Exhibit 10.2


 


FORM OF NOTICE OF GRANT OF PERFORMANCE-BASED
RESTRICTED STOCK UNITS


AND


FORM OF PERFORMANCE-BASED RESTRICTED
STOCK UNIT AGREEMENT


FOR ASSOCIATES


 


	Performance-Based Restricted Stock Unit Award	 West Marine, Inc.
	Under the West Marine, Inc. Omnibus Equity Incentive Plan, 	500 Westridge Drive
	as amended and restated effective March 27, 2014	Watsonville, CA  95076


 


FORM OF NOTICE OF GRANT OF PERFORMANCE-BASED
RESTRICTED STOCK UNITS


Grant Date:  [______________]


 


You have been granted the number of performance-based
restricted common stock units (the “PVUs”) stated for you on the Morgan Stanley “Plan Documents” page
at https://benefits.morganstanley.com (the “Morgan Stanley Website”).


 


The PVUs entitle you to receive shares
of West Marine, Inc. (the “Company”) common stock at a future date, subject to the satisfaction of the terms and conditions
set forth herein and in the West Marine, Inc. Omnibus Equity Incentive Plan, as amended and restated effective March 27, 2014 (the
“Plan”) and the Performance-Based Restricted Stock Unit Agreement (the “Award Agreement”) attached hereto
as Exhibit A.  Capitalized terms not explicitly defined in this Grant Notice but defined in the Plan shall have the same
meaning as in the Plan.


 


The Performance Goal and Actual Awards
of PVUs will be determined based on the table below:


 


	Performance Level	 	FY [ ] (“FY [ ]”) Ending Return on 
 Capital1 (“ROC”) Performance Goal 
 (“Performance Goal”)	 	 	PVU % Awarded Based on ROC
 % Achieved
 (“Actual Award”)	 
	Threshold	 	 	[______]%	 	 	 	50	%
	Target	 	 	[______]%	 	 	 	100	%
	Maximum	 	 	[______]%	 	 	 	150	%



 


1 Return on Capital is
generally calculated as follows: Earnings before interest and taxes divided by net working capital deployed in the operation
of the business over that course of the year, subject to any adjustments approved by the CLDC or the Board.


 


No PVUs will be awarded if the FY [____]
ending ROC Performance Goal is below [____%]. No PVUs in excess of 150% will be awarded under any circumstances. The number of
PVUs awarded at performance levels between threshold and target and between target and maximum will be interpolated on a straight-line
basis.


 


Determination of Actual Award:  The
actual number of PVUs to be awarded to you (the “Actual Award”) will be equal to a percentage of the Target Award specified
above, which shall be determined by the level of achievement by the Company of the ROC Performance Goal measured at the end of
FY [ ] (the “Performance Period”). The ROC goal shall be established at the end of the Company’s prior
FY or during the first 90 days of the Performance Period and the achievement of such ROC goal shall be subject to confirmation
by the Company’s Compensation and Leadership Development Committee (“Committee”) of the Company’s Board
of Directors (“Board”), after the financial results for the Performance Period have been prepared by the Company, in
the Committee’s sole discretion acting pursuant to the terms of the Plan (“Determination Date”).


 




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The PVUs will vest as follows, assuming
continuous employment or as otherwise determined by the Board or the Committee, and subject to achievement of at least the Threshold
Performance Goal set forth in the table above:


 


	% of Total	 	Date Vest
	33%	 	1st Anniversary of Grant Date
	33%	 	2nd Anniversary of Grant Date
	34%	 	3rd Anniversary of Grant Date


 


The PVUs granted hereunder hereinafter are referred to as the
“PVU Grant.”


 





 



 


You and the Company agree that the PVU
Grant is granted under and governed by the terms and conditions of the Plan and the Award Agreement (collectively, the “Plan
Documents”), all of which are incorporated herein and made a part of this document.  You acknowledge that a copy
of the Plan Documents have been made available to you. You further acknowledge and agree that the Award Agreement does not require
your signature or the Company’s signature to be effective, and that this Notice of the PVU Grant issued to you (which notice
may be accomplished through the posting thereof on a website for the Plan Documents), shall be sufficient evidence of the issuance
to, and acceptance by, you of the PVU Grant reflected in the Award Agreement, unless you expressly reject such Award Agreement
in writing.


 


Additionally, unless you expressly reject
such Award Agreement in writing, you further acknowledge and agree that prior to the delivery of any shares or cash pursuant to
the Plan, the Company shall have the power and the right to deduct or withhold, or require you to remit to the Company, through
the sale of vested shares or otherwise, an amount sufficient to satisfy Federal, state, and local taxes (including your FICA obligation)
required by law to be withheld, plus any fees assessed by Morgan Stanley, with respect to any PVU Grant (collectively, “Applicable
Tax and Fee Obligation”).  In this regard, you authorize the Company to withhold shares or facilitate the sale
of vested shares having a value equal to the amount required to be withheld to satisfy your Applicable Tax and Fee Obligation.
Notwithstanding the foregoing, if you are an “Executive Officer” as defined in Rule 3b-7 under the Securities Exchange
Act of 1934, as amended, you, and not the Company, shall have the sole power and the right to direct the Company to withhold an
amount of shares sufficient to satisfy your Applicable Tax and Fee Obligation. Executive Officers must make such election during
an open trading window and such election, once made, shall be irrevocable.


 





 



 


	Associate's Performance-Based Restricted Stock Units	RSU No.: On website
	(3 year - 33, 33, 34%)	ID: Associate Number


 




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Exhibit A


West Marine, Inc.


Omnibus Equity Incentive Plan (as amended
and restated effective March 27, 2014)


 


FORM OF PERFORMANCE-BASED RESTRICTED
STOCK UNIT AGREEMENT


 


1          GRANT OF PERFORMANCE-BASED RESTRICTED
STOCK UNITS. West Marine, Inc. (the "Company") hereby grants to the Associate referenced in the "Notice of Grant
of Performance-Based Restricted Stock Units" (the “Notice of Grant”) under the West Marine, Inc. Omnibus Equity
Incentive Plan, as amended and restated effective March 27, 2015 (the "Plan"), as a separate incentive in connection
with his or her employment and not in lieu of any salary or other compensation for his or her services, on the terms and conditions
set forth in this Performance-Based Restricted Stock Unit Agreement (this “Agreement”) and the Plan, the performance-based
restricted stock unit Awards (the “PRSU Awards”) which entitle the Associate on a future date to receive the number
of shares of common stock of the Company (“Common Stock”) set forth for the Associate on the Morgan Stanley Website
as referenced in the Notice of Grant, subject to the achievement of the Performance Goals set forth in Section 2 below. Capitalized
terms not explicitly defined in this Agreement but defined in the Notice of Grant and/or the Plan shall have the same meanings
in the Notice of Grant and/or the Plan, as applicable.


 


2.          
RETURN ON INVESTED CAPITAL PERFORMANCE REQUIREMENT.


 


(a) The “Performance Period”
for the PVU Awards shall be the [fifty-____(__) week period for FY [_____] commencing on [______________] and ending on
[_______________]. The PVU Awards shall be subject to performance vesting requirements based upon the achievement of the Performance
Goal established under this Agreement and the Plan, subject to certification of the degree of achievement of such performance goal
by the Board or the Committee on the Determination Date.


 


(b) The measurement tool for determining
level of achievement shall be the Return on Capital (“ROC”)1 for the Performance Period. Achievement of
this measurement tool will be confirmed by the Committee, subject to all authority granted under the terms of the Plan, including
adjustments that may be made by the Committee to take into account any factors that the Committee has determined are not properly
reflected in such reported figures. Such adjustments may include, but are not limited to, income tax adjustments, remedial reserve
adjustments, acquisitions and other unusual items.


 


3.DETERMINING NUMBER
OF PVU AWARDS EARNED.


 


(a) The “Target
Award” for Associates under this Agreement is the target number of PVUs announced on [__________]. The actual number of PVUs
earned by the Associate will be determined as described below, based upon the actual achievement of the following Performance Goals
for the Performance Period. “Threshold Performance” is the minimum level of performance that must be achieved to qualify
for any Award; “Target Performance” is the expected achievement in Return on Capital; and “Maximum Performance”
is the maximum level of performance that could be achieved that would result in an increase in the number of PVUs earned under
this PRSU Award. The target levels of achievement for the Performance Goals will be announced no later than March 15, [____],
following preparation by the Company of the financial results for the Performance Period. Subject to adjustment pursuant to Subsection
3(b), 3(c) and 3(d) or in the sole discretion of the Committee, each such percentage correlates to a number of PVUs that may be
earned under this PRSU Award, as follows:


 


	Performance Level	 	FY Ending ROC
 Performance Goal %	 	 	Resulting Payout %
 Earned	 
	Threshold	 	 	[______]%	 	 	 	50	%
	Target	 	 	[______]%	 	 	 	100	%
	Maximum	 	 	[______]%	 	 	 	150	%



 


1 Return on Capital is generally
calculated as follows: Earnings before interest and taxes divided by net working capital deployed in the operation of the business
over that course of the year, subject to any adjustments approved by the CLDC or the Board.


 




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(b) In the event that
the Company’s actual performance does not meet the Threshold Performance, no PVUs shall be earned under this PRSU Award.


 


(c) If the Company’s
actual performance for the Performance Period is between Threshold and Target performance, the number of PVUs earned shall be straight-line
interpolated between Threshold and Target performance payout percentages.


 


(d) If the Company’s actual performance
for the Performance Period is between Target and Maximum performance, the number of PVUs earned shall be straight-line interpolated
between Target and Maximum performance payout percentages.


 


4.         NUMBER OF SHARES.  The
number and class of shares specified in the Notice of Grant 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 PVUs 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 PVUs 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 Board or the Committee, whose determination in that respect shall be final, binding
and conclusive.


 


5.         LAPSE
OF PVU RESTRICTIONS.  Except as otherwise provided in this Agreement and subject to the terms of the Plan and achievement
of the applicable Performance Goal, after the end of the Performance Period, the Associate shall be entitled to receive his/her
total number of PVUs determined under Sections 2 and 3, and the right to receive the shares of Common Stock under this Agreement
shall accrue:


 


(a)      as
to 33% of the PVUs, on the day of the first anniversary of the Grant Date of the Notice of Grant,


(b)      as
to an additional 33% on the day of the second anniversary of the Grant Date, and


(c)      as
to the remaining 34% on the day of the third anniversary of the Grant Date.


 


Upon vesting, each PVU will be settled
by payment of one share of Common Stock. Payment of such shares of Common Stock shall be made as soon as administratively feasible
after the Committee certifies the actual performance of the Company during the Performance Period. The Company shall not be required
to issue any fractional shares of Common Stock.


 


In the event of termination of the Associate’s
employment with the Company and its Subsidiaries for any reason, the Associate will accrue no further entitlement to the PVUs under
this Agreement, the Plan or otherwise, and all PVUs which have not become fully vested under this Section 5 as of the earlier of
the date the Associate’s employment is terminated or the date the Associate receives notice of such termination shall lapse
and expire immediately. That is, except as otherwise determined by the Board and/or the Committee, the Associate will not continue
to accrue any benefits in the Plan during the period of any actual or deemed notice of termination.


 


6.          DISTRIBUTION
DATE. Subject to any overriding provisions in the Plan, or any applicable condition of receipt, as soon as practicable following
the respective vesting date under Section 5 of this Agreement, the Company shall transfer to the Associate shares equivalent to
the PVUs (less any fees and/or applicable tax withholding as set forth in the Notice of Grant and/or the Plan) which vested as
of such date, provided that in no event shall such shares be distributed later than March 15 of the year following the calendar
year in which the PVUs vested.


 


7.          CONDITIONS
OF RECEIPT.  The Company may postpone issuing and delivering any shares in settlement of PVUs for so long as the
Company determines to be advisable to satisfy any conditions, including the following: (i) its completing or amending any securities
registration or qualification of the PVU shares or its or the Associate satisfying any exemption from registration under any Federal
or state law, rule, or regulation; (ii) the period of time necessary to complete the financial results for the Performance Period;
(iii) its receiving proof it considers satisfactory that a person seeking to receive the RSU shares after the Associate’s
death is entitled to do so; (iv) the Associate complying with any requests for representations under the Plan; and (v) the Associate
complying with any Federal, state, or local tax withholding obligations.


 




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8.          ADDITIONAL
REPRESENTATIONS FROM THE ASSOCIATE. If the Associate is entitled to receive PVU shares at a time when the Company does not
have a current registration statement (generally on Form S-8) under the Securities Act of 1933, as amended (the “Act”),
that covers issuances of such shares to the Associate, the Associate must comply with the following before the Company will issue
any shares to the Associate. The Associate must: (i) represent to the Company, in a manner satisfactory to the Company’s
counsel, that the Associate is acquiring the PVU shares for the Associate’s own account and not with a view to reselling
or distributing the PVU shares; and (ii) agree that the Associate will not sell, transfer, or otherwise dispose of the PVU shares
unless a registration statement under the Act is effective at the time of disposition with respect to the PVU shares the Associate
proposes to sell, transfer, or otherwise dispose of; or the Company has received an opinion of counsel or other information and
representations it considers satisfactory to the effect that, because of Rule 144 under the Act or otherwise, no registration under
the Act is required.


 


9           REPAYMENT OF BENEFITS ARISING
FROM A MATERIAL RESTATEMENT. Notwithstanding any provision of this Agreement to the contrary, following a material restatement
of the Company’s FY end financial statements, if the Committee or the Board determines that the Associate is not entitled
to retain any amount received under this Agreement for the period covered by the restatement, then the Associate shall be required
to refund to the Company such amounts received by the Associate under this Agreement. The Associates subject to this paragraph
are limited to Executive Officers. The provisions of this Section, without implication as to any other section hereof, shall survive
the expiration or termination of this Agreement and of the Associates employment.


 


10.       RIGHTS
OF STOCKHOLDER. The Associate shall have no rights or privileges of a stockholder of the Company, including but not limited
to voting or dividend rights, until shares are transferred to the Associate in settlement of the PVU.


 


11.       UNSECURED
CREDITOR. The PVU Grant creates a contractual obligation on the part of the Company to make a distribution of the shares pursuant
to the PVU Grant at the time provided for in this Agreement. Neither the Associate nor any other party claiming an interest in
the PVU Grant hereunder shall have any interest whatsoever in any specific asset of the Company. The Associate’s right to
receive distributions hereunder is that of an unsecured general creditor of the Company.


 


12.       PVU
GRANTS HAVE NO EFFECT ON EMPLOYMENT. The terms of Associate's employment shall be determined from time to time by the Company,
or the Subsidiary employing the Associate, as the case may be, and the Company, or the Subsidiary employing the Associate, as the
case may be, shall have the right, which is hereby expressly reserved, to terminate or change the terms of the employment of the
Associate at any time for any reason whatsoever, with or without good cause.


 


13.       NO
REPRESENTATIONS OR PROMISES. Neither the Company nor anyone else is making any representations or promises regarding the duration
of the Associate’s service, vesting of the PVU, the value of the shares or of the PVUs, or the Company’s prospects.
In addition, the Company does not hereby provide any advice regarding tax consequences to the Associate or regarding the Associate’s
decisions regarding the RSUs. The Associate agrees to rely only upon the Associate’s own personal advisors for financial
or tax advice for all matters pertaining to the PVUs.


 


14.       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, Inc., 500 Westridge Drive, Watsonville, CA 95076, or at such other address as the Company
may hereafter designate in writing. Any notice to be given to the Associate shall be addressed to the Associate at such other address
as the Associate may hereafter designate in writing, or at the last known address that the Company has on file for the Associate.
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.


 




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15.       NON-TRANSFERABILITY.
The PVUs 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 PVU, 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 PVU and the rights and privileges conferred hereby shall immediately become null and
void.


 


16.       BINDING
AGREEMENT. Subject to the non-transferability of the PVU, this Agreement shall be binding upon and inure to the benefit of
the heirs, legatees, legal representatives, successors and assigns of the parties hereto.


 


17.       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 or the Notice of Grant and one or more provisions of the Plan, the provisions of the Plan shall govern.


 


18.       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 Associate, 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.


 


19.       CAPTIONS.
Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.


 


20.       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.


 


21.       FURTHER
ASSURANCES. At any time, and from time to time after executing this Agreement, the Associate 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.


 


22.       COMPLIANCE
WITH LAW. The Company will not issue the PVU shares if doing so would violate any applicable federal or state securities laws,
or any other applicable law or regulation. The Associate may not sell or otherwise dispose of the PVU shares in violation of applicable
law.


 


23.       SECTION
409A. The PVU is intended to comply with the requirements of Section 409A of the Internal Revenue Code and will be construed
consistently with that section. Nevertheless, the Company makes no representations or warranties and shall have no liability to
the Associate or any other person, if any provisions of or distribution under this Agreement is determined to constitute deferred
compensation subject to Section 409A but not to satisfy the conditions of that section. Neither the Company nor the Associate shall
have the right to accelerate or defer the delivery of any shares except to the extent specifically permitted or required by Section
409A. In no event may the Company or the Associate defer the delivery of the shares beyond the date specified in Section 3(a) of
this Agreement, unless such deferral complies in all respects with Treasury Regulation Section 1.409A-2(b) related to subsequent
changes in the time or form of payment of nonqualified deferred compensation arrangements, or any successor regulation. Notwithstanding
anything in the Plan or this Agreement to the contrary, if the PVU vests in connection with the Associate’s “separation
from service” within the meaning of Section 409A, as determined by the Company), and if (x) the Associate is then a “specified
employee” within the meaning of Section 409A at the time of such separation from service (as determined by the Company, by
which determination the Associate hereby agrees to be bound) and (y) the distribution of shares under such vesting will result
in the imposition of additional tax under Section 409A if distributed to the Associate within the six month period following the
Associate’s separation from service, then the distribution of such shares will not be made until the earlier of (i) the date
six months and one day following the date of the Associate’s separation from service or (ii) the day after the Associate’s
date of death.


 




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24.       GOVERNING
LAW. The Agreement, PVUs and all related documentation and matters shall be construed in accordance with and governed by the
laws of the State of California (without giving effect to principles of conflicts of laws thereof) and applicable Federal law.


 


25.       ENTIRE
AGREEMENT. This Agreement and the Notice of Grant (in each case subject to applicable provisions of the Plan) contains the
entire agreement among the parties relating to the subject matter hereof and there are no other or further agreements outstanding
not specifically mentioned herein; provided, however, that the Company may amend and supplement this Agreement in writing from
time to time as permitted under the Plan.


 


IN WITNESS WHEREOF, this Agreement is deemed
to be executed by the parties effective as of the Grant Date of the Notice of Grant.


 


	 	West Marine, Inc.


 




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