<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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 (S) 240.14a-11(c) or (S) 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):
[_] No fee required.
[_] 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:
-------------------------------------------------------------------------
Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
WILMAR INDUSTRIES, INC.
303 Harper Drive
Moorestown, New Jersey 08057
April 26, 1999
N O T I C E O F A N N U A L M E E T I N G O F S H A R E H O L D E R S
- --------------------------------------------------------------------------------
Wilmar Industries, Inc. will hold its Annual Meeting of Shareholders on:
May 27, 1999
8:30 a.m., local time
The DoubleTree Guest Suites,
515 Fellowship Road,
Mount Laurel, New Jersey 08054.
We are holding the annual meeting for the following purposes:
1) to elect two directors;
2) to consider a proposal to increase the number of shares that we may
grant under the Amended and Restated 1995 Stock Option Plan; and
3) to transact any other business appropriately brought before the
meeting.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR ITS NOMINEES FOR ELECTION
TO THE BOARD OF DIRECTORS AND FOR THE PROPOSAL TO INCREASE THE NUMBER OF SHARES
THAT WE MAY BE GRANT UNDER THE AMENDED AND RESTATED 1995 STOCK OPTION PLAN.
PLEASE READ THE ATTACHED PROXY STATEMENT FOR FURTHER INFORMATION.
If you own shares of our common stock at the close of business on March 29,
1999, you will be entitled to vote at the annual meeting.
The approximate date of mailing for this proxy statement is April 26, 1999.
Sincerely yours,
Fred B. Gross
Secretary
================================================================================
- --------------------------------------------------------------------------------
WE URGE YOU TO COMPLETE, DATE, SIGN AND RETURN THE
ENCLOSED PROXY CARD AS SOON AS POSSIBLE SO
THAT WE CAN HAVE YOUR VOTE
AT THE ANNUAL MEETING.
- --------------------------------------------------------------------------------
================================================================================
<PAGE>
T A B L E O F C O N T E N T S
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
General Information.......................................................... 1
Proposal 1: Election of Directors........................................... 3
Information about the Board of Directors................................ 4
Proposal 2: Amendment to the Amended and Restated 1995 Stock Option Plan... 6
Stock Ownership.............................................................. 9
Executive Officers........................................................... 11
Executive Officers Compensation.............................................. 12
Joint Report of the Compensation Committee and the Stock Option Committee.... 15
Performance Graph............................................................ 17
Other Information............................................................ 18
Certain Relationships and Certain Transactions.......................... 18
Compensation Committee Interlocks and Insider Participation............. 18
Compliance under Section 16(a) of the Securities Exchange Act of 1934... 18
Expenses of Solicitation................................................ 18
Accountants............................................................. 19
Proposals for Next Year's Meeting....................................... 19
</TABLE>
ii
<PAGE>
WILMAR INDUSTRIES, INC.
303 HARPER DRIVE
MOORESTOWN, NEW JERSEY 08057
G E N E R A L I N F O R M A T I O N
- --------------------------------------------------------------------------------
WHAT IS THE PURPOSE OF THE ANNUAL MEETING?
Two matters will be voted on at the annual meeting:
1) the election of two directors; and
2) a proposal to increase the number of shares that may be granted under
the Amended and Restated 1995 Stock Option Plan (the "Stock Option
Plan").
WHAT ARE THE BOARD'S RECOMMENDATIONS?
Your board of directors recommends that you vote for its two nominees for
election to the board and the proposal to increase the number of shares that may
be granted under the Stock Option Plan. Information concerning the board's
nominees and the plan is contained in this Proxy Statement.
WILL OTHER MATTERS BE BROUGHT BEFORE THE ANNUAL MEETING?
The Board of Directors does not intend to bring any other matters before the
Annual Meeting and has no reason to believe any other matters will be presented.
If, however, other matters properly come before the meeting, the persons named
as proxies on the enclosed proxy card intend to vote upon such matters as they
deem appropriate.
WHO IS ENTITLED TO VOTE AT THE ANNUAL MEETING?
Shareholders as of the close of business on March 29, 1999 are entitled to vote
at the Annual Meeting. As of that date, there were 13,294,760 shares of common
stock eligible to vote. Each share of common stock is entitled to one vote.
HOW DO I VOTE?
To vote, you should sign and date each proxy card you receive and return it in
the postage-prepaid envelope. If you return your signed proxy card but do not
mark the boxes showing how you wish to vote, your shares will be voted FOR the
Board's nominees for election to the Board and FOR the proposal to approve the
amendment to the Stock Option Plan.
1
<PAGE>
CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?
Yes. You have the right to revoke your proxy at any time before the meeting by:
(1) notifying Wilmar's Secretary at the address listed above,
(2) returning a later-dated proxy card, or
(3) voting in person at the Annual Meeting.
WHAT CONSTITUTES A QUORUM?
There must be a quorum for action to be taken at the Annual Meeting. A "quorum"
is holders of a majority of the outstanding shares of common stock and the
holders may be present in person or by proxy. If you submit a properly executed
proxy card, then you will be considered part of the quorum even if you withhold
your vote in the election of directors and abstain from voting on other
proposals; in addition, "broker non-votes" are counted as present for
establishing a quorum. However, abstentions and broker non-votes are not
counted in the tally of votes FOR or AGAINST a proposal. A WITHHELD vote is the
same as an abstention. A broker non-vote occurs when a broker votes on some
matters on the proxy card but not on others, often because the broker does not
have the authority to do so. Generally, brokers are authorized to vote your
shares for a company's nominees for directors, but cannot vote on matters such
as approving the adoption or amendment of a stock option.
WHO CAN ATTEND THE ANNUAL MEETING?
Any shareholder of record as of March 29, 1999 can attend the Annual Meeting.
2
<PAGE>
P R O P O S A L N U M B E R 1
- --------------------------------------------------------------------------------
E L E C T I O N O F D I R E C T O R S
The Board of Directors is currently divided into three classes, each having
three-year terms that expire in successive years and consists of:
CLASS I William S. Green Term expires at the 2000 Annual Meeting
CLASS II Fred B. Gross Term expires at the 2001 Annual Meeting
Martin E. Hanaka
CLASS III Ernest K. Jacquet Term Expires at the 1999 Annual Meeting
Donald M. Wilson
The Board has nominated Messrs. Jacquet and Wilson for re-election as members of
the Board. Each director elected at the Annual Meeting will serve until the
2002 Annual Meeting and until his successor is elected and qualified.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THESE NOMINEES. WILMAR
---
SHAREHOLDERS WILL ELECT DIRECTORS BY A PLURALITY OF THE VOTES CAST.
We have provided below information on each of the nominees and each of the
directors who are continuing in office.
DIRECTORS STANDING FOR ELECTION
CLASS III DIRECTORS
ERNEST K. JACQUET Mr. Jacquet, age 52, has been a director of Wilmar since
March 1995. Since June 1998, he has served as managing
director of Partheon Capital, a venture partnership.
From April 1990 through May 1998, he served as a general
partner of Summit Partners, a venture partnership. Mr.
Jacquet also serves as a director of CIDCO Incorporated,
which designs, develops and markets subscriber telephone
equipment.
DONALD M. WILSON Mr. Wilson, age 58, has been a director of Wilmar since
July 1996. Mr. Wilson was employed by Viking Office
Products from December 1979 until his retirement in
December 1995, most recently serving as its Vice
President-Operations.
3
<PAGE>
DIRECTORS CONTINUING IN OFFICE
CLASS I DIRECTORS
WILLIAM S. GREEN Mr. Green, age 40, co-founded Wilmar in 1978 with his
father and has served as its Chairman, President and
Chief Executive Officer since 1986.
CLASS II DIRECTORS
FRED B. GROSS Mr. Gross, age 61, has served as Wilmar's Vice President
and Secretary since March 1994 and as Vice President-
Corporate Development since November 1995. He has served
as a director since 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 Mr. Hanaka, age 49, has been a director since December
1996. Since September 1998, he has served as Chief
Executive Officer of The Sports Authority, Inc. From
October 1997 through August 1998, he served as Vice
Chairman of The Sports Authority, Inc. From August 1994
through October 1997, Mr. Hanaka was President and Chief
Operating Officer of Staples, Inc. From October 1992
until August 1994, he held the positions of President
and Chief Executive Officer of Lechmere, Inc., and
earlier as Executive 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.
INFORMATION ABOUT THE BOARD OF DIRECTORS
HOW OFTEN DID THE BOARD MEET DURING FISCAL 1998?
The Board of Directors met four times in the last fiscal year and acted by
written consent two times in the last fiscal year. Each director attended more
than 75% of the total number of meetings of the Board and committees on which he
served.
WHAT COMMITTEES HAS THE BOARD ESTABLISHED?
The Board of Directors currently has three standing committees:
AUDIT COMMITTEE The Audit Committee has the authority to recommend the
appointment of our independent auditors and review the
results and scope of audits, internal accounting
controls and tax and other accounting-related matters.
The Audit Committee consists of Messrs. Jacquet and
Wilson.
4
<PAGE>
COMPENSATION COMMITTEE The Compensation Committee has the authority to approve
salaries and bonuses and other compensation matters for
Wilmar's officers. In addition, the Compensation
Committee has the authority to approve employee health
and benefit plans. The Compensation Committee consists
of Messrs. Green, Jacquet and Wilson.
STOCK OPTION COMMITTEE The Stock Option Committee administers the Stock Option
Plan. The Stock Option Committee consists of Messrs.
Jacquet and Wilson.
HOW ARE MEMBERS OF THE BOARD COMPENSATED?
Independent directors are paid directors' fees of $1,500 for each Board meeting
they attend. In addition, directors are reimbursed for expenses incurred in
connection with their attendance at meetings of the Board and of committee on
which they serve. Directors are also eligible to participate in the 1996
Director Stock Option Plan. On May 7, 1998, Mr. Hanaka and Mr. Wilson were each
granted options to purchase 2,500 shares; Mr. Jacquet was granted options to
purchase 10,000 shares. All granted options are exercisable at $ 22.625 per
share.
5
<PAGE>
P R O P O S A L 2
- --------------------------------------------------------------------------------
A M E N D M E N T T O T H E A M E N D E D A N D R E S T A T E D
1 9 9 5 S T O C K O P T I O N P L A N
The Board of Directors has adopted, subject to shareholder approval, an
amendment to Stock Option Plan which would increase the numbers of shares that
we may grant under the Stock Option Plan. We have described below the Board's
rationale in seeking an increase in the number of shares that may be granted
under the Stock Option Plan, as well as the key features of the Stock Option
Plan.
THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE SHARES PRESENT IN
PERSON OR BY PROXY AND ENTITLED TO VOTE IS REQUIRED TO APPROVE THE AMENDMENT TO
STOCK OPTION PLAN. YOUR BOARD OF DIRECTORS RECOMMEND A VOTE FOR THE PROPOSAL TO
---
APPROVE THE INCREASE IN THE NUMBER OF SHARES THAT MAY BE GRANTED UNDER THE STOCK
OPTION PLAN.
AMENDMENT TO THE STOCK OPTION PLAN
WHY IS THE BOARD RECOMMENDING AN INCREASE IN THE NUMBER OF SHARES THAT MAY BE
GRANTED UNDER THE STOCK OPTION PLAN?
The Stock Option Plan currently provides for the issuance of up to 800,000
shares; options to purchase 789,588 have been granted through December 25, 1998.
In order for the Stock Option Plan to continue to be used to encourage officers
and other key employees to contribute materially to our growth, thereby
benefitting Wilmar's shareholders and aligning the economic interests of the
participants with those of our shareholders, the Stock Option Committee needs
the ability to be able to grant additional options to Wilmar's officers and key
employees. Accordingly, the Board of Directors recommends that an additional
800,000 shares of common stock be reserved for issuance pursuant to the Stock
Option Plan.
SUMMARY OF THE STOCK OPTION PLAN
WHAT IS THE STOCK OPTION PLAN'S PURPOSE?
The purpose of the Stock Option Plan is to provide Wilmar's officers (including
officers who are directors) and other key employees with the opportunity to
receive stock options. We believe that the Stock Option Plan will encourage the
participants to contribute materially to our growth, thereby benefitting
Wilmar's shareholders, and will align the economic interests of the participants
with those of the shareholders.
HOW MANY SHARES MAY BE GRANTED UNDER THE STOCK OPTION PLAN?
The Stock Option Plan currently provides for the issuance of up to 800,000
shares; options to purchase 789,588 have been granted through December 25, 1998.
If options terminate, expire or lapse unexercised, the shares attributable to
such grants may again be subject to grants under the Stock Option Plan. The
Stock Option Plan provides that no more than 150,000 shares may be granted to
any individual.
HOW IS THE STOCK OPTION PLAN ADMINISTERED?
The Stock Option Plan is administered by the Stock Option Committee of the Board
of which consists of Messrs. Jacquet and Wilson. The Stock Option Committee has
full power and authority to administer and interpret the Stock Option Plan.
6
<PAGE>
The Stock Option Committee selects the officers and key employees to receive
grants and determines, among other things, the number of shares of common stock
that will be subject to each grant, the grant and expiration dates of each grant
and the vesting schedule. As of the date of the mailing of this proxy
statement, there are approximately fifty-one officers and key employees
eligible to receive grants under the Stock Option Plan.
WHAT KIND OF OPTIONS CAN BE GRANTED? WHAT LIMITATIONS APPLY TO THE GRANTS?
The Stock Option Plan provides for the grant of incentive stock options and non-
qualified stock options. Incentive stock options are stock options that meet
certain conditions of Section 422 of the Internal Revenue Code of 1986, as
amended. Incentive stock options provide certain benefits to option holders who
meet the Internal Revenue Code's holding period requirements. Non-qualified
stock options are options not intended to so qualify.
The Stock Option Committee will establish the terms of the grants, including
vesting and exercise periods. The purchase price of stock subject to an option
may be equal to, greater than or less than the fair market value of a share of
common stock on the date of grant, provided that (I) the option price of an
incentive stock option may not be less than the fair market value of a share of
common stock on the date of grant and (ii) an incentive stock option that is
granted to a holder of more than 10% of the combined voting power of all our
stock must have an option price of not less than 110% of the fair market value
of the common stock on the date of grant. If the aggregate market value of our
stock underlying all incentive stock options granted to any participant which
are exercisable for the first time in any calendar year exceeds $100,000, then
any incentive stock option granted under the Stock Option Plan which becomes
exercisable in such year will be treated as a non-qualified stock option.
The Stock Option Committee determines the term of each option, which may not
exceed ten years from the date of grant. However, an incentive stock option
granted to a holder of more than 10% of the combined voting power of all of our
stock may not have a term longer than five years from the date of grant. The
grantee may pay the option price (I) in cash, (ii) with the consent of the Stock
Option Committee, by tendering shares of common stock owned by the grantee, or
(iii) with approval of the Stock Option Committee, by the proceeds of a
promissory note payable by the grantee to Wilmar, subject to certain
restrictions. Options may be exercised while the grantee is an employee or
within a specified time after termination of employment, depending on the
circumstances of the termination of their employment or service.
DOES THE STOCK OPTION PLAN PROVIDE FOR ANTI-DILUTION ADJUSTMENTS?
Yes, in the event of certain changes in our stock (such as stock splits, stock
dividends and recapitalization), the Stock Option Committee will proportionately
adjust the number of shares of common stock available for options, the number of
shares covered by outstanding options and the price per share for shares covered
by the stock option.
DOES THE STOCK OPTION PLAN IMPOSE RESTRICTIONS ON THE TRANSFER OF OPTIONS OR
STOCK?
Yes. The options are not transferable except upon the death of the grantee, or
if permitted by the Stock Option Committee and Rule 16b-3 of the Exchange of
1934, pursuant to a qualified domestic relations order, as defined under ERISA.
7
<PAGE>
WHEN WILL THE STOCK OPTION PLAN TERMINATE? HOW IS THE STOCK OPTION PLAN
AMENDED?
The Stock Option Plan provides that it will terminate ten years from its
effective date. The Board may amend or terminate the Stock Option Plan,
however, shareholder approval is required if such amendment materially increases
the participants' benefits or the number of shares available under the Stock
Option Plan, or modifies the requirements as to eligibility. The Board cannot
amend the Stock Option Plan if such amendment would cause the Stock Option Plan
or any option to fail to comply with Rule 16b-3 of the Exchange Act of 1934 or
would cause the Stock Option Plan, option or exercise of an incentive stock
option to fail to comply with the requirements of section 422 of the Internal
Revenue Code.
FEDERAL INCOME TAX TREATMENT OF STOCK OPTIONS
The following discussion is based on the Internal Revenue Code as presently in
effect and does not purport to be a complete description of federal income tax
aspects of grants under the Stock Option Plan.
Under the Internal Revenue Code, as currently in effect, an officer or employee
receiving non-qualified stock options under the Stock Option Plan will not
recognize income when the options are granted. The grantee will recognize
ordinary income upon the exercise of a non-qualified stock option to the extent
that the fair market value of the shares at the time of exercise exceeds the
option price. Wilmar is generally entitled to a corresponding deduction for
federal income tax purposes at the time of exercise.
Incentive stock options may only be granted to employees. An employee generally
will not recognize federal taxable income upon the grant or exercise of an
incentive stock option. An employee who disposes of the shares acquired upon
exercise of an incentive stock option after two years from the date the
incentive stock option was granted and one year from the date such shares were
transferred to him or her upon exercise of the incentive stock option will
recognize capital gain or loss in the amount of the difference between the
amount realized on the sale and the option price. As a general rule, if an
employee disposes of the shares acquired upon exercise of an incentive stock
option before satisfying both holding period requirements, the employee will
recognize ordinary income to the extent of the difference between the fair
market value of such shares on the date of exercise and the option price. The
gain, if any, in excess of the amount recognized as ordinary income on such a
disqualifying disposition will be capital gain. The tax rate of capital gain
depends on the length of time the employee held the shares prior to the
disposition. Wilmar generally will not be entitled to a tax deduction by reason
of an exercise of an incentive stock option, unless a disqualifying disposition
occurs.
Under Section 162(m) of the Internal Revenue Code, Wilmar may be precluded from
claiming a federal income tax deduction for total remuneration in excess of
$1,000,000 paid to the chief executive officer or to any of the other four most
highly compensated officers in any year. Total remuneration generally includes
amounts received upon the exercise of options and amounts taxable upon the grant
or vesting of stock awards. An exception exists for performance-based
compensation that meets certain requirements. Options under the Stock Option
Plan are intended to qualify for treatment as performance-based compensation,
but stock awards will not qualify for such treatment.
As of March 29, 1999, the last reported sales price of the common stock as
reported on the Nasdaq National Market was $ 15.125 per share.
8
<PAGE>
S T O C K O W N E R S H I P
- --------------------------------------------------------------------------------
HOW MUCH STOCK DO WILMAR'S DIRECTORS AND EXECUTIVE OFFICERS OWN?
WHO ARE THE LARGEST OWNERS OF WILMAR'S STOCK?
The following table shows how much stock the executive officers, directors and
holders of more than 5% of outstanding common stock beneficially owned as of
March 29, 1999. In general a person is considered to "beneficially own" shares
if the person has the power to vote or transfer the shares for the purposes of
this table, a person is also considered to beneficially own shares that may be
issued upon exercise of stock options that are exercisable currently or within
60 days. Each shareholder listed below has the sole power to vote or transfer
shares listed to the shareholder's name, unless otherwise noted.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
BENEFICIAL OWNERSHIP
AS OF MARCH 29, 1999
-----------------------------------------------------
CURRENTLY
NAME COMMON STOCK EXERCISABLE OPTIONS PERCENTAGE /(1)/
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
William S. Green /(2)/ 2,013,536 20,000 15.30%
- ----------------------------------------------------------------------------------------
RCM Capital Management LLC /(3)/ 1,960,300 -- 14.74%
- ----------------------------------------------------------------------------------------
The Kaufman Fund /(4)/ 900,000 -- 6.77%
- ----------------------------------------------------------------------------------------
E.M. Warburg, Pincus & Co. /(5)/ 688,730 -- 5.18%
- ----------------------------------------------------------------------------------------
The TCW Group, Inc. /(6)/ 681,000 -- 5.12%
- ----------------------------------------------------------------------------------------
Michael J. Grebe - - *
- ----------------------------------------------------------------------------------------
Fred B. Gross/ (7)/ 43,009 70,345 *
- ----------------------------------------------------------------------------------------
Martin E. Hanaka - 12,500 *
- ----------------------------------------------------------------------------------------
Ernest K. Jacquet - 10,000 *
- ----------------------------------------------------------------------------------------
Michael T. Toomey - 51,600 *
- ----------------------------------------------------------------------------------------
Donald M. Wilson - 12,500 *
- ----------------------------------------------------------------------------------------
Directors and Officers as a Group 2,056,545 176,945 16.80%
(7 persons)
- ----------------------------------------------------------------------------------------
</TABLE>
* Less than 1% of Wilmar's outstanding shares of common stock.
/(1)/ All percentages are based on 13,294,760 shares outstanding on March 29,
1999. If a person holds options that are currently exercisable or
exercisable within 60 days, the number of shares underlying the options
are considered outstanding and beneficially owned for the purpose of
computing that person's percentage ownership. Such shares are not
considered outstanding for the purpose of computing the beneficial
ownership of others listed in the table.
9
<PAGE>
/(2)/ Includes 38,000 shares of common stock held by the William S. Green
Irrevocable Sibling Trust dated December 31, 1998, but excludes 43,009
shares of common stock held by Green Family Associates, L.P. Mr. Green
disclaims beneficial ownership of the shares held by Green Family
Associates, L.P.
/(3)/ This information is based upon the Schedule 13G/A filed February 16, 1999
with the Securities and Exchange Commission by RCM Capital Management LLC,
which is located at 4 Embarcadero Center, Suite 3000, San Francisco,
California 94111.
/(4)/ This information is as of December 31, 1998 and is based on available
public information. The Kaufman Fund is located at 140 East 45th Street,
43rd Floor, New York, New York 10017.
/(5)/ This information is as of December 31, 1998 and is based on available
public information. E.M. Warburg, Pincus & Co. is located at 466 Lexington
Avenue, 10th Floor, New York, New York 10017.
/(6)/ This information is based upon the Schedule 13G filed February 12, 1999
filed with the Securities and Exchange Commission by The TCW Group, Inc.,
which is located at 865 South Figueroa Street, Los Angeles, California
90017.
/(7)/ Includes 43,009 shares of common stock held by Green Family Associates,
L.P., of which Mr. Gross is an officer of its general partner, ALA Green
Corporation.
10
<PAGE>
E X E C U T I V E O F F I C E R S
- --------------------------------------------------------------------------------
Wilmar's executive officers currently are:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
NAME AGE POSITION
- ------------------------------------------------------------------------------
<S> <C> <C>
William S. Green 40 Chairman, President and Chief Executive Officer
- ------------------------------------------------------------------------------
Michael J. Grebe 41 Executive Vice President and Chief Operating Officer
- ------------------------------------------------------------------------------
Fred B. Gross 61 Vice President-Corporate Development and Secretary
- ------------------------------------------------------------------------------
Michael T. Toomey 34 Chief Financial Officer and Treasurer
- ------------------------------------------------------------------------------
</TABLE>
Biographical information about Messrs. Green and Gross can be found on page 4;
we have provided information about Messrs. Grebe and Toomey below:
Michael T. Toomey Mr. Toomey has served as Wilmar's Chief Financial
Officer and Treasurer since October 1992. From October
1986 until October 1992, he was an accountant with the
public accounting firm of Fishbein & Company, P.C. Mr.
Toomey is a certified public accountant.
Michael J. Grebe Mr. Grebe joined Wilmar in November of 1998 as Executive
Vice President and Chief Operating Officer. Mr. Grebe
previously served as a Group Vice President of Airgas,
Inc. where he was employed from April 1986 though
November 1998. Mr. Grebe has served in the distribution
industry since 1985.
11
<PAGE>
E X E C U T I V E O F F I C E R S C O M P E N S A T I O N
- --------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
The following table shows, for the last three fiscal years, the cash and other
compensation paid to Wilmar's Chief Executive Officer and Wilmar's three other
most highly compensated executive officers.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG TERM
COMPENSATION
---------------------------------------------------
SECURITIES
NAME YEAR SALARY BONUS UNDERLYING ALL OTHER
OPTIONS COMPENSATION/(1)/
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
William S. Green 1998 $245,111 $ - 0 - 10,050 $3,677
President and Chief Executive 1997 $229,031 $ - 0 - 10,125 $3,435
Officer 1996 $218,186 $ - 0 - - $2,805
- ------------------------------------------------------------------------------------------
Michael J. Grebe /(2)/ 1998 $ 26,923 $ - 0 - 100,000 $- 0 -
Executive Vice President and
Chief Operating Officer
- ------------------------------------------------------------------------------------------
Fred B. Gross 1998 $120,730 $ 8,000 10,050 $3,018
Vice President, Corporate 1997 $112,809 $ - 0 - 5,125 $2,820
Development and Secretary 1996 $107,536 $ - 0 - 17,045 $2,805
- ------------------------------------------------------------------------------------------
Michael T. Toomey 1998 $103,670 $13,500 10,050 $2,704
Chief Financial Officer 1997 $102,345 $ - 0 - 5,125 $2,371
1996 $ 80,600 $ - 0 - 17,045 $2,255
- ------------------------------------------------------------------------------------------
</TABLE>
(1) "All Other Compensation" consists of amounts matched by Wilmar under its
401(k) Plan.
(2) Wilmar has employed Mr. Grebe since November 1998. Under his employment
agreement, his annual base salary is $200,000.
12
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table includes information on option grants during the 1998 fiscal
year to the executive officers named in the Summary Compensation Table.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE
INDIVIDUAL GRANTS (1) APPRECIATION FOR OPTION
TERM (2)
-------------------------------------------------------------------
PERCENT OF
TOTAL
OPTIONS
OPTIONS GRANTED TO EXERCISE EXPIRATION
NAME GRANTED EMPLOYEES PRICE DATE 5% 10%
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
William S. Green 10,000 3.55% $21.00 3/5/08 132,070 334,690
25 0.01% $21.00 3/12/08 330 840
25 0.01% $22.13 5/5/08 350 880
- ----------------------------------------------------------------------------------------
Michael J. Grebe 100,000 35.53% $17.25 11/5/08 1,084,840 2,749,210
- ----------------------------------------------------------------------------------------
Fred B. Gross 10,000 3.55% $21.00 3/5/08 132,070 334,690
25 0.01% $21.00 3/12/08 330 840
25 0.01% $22.13 5/5/008 350 880
- ----------------------------------------------------------------------------------------
Michael T. Toomey 10,000 3.55% $21.00 3/5/08 132,070 334,690
25 0.01% $21.00 3/12/08 330 840
25 0.01% $22.13 5/5/08 350 880
- ----------------------------------------------------------------------------------------
</TABLE>
(1) Except as otherwise noted, options were granted pursuant to the Stock
Option Plan. 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 Wilmar for cause or a voluntary termination of
employment by the employee, or (b) one year following the death or
disability of the employee. Options granted under the Stock Option Plan
are not assignable or otherwise transferrable except by will or the laws of
descent and distribution.
(2) The dollar amounts under these columns reflect the 5% and 10% rates of
appreciation prescribed by the Securities and Exchange Commission. These
dollar amounts are not intended to forecast future appreciation of Wilmar's
stock price. The Named Executive Officers will not benefit unless Wilmar's
stock price increases above the exercise price. Any gain to the Named
Executive Officers resulting from an increase in Wilmar's stock price would
benefit all shareholders.
13
<PAGE>
AGGREGATED OPTION EXERCISED DURING FISCAL 1998
AND FISCAL YEAR END VALUES
The following table shows the exercise of stock options in fiscal 1998 and the
number and value of options held as of December 25, 1998 by the executive
officers named in the Summary Compensation Table.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
NUMBER NUMBER OF SECURITIES VALUE OF UNEXERCISED
OF SHARES UNDERLYING UNEXERCISE IN-THE-MONEY OPTIONS AT
ACQUIRED VALUE OPTIONS AT FISCAL YEAR END FISCAL YEAR END
UPON REALIZED ----------------------------------------------------------------
EXERCISE UPON
NAME OF OPTION EXERCISE EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
William S. Green 20,000 175 $ 46,250 $ 465
- ------------------------------------------------------------------------------------------------------------
Michael J. Grebe -- 100,000 -- $287,500
- ------------------------------------------------------------------------------------------------------------
Fred B. Gross 54,245 32,375 $621,730 $512,282
- ------------------------------------------------------------------------------------------------------------
Michael T. Toomey 18,000 $188,376 33,400 36, 575 $315,593 $579,041
- ------------------------------------------------------------------------------------------------------------
</TABLE>
EMPLOYMENT AGREEMENTS
William S. Green entered into an employment agreement with Wilmar in March 1995.
Under the terms of the agreement, Mr. Green will serve as Wilmar's President and
Chief Executive Officer until March 1, 2001, unless earlier terminated by
Wilmar. His annual base salary is $200,000, subject to adjustment, and an
annual bonus upon achieving specified financial targets set by the Compensation
Committee. The agreement contains certain non-competition and related
provisions.
Fred B. Gross entered into an employment agreement with Wilmar in March 1996.
The term of the agreement expires in April 1999, but is 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 agreement contains certain non-competition and related
provisions.
14
<PAGE>
J O I N T R E P O R T O F T H E C O M P E N S A T I O N
C O M M I T T E E A N D T H E S T O C K O P T I O N C O M M I T T E E
- --------------------------------------------------------------------------------
The Board of Directors created the Compensation Committee and the Stock Option
Committee to have responsibility for implementing and administrating Wilmar'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 and Wilmar's other
executive officers. Mr. Green does not participate in the approval of his
compensation. The Stock Option Committee is responsible for determining which
executives, including the Chief Executive Officer, will be granted stock options
and the size of such grants.
COMPENSATION POLICIES
Wilmar'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
the executive officers with those of Wilmar's shareholders and further
reward successful performance.
The principal components of Wilmar's executive officer compensation program are
base salary, annual cash incentive awards and grants of stock options.
Base salary levels for Wilmar'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 position's complexity, responsibility and need for special
expertise. Individual salaries also take into account individual experience and
performance.
The annual cash incentive award for 1998 was based on individual responsibility
and contribution to the Company's performance.
Wilmar granted stock options to its executive officers in 1998. The issuance of
stock options was based on Wilmar 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 Wilmar's officers and other employees. The objective of the Stock
Option Plan is to align senior management and shareholder long-term interests by
creating a strong and direct link between the executive's accumulation of wealth
and shareholder return to enable executives to develop and maintain a
significant, long-term stock ownership position in Wilmar's common stock.
Individual grants of stock options under the Stock Option Plan are based upon
individual performance. The Stock Option Committee believes that its past
grants of stock options have successfully focused Wilmar's executive officers
and other members of senior management on building profitability and shareholder
value.
15
<PAGE>
COMPENSATION OF THE 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 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
Wilmar's common stock increased 33% over last year and the return to
shareholders, as measured by the December 25, 1998 closing price of Wilmar's
common stock, has increased 83% from the IPO price of $11.00 per share. Mr.
Green's total annual compensation increased 7% over the same period. The
Compensation Committee and the Stock Option Committee determined that Mr. Green
should be granted additional options since Wilmar had achieved the earnings
target established by the Board of Directors. Therefore, Mr. Green was granted
stock options to purchase 10,000 shares of common stock in March 1998.
Respectfully submitted by the Compensation Committee
William S. Green
Ernest K. Jacquet
Donald M. Wilson
and the Stock Option Committee
Ernest K. Jacquet
Donald M. Wilson
16
<PAGE>
P E R F O R M A N C E G R A P H
- --------------------------------------------------------------------------------
The performance graph below compares the percentage change in the cumulative
shareholder return of Wilmar from January 24, 1996 through December 25, 1998
with the percentage change in the cumulative total return over the same period
on (I) the Nasdaq Stock Market (U.S.) Index (the "Nasdaq Index") and (ii)
Russell 2000 Index. Wilmar has chosen the Russell 2000 Index as an index of
issuers with similar market capitalization because we do not believe we can
reasonably identify a peer group or applicable published industry or line-of-
business index. Those industry or line-of-business indices are comprised
primarily of either retailers or manufacturers whose business is not
substantially similar to Wilmar's and are of substantially greater market
capitalization. In addition, most of Wilmar's competitors are smaller,
privately held companies.
This graph assumes an initial investment of $100 on January 24, 1996 in each of
Wilmar common stock, the Nasdaq Index and the Russell 2000 Index.
[CHART APPEARS HERE]
NASDAQ
Measurement Date Wilmar Industries Stock Market - US Russell 2000
01/24/96 100 100 100
12/27/96 198 123 116
12/26/97 202 151 143
12/25/98 183 212 142
* $100 INVESTED ON 1/24/96 IN STOCK OR ON 12/31/95
IN INDEX - INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
17
<PAGE>
O T H E R I N F O R M A T I O N
- --------------------------------------------------------------------------------
CERTAIN RELATIONSHIPS AND CERTAIN TRANSACTIONS
On April 29, 1996, Wilmar entered into an operating lease agreement with 804
Eastgate Associates, LLC, an entity owned by William S. Green, Fred B. Gross and
an unrelated third party, pursuant to which Wilmar leases approximately 70,000
square feet for a warehouse and customer service center in Mount Laurel, New
Jersey. The minimum monthly rent is $24,052 from January 1, 1997 through May 31,
2001; from June 1, 2001 through the end of the lease term, the rent will
increase based on the Consumer Price Index. Wilmar 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, Wilmar is solely responsible for the
costs of maintenance, operation and repair of the property. The lease expires
on May 31, 2006. Wilmar believes that the terms of the lease are no less
favorable to it than could be obtained from an unaffiliated third party. Wilmar
paid rent under this lease of approximately $289,000 in fiscal 1998.
Wilmar's headquarters in Moorestown, New Jersey, is leased to us by William S.
Green. Under the lease dated March 1, 1994, and amended March 7, 1995, Wilmar
rents approximately 12,500 square feet at an annual minimum rent of $137,500.
Wilmar 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,
Wilmar is solely responsible for the costs of maintenance, operation and repair
of the property. The lease expires on February 28, 2004 and does not contain
any renewal terms. Wilmar believes that the terms of the lease are no less
favorable to it than could be obtained from an unaffiliated third party. Wilmar
paid rent under this lease in the amount of $137,500 in fiscal 1998.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None.
COMPLIANCE UNDER SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16 of the Securities Exchange Act of 1934 requires our directors and
officers, and persons who beneficially own more than 10% of Wilmar's common
stock to file certain reports with the Securities and Exchange Commission.
Based on our review of information provided by persons subject to the Section 16
filing requirements, we believe that all required filings were made on a timely
basis.
EXPENSES OF SOLICITATION
The expense of soliciting proxies for the Annual Meeting will be paid for by
Wilmar. Following the original mailing of the proxies and other soliciting
materials, Wilmar officers, employees and/or agents may also solicit proxies by
mail, telephone, facsimile or in person. We will request that brokers,
custodians, nominees and other record holders of common stock forward copies of
the proxy and other soliciting materials to persons for whom they hold shares of
common stock and seek instructions for the exercise of proxies. In such cases,
Wilmar, upon the request of the record holders, will reimburse such holders for
their reasonable expense.
18
<PAGE>
ACCOUNTANTS
Deloitte & Touche LLP served as our independent public accountants for the 1998
fiscal year. We have selected Deloitte & Touche LLP to serve as our independent
public accountants for the 1999 fiscal year. We have requested that a
representative of Deloitte & Touche LLP attend the Annual Meeting. The
representative will have an opportunity to make a statement, if they wish, and
will be available to respond to appropriate shareholders' questions.
PROPOSALS FOR NEXT YEAR'S MEETING
Any eligible shareholder who wishes to submit a proposal for presentation at our
2000 Annual Meeting must submit the proposal not later than December 23, 1999,
to Wilmar Industries, Inc., 303 Harper Drive, Moorestown, New Jersey 08057,
Attention: Secretary, for inclusion, if appropriate, in our proxy statement and
form of proxy relating to our 2000 Annual Meeting.
19
<PAGE>
WILMAR INDUSTRIES, INC.
Proxy for Annual Meeting of Stockholders May 27, 1999
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 March 29, 1999, at the Annual Meeting of Stockholders to be held
on May 27, 1999 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 27, 1999
<TABLE>
<S> <C>
\/ Please Detach and Mail in the Envelope Provided \/
Please mark your
[X] votes as in this
example.
WITHHOLD AUTHORITY
to vote for all nominees
1. Election FOR listed at right FOR AGAINST ABSTAIN
of [_] [_] Nominees: Ernest K. Jacquet 2. To approve the amendment to [_] [_] [_]
Directors Donald M. Wilson Wilmar Industries, Inc.'s
Amended and Restated 1995
For all nominees listed (except as marked to the Stock Option Plan pursuant
contrary below) to which additional shares
of common stock will be
reserved for issuance.
- -----------------------------------
3. In their discretion, upon such other business as may
properly 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 IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
STOCKHOLDERS. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" THE ELECTION OF DIRECTORS AND "FOR" THE
AMENDMENT TO THE AMENDED AND RESTATED 1995 STOCK OPTION
PLAN.
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 aappears on stock certificate hereon.
</TABLE>
