<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Wilmar Industries, Inc.
- --------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
- --------------------------------------------------------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[X] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] 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.
(1) Amount Previously Paid:
----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------------------
(3) Filing Party:
----------------------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------------------
<PAGE>
WILMAR INDUSTRIES, INC.
303 Harper Drive
Moorestown, New Jersey 08057
_______________________________
NOTICE OF 1998 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
MAY 7, 1998
_______________________________
TO THE SHAREHOLDERS OF
WILMAR INDUSTRIES, INC.:
Notice is hereby given that the 1998 annual meeting of shareholders (the
"Annual Meeting") of Wilmar Industries, Inc. (the "Company" or "Wilmar") will be
held at The DoubleTree Guest Suites, 515 Fellowship Road, Mount Laurel, New
Jersey 08054 on May 7, 1998, at 8:30 a.m., local time, for the following
purposes:
1. To elect two directors; and
2. To transact such other business as may properly come before the Annual
Meeting or any adjournments thereof.
Only shareholders of record as of the close of business on April 6, 1998
will be entitled to notice of the Annual Meeting and to vote at the Annual
Meeting and any adjournments thereof. A list of shareholders of the Company as
of the close of business on April 6, 1998 will be available for inspection
during normal business hours for ten days prior to the Annual Meeting at the
Company's executive offices at 303 Harper Drive, Moorestown, New Jersey.
By order of the board of directors,
Fred B. Gross
Secretary
Moorestown, New Jersey
April 10, 1998
================================================================================
EACH SHAREHOLDER IS URGED TO COMPLETE, SIGN AND RETURN THE ENCLOSED
PROXY CARD IN THE ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED IN
THE UNITED STATES. IF A SHAREHOLDER DECIDES TO ATTEND THE MEETING, HE OR
SHE MAY, IF SO DESIRED, REVOKE THE PROXY AND VOTE THE SHARES IN PERSON.
================================================================================
<PAGE>
WILMAR INDUSTRIES, INC.
303 Harper Drive
Moorestown, New Jersey 08057
_______________________________
PROXY STATEMENT
FOR
1998 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
MAY 7, 1998
_______________________________
This proxy statement and the accompanying form of proxy are being mailed on
or about April 10, 1998, to the shareholders of Wilmar Industries, Inc. (the
"Company" or "Wilmar"). These materials are being furnished in connection with
the solicitation by the Board of Directors of the Company of proxies to be voted
at the 1998 Annual Meeting of Shareholders (the "Annual Meeting") to be held at
The DoubleTree Guest Suites, 515 Fellowship Road, Mount Laurel, New Jersey 08054
on May 7, 1998, at 8:30 a.m., local time, and at any adjournments thereof.
The entire cost of soliciting proxies will be borne by the Company. In
addition to the use of the mails, proxies may be solicited by telephone by
officers and directors and a small number of regular employees of the Company
who will not be specially compensated for such services. The Company also will
request banks and brokers to solicit proxies from their customers, where
appropriate, and will reimburse such persons for reasonable expenses incurred in
that regard.
VOTING AT THE MEETING
Only shareholders of record at the close of business on April 6, 1998 are
entitled to notice of, and to vote at, the Annual Meeting. As of April 6, 1998,
there were 13,354,854 shares of the Company's common stock, no par value (the
"Common Stock") outstanding. Each shareholder entitled to vote shall have the
right to one vote for each share of Common Stock outstanding in such
shareholder's name.
The Company presently has no other class of stock outstanding and entitled
to be voted at the Annual Meeting. The presence in person or by proxy of
shareholders entitled to cast a majority of all votes entitled to be cast at the
Annual Meeting will constitute a quorum.
Shares cannot be voted at the Annual Meeting unless the holder of record is
present in person or by proxy. The enclosed form of proxy is a means by which a
shareholder may authorize the voting of his or her shares at the Annual Meeting.
Directors are to be elected at the Annual Meeting by a plurality of the votes
cast by holders of Common Stock present in person or represented by proxy at the
Annual Meeting and entitled to vote. In the case of shares that are present at
the Annual Meeting for quorum purposes, not voting those shares for a particular
nominee for director (including by withholding authority on the proxy) will not
operate to prevent the election of that nominee if he otherwise receives
affirmative votes of a plurality of the votes cast; an abstention on any other
item will operate to prevent approval of the item to the same extent as a vote
against approval of such item and a broker "non-vote" on any item (which results
when a broker holding shares for a beneficial owner has not received timely
voting instructions on certain matters from such beneficial owner and those
matters are matters with respect to which the broker has no discretion to vote)
will have no effect on the outcome of the vote on such item. The shares of
Common Stock represented by each properly executed proxy will be voted at the
Annual Meeting in accordance with each shareholder's directions. Shareholders
are urged to specify their choices by marking the appropriate boxes on the
enclosed proxy card. If no choice has been specified and the enclosed proxy
card is properly executed
2
<PAGE>
and returned, the shares will be voted for all nominees listed herein under
"Election of Directors." If any other matters are properly presented to the
Annual Meeting for action, the proxy holders will vote the proxies (which confer
discretionary authority to vote on such matters) in accordance with their best
judgment.
Execution of the accompanying proxy will not affect a shareholder's right
to attend the Annual Meeting and vote in person. Any shareholder giving a proxy
has the right to revoke it by giving written or oral notice of revocation to the
Secretary of the Company, or by delivering a subsequently executed proxy, at any
time before the proxy is voted.
Your proxy vote is important. Accordingly, you are asked to complete, sign
and return the accompanying proxy card whether or not you plan to attend the
Annual Meeting. If you plan to attend the Annual Meeting to vote in person and
your shares are registered with the Company's transfer agent in the name of a
broker or bank, you must secure a proxy from your broker or bank assigning
voting rights to you for your shares of Common Stock.
3
<PAGE>
SECURITY OWNERSHIP
The following table sets forth certain information (as of March 31, 1998,
except as otherwise noted), with respect to shares of Common Stock beneficially
owned by owners of more than five percent of the outstanding Common Stock, by
all current directors, by the executive officers of the Company named in the
Summary Compensation Table included elsewhere in this proxy statement and by all
current directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
NUMBER
OF SHARES
BENEFICIALLY PERCENT OF
BENEFICIAL OWNER OWNED/(1)/ CLASS/(2)/
---------------- --------------- -----------
<S> <C> <C>
William S. Green......................................................... 2,099,036/(3)/ 15.72%
RCM Capital Management LLC............................................... 1,331,700/(4)/ 9.99
The Kaufman Fund......................................................... 900,000/(5)/ 6.74
Denver Investment Advisors LLC........................................... 881,190/(6)/ 6.60
Fred B. Gross............................................................ 105,754/(7)/ *
Martin E. Hanaka......................................................... 10,000/(8)/ *
Ernest K. Jacquet........................................................ 0/(9)/ *
Michael T. Toomey........................................................ 33,400/(10)/ *
Donald M. Wilson......................................................... 10,000/(11)/ *
All current directors and executive officers of the Company as a group
(6 persons).............................................................. 2,258,190/(12)/ 16.91%
</TABLE>
__________________
(1) In accordance with Securities and Exchange Commission regulations, the
table lists all shares as to which such persons have or share the power to
vote or to direct disposition. The number of shares indicated includes
shares issuable upon the exercise of outstanding stock options held by each
individual or group to the extent exercisable at March 31, 1998 or within
60 days thereafter. Unless otherwise indicated, each person has the sole
power to vote and to direct disposition of the shares listed as
beneficially owned by such person.
(2) Percentage calculated with reference to an aggregate of 13,354,854 shares
of Common Stock outstanding at March 31, 1998. Percentages of less than 1%
have not been indicated.
(3) The amount shown excludes 46,509 shares held by Green Family Associates,
L.P. Mr. Green disclaims beneficial ownership of all shares held by Green
Family Associates, L.P. The amount shown includes currently exercisable
options to purchase 20,000 shares of Common Stock granted under the 1995
Stock Option Plan (the "1995 Plan").
(4) This information is as of December 31, 1997 and is based upon Schedule 13G
filed February 6, 1998 with the Securities and Exchange Commission by RCM
Capital Management LLC, which is located at 4 Embarcadero Center, Suite
3000, San Francisco, CA 94111.
4
<PAGE>
(5) This information is as of December 31, 1997 and is based upon Amendment No.
1 to Schedule 13G filed January 29, 1998 with the Securities and Exchange
Commission by The Kaufman Fund, which is located at 140 E. 45th Street,
43rd Floor, New York, New York 10017.
(6) This information is as of December 31, 1997 and is based upon Amendment No.
1 to Schedule 13G filed February 12, 1998 with the Securities and Exchange
Commission by Denver Investment Advisors LLC, which is located at 1225 17th
Street, 26th Floor, Denver, Colorado 80202.
(7) The amount shown includes 46,509 shares of Common Stock held by Green
Family Associates, L.P., a limited partnership of which Mr. Gross is
president of the general partner. The amount shown also includes currently
exercisable options to purchase 54,245 shares of Common Stock granted under
the 1995 Plan.
(8) The amount shown includes currently exercisable options to purchase 10,000
shares of Common Stock granted under the Wilmar Industries, Inc. 1996
Director Stock Option Plan (the "Director Plan").
(9) The shares of Common Stock previously owned by Summit Ventures III, L.P.,
Summit Investors II, L.P. and Summit Subordinated Debt Fund, L.P. were
distributed by those entities to their partners and Mr. Jacquet no longer
claims beneficial ownership of those shares.
(10) The amount shown includes currently exercisable options to purchase 33,400
shares of Common Stock granted under the 1995 Plan.
(11) The amount shown includes currently exercisable options to purchase 10,000
shares of Common Stock granted under the Director Plan.
(12) The amount shown includes currently exercisable options to purchase 127,645
shares of Common Stock.
5
<PAGE>
ELECTION OF DIRECTORS
The Board of Directors of the Company currently consists of five members
and is divided into three classes, two classes each consisting of two directors
and one class consisting of one director. One class is elected each year to
hold office for a three year term and until the election and qualification of
successors of such class or until a director's death, removal or resignation.
At the Annual Meeting, two directors are to be elected for the current class,
whose term of office will expire at the 2001 annual meeting of shareholders.
Fred B. Gross, who is a current member of the Board of Directors, has been
nominated by the Board of Directors for election as a Class II director at the
Annual Meeting.
Martin E. Hanaka, who is a current member of the Board of Directors, has
been nominated by the Board of Directors for election as a Class II director at
the Annual Meeting.
All nominees have consented to be named and to serve if elected. Unless
otherwise instructed by the shareholders, the persons named in the proxies will
vote the shares represented thereby for the election of such nominees. The
Board of Directors believes that all nominees will be able to serve as
directors; if this should not be the case, however, the proxies may be voted for
one or more substitute nominees to be designated by the Board of Directors or
the board may decide to reduce the number of directors. THE BOARD OF DIRECTORS
UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE NOMINEES.
___________________________________________________________
NOMINEES FOR ELECTION
___________________________________________________________
<TABLE>
<CAPTION>
YEAR FIRST BECAME DIRECTOR, PRINCIPAL OCCUPATIONS DURING
NAME OF DIRECTOR AGE PAST FIVE YEARS AND CERTAIN DIRECTORSHIPS
- ---------------- --- --------------------------------------------------------
<S> <C> <C>
Fred B. Gross 60 Mr. Gross has been a Vice President and Secretary of the Company since
(Class II) March 1994 and Vice President-Corporate Development since November
1995. He was elected a director of the Company in July 1995. From 1989
until February 1994, Mr. Gross was Regional Vice President of Angelo
Brothers Company, a supplier of electrical products, while also maintaining a
private law practice. Before attending law school, Mr. Gross worked for 22
years in the plumbing supply industry.
Martin E. Hanaka 48 Mr. Hanaka has been a director of the Company since December 1996. He has
(Class II) served as Vice Chairman of The Sports Authority, Inc. since October 1997.
From August 1994 throughout October 1997, he served as President and Chief
Operating Officer of Staples, Inc. From October 1992 to August 1994 Mr.
Hanaka held the positions of President and Chief Operating Officer of
Lechmere, Inc., and earlier as Executive Vice President - Marketing. Prior to
joining Lechmere, Inc., Mr. Hanaka was with Sears Roebuck and Co. where,
commencing in 1990, he served in various capacities, including Vice President
- Brand Central.
</TABLE>
6
<PAGE>
_________________________________________________________________________
CLASS III DIRECTORS CONTINUING IN OFFICE WITH TERM EXPIRING IN 1999
_________________________________________________________________________
<TABLE>
<S> <C> <C>
Ernest K. Jacquet 51 Mr. Jacquet has been a director of the Company since March 1995. Since
April 1990, he has been a general partner of Summit Partners, a venture capital
partnership that is the general partner of Summit Ventures III, L.P., Summit
Investors II, L.P. and Summit Subordinated Debt Fund, L.P. (collectively, the
"Summit Investors"). Mr. Jacquet also serves as a director of CIDCO
Incorporated. Mr. Jacquet is currently a member of the Compensation, Stock
Option and Audit Committees of the Board of Directors.
Donald M. Wilson 57 Mr. Wilson has been a director of the Company since July 1996. Mr. Wilson
was employed by Viking Office Products from December 1979 until his
retirement in December 1995. From January 1991 until his retirement, Mr.
Wilson served as Viking's Vice President-Operations. Mr. Wilson is currently
a member of the Compensation, Stock Option and Audit Committees of the
Board of Directors.
</TABLE>
_________________________________________________________________________
CLASS I DIRECTOR CONTINUING IN OFFICE WITH TERM EXPIRING IN 2000
_________________________________________________________________________
<TABLE>
<S> <C> <C>
William S. Green 39 Mr. Green co-founded the Company in 1978 with his father and has been
its Chairman, President and Chief Executive Officer since 1986. From 1978
until 1986, he served as the Company's Vice President. Mr. Green is currently a
member of the Compensation Committee of the Board of Directors.
</TABLE>
GENERAL INFORMATION CONCERNING THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors is divided into three classes. Each class holds
office until the third annual meeting for the election of directors following
the election of such class. Mr. Green is a Class I director, Messrs. Gross and
Hanaka are Class II directors, and Messrs. Jacquet and Wilson are Class III
directors.
The Board of Directors of the Company met on four occasions during 1997.
Each director attended at least 75% of the aggregate of the meetings of the
Board of Directors held during the period for which he was a director, and the
meetings of the committee or committees on which he served during such period.
The New Jersey Business Corporation Act provides that the board of directors, by
resolution adopted by a majority of the entire board, may designate one or more
committees, each of which shall consist of one or more directors. The Board of
Directors annually elects from its members a Compensation Committee, a Stock
Option Committee and an Audit Committee.
Compensation Committee. The Compensation Committee, consisting of Messrs.
Green, Jacquet and Wilson, has the authority to approve salaries and bonuses and
other compensation matters for officers of the Company and to approve employee
health and benefit plans. The Compensation Committee met twice during 1997.
7
<PAGE>
Stock Option Committee. The Stock Option Committee, consisting of the
members of the Compensation Committee other than Mr. Green, administers the
Company's Stock Option Plan. The Stock Option Committee met twice during 1997.
Audit Committee. The Audit Committee, consisting of Messrs. Jacquet and
Wilson, has the authority to recommend the appointment of the Company's
independent auditors and review the results and scope of audits, internal
accounting controls and tax and other accounting related matters. The Audit
Committee met once during 1997.
CERTAIN BUSINESS RELATIONSHIPS WITH DIRECTORS
Mt. Laurel Lease. On April 29, 1996, the Company entered into an operating
lease agreement with 804 Eastgate Associates, LLC, a company owned by William S.
Green, Fred B. Gross and an unrelated third party, pursuant to which the Company
leases approximately 70,000 square feet for a warehouse and customer service
center in Mount Laurel, New Jersey for a minimum monthly rent of $24,050 from
January 1, 1997 through May 31, 2001 and an increased rent from June 1, 2001
through the end of the lease term based on the Consumer Price Index. The
Company pays, as additional rent, all real estate taxes and assessments, all
utilities and insurance premiums for casualty insurance and any other public
liability insurance relating to the premises. Under the terms of the lease, the
Company is solely responsible for the costs of maintenance, operation and repair
of the leased property. The Company believes that the terms of the lease are no
less favorable to it than could be obtained from an unaffiliated party. The
lease term commenced on June 1, 1996 and will expire May 31, 2006. The Company
paid rent under this lease in the amount of $288,600 in fiscal 1997.
Headquarters Lease. The Company's headquarters at 303 Harper Drive,
Moorestown, New Jersey is leased to the Company by William S. Green. Under the
lease dated March 1, 1994 and amended March 7, 1995, the Company rents
approximately 12,500 square feet at an annual minimum rent of approximately
$137,500. The Company pays, as additional rent, all real estate taxes and
assessments, all utilities and insurance premiums for casualty insurance and any
other public liability insurance relating to the premises. Under the terms of
the lease, the Company is solely responsible for the costs of maintenance,
operation and repair of the headquarters property. The Company paid rent to Mr.
Green in the amount of $137,500 during fiscal 1997. The lease expires on
February 28, 2004 and does not contain any renewal terms. The Company believes
that the terms of the lease are no less favorable to it than could be obtained
from an unaffiliated party.
Certain Payments for Collection Services. In 1997, the Company made
payments in the aggregate amount of $20,250 to a law firm for paralegal services
in collecting delinquent accounts receivable on behalf of the Company. This
firm, which is owned by Mr. Gross, collects delinquent accounts receivable for a
number of businesses, including the Company. The day-to-day services of the
firm are performed by Mr. Gross's spouse and an unrelated lawyer. The Company
believes that the terms of the engagement are no less favorable than could be
obtained by an unaffiliated firm.
8
<PAGE>
EXECUTIVE OFFICERS
Set forth below is certain information regarding each of the current
executive officers of the Company.
<TABLE>
<CAPTION>
EXECUTIVE OFFICERS AGE POSITION
------------------ --- --------
<S> <C> <C>
William S. Green (1)... 39 Chairman, President, Chief Executive Officer and
Director
Fred B. Gross (1)...... 60 Vice President-Corporate Development, Secretary
and Director
Michael T. Toomey (2).. 33 Chief Financial Officer and Treasurer
</TABLE>
__________________
(1) See "Directors" for biographical information.
(2) Mr. Toomey has been Chief Financial Officer and Treasurer of the
Company since October 1992. Mr. Toomey is a certified public
accountant and, from October 1986 until October 1992, was an
accountant with the public accounting firm of Fishbein & Company, P.C.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
that directors and certain officers of the Company, and persons who own more
than ten percent of the Company's Common Stock, file with the Securities and
Exchange Commission initial reports of ownership and reports of changes of
ownership of such Common Stock.
To the Company's knowledge, all fiscal year 1997 Section 16(a) filing
requirements applicable to its directors, officers and more than ten percent
shareholders were complied with.
9
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth for the years ended December 26, 1997 and
December 27, 1996 certain compensation paid by the Company to its Chief
Executive Officer and the two other most highly paid executive officers of the
Company.
SUMMARY COMPENSATION TABLE
--------------------------
<TABLE>
<CAPTION>
ANNUAL LONG TERM ALL OTHER
COMPENSATION COMPENSATION COMPENSATION (1)
---------------- ------------ ----------------
SECURITIES
UNDERLYING
NAME AND PRINCIPAL POSITION(2) YEAR SALARY BONUS OPTIONS
------------------------------ ---- --------- ----- -------
<S> <C> <C> <C> <C> <C>
William S. Green................................. 1997 $229,031 $-0- 10,125 $3,435
Chairman, President and Chief Executive Officer 1996 $218,186 $-0- -0- $2,805
Fred B. Gross.................................... 1997 $112,809 $-0- 5,125 $2,820
Vice President - Corporate Development and 1996 $107,536 $-0- 17,045 $2,805
Secretary
Michael T. Toomey................................ 1997 $102,345 $-0- 5,125 $2,371
Chief Financial Officer 1996 $ 80,600 $-0- 17,045 $2,255
</TABLE>
__________________
(1) All other compensation consists of amounts matched by the Company under its
401(k) plan with respect to Messrs. Green, Gross and Toomey. The amount
shown for Mr. Gross does not include legal fees paid to his spouse for
paralegal services of $20,250 and $12,400 for the years ended December 26,
1997 and December 27, 1996, respectively. See "Certain Business
Relationships with Directors."
(2) No individual named above received perquisites or non-cash compensation
during the years indicated exceeding the lesser of $50,000 or an amount
equal to 10% of such person's salary and bonus.
10
<PAGE>
The following table summarizes stock options granted during 1997 to the
persons named in the Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
INDIVIDUAL GRANTS (1) OPTION TERM (2)
--------------------------------------------------------------- -----------------------
OPTIONS PERCENT OF TOTAL OPTIONS EXERCISE EXPIRATION
NAME GRANTED GRANTED TO EMPLOYEES IN 1997 PRICE DATE 5% 10%
---- ---------- ---------------------------- -------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
William S. Green 10,000 (3) 5.79% $15.50 4/4/07 $97,480 $247,030
100 (4) 0.06 15.50 4/4/07 970 2,470
25 (4) 0.01 24.25 8/5/07 380 970
Fred B. Gross 5,000 (3) 2.90% $15.50 4/4/07 $48,750 $123,500
100 (4) 0.06 15.50 4/4/07 970 2,470
25 (4) 0.01 24.25 8/5/07 380 970
Michael T. Toomey 5,000 (3) 2.90% $15.50 4/4/07 $48,750 $123,500
100 (4) 0.06 15.50 4/4/07 970 2,470
25 (4) 0.01 24.25 8/5/07 380 970
</TABLE>
__________________
(1) Except as otherwise indicated, this column relates to options granted under
the 1995 Stock Option Plan (the "1995 Plan"). Except as otherwise
indicated, the options granted vested fully on the date of grant. The
options expire on the tenth anniversary of the date of grant. In general,
options terminate (a) at any time the optionee's employment is terminated
by the Company for cause or a voluntary termination of employment by the
employee, or (b) one year following death or disability of the employee.
Options granted under the 1995 Plan are not assignable or otherwise
transferable except by will or the laws of descent and distribution. Shares
subject to options granted under the 1995 Plan which have elapsed or
terminated may again by subject to options granted under the 1995 Plan.
(2) Potential Realizable Values are based on an assumption that the stock price
of the Common Stock starts equal to the exercise price shown for each
particular option grant and appreciates at the annual rate shown
(compounded annually) from the date of grant until the end of the term of
the option. These amounts are reported net of the option exercise price,
but before any taxes associated with exercise or subsequent sale of the
underlying stock. The actual value, if any, an option holder may realize
will be a function of the extent to which the stock price exceeds the
exercise price on the date the option is exercised and also will depend on
the option holder's continued employment through the vesting period. The
actual value to be realized by the option holder may be greater or less
than the values estimated in this table.
(3) The options vested fully on the date of grant. In addition, in March 1998,
each of Mr. Green, Mr. Gross and Mr. Toomey was granted an option to
purchase 10,000 shares of Common Stock at an exercise price of $21.00, the
fair market value of the Common Stock on the date of grant. These options
vested fully on the date of grant.
(4) The options vest in 25% increments on each anniversary of the date of
grant, beginning on the second anniversary of the date of the grant.
11
<PAGE>
The following table summarizes option exercises during 1997 and the value
of vested and unvested options for the persons named in the Summary Compensation
Table at December 26, 1997. Year-end values are based upon a price of $22.25
per share, which was the closing market price of a share of the Company's Common
Stock on December 26, 1997.
AGGREGATED OPTION EXERCISES IN LAST YEAR AND
YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS IN-THE-MONEY OPTIONS AT
AT DECEMBER 26, 1997 (#) DECEMBER 26, 1997 ($)
---------------------------- --------------------------
SHARES ACQUIRED
NAME ON EXERCISE (#) VALUE REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- ----------------- ------------ ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
William S. Green -0- - 10,000 125 $ 67,500 $ 675
Fred B. Gross 10,000 115,000 28,145 48,425 425,628 871,041
Michael T. Toomey 17,045 188,376 23,200 54,725 361,714 984,567
</TABLE>
The Company does not currently grant any long-term incentives, other than
stock options, to its executives or other employees. Similarly, the Company
does not sponsor any defined benefit or actuarial plans at this time.
EMPLOYMENT AGREEMENTS
In March 1995, William S. Green entered into an employment agreement with
the Company. Under the provisions of the employment agreement, Mr. Green will
serve as President and Chief Executive Officer of the Company until March 1,
2000, unless earlier terminated by the Company, at an annual base salary of
$200,000, subject to adjustment, and an annual bonus upon achieving specified
financial targets set by the Compensation Committee. The employment agreement
also contains certain non-competition and related provisions.
In March 1996, the Company entered into an employment agreement with Fred
B. Gross. The term of the agreement expires in April 1998 but will be renewed
automatically for successive one-year terms unless terminated by either party.
The agreement provides that Mr. Gross will receive an annual base salary of not
less than $107,500. The employment agreement also contains certain non-
competition and related provisions.
COMPENSATION OF DIRECTORS
Independent directors are paid directors' fees of $1,500 for each board
meeting attended. In addition, directors are reimbursed for expenses incurred in
connection with attendance at Board of Directors and Committee meetings and are
eligible to participate in the Director Plan.
12
<PAGE>
The following Compensation Committee Report and the
Comparative Stock Performance Graph shall not be deemed
incorporated by reference by any general statement incorporating
by reference this Proxy Statement into any filing under the
Securities Act of 1933, as amended, or under the Securities
Exchange Act of 1934, as amended, except to the extent that the
Company specifically incorporates this information by reference,
and shall not otherwise be deemed filed under such Acts.
JOINT REPORT OF THE COMPENSATION COMMITTEE AND
STOCK OPTION COMMITTEE ON EXECUTIVE COMPENSATION
The Board of Directors created the Compensation Committee and the Stock
Option Committee (the "Committees") to have the responsibility for implementing
and administrating the Company's compensation policies and programs for its
executive officers.
The Compensation Committee is responsible for setting the base salaries and
the total compensation levels of the Chief Executive Officer (the "CEO") and the
other executive officers of the Company. Mr. Green does not participate in the
approval of his compensation. The Stock Option Committee is responsible for
determining which executives, including the CEO, will be granted stock options
and the size of such grants.
COMPENSATION POLICIES
The Company's compensation policies for executive officers are designed to
(a) provide competitive compensation packages that will attract and retain
superior executive talent, (b) link a significant portion of compensation to
financial results, so as to reward successful performance, and (c) provide long-
term equity compensation, to further align the interests of executive officers
with those of shareholders and further reward successful performance. The
principal components of the Company's executive officer compensation program are
base salary, annual cash incentive awards, and grants of stock options.
Base salary levels for the Company's executive officers are reviewed on an
annual basis by the Compensation Committee and are set generally to be
competitive with other companies of comparable size and geographic location,
taking into consideration the positions complexity, responsibility and need for
special expertise. Individual salaries also take into account individual
experience and performance.
The cash bonus program in 1997 was based on the Company's exceeding certain
earnings targets established by the Board of Directors. While the Company had
exemplary performance in 1997 and met the earnings goal established by the Board
of Directors for issuance of stock options, that performance did not exceed the
established earnings goal for cash bonuses and, therefore, no cash bonuses were
distributed.
The Company granted stock options to its executive officers in 1997. The
issuance of stock options was based on the Company's meeting certain earnings
targets established by the Board of Directors.
LONG-TERM COMPENSATION
The Stock Option Committee annually considers the desirability of granting
stock options to officers and other employees of the Company. The objective of
the 1995 Plan is to align senior management and shareholder long-term interest
by creating a strong and direct link between the executive's accumulation of
wealth and shareholder return and to enable executives to develop and maintain a
significant, long-term stock ownership position in the Company's common stock.
Individual grants of stock options under the 1995 Plan are based upon individual
performance. The Stock Option Committee believes that its past grants of stock
options have successfully focused the Company's executive officers and other
members of senior management on building profitability and shareholder value.
13
<PAGE>
COMPENSATION OF CHIEF EXECUTIVE OFFICER
In determining the compensation of Mr. Green, the Compensation Committee
has taken into consideration pay levels of chief executive officers of other
companies, his contributions to the profitable growth and increased return on
equity of the Company over the past several years and Mr. Green's overall
management strengths and business acumen. It noted that the earnings per share,
assuming dilution, of the Company's Common Stock increased 35% over last year
and the return to shareholders, as measured by the December 26, 1997 closing
price of the Company's Common Stock, has increased 102% from the IPO price of
$11.00 per share. Mr. Green's total annual compensation increased 4% over the
same period. The Compensation Committee and the Stock Option Committee
determined that Mr. Green should be granted additional options since the Company
had achieved the earnings target for issuance of options established by the
Board of Directors. Therefore, Mr. Green was granted stock options to purchase
10,000 shares of Common Stock in April 1997.
<TABLE>
<CAPTION>
COMPENSATION COMMITTEE OF STOCK OPTION COMMITTEE OF
THE BOARD OF DIRECTORS THE BOARD OF DIRECTORS
<S> <C>
William S. Green Ernest K. Jacquet
Ernest K. Jacquet Donald M. Wilson
Donald M. Wilson
</TABLE>
14
<PAGE>
COMPARATIVE STOCK PERFORMANCE GRAPH
The graph below compares the cumulative total shareholder return on the
Company's Common Stock with the cumulative total shareholder return of (i) the
NASDAQ Stock Market (U.S.) Index (the "NASDAQ Index"), and (ii) the Russell 2000
Index, assuming an investment of $100 on January 24, 1996 in each of the Common
Stock of the Company, the stocks comprising the NASDAQ Index and the stocks
comprising the Russell 2000 Index, and further assuming reinvestment of
dividends, if any. The graph commences as of January 24, 1996. The Company has
chosen the Russell 2000 Index as an index of issuers with similar market
capitalizations because the Company does not believe it can reasonably identify
a peer group or applicable published industry or line-of-business index. Such
industry or line-of-business indices are comprised primarily of either
retailers or manufacturers whose business is not substantially similar to the
Company's business and are of substantially greater market capitalization than
the Company. In addition, most of the Company's competitors are smaller,
privately held companies.
[GRAPH APPEAR HERE]
WILMAR INDUSTRIES, INC. NASDAQ STOCK MARKET (U.S.) RUSSEL 2000
-------- ------ .......
* $100 INVESTED ON 1/24/906 IN STOCK OR ON
12/31/95 IN INDEX - INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING DECEMBER 31.
<TABLE>
<CAPTION>
NASDAQ
Measurement Date Wilmar Industries, Inc. Stock Market - US Russell 2000
<S> <C> <C> <C>
01/24/96 100 100 100
12/27/96 198 123 116
12/26/97 202 151 143
</TABLE>
15
<PAGE>
OTHER MATTERS
The Board of Directors is not aware of any matters not set forth herein that
may come before the meeting. If, however, further business properly comes
before the meeting, the persons named in the proxies will vote the shares
represented thereby in accordance with their judgment.
The accounting firm of Deloitte & Touche LLP has been selected as the
Company's independent auditors for the 1998 fiscal year. A representative of
Deloitte & Touche LLP is expected to be present at the Annual Meeting. Such
representative will have an opportunity to make a statement if such
representative desires to do so and will be available to respond to appropriate
questions from shareholders of the Company.
SHAREHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING
Shareholders may submit proposals on matters appropriate for shareholder
action at annual meetings in accordance with regulations adopted by the SEC. To
be considered for inclusion in the proxy statement and form of proxy relating to
the 1999 annual meeting, such proposals must be received by the Company no later
than December 11, 1998. Proposals should be directed to the attention of the
Secretary of the Company.
ANNUAL REPORT ON FORM 10-K
The Company will furnish without charge to each person whose proxy is being
solicited, upon the written request of such person, a copy of the Company's
annual report on Form 10-K for the year ended December 26, 1997, including the
financial statements, but excluding exhibits. Requests for copies of such
report should be directed to the Company, Attention: Fred B. Gross.
By order of the board of directors,
Fred B. Gross
Secretary
April 10, 1998
16
<PAGE>
PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED
WILMAR INDUSTRIES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS MAY 7, 1998
The undersigned hereby appoints William S. Green and Fred B. Gross as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them, to represent and vote, as designated on the reverse, all shares of Common
Stock of Wilmar Industries, Inc. (the "Company") held of record by the
undersigned on April 6, 1998, at the Annual Meeting of Stockholders to be held
on May 7, 1998 or any adjournment thereof.
(TO BE SIGNED ON REVERSE SIDE.)
<PAGE>
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
WILMAR INDUSTRIES, INC.
MAY 7, 1998
. PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED .
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
WITHHOLD AUTHORITY
to vote for all nominees:
FOR listed at right
1. ELECTION
OF [_] [_] Nominees: Martin E. Hanaka
DIRECTORS Fred B. Gross
For all nominees listed (except as marked to the contrary below)
_____________________________________
2. In then discretion, upon such other business as may property come before
the Annual Meeting or any postponement or adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS PROXY, WHEN
PROPERLY EXECUTED, WILL BE VOTED ON THE MANNER DIRECTED HEREBY BY THE
UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
"FOR" THE ELECTION OF DIRECTORS.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE URGED TO MARK, SIGN, DATE
AND RETURN THE PROXY CARD PROMPTLY IN THE ENCLOSED PRE-ADDRESSED ENVELOPE.
SIGNATURE ______________________________________ DATE ____________________
NOTE: PLEASE SIGN EXACTLY AS NAME OR NAMES APPEARS ON STOCK CERTIFICATE HEREON.
