UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

SCHEDULE 14A
(RULE 14a-101)

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

 

Check the appropriate box:

WEST MARINE, INC.

(Name of Registrant as Specified In Its Charter)

N/A

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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August 11, 2017

Dear West Marine Stockholders:

You are cordially invited to attend a special meeting of stockholders (the “Special Meeting”) of West Marine, Inc., a Delaware corporation (“West Marine,” the “Company,” “we,” “us” or “our”), to be held on September 12, 2017, at 8:00 a.m., Pacific Time, at West Marine Support Center located at 500 Westridge Drive, Watsonville, California 95076-4100.

On June 29, 2017, the Company entered into the Agreement and Plan of Merger (the “Merger Agreement”) with Rising Tide Parent Inc., a Delaware corporation (“Parent”), and Rising Tide Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of Parent (“Sub”). Parent and Sub are entities affiliated with Monomoy Capital Partners, a New York-based private equity fund. Under the Merger Agreement, at the effective time of the merger, Sub will merge with and into the Company, with the Company surviving the merger as a wholly-owned subsidiary of Parent (the “Merger”). At the Special Meeting, we will ask you to adopt the Merger Agreement.

At the effective time of the Merger, each share of the Company’s common stock, par value $0.001 per share (“our common stock”), issued and outstanding prior to the effective time, other than (i) shares held in the treasury of the Company or owned of record by any wholly-owned subsidiary of the Company, Parent or any of its wholly-owned subsidiaries and (ii) shares of our common stock held by stockholders who have not voted in favor of the adoption of the Merger Agreement and who have perfected their statutory right of appraisal in respect of such shares of our common stock in accordance with Section 262 of the Delaware General Corporation Law, will be cancelled and automatically be converted into the right to receive $12.97 per share in cash, without interest (the “Merger Consideration”), subject to any withholding taxes.

The Merger Consideration represents a premium of approximately 34.4% over the closing price of our common stock reported on The NASDAQ Global Select Market (the “NASDAQ”) on June 29, 2017, the last full trading day before the entering into of the Merger Agreement, and approximately 31.7% over the average closing price of our common stock reported on the NASDAQ for the trading days during the 30-day period ended on June 29, 2017.

In connection with the process to explore strategic alternatives available to the Company, the board of directors of the Company (the “Board”) carefully reviewed and considered the terms and conditions of the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement and unanimously (i) adopted and declared advisable the Merger Agreement and the consummation by the Company of the transactions contemplated by the Merger Agreement, including the Merger, (ii) approved the execution, delivery and performance of the Merger Agreement and the consummation by the Company of the transactions contemplated by the Merger Agreement, including the Merger, (iii) determined that the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger, are advisable and in the best interests of the Company and its stockholders, and (iv) recommended that the Company stockholders adopt the Merger Agreement and directed that the Merger Agreement be submitted to the Company stockholders for adoption. Accordingly, the Board unanimously recommends a vote “FOR” the proposal to adopt the Merger Agreement (Proposal 1).

In addition, at the Special Meeting, you will be asked to consider and vote on a proposal to approve, on a non-binding, advisory basis, certain compensation that may be paid or become payable to the Company’s named executive officers that is based on or otherwise relates to the Merger (Proposal 2) and a proposal to adjourn the Special Meeting, if necessary or appropriate, to solicit additional proxies to approve the proposal to adopt the Merger Agreement (Proposal 3). You will also at the Special Meeting be asked to transact such other business as may properly come before the meeting or any adjournment or postponement thereof.

Your vote is very important, regardless of the number of shares of our common stock that you own. We cannot consummate the Merger unless the proposal to adopt the Merger Agreement is approved by the affirmative vote of the holders of at least a majority of the outstanding shares of our common stock

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entitled to vote at the Special Meeting. Whether or not you plan to attend the Special Meeting, please complete, date, sign and return, as promptly as possible, the enclosed proxy card or voting instruction form in the accompanying prepaid reply envelope, or submit your proxy or voting instructions by telephone or the Internet. The failure to vote your shares of our common stock will have the same effect as a vote “AGAINST” approval of the proposal to adopt the Merger Agreement . The Board unanimously recommends that you vote “FOR” the proposal to adopt the Merger Agreement, FOR” the approval, by a non-binding advisory vote, of the compensation that may be paid or become payable to the Company’s named executive that is based on or otherwise relates to the Merger and “FOR” the proposal to adjourn the Special Meeting if necessary or appropriate, as determined by the Company, to solicit additional proxies in favor of the proposal to adopt the Merger Agreement.

The obligations of the Company, Parent and Sub to consummate the Merger are subject to the satisfaction or waiver of certain conditions. The accompanying proxy statement contains detailed information about us, the Special Meeting, the Merger Agreement, the Merger and the Merger-related proposals. A copy of the Merger Agreement is attached as Annex A to the proxy statement. We encourage you to read the entire proxy statement carefully, including its annexes and the documents incorporated by reference. In addition, you may obtain more information about the Company from documents that it files with the Securities and Exchange Commission. See the section in the proxy statement captioned “ Where You Can Find More Information .”

If you have any questions or need assistance voting your shares, please contact our proxy solicitor:

D.F. King & Co., Inc.
Stockholders May Call Toll-Free: (866) 751-6312
Banks & Brokers May Call Collect: (212) 269-5550
Email: WMAR@dfking.com

On behalf of the Board, we thank you for your support and appreciate your consideration of this matter.

		Sincerely,
/s/ Barbara L. Rambo		/s/ Matthew L. Hyde
Barbara L. Rambo		Matthew L. Hyde
Board Chair		President and Chief Executive Officer

The accompanying proxy statement is dated August 11, 2017 and, together with the enclosed form of proxy card, is first being mailed to the Company stockholders on or about August 14, 2017.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved the Merger, passed upon the merits or fairness of the Merger Agreement or the transactions contemplated thereby, including the proposed Merger, or passed upon the adequacy or accuracy of the information contained in the accompanying proxy statement. Any representation to the contrary is a criminal offense.

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WEST MARINE, INC.

 

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
  
September 12, 2017

 

Notice is hereby given that a special meeting of stockholders (the “Special Meeting”) of West Marine, Inc., a Delaware corporation (“West Marine,” the “Company,” “we,” “us” or “our”), will be held on September 12, 2017, at 8:00 a.m., Pacific Time, at West Marine Support Center located at 500 Westridge Drive, Watsonville, California 95076-4100, for the following purposes:

1.

Adoption of the Merger Agreement.   To adopt the Agreement and Plan of Merger dated as of June 29, 2017 (the “Merger Agreement”), entered into by and among the Company, Rising Tide Parent Inc., a Delaware corporation (“Parent”), and Rising Tide Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of Parent (“Sub”), pursuant to which Sub will be merged with and into the Company, with the Company surviving the merger as a wholly-owned subsidiary of Parent (the “Merger”).

2.

Advisory Vote Regarding Merger-Related Compensation.   To approve, on a non-binding, advisory basis, the compensation that may be paid or become payable to the Company’s named executive officers that is based on or otherwise relates to the Merger.

3.

Adjournment or Postponement of the Special Meeting.   To approve a proposal to adjourn the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at that time to approve the proposal to adopt the Merger Agreement.

4.

Any Other Business.   To transact such other business as may properly come before the Special Meeting or any adjournment or postponement thereof.

All stockholders at the close of business on August 3, 2017, the record date with respect to the Special Meeting, are entitled to notice of and to vote at the Special Meeting and any adjournment or postponement thereof.

In connection with the process to explore strategic alternatives available to the Company, the board of directors of the Company (the “Board”) carefully reviewed and considered the terms and conditions of the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement and unanimously (i) adopted and declared advisable the Merger Agreement and the consummation by the Company of the transactions contemplated by the Merger Agreement, including the Merger, (ii) approved the execution, delivery and performance of the Merger Agreement and the consummation by the Company of the transactions contemplated by the Merger Agreement, including the Merger, (iii) determined that the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger, are advisable and in the best interests of the Company and its stockholders, and (iv) recommended that the Company stockholders adopt the Merger Agreement and directed that the Merger Agreement be submitted to the Company stockholders for adoption.

The Board unanimously recommends that you vote “FOR” the proposal to adopt the Merger Agreement, “FOR” the approval, by a non-binding advisory vote, of the compensation that may be paid or become payable to the Company’s named executive officers that is based on or otherwise relates to the Merger and “FOR” the proposal to adjourn the Special Meeting if necessary or appropriate, as determined by the Company, to solicit additional proxies in favor of the proposal to adopt the Merger Agreement.

YOUR VOTE IS IMPORTANT

WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING IN PERSON, WE ENCOURAGE YOU TO SUBMIT YOUR PROXY AS PROMPTLY AS POSSIBLE (1) BY TELEPHONE; (2) THROUGH THE INTERNET; OR (3) BY SIGNING AND DATING THE ENCLOSED PROXY CARD AND RETURNING IT IN THE POSTAGE-PAID ENVELOPE PROVIDED. IF YOU ARE A

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STOCKHOLDER OF RECORD, YOU MAY REVOKE YOUR PROXY OR CHANGE YOUR VOTE AT ANY TIME BEFORE IT IS VOTED AT THE SPECIAL MEETING. IF YOU ARE VOTING BY TELEPHONE OR THROUGH THE INTERNET, THEN YOUR VOTING INSTRUCTIONS MUST BE RECEIVED BY 11:59 P.M. PACIFIC TIME ON THE DAY BEFORE THE SPECIAL MEETING. YOUR PROXY IS BEING SOLICITED BY THE BOARD.

If you hold your shares in “street name,” you should instruct your bank, broker or other nominee how to vote your shares in accordance with the voting instruction form that you will receive from your bank, broker or other nominee. Your broker or other agent cannot vote on any of the proposals, including the proposal to adopt the Merger Agreement and approve the Merger and the other transactions contemplated thereby, without your instructions.

If you are a stockholder of record, voting in person by ballot at the Special Meeting will revoke any proxy that you previously submitted. If you hold your shares through a bank, broker or other nominee, you must obtain a “legal proxy” in order to vote in person at the Special Meeting.

We encourage you to read the accompanying proxy statement and its annexes, including all documents incorporated by reference into the accompanying proxy statement, carefully and in their entirety. If you have any questions concerning the Merger, the Special Meeting or the accompanying proxy statement, would like additional copies of the accompanying proxy statement or need help voting your shares of our common stock, please contact our proxy solicitor:

D.F. King & Co., Inc.
Stockholders May Call Toll-Free: (866) 751-6312
Banks & Brokers May Call Collect: (212) 269-5550
Email: WMAR@dfking.com

If you fail to (i) return your proxy card or voting instruction form, (ii) grant your proxy electronically over the Internet or by telephone or (iii) attend the Special Meeting in person, your shares will not be counted for purposes of determining whether a quorum is present at the Special Meeting and, if a quorum is present, will have the same effect as a vote “AGAINST” the proposal to adopt the Merger Agreement, but will have no effect on the other two proposals.

For more information concerning the Special Meeting, the Merger Agreement, the Merger and other transactions contemplated by the Merger Agreement, please review the accompanying proxy statement and the copy of the Merger Agreement attached as Annex A thereto.

		By the Order of the Board,
/s/ Barbara L. Rambo		/s/ Matthew L. Hyde
Barbara L. Rambo		Matthew L. Hyde
Board Chair		President and Chief Executive Officer

This proxy statement is dated August 11, 2017 and is first being mailed to our stockholders on or about August 14, 2017.

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SUMMARY			1
Parties to the Merger			1
The Merger and the Merger Consideration			2
Material U.S. Federal Income Tax Consequences of the Merger			2
Treatment of Equity Awards			3
Financing of the Merger			3
Conditions to the Merger			4
Regulatory Approvals Required for the Merger			4
Restriction on Solicitation of Competing Proposals			5
Termination of the Merger Agreement			5
Effect of Termination			6
Company Termination Fee			6
Reverse Termination Fee and Other Remedies			7
Appraisal Rights			8
Recommendation of the Board and Reasons for the Merger			8
Interests of the Company’s Directors and Executive Officers in the Merger			8
Voting Agreement			8
Opinion of Guggenheim Securities, LLC			9
Market Price and Dividend Data			9
Certain Effects of the Merger			9
Effect on the Company if the Merger is Not Consummated			10
The Special Meeting			10
Litigation Related to the Merger			11
QUESTIONS AND ANSWERS			12
FORWARD-LOOKING STATEMENTS			20
RISK FACTORS			21
THE SPECIAL MEETING			23
Date, Time and Place			23
Purpose of the Special Meeting			23
Record Date; Shares Entitled to Vote; Quorum			23
Vote Required for Approval			23
Abstentions and Broker Non-Votes			24
Shares Held by the Company’s Directors and Executive Officers			24
Voting of Proxies			25
Revocability of Proxies			25
The Board’ Recommendation			26
Solicitation of Proxies			26
Anticipated Date of Consummation of the Merger			26
Appraisal Rights			26

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Other Matters			27
Householding of Special Meeting Materials			27
Questions and Additional Information			27
PROPOSAL 1: ADOPTION OF THE MERGER AGREEMENT			28
PROPOSAL 2: ADVISORY, NON-BINDING VOTE TO APPROVE CERTAIN MERGER-RELATED EXECUTIVE COMPENSATION ARRANGEMENTS			29
PROPOSAL 3: ADJOURNMENT OF THE SPECIAL MEETING			30
THE MERGER			31
Parties to the Merger			31
Effect of the Merger			31
Effect on the Company if the Merger is Not Consummated			32
Merger Consideration			32
Background of the Merger			32
Recommendation of the Board and Reasons for the Merger			43
Opinion of Guggenheim Securities, LLC			47
Forward-Looking Financial Information			60
Financial Projections			62
Financing			63
Limited Guarantees			64
Interests of the Company’s Directors and Executive Officers in the Merger			64
Closing and Effective Time of the Merger			70
Appraisal Rights			70
Material U.S. Federal Income Tax Consequences of the Merger			75
Regulatory Approvals Required for the Merger			77
Litigation Related to the Merger			78
THE MERGER AGREEMENT			80
Explanatory Note Regarding the Merger Agreement			80
Form and Effects of the Merger; Directors and Officers; Certificate of Incorporation and Bylaws			80
Closing and Effective Time of the Merger			81
Merger Consideration			81
Treatment of the Company Equity-Based Awards			82
Exchange and Payment Procedures			83
Representations and Warranties			84
Covenants Regarding Conduct of Business by the Company Prior to the Merger			87
Restriction on Solicitation of Competing Proposals			89
Obligation of the Board with respect to Its Recommendation			90
Obligations with respect to this Proxy Statement and the Special Meeting			92
Access to Information			92
Efforts to Consummate the Merger			92
Directors’ and Officers’ Indemnification and Insurance			93

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Financing Covenants			94
Employee Benefits			94
Securityholder Litigation			95
Other Covenants and Agreements			95
Conditions to the Merger			96
Termination of the Merger Agreement			97
Effect of Termination			98
Company Termination Fee			98
Reverse Termination Fee and Other Remedies			99
Amendment and Waiver			100
Governing Law			100
Specific Performance			100
THE VOTING AGREEMENT			101
Voting Provisions			101
Restrictions on Transfer; Other Actions			102
Non-Solicitation			102
Termination			102
MARKET PRICES AND DIVIDEND DATA			103
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			104
FUTURE STOCKHOLDER PROPOSALS			106
WHERE YOU CAN FIND MORE INFORMATION			106
MISCELLANEOUS			108
Annexes
Annex A — Agreement and Plan of Merger			A-1
Annex B — Opinion of Guggenheim Securities, LLC			B-1
Annex C — Section 262 of the General Corporation Law of the State of Delaware			C-1
Annex D — Voting and Support Agreement			D-1

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SUMMARY

This summary highlights selected information that is contained elsewhere in this proxy statement. It may not contain all of the information that may be important to you. Accordingly, you should carefully read this proxy statement in its entirety, including its annexes, as well as the other documents referred to in this proxy statement. You may obtain the information incorporated by reference in this proxy statement (excluding exhibits) without charge by following the instructions under “Where You Can Find More Information” on page 106 . Parenthetical page references have been included to direct you to a more complete description of the topics presented in this summary.

Except as otherwise specifically noted in this proxy statement, “West Marine,” the “Company,” “we,” “us,” “our” and similar words refer to West Marine, Inc., a Delaware corporation. Throughout this proxy statement, we refer to Rising Tide Parent Inc., a Delaware corporation, as “Parent,” and Rising Tide Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of Parent, as “Sub.” In addition, throughout this proxy statement, we refer to the Agreement and Plan of Merger dated June 29, 2017, by and among the Company, Parent and Sub, as it may be amended from time to time, as the “Merger Agreement,” and the merger of Sub with and into the Company, with the Company continuing as the surviving corporation and as a wholly-owned subsidiary of Parent pursuant to the terms and conditions of the Merger Agreement as the “Merger.”

This proxy statement and a proxy card are first being sent or given on or about August 14, 2017 to stockholders as of the close of business on August 3, 2017.

Parties to the Merger (Page 31 )

West Marine, Inc.

West Marine is a leading omni-channel specialty retailer exclusively offering boating gear, apparel, footwear and other waterlife-related products to anyone who enjoys recreational time on or around the water. Providing great customer experiences and a consistent brand is important to us, regardless of the sales channel our customer uses. With our numerous stores and our eCommerce websites reaching domestic and international customers, we are recognized as a dominant waterlife outfitter for cruisers, sailors, anglers and paddlesports enthusiasts.

Our principal executive offices are located at 500 Westridge Drive, Watsonville, California 95076-4100, and our telephone number is (831) 728-2700. Our common stock is listed on The NASDAQ Global Select Market (the “NASDAQ”) under the symbol “WMAR.”

Rising Tide Parent Inc.

Parent was formed on June 27, 2017 solely for the purpose of engaging in the Merger and the other transactions contemplated by the Merger Agreement. Parent has not engaged in any business activities other than those incidental to its formation and in connection with the transactions contemplated by the Merger Agreement and arranging the equity financing and debt financing in connection with the Merger.

Parent’s principal executive offices are located at 142 West 57 ^th Street, 17 ^th Floor, New York, New York 10019, and its telephone number is (212) 699-4000.

Rising Tide Merger Sub Inc.

Sub was formed on June 27, 2017 solely for the purpose of engaging in the Merger and the other transactions contemplated by the Merger Agreement. Sub has not engaged in any business activities other than those incidental to its formation and in connection with the transactions contemplated by the Merger Agreement and arranging the equity financing and debt financing in connection with the Merger. Upon the consummation of the Merger, Sub will cease to exist as a separate entity.

Sub’s principal executive offices are located at 142 West 57 ^th Street, 17 ^th Floor, New York, New York 10019, and its telephone number is (212) 699-4000.

Parent and Sub are entities affiliated with Monomoy Capital Partners (“Monomoy”), a private equity firm with $1.5 billion in committed capital. Through its three fund vehicles, Monomoy makes controlling

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investments in middle market businesses in the manufacturing, industrial, distribution and consumer products sectors. Monomoy’s principal executive offices are located at 142 West 57 ^th Street, 17 ^th Floor, New York, New York 10019, and its telephone number is (212) 699-4000.

The Merger and the Merger Consideration (Page 32 )

Upon the terms and subject to the conditions of the Merger Agreement, if the Merger is consummated, Sub will merge with and into the Company, and the Company will continue as the surviving corporation in the Merger and as a wholly-owned subsidiary of Parent (the “Surviving Corporation”).

Upon the consummation of the Merger, the Company will cease to be a publicly traded company and each outstanding share of our common stock issued and outstanding immediately prior to the effective time of the Merger (the “Effective Time”), other than (i) shares held in the treasury of the Company or owned of record by any wholly-owned subsidiary of the Company, Parent or any of its wholly-owned subsidiaries (the “Cancelled Shares”) and (ii) shares of our common stock held by stockholders who have not voted in favor of the adoption of the Merger Agreement and who have perfected their statutory right of appraisal in respect of such shares of our common stock (the “Dissenting Shares”) in accordance with Section 262 of the General Corporation Law of the State of Delaware (the “DGCL”), will be cancelled and automatically be converted into the right to receive in cash an amount equal to $12.97 per share, without interest (the “Merger Consideration”), less any applicable withholding taxes. Following the consummation of the Merger, you will no longer own any shares of the capital stock of the Surviving Corporation.

If the Merger is consummated and your shares of our common stock are held in book-entry form, the Paying Agent (as defined in the Merger Agreement and described in the section captioned “ The Merger Agreement — Exchange and Payment Procedures ”) will issue and deliver to you a check or wire transfer for your shares without any further action on your part. If you are a stockholder of record with your shares held in certificate form, you will receive a letter of transmittal with instructions on how to send your stock certificate(s) representing your shares of our common stock to the Paying Agent following consummation of the Merger. The Paying Agent will issue and deliver to you a check or wire transfer for your shares after you comply with these instructions. Please do not send your stock certificates with your proxy card . See the section captioned “ The Merger Agreement — Exchange and Payment Procedures .”

If your shares are held in “street name” by your broker, bank, or other nominee, you will receive instructions from your broker, bank or other nominee as to how to effect the surrender of your shares held in “street name.”

Material U.S. Federal Income Tax Consequences of the Merger (Page 75 )

For U.S. federal income tax purposes, the receipt of cash by a U.S. Holder (as defined in the section captioned “ The Merger — Material U.S. Federal Income Tax Consequences of the Merger ”) in exchange for such U.S. Holder’s shares of our common stock in the Merger generally will result in the recognition of gain or loss in an amount measured by the difference, if any, between the amount of cash that such U.S. Holder receives in the Merger and such U.S. Holder’s adjusted tax basis in the shares of our common stock surrendered in the Merger. Gain or loss realized generally must be calculated separately for each block of shares ( i.e. , shares acquired at the same cost in a single transaction) surrendered pursuant to the Merger.

A Non-U.S. Holder (as defined in the section captioned “ The Merger — Material U.S. Federal Income Tax Consequences of the Merger ”) generally will not be subject to U.S. federal income tax with respect to the exchange of shares of our common stock for cash in the Merger, unless such Non-U.S. Holder has certain connections to the United States.

The determination of actual tax consequences of the Merger to a holder of our common stock will depend on the holder’s specific situation. For more information, see the section captioned “ The Merger — Material U.S. Federal Income Tax Consequences of the Merger .” Stockholders should consult their own tax advisors concerning the U.S. federal income tax consequences relating to the Merger in light of their particular circumstances and any consequences arising under U.S. federal non-income tax laws or the laws of any state, local or foreign taxing jurisdiction.

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Treatment of Equity Awards (Page 65 )

The Merger Agreement provides for the following treatment as of the Effective Time of the stock options (“Options”) and time-based restricted stock units and performance-based restricted stock units (collectively, “RSUs”) that are outstanding under the Company’s Amended and Restated Omnibus Equity Incentive Plan (the “Company Equity Incentive Plan”).

Options

Immediately prior to the Effective Time, each Option granted under the Company Equity Incentive Plan that is then outstanding, all of which are fully vested, will be cancelled and, in exchange therefor, each holder of any such Option will be entitled to receive payment of an amount in cash equal to the product of (i) the total number of shares of our common stock subject to such Option, multiplied by (ii) the excess, if any, of (A) the Merger Consideration over (B) the exercise price per share subject to such Option, without interest; provided, however , that (i) any such Option with respect to which the exercise price per share subject thereto is greater than the Merger Consideration will be cancelled in exchange for no consideration and (ii) such Option payments may be reduced by the amount of any required tax withholdings as contemplated by the Merger Agreement.

RSUs

Employee RSUs

Immediately prior to the Effective Time, each award of unvested RSUs (including performance-based stock units, referred to as “PSUs”) granted under the Company Equity Incentive Plan that is then outstanding (other than those RSUs held by a non-employee director of the Company) will be assumed by the Surviving Corporation and will be converted into a right to receive payment of an amount in cash equal to the product of (i) the Merger Consideration, multiplied by (ii) the total number of shares of our common stock subject to such RSUs, without interest (the “Cash Replacement Company RSUs”), which such Cash Replacement Company RSUs will, subject to the holder’s continued employment with the Surviving Corporation through the applicable vesting dates, vest and be payable at the same time as the RSUs for such Cash Replacement Company RSUs were exchanged would have vested pursuant to their terms. All Cash Replacement Company RSUs will have the same terms and conditions as applied to the RSUs for which they were exchanged, except for terms rendered inoperative by reason of the transactions contemplated by the Merger Agreement or for administrative or ministerial changes that are not materially detrimental to the holders and that are necessary for the administration of the Cash Replacement Company RSUs. With respect to PSUs, the number of PSUs assumed by the Surviving Corporation and converted into Cash Replacement Company RSUs will be determined (A) for PSUs with a performance period that by its terms has ended prior to the Effective Time, based on actual performance through the end of such performance period, and (B) for PSUs with a performance period that by its terms has not ended prior to the Effective Time, assuming performance at 100% of target levels.

Non-Employee Director RSUs

Immediately prior to the Effective Time, each award of unvested RSUs granted under the Company Equity Incentive Plan that is then outstanding and is held by a non-employee director of the Company will be fully vested and cancelled and, in exchange therefor, each holder of any such cancelled RSUs will be entitled to receive payment of an amount in cash equal to the product of (i) the Merger Consideration, multiplied by (ii) the total number of shares of our common stock subject to such RSUs, without interest; provided , however , that any such RSU payments may be reduced by the amount of any required tax withholdings as contemplated by the Merger Agreement.

Financing of the Merger (Page 63 )

The Company and Parent estimate that the total amount of funds required to consummate the Merger and related transactions and pay related fees and expenses will be approximately $354 million. This amount includes funds needed to (i) pay our stockholders the amounts due to them under the Merger Agreement; (ii) make payments due as of the Effective Time in respect of the Company’s outstanding equity awards pursuant to the Merger Agreement and (iii) pay all fees and expenses payable by Parent and Sub in connection with the Merger and related transactions.

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Parent expects this total amount to be funded through a combination of the following:

The obligations of Parent and Sub to consummate the Merger are not subject to any financing condition.

Conditions to the Merger (Page 96 )

The respective obligations of the Company, Parent and Sub to consummate the Merger are subject to the satisfaction or, to the extent permitted by applicable law, waiver of certain customary conditions, including, among other things, the following:

Regulatory Approvals Required for the Merger (Page 77 )

Parent and the Company have generally agreed to (and Parent has agreed to cause Sub and each of Parent’s and Sub’s affiliated investment funds to and the Company has agreed to cause each of its subsidiaries to) use their reasonable best efforts to promptly obtain all necessary actions, nonactions or approvals from governmental entities to consummate the Merger and the other transactions contemplated by the Merger Agreement. These actions, nonactions or approvals (i) include expiration or termination of the applicable waiting period under the HSR Act (early termination of the waiting period was granted on July 25, 2017, and (ii) may include the approval or clearance of the Merger pursuant to antitrust laws of potentially other jurisdictions as required.

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Restriction on Solicitation of Competing Proposals (Page 89 )

Under the Merger Agreement, the Company is required to and is required to cause each of its subsidiaries to and its and their respective directors, officers, employees, managers, consultants, accountants, advisors, investment bankers and counsel (collectively, the “representatives”) to, cease any solicitations, discussions or negotiations with any persons that may have been ongoing with respect to any Competing Proposal (as defined in the Merger Agreement and described in the section captioned “ The Merger Agreement — Restriction on Solicitation of Competing Proposals ”) and terminate “data room” access for such persons and their representatives and request the prompt return or destruction of any non-public information regarding the Company or its subsidiaries furnished to such persons and their representatives. Except as permitted by the terms of the Merger Agreement, the Company will not, and will cause each of its subsidiaries and its and their respective representatives not to:

Under certain circumstances, however, and in compliance with its obligations contained in the Merger Agreement, the Company may furnish information with respect to the Company and its subsidiaries to, and participate in discussions or negotiations with, the person making a Competing Proposal if, in addition to other conditions, the Board determines in good faith, after consultation with its financial advisors and outside counsel, that such Competing Proposal constitutes or would reasonably be expected to lead to a Superior Proposal (as defined in the Merger Agreement and described in the section captioned “ The Merger Agreement — Restriction on Solicitation of Competing Proposals ”). Under certain circumstances, the Company is permitted to terminate the Merger Agreement to enter into a definitive agreement with respect to a Superior Proposal after or concurrently with the payment by the Company to Parent of a termination fee of $11 million (the “Company Termination Fee”).

Termination of the Merger Agreement (Page 97 )

The Merger Agreement may be terminated under the following circumstances:

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Effect of Termination (Page 98 )

If the Merger Agreement is terminated, the Merge Agreement will become void and there shall be no liability or obligation on the part of Parent, Sub or the Company or their respective subsidiaries, officers or directors or any Affiliate of any of the foregoing, except that certain specified provisions of the Merger Agreement will survive any such termination and remain in full force and effect. Subject to the termination fees payable by the Company or Parent described below, the termination of the Merger Agreement will not relieve any party from any liabilities or damages incurred or suffered by another party as a result of such first party’s intentional fraud or willful and material breach of any of its representations, warranties, covenants or agreements set forth in the Merger Agreement.

Company Termination Fee (Page 98 )

The Company has agreed to pay Parent the Company Termination Fee if the Merger Agreement is terminated as described below:

In addition, the Company has agreed to pay Parent the Company Termination Fee if the Merger Agreement is terminated as described below:

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Reverse Termination Fee and Other Remedies (Page 99 )

Parent has agreed to pay the Company $17 million (the “Reverse Termination Fee”) if the Merger Agreement is terminated as described below:

Furthermore, Parent has agreed that the Company has the right to seek damages following a termination of the Merger Agreement by the Company in the instance where Parent or Sub has intentionally breached its covenants specified in Article V of the Merger Agreement and such breach is not curable prior to the Outside Date or has not been cured within 30 days after delivery of notice by the Company to Parent; provided, however , that under no circumstance will the Company or any of its affiliates be entitled to receive damages for such alleged intentional breach in excess of $15 million.

In addition, prior to the termination of the Merger Agreement by the Company, the Company will be entitled to obtain specific performance to cause Parent and Sub to cause the Equity Financing to be funded and to consummate the Merger under certain circumstances. If a court of competent jurisdiction has declined to specifically enforce such obligations of Parent and has instead granted an award of damages for such alleged breach of Parent’s obligations and Parent does not consummate the Merger within ten business days, the Company may enforce such award and accept damages for such alleged breach; provided, however , that under no circumstances will the Company or any of its affiliates be entitled to enforce such an award or accept damages for such alleged breach in excess of $25 million.

The Company will not be permitted or entitled to receive both such grant of specific performance (or damages contemplated pursuant to the immediately preceding paragraph) and the payment of the Reverse Termination Fee or damages relating to any intentional breach.

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Appraisal Rights (Page 70 )

Under the DGCL, our stockholders that do not vote in favor of the adoption of the Merger Agreement have the right to seek appraisal of the fair value of their shares of our common stock in cash as determined by the Delaware Court of Chancery (the “Court of Chancery”), but only if they comply fully with all of the applicable requirements of the DGCL for exercise of such appraisal rights, which requirements are summarized in this proxy statement. Any appraisal amount determined by the Court of Chancery could be more than, the same as, or less than the value of the Merger Consideration. Any stockholder intending to exercise appraisal rights must, among other things, submit a written demand for appraisal to us before the vote on the adoption of the Merger Agreement, and must not vote or otherwise submit a proxy in favor of the adoption of the Merger Agreement. Failure to follow the procedures specified under the DGCL will result in the loss of appraisal rights. Because of the complexity of the DGCL relating to appraisal rights, if you are considering exercising your appraisal rights, we encourage you to promptly seek the advice of your own legal and financial advisors. See the section captioned “ The Merger — Appraisal Rights ,” beginning on page 70 , and Annex C for additional information about these matters.

Recommendation of the Board and Reasons for the Merger (Page 43 )

After careful consideration and consulting with the legal and financial advisors to the Board, the Board has unanimously (i) adopted and declared advisable the Merger Agreement and the consummation by the Company of the transactions contemplated by the Merger Agreement, including the Merger, (ii) approved the execution, delivery and performance of the Merger Agreement and the consummation by the Company of the transactions contemplated by the Merger Agreement, including the Merger, (iii) determined that the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger, are advisable and in the best interests of the Company and its stockholders, and (iv) recommended that the Company stockholders adopt the Merger Agreement and directed that the Merger Agreement be submitted to the Company stockholders for adoption.

Accordingly, the Board unanimously recommends that you vote:

Interests of the Company’s Directors and Executive Officers in the Merger (Page 64 )

In considering the recommendation of the Board that you vote “ FOR ” the proposal to adopt the Merger Agreement, you should be aware that some of our directors and executive officers have interests that may be different from, or in addition to, the interests of the Company stockholders generally. You should keep this in mind when considering the recommendation of the Board in favor of the adoption of the Merger Agreement. The Board was aware of these interests and considered them at the time the Board approved the Merger Agreement and made its recommendation to the Company stockholders. For more information, see the section captioned “ The Merger — Interests of the Company’s Directors and Executive Officers in the Merger .”

Voting Agreement (Page 101 )

Concurrently with the execution of the Merger Agreement, Randolph K. Repass, his spouse and certain of the Repass family trusts, which beneficially owned, in the aggregate, approximately 20% of the issued and outstanding shares of our common stock as of that date, entered into a voting and support agreement (the “Voting Agreement”) with Parent and Sub. Certain other Repass family trusts, which beneficially owned shares of our common stock but were not able to deliver their signature pages concurrently with the execution of the Merger Agreement, signed the Voting Agreement on the following day, June 30, 2017, which increased the total issued and outstanding shares of our common stock subject to the Voting Agreement to approximately 24% as of June 30, 2017 and approximately 24% as of the Record Date. Pursuant to the Voting

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Agreement, they agreed, among other things, during the period beginning on the date of the Voting Agreement and ending on its termination date set forth therein, (i) to vote in favor of the Merger and the other transactions contemplated by the Merger Agreement, (ii) to certain restrictions in the transfer of their shares of our common stock, (iii) to vote against any action or agreement which could reasonably be expected to impede, interfere with, prevent, delay or adversely affect the Merger Agreement or the Merger and (iv) to not take and to cause his or her representatives to not take any actions, directly or indirectly, any actions that the Company is prohibited from taking under the Merger Agreement as they relate to the restriction on the solicitation of competing proposals. Mr. Repass executed the Voting Agreement as a Company stockholder, and therefore it does not limit or restrict him from acting in his capacity as a director of the Company, in his discretion on any matter. The foregoing summary of the Voting Agreement is subject to, and qualified in its entirety by reference to, the full text of the Voting Agreement. A copy of the Voting Agreement is attached as Annex D to this proxy statement and is incorporated herein by reference.

Opinion of Guggenheim Securities, LLC (Page 47 )

The Board retained Guggenheim Securities, LLC (“Guggenheim”) as its financial advisor in connection with the potential sale of the Company. Guggenheim delivered an opinion to the Board to the effect that, as of June 29, 2017 and based on and subject to the matters considered, the procedures followed, the assumptions made and various limitations of and qualifications to the review undertaken, the Merger Consideration was fair, from a financial point of view, to holders of shares of our common stock (excluding the Company or any of its wholly owned subsidiaries or Parent or any of its wholly owned subsidiaries). The full text of Guggenheim’s written opinion, which is attached as Annex B to this proxy statement and which you should read carefully and in its entirety, is subject to the assumptions, limitations, qualifications and other conditions contained in such opinion and is necessarily based on economic, capital markets and other conditions and the information made available to Guggenheim, as of the date of such opinion.

Guggenheim’s opinion was provided to the Board (in its capacity as such) for its information and assistance in connection with its evaluation of the Merger Consideration. Guggenheim’s opinion and any materials provided in connection therewith did not constitute a recommendation to the Board with respect to the Merger, nor does Guggenheim’s opinion and any materials provided in connection therewith constitute advice or a recommendation to any holder of shares of our common stock as to how to vote or act in connection with the Merger or otherwise. Guggenheim’s opinion addresses only the fairness, from a financial point of view and as of the date of such opinion, of the Merger Consideration to be paid to holders of our common stock (excluding the Company or any of its wholly owned subsidiaries or Parent or any of its wholly owned subsidiaries) to the extent expressly specified in such opinion and does not address any other term, aspect or implication of the Merger, the Merger Agreement (including, without limitation, the form or structure of the Merger) or any other agreement, transaction document or instrument contemplated by the Merger Agreement or to be entered into or amended in connection with the Merger or any financing or other transactions related thereto.

For a description of the opinion that the Board received from Guggenheim, see the section captioned “ The Merger — Opinion of Guggenheim Securities, LLC .” beginning on page 47 .

Market Price and Dividend Data (Page 103 )

Our common stock is traded on the NASDAQ under the symbol “WMAR.” On June 29, 2017, the last full trading day prior to the public announcement of the Merger, the closing price for our common stock was $9.65 per share. On August 4, 2017, the latest practicable date before the printing of this proxy statement, the closing price for our common stock was $12.89 per share.

Certain Effects of the Merger (Page 31 )

Upon consummation of the Merger, Sub will be merged with and into the Company upon the terms set forth in the Merger Agreement. As the Surviving Corporation in the Merger, the Company will continue to exist following the Merger as a wholly-owned subsidiary of Parent.

Following the consummation of the Merger, shares of our common stock will no longer be traded on the NASDAQ or any other public market. In addition, the registration of shares of our common stock under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), will be terminated.

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Effect on the Company if the Merger is Not Consummated (Page 32 )

If the Merger Agreement is not adopted by stockholders or if the Merger is not consummated for any other reason, the Company stockholders will not receive any payment for their shares of our common stock. Instead, the Company will remain an independent public company, our common stock will continue to be listed and traded on the NASDAQ and registered under the Exchange Act, and we will continue to file periodic and current reports with the Securities and Exchange Commission (the “SEC”).

The Special Meeting (Page 23 )

Date, Time and Place

A special meeting of the Company stockholders (the “Special Meeting”) will be held on September 12, 2017, at 8:00 a.m., Pacific Time, at West Marine Support Center located at 500 Westridge Drive, Watsonville, California 95076-4100.

Record Date; Shares Entitled to Vote

You are entitled to vote at the Special Meeting if you owned shares of our common stock at the close of business on August 3, 2017 (the “Record Date”). You will have one vote at the Special Meeting for each share of our common stock that you owned at the close of business on the Record Date.

Purpose

At the Special Meeting, we will ask our stockholders to vote on proposals to: (1) adopt the Merger Agreement; (2) approve, by non-binding, advisory vote, certain compensation that may be paid or become payable to the Company’s named executive officers that is based on or otherwise relates to the Merger and (3) adjourn the Special Meeting to a later date or dates to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting. You will also at the Special Meeting be asked to transact such other business as may properly come before the Special Meeting or any adjournment or postponement thereof.

Quorum

The presence at the Special Meeting, in person or by proxy, of the holders of a majority of the shares of our common stock issued and outstanding and entitled to vote at the Special Meeting constitutes a quorum for the purpose of considering the proposals. As of the close of business on the Record Date, there were 25,274,566 shares of our common stock outstanding. If you are a Company stockholder of record as of the close of business on the Record Date and you vote by mail, by telephone, through the Internet or in person at the Special Meeting, you will be considered part of the quorum. If you are a “street name” holder of shares of our common stock and you provide your bank, broker, trust or other nominee with voting instructions, then your shares will be counted in determining the presence of a quorum. If you are a “street name” holder of shares and you do not provide your bank, broker or other nominee with voting instructions, then your shares will not be counted as present in determining the presence of a quorum.

Required Vote

If a quorum is present, the affirmative vote of a majority of the issued and outstanding shares of our common stock is required to adopt the Merger Agreement. A failure to vote your shares of our common stock or an abstention from voting will have the same effect as a vote against the proposal to adopt the Merger Agreement.

Approval of each of the non-binding, advisory vote, of certain compensation that may be paid or become payable to the Company’s named executive officers that is based on or otherwise relates to the Merger, if a quorum is present and the proposal to adjourn the Special Meeting, whether or not a quorum is present at the Special Meeting, requires the affirmative vote of the majority of the votes cast for either proposal. Abstentions and failure to vote your shares will have no effect on these proposals.

As described above, concurrently with the execution of the Merger Agreement, Randolph K. Repass, his spouse and certain of the Repass family trusts, which beneficially owned, in the aggregate, approximately 20% of the issued and outstanding shares of our common stock as of that date, entered into the Voting Agreement

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with Parent and Sub. Certain other Repass family trusts, which beneficially owned shares of our common stock but were not able to deliver their signature pages concurrently with the execution of the Merger Agreement, signed the Voting Agreement on the following day, June 30, 2017, which increased the total issued and outstanding shares of our common stock subject to the Voting Agreement to approximately 24% as of June 30, 2017 and approximately 24% as of the Record Date. Pursuant to the Voting Agreement, they agreed, among other things, during the period beginning on the date of the Voting Agreement and ending on its termination date set forth therein, to vote in favor of the Merger and the other transactions contemplated by the Merger Agreement.

How to Vote

If your shares are registered in your name with our transfer agent, Computershare Investor Services, LLC, you may cause your shares to be voted by returning a signed and dated proxy card in the accompanying prepaid envelope, or you may vote in person at the Special Meeting. Additionally, you may grant a proxy electronically over the Internet or by telephone by following the instructions on your proxy card.

If you plan to attend the Special Meeting and wish to vote in person, you will be given a ballot at the Special Meeting. If your shares are registered in your name, you are encouraged to vote by proxy even if you plan to attend the Special Meeting in person. If you attend the Special Meeting and vote in person by ballot, your vote will revoke any previously submitted proxy.

If your shares are held in “street name” through a bank, broker or other nominee, you may vote through your bank, broker or other nominee by completing and returning the voting form provided by your bank, broker or other nominee or attending the Special Meeting and voting in person with a “legal proxy” from your bank, broker or other nominee. Unless you give your bank, broker, trust or other nominee instructions on how to vote your shares of our common stock, your bank, broker or other nominee will not be able to vote your shares at the Special Meeting.

YOU SHOULD NOT SEND IN YOUR STOCK CERTIFICATE(S) WITH YOUR PROXY CARD. A letter of transmittal with instructions for the surrender of certificates representing shares of our common stock will be mailed to stockholders if the Merger is consummated.

For additional information regarding the procedure for delivering your proxy, see the sections captioned “ The Special Meeting — Voting of Proxies ” beginning on page 25 . If you have any questions about the Merger or how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, please contact our Corporate Secretary at 500 Westridge Drive, Watsonville, California 95076-4100.

Litigation Related to the Merger (Page 78 )

The Company and its directors have been named as defendants in certain lawsuits brought by purported stockholders of the Company seeking, among other things, equitable relief that would enjoin consummation of the Merger. For more information, see the section captioned “ The Merger — Litigation Related to the Merger .”

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QUESTIONS AND ANSWERS

The following questions and answers address some commonly asked questions regarding the Merger, the Merger Agreement and the Special Meeting. These questions and answers may not address all questions that are important to you. We encourage you to read carefully the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents we refer to in this proxy statement. You may obtain the information incorporated by reference in this proxy statement without charge by following the instructions in the section captioned “ Where You Can Find More Information .”

Even if you plan to attend the Special Meeting in person, to ensure that your shares of our common stock will be represented at the Special Meeting we encourage you to sign, date and return the enclosed proxy card in the accompanying prepaid reply envelope or grant your proxy electronically over the Internet or by telephone. If you attend the Special Meeting and vote in person by ballot, your vote will revoke any proxy previously submitted by you with respect to the shares so voted in person.

If you hold your shares in “street name,” you should instruct your bank, broker or other nominee how to vote your shares in accordance with the voting instruction form that you will receive from your bank, broker or other nominee. Your broker or other agent cannot vote on any of the proposals, including the proposal to adopt the Merger Agreement, without your instructions. If you hold your shares in “street name,” you may not vote your shares in person at the Special Meeting unless you obtain a “legal proxy” from your bank, broker or other nominee.

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If your shares are held in “street name” by your broker, bank, or other nominee, you will receive instructions from your broker, bank or other nominee as to how to effect the surrender of your shares held in “street name.”

Accordingly, the Board recommends that you vote (i) “ FOR ” the adoption of the Merger Agreement; (ii) “ FOR ” the proposal to approve, by non-binding, advisory vote, certain compensation that may be paid or become payable to the Company’s named executive officers that is based on or otherwise relates to the Merger and (iii) “ FOR ” the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement.

Under specified circumstances, the Company will be required to pay Parent the Company Termination Fee upon the termination of the Merger Agreement, as described in the section captioned “ The Merger Agreement — Company Termination Fee .”

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All shares of our common stock held by stockholders that are present in person, or represented by proxy, and entitled to vote at the Special Meeting, regardless of how such shares are voted or whether such stockholders have indicated on their proxy that they are abstaining from voting, will be counted in determining the presence of a quorum. In the absence of a quorum, the Special Meeting may be adjourned.

If a quorum is present at the Special Meeting, the failure of any stockholder of record to (i) submit a signed proxy card, (ii) grant a proxy over the Internet or by telephone or (iii) vote in person by ballot at the Special Meeting will have the same effect as a vote “ AGAINST ” the proposal to adopt the Merger Agreement. If you hold your shares in “street name” and a quorum is present at the Special Meeting, the failure to instruct your bank, broker or other nominee how to vote your shares will have the same effect as a vote “ AGAINST ” the proposal to adopt the Merger Agreement. If a quorum is present at the Special Meeting, abstentions will have the same effect as a vote “ AGAINST ” the proposal to adopt the Merger Agreement.

Adjournment or Postponement of the Special Meeting (Proposal 3) .  Approval of the proposal to adjourn the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting, whether or not a quorum is present, requires the affirmative vote of the majority of the votes cast for the proposal.

The failure of any stockholder of record to (i) submit a signed proxy card, (ii) grant a proxy over the Internet or by telephone or (iii) vote in person by ballot at the Special Meeting will not have any effect on either of Proposal 2 or Proposal 3. If you hold your shares in “street name,” the failure to instruct your bank, broker or other nominee how to vote your shares will not have any effect on either of these proposals. Similarly, abstentions will have no effect on these proposals.

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If your shares are held through a bank, broker or other nominee, you are considered the “beneficial owner” of shares of our common stock held in “street name.” In that case, this proxy statement has been forwarded to you by your bank, broker or other nominee who is considered, with respect to those shares, to be the stockholder of record. As the beneficial owner, you have the right to direct your bank, broker or other nominee how to vote your shares by following their instructions for voting. You are also invited to attend the Special Meeting. However, because you are not the stockholder of record, you may not vote your shares in person at the Special Meeting unless you obtain a “legal proxy” from your bank, broker or other nominee.

A control number, located on your proxy card, is designed to verify your identity and allow you to vote your shares of our common stock, and to confirm that your voting instructions have been properly recorded when voting electronically over the Internet or by telephone. Please be aware that, although there is no charge for voting your shares, if you vote electronically over the Internet or by telephone, you may incur costs such as Internet access and telephone charges for which you will be responsible.

Even if you plan to attend the Special Meeting in person, you are strongly encouraged to vote your shares of our common stock by proxy. If you are a record holder or if you obtain a “legal proxy” to vote shares that you beneficially own, you may still vote your shares of our common stock in person by ballot at the Special Meeting even if you have previously voted by proxy. If you are present at the Special Meeting and vote in person by ballot, your previous vote by proxy will not be counted.

If your shares are held in “street name” through a bank, broker or other nominee, you may vote through your bank, broker or other nominee by completing and returning the voting form provided by your bank, broker or other nominee, or, if such a service is provided by your bank, broker or other nominee, electronically over the Internet or by telephone. To vote over the Internet or by telephone through your bank, broker or other nominee, you should follow the instructions on the voting form provided by your bank, broker or nominee.

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If you hold your shares of our common stock in “street name,” you should contact your bank, broker or other nominee for instructions regarding how to change your vote. You may also vote in person at the Special Meeting if you obtain a “legal proxy” from your bank, broker or other nominee.

If you properly sign your proxy card but do not mark the boxes showing how your shares should be voted on a matter, the shares represented by your properly signed proxy will be voted: (i) “ FOR ” the adoption of the Merger Agreement; (ii) “ FOR ” the proposal to approve, by non-binding, advisory vote, certain compensation that may be paid or become payable to the Company’s named executive officers that is based on or otherwise relates to the Merger; and (iii) “ FOR ” the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting.

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A Non-U.S. Holder (as defined under the section captioned “ The Merger — Material U.S. Federal Income Tax Consequences of the Merger ”) generally will not be subject to U.S. federal income tax with respect to the exchange of our common stock for cash in the Merger unless such Non-U.S. Holder has certain connections to the United States.

You should consult your own tax advisor to determine the U.S. federal income tax consequences of the Merger to you in light of your own particular circumstances and any consequences arising under the laws of any state, local or foreign taxing jurisdiction. A more complete description of certain U.S. federal income tax consequences of the Merger is provided under the section captioned “ The Merger — Material U.S. Federal Income Tax Consequences of the Merger .”

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If your shares are held in “street name” by your broker, bank, or other nominee, you will receive instructions from your broker, bank or other nominee as to how to effect the surrender of your shares held in “street name.”

D.F. King & Co., Inc.
Stockholders May Call Toll-Free: (866) 751-6312
Banks & Brokers May Call Collect: (212) 269-5550
Email: WMAR@dfking.com

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FORWARD-LOOKING STATEMENTS

This proxy statement may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder and Section 21E of the Exchange Act. All statements included or incorporated by reference in this proxy statement, other than statements of historical fact, are forward-looking statements. Stockholders can identify forward-looking statements by the use of words such as “estimate,” “may,” “will,” “could,” “anticipate,” “expect,” “intend,” “believe,” “continue” or the negative of such terms, or other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. Actual results may be materially different from any future results expressed or implied by such forward-looking statements. Among other risks and uncertainties, there can be no guarantee that the Merger will be consummated, or if it is consummated, that it will close within the anticipated time frame. Additional risks and uncertainties relating to the acquisition include: (i) the Company may be unable to obtain the approval of the Company stockholders as required for the proposed transaction; (ii) other conditions to the closing of the proposed transaction may not be satisfied or waived; (iii) the proposed transaction may involve unexpected costs, liabilities or delays; (iv) the Company’s business may suffer as a result of uncertainty surrounding the proposed Merger, including due to disruption of current plans and operations and the potential difficulties in employee retention as a result of the proposed transaction; (v) the outcome of any legal proceedings related to the proposed transaction; (vi) the ability and timing to obtain required regulatory approvals; and (vii) the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement. For a discussion of relevant factors, risks and uncertainties that could materially affect the Company’s future results, attention is directed to the “Risk Factors” section in this proxy statement and “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in its Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on February 28, 2017 and incorporated herein by reference. The Company undertakes no obligation to publicly release any revisions to any forward-looking statements contained in this filing to reflect events or circumstances occurring after the date of this filing or to reflect the occurrence of unanticipated events.

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RISK FACTORS
 
Risks Relating to the Pending Merger

If the proposed Merger is not consummated, our business could be harmed and our stock price could decline.

The consummation of the Merger is conditioned upon, among other things, the adoption of the Merger Agreement by our stockholders and other customary closing conditions. Therefore, the Merger may not be consummated or may not be consummated in a timely manner. If the Merger Agreement is terminated, the market price of our common stock will likely decline. In addition, our stock price may decline as a result of the fact that we have incurred and will continue to incur significant expenses related to the Merger prior to its closing that will not be recovered if the Merger is not consummated. If the Merger Agreement is terminated under certain circumstances as described below under “ The Merger Agreement — Company Termination Fee ” we may be obligated to pay Parent the Company Termination Fee of $11 million. As a consequence of the failure of the Merger to be consummated, as well as of some or all of these potential effects of the termination of the Merger Agreement, our business could be harmed in that concerns about our viability are likely to increase, making it more difficult to retain employees and existing customers and to generate new business.

The fact that there is a Merger pending could harm our business, revenue and results of operations.

While the Merger is pending, it creates uncertainty about our future. As a result of this uncertainty, customers may decide to delay, defer, or cancel purchases of our products pending consummation of the Merger or termination of the Merger Agreement. If these decisions represent a significant portion of our anticipated revenue, our results of operations and quarterly revenues could be substantially below the expectations of investors.

In addition, while the Merger is pending, we are subject to a number of risks that may harm our business, revenue and results of operations, including:

Our executive officers may have interests in the Merger other than, or in addition to, the interests of our stockholders generally.

Members of our Board and our executive officers may have interests in the Merger that are different from, or are in addition to, the interests of our stockholders generally. Our Board was aware of these interests and considered them, among other matters, in approving the Merger Agreement. You should keep this in mind when considering the recommendation of the Board in favor of the adoption of the Merger Agreement. These interests include the treatment of outstanding equity awards upon consummation of the Merger pursuant to the Merger Agreement, the vesting or delivery of outstanding equity awards and payments that may come due in connection with a change of control, which will occur upon the consummation of the Merger, under the Company’s Amended and Restated Executive Officer Severance Plan, and the continuation of indemnification obligations and directors’ and officers’ insurance for former and continuing officers and directors.

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Litigation has been instituted against the Company and members of the Board, challenging the Merger, and adverse judgments in these lawsuits or any other may prevent the Merger from becoming effective within the expected timeframe or at all.

The Company and members of the Board have been named as defendants in four class action lawsuits challenging the Merger. If the plaintiffs in these or any other actions that may be brought are successful, these adverse judgments may prevent the parties from completing the Merger in the expected timeframe, if at all. Even if the plaintiffs in these potential actions are not successful, the costs of defending against such claims could adversely affect the financial condition of the Company and such actions could adversely affect the reputation of the Company and members of the Board or management. See “ The Merger — Litigation Related to the Merger ” for a discussion of these legal proceedings.

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THE SPECIAL MEETING

The enclosed proxy is solicited on behalf of the Board for use at the Special Meeting.

Date, Time and Place

We will hold the Special Meeting on September 12, 2017, at 8:00 a.m., Pacific Time, at West Marine Support Center located at 500 Westridge Drive, Watsonville, California 95076-4100.

Purpose of the Special Meeting

At the Special Meeting, we will ask stockholders to vote on proposals to: (i) adopt the Merger Agreement (Proposal 1); (ii) consider a non-binding, advisory proposal to approve certain compensation that may be paid or become payable to the Company’s named executive officers that is based on or otherwise relates to the Merger (Proposal 2); and (iii) adjourn the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement (Proposal 3). You will also at the Special Meeting be asked to transact such other business as may properly come before the Special Meeting or any adjournment or postponement thereof.

Record Date; Shares Entitled to Vote; Quorum

Only stockholders of record as of the close of business on the Record Date are entitled to notice of the Special Meeting and to vote at the Special Meeting. A list of stockholders entitled to vote at the Special Meeting will be available at West Marine Support Center located at 500 Westridge Drive, Watsonville, California 95076-4100, during regular business hours for a period of no less than ten days before the Special Meeting and at the place of the Special Meeting during the meeting.

As of the Record Date, there were 25,274,566 shares of our common stock issued and outstanding and entitled to vote at the Special Meeting. The presence at the Special Meeting, in person or by proxy, of the holders of 12,637,284 shares of our common stock, representing a majority of the shares of our common stock issued and outstanding and entitled to vote at the Special Meeting, constitutes a quorum for the Special Meeting.

If you are a Company stockholder of record and you vote by mail, by telephone or through the Internet or in person at the Special Meeting, then your shares of our common stock will be counted as part of the quorum. If you are a “street name” holder of shares of our common stock and you provide your bank, broker or other nominee with voting instructions, then your shares will be counted in determining the presence of a quorum. If you are a “street name” holder of shares and you do not provide your bank, broker or other nominee with voting instructions, then your shares will not be counted as present in determining the presence of a quorum.

All shares of our common stock held by stockholders of record that are present in person or represented by proxy and entitled to vote at the Special Meeting, regardless of how such shares are voted or whether such stockholders abstain from voting, will be counted in determining the presence of a quorum. In the absence of a quorum, the Special Meeting may be adjourned.

Vote Required for Approval

Adoption of the Merger Agreement (Proposal 1) .  If a quorum is present, the adoption of the Merger Agreement (Proposal 1) requires the affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote on such matter.

Advisory Vote regarding Merger-Related Compensation (Proposal 2).   If a quorum is present, approval, by non-binding, advisory vote, of certain compensation that may be paid or become payable to the Company’s named executive officers that is based on or otherwise relates to the Merger requires the affirmative vote of the majority of the votes casts on such proposal at the Special Meeting.

Adjournment or Postponement of the Special Meeting (Proposal 3).   Approval of the proposal to adjourn the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting, whether or not a quorum is present, requires the affirmative vote of the majority of the votes casts on such proposal at the Special Meeting.

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Concurrently with the execution of the Merger Agreement, Randolph K. Repass, his spouse and certain of the Repass family trusts, which beneficially owned, in the aggregate, approximately 20% of the issued and outstanding shares of our common stock as of that date, entered into the Voting Agreement with Parent and Sub. Certain other Repass family trusts, which beneficially owned shares of our common stock but were not able to deliver their signature pages concurrently with the execution of the Merger Agreement, signed the Voting Agreement on the following day, June 30, 2017, which increased the total issued and outstanding shares of our common stock subject to the Voting Agreement to approximately 24% as of June 30, 2017 and approximately 24% as of the Record Date. Pursuant to the Voting Agreement, they agreed, among other things, during the period beginning on the date of the Voting Agreement and ending on its termination date set forth therein, to vote in favor of the Merger and the other transactions contemplated by the Merger Agreement.

Abstentions and Broker Non-Votes

The proposal to adopt the Merger Agreement (Proposal 1) requires the affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote on such matter. Therefore, the failure to vote or the abstention from voting will have the same effect as a vote “ AGAINST ” the proposal to adopt the Merger Agreement.

The proposal to approve, by non-binding, advisory vote, of certain compensation that may be paid or become payable to the Company’s named executive officers that is based on or otherwise relates to the Merger (Proposal 2), requires the affirmative vote of the majority of the votes cast on such proposal at the Special Meeting. Consequently, abstentions and failure to vote your shares will have no effect on this proposal.

The proposal to adjourn the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting, whether or not a quorum is present (Proposal 3), requires the affirmative vote of the majority of the votes cast on such proposal at the Special Meeting. Consequently, abstentions and failure to vote your shares will have no effect on this proposal.

All of the proposals in this proxy statement are non-routine matters, so there can be no broker non-votes at the Special Meeting. A broker non-vote occurs when shares held by a bank, broker or other nominee are represented at a meeting, but the bank, broker or other nominee has not received voting instructions from the beneficial owner and does not have the discretion to direct the voting of the shares on a particular proposal. Accordingly, if your shares are held in “street name,” your bank, broker or other nominee will NOT be able to vote your shares of our common stock on any of the proposals, and your shares will not be counted as present in determining the presence of a quorum, unless you have properly instructed your bank, broker or other nominee on how to vote. Because Proposal 1 requires the affirmative vote of a majority of the outstanding shares of our common stock, the failure to provide your bank, broker or other nominee with voting instructions will have the same effect as a vote “ AGAINST ” Proposal 1. Because the approval of each of Proposal 2 and Proposal 3 requires the affirmative vote of the majority of the votes cast on such proposal at the Special Meeting, and because your bank, broker or other nominee does not have discretionary authority to vote on either proposal, the failure to provide your bank, broker or other nominee with voting instructions will have no effect on each such proposal.

Shares Held by the Company’s Directors and Executive Officers

As of the Record Date, our directors and executive officers beneficially owned and were entitled to vote, in the aggregate, 6,790,835 shares of our common stock, representing approximately 27% of the total shares of our common stock outstanding on the Record Date. Concurrently with the execution of the Merger Agreement, Randolph K. Repass, his spouse and certain of the Repass family trusts, which beneficially owned, in the aggregate, approximately 20% of the issued and outstanding shares of our common stock as of that date, entered into the Voting Agreement with Parent and Sub. Certain other Repass family trusts, which beneficially owned shares of our common stock but were not able to deliver their signature pages concurrently with the execution of the Merger Agreement, signed the Voting Agreement on the following day, June 30, 2017, which increased the total issued and outstanding shares of our common stock subject to the Voting Agreement to approximately 24% as of June 30, 2017 and approximately 24% as of the Record Date. Pursuant to the Voting Agreement they agreed, among other things, during the period beginning on the date of

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the Voting Agreement and ending on the termination date set forth therein, (i) to vote in favor of the Merger and the other transactions contemplated by the Merger Agreement, (ii) on certain restrictions in the transfer of their shares of our common stock, and (iii) to vote against any or agreement which could reasonably be expected to impede, interfere with, prevent, delay or adversely affect the Merger Agreement or the Merger.

Voting of Proxies

If your shares are registered in your name with our transfer agent, Computershare Investor Services, LLC, you may cause your shares to be voted by returning a signed and dated proxy card in the accompanying prepaid envelope, or you may vote in person at the Special Meeting. Additionally, you may grant a proxy electronically over the Internet or by telephone by following the instructions on your proxy card. You must have the enclosed proxy card available, and follow the instructions on the proxy card, in order to grant a proxy electronically over the Internet or by telephone. Based on your proxy cards or Internet and telephone proxies, the proxy holders will vote your shares according to your directions.

If you plan to attend the Special Meeting and wish to vote in person, you will be given a ballot at the Special Meeting. If your shares are registered in your name, you are encouraged to vote by proxy even if you plan to attend the Special Meeting in person. If you attend the Special Meeting and vote in person by ballot, your vote will revoke any previously submitted proxy.

Voting instructions are included on your proxy card. All shares represented by properly signed and dated proxies received in time for the Special Meeting will be voted at the Special Meeting in accordance with the instructions of the stockholder. Properly signed and dated proxies that do not contain voting instructions will be voted (i) “ FOR ” the Adoption of the Merger Agreement (Proposal 1); (ii) “ FOR ” the Advisory Vote regarding Merger-Related Compensation (Proposal 2); and (iii) “ FOR ” the Adjournment or Postponement of the Special Meeting (Proposal 3).

If your shares are held in “street name” through a bank, broker or other nominee, you may vote through your bank, broker or other nominee by completing and returning the voting form provided by your bank, broker or other nominee or attending the Special Meeting and voting in person with a “legal proxy” from your bank, broker or other nominee. If such a service is provided, you may vote over the Internet or telephone through your bank, broker or other nominee by following the instructions on the voting form provided by your bank, broker or other nominee. If you do not return the voting form provided by your bank, broker or other nominee, do not vote via the Internet or telephone through your bank, broker or other nominee, if possible, or do not attend the Special Meeting and vote in person with a “legal proxy” from your bank, broker or other nominee, it will have the same effect as if you voted “ AGAINST ” Proposal 1, but will have no effect on Proposal 2 or Proposal 3.

Revocability of Proxies

If you are a stockholder of record on the Record Date, you may change your vote or revoke your proxy at any time before it is voted at the Special Meeting by:

If you have submitted a proxy, your appearance at the Special Meeting, in the absence of voting in person or submitting an additional proxy or revocation, will not have the effect of revoking your prior proxy.

If you hold your shares of our common stock in “street name,” you should contact your bank, broker or other nominee for instructions regarding how to change your vote. You may also vote in person at the Special Meeting if you obtain a “legal proxy” from your bank, broker or other nominee.

Any adjournment, postponement or other delay of the Special Meeting, including for the purpose of soliciting additional proxies, will allow stockholders who have already sent in their proxies to revoke them at any time prior to their use at the Special Meeting, as adjourned, postponed or delayed.

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The Board’ Recommendation

The Board, after considering the various factors described in the section captioned “ The Merger —  Recommendation of the Board and Reasons for the Merger ,” has unanimously (i) adopted and declared advisable the Merger Agreement and the consummation by the Company of the transactions contemplated by the Merger Agreement, including the Merger, (ii) approved the execution, delivery and performance of the Merger Agreement and the consummation by the Company of the transactions contemplated by the Merger Agreement, including the Merger, (iii) determined that the Merger Agreement, and the transactions contemplated by the Merger Agreement, including the Merger, are advisable and in the best interests of the Company and its stockholders, and (iv) recommended that the Company stockholders of the Company adopt the Merger Agreement and directed that the Merger Agreement be submitted to the Company stockholders for adoption.

The Board unanimously recommends that you vote “FOR” the proposal to adopt the Merger Agreement (Proposal 1), “FOR” the approval, by a non-binding advisory vote, of the compensation that may be paid or become payable to the Company’s named executive officers that is based on or otherwise relates to the Merger (Proposal 2) and “FOR” the proposal to adjourn the Special Meeting if necessary or appropriate, as determined by the Company, to solicit additional proxies in favor of the proposal to adopt the Merger Agreement (Proposal 3).

Solicitation of Proxies

The expense of soliciting proxies will be borne by the Company. We have retained D.F. King & Co., Inc., a proxy solicitation firm (the “Proxy Solicitor”) to solicit proxies in connection with the Special Meeting at a cost of $11,500, plus expenses. We will also indemnify the Proxy Solicitor against losses arising out of its provisions of these services on our behalf. In addition, we may reimburse banks, brokers and other nominees representing beneficial owners of shares for their expenses in forwarding soliciting materials to such beneficial owners. Proxies may also be solicited by our directors, officers and employees, personally or by telephone, email, fax, over the Internet or other means of communication. No additional compensation will be paid for such services.

Anticipated Date of Consummation of the Merger

Assuming timely satisfaction of necessary closing conditions, including the approval by stockholders of the proposal to adopt the Merger Agreement, we anticipate that the Merger will be consummated in the third quarter of fiscal year 2017.

Appraisal Rights

If the Merger is consummated, stockholders who do not vote in favor of the adoption of the Merger Agreement, who continuously hold their shares of our common stock through the Effective Time, and who properly demand appraisal of their shares of our common stock in compliance with the requirements of Section 262 of the DGCL are entitled to exercise appraisal rights in connection with the Merger under Section 262. This means that holders of shares of our common stock who may exercise appraisal rights and who also have properly exercised, perfected and not lost such appraisal rights are entitled to have their shares appraised by the Court of Chancery and to receive payment in cash of the “fair value” of their shares of our common stock, exclusive of any elements of value arising from the accomplishment or expectation of the Merger, together with interest to be paid on the amount determined to be fair value, if any, as determined by the Court of Chancery, so long as such holders comply exactly with the procedures established by Section 262.

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Due to the complexity of the appraisal process, stockholders who wish to seek appraisal of their shares of our common stock are encouraged to seek the advice of legal counsel with respect to the exercise of appraisal rights. Stockholders considering seeking appraisal should be aware that the fair value of their shares as determined pursuant to Section 262 could be more than, the same as or less than the value of the Merger Consideration.

To exercise your appraisal rights, you must follow exactly the procedures specified under the DGCL, including (i) delivering a written demand for appraisal to the Company before the vote is taken on the proposal to adopt the Merger Agreement and approve the Merger and the other transactions contemplated thereby; (ii) not submitting a proxy or otherwise voting in favor of the proposal to adopt the Merger Agreement and approve the Merger and the other transactions contemplated thereby; and (iii) continuing to hold your shares of our common stock of record through the Effective Time. Your failure to follow exactly the procedures specified under the DGCL will result in the loss of your appraisal rights. If you hold your shares of our common stock through a bank, brokerage firm or other nominee and you wish to exercise appraisal rights, you should consult with your bank, brokerage firm or other nominee to determine the appropriate procedures for the making of a demand for appraisal by such bank, brokerage firm or nominee. The DGCL requirements for exercising appraisal rights are described in further detail in this proxy statement in the section captioned “ The Merger — Appraisal Rights ,” and Section 262 regarding appraisal rights is reproduced and attached as Annex C to this proxy statement.

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PROPOSAL 2: ADVISORY, NON-BINDING VOTE TO APPROVE
CERTAIN MERGER-RELATED EXECUTIVE COMPENSATION ARRANGEMENTS

Section 14A of the Exchange Act, which was enacted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, requires that we provide stockholders with the opportunity to vote to approve, on an advisory, non-binding basis, the payment of certain compensation that may be paid or become payable to the Company’s named executive officers that is based on or otherwise relates to the Merger, as disclosed in the section captioned “ The Merger — Interests of the Company’s Directors and Executive Officers in the Merger — Golden Parachute Compensation .”

We are asking stockholders to indicate their approval of the various compensation that may be paid or become payable to the Company’s named executive officers that is based on or otherwise relates to the Merger. These payments are set forth in the section captioned “ The Merger — Interests of the Company’s Directors and Executive Officers in the Merger — Golden Parachute Compensation ” and the accompanying footnotes. In general, the various plans and arrangements pursuant to which these compensation payments may be made have previously formed part of the Company’s overall compensation program for our named executive officers and previously have been disclosed to stockholders as part of the Compensation Discussion and Analysis and related sections of our annual proxy statements. These historical arrangements were adopted and approved by the Compensation and Leadership Development Committee of the Board, which is composed solely of non-management directors, and are believed to be reasonable and in line with marketplace norms.

Accordingly, we are seeking approval of the following resolution at the Special Meeting:

“RESOLVED, that the stockholders of West Marine, Inc. approve, on a nonbinding, advisory basis, the compensation that may be paid or become payable to the Company’s named executive officers that is based on or otherwise relates to the Merger as disclosed pursuant to Item 402(t) of Regulation S-K in the section captioned “ The Merger — Interests of the Company’s Directors and Executive Officers in the Merger — Golden Parachute Compensation” in the Company’s proxy statement for the Special Meeting.”

Stockholders should note that this proposal is not a condition to consummation of the Merger, and as an advisory vote, the result will not be binding on the Company, the Board or Parent. Further, the underlying plans and arrangements are contractual in nature and not, by their terms, subject to stockholder approval. Accordingly, regardless of the outcome of the advisory vote, if the Merger is consummated, our named executive officers will be eligible to receive the compensation that is based on or otherwise relates to the Merger in accordance with the terms and conditions applicable to those payments.

The Board unanimously recommends that you vote “FOR” this proposal.

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THE MERGER

This discussion of the Merger is qualified in its entirety by reference to the Merger Agreement, which is attached to this proxy statement as Annex A and incorporated into this proxy statement by reference. You should read the entire Merger Agreement carefully as it is the legal document that governs the Merger.

Parties to the Merger

West Marine, Inc.

West Marine is a leading omni-channel specialty retailer exclusively offering boating gear, apparel, footwear and other waterlife-related products to anyone who enjoys recreational time on or around the water. Providing great customer experiences and a consistent brand is important to us, regardless of the sales channel our customer uses. With our numerous stores and our eCommerce websites reaching domestic and international customers, we are recognized as a dominant waterlife outfitter for cruisers, sailors, anglers and paddlesports enthusiasts.

Our principal executive offices are located at 500 Westridge Drive, Watsonville, California 95076-4100, and our telephone number is (831) 728-2700. Our common stock is listed on the NASDAQ under the symbol “WMAR.”

Rising Tide Parent Inc.

Parent is a Delaware corporation formed on June 27, 2017, solely for the purpose of engaging in the Merger and the other transactions contemplated by the Merger Agreement. Parent has not engaged in any business activities other than those incidental to its formation and in connection with the transactions contemplated by the Merger Agreement and arranging the equity financing and debt financing in connection with the Merger.

Parent’s principal executive offices are located at 142 West 57 ^th Street, 17 ^th Floor, New York, New York 10019, and its telephone number is (212) 699-4000.

Rising Tide Merger Sub Inc.

Sub is a wholly-owned subsidiary of Parent and was formed on June 27, 2017, solely for the purpose of engaging in the Merger and the other transactions contemplated by the Merger Agreement. Sub has not engaged in any business activities other than those incidental to its formation and in connection with the transactions contemplated by the Merger Agreement and arranging the equity financing and debt financing in connection with the Merger. Upon the consummation of the Merger, Sub will cease to exist as a separate entity.

Sub’s principal executive offices are located at 142 West 57 ^th Street, 17 ^th Floor, New York, New York 10019, and its telephone number is (212) 699-4000.

Parent and Sub are entities affiliated with Monomoy, a private equity firm with $1.5 billion in committed capital. Through its three fund vehicles, Monomoy makes controlling investments in lower middle market businesses in the manufacturing, industrial, distribution and consumer products sectors. Monomoy’s principal executive offices are located at 142 West 57 ^th Street, 17 ^th Floor, New York, New York 10019, and its telephone number is (212) 699-4000.

Effect of the Merger

Upon the terms and subject to the conditions of the Merger Agreement, if the Merger is consummated, Sub will merge with and into the Company, and the Company will continue as the Surviving Corporation. As a result of the Merger, the Company will become a wholly-owned subsidiary of Parent, and our common stock will no longer be publicly traded and will be delisted from the NASDAQ. In addition, our common stock will be deregistered under the Exchange Act, and we will no longer file periodic or current reports with the SEC. If the Merger is consummated, you will not own any shares of the capital stock of the Surviving Corporation.

The Effective Time will occur upon the filing of a certificate of merger with the Secretary of State of the State of Delaware, or at such other time as is agreed upon in writing by Parent and the Company and specified in the certificate of merger in accordance with the DGCL.

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Effect on the Company if the Merger is Not Consummated

If the Merger Agreement is not adopted by stockholders or if the Merger is not consummated for any other reason, the Company stockholders will not receive any payment for their shares of our common stock. Instead, the Company will remain an independent public company, our common stock will continue to be listed and traded on the NASDAQ and registered under the Exchange Act, and we will continue to file periodic and current reports with the SEC. In addition, if the Merger is not consummated, we expect that management will operate the business in a manner similar to that in which it is being operated today and that stockholders will continue to be subject to the same risks and opportunities to which they are currently subject, including risks related to the highly competitive industry in which the Company operates and risks related to adverse economic conditions.

Furthermore, if the Merger is not consummated, and depending on the circumstances that caused the Merger not to be consummated, the price of our common stock may decline significantly. If that were to occur, it is uncertain when, if ever, the price of our common stock would return to the price at which it trades as of the date of this proxy statement.

Accordingly, if the Merger is not consummated, there can be no assurance as to the effect of these risks and opportunities on the future value of your shares of our common stock. If the Merger is not consummated, the Board will continue to evaluate and review the Company’s business operations, strategic direction and capitalization, among other things, and will make such changes as are deemed appropriate. If the Merger Agreement is not adopted by stockholders or if the Merger is not consummated for any other reason, there can be no assurance that any other transaction acceptable to the Board will be offered or that the Company’s business, prospects or results of operation will not be adversely impacted.

In addition, the Company may be required to pay to Parent the Company Termination Fee of $11 million if the Merger Agreement is terminated under specified circumstances. For more information, please see the section of this proxy statement captioned “ The Merger Agreement — Company Termination Fee .”

Merger Consideration

At the Effective Time, each share of our common stock issued and outstanding immediately prior to the Effective Time (including any shares resulting from the exercise of Options or settlement of RSUs which become vested as of the consummation of the Merger, but excluding the Cancelled Shares and the Dissenting Shares) will be cancelled and automatically converted into the right to receive the Merger Consideration of $12.97 in cash, without interest, and subject to deduction for any required withholding tax. At the Effective Time, each Cancelled Share will be automatically canceled without payment of any consideration. Each Dissenting Share will not be converted into the right to receive Merger Consideration, unless and until such stockholder fails to perfect or effectively withdraws or loses such stockholder’s right to appraisal under Section 262 of the DGCL, at which time each such share of our common stock will be converted into and will be exchangeable only for the right to receive, as of the later of the Effective Time and the time that such right to appraisal is irrevocably lost, the Merger Consideration. The Dissenting Shares shall be treated in accordance with Section 262, as more fully described in the section captioned “ The Merger — Appraisal Rights .”

Background of the Merger

The Board and management regularly review and evaluate our results of operations, financial position, business strategy and growth opportunities, as well as the trends and conditions affecting our industry and business generally. As part of its evaluation, the Board has, from time to time, considered a variety of strategic alternatives to the Company’s business strategies as an independent company, including consideration of potential strategic and financial alternatives to maximize stockholder value, such as business combinations, acquisitions and financing transactions.

On May 26, 2016, the Board received an unsolicited, non-binding proposal letter from Monomoy, offering to acquire 100% of the Company’s issued and outstanding shares for a price per share in cash of $10.25. On May 26, 2016, the closing price of our common stock was $9.01.

On June 3, 2016, the Company sent a letter to Monomoy confirming receipt of the proposal, noting that the Board would review it and the Company would get back to Monomoy with the outcome of that review.

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On June 7, 2016, the Board held a meeting to consider, among other things, Monomoy’s proposal. Members of the Company’s management as well as representatives of Sidley Austin LLP (“Sidley”), the Company’s outside counsel, participated in the meeting. At the meeting, representatives of Sidley outlined the fiduciary duties of the Board in considering an offer such as Monomoy’s proposal and generally in connection with engaging in a process that might result in a change of control of the Company. Following the discussion, the Board unanimously determined that the price per share included in Monomoy’s proposal did not provide meaningful incremental value relative to the Company’s stock price and the Company’s standalone prospects that would justify pursuing the proposal at that time. The Board also instructed management to work with Sidley to prepare a response letter to Monomoy on behalf of the Board.

On June 14, 2016, the Company sent a letter to Monomoy indicating that the Board had carefully considered Monomoy’s proposal and unanimously agreed that it was not one that the Company should explore.

On July 7, 2016, the Board received a second non-binding proposal letter from Monomoy, offering to acquire 100% of the Company’s issued and outstanding shares for a price per share in cash of $10.50.

On July 8, 2016, Matthew Hyde, Chief Executive Officer of the Company, Jeffrey Lasher, its Chief Financial Officer, and Pamela Fields, its General Counsel, Barbara L. Rambo, the chair of the Board, and representatives of Sidley held a meeting, during which the parties present discussed Monomoy’s revised offer. In light of the Board’s views as discussed at the June 7, 2016 meeting, it was the consensus of the group that while the Board was unlikely to be interested in pursuing Monomoy’s revised proposal, it would nonetheless be worthwhile to provide Monomoy with an opportunity to elaborate on its proposal. However, given that management was busy with closing the quarter and preparing for the earnings release and Form 10-Q filing, and also was deep in the process of completing its annual strategic plan for the Board’s review at the upcoming Board meeting, the best course of action at that time was to defer any formal response to Monomoy regarding its proposal until after the Board had an opportunity to review in detail the Company’s annual strategic plan at the upcoming Board meeting, but to continue engagement with Monomoy. It was agreed that Ms. Rambo should confirm the proposed approach with the other members of the Board.

Ms. Rambo subsequently confirmed with the other members of the Board that they agreed with that approach. Management then sent a letter to Monomoy stating that the Company would arrange a meeting, to occur after the Company issued its earnings release for the second quarter of fiscal year 2016, between representatives of Monomoy and Messrs. Hyde and Lasher for the purpose of enabling Monomoy to further elaborate on and discuss its proposal.

On August 16, 2016, Messrs. Hyde and Lasher met with representatives of Monomoy. During that meeting, Monomoy expressed its continued interest in acquiring the Company and suggested that the parties could enter into a non-disclosure agreement and engage in a due diligence review of the Company in furtherance of acquisition discussions. Mr. Hyde responded that he would discuss that with the Board at its next meeting.

Beginning on August 30 through September 1, 2016, the Board held its regularly scheduled three-day meeting at which members of management of the Company were in attendance. Management presented and discussed with the Board the Company’s annual strategic plan. Representatives of Sidley participated in a portion of the meeting on September 1, 2016, during which they made a presentation to the Board regarding certain legal considerations relevant to the Company remaining as a standalone public company versus exploring a potential business combination transaction, in light of Monomoy’s proposals received by the Board, and also discussed the fiduciary duties of the Board under Delaware law in the context of a potential business combination transaction. The Board then discussed Monomoy’s revised proposal and the Company’s possible responses. Following the discussion, the Board unanimously resolved to reject Monomoy’s revised proposal as inadequate, determined that entry into a non-disclosure agreement and conducting due diligence was not advisable at the time and instructed management to work with Ms. Rambo to develop a response to Monomoy. While the Board decided to reject Monomoy’s proposal as inadequate, the Board also decided that it should select a financial advisor to help it consider whether it might be an opportune time for the Company to explore various strategic options, including a sale of the Company.

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On September 12, 2016, Monomoy sent a third unsolicited, non-binding proposal letter to the Board, offering to acquire 100% of the Company’s issued and outstanding shares for a price per share in cash of $10.75.

On September 13, 2016, the Company sent a letter to Monomoy stating that the Board had considered Monomoy’s July 7 proposal at a recent meeting and had unanimously determined that the July 7 proposal did not present an opportunity that was in the best interest of the Company to explore. The letter also noted that the Company had received the September 12 proposal, which would be forwarded to the Board and considered by the Board at its next Board meeting. The Company’s letter also stated that the Board had considered Monomoy’s request to enter into a non-disclosure agreement, but the Board was in the process of reviewing the management’s long-term strategic plans and, as such, the Board had determined that entering into a non-disclosure agreement with Monomoy would be premature. The letter further stated that if, in the context of its review, the Board decided to pursue strategic alternatives, the Board would revisit Monomoy’s request.

On September 15, 2016, the Board held a meeting during which Mr. Hyde provided an update on Monomoy’s latest proposal. The Board discussed and approved the formation of a new subcommittee of the Board that would be administratively easier to convene, to pursue the evaluation of strategic alternatives, subject to approving a charter for the subcommittee by written consent to be circulated to the Board members. The Board decided to defer the review of Monomoy’s third proposal letter until the Board engaged a financial advisor.

On September 19, 2016, the Board approved, by unanimous written consent, the formation of a subcommittee of the Board (the “Strategic Committee”), consisting of Ms. Rambo (chair), Robert D. Olsen, Alice M. Richter and Christiana Shi, each an independent director and member of the Company’s audit and finance committee of the Board. The Strategic Committee was authorized to, among other things, establish and direct the process of reviewing and evaluating strategic alternatives, solicit proposals, review and negotiate the terms and conditions of strategic alternatives.

On September 23, 2016, the Strategic Committee held a meeting, in which Ms. Fields and a representative of Sidley participated. The Strategic Committee discussed the process with Monomoy, including their third proposal letter received on September 12, 2016 and the Company’s letter sent to Monomoy on September 13, 2016 in response to the July 7 proposal. Following the discussion, the Strategic Committee determined that the committee and the Board should defer any action in response to Monomoy’s proposal until after engagement of a financial advisor and further review and consideration of the strategic and financial plans to be prepared by management.

On September 27, 2016, Monomoy reached out via email to Mr. Repass requesting a brief phone call. Mr. Repass responded on September 30, 2016 declining to take such a call and noting that the Company would be in touch with Monomoy after the Board had an opportunity to consider whether to pursue strategic alternatives.

On October 7, 2016, the Strategic Committee held a meeting that was also attended by members of the Company’s senior management. At the invitation of the committee, two financial advisory firms, including Guggenheim, participated in a portion of the meeting and each made a presentation to the Strategic Committee regarding their capabilities and relevant experience. Following the presentations, the Strategic Committee discussed each financial advisory firm’s experience in the retail industry and relevant transactions, approaches to strategic alternatives, geographic location and other considerations. Following the discussion, and with input from management, the Strategic Committee selected Guggenheim as the financial advisor to the Board and recommended the engagement to the Board for approval.

On October 10, 2016, the Board held a meeting, in which members of the senior management of the Company and a representative of Sidley participated. The Board reviewed the recommendation of the Strategic Committee to engage Guggenheim as its financial advisor, discussed and approved the engagement and delegated to the Strategic Committee the authority to negotiate and finalize the engagement letter with Guggenheim. The Strategic Committee subsequently finalized the engagement letter, and the Company and Guggenheim entered into the engagement letter with Guggenheim.

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On November 4, 2016, the Strategic Committee held a meeting, in which members of the senior management of the Company and representatives of Guggenheim and Sidley participated. The committee, management of the Company and Guggenheim discussed the initial steps to be taken in the Board’s review of potential strategic alternatives, including a review of the business and management’s strategic and financial plans, the development of a list of potentially interested parties to be contacted in connection with a potential strategic transaction and the development of a financial model with management that would include detailed assumptions and forecasts typically expected from potential buyers. The participants in the meeting discussed the next steps in considering the exploration of the strategic transaction and an engagement strategy with Monomoy.

Following the November 4 meeting and continuing through February 2017, management and Guggenheim worked together on the matters as directed by the Strategic Committee, including the review of the management’s strategic and financial plans, development of a financial model, creation of an online data room and development of a list of potentially interested parties to be contacted.

On November 29 and 30, 2016, the Board held its regularly scheduled meeting. Representatives of Guggenheim and Sidley participated in the meeting on November 30, 2016. Representatives of Guggenheim gave a presentation on the status of its preliminary review of the strategic options and valuation of the Company, including actions that might be taken by the Company if it decided to remain as a standalone public company in order to increase value to its stockholders. The Board and Guggenheim discussed the next steps in potentially pursuing a sale process, including assessing the level of interest in the Company from potential buyers and management’s continued development of a financial model to be used in further consideration of strategic alternatives and that would be provided to potential counterparties. The Board authorized Guggenheim to reach out to a limited number of parties that would be most interested in pursuing a potential acquisition of the Company to make an initial assessment of the level of interest that might exist for the potential acquisition of the Company to assist the Board in its evaluation of whether to launch a full bidding process.

Beginning in early December 2016 and continuing through mid-January 2017, at the direction of the Board, Guggenheim and members of the Company’s management engaged in a limited outreach to potentially interested parties, including both strategic and financial buyers, and, in some cases, held initial meetings, to gauge market interest in, and perceived obstacles to, an acquisition of the Company.

On December 9, 2016, the Company received a proposal letter from a strategic party (“Party A”), offering to acquire all of the Company’s issued and outstanding shares for a price per share in cash of $11.50. Following that submission and prior to December 20, 2016, Guggenheim engaged in a series of discussions with Party A regarding the proposal and informed Party A that the Company was considering a sale process. Party A indicated that it was not interested in participating in a process.

On December 16, 2016, the Strategic Committee held a meeting, in which members of the Company’s management and representatives of Guggenheim and Sidley participated. Representatives of Guggenheim updated the Strategic Committee on the status of communications with Party A and Monomoy. The Strategic Committee discussed the proposal from Party A, noting that it was not at a preemptive value that would justify pursuing a negotiated transaction with Party A given the value that Guggenheim believed could be achieved through a broader bidding process. Guggenheim was directed to explore with Party A whether they would increase their offer and to keep Monomoy interested in engaging in a sale process.

Between the Strategic Committee meeting and December 20, 2016, Guggenheim had a series of discussions with Party A, in which Guggenheim informed Party A that a proposal of $11.50 per share was not at a level that would dissuade the Company from pursuing a process. Party A submitted a revised proposal letter on December 20, 2016, offering to acquire all of the Company’s issued and outstanding shares for a price per share in cash of $14.00.

On December 21, 2016, the Strategic Committee held a meeting, in which members of the senior management and representatives of Guggenheim and Sidley participated. A representative of Guggenheim discussed the conversations he had had with the Chief Executive Officer of Party A regarding its revised proposal. After discussion, the Strategic Committee determined that the Company should enter into a

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non-disclosure agreement with Party A, respond to Party A’s request for diligence information and agree to a meeting between Party A and the Company’s management. The committee then discussed the next course of action in the coming weeks, including continuing exploration of potential interest in an acquisition of the Company and finalizing management’s financial model for review by the Strategic Committee and the Board.

Following the Strategic Committee meeting, the Company and Party A entered into a non-disclosure agreement and Party A engaged in initial diligence activities, including meeting with the Company’s management and founder, and reviewing confidential diligence materials, regarding the business.

On January 13, 2017, the Strategic Committee held a meeting, in which members of the senior management and representatives of Guggenheim and Sidley participated. Representatives of Guggenheim and Mr. Hyde updated the committee on the status of the initial sales process outreach as well as the status of activities with Party A, including an upcoming in-person meeting with certain executive officers of Party A to discuss an overview of the business and opportunities and possible synergies from a business combination.

Following that in-person meeting, Party A informed Guggenheim on January 17, 2017 that Party A would not continue to pursue its non-binding proposal to acquire the Company at a price per share of $14, but remained interested at a price closer to its initial $11.50 offer and still did not wish to participate in a sale process. Party A and Guggenheim noted that they should stay in contact.

On January 27, 2017, the Strategic Committee held a meeting, in which members of the senior management and representatives of Guggenheim and Sidley participated. Representatives of Guggenheim presented the Strategic Committee with a summary status report, noting that of the 22 parties contacted to date, six parties had declined to engage in discussions and, of the remaining parties, nine had engaged in initial meetings (including Party A). Guggenheim and Mr. Hyde reported differing levels of interest and perspectives on the Company’s strategies from the contacted parties and discussed the in-person meeting with Party A and their subsequent communication on price and process. Guggenheim proposed a list of additional parties to contact. The Strategic Committee reviewed and discussed the additional parties, including potential strategic and financial buyers that the Strategic Committee and Guggenheim believed would be most interested in pursuing an acquisition of the Company, and decided that the financial model should be finalized before seeking additional proposals from potential interested parties.

On February 10, 2017, the Strategic Committee held a meeting, in which members of the senior management and representatives of Guggenheim and Sidley participated. Members of the Company’s management team presented the five-year financial model they had been working on developing over the last several months for use in connection with the sale process. Management and the committee discussed, among other things, the key assumptions underlying the model, various risks that could impact achievement of the results set forth in the model and different components of the model. Representatives of Guggenheim provided a process update and discussed proposed next steps, including reaching out to additional parties as discussed at the January 27 meeting, entering into non-disclosure agreements, providing access to diligence materials, including the model, and distributing first round bid procedure letters. After further discussing the financial model and proposed next steps, the committee approved the model as presented for use in the sale process and directed Guggenheim to proceed with the proposed next steps in the process as outlined at the meeting, including reaching out to the remaining potential parties as discussed.

Following that meeting, Guggenheim began contacting additional parties providing a form of non-disclosure agreement to parties who had expressed interest but had not already entered into a non-disclosure agreement with the Company.

Since the formation of the Strategic Committee, Ms. Rambo frequently updated other members of the Board as to developments in the strategic alternatives evaluation process and the Board was updated on the Strategic Committee’s work at each meeting of the Board. In light of the increased momentum in the process, the Strategic Committee determined that all members of the Board would be invited to attend and participate in the Strategic Committee meetings beginning with the February 24, 2017 meeting of the Strategic Committee. Ms. Rambo continued to update other members of the Board who did not attend the Strategic Committee meetings and the Board continued to be updated on the Strategic Committee’s work at each meeting of the Board.

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On February 24, 2017, the Strategic Committee held a meeting, in which Mr. Randolph K. Repass, founder of the Company and one of the Board members, Ms. Fields, and representatives of Guggenheim and Sidley participated. Representatives of Guggenheim reported that a total of 49 potential interested parties had been contacted to date, three of which had executed non-disclosure agreements and ten of which had passed on the opportunity. Guggenheim and the committee discussed the list of parties who remained interested and proposed next steps of contacting those parties as well as continued efforts to reach out to the remaining parties as discussed at the February 10, 2017 meeting. The Strategic Committee then reviewed a proposed confidential information memorandum and bid instruction letter prepared by Guggenheim and, following discussion, authorized Guggenheim to share the confidential information memorandum with parties who executed a non-disclosure agreement and to proceed with the distribution of bid instruction letters.

On March 2, 2017, representatives of Party A and Guggenheim had a conversation in which Party A stated that it did not want to participate in a process or receive the confidential information memorandum.

Between March 9 and 16, 2017, Guggenheim sent process letters to 20 potential buyers, including Monomoy, instructing each buyer to submit its proposal no later than March 28, 2017.

On March 10, 2017, the Strategic Committee held a meeting, in which Mr. Repass, members of the senior management and representatives of Guggenheim and Sidley participated. Representatives of Guggenheim provided an update on the potential bidders and the process timeline, noting that a total of 78 potential interested parties had been contacted to date, 32 of which had passed on the opportunity.

On March 22 and 23, 2017, the Board held its regularly-scheduled meeting. Representatives of Guggenheim and Sidley participated in a portion of the meeting on March 23, 2017. Representatives of Guggenheim provided an update on the potential sale of the Company and the bidding process, including a market update, a discussion of the financial model prepared by management and provided to potential bidders following the Strategic Committee’s review, a preliminary financial analysis, an analysis on the impact of a potential dividend payment by the Company on the process and a review of the proposed overall timeline of the process going forward. Guggenheim reported that a total of 79 parties had been contacted to date (including 16 strategic parties (including Party A, which Guggenheim noted continued to seem to be interested in talking with Guggenheim regarding the opportunity notwithstanding their prior statements) and 63 financial parties), 22 of which had executed a non-disclosure agreement, with three of those having passed on the opportunity. It was noted that more information on the status of the process would be known on March 28, 2017 when bids were due. Following discussion regarding various considerations relating to declaring a cash dividend, the Board approved the Company declaring a cash dividend of $0.05 per share on issued and outstanding shares of our common stock.

On March 24, 2017, the Company announced that the Board declared a cash dividend of $0.05 per share, which was paid on May 25, 2017 to the Company stockholders of record as of the close of business on May 11, 2017.

Throughout the process, Guggenheim contacted a total of 79 parties and the Company entered into non-disclosure agreements with a total of 22 counterparties (including Monomoy and Parties A through F below), who were provided access to an online data room containing information related to the Company and its business. All of the executed non-disclosure agreements contained a standstill provision, which ceased to apply to these counterparties upon the Company’s entering into the Merger Agreement.

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On March 28, 2017, six potential financial buyers, including Monomoy, submitted non-binding initial indications of interest. Each potential buyer submitted a non-binding all-cash offer to acquire the outstanding shares of our common stock. The table below presents the ranges of per share prices reflected by the indications of interest received:

Bidder		Price Per Share Range
Monomoy			$11.50 – $13.50
Party B			$11.80 – $12.30
Party C			$12.00
Party D			$11.50 – $12.50*
Party E			$11.00 – $12.00
Party F			$12.00

On March 31, 2017, the Strategic Committee and the rest of the Board members met to review the preliminary indications of interest. Mr. Hyde and Ms. Fields were in attendance as well as representatives of Guggenheim and Sidley. Guggenheim presented the six bids received. After discussing the bids and potential responses to these bidders, the Board instructed Guggenheim to provide feedback to each bidder, noting that the Company would continue the process with each bidder, but in order for an offer to be considered by the Board, the proposed per share price would need to be above $12.

Following the meeting, Guggenheim contacted each bidder on March 31, 2017, noting that each would be invited to a management presentation with the Company, the Company had received a number of bids with a price per share at or above $12 and the Company was not inviting bidders to continue in the process unless they understood that the per share price proposed by their bids would need to be above $12.

Over the course of April, management of the Company held in-person management presentations with five of the six bidders and a telephonic presentation with the sixth bidder, with representatives of Guggenheim in attendance at each meeting and in the case of Monomoy, with its financial advisor in attendance or on the phone. Through their submission of bids, or, if earlier, their withdrawal from the process, the bidders continued to conduct due diligence of the Company and its business, including through diligence meetings with the Company’s management team and Mr. Repass, at which representatives of Guggenheim were present, and to discuss their participation in the process with Guggenheim.

On April 20, 2017, Guggenheim had calls with the Chief Executive Officer of Party A and subsequently with the financial advisor to Party A, advising Party A that the Company had received multiple indications of interest with proposed purchase prices higher than Party A’s last proposed price of $11.50. Party A expressed an interest in entering the process, noting that it would consider a transaction structure of a combination of cash and stock valued at $12 per share. Guggenheim informed Party A that Party A should engage in due diligence.

On April 21, 2017, the Strategic Committee held a meeting, in which Mr. Repass, members of senior management and representatives of Guggenheim and Sidley participated. The Strategic Committee received an update from management and Guggenheim regarding the sale process. Representatives of Guggenheim also reported on their discussion with Party A on the preceding day. Guggenheim noted that it would be following up with each bidder directly on whether they were still interested in pursuing and to discuss next steps.

On May 8, 2017, representatives of Party A informed representatives of Guggenheim that Party A was not able to proceed in the process at that time.

On May 15, 2017, Party E notified Guggenheim of its decision to withdraw from the process, indicating that it would not be able to complete a transaction at this point given its internal resource constraints.

On May 17, 2017, Guggenheim sent the second round bid letters to the remaining five bidders, instructing each bidder to provide a revised indication of interest by June 13, 2017.

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On May 19, 2017, the Strategic Committee held a meeting, in which Mr. Repass and Dennis Madsen, two members of the Board, members of senior management and representatives of Guggenheim and Sidley participated. The Strategic Committee received an update from management and Guggenheim regarding the bidding process and the meetings management of the Company had with the potential bidders. Guggenheim also reported that the second-round bid letters had been distributed requesting updated proposals by June 13, 2017. A representative of Sidley reviewed a summary of the key terms of the proposed bid draft merger agreement, previously circulated to the Strategic Committee, including transaction structure, conditions, non-solicitation restrictions, representations and warranties, covenants, termination rights and termination fees.

On May 22, 2017, the Strategic Committee, with representatives of Sidley and members of management present, met to further discuss the draft merger agreement and provide guidance to management and Sidley on the proposed terms. The Strategic Committee instructed the Company and Sidley to finalize the proposed bid draft merger agreement and provide it to the bidders.

On May 25, 2017, the Company posted the bid draft merger agreement in the online data room, making it available to the bidders remaining in the process.

On May 26, 2017, Party A’s financial advisor contacted Guggenheim, indicating that Party A was interested in re-engaging with the Company to pursue a transaction in which Mr. Repass would receive Party A equity in exchange for his stock in the Company, while the other Company stockholders would receive cash consideration. Guggenheim provided Party A with details on the timing process, including the June 13, 2017 deadline for all bidders to submit their bids.

On May 31, 2017, Guggenheim sent the second-round bid instruction letter to Party A.

On May 31 and June 1, 2017, the Board held its regularly-scheduled meeting. Representatives of Guggenheim and Sidley participated in a portion of the meeting on June 1, 2017. Guggenheim updated the Board on the latest discussions with Party A and the cash and stock transaction structure proposed by Party A. Guggenheim then provided an overview of the remaining bidders still engaged in the process. The Board discussed Party A’s proposed structure and instructed Guggenheim to inform Party A that the Board strongly preferred a transaction in which all stockholders received the same consideration. The Board also discussed, with input from a representative of Sidley, the preparation of internal and external communications as well as SEC filing requirements in connection with a sale transaction.

Shortly after the June 1, 2017 Board meeting and in the following several days, Guggenheim conveyed the Board’s feedback to Party A and continued the discussions with the representative of Party A.

On June 3, 2017, Party D notified Guggenheim of its decision to withdraw from the process, citing Amazon as a threat to the brick-and-mortar retail business and indicating concerns over the Company’s performance trends.

On June 8, 2017, Party B notified Guggenheim of its decision to withdraw from the process, citing Amazon as a threat to the brick-and-mortar retail business.

On June 9, 2017, Party F notified Guggenheim of its decision to withdraw from the process, noting that it would not be in a position to submit a bid by the June 13, 2017 deadline but would revisit a transaction later if the Company was not able to complete a transaction within its proposed timeline.

On June 11, 2017, at the request of Party A, representatives of Party A’s outside counsel had a call with representatives of Sidley and Guggenheim and Ms. Fields in which Party A’s counsel informed them that Party A’s bid would contemplate that Mr. Repass would receive equity in Party A and that all other Company stockholders would receive cash, and explained the reasons for that structure. The Sidley representative responded that the Company could not provide a response to this proposed structure until Party A submitted a bid that included an offer price and further details of the proposed transaction and the Board had an opportunity to review and consider such proposal.

On June 12, 2017, Guggenheim spoke with Monomoy’s financial advisor, which requested guidance on the Company’s valuation. Guggenheim further indicated that, while it did not have specific guidance on value,

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it believed that, based on the feedback it had received from the Board to date, a deal would likely not be done below the midpoint of initial range of per share prices included in Monomoy’s March 28 proposal.

Also on June 12, 2017, Guggenheim spoke with Party A’s financial advisor, who asked whether the bid price of $12 orally proposed by Party A in April would be competitive. Guggenheim responded that, while it did not have definitive proposals in advance of the June 13, 2017 deadline, a bid price of $12 would likely not be high enough to be competitive based on the feedback it had received from the Board to date.

On June 13, 2017, Party A advised Guggenheim that Party A was no longer interested in submitting a bid as its proposed $12 price was unlikely to be competitive on valuation and it was not prepared to offer more than $12.

Also on June 13, 2017, Monomoy and Party C each submitted a revised non-binding letter of intent.

Monomoy’s bid contemplated a per share purchase price of $12.21 in cash. The letter of intent indicated that Monomoy would finance the acquisition with a combination of equity and debt but the transaction would not be subject to any financing contingency. Monomoy submitted drafts of debt commitment letters and a mark-up of the bid draft merger agreement. Party C’s bid proposed a per share purchase price of $11.50. The letter of intent indicated that, while Party C would seek to obtain debt financing from third party lenders, Party C intended to provide an equity commitment for the full purchase price in order to enhance the certainty of the consummation of a transaction and that Party C’s transaction would not be subject to any financing contingency. Party C also submitted a mark-up of the bid draft merger agreement.

On June 15, 2017, Guggenheim contacted Monomoy and Party C to obtain additional insight as to the parties’ proposals, noting that Guggenheim would provide specific feedback following the review of the bids by the Board.

On June 16, 2017, the Board held a telephonic meeting, in which Mr. Repass and Mr. Madsen, as well as members of the senior management of the Company and representatives of Guggenheim and Sidley participated. Representatives of Guggenheim summarized the sale process to date, including the bids received, and reviewed and discussed its preliminary financial analysis with respect to the Company and the two revised bids. Representative of Sidley provided the directors with a refresher overview of their fiduciary duties under Delaware law with respect to a potential transaction, as previously presented to the Board. A representative of Sidley also reviewed the key issues contained in the two mark-ups of the bid draft merger agreement provided by Monomoy and Party C. The Board discussed the strategic alternatives available to the Company, including the bids presented as well as continuing as a standalone company. Following discussion, the Board decided that the Company should continue to engage in discussions with the two remaining bidders with an aim of trying to maximize the value offered to stockholders in a potential transaction, taking into consideration the certainty of the consummation of a transaction proposed by the two bids, and directed Guggenheim to continue to do so.

Following the meeting on June 16, 2017, a representative of Guggenheim contacted Party C, noting that, while the Board valued that the bid was not dependent on obtaining debt financing, the bid price of $11.50 was not at a level at which the Board would approve a transaction, and was not competitive with other interest in the Company. Guggenheim also advised Party C that the Board had authorized Guggenheim to keep the process open for a limited period of time with an understanding that any transaction price would be well above $12 and that, while the Company was not asking for a re-bid at this time, Party C should only proceed with an acknowledgement of that understanding. After discussion, Party C agreed that it would continue in the process with that understanding.

Later on June 16, 2017, a representative of Guggenheim contacted Monomoy, noting that in evaluating Monomoy’s mark-up of the bid draft merger agreement, the Board had expressed concerns regarding the debt financing structure as well as the mark-up of other terms reflected in the merger agreement. Guggenheim also reiterated that the offer price was disappointing to the Board relative to the initial range and unlikely to be high enough to complete a transaction. Subsequently, Monomoy’s outside counsel, Kirkland & Ellis (“ K&E ”), had a preliminary discussion regarding the merger agreement with Sidley, and delivered a revised draft merger agreement on June 19.

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During the period from June 16 through June 23, 2017, Monomoy and Party C continued to conduct their confirmatory due diligence, and Sidley engaged in discussions with K&E, counsel to Monomoy, and counsel to Party C, regarding the merger agreement mark-ups and exchanged drafts of the merger agreement, the equity commitment letter, the limited guarantee, voting and support agreement and other ancillary agreements. Guggenheim also held calls with Monomoy to discuss Monomoy’s proposed financing arrangements.

On June 23, 2017, the Strategic Committee held a meeting, in which Mr. Repass, members of the senior management of the Company and representatives of Guggenheim and Sidley participated. Guggenheim provided an update on the process and its discussions with Monomoy and Party C, noting that both bidders were prepared to make their best and final bids. Guggenheim then reviewed its preliminary valuation analysis of the Company, a transaction analysis for each bidder and a retail market update, discussed the proposed debt and equity financing requirements of Monomoy and the “all-equity” bid by Party C, and recommended distributing the bid instruction letter to each bidder to submit its best and final offer. A representative of Sidley then reviewed the open items in the draft merger agreements and possible resolutions of those issues. Following the discussion, the committee approved the Company to proceed with the proposed bidding process and instruct the two remaining bidders to submit their best and final offers by June 27, 2017.

Later on June 23, 2017, Guggenheim sent the best and final bid instruction letters to Monomoy and Party C.

On the next day, June 24, 2017, the Board held a meeting, in which members of management of the Company and representatives of Guggenheim and Sidley participated. Management provided an update on the Company’s operation and business. A representative of Guggenheim reviewed its preliminary valuation analysis, the status of the process and next steps planned based on the discussions at the Strategic Committee meeting on the previous date, noting that instruction letters had been distributed requesting each bidder to submit its best and final bid by June 27, 2017. The Board discussed Guggenheim’s valuation analysis and observed that the value likely to be reflected in the best and final bids would likely exceed the value expected to be achieved if the Company were to remain an standalone public company. Following the discussion, the Board determined to convene their next meeting on June 28 to review the final bids.

On June 25, 2017, Guggenheim informed Monomoy that given an “all-equity” bid submitted by a competing bidder that the Board valued from a deal certainty perspective, Monomoy should seek to improve terms to increase deal certainty and to distinguish itself on price.

On June 26 and 27, 2017, Guggenheim held calls with the financial advisor to Monomoy and with Party C, during which Guggenheim responded to each party regarding the bidding status.

Late in the day on June 27, 2017, Party C submitted its final proposal to acquire all of the issued and outstanding shares of our common stock for cash at a purchase price $12.03 per share, on an all-equity commitment basis. Party C also submitted its revised draft of the merger agreement.

Also on June 27, 2017, Monomoy submitted its final proposal to acquire all of the issued and outstanding shares of our common stock for cash at a purchase price $13.01 per share. Monomoy also submitted its revised draft of the merger agreement, the equity commitment letter and the fully-executed debt commitment letters.

In the morning of June 28, 2017, Guggenheim discussed with Monomoy the Company’s final capitalization details that would be included in the execution version of a merger agreement, which figures differed from the estimates provided earlier in the process and upon which both Monomoy and Party C’s per share bid prices were based. After reviewing the Company’s updated capitalization numbers and discussing with Guggenheim, Monomoy adjusted its final bid per share price to $12.97, which represented a total equity value of $337.7 million, consistent with the total equity value implied in its proposal submitted on the previous day.

Later in the morning on June 28, 2017, the Board met via telephone to discuss the final bids submitted by Monomoy and Party C, in which members of senior management of the Company and representatives of Guggenheim and of Sidley participated. At that meeting, a representative of Guggenheim reviewed and discussed the final bids from Monomoy and Party C, including the adjustments associated with the Company’s

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final capitalization figures. Following the discussion, the Board determined that the Monomoy offer was superior to the other proposal, instructed management and its advisors to finalize the transaction with Monomoy and directed Guggenheim to notify each bidder of the Board’s decision. The Board also instructed Guggenheim to further review and discuss with Monomoy the terms of the debt and equity financings included in Monomoy’s bid, with an aim to improve the deal certainty.

Following such instructions, on June 28, 2017, Guggenheim notified Monomoy that the Board had instructed Guggenheim and Sidley to finalize the transaction with Monomoy, subject to the continuing review of the debt and equity commitment letters included in Monomoy’s final bid. During July 28 and 29, 2017, Guggenheim had a series of discussions with Monomoy to clarify and negotiate the terms of the debt and equity financings and Sidley finalized the terms of the merger agreement and other ancillary agreements and documents with K&E.

Also on June 28, 2017, Guggenheim notified Party C that its final bid was lower than the other bid and that the Company was moving forward to execute a transaction with the other bidder. Party C requested additional information later in the day and was informed by Guggenheim that its proposed price fell far short of the other bid. Late in the afternoon, Party C submitted a revised offer to Guggenheim, increasing the purchase price per share from $12.03 in the offer submitted the day before to $12.50.

Shortly after receipt of Party C’s revised offer, Ms. Rambo, members of management and representatives of Guggenheim and Sidley held a call, during which they reviewed and discussed Party C’s revised offer and how to determine whether Party C would further increase its price. Given how late in the day this latest development was occurring, the participants believed that, based on the Board’s discussion at its meeting earlier that day, the Board would likely still view Monomoy’s bid as being superior notwithstanding the greater financing certainty associated with Party C’s bid. Ms. Rambo contacted Mr. Repass, who confirmed his agreement with this assessment. Ms. Rambo then instructed Guggenheim to seek to determine whether Party C could further increase its price, noting that, based on Party C’s current price, the Company would still proceed towards finalizing the transaction with the other bidder. Ms. Rambo immediately contacted the other members of the Board, each of whom also confirmed his or her agreement with this assessment.

Following the call, in the evening of June 28, 2017, a representative of Guggenheim contacted a representative of Party C to inform Party C of the reaction to their revised bid. Party C stated that they could not increase their bid above $12.50.

On June 29, 2017, the Board held a meeting in which members of management and representatives of Guggenheim and Sidley participated. At the meeting, a representative of Guggenheim updated the Board on the revised offer submitted by Party C. A representative of Sidley then reviewed with the Board its fiduciary duties in the context of the proposed Merger and summarized the material terms of the proposed form of the merger agreement. At the request of the Board, Guggenheim then reviewed and discussed its financial analysis with respect to the Company and the final bids from Monomoy and Party C, as well as the terms of the debt and equity financing involved in Monomoy’s bid and the negotiations over the past few days. Thereafter, at the request of the Board, Guggenheim verbally rendered its opinion to the Board, which was subsequently confirmed in writing by delivery of Guggenheim’s written opinion addressed to the Board dated June 29, 2017, as to, as of such date and based on and subject to the matters considered, the procedures followed, the assumptions made and various limitations of and qualifications to the review undertaken, the fairness, from a financial point of view, to holders of our common stock (excluding the Company or any of its wholly owned subsidiaries or Parent or any of its wholly owned subsidiaries), of the merger consideration to be received by such holders from Monomoy in the merger pursuant to the terms of the Merger Agreement. The Board then unanimously approved the Merger Agreement with Monomoy, the voting and support agreements, the merger and the other transactions contemplated by the Merger Agreement, and resolved to recommend to the Company stockholders that they adopt the Merger Agreement.

Shortly after the June 29 meeting, the Company and Monomoy executed the Merger Agreement and received the executed final copies of the limited guarantee, the equity commitment letter, the debt commitment letters and the voting and support agreements. The Company and Monomoy issued a joint press release announcing the execution of the Merger Agreement.

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Recommendation of the Board and Reasons for the Merger

Recommendation of the Board

After careful consideration and consulting with the legal and financial advisors to the Board, the Board unanimously (i) adopted and declared advisable the Merger Agreement and the consummation by the Company of the transactions contemplated by the Merger Agreement, including the Merger, (ii) approved the execution, delivery and performance of the Merger Agreement and the consummation by the Company of the transactions contemplated by the Merger Agreement, including the Merger, (iii) determined that the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger, are advisable and in the best interests of the Company and its stockholders, and (iv) recommended that the Company stockholders adopt the Merger Agreement and directed that the Merger Agreement be submitted to the Company stockholders for adoption.

Accordingly, the Board unanimously recommends that you vote: (1) “ FOR ” the adoption the Merger Agreement; (2) “ FOR ” the non-binding, advisory proposal to approve certain compensation that may be paid or become payable to the Company’s named executive officers that is based on or otherwise relates to the Merger; and (3) “ FOR ” the proposal to adjourn the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement.

Reasons for the Merger

In evaluating the Merger Agreement and the transactions contemplated thereby, including the Merger, the Board and the Strategic Committee consulted with the Company’s senior management team and outside legal and financial advisors and, in reaching its decision to recommend that the Company stockholders approve the Merger Agreement, the Board considered and evaluated numerous factors, including the following material factors, each of which the Board believes supported their determinations (which factors are not presented in order of relative importance):

Company’s Operating and Financial Condition; Prospects of the Company.   The Board considered that the Merger Consideration of $12.97 per share to be received by our stockholders provides greater certainty of value (and less risk) to our stockholders relative to the potential trading price of our common stock over a longer period after accounting for the long-term risks to our business resulting from operational execution risk and evolving industry dynamics. The Board considered the possibility of continuing to operate the Company as a standalone public company, including the related risks and uncertainties and the prospects for the Company going forward as a standalone entity. In doing so, the Board considered the following:

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Merger Consideration.   The Board considered the fact that the Merger Consideration of $12.97 represents:

Strategic Review and Broad and Competitive Process.   The Board believed that the value offered to our stockholders in the Merger was more favorable to our stockholders than the potential value of remaining a standalone company and that the Merger Consideration obtained was the highest that was reasonably attainable. As part of the Board’s and the Strategic Committee’s exploration of strategic alternatives, the Company and, on behalf of the Board, its financial advisor had contact with a wide variety of potential parties interested in an acquisition of the Company over the course of approximately six months, including by approaching 79 parties, executing non-disclosure agreements with 22 of them, receiving initial indications of interest from seven of them. The Board also considered the revised and final bids submitted by the two finalists, of which Parent’s bid was the higher, at $12.97.

Increase in Proposed Price.   The Board and the Strategic Committee considered that the Merger Consideration of $12.97 per share was significantly higher than the price per share of $10.25 in the initial indication of interest received by the Board from Monomoy on May 26, 2016.

Cash Consideration; Certainty of Value.   The Board and the Strategic Committee considered the fact that the Merger Consideration will be paid in cash, providing certainty, immediate value and liquidity to our stockholders, in comparison to the risks and uncertainty that would be inherent in remaining a standalone company.

No Financing Condition; Reverse Termination Fee.   The Board and the Strategic Committee considered the fact that the Merger is not subject to a financing condition, Parent has obtained committed debt financing for the transaction from reputable financial institutions and Monomoy has committed the Equity Financing of up to $130 million. The Board and the Strategic Committee also considered (i) the limited number and nature of the conditions to the Debt Financing and Equity Financing, (ii) the obligation of Parent to use reasonable best efforts to consummate the Debt Financing, and (iii) the Company’s ability, under circumstances specified in the Merger Agreement, including all conditions to Parent’s and Sub’s obligations to consummate the Merger having been satisfied, the Company confirming the satisfaction (or waiver) of all conditions to the Company’s obligation to consummate the Merger and that it stands ready, willing and able to close and Parent’s Debt Financing having been funded or being available to be funded, to seek specific performance of Parent’s obligation to cause, and pursuant to the Equity Commitment Letter, under certain circumstances to seek specific performance to directly cause, Monomoy to fund the Equity Financing as contemplated by the Merger Agreement and the Equity Commitment Letter, as described in further detail in the section captioned “ The Merger Agreement —  Specific Performance. ” The Board and the Strategic Committee also considered the Company’s right that, in the event of a failure of the Merger to be consummated under specified circumstances, including all conditions Parent’s and Sub’s obligations to consummate the Merger having been satisfied and the Company confirming the satisfaction (or waiver) of all conditions to the Company’s obligation to consummate the Merger and that it stands ready, willing and able to close, to require Parent to pay the Company the Reverse Termination Fee of $17 million, or approximately 5% of the equity value of the Merger, as described in further detail in the section captioned “ The Merger Agreement — Reverse Termination Fee and Other Remedies. ”

Financial Analysis of the Company’s Financial Advisor and Related Opinion.   The Board and the Strategic Committee considered the financial analysis reviewed by Guggenheim with the Board, the oral opinion of Guggenheim rendered to the Board on June 29, 2017, and Guggenheim’s written opinion addressed to the Board dated June 29, 2017, as to the fairness, as of such date, from a financial point of view, to our stockholders (excluding the Company or any of its wholly owned subsidiaries or Parent or

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any of its wholly owned subsidiaries), of the Merger Consideration to be received by such holders in the Merger pursuant to the Merger Agreement, which opinion was based on and subject to the matters considered, the procedures followed, the assumptions made and various limitations and qualifications to the review undertaken as more fully described under the section captioned “ Opinion of Guggenheim Securities, LLC .”

Negotiations with Parent.   The Board and the Strategic Committee considered the benefits that we and our advisors were able to obtain during our negotiations with Parent and that the Merger Agreement was the product of arm’s-length negotiations, and contained terms and conditions that were, in the Board’s view, advisable and favorable to us and our stockholders.

Merger Agreement.   The Board and the Strategic Committee considered the provisions of the Merger Agreement, including:

Timing of Consummation.   The Board and the Strategic Committee considered the anticipated timing of the consummation of the transactions contemplated by the Merger Agreement.

Appraisal Rights.   The Board and the Strategic Committee considered the availability of statutory appraisal rights to our stockholders who do not vote in favor of the adoption of the Merger Agreement and otherwise comply with all required procedures under the DGCL.

Stockholders’ Ability to Reject the Merger.   The Board and the Strategic Committee considered the fact that the Merger is subject to the adoption of the Merger Agreement by the affirmative vote of holders of a majority of the shares of our common stock outstanding and entitled to vote thereon as of the close of business on the Record Date.

Voting Agreement.   The Board and the Strategic Committee considered the fact that the Voting Agreement with Randolph K. Repass, his spouse and a number of the Repass family trusts terminates in the event that the Merger Agreement is terminated, which would permit such stockholders to support a transaction involving a Superior Proposal.

The Board and the Strategic Committee also considered a variety of risks and uncertainties and other potentially negative factors in its evaluation of the Merger and the Merger Agreement, including, but not limited to, the following:

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Potential Payment of a Termination Fee.   The requirement, under certain circumstances, to pay the Company Termination Fee of $11 million, though the Board believed that the amount of such fee was reasonable relative to similar transactions.

Delays in or Failure to Consummate Merger .  The Merger may be delayed or not be consummated, resulting in loss of value to our stockholders and negative impact on our financial position, operations and prospects.

Lack of Ongoing Equity Participation for Our Stockholders .  Our stockholders will have no ongoing equity participation in the Company or Parent following the Merger, and our stockholders will cease to participate in our future earnings or growth, if any, and will not benefit from increases, if any, in the value of our common stock following the Merger.

Substantial Costs of Merger .  There have been and will continue to be significant costs involved in connection with negotiating the Merger Agreement and consummating the Merger (certain of which we will be required to bear), including in connection with the pursuit of regulatory approval and in connection with litigation that could arise in the future in connection with the Merger. In addition, substantial management time and effort have been and will continue to be required to effectuate the Merger, which could result in disruption of our day-to-day operations during the pendency of the Merger.

Disruption of Business and Other Relationships .  If the Merger is not consummated, the pendency of the Merger could adversely affect our and our subsidiaries’ relationships with our and their respective customers, suppliers, associates and others with whom we and they have business dealings.

Restrictions on Our Operations .  The terms of the Merger Agreement place restrictions on the conduct of our business prior to consummation of the Merger, which may delay or prevent us from undertaking business opportunities that may arise prior to consummation of the Merger.

Taxable Transaction for Stockholders .  The receipt of cash in exchange for shares of our common stock pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes for many of our stockholders.

Interest of Our Directors and Executive Officers .  Our directors and executive officers may have interests in the Merger that are different from, or in addition to, the interests of our stockholders, including (i) the expectation that certain of our executive officers may enter into agreements with Parent or Sub regarding employment with the Surviving Corporation, (ii) the cash-out of the Options, all of which are vested, held by executive officers and directors and the accelerated vesting and cash-out of RSUs held by non-employee directors, (iii) the assumption of the RSUs held by our executive officers by the Surviving Corporation and the right to receive cash payment based on each holder’s continued employment with the Surviving Corporation through the applicable vesting dates, (iv) the acceleration of RSUs and certain severance benefits to the executive officers under the Top Hat Severance Plan if his or her employment is terminated without cause or if such executive officer resigns for good reason, and (v) continued indemnification and insurance coverage for our directors and executive officers from the Surviving Corporation and Parent under the terms of the Merger Agreement.

After taking into account all of the factors set forth above, as well as others, the Board concluded that the risks, uncertainties, and potentially negative factors associated with the Merger were outweighed by the potential benefits of the Merger to the Company and our stockholders. Accordingly, the Board determined that the Merger Agreement, the Merger and the other transactions contemplated thereby are advisable and in the best interests of the Company and our stockholders.

THE FOREGOING DISCUSSION IS NOT INTENDED TO BE AN EXHAUSTIVE LIST OF THE INFORMATION AND FACTORS CONSIDERED BY THE BOARD IN ITS CONSIDERATION OF THE MERGER, BUT IS MERELY A SUMMARY OF THE MATERIAL POSITIVE FACTORS AND MATERIAL NEGATIVE FACTORS CONSIDERED BY THE BOARD IN THAT REGARD. IN VIEW OF THE NUMBER AND VARIETY OF FACTORS AND THE AMOUNT OF INFORMATION CONSIDERED, THE BOARD DID NOT FIND IT PRACTICABLE TO MAKE SPECIFIC ASSESSMENTS OF, QUANTIFY, OR OTHERWISE ASSIGN RELATIVE WEIGHTS TO THE

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SPECIFIC FACTORS CONSIDERED IN REACHING ITS DETERMINATION. IN ADDITION, THE BOARD DID NOT UNDERTAKE TO MAKE ANY SPECIFIC DETERMINATION AS TO WHETHER ANY PARTICULAR FACTOR, OR ANY ASPECT OF ANY PARTICULAR FACTOR, WAS FAVORABLE OR UNFAVORABLE TO THEIR ULTIMATE DETERMINATION, AND INDIVIDUAL MEMBERS OF THE BOARD MAY HAVE GIVEN DIFFERENT WEIGHTS TO DIFFERENT FACTORS. BASED ON THE TOTALITY OF THE INFORMATION PRESENTED, THE BOARD COLLECTIVELY REACHED THE UNANIMOUS DECISION TO APPROVE AND ADOPT THE MERGER AGREEMENT AND THE MERGER IN LIGHT OF THE FACTORS DESCRIBED ABOVE AND OTHER FACTORS THAT THE BOARD FELT WERE APPROPRIATE. THE ABOVE EXPLANATION OF THE REASONS FOR THE MERGER AND OTHER INFORMATION PRESENTED IN THIS SECTION IS FORWARD-LOOKING IN NATURE AND, THEREFORE, SHOULD BE READ IN LIGHT OF THE SECTION CAPTIONED “FORWARD-LOOKING STATEMENTS,” BEGINNING ON PAGE 20 .

Opinion of Guggenheim Securities, LLC

Overview

Pursuant to an engagement letter dated November 29, 2016, the Board retained Guggenheim to act as its financial advisor with respect to the potential sale of the Company. In selecting Guggenheim as the Board’s financial advisor, the Board considered that, among other things, Guggenheim is an internationally recognized investment management, investment banking and financial advisory firm whose senior professionals have substantial experience advising companies in the retail industry as well as significant experience providing strategic and financial advisory services. Guggenheim, as part of its investment banking, financial advisory and capital markets businesses, is regularly engaged in the valuation and financial assessment of businesses and securities in connection with mergers and acquisitions, restructurings and recapitalizations, spin-offs/split-offs, securities offerings in both the private and public capital markets and valuations for corporate and other purposes.

At the June 29, 2017 meeting of the Board, Guggenheim rendered an oral opinion, which was confirmed by delivery of a written opinion, to the Board to the effect that, as of June 29, 2017 and based on and subject to the matters considered, the procedures followed, the assumptions made and various limitations of and qualifications to the review undertaken, the Merger Consideration was fair, from a financial point of view, to holders of shares of our common stock (excluding the Company or any of its wholly owned subsidiaries or Parent or any of its wholly owned subsidiaries).

This description of Guggenheim’s opinion is qualified in its entirety by the full text of the written opinion, which is attached as Annex B to this proxy statement and which you should read carefully and in its entirety. Guggenheim’s written opinion sets forth the matters considered, the procedures followed, the assumptions made and various limitations of and qualifications to the review undertaken by Guggenheim. Guggenheim’s written opinion, which was authorized for issuance by the Fairness Opinion and Valuation Committee of Guggenheim, is necessarily based on economic, capital markets and other conditions, and the information made available to Guggenheim, as of the date of such opinion. Guggenheim has no responsibility for updating or revising its opinion based on facts, circumstances or events occurring after the date of the rendering of the opinion.

In reading the discussion of the opinion set forth below, you should be aware that Guggenheim’s opinion (and, as applicable, any materials provided in connection therewith):

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In the course of performing its reviews and analyses for rendering its opinion, Guggenheim:

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With respect to the information used in arriving at Guggenheim’s opinion:

Guggenheim also noted certain other considerations with respect to its engagement and the rendering of its opinion:

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Summary of Financial Analyses

Overview of Financial Analyses

This “Summary of Financial Analyses” presents a summary of the principal financial analyses performed by Guggenheim and presented to the Board in connection with Guggenheim’s rendering of its opinion. Such presentation to the Board was supplemented by Guggenheim’s oral discussion, the nature and substance of which may not be fully described herein.

Some of the financial analyses summarized below include summary data and information presented in tabular format. In order to understand fully such financial analyses, the summary data and tables must be read together with the full text of the summary. Considering the summary data and tables alone could create a misleading or incomplete view of Guggenheim’s financial analyses.

The preparation of a fairness opinion is a complex process and involves various judgments and determinations as to the most appropriate and relevant financial analyses and the application of those methods to the particular circumstances involved. A fairness opinion therefore is not readily susceptible to partial analysis or summary description, and taking portions of the financial analyses set forth below, without considering such analyses as a whole, would in Guggenheim’s view create an incomplete and misleading picture of the processes underlying the financial analyses considered in rendering Guggenheim’s opinion.

In arriving at its opinion, Guggenheim:

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With respect to the financial analyses performed by Guggenheim in connection with rendering its opinion:

Certain Definitions

Throughout this “Summary of Financial Analyses,” the following financial terms are used in connection with Guggenheim’s various financial analyses:

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Recap of Implied Merger Financial Metrics

Based on the Merger Consideration of $12.97 per share in cash for each share of our common stock, Guggenheim calculated various implied merger-related premia and multiples as outlined in the table below:

Merger Premia and Implied Merger Multiples

						Market (1)				Merger
Price per Share (2)						$	9.70			$	12.97
% Premium							0.0	%			33.7	%
% Cash-Adjusted Premium							0.0	%			54.9	%
Enterprise Value/EBITDA Multiples:			Metric
LTM:		$	38				4.1x				6.4x
2017E:		$	41				3.8x				5.9x
2018E:		$	47				3.3x				5.1x
Enterprise Value/EBIT Multiples:
LTM:		$	15				10.2x				15.9x
2017E:		$	16				9.6x				14.9x
2018E:		$	21				7.3x				11.3x
Cash-Adjusted P/E Multiples:
LTM:		$	0.34				17.4x				26.9x
2017E:		$	0.39				15.3x				23.7x
2018E:		$	0.52				11.6x				17.9x
P/E Multiples:
LTM:		$	0.34				28.2x				37.7x
2017E:		$	0.39				24.9x				33.2x
2018E:		$	0.52				18.8x				25.1x

West Marine Financial Analyses

Recap of Financial Analyses.

In evaluating the Company in connection with rendering its opinion, Guggenheim performed various financial analyses which are summarized in the table below and described in more detail elsewhere herein, including selected publicly traded companies analysis, selected precedent merger and acquisition transactions

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analysis and discounted cash flow analyses. Solely for informational reference purposes, Guggenheim also performed a discounted cash flow sensitivity analysis, a leveraged buyout valuation analysis and a premia paid analysis and reviewed the historical trading price range for our common stock and Wall Street equity research analysts’ price targets for our common stock.

Recap of West Marine Change-of-Control Financial Analyses

Merger Price Per Share		$	12.97

		Reference Range for West Marine
		Low				High
Financial Analyses
Selected Publicly Traded Companies Analysis
Enterprise Value/2017E EBITDA Multiples		$	9.54			$	12.51
Enterprise Value/2017E EBIT Multiples		$	6.84			$	9.72
2017E Cash-Adjusted P/E Multiples		$	6.54			$	9.10
Selected Precedent M&A Transactions Analyses
Enterprise Value/CY (EBITDA – CapEx) Multiples		$	11.18			$	16.49
Enterprise Value/CY EBIT Multiples		$	9.72			$	12.81
CY Cash-Adjusted P/E Multiples		$	9.70			$	12.68
Discounted Cash Flow Analysis		$	11.72			$	14.88
For Informational Reference Purposes
Discounted Cash Flow Sensitivity Analysis		$	7.65			$	14.88
Leveraged Buyout Valuation Analysis		$	11.69			$	14.50
52 Week Low/High		$	7.77			$	11.72
Premia Paid Analysis		$	10.99			$	12.83
Research Analyst Price Targets		$	11.00			$	12.00

Selected Publicly Traded Companies Analysis.

Guggenheim reviewed and analyzed the Company’s historical stock price performance, projected/forecasted financial performance and trading valuation metrics compared to corresponding data for certain publicly traded companies in the boat sales, sporting goods retail and small cap specialty retail sectors that Guggenheim deemed relevant for purposes of its valuation analysis. The following eighteen publicly traded companies were selected by Guggenheim for purposes of this analysis:

Selected Publicly Traded Companies

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Guggenheim calculated, among other things, various trading multiples for the Company and the selected publicly traded companies (in the case of the selected publicly traded companies, based on Wall Street equity research consensus estimates and each company’s most recent publicly available financial filings), which are summarized in the table below:

Selected Publicly Traded Company Multiples

2017E Enterprise Value/EBITDA

2017E Enterprise Value/EBIT

2017E Cash-Adjusted P/E

Boat Sales

MarineMax, Inc.

11.5x

13.3x

16.1x

Sporting Goods Retailers

Big 5 Sporting Goods Corp.

5.1x

7.2x

10.8x

Dick’s Sporting Goods, Inc.

5.0x

6.9x

10.9x

Hibbett Sports, Inc.

3.5x

4.4x

7.0x

Sportsman’s Warehouse Holdings, Inc.

5.8x

7.9x

8.8x

Small Cap Specialty Retail

Abercrombie & Fitch Co.

4.1x

NM

NM

Ascena Retail Group, Inc.

3.5x

12.4x

17.3x

The Buckle, Inc.

3.8x

4.8x

7.1x

Express, Inc.

2.7x

6.7x

11.7x

The Finish Line, Inc.

4.0x

6.8x

10.6x

Francesca’s Holdings Corp.

4.3x

5.7x

9.0x

Genesco Inc.

4.1x

6.7x

8.6x

Guess?, Inc.

6.4x

14.1x

22.7x

Shoe Carnival, Inc.

5.9x

9.5x

13.9x

Tailored Brands, Inc.

6.1x

9.2x

5.9x

Tilly’s, Inc.

4.1x

8.0x

12.9x

Vera Bradley, Inc.

5.4x

9.6x

14.4x

Zumiez Inc.

3.6x

6.3x

9.9x

Statistical Recap – Sporting Goods

75 th Percentile

5.6x

7.7x

10.8x

Mean

4.8x

6.6x

9.4x

Median

5.1x

7.1x

9.8x

25 th Percentile

3.9x

5.0x

7.5x

Statistical Recap – Small Cap Specialty Retail

75 th Percentile

5.6x

9.6x

14.3x

Mean

4.5x

8.3x

12.0x

Median

4.1x

7.4x

11.2x

25 th Percentile

3.7x

6.4x

8.7x

In performing its selected publicly traded companies analysis:

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Selected Precedent Merger and Acquisition Transaction Analysis.

Guggenheim reviewed and analyzed certain financial metrics associated with precedent merger and acquisition transactions announced since 2013 involving a U.S.-target company in the specialty retail sector with target values over $250 million. The following twelve precedent merger and acquisition transactions were selected by Guggenheim for purposes of this analysis:

Selected Precedent Merger and Acquisition (M&A) Transactions

Date Announced		Acquirer		Target
10/03/2016		Bass Pro Group, LLC		Cabela’s Inc.
08/07/2016		Steinhoff International Holdings N.V.		Mattress Firm Holding Corp.
12/20/2016		Orchestra-Premaman S.A.		Destination Maternity Corp.
11/23/2015		CVC Capital Partners Limited & Canada Pension Plan Investment Board		PETCO Animal Supplies, Inc.
05/18/2015		Ascena Retail Group, Inc.		ANN Inc.
02/04/2015		Staples, Inc.		Office Depot, Inc.
12/14/2014		BC Partners, Inc.		PetSmart, Inc.
12/19/2013		Sycamore Partners, L.P.		The Jones Group Inc.
11/26/2013		The Men’s Wearhouse, Inc.		Jos. A. Bank Clothiers, Inc.
05/23/2013		Apax Partners, L.P.		rue21, Inc.
05/10/2013		TowerBrook Capital Partners L.P.		True Religion Apparel, Inc.
03/07/2013		Sycamore Partners Management, L.L.C.		Hot Topic, Inc.

Guggenheim calculated, among other things and to the extent publicly available, certain implied change-of-control transaction multiples for the selected precedent merger and acquisition transactions (based on Wall Street equity research consensus estimates, each company’s most recent publicly available financial filings and certain other publicly available information), which are summarized in the table below:

Selected Precedent M&A Transaction Multiples

Precedent M&A Transactions

Enterprise Value/CY (EBITDA – CapEx)

Enterprise Value/CY EBIT

CY Cash-Adjusted P/E

Cabela’s Inc.

15.9x

15.1x

18.3x

Mattress Firm Holding Corp.

15.2x

15.9x

27.8x

Destination Maternity Corp.

NA

NA

NA

PETCO Animal Supplies, Inc.

NA

NA

NA

ANN Inc.

10.7x

13.6x

22.8x

Office Depot, Inc.

11.7x

14.4x

24.4x

PetSmart, Inc.

10.7x

10.8x

18.8x

The Jones Group Inc.

8.1x

9.6x

14.5x

Jos. A. Bank Clothiers, Inc.

NA

9.3x

16.4x

rue21, Inc.

16.5x

13.1x

21.0x

True Religion Apparel, Inc.

7.7x

7.5x

12.8x

Hot Topic, Inc.

18.1x

13.0x

23.7x

Statistical Recap

75 th Percentile

16.2x

14.6x

23.9x

Mean

12.7x

12.2x

20.0x

Median

11.7x

13.0x

19.9x

25 th Percentile

9.4x

9.6x

15.9x

Parent/West Marine Merger

11.7x

14.9x

23.7x

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In performing its selected precedent merger and acquisition transactions analysis:

Discounted Cash Flow Analyses.

Guggenheim performed illustrative stand-alone discounted cash flow analyses of the Company based on management’s projected unlevered free cash flows for the Company (treating the impact of stock-based compensation as a cash expense) and an estimate of its terminal/continuing value at the end of the projection horizon. In performing its illustrative discounted cash flow analyses:

Other Financial Reviews and Analyses for Informational Reference Purposes

In order to provide certain context for the financial analyses in connection with its opinion as described above, Guggenheim undertook various additional financial reviews and analyses as summarized below for informational reference purposes. As a general matter, Guggenheim did not consider such additional financial reviews and analyses to be determinative methodologies for purposes of its opinion.

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Discounted Cash Flow Sensitivity Analysis.

Guggenheim repeated the discounted cash flow analyses described above after sensitizing certain of the Company’s EBITDA margins and the Company’s average comparable sales during the Projections period. These variables were selected, in consultation with the Company’s management and the Board, because of the potential volatility in operating performance in the current retail environment. The sensitized discounted cash flow analyses applied the same WACC and perpetuity growth rates as the illustrative discounted cash flow analyses described above. Guggenheim illustrative discounted cash flow sensitivity analyses resulted in an overall reference range of implied values of $7.65 to $14.88 per share of our common stock.

The results of the illustrative discounted cash flow sensitivity analysis based on variations in the Company’s EBITDA margin and average comparable sales are summarized in the tables below:

WACC: 14.25%; Perpetuity Growth Rate: (2.0%)
										Average Comparable Sales
																		Management Plan
		2021E EBITDA Margin at Base Case Revenue				Change in EBITDA Margin from 2016				(1.0%)				1.0%				2.2%
Base Case			4.8	%			0.00	%		$	7.65			$	7.82			$	7.92
Best Case (’07 – ’16)			5.9	%			1.1	%			8.58				8.86				9.03
Management Plan			8.4	%			3.6	%			10.87				11.40				11.72

WACC: 12.75%; Perpetuity Growth Rate: (1.0%)
										Average Comparable Sales
																		Management Plan
		2021E EBITDA Margin at Base Case Revenue				Change in EBITDA Margin from 2016				(1.0%)				1.0%				2.2%
Base Case			4.8	%			0.00	%		$	8.13			$	8.40			$	8.55
Best Case (’07 – ’16)			5.9	%			1.1	%			9.24				9.63				9.86
Management Plan			8.4	%			3.6	%			11.93				12.61				13.02

WACC: 11.25%; Perpetuity Growth Rate: 0.0%
										Average Comparable Sales
																		Management Plan
		2021E EBITDA Margin at Base Case Revenue				Change in EBITDA Margin from 2016				(1.0%)				1.0%				2.2%
Base Case			4.8	%			0.00	%		$	8.82			$	9.21			$	9.45
Best Case (’07 – ’16)			5.9	%			1.1	%			10.17				10.72				11.05
Management Plan			8.4	%			3.6	%			13.42				14.33				14.88

Leveraged Buyout Analysis.

Guggenheim performed an illustrative analysis of the implied price per share of our common stock that could theoretically be paid by a financial sponsor, assuming a June 30, 2017 starting balance sheet and that such sponsor required a 4.5-year internal rate of return ranging from 20% – 25%. Guggenheim performed the illustrative leveraged buyout analysis assuming (i) the transaction was completed with $124 million of total debt (implying initial leverage ratios of approximately 3.1x EBITDA and 4.1x EBITDAR, which levels were consistent with the size of the equity guarantee provided by Monomoy (ii) the Company achieved the management projections during the 4.5-year projection period and (iii) the financial sponsor exited its investment at the end of the 4.5-year projection period for an enterprise value/EBITDA multiple ranging from 3.5x – 5.5x.

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West Marine’s Stock Price Trading History.

Guggenheim reviewed the Company’s stock price trading history over a fifty-two week timeframe ended June 28, 2017 and noted, among other things, that shares of our common stock never traded above the Merger Consideration of $12.97 during such timeframe and were bound between $7.77 and $11.72 during such timeframe.

Premia Paid Analysis.

Guggenheim reviewed the premia paid in transactions in which U.S. retail targets (excluding auto retailers and gas stations) were acquired in transactions announced after June 21, 2004 with transaction values ranging between $200 million and $1 billion, as summarized in the following table:

Premia Paid Analysis: Selected Retail M&A Transactions Announced Since June 21, 2004

Date   Announced		Acquiror				Target				Cash-Adjusted Premium (%)
										1-Day				1-Week				1-Month				3-Month
11/07/2016			Bain Capital Private Equity				Blue Nile, Inc.				38	%			18	%			17	%			40	%
11/11/2015			The Kroger Co.				Roundy’s, Inc.				65	%			60	%			31	%			46	%
08/21/2015			Catterton Management Co., L.L.C.				Steiner Leisure Limited				15	%			11	%			18	%			32	%
12/05/2015			Sequential Brands Group, Inc.				Martha Stewart Living Omnimedia, Inc.				24	%			28	%			29	%			(5	)%
09/29/2014			JAB Holding Co.				Einstein Noah Restaurant Group, Inc.				51	%			52	%			42	%			28	%
07/02/2014			The Kroger Co.				Vitacost.com Inc.				32	%			31	%			27	%			14	%
12/20/2013			TPG Capital, L.P.				Telautograph Corp.				11	%			15	%			17	%			28	%
07/24/2013			Hanesbrands Inc.				Maidenform Brands, Inc.				23	%			26	%			36	%			30	%
07/22/2013			Spartan Stores, Inc.				Nash-Finch Co.				0	%			2	%			14	%			27	%
05/10/2013			TowerBrook Capital Partners L.P.				True Religion Apparel, Inc.				76	%			83	%			55	%			14	%
03/23/2013			Apax Partners, L.P.				rue21, Inc.				57	%			50	%			61	%			48	%
03/07/2013			Sycamore Partners				Hot Topic, Inc.				34	%			26	%			24	%			41	%
11/14/2012			Starbucks Corp.				Teavana Holdings, Inc.				53	%			48	%			23	%			36	%
09/26/2012			Investor Group				American Greetings Corp.				22	%			14	%			22	%			33	%
05/14/2012			Golf Town USA Holdings Inc.				Golfsmith International Holdings Inc.				30	%			30	%			38	%			38	%
05/09/2012			Bed Bath & Beyond Inc.				Cost Plus, Inc.				22	%			16	%			24	%			54	%
05/02/2012			Ascena Retail Group, Inc.				Charming Shoppes, Inc.				129	%			151	%			130	%			175	%
12/19/2011			Bi-Lo LLC				Winn-Dixie Stores, Inc.				76	%			84	%			52	%			37	%
06/13/2011			Honeywell International Inc.				EMS Technologies, Inc.				36	%			33	%			39	%			81	%
05/02/2011			PPR S.A.				Volcom, Inc.				30	%			40	%			41	%			63	%
08/24/2009			Advent International Corp.				Charlotte Russe Holding, Inc.				34	%			36	%			30	%			102	%
06/25/2009			Ascena Retail Group, Inc.				Tween Brands, Inc.				20	%			20	%			45	%			177	%
11/13/2006			Dick’s Sporting Goods Inc.				Golf Galaxy, Inc.				20	%			22	%			44	%			72	%
06/21/2004			Dick’s Sporting Goods Inc.				Gaylan’s Trading Company, Inc.				53	%			52	%			87	%			58	%
							Statistical Recap
							25 th Percentile				22	%			19	%			23	%			28	%
							Median				33	%			30	%			34	%			39	%
							75 th Percentile				53	%			51	%			45	%			61	%

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Wall Street Equity Research Analyst Stock Price Targets.

Guggenheim reviewed selected Wall Street equity research analyst stock price targets for the Company as published prior to June 28, 2017:

Other Considerations

Except as described in the summary above, the Company did not provide specific instructions to, or place any limitations on, Guggenheim with respect to the procedures to be followed or factors to be considered in performing its financial analyses or providing its opinion. The type and amount of consideration payable in the Merger were determined through negotiations between the Company and Monomoy and were approved by the Board. The decision to enter into the Merger Agreement was solely that of the Board. Guggenheim’s opinion was just one of the many factors taken into consideration by the Board. Consequently, Guggenheim’s financial analyses should not be viewed as determinative of the decision of the Board with respect to the fairness, from a financial point of view, of the Merger Consideration to holders of shares of our common stock (excluding the Company or any of its wholly owned subsidiaries or Parent or any of its wholly owned subsidiaries).

Pursuant to the terms of Guggenheim’s engagement letter, the Company has agreed to pay Guggenheim a cash transaction fee (based on a percentage of the aggregate consideration involved in the Merger) contingent upon consummation of the Merger, which cash transaction fee is estimated to be approximately $5.9 million. In connection with Guggenheim engagement, a cash milestone fee of $1.0 million became payable upon delivery of Guggenheim’s opinion, which will be credited against the foregoing cash transaction fee. In addition, the Company has agreed to reimburse Guggenheim for certain expenses and to indemnify Guggenheim against certain liabilities arising out of its engagement.

As previously disclosed to the Board, aside from Guggenheim’s current engagement by the Company, Guggenheim has not been previously engaged during the past two years by the Company, nor has Guggenheim been previously engaged during the past two years by Monomoy, to provide financial advisory or investment banking services for which Guggenheim received fees. Guggenheim may seek to provide the Company, Monomoy, and their respective affiliates with certain financial advisory and investment banking services unrelated to the Merger in the future, for which services Guggenheim would expect to receive compensation.

Guggenheim and its affiliates and related entities engage in a wide range of financial services activities for its and their own accounts and the accounts of Guggenheim and its customers, including: asset, investment and wealth management; insurance services; investment banking, corporate finance, mergers and acquisitions and restructuring; merchant banking; fixed income and equity sales, trading and research; and derivatives, foreign exchange and futures. In the ordinary course of these activities, Guggenheim or its affiliates and related entities may (i) provide such financial services to the Company, Monomoy, other participants in the Merger or their respective affiliates, subsidiaries, investment funds and portfolio companies, for which services Guggenheim or its affiliates and related entities has received, and may receive, compensation and (ii) directly or indirectly, hold long or short positions, trade and otherwise conduct such activities in or with respect to certain bank debt, debt or equity securities and derivative products of or relating to the Company, Monomoy, other participants in the Merger or their respective affiliates, subsidiaries, investment funds and portfolio companies. Furthermore, Guggenheim or its affiliates and related entities and Guggenheim’s or its affiliates’

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respective directors, officers, employees, consultants and agents may have investments in the Company, Monomoy, other participants in the Merger or their respective affiliates, subsidiaries, investment funds and portfolio companies.

Consistent with applicable legal and regulatory guidelines, Guggenheim has adopted certain policies and procedures to establish and maintain the independence of its research departments and personnel. As a result, Guggenheim’s research analysts may hold views, make statements or investment recommendations and publish research reports with respect to the Company, Monomoy, other participants in the Merger or their respective affiliates, subsidiaries, investment funds and portfolio companies and the Merger that differ from the views of Guggenheim’s investment banking personnel.

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The financial projections do not necessarily reflect changes in general business or economic conditions since the time they were prepared, changes in the Company’s businesses or their prospects or any other transactions or events that have occurred or that may occur and that were not anticipated at the time the financial projections were prepared, and the financial projections are not necessarily indicative of current values or necessarily predictive of future performance, which may be significantly more favorable or less favorable than as set forth therein and should not be regarded as a representation that the financial forecasts, projected results or other estimates and assumptions therein will be achieved.

Because the financial projections reflect subjective judgment in many respects, they are susceptible to multiple interpretations and frequent revisions based on actual experience and business developments. The financial projections also cover multiple fiscal years, and such information by its nature becomes less predictive with each succeeding fiscal year. The financial projections constitute forward-looking information and are subject to a wide variety of significant risks and uncertainties that could cause the actual results to differ materially from the projected results, including, without limitation, the factors described in the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K for fiscal year ended December 31, 2016, filed with the SEC on February 28, 2017, and in the Company’s other public filings with the SEC. For additional information on factors that may cause the Company’s future financial results to materially vary from the projected results summarized below, see the section captioned “ Forward-Looking Statements ” on page 20 . Accordingly, there can be no assurance that the projected results summarized below will be realized or that actual results will not differ materially from the projected results summarized below, and the financial projections cannot be considered a guarantee of future operating results and should not be relied upon as such. No representation is made by the Company or any of its affiliates, advisors or other representatives or any other person to any Company stockholder or any other person regarding the actual performance of the Company compared to the results included in the financial projections or otherwise.

The financial projections should be evaluated, if at all, in conjunction with the historical financial statements and other information regarding the Company contained in the Company’s public filings with the SEC. For a more detailed description of the information available, see the section captioned “ Where You Can Find More Information ” on page 106 . The financial projections do not take into account any circumstances or events occurring after the date they were prepared, including the effect of the Merger and related matters. Further, the financial projections do not take into account the effect of any failure of the Merger to be consummated and should not be viewed in any manner in that context.

The financial projections reflect various estimates, assumptions and methodologies of the Company, all of which are difficult to predict and many of which are beyond the Company’s control, including, among other things, assumptions with respect to industry performance, general business, economic, regulatory, litigation, market and financial conditions and matters specific to the Company’s businesses. Such assumptions include, but are not limited to, the following:

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In addition, certain of the financial projections are non-GAAP financial measures, including EBITDA, net revenue, net income and unlevered cash flow. Non-GAAP financial measures should not be considered in isolated form or as a substitute for financial information presented in compliance with GAAP, and non-GAAP financial measures as used by the Company may not be comparable to similarly titled financial measures used by other companies.

Financial Projections

The following table summarizes the financial projections:

Financial Projections                                                                                    (U.S. dollars in millions, except per share amounts)
		Fiscal Years
		2017				2018				2019				2020				2021
Net Revenue		$	714.9			$	734.2			$	772.9			$	806.1			$	839.8
% Growth			2.0	%			2.7	%			5.3	%			4.3	%			4.2	%
EBITDA (1)		$	40.9			$	47.1			$	57.4			$	61.3			$	70.7
% Margin			5.7	%			6.4	%			7.4	%			7.6	%			8.4	%
EBIT		$	16.2			$	21.4			$	34.9			$	39.9			$	52.8
% Margin			2.3	%			2.9	%			4.5	%			4.9	%			6.3	%
Net Income Per Diluted Share		$	0.39			$	0.52			$	0.84			$	0.97			$	1.28
% Growth			47.6	%			32.4	%			63.5	%			14.5	%			32.7	%
Unlevered Free Cash Flow		$	21			$	24			$	32			$	37			$	39

NEITHER THE COMPANY NOR ANY OF ITS AFFILIATES INTENDS TO, AND EACH OF THEM DISCLAIMS ANY OBLIGATION TO, UPDATE, CORRECT OR OTHERWISE REVISE THE FINANCIAL PROJECTIONS TO REFLECT CIRCUMSTANCES EXISTING OR EVENTS OCCURRING AFTER THE RESPECTIVE DATES WHEN THE FINANCIAL PROJECTIONS WERE PREPARED OR TO REFLECT THE EXISTENCE OF FUTURE CIRCUMSTANCES OR THE OCCURRENCE OF FUTURE EVENTS, EVEN IN THE EVENT THAT ANY OR ALL OF THE ASSUMPTIONS UNDERLYING THE FINANCIAL PROJECTIONS ARE INACCURATE OR NO LONGER APPROPRIATE.

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Financing

General .  Parent estimates that the total amount of funds required to consummate the merger and related transactions and pay related fees and expenses will be approximately $354 million. Parent expects this amount to be funded through a combination of the following:

Equity Financing.   On June 29, 2017, Monomoy entered into an equity commitment letter (the “Equity Commitment Letter”) with Parent pursuant to which Monomoy committed to contribute (or cause to be contributed) to Parent up to $130 million in cash in the aggregate (the “Equity Financing”). The Equity Commitment of Monomoy is subject to the following conditions:

The obligation of Monomoy to fund the Equity Commitment will automatically and immediately terminate upon the earliest to occur of: (i) the consummation of the Merger; (ii) the termination of the Merger Agreement; or (iii) if neither of the foregoing have occurred, 60 days after the Outside Date, unless the Company has made a claim to enforce the commitment of Monomoy in which case the Equity Commitment continues until the claim is resolved or the parties otherwise agree.

The Company is an express third-party beneficiary of the Equity Commitment Letter and has the right to seek specific performance of the obligations of Monomoy under the Equity Commitment Letter under certain circumstances.

Debt Financing.   In connection with the entry into the Merger Agreement, (i) Bank of America, N.A. (“BAML”) provided commitments to Parent under a commitment letter dated June 27, 2017 (the “BAML Debt Commitment Letter”), which provides for a commitment to fund up to the $225 million senior-secured portion of the Debt Financing (the “BAML Debt Commitment”) subject to terms and express conditions, and (ii) Pathlight Capital LLC (“Pathlight”) provided its commitment to Parent under a commitment letter dated June 27, 2017 (the “Pathlight Debt Commitment Letter”), which provides for a commitment to fund the $25 million second-lien term loan of the Debt Financing in the form subject to terms and express conditions. Under the BAML Debt Commitment Letter and the Pathlight Debt Commitment Letter, BAML and Pathlight have committed to provide an aggregate principal amount of $250 million in asset-based debt financing, consisting of a $200 million senior secured first lien revolving line of credit, a $25 million senior secured first-in last-out term loan facility and a $25 million second lien term loan facility. Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”) will act as lead arranger to form a syndicate of financial institutions and institutional investors (with BAML, the “Lenders”) to fund the BAML Debt Commitment, however, the formation of such a syndicate is not a condition to the BAML Debt Commitment.

The obligations of the Lenders to provide the debt financing under the BAML Debt Commitment Letter and of Pathlight to provide the debt financing under the Pathlight Debt Commitment Letter are subject to customary conditions, including, without limitation, the following (subject to certain exceptions and qualifications as set forth in the BAML Debt Commitment Letter and the Pathlight Debt Commitment Letter):

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The commitment of the Lenders under the BAML Debt Commitment Letter and the commitment of Pathlight under the Pathlight Debt Commitment Letter expire upon the earliest of (i) the Outside Date, (ii) the consummation of the Merger without the use of the Debt Financing, and (iii) the valid termination of the Merger Agreement.

Limited Guarantees

Concurrently with the execution of the Merger Agreement, an affiliated fund of Monomoy has executed and delivered a limited guarantee in favor of the Company (the “Limited Guarantee”), pursuant to which such fund has agreed, subject to the terms and conditions of the Limited Guarantee, to guarantee the payment of Parent’s obligations to pay the Reverse Termination Fee (as described in more detail under “ The Merger Agreement — Reverse Termination Fee and Other Remedies ”), and certain reimbursement and indemnification obligations, which are referred to as the “Guaranteed Obligations.”

The Limited Guarantee will terminate upon the earliest to occur of:

In the event that the Company, any shareholder or affiliate expressly asserts in any litigation or other legal proceeding relating to a Limited Guarantee that certain provisions of the Limited Guarantee are illegal, invalid or unenforceable or that an affiliated fund of Monomoy is liable in excess of the cap or other specified permitted claims, then (i) the obligations of such fund under such Limited Guarantee will terminate, (ii) if such fund has previously made any payments under its Limited Guarantee, it will be entitled to recover such payments from the Company and (iii) such fund will not have any liability to the Company with respect to such Limited Guarantee.

Interests of the Company’s Directors and Executive Officers in the Merger

When considering the recommendation of the Board that you vote to approve the proposal to adopt the Merger Agreement, you should be aware that our directors and executive officers may have interests in the Merger that are different from, or in addition to, the interests of stockholders generally, as more fully described below. In (i) evaluating and negotiating the Merger Agreement; (ii) approving the Merger Agreement and the Merger; and (iii) recommending that the Merger Agreement adopted by stockholders, the Board and the Strategic Committee were aware of and considered these interests to the extent that they existed at the time, among other matters.

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Insurance and Indemnification of Directors and Executive Officers

All rights to indemnification by the Company or any of its subsidiaries in favor of present and former directors and officers of the Company or any of its subsidiaries (the “indemnified parties”) set forth in the organizational documents of the Company or any of its subsidiaries as in effect as of the date of the Merger Agreement will survive the Merger and will be observed by Parent and the Surviving Corporation and its subsidiaries to the fullest extent permitted by applicable law. The Merger Agreement also provides that the indemnification rights set forth in the indemnification agreements, the form of which was filed as an exhibit to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2016, between the Company or any of its subsidiaries and any of the directors, officers or employees thereof will be assumed by the Surviving Corporation and will continue in full force and effect in accordance with their terms following the Effective Time.

If the Company fails to do so prior to the Effective Time, Parent is obligated to cause the Surviving Corporation to obtain and fully pay the premium for an insurance and indemnification policy that provides coverage for a period of six years from the Effective Time. If the Company and the Surviving Corporation for any reason fail to obtain such a “tail” insurance policy as of the Effective Time, the Surviving Corporation must, and Parent must cause the Surviving Corporation to, continue to maintain in effect for a period of six years from and after the Effective Time (and for so long thereafter as any claims brought before the end of such six-year period thereunder are being adjudicated) such insurance in place as of the date of the Merger Agreement with terms, conditions, retentions and limits of liability that are at least as favorable as provided in the Company’s existing policies as of the date of the Merger Agreement. Alternatively, the Surviving Corporation is obligated to, and Parent must cause the Surviving Corporation to, purchase comparable directors’ and officers’ liability insurance for such six-year period (and for so long thereafter as any claims brought before the end of such six-year period thereunder are being adjudicated) with terms, conditions, retentions and limits of liability that are at least as favorable as provided in the Company’s existing policies as of the date of the Merger Agreement.

For more information, see the section captioned “ The Merger Agreement — Directors’ and Officers’ Indemnification and Insurance .”

Treatment of Equity-Based Awards

Options

Immediately prior to the Effective Time, each Option granted under the Company Equity Incentive Plan that is then outstanding, all of which are fully vested, will be cancelled and, in exchange therefor, each holder of any such cancelled Option will be entitled to receive payment of an amount in cash equal to the product of (i) the total number of shares of our common stock subject to such Option, multiplied by (ii) the excess, if any, of (A) the Merger Consideration over (B) the exercise price per share subject to such cancelled Option, without interest; provided, however , that (i) any such Option with respect to which the exercise price per share subject thereto is greater than the Merger Consideration will be cancelled in exchange for no consideration and (ii) such option payments may be reduced by the amount of any required tax withholdings as contemplated by the Merger Agreement.

Employee RSUs

Immediately prior to the Effective Time, each RSU granted under the Company Equity Incentive Plan that is then outstanding (other than those RSUs held by a non-employee director of the Company) will be assumed by the Surviving Corporation and will be converted into a Cash Replacement Company RSU. Such Cash Replacement Company RSUs will, subject to the holder’s continued employment with the Surviving Corporation through the applicable vesting dates, vest and be payable at the same time as the RSUs for such Cash Replacement Company RSUs were exchanged would have vested pursuant to their terms. All Cash Replacement Company RSUs will have the same terms and conditions as applied to the RSUs for which they were exchanged, except for terms rendered inoperative by reason of the transactions contemplated by the Merger Agreement or for administrative or ministerial changes that are not materially detrimental to the holders and that are necessary for the administration of the Cash Replacement Company RSUs. With respect to PSUs, the number of PSUs assumed by the Surviving Corporation and converted into Cash Replacement Company RSUs will be determined (A) for PSUs with a performance period that by its terms has ended prior

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to the Effective Time, based on actual performance through the end of such performance period, and (B) for PSUs with a performance period that by its terms has not ended prior to the Effective Time, assuming performance at 100% of target levels.

Non-Employee Director RSUs

Immediately prior to the Effective Time, each award of unvested RSUs granted under the Company Equity Incentive Plan, that is then outstanding and is held by a non-employee director of the Company will be fully vested and cancelled and, in exchange therefor, each holder of any such cancelled RSUs will be entitled to receive payment of an amount in cash equal to the product of (i) the Merger Consideration, multiplied by (ii) the total number of shares of our common stock subject to such RSUs, without interest; provided, however , that any such RSU payments may be reduced by the amount of any required tax withholdings as contemplated by the Merger Agreement.

Summary Table

The following table sets forth the number of shares of our common stock underlying Options and RSUs currently held by each of the Company’s executive officers and non-employee directors, and also the cash payments that each Company executive officer is expected to receive with respect to his vested outstanding Options (and, in the case of RSUs granted to Company executive officers, the equity acceleration value of such unvested outstanding awards upon a qualified termination in connection with a change in control) and that each Company non-employee director is expected to receive with respect to his or her vested Options and unvested outstanding RSUs. The amounts in the table are based on the equity awards held by our executive officers and directors as of August 4, 2017, the latest practicable date to determine such amounts before the filing of this proxy statement, and the Merger Consideration of $12.97 per share. These numbers do not forecast any grants, additional issuances, dividends, additional deferrals or forfeitures of equity-based awards following the date of this proxy statement. Depending on when the closing date of the Merger occurs, certain equity-based awards shown in the table may vest in accordance with their terms.

Name		Options (#)				Options ($)				RSUs (#) (3)				RSUs ($) (1) (3)				PSUs (#) (2)				PSUs ($) (1)				Total ($) (1)
Executive Officers
Matthew L. Hyde			126,667			$	147,134				81,802			$	1,065,062				35,230			$	458,695			$	1,670,890
Jeffrey L. Lasher			—				—				41,410			$	539,158				14,325			$	186,512			$	725,670
Barry Kelley			30,833			$	70,766				30,410			$	395,938				13,062			$	170,067			$	636,772
Paul Rutenis			—				—				41,410			$	539,158				14,325			$	186,512			$	725,670
Directors
Barbara L. Rambo			—				—				6,493			$	84,492				—				—			$	84,492
Randolph K. Repass			10,123			$	40,290				6,493			$	84,353				—				—			$	124,643
Alice M. Richter			—				—				6,493			$	84,492				—				—			$	84,492
Dennis F. Madsen			6,691			$	9,255				6,493			$	84,492				—				—			$	93,748
Christiana Shi			—				—				6,493			$	84,492				—				—			$	84,492
James F. Nordstrom, Jr.			—				—				6,493			$	84,492				—				—			$	84,492
Robert D. Olsen			—				—				6,493			$	84,492				—				—			$	84,492