These excerpts taken from the WMAR 10-K filed Mar 25, 2005.
Nonqualified Stock Option Agreement
1. Grant of Option. The Company hereby grants a non-qualified stock option to the Director under the terms of the Omnibus Equity Incentive Plan (the Plan). This option entitles the Director to purchase, on the terms and conditions set forth in this Agreement and the Plan, all or any part of the number of shares of Common Stock set forth in the Notice of Grant of Stock Options, at the purchase price set forth in the Notice of Grant of Stock Options. The option granted hereby is not an Incentive Stock Option with the meaning of Section 422 of the Code.
2. Exercise Price. The purchase price per share (the Option Price) shall be as set forth in the Notice of Grant of Stock Options, which is the fair market value per share of Common Stock on the effective date specified in the Notice of Grant of Stock Options and Option Agreement. The Option Price shall be payable in the legal tender of the United States or, in the discretion of the Committee, in shares of Common Stock of the Company or in a combination of such legal tender and shares.
3. Number of Shares. The number and class of shares specified in the Notice of Grant of Stock Options, and/or the Option Price, are subject to appropriate adjustment in the event of changes in the capital stock of the Company by reason of stock dividends, split-ups or combinations of shares, reclassifications, mergers, consolidations, reorganizations or liquidations. Subject to any required action of the stockholders of the Company, if the Company shall be the surviving corporation in any merger or consolidation, the option granted hereunder (to the extent that it is still outstanding) shall pertain to and apply to the securities to which a holder of the same number of shares of Common Stock that are then subject to the option would have been entitled. To the extent that the foregoing adjustments relate to stock or securities of the Company, such adjustments shall be made by the Governance and Compensation Committee of the Board (the Committee), whose determination in that respect shall be final, binding and conclusive.
4. Commencement of Exercisability. Except as otherwise provided in this Agreement, the right to exercise the option awarded by this Agreement shall accrue as to 100% of the shares subject to such option on the date which is six months following the effective date of this Agreement, as set forth in the Notice of Grant of Stock Options.
5. Termination of Option. The option awarded by this Agreement shall terminate upon the expiration of ten (10) years from the date the option was granted, provided that if the Director ceases to be a Director prior to the date that the option has become exercisable under paragraph 4 of this Appendix A, such option shall terminate on the date the Director ceases to serve as a Director.
6. Persons Eligible to Exercise. The option shall be exercisable during the Directors lifetime only by the Director. The option shall be non-transferable by the Director other than by a beneficiary designation made in a form and manner acceptable to the Committee, or by will or the applicable laws of descent and distribution.
7. Death of Director. To the extent exercisable after the Directors death, the option shall be exercised only by the Directors designated beneficiary or beneficiaries, or if no beneficiary survives the Director, by the person or persons entitled to the option under the Directors will, or if the Director shall fail to make testamentary disposition of the option, by his or her legal representative. Any transferee exercising the option must furnish the Company (a) written notice of his or her status as transferee, (b) evidence satisfactory to the Company to establish the validity of the transfer of the option and compliance with any laws or regulations pertaining to said transfer, and (c) written acceptance of the terms and conditions of the option as prescribed in this Agreement.
8. Exercise of Option. The option may be exercised by the person then entitled to do so as to any shares which may then be purchased (a) by giving written notice of exercise to the Company, specifying the number of full shares
to be purchased and accompanied by full payment of the purchase price thereof (and the amount of any income tax the Company is required by law to withhold by reason of such exercise), and (b) by giving satisfactory assurances in writing if requested by the Company signed by the person exercising the option, that the shares to be purchased upon such exercise are being purchased for investment and not with a view to the distribution thereof.
9. Suspension of Exercisability. If at any time the Company shall determine, in its discretion, that the listing registration or qualification of the shares covered by the option on any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory authority, is necessary or desirable as a condition of the purchase of shares hereunder, the option may not be exercised, in whole or in part, unless and until such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Company. The Company shall make reasonable efforts to meet the requirements of any such state or federal law or securities exchange and to obtain any such consent or approval of any such governmental authority.
10. No Rights of Stockholder. Neither the Director nor any person claiming under or through said Director shall be or have any of the rights or privileges of a stockholder of the Company in respect of any of the shares issuable upon the exercise of the option, unless and until certificates representing such shares shall have been issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to Director.
11. No Effect on Service. Nothing in this Agreement shall confer upon the Director the right to continue in service on the Board.
12. Addresses for Notices. Any notice to be given to the Company under the terms of this Agreement shall be addressed to the Company, in care of its Secretary, at West Marine Products, Inc., 500 Westridge Drive, Watsonville, California 95076, or at such other address as the Company may hereafter designate in writing. Any notice to be given to the Director shall be addressed to the Director at the address set forth beneath the Directors signature in the Notice of Grant of Stock Options, or at such other address as the Director may hereafter designate in writing. Any such notice shall be deemed to have been duly given if and when enclosed in a properly sealed envelope, addressed as aforesaid, registered or certified and deposited, postage and registry fee prepaid, in a United States post office.
13. Non-Transferability of Option. Except as otherwise herein provided, the option herein granted and the rights and privileges conferred hereby shall not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to sale under execution, attachment or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of said option, or of any right or privilege conferred hereby, contrary to the provisions hereof, or upon any attempted sale under any execution, attachment or similar process upon the rights and privileges conferred hereby, said option and the rights and privileges conferred hereby shall immediately become null and void.
14. Maximum Term of Option. Notwithstanding any other provision of this Agreement, this option is not exercisable after the expiration of ten (10) years from the effective date of this Agreement, as set forth in the Notice of Grant of Stock Options.
15. Binding Agreement. Subject to the limitation on the transferability of the option contained herein, this Agreement shall be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.
16. Plan Governs. This Agreement is subject to all terms and provisions of the Plan. In the event of a conflict between one or more provisions of this Agreement and one or more provisions of the Plan, the provisions of the Plan shall govern. Terms used and not defined in this Agreement shall have the meaning set forth in the Plan.
17. Committee Authority. The Committee shall have the discretionary power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent
therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Committee in good faith shall be final and binding upon Director, the Company and all other interested persons. No member of the Committee shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or this Agreement.
18. Captions. Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.
19. Agreement Severable. In the event that any provision in this Agreement shall be held invalid or unenforceable, such provision shall be severable from, and such invalidity or unenforceability shall not be construed to have any effect on, the remaining provisions of this Agreement.
20. Further Assurances. At any time, and from time to time after executing this Agreement, the Director will execute such additional instruments and take such actions as may be reasonably requested by the Company to confirm or perfect or otherwise to carry out the intent and purpose of this Agreement.
21. Governing Law. This Agreement is to be governed by the laws of the State of California without regard to conflicts of law principles thereof.
West Marine, Inc.