TYPE: 8-K SEQUENCE: 1 DESCRIPTION: FORM 8-K
SECURITIES AND EXCHANGE COMMISION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) April 21, 2000
ACE HARDWARE CORPORATION
(Exact name of Registrant as Specified in its Charter)
DELEWARE 36-0700810
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
2200 Kensington Court, Oak Brook, IL 60523
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code 630-990-6600
Not Applicable
(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS
The Registrant provides the plan of distribution of patronage dividends
with respect to purchases of merchandise made from the Registrant from January
1, 1999 adopted by the Board of Directors of the Registrant as Exhibit 4-F.
The Registrant provides Notice of Annual Meeting of Stockholders on
June 5, 2000 and Proxy solicited by Board of Directors and related
information, which are attached hereto as Exhibits 99-A through 99-D.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
EXHIBIT 4-F Copy of the plan of distribution of patronage
dividends with respect to purchases of
merchandise made from the Registrant from
January 1, 1999 adopted by the Board of
Directors of the Registrant.
EXHIBIT 99-A Letter to Our Ace Retailer Shareholders from
David F. Hodnik, President and CEO and Howard J.
Jung, Chairman of the Board.
EXHIBIT 99-B Notice of Annual Shareholders Meeting on
June 5, 2000
EXHIBIT 99-C Proxy solicited by Board of Directors
EXHIBIT 99-D Reservation Card
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Ace Hardware Corporation
(Registrant)
Date: April 21, 2000 Lori L. Bossmann
(Signature)
Name: Lori L. Bossmann
Title: Vice President. Finance
Exhibit 4-F
ACE HARDWARE CORPORATION
PATRONAGE DIVIDEND DISTRIBUTION PLAN ADOPTED BY THE
BOARD OF DIRECTORS FOR THE YEAR 1999 AND SUBSEQUENT YEARS
_________________________________________________________
1. With respect to each store owned or controlled by each eligible and
qualifying dealer, such dealer shall receive a minimum cash distribution
determined as follows:
a) an amount equal to 20% of the first $5,000 of the total patronage
dividends allocated for distribution each year to such dealer in
connection with the purchases made for such store;
b) an amount equal to 25% of the portion of the total patronage dividends
allocated for distribution each year to such dealer for such store
which exceeds $5,000 but does not exceed $7,500;
c) an amount equal to 30% of the portion of the total patronage dividends
allocated for distribution each year to such dealer for such store
which exceeds $7,500 but does not exceed $10,000;
d) an amount equal to 35% of the portion of the total patronage dividends
allocated for distribution each year to such dealer for such store
which exceeds $10,000 but does not exceed $12,500;
e) an amount equal to 40% of the portion of the total patronage dividends
allocated for distribution each year to such dealer for such store
which exceeds $12,500.
1A. The portion of the total annual distribution allocated to any such dealer
for each store owned or controlled by such dealer in excess of the amount
to be distributed to such dealer for such store in cash shall be
distributed to him for the year 1999 payable in the year 2000 as follows:
a) To the extent there is an excess amount over a store's minimum cash
distribution, each such eligible store shall receive stock options of
OurHouse, Inc. (valued at $3.40 each) rounded to the nearest multiple
of 50 but not to exceed 150 stock options.
b) Next, to the extent there is an excess over a store's minimum cash
distribution and allocation under 1. above, each such eligible store
shall receive its prorata share of 3,000,000 stock options less the
number of stock options allocated under 1. above. Allocation to each
eligible store shall be based on each store's total patronage dividend
as a percentage of the Company's total patronage dividend rounded to
nearest multiple of 50.
c) The eligible stores include change of ownership stores, but exclude
canceled stores.
2. The portion of the total annual distribution allocated to any such dealer
for each store owned or controlled by such dealer in excess of the amount
to be distributed to such dealer for such store in cash or property shall
be distributed to him each year in the form of shares of Class C Non-voting
Stock of Ace Hardware Corporation (par value $100 per share), valued at the
par value thereof, until the total par value of all shares of all classes
of capital stock of the corporation held by such dealer with respect to
such store equals the greater of:
a) $20,000; or
b) a sum equal to the total of the following categories of purchases
made by such dealer for such store during the most recent calendar
year:
(i) 15% of the volume of Ace manufactured paint and related products
purchases, plus
(ii) 3% of the volume of drop-shipment or direct purchases (excluding
Ace manufactured paint and related products), plus
(iii)15% of the volume of warehouse (including STOP and excluding Ace
manufactured paint and related products) and bulletin purchases,
plus
(iv) 4% of the volume of LTL Plus purchases;
provided, however, that no fractional shares of Class C Non-voting Stock shall
be issued to any dealer and that any amount which would have otherwise been
distributable as a fractional share of such stock shall instead be distributed
to such dealer in cash.
3. The portion of the total patronage dividends allocated each year to any
such dealer for each store owned or controlled by such dealer which exceeds
the sum of (a) the amount to be distributed to such dealer for such store
in cash pursuant to Paragraph 1. Above, (b) the amount to be distributed
to such dealer for such store in property pursuant to Paragraph 1A. above,
and (c) any amount to be distributed to him in the form of shares of Class
C Non-voting Stock of Ace Hardware Corporation (par value $100 per share)
pursuant to Paragraph 2. above shall be distributed to such dealer in
cash; provided, however, that in no event shall the total amount
distributed under this plan to any such dealer for any such store in cash
exceed 45% of the total patronage dividends allocated for such store for
such year, and to the extent that any distribution to be made to any such
dealer for any store pursuant to this Paragraph 3. would otherwise cause
the total cash distribution to such dealer for such store to exceed 45% of
the total patronage dividends allocated for such store for such year, the
distribution to be made under this Paragraph 3. shall instead be made in
the form of a non-negotiable patronage refund certificate having such a
maturity date and bearing interest at such an annual rate as shall be
determined by the Board of Directors prior to the issuance thereof.
Exhibit 99-A
April 7, 2000
TO: Our Ace Retailer Shareholders
Enclosed is a formal notice of the Annual Shareholders' Meeting that will be
held on Monday, June 5, 2000. As of this date, the matters that will be acted
upon at the meeting will be the election of four directors.
The enclosed notice contains an Explanatory Summary giving the names and
background information of each of the four persons recommended by the Board of
Directors for election as directors.
The four directors to be chosen are to be elected to positions in the first
director class for three-year terms. One director being elected as a dealer
director at large and three regional dealer directors being elected from each
of Regions 1, 3, and 7. As provided in the By-laws, regional dealer directors
are elected from designated geographic regions of the United States.
Please review the enclosed materials carefully and then complete, sign, date
and mail the enclosed proxy card in the envelope provided for your convenience.
The prompt return of your proxy enables the business of the meeting to proceed
and will save your Company additional expenses of a follow-up solicitation.
Of course, if you find it convenient to attend the meeting, you may rescind
your proxy vote and vote in person if you so desire.
Sincerely,
Howard J. Jung David F. Hodnik
Chairman of the Board President and CEO
Exhibit 99-B
ACE HARDWARE CORPORATION
NOTICE OF ANNUAL SHAREHOLDERS' MEETING
June 5, 2000
Ace Hardware Corporation will hold its Annual Shareholders' Meeting on Monday,
June 5, 2000, at 9:00 A.M., Central Daylight Saving Time. The meeting will be
in Krausman Hall at the general office of the Corporation, 2200 Kensington
Court, Oak Brook, Illinois. At the meeting, we will:
(1) Elect four members of the Board of Directors of the first class to serve
for 3-year terms. One member will be a dealer director at large and three
members will be regional dealer directors. The regional dealer directors will
be elected from each of the following director regions: Region 1, Region 3 and
Region 7;
and
(2) Transact such other business properly presented at the meeting.
Shareholders owning Class "A" stock outstanding at the close of business on
April 7, 2000 are entitled to notice of, and to vote at the meeting.
The names of the four persons nominated for election as directors together with
background information concerning each of them, are included in the attached
Explanatory Summary.
By order of the Board of Directors
DAVID W. LEAGUE
April 7, 2000 Secretary
IMPORTANT -- PLEASE MAIL YOUR PROXY PROMPTLY
In order that there may be proper representation at the meeting, we urge you to
sign and return the enclosed proxy in the envelope provided. Your cooperation
in promptly returning your signed proxy will reduce expenses that we will incur
if we must follow up this solicitation of proxies. Submission of a signed
proxy will not prevent you from voting in person at the meeting if you so
desire.
ACE HARDWARE CORPORATION
2200 Kensington Court
Oak Brook, Illinois 60523
EXPLANATORY SUMMARY FURNISHED IN CONNECTION WITH
SOLICITATION OF PROXIES BY BOARD OF DIRECTORS
The Board of Directors solicits proxies in the enclosed form for use at the
Annual Shareholders' Meeting and at any adjournment thereof. Voting
instructions are included on the proxy card. If you properly sign and return
your proxy, your share will be voted as you have directed on the proxy card.
If you properly submit your proxy but do not specify how you want your share
voted, the share will be voted FOR the election of all nominees for Director
recommended by the Board of Directors. You may change your vote at any time
before your proxy is exercised by voting in person at the Annual Meeting or
submitting another proxy with a later date that has been properly executed. We
do not know of any other matters to be presented or acted upon at the meeting.
If any other matter properly comes before the meeting, the shares represented
will be voted in accordance with the judgment of the person or persons voting
those shares.
Only the record shareholders of Class A stock at the close of business on
April 7, 2000, will be entitled to vote at the meeting. The exact number of
outstanding shares of Class A stock on the record date of April 7, 2000, will
be reported at the meeting. Each share is entitled to one vote on each matter
to be voted upon at the Annual Meeting. There will not be cumulative voting
for the election of directors.
Even if you expect to attend the meeting in person, we request that you return
your executed proxy in the enclosed envelope as promptly as possible. This
will assure that a quorum of the Class A stock is represented at the meeting
and enables the business of the meeting to be conducted as expeditiously as
possible.
The cost of soliciting proxies in the enclosed form is paid for by the Company.
Proxies may also be solicited by employees, officers and directors of the
Company by mail, telephone, fax, email or in person.
The Company's 1999 Annual Report, including financial statements, has been
mailed to each shareholder.
ELECTION OF DIRECTORS
[Item (1) on proxy card]
The Board is presently comprised of 12 persons. Mr. Peterson, non-dealer
director, has submitted his resignation from the Board effective May 31, 2000.
In accordance with Article IV of the Company's By-laws, the Board of Directors
has determined that, effective June 1, 2000, the Board shall be comprised of 11
persons. The Board has determined that two directors shall be dealer directors
at large, one shall be a non-dealer director, and that all 8 remaining members
of the Board as to be constituted following the 2000 Annual Shareholders'
Meeting, shall be "regional dealer directors".
Each dealer director must be either the owner of a retail business organization
owning stock of the Company or an executive officer, general partner, or
general manager of such a retail business organization.
As also provided by the Company's By-laws, the Board of Directors has
established 7 geographic regions of the United States from which regional
dealer directors are to be chosen. The Board has authority from time to time
to make revisions in the geographic composition of such regions, as well as to
change the number of regions. Determinations are to be made by the Board each
year as to the regions from which regional dealer directors to be elected at
the next annual meeting shall be chosen. In the discretion of the Board, two
or more dealer directors from the same region may serve on the Board at the
same time.
The current geographic composition of each of the regions established by the
Board of Directors for the election of regional dealer directors pursuant to
the applicable By-law provisions is as follows:
Region 1 - Maine, New Hampshire, Vermont, Massachusetts, Connecticut,
Rhode Island, New York, Pennsylvania, New Jersey;
Region 2 - Delaware, Maryland, Virginia, West Virginia, Kentucky,
Tennessee, North Carolina, South Carolina, District of
Columbia, Ohio;
Region 3 - Alabama, Mississippi, Georgia, Florida;
Region 4 - Indiana, Illinois, Michigan, Wisconsin;
Region 5 - Iowa, Missouri, Nebraska, Kansas, Colorado, Idaho, Minnesota,
Montana, North Dakota, South Dakota, Utah, Wyoming;
Region 6 - Arkansas, Louisiana, Oklahoma, Texas, Arizona, New Mexico;
Region 7 - Alaska, Washington, Oregon, Nevada, California, Hawaii;
The present directors, their respective director regions and classes, and the
years of expiration of their current terms of office are as follows:
Year of Expiration
Director Region Class of Current Term
Eric R. Bibens, II 1 First 2000
D. William Hagan 3 First 2000
Jennifer C. Anderson 7 First 2000
Mark Jeronimus 5 First 2000
J. Thomas Glenn 2 Second 2002
Richard F. Baalmann, Jr. 4 Second 2002
Richard W. Stine 6 Second 2002
Lawrence R. Bowman 5 Third 2001
Daniel L. Gust 5 Third 2001
Howard J. Jung N/A Third 2001
Roger E. Peterson N/A Third 2001
Mario R. Nathusius N/A Third 2001
As required by the By-laws, the Board of Directors has determined that the four
positions on the Board currently held by directors of the class whose terms
expire in 2000 shall be filled at the 2000 Annual Shareholders' Meeting by
persons to be elected for 3-year terms as follows: one dealer director at
large, one director from Region 1, one director from Region 3 and one director
from Region 7.
Under the By-laws, Mr. Jeronimus is not eligible for re-election upon
expiration of his term in 2000, but, Mr. Bibens, Mr. Hagan and Ms. Anderson are
eligible for re-election as regional dealer directors at the 2000 Annual
Shareholders' Meeting. As authorized by a provision in the By-laws under which
the Board of Directors can propose the nomination for re-election of any
eligible incumbent director, the Board determined that Mr. Bibens, Mr. Hagan
and Ms. Anderson should be nominated for re-election at the 2000 Annual Meeting
for an additional term of three years. The Board has also determined that
Mr. Richard Karp should be nominated for election as a dealer director at large
for a term of three years.
The Board of Directors recommends that shareholders vote FOR all four nominees
referred to above.
The director regions, classes and terms for which they are being nominated,
together with background information concerning each nominee, is set forth
below.
Region, Class and Term Nominee
Region 1, First and 3 years Eric R. (Rick) Bibens II, 43, is president of
Bibens Home Center, Inc., in North Springfield, Vermont. He began his
full-time hardware career in 1978 at his father's store, after attending
Northeastern College in Boston and working three years for a plywood
wholesaler. He purchased the store in 1983, later selling the store and
building a ground-up Store of the Future down the street. He is active in the
community, including serving as chairman of the board for the Springfield
Hospital and as director of the Springfield Development Corporation. He also
is an active participant in the Springfield Chamber of Commerce. Rick currently
is chair of the retail success committee. He is seeking re-election to a second
three-year term, representing retailers in Region 1 - Massachusetts, Vermont,
New Hampshire, New York, Connecticut, Rhode Island, New Jersey, Maine and
Pennsylvania.
Region 3, First and 3 years D. William Hagan, 42, is president of five Ace
stores in Florida. He began his Ace career in 1976 as a floor sales department
manager at Hagan Ace Hardware after attending Florida Junior College in
Jacksonville. He was promoted to store manager in 1980. That year, he also
became part owner of a new Ace store in Orange Park. In 1993, he became part
owner of a second store in Hilliard, and in 1994, a third store in Middleburg.
In January 1999, he became president and part owner of two additional Ace
stores. Bill is active in his community, including having served as president
and board member for his local Chamber of Commerce. Bill currently serves as
chairperson of the nominating committee on the Board. He is seeking
re-election to a second three-year term, representing retailers in Region 3
which includes Mississippi, Florida, Alabama and Georgia.
Region 7, First and 3 years Jennifer C. Anderson, 49, is president of Davis
Lumber & Ace Hardware, a third-generation family-owned business, in Davis,
California. She currently manages approximately 100 employees as well as the
store's financial operations. Jennifer began working at the store in 1982.
She graduated from Wilkes University in Wilkes-Barre, Pennsylvania, in 1975
with a bachelor of science degree in business administration and marketing.
She currently serves as chair of the human resources/compensation committee.
Jennifer is seeking re-election to a third three-year term on the Board. She
represents Region 7, including retailers in Alaska, Hawaii, California, Nevada,
Oregon and Washington.
Region N/A, First and 3 years Richard (Rick) Alan Karp, 48, owns Cole
Hardware, a three-store chain in San Francisco, California. He attended the
University of California, Berkeley, earning a bachelor of arts degree in 1973.
He also obtained an elementary teaching credential in 1976 from San Francisco
State University. Rick has been involved in the family business, started by
his father, Dave, since he was 12 years old. He was named president of the
operations in 1981. His stores range in size from 4,000 sq. ft. to 6,000 sq.
ft. and combined employ more than 100 associates. In addition to the three
stores, Rick started a home repair service that has involved a thriving repair
and construction service, employing 25 individuals. Rick has been nominated to
a three year term, serving as a director at large.
The principal occupation of Mr. Bibens, Mr. Hagan, Ms. Anderson and Mr. Karp
during the past 5 years or more consisted of being an owner, officer or manager
of a retail hardware business.
The Board of Directors expects all nominees to be available for election. If
any nominee named above should refuse or become unable to serve as a director,
the Board may substitute another person as nominee. In that case, under this
proxy, your share will be voted for that other person.
Again, your shares will be voted according to your instructions as indicated on
your properly submitted proxy. If you properly submit your proxy but do not
provide voting instructions, your shares will be voted FOR the election of the
four nominees.
OTHER MATTERS
As of the date of this notice, the Board of Directors has no knowledge of
matters to be presented at the meeting other than those described above.
If, however, any additional matters are presented by others, the proxy holders
have been vested by the Board of Directors with discretionary powers to vote
the shares represented by the proxies held by them in accordance with their own
best judgment with respect to all such matters.
By Order of the Board of Directors
DAVID W. LEAGUE
April 7, 2000 Secretary
Exhibit 99-C
ACE HARDWARE CORPORATION
PROXY
This proxy is solicited on behalf of the Board of Directors
for the Annual Shareholders' Meeting on June 5, 2000.
As the holder, or the authorized agent of the holder, of 1 share of Class A
stock of Ace Hardware Corporation issued as of the record date of April 7, 2000
for the Ace store designated by the number shown on the reverse side hereof,
the undersigned does hereby constitute and appoint J.Thomas Glenn, Richard F.
Baalmann, Jr. and Richard W. Stine and each of them, with each to have full
power of substitution, as Proxies to vote said share of stock at the annual
shareholders' meeting of Ace Hardware Corporation to be held at 9:00 A.M. on
Monday, June 5, 2000, and at any adjournment thereof, on all matters coming
before said meeting. If no directions are given on the other side of this card,
the Proxies will vote FOR the election of all director nominees recommended by
the Board of Directors and in their discretion on any other business that may
properly come before the meeting. The Proxies appointed herein may act by a
majority of such of said Proxies as shall be present at the meeting (or if only
one is present then by that one). Any prior Proxies given by the undersigned
with respect to said meeting are hereby revoked.
(Continued and to be signed on the reverse side)
(Continued from the other side)
Election of Directors:
__ FOR all nominees listed below __ WITHHOLD AUTHORITY to vote for all
(except as marked to the contrary below) nominees listed below
(To withhold authority to vote for any individual nominee, strike a line
through the nominee's name in the list below.)
Eric R. Bibens, II, D. William Hagan, Jennifer C. Anderson, Richard A. Karp
Dated:
(Legal corporate, partnership or business name)
Ace Store # By
(In the case of a corporate or partnership
stockholder, an appropriate officer or partner
should sign and his title should be inserted.
If the stock is held in joint tenancy, each
holder should sign.)
Exhibit 99-D
ANNUAL SHAREHOLDERS' MEETING
MONDAY, JUNE 5, 2000
The Annual Shareholders' Meeting of Ace Hardware Corporation will be held on
Monday, June 5, 2000 at the Ace corporate offices, 2200 Kensington Court,
Krausman Hall - 3rd Floor, Oak Brook, Illinois.
You are invited to join the Ace Staff for a continental breakfast at 8:30 A.M.
The Meeting will begin promptly at 9:00 A.M.
IF YOU PLAN TO ATTEND, please return the Reservation Form so that proper
arrangements can be made for the breakfast and meeting.
Please Note: Ace Hardware adopted a "Tobacco Free Policy" several years ago.
Smoking is not permitted anywhere within our corporate office facilities. Your
efforts in maintaining a healthier, smoke-free work environment are appreciated
by the Company and employees.
ANNUAL SHAREHOLDERS' MEETING
MONDAY, JUNE 5, 2000
Please reserve _____ places for the following person(s) who plan to attend the
Continental Breakfast and Annual Meeting.
____________________________ ______________________________
____________________________ ______________________________
Return form to:
Ace Hardware Corporation Store Stamp
2200 Kensington Court
Oak Brook, Illinois 60523
Attn: Chairman's Office
