential information known to him or her relating to the Company and its businesses, which shall have been obtained by the Participant during his or her employment by the Company, except (i) to the extent such secret or confidential information becomes public knowledge (other than by acts of the Participant or a representative of the Participant), (ii) with the prior written consent of the Company, or (iii) as may otherwise be required by law or legal process.

1.6CLDC. The Compensation and Leadership Development Committee of the Company’s Board of Directors (or any successor committee thereto responsible for the oversight of executive compensation, including this Plan).

1.7Company.  Collectively, West Marine, Inc. and its Affiliates.

1.8Disability.  A physical or mental infirmity which impairs the Eligible Executive's ability to substantially perform his or her duties with the Company for one hundred and twenty (120) consecutive days, or one hundred and twenty (120) business days out of any twelve (12) month period.

1.9Effective Date.  The Plan shall be effective as of March 16, 2011, as amended on December 5, 2013.

1.10Eligible Executive.  The following Company officers who are employed on a full-time basis in the United States: Chief Executive officer, President, Executive Vice President, Senior Vice President or Vice President, provided any such officer is not a party to any employment, termination or other agreement with the Company that provides for any form of separation payment or severance benefit upon a termination of employment.

1.11ERISA.  The Employee Retirement Income Security Act of 1974, as amended, and any successor statute thereto.

1.12Excluded Termination.  The Termination of an Eligible Executive’s employment with the Company as a result of his or her death, Disability, Termination for Cause by the Company, or voluntary termination without Good Reason.

1.13Good Reason.  An Eligible Executive shall have Good Reason to terminate his or her employment, if without his or her consent, the Company:

1.13.1Has materially and adversely changed the Eligible Executive's title, position or responsibilities (excluding reporting responsibilities) from his or her title, position or responsibilities in effect immediately prior thereto (it being understood that a change in responsibilities that results from the Company no longer having publicly-traded securities will not, without more, be deemed to be material); or

1.13.2Has reduced  the Eligible Executive's Base Salary by more than ten (10 %) percent, other than in connection with a reduction of ten (10%) percent or more applicable to all or substantially all of the Company’s senior management; or

1.13.3Has relocated the principal offices of the Company to which the Eligible Executive reports to a location more than one hundred (100) miles from its current location, excluding (i) any Eligible Executive who was not previously assigned to a principal location, and (ii) required travel on the Company’s business; or

1.13.4Has requested that the Eligible Executive engage or participate in any unlawful act.

1.13.5Notwithstanding anything to the contrary contained in this Section 1.13, an Eligible Executive shall not have Good Reason, and shall not be deemed a Participant entitled to any Severance Benefits, unless and until: (a) the Eligible Executive has delivered to the Company within sixty

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(60) days of the event(s) giving rise to such alleged Good Reason a Notice of Termination signed by the Eligible Executive, setting forth the Eligible Executive's intention to terminate his or  her employment for Good Reason; (b) the Company is given thirty (30) days in which to investigate the allegations made by the Eligible Executive (“Investigation Period”), provided that during such Investigation Period the Company, at its sole election, may suspend the Eligible Executive’s employment with pay; and (c) the Company has failed to cure the alleged failure within thirty (30) days following the expiration of the Investigation Period.

1.14Notice of Termination. A written notice delivered by the Company to an Eligible Executive, or by the Eligible Executive to the Company, as applicable, which: (i) indicates the specific termination provision(s) relied upon; (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for Termination under the provision so indicated; and (iii) if the Termination Date is other than the date of receipt of such notice, specifies the Termination Date (which date shall be no more than thirty (30) days after giving of such notice).  The failure by the Eligible Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Eligible Executive or the Company, respectively, hereunder, or preclude the Eligible Executive or the Company, respectively, from asserting such fact or circumstance in enforcing the Eligible Executive’s or the Company’s rights hereunder.  A Notice of Termination shall be provided by hand delivery, or registered or certified mail, return receipt requested, postage prepaid, to the last known home address of the Eligible Executive or to the address of the principal office of the Company, as applicable, with a copy to the General Counsel.

1.15Participant.  An Eligible Executive who becomes eligible for Severance Benefits under this Plan by satisfying the requirements of Section 2.

1.16Plan.  This West Marine Executive Officer Severance Plan, as amended from time to time.

1.17Pro-Rata Bonus.  An amount equal to the annual cash bonus, if any, earned by a Participant during the Company’s fiscal year in which the Termination occurs, multiplied by a fraction, the numerator of which is the number of days in the fiscal year in which the Eligible Executive's Termination occurs that have elapsed through and including the Termination Date, and the denominator of which is 365.

1.18Release Agreement.  A written agreement in a form provided by the Company by which a Participant releases any and all claims he or she might have against the Company and its agents in exchange for the Severance Benefits. The Release Agreement will be generally effective for any claims against the Company through the Termination Date, but will not cover any claims or appeal processes set forth in any tax-qualified retirement plan or fully-insured ERISA plan sponsored by the Company.  The Release Agreement will not be valid unless it is signed and returned after the date of the Eligible Executive's Termination Without Cause and within forty-five (45) days or other time period prescribed by the Company.  Failure to sign and return the Release Agreement within the prescribed period will result in Eligible Executive being ineligible to be a Participant or receive Severance Benefits under the Plan.

1.19Severance Benefits.  The benefits set forth in Section 3 below.

1.20Severance Period.  The period commencing on a Participant’s Termination Date and extending for the applicable period set forth in Section 3.1.1(a) below.

1.21Termination.  The termination of employment from the Company of an Eligible Executive.

1.22Termination Date.  The last day of active employment.  For these purposes, a Participant will be deemed to have terminated on the last day of employment at 5:00 p.m. in the Participant's time zone.  To the extent the Severance Benefits constitute “deferred compensation” under Code Section 409A, the Termination Date shall be not later than the date the Eligible Executive has a “Separation from Service,” as defined in Code Section 409A.

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1.23Termination Without Cause.  (i) The Company’s Termination of an Eligible Executive’s employment for any reason other than an Excluded Termination, or (ii) the Eligible Executive’s Termination for Good Reason.

SECTION 2

ELIGIBILITY 

2.1An Eligible Executive will become a Participant entitled to Severance Benefits under Section 3 only if the Administration Committee has determined that:

2.1.1his or her employment is a Termination Without Cause; and

2.1.2 he or she is not receiving, or eligible to receive, severance benefits under an employment, termination or other agreement with the Company that provides for separation payments and/or severance benefits following a termination for any reason; and

2.1.3he or she has entered into, and has not revoked, a Release Agreement within forty-five (45) days of the Termination Date; and

2.1.4within forty-five (45) days of the Termination Date, he or she has entered into (or is otherwise bound by) a written agreement in a form provided by the Company which includes:  (i) a Confidentiality Agreement; (ii) an agreement that, for a period of (2) two years following his or her Termination Date, he or she will not directly or indirectly hire, manage, solicit or recruit any Associates of the Company; and (iii) an agreement he or she will not disparage the Company or any of its Directors or Associates.

SECTION 3

SEVERANCE BENEFITS

3.1 General.  If an Eligible Executive becomes a Participant, he or she shall be entitled to receive the following Severance Benefits:

3.1.1Cash:

(a)Cash severance payments equal in the aggregate to the Participant’s Base Salary multiplied by the applicable Severance Period set forth in the chart below (“Cash Severance Payment”):

POSITION	LESS THAN 1 YEAR	1 YEAR OR MORE BUT LESS THAN 5 YEARS	5 YEARS OR MORE
Chief Executive Officer/President	Base Salary x 52 weeks	Base Salary x 60 weeks	Base Salary x 78 weeks
Executive Vice President	Base Salary x  35 weeks	Base Salary x 40 weeks	Base Salary x 52 weeks
Senior Vice President	Base Salary x  27 weeks	Base Salary x 31 weeks	Base Salary x 40 weeks
Vice President/ Regional Vice President	Base Salary x 17 weeks	Base Salary x 20 weeks	Base Salary x 26 weeks

(b)The Cash Severance Payment shall be payable in substantially equal payments over the Participant’s applicable Severance Period, on the Company’s regularly-scheduled payroll dates, commencing as of the first payroll date following forty-five (45) days after his or her Termination Date, subject to Section 3.5, if applicable. 

(c)  Notwithstanding anything to the contrary contained in this Plan, a Participant shall be required to mitigate the Cash Severance Payment by seeking other comparable employment as promptly as practicable after the Termination Date. If, during the Severance Period, a Participant earns or is

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paid compensation from a third party (whether by employment or by functioning as an independent contractor) including, without limitation, salary, consulting fees, signing bonuses, or other compensation income (collectively, “Mitigation Compensation”), then the Company's obligation to pay the Participant any Cash Severance Payment thereafter shall be reduced by the gross amount of such Mitigation Compensation paid to or earned by the Participant during the Severance Period. The Participant agrees to promptly notify the Company if he or she accepts any employment or enters into any service arrangement as described above that provides the Participant with such Mitigation Compensation. Company agrees that it shall pay to Participant the shortfall, if any, between the Cash Severance Payment and the Mitigation Compensation earned or received by Participant during the Severance Period, which amount shall be paid at the same time as specified in Section 3.1.1(b) above, subject to applicable withholding and Section 3.5, if applicable.

3.1.2Annual Cash Bonus.  If the Participant’s Termination Date occurs during the second half of the Company’s fiscal year, the Participant will be eligible to receive his or her Pro-Rata Bonus, if any, for that fiscal year, payable at the time the Company pays such bonuses to other Eligible Executives, provided he or she is a Participant on such date. Severance Benefits shall not include any bonus amount if the Participant’s Termination Date occurs at any time during the first six (6) months of any fiscal year.

3.1.3Equity.  Participant shall be entitled to exercise his or her vested stock options in accordance with the terms of his or her stock option award agreement, which generally allow him or her to exercise vested options at any time during the ninety (90) day period following the Termination Date and at the end of such ninety (90) days, any unexercised vested stock options automatically are forfeited.  Any stock options or restricted stock awards or  restricted stock units (whether time-vested or performance-based) not vested as of the Termination Date shall be forfeited upon the Termination Date, and the Eligible Executive shall not receive any further equity awards on or after the Termination Date.

3.2Death of a Participant. All Severance Benefits provided under this Plan shall immediately cease upon the death of the Participant.

3.3Re-employment During Severance Period.  In the event a Participant is re-employed by the Company during the Severance Period, the Company will terminate the Severance Benefits as of the date of re-employment.

3.4 Tax Withholding.  The Company shall be entitled to reduce the Severance Benefits for applicable payroll withholding, but the Participant shall be responsible for the payment of all federal, state and local taxes due and owing in connection with any Severance Benefits.

3.5Section 409A.  Notwithstanding any provision of this Plan to the contrary, if, at the time of Participant's Termination, he or she is a "specified employee" as defined in Section 409A of the Code, and one or more of the payments or benefits received or to be received by a Participant pursuant to this Plan would constitute deferred compensation subject to Section 409A, no such payment or benefit will be provided under this Plan until the earlier of: the date that is six (6) months following Participant's Termination; or the Participant's death.  The provisions of this Section 3.5 shall only apply to the extent required to avoid Participant's incurring any penalty tax or interest under Section 409A of the Code or any regulations or Treasury guidance promulgated thereunder.  In addition, if any provision of this Plan would cause Participant to incur any penalty tax or interest under Section 409A of the Code or any regulations or Treasury guidance promulgated thereunder, the Company may reform such provision to maintain, to the maximum extent practicable, the original intent of the applicable provision without violating the provisions of Section 409A of the Code.

SECTION 4

ADMINISTRATION COMMITTEE 

4.1Administration Committee.  The Administration Committee shall be the following officers:  the CEO/President, the Vice President of Human Resources and the General Counsel (the

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"Administration Committee") unless and until the CLDC appoints other individuals to comprise the Administration Committee.

4.2Powers of the Administration Committee.  The Administration Committee has absolute discretionary authority to make all decisions under this Plan, including: 

4.2.1To adopt rules of procedure (including distribution procedures) necessary for the administration of the Plan, provided the rules are not inconsistent with the terms of the Plan;

4.2.2To interpret and enforce all provisions of the Plan;

4.2.3To determine all questions with respect to rights of Participants under the Plan, including but not limited to rights of eligibility of a Participant to participate in the Plan, and the amounts of Severance Benefits;

4.2.4To review and render decisions with respect to a claim for (or denial of a claim for) Severance Benefits under the Plan;

4.2.5To furnish the Company with information which the Company may require for applicable reporting and disclosure provisions of state and Federal laws, including tax, securities or other purposes;

4.2.6To engage the service of counsel (who may, if appropriate, be counsel for the Company), accountants and other third parties whom it may deem advisable to assist it with the performance of its duties hereunder;

4.2.7To receive from the Company and from Participants such information as shall be necessary for the proper administration of the Plan; and

4.2.8To report, as appropriate, to the Company and/or the CLDC on the operation and status of the Plan.

4.3 Decisions of the Administration Committee.  All decisions of the Administration Committee are final, binding and conclusive.

SECTION 5

 COMPANY ADMINISTRATIVE PROVISIONS

5.1 Amendment or Termination.  The Plan may be amended or terminated by the CLDC at any time and from time to time when, in its sole and absolute discretion, such amendment or termination is necessary or desirable.  All exercises of power by the CLDC hereunder shall be final, conclusive and binding on all interested parties. In addition, the Administration Committee may amend the Plan to comply with changes in relevant laws, to provide for more efficient administration or other changes it deems appropriate as long as the changes do not materially increase the obligation or liabilities of the Company.  No such termination or amendment of this Plan shall adversely affect any of the Severance Benefits to any Participant who is receiving Severance Benefits at the time of such amendment or termination.

5.2No vested right. No Eligible Executive shall have a vested right to Severance Benefits unless and until the Administration Committee has approved him or her as a Participant. 

5.3Claim Procedure.

5.3.1In General.  If a Participant's written claim for Severance Benefits is denied, the Company will furnish written notice of denial to the Participant making the claim (the "Claimant") within sixty (60) days of the date the claim is received, unless special circumstances require an extension of time for processing the claim.  This extension will not exceed sixty (60) days, and the Claimant must receive

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written notice stating the grounds for the extension and the length of the extension within the initial sixty (60) day review period.  If the Company does not provide written notice within such time period, the Claimant may deem the claim denied and seek review according to the appeals procedures set forth below.

5.3.2Denial Notice.   The notice of denial to the Claimant shall state: (i) the specific reasons for the denial; (ii) specific references to pertinent provisions of the Plan upon which the denial was based; (iii) a description of any additional material or information needed for the Claimant to perfect his or her claim and an explanation of why the material or information is needed; and (iv) a statement that the Claimant may request a review, upon written application to the Administration Committee, submitted to the Administration Committee within ninety (90) days after the Claimant receives notice of denial of benefits. The notice of denial of benefits shall identify the name and address of the Administrator to which the Claimant may forward an appeal.  The notice may state that failure to appeal the action to the Administration Committee in writing within the ninety (90) day period will render the determination final, binding and conclusive.

5.4 Appeal Procedure.  If the Claimant appeals to the Administration Committee, the Claimant or his or her authorized representative may submit in writing whatever issues and comments he or she believes to be pertinent to the appeal.  The Administration Committee shall examine all facts related to the appeal and make a final determination about whether the denial of benefits is justified under the circumstances.  The Administration Committee shall advise the Claimant in writing of: (i) its decision on appeal; (ii) the specific reasons for the decision; and (iii) the specific provisions of the Plan upon which the decision is based.  Notice of the Administration Committee's decision shall be given within sixty (60) days of the Claimant's written request for review, unless additional time is required due to special circumstances.  In no event shall the Administration Committee render a decision on an appeal later than one hundred twenty (120) days after receiving a request for a review.

5.5           Arbitration.  In the event that a dispute arises concerning the interpretation or enforcement of this Plan, a party’s rights or obligations under this Plan or any other related matter, the parties agree that any such dispute shall be resolved by a three member arbitration panel in Santa Cruz, California in accordance with the then prevailing commercial arbitration rules of the American Arbitration Association. Claimant or Participant, as applicable, therefore specifically waives any right to jury trial on such disputes. Such decisions and awards rendered by the arbitrator shall be final and conclusive and may be entered in any court having jurisdiction thereof as a basis of judgment and of the issuance of a writ for its collection. Claimant or Participant, as applicable, and Company shall share all costs of arbitration, including any arbitrator or administrative fees, and each party shall bear his/her/its own attorneys' fees incurred in connection with such Arbitration proceeding. The parties shall keep confidential the existence of the claim, controversy or disputes from third parties (other than arbitrator(s)), and the determination thereof, unless otherwise required by law.

LIMITATIONS.  YOU MUST EXHAUST THE CLAIMS AND APPEAL PROCEDURES SET FORTH SECTIONS 5.3 AND 5.4 ABOVE BEFORE YOU ARE ENTITLED TO FILE FOR AN ARBITRATION PROCEEDING UNDER SECTION 5.5. YOUR RIGHT TO BRING SUCH AN ARBITRATION PROCEEDING WILL LAPSE ON THE FIRST ANNIVERSARY OF THE DATE OF THE DENIAL FROM THE ADMINISTRATION COMMITTEE.

SECTION 6

 MISCELLANEOUS PROVISIONS 

6.1 Governing Law.  To the extent not preempted by ERISA, the terms of the Plan shall be governed by, and construed and enforced in accordance with, the laws of the State of California, including all matters of construction, validity and performance.

6.2Spendthrift Clause.  Severance Benefits under the Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge prior to actual receipt thereof by a Participant.  Any attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber or charge prior to such receipt shall be void.  The Company shall not be liable in any manner for, or subject to, the debts, contacts, liabilities, engagements or torts of any person entitled to any Severance Benefits under the Plan.  No benefit, payment or distribution under this Plan, or right to receive such a benefit, payment or

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distribution shall be subject either to the claim of any creditor of a Participant or to attachment, garnishment, levy (other than Federal tax levy under Section 6331 of the Code), execution or other legal or equitable process by any creditor of such person.

6.3Employment at Will.  Nothing contained herein shall confer upon any Participant the right to be retained in the service of the Company, nor limit the right of the Company, to discipline, discharge or otherwise deal with any Eligible Executive without regard to the existence of the Plan.

6.4Unfunded.  The Plan shall at all times be entirely unfunded, and no provision shall at any time be made with respect to segregating assets of the Company for payment of any Severance Benefits hereunder.  No Participant or any other person shall have any interest in any particular assets of the Company by reason of the right to receive Severance Benefits under the Plan, and any such Participant or any other person shall have only the rights of a general unsecured creditor of the Company with respect to any rights under the Plan.

6.5Indemnification.  The Company shall indemnify each member of the CLDC and the Administration Committee regarding acts or omissions of the CLDC and/or the Administration Committee, for any liability, assessment, loss, expense, or other cost of any kind or description whatsoever, including all reasonable legal fees and expenses, actually incurred by such individual on account of any action, allegation or proceeding, actual or threatened, which arises as a result of being a member of the CLDC and/or the Administration Committee or being delegated a responsibility under the Plan or being an advisor to the CLDC and/or the Administration Committee or a member thereof, provided such action, allegation or proceeding does not arise as a result of the member’s own gross negligence, willful misconduct or lack of good faith. The indemnity shall survive the termination of the member’s (i) term on the CLDC and/or the Administration Committee, and (ii) employment with the Company.

6.6Savings Clause.  In the event that any one or more of the terms, conditions, provisions, or any part thereof, contained in this Plan, or the application thereof to any person or circumstance, shall for any reason, in any respect, or to any extent be held to be invalid, illegal or unenforceable by any court or governmental agency of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect the remainder of such term, condition or provision, or any other provision of this Plan, or the application thereof, and the Plan shall be construed as if such invalid, illegal or unenforceable term, condition or provision had never been part of the Plan.

 Pursuant to the authority delegated to me by the CLDC, this Plan, as amended, is hereby adopted effective as of the Effective Date:

/s/ Matthew L. Hyde

Matthew L. Hyde, CEO & President

 Reviewed and Approved, as Amended, by the Compensation & Leadership Committee:  December 5, 2016

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EX-10.3

EXHIBIT 10.3

West Marine, Inc.

Policy Regarding Repayment or Forfeiture of Certain Compensation

(“Clawback Policy”)

I.  Policy Statement – Overview and Purpose

a.   The Board of Directors (“Board”) of West Marine, Inc. (the “Company”) believes it to be in the best interests of the Company and its stockholders to keep current with “best practices” in compensation matters and risk management. The Board, therefore, adopted this Policy Regarding Repayment or Forfeiture of Certain Compensation (this “Clawback Policy”) to increase incentives for each of its “Executive Officers” as defined in Rule 3b-7 under the Securities Exchange Act of 1934, as amended (“Covered Officers”) to take full account of risks to the Company and its stockholders in their decision-making, and to reduce such risks wherever practicable.

b.   The Board has delegated authority to its Compensation and Leadership Development Committee (“C&LDC”), comprised solely of “independent directors” (as defined by applicable listing standards of the NASDAQ Stock Market, applicable rules promulgated by the U.S. Securities and Exchange Commission and other applicable law), the authority and responsibility to administer this Policy.

II. Covered Event - Effect of Restatement of the Company’s Financial Statements:  For purposes of this Clawback Policy, a “Covered Event” means a material restatement of all or a portion of the Company’s financial statements occurs (other than a restatement due to a change in financial accounting rules).

III. Covered Compensation Subject to Recovery; Remedies

To the extent permitted by applicable law, the C&LDC and the Board may require reimbursement of any “Performance-based Compensation” (as defined below) paid to the Covered Officer, to the extent such payments and grants are compensation for services performed by the Covered Officer during the period in which the Covered Event occurred (the “Covered Period”), provided that the C&LDC or Board determine that the amount of any such Performance-based Compensation actually paid or awarded to the Covered Officer (the “Awarded Compensation”) would have been a lower amount had it been calculated based on such Covered Event and further provided that the Awarded Compensation subject to forfeiture and/or recoupment will be limited to the excess portion that the Covered Officer would not have received if the financial statements subject to the Covered Event had been accurate.

IV. C&LDC and Board Discretion

The C&LDC and the Board will have full discretion to decline to seek recovery, or to seek only partial recovery, under this Policy.  In exercising such discretion, the C&LDC and the Board may consider the following factors: (i) the likelihood of success in achieving the recovery, given the anticipated cost and management effort required; (ii) whether the Covered Officers have already paid taxes on the Awarded Compensation; (iii) the assertion of a claim for recovery may prejudice the interests of the Company, including in any related proceeding or investigation; (iv) the passage of time since the Covered Misconduct; and (v) any pending legal proceeding relating to the Covered Event.

V.  Due Process Rights

Before the C&LDC or the Board determines to seek recovery pursuant to this Policy, the Covered Officer will be provided written notice and the opportunity to be heard at a meeting of the C&LDC or the Board (which may be in-person or telephonic, as determined by the C&LDC or the Board).

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VI. Manner of Repayment

If the C&LDC or the Board determines to seek a recovery pursuant to this Policy, it will make a written demand for repayment from the Covered Officer and, if the Covered Officer does not promptly tender repayment in response to such demand, and the C&LDC or Board determines that he or she is unlikely to do so, the C&LDC or Board may engage counsel and take any action it deems necessary and proper against the Covered Officer to obtain such repayment.

VII. Performance-Based Compensation

For purposes of this policy, the term “Performance-based Compensation” means all bonuses and other incentive and equity compensation awarded to a Covered Officer in each case granted or awarded by the Company on or after December 5, 2013, the amount, payment and/or vesting of which was calculated based wholly or in part on the application of objective performance measured during any part of the period covered by the Covered Event. For the avoidance of doubt, Performance-based Compensation will not include time-based equity awards or severance benefits.

The C&LDC and the Board also may terminate the employment of the Covered Officer.

VIII. Administration

a.   Subject to the authority delegated to the C&LDC in this Clawback Policy, the Board retains full and final authority to make determinations under this Clawback Policy, including without limitation whether the Policy applies and if so, the amount of compensation to be repaid or forfeited by the Covered Officer. All determinations and decisions made by the Board or the C&LDC pursuant to the provisions of this Clawback Policy will be final, conclusive and binding on all persons, including the Company, its affiliates, its stockholders and employees. All determinations by the Board or the C&LDC implementing the Clawback Policy will be made in its sole discretion, exercised in good faith, and as evidenced by a resolution adopted by the Board.

b.   Each award agreement or other document setting forth the terms and conditions of any Performance-based Compensation granted to a Covered Officer will include a provision incorporating the requirements of this Clawback Policy. Each Covered Officer is required to sign a Clawback Policy Acknowledgment and Agreement in a form attached hereto as Exhibit A, as may be amended from time to time by the Company in its sole determination, as a condition to receiving grants or awards of Performance-based Compensation. The remedy specified in this Clawback Policy will not be exclusive and will be in addition to every other right or remedy at law or in equity that may be available to the Company.

 Reviewed and Approved by the Compensation & Leadership Development Committee:  December 5, 2013

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EXHIBIT A

CLAWBACK POLICY

ACKNOWLEDGEMENT AND AGREEMENT

This Clawback Policy Acknowledgment and Agreement (this “Agreement”) is entered into as of the [      ] day of [               ], 20[  ], between West Marine, Inc. (the “Company”) and [                ] (“Executive”).

Recitals:

WHEREAS, Executive is the Chief Executive Officer or Chief Financial Officer of the Company (each, a “Covered Officer”);

WHEREAS, the Company's Compensation and Leadership Development Committee (“C&LDC”) of the Board of Directors (the “Board”) maintains the Company Policy Regarding Repayment or Forfeiture of Certain Compensation by Executive Officers, as adopted on December 5, 2013 (the “Clawback Policy”); and

WHEREAS, in consideration of, and as a condition to the receipt of, future annual or short-term incentive compensation, performance-based restricted stock, other performance-based compensation, and such other compensation as may be designated by resolution of the Board or the C&LDC as being subject to the terms of the Clawback Policy (collectively, the “Covered Compensation”), Executive and the Company are entering into this Agreement.

Agreement:

NOW, THEREFORE, the Company and the Executive hereby agree as follows:

1.     Executive acknowledges receipt of the Clawback Policy, a copy of which is attached hereto as Annex A and is incorporated into this Agreement by reference. Executive has read and understands the Clawback Policy and has had the opportunity to ask questions to the Company regarding the Clawback Policy.

2.     Executive hereby acknowledges and agrees that the Clawback Policy will apply to any Performance-based Compensation (as defined in the Clawback Policy) granted on or after December 5, 2013, and all such Performance-based Compensation will be subject to repayment or forfeiture under the Clawback Policy.

3.     Each award agreement or other document setting forth the terms and conditions of any Performance-based Compensation granted to Executive will include a provision incorporating the requirements of the Clawback Policy and incorporate it by reference. In the event of any inconsistency between the provisions of the Clawback Policy and the applicable award agreement or other document setting forth the terms and conditions of any Performance-based Compensation, the terms of the Clawback Policy will govern.

4.     The repayment or forfeiture of Performance-based Compensation pursuant to the Clawback Policy and this Agreement will not in any way limit or affect the Company's right to pursue disciplinary action or dismissal, take legal action or pursue any other available remedies available to the Company. This Agreement and the Clawback Policy will not replace, and will be in addition to, any rights of the Company to recover Performance-based Compensation, or any other compensation, from its Covered Officers under applicable laws and regulations, including but not limited to the Sarbanes-Oxley Act of 2002.

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5.     Executive acknowledges that Executive's execution of this Agreement is in consideration of, and is a condition to, the receipt by Executive of grants of Performance-based Compensation from the Company on and after December 5, 2013; provided, however, that nothing in this Agreement will be deemed to obligate the Company to make any such awards to Executive.

6.      This Agreement may be executed in two or more counterparts, and by facsimile or electronic transmission, each of which will be deemed to be an original but all of which, taken together, will constitute one and the same Agreement.

7.    To the extent not preempted by federal law, this Agreement will be governed by and construed in accordance with the laws of the State of Delaware without reference to principles of conflict of laws. No modifications, waivers or amendments of the terms of this Agreement will be effective unless in writing and signed by the parties or their respective duly authorized agents. Each of this Agreement and the Clawback Policy will survive and continue in full force in accordance its terms notwithstanding any termination of Executive's employment with the Company and its affiliates. The provisions of this Agreement will inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of Executive, and the successors and assigns of the Company.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

WEST MARINE, INC.

By:

Title:

EXECUTIVE

Signature

Name:

Reviewed and Approved by the Compensation & Leadership Development Committee:  December 5, 2013

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