<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 13, 2000
REGISTRATION NO. 333-26727
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 7
TO
FORM S-2
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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TRUSERV CORPORATION
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 36-2099896
(State of Incorporation) (IRS Employer Identification No.)
</TABLE>
8600 West Bryn Mawr Avenue
Chicago, Illinois 60631-3505
(773) 695-5000
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
Leonard G. Kuhr, Senior Vice President
and Chief Financial Officer
TruServ Corporation
8600 West Bryn Mawr Avenue
Chicago, Illinois 60631-3505
(773) 695-5000
Fax: (773) 695-6563
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Geoffrey R. Morgan
Michael Best & Friedrich, LLP
100 East Wisconsin Avenue
Milwaukee, Wisconsin 53202-4108
(414) 271-6560
Fax: (414) 277-0656
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Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Post-Effective Amendment
to the
Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
If the Registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1)
of this Form, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
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<PAGE> 2
PROSPECTUS
TRUSERV CORPORATION
$36,505,962
Variable Denomination Floating Rate Demand Notes
The Offering:
<TABLE>
<CAPTION>
Total
-----------
<S> <C> <C>
Public Price............................................. $36,505,962 (1)
Underwriting Discounts................................... none (2)
Proceeds to TruServ...................................... $36,505,962 (3)
</TABLE>
(1) There are no firm commitments for the sale of these securities.
(2) There are no underwriters. We are offering the notes directly to you.
(3) There are no firm commitments for the sale of these notes. So far, we have
sold $13,494,038 aggregate principal amount of the notes. If the entire
offering is sold, we will receive $36,505,962 before deducting estimated
expenses of $74,000.
Minimum initial purchase: $250
These notes are designed to provide you with a convenient means of
investing funds directly with us. If you invest in the notes, your investment
will be represented by a program account at our agent bank, instead of by a
certificate or other evidence of ownership.
The principal amount of each note will be equal to all of your investments
in the notes, plus accrued and reinvested interest, less any redemption and
fees. The notes have no stated maturity and will earn interest at floating
rates, which will be adjusted each week.
The weekly interest rate paid on these notes may not provide a basis for
comparison with other investments which use a different method of calculating a
variable yield or which pay a fixed yield for a stated period of time.
There is no market for the notes nor is a market expected to develop. The
notes have restricted transferability, and they may be called by us. We also
reserve the right to modify, withdraw or cancel this offer.
CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 4 IN THIS PROSPECTUS.
THE NOTES ARE UNSECURED OBLIGATIONS OF TRUSERV AND ARE SUBORDINATED TO SENIOR
NOTES, BANK DEBT, AMOUNTS DUE TRADE CREDITORS AND OTHER DEBT.
YOUR PROGRAM ACCOUNT IS NOT A DEPOSIT OR OTHER BANK ACCOUNT AND IS NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------
These securities are offered through
TRUSERV CORPORATION
8600 WEST BRYN MAWR AVENUE
CHICAGO, ILLINOIS, 60631-3505
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THE DATE OF THIS PROSPECTUS IS
<PAGE> 3
WHERE YOU CAN FIND MORE INFORMATION
The terms "TruServ," "Company," "Cooperative," "we," "us," and similar
words refer to TruServ Corporation. The terms "member," "retailer," "you,"
"your" and similar words refer to someone who purchases our notes.
We file annual, quarterly and special reports, and other information with
the SEC. Our SEC filings are available to the public over the Internet at the
SEC's web site at http://www.sec.gov. You may also read and copy any document we
file at the SEC's public reference rooms in Washington, D.C., New York, New York
and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms.
REPORTS TO SECURITY HOLDERS
Each year, we distribute an annual report containing consolidated financial
statements reported upon by our independent auditors to our stockholder-members.
We may, from time to time, also furnish to our stockholder-members interim
reports, as determined by our management.
DOCUMENTS INCLUDED AND INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" information we file with
them which means that we can disclose important information to you by referring
you to those documents and delivering them to you with this prospectus. We are
incorporating by reference our Annual Report on Form 10-K for the year ended
December 31, 1999, our Quarterly Reports on Form 10-Q for the quarters ended
April 1, 2000, July 1, 2000, and September 30, 2000, and our Current Reports on
Form 8-K, filed June 28, 2000, July 6, 2000, and September 28, 2000, all of
which we filed with the SEC under Section 15(d) of the Securities Exchange Act
of 1934. We also are including the Annual Report on Form 10-K for the year ended
December 31, 1999 and the Quarterly Report on Form 10-Q for the quarter ended
September 30, 2000 with this prospectus for your information.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE
HAVE NOT AUTHORIZED ANY OTHER PERSON TO PROVIDE YOU WITH DIFFERENT INFORMATION.
THIS PROSPECTUS IS NOT AN OFFER TO SELL, NOR IS IT SEEKING AN OFFER TO BUY,
THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
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SUMMARY
The summary highlights information contained elsewhere in this prospectus.
Because this is only a summary, it does not contain all the information that you
should consider before buying notes in this offering. You should read the entire
prospectus carefully, including our consolidated financial statements and the
related notes included elsewhere in this prospectus.
TruServ Corporation is a member-owned wholesaler of hardware,
lumber/building materials and related merchandise. Our company is the largest
member-owned wholesaler of these items in the United States. For financial
reporting purposes, we operate in a single industry as a member-owned wholesaler
cooperative. Our corporate headquarters are located at 8600 West Bryn Mawr
Avenue, Chicago, Illinois 60631-3505. Our telephone number is (773) 695-5000.
We are offering the notes exclusively to current company members who own
Class A common stock and to current holders of certain TruServ Corporation
Variable Denomination Fixed Rate Redeemable Term Notes. You may purchase the
notes in variable amounts with $250 being the initial minimum denomination note.
Ownership of the notes can be issued in one of the following four types of
accounts:
1. Single tenancy;
2. Joint tenancy with right of survivorship;
3. Tenancy by custodian (under the Uniform Gifts to Minors Act); or
4. Living trust.
We will issue notes each calendar quarter. You must pay for the notes in
cash. The notes will have no stated maturity. We will determine the rate of
interest, which will be a floating rate that will be adjusted each week. You can
obtain interest rate information by calling toll-free (800) 507-9000. You may
redeem any part of your account at any time. Your accrued interest will be
automatically reinvested in additional notes monthly.
The notes are not the same as a deposit or other bank account. They are not
insured by the Federal Deposit Insurance Corporation or any other government
agency or insurer. The notes are not subject to the requirements of the
Investment Company Act of 1940. All investments in the notes are investments in
TruServ Corporation securities and are not obligations of any other bank or
company.
You may not transfer any of the notes that you purchase, nor can you pledge
them as collateral for any of your debts. Additionally, we may redeem all or
part of the notes at any time. If we elect to redeem the notes, you will be paid
the principal amount plus accrued interest up to the date of redemption.
You may redeem any notes that you purchase at any time.
The notes are unsecured obligations and are subordinated to senior notes,
bank debt, amounts due trade creditors and other debt. Because they are
unsecured, they rank equally with all of our other unsecured and subordinated
debt.
There is no existing trading market for these notes, and we do not expect
any market will develop.
We plan to use the proceeds from this offering for general working capital,
including the purchase of merchandise for resale to our members.
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<PAGE> 5
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for each of the periods indicated is
as follows:
<TABLE>
<CAPTION>
FOR THE FISCAL YEARS
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1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
(.60) 1.33 2.02 2.57 2.78
</TABLE>
<TABLE>
<CAPTION>
FOR THE THIRTY-NINE
WEEKS ENDED
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SEPTEMBER 30, OCTOBER 2,
2000 1999
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<S> <C>
1.22 1.00
</TABLE>
The ratio of earnings to fixed charges has been computed by dividing
earnings before income taxes plus fixed charges by fixed charges. Fixed charges
consist of interest expense and the portion of rental expense deemed to
represent interest expense. For 1999, earnings were insufficient to cover fixed
charges by $131,143,000.
RISK FACTORS
The following risks should be considered before investing in the Notes:
SUBORDINATION OF NOTES
The notes are unsecured obligations and are subordinated to our senior
notes, bank debt, amounts due trade creditors and other debts. Because they are
unsecured, they rank equally with all of our other unsecured and subordinated
debt. The notes have no secondary market and cannot be transferred or pledged as
collateral. All of your investments in us, including the notes, are subject to
our lien rights ensuring payment of your debts to us. The notes are uninsured.
COMPETITION
Our markets are subject to increasingly intense competition and changes. We
expect continued intense competition from the so-called "Big Box" stores such as
Home Depot, Menards and Lowes, as well as from additional emphasis on directly
competitive lines of business by Home Depot and diversified retailers such as
Sears. These competitors may have greater resources, larger market shares and
more widespread presence than we do. We believe our cooperative structure best
situates our Members to compete with the Big Boxes and other market competitors,
but no assurances can be made that any Member or Members will be successful.
VOLATILE PRICING OF MERCHANDISE/INVENTORY
The price of merchandise and inventory in the lumber and building materials
industry can change rapidly and such changes may affect our profit margins and
competitive abilities adversely. We believe our cooperative structure creates
the best opportunity for our Members to obtain lower prices and maximize their
purchasing power but such efficiencies cannot be assured.
REGIONAL MARKET VARIATIONS
We transact business nationwide. From time to time, significant variations
in marketing opportunities may confront our Members due to economic conditions
in the Member's specific geographic region. We are unable to predict any adverse
regional economic conditions that may materially affect a Member or Members.
ENVIRONMENTAL
We engage in activities such as the manufacture of paint and related
products, that could have an environmental impact. These areas are subject to
constant review and scrutiny by governmental authorities at the federal, state
and local level. We are unable to predict whether, or to what extent, such
business activities and governmental scrutiny may result in future costs or
liabilities.
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MEMBER BASE
The success of the company is dependent upon the continued support from its
members and their purchases through the cooperative. The trend in the number of
members participating in the company's programs has recently been unfavorable.
If this trend continues the company's operating results and financial condition
could be adversely effected.
ACCESS TO CAPITAL
The company is financed by debt capital obtained from various external
sources. The majority of the short-term capital is mainly derived from a $300
million revolving credit agreement supported by nine major financial
institutions. This agreement is subject to the company's compliance with certain
financial and non-financial covenants, and any breach of these covenants would
increase the cost of such financing and make it more difficult to access the
necessary working capital requirements.
KEY PERSONNEL
Our success depends to a significant degree upon the continued
contributions of key management, sales, marketing and merchandising personnel,
many of whom would be difficult to replace. If certain of these associates were
to leave, the company would be adversely effected. We also believe our future
success is dependent upon our ability to attract and retain highly skilled
managers and sales, marketing and merchandising associates. Competition for
those types of associates is intense and there can be no assurance that we will
be successful in attracting and retaining the necessary personnel. To the extent
we are not successful, we could be adversely effected.
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<PAGE> 7
THE TRUSERV VARIABLE DENOMINATION FLOATING RATE DEMAND NOTE
INVESTMENT PROGRAM
The program is designed to provide you with a convenient means of investing
funds directly with us. The notes are available in variable amounts with $250
being the initial minimum denomination note.
INTEREST
The principal amount of each note will be equal to all of your investments
in the notes, plus accrued and reinvested interest, less any redemptions and
fees. The notes will have no stated maturity and will earn interest at floating
rates that will be determined by the TruServ Investment Program Committee on a
weekly basis. These rates will be effective the following week. The rate of
interest on the notes will probably be greater than the most recent seven-day
average yield for taxable money market funds in the United States. These rates
are published in the IBC Money Fund Report published on Thursdays in The Wall
Street Journal. Rates may vary by account balance or other factors. Interest
will accrue daily and will be compounded monthly. The rate of interest paid for
any period is not an indication or representation of future rates. You may
obtain interest rate information by calling toll-free 1-800-507-9000.
TYPES OF ACCOUNTS
You may hold ownership of the notes in one of the four following types of
accounts:
1. Single tenancy;
2. Joint tenancy with right of survivorship;
3. Tenancy by custodian (under the Uniform Gifts to Minors Act); or
4. Living trust.
You may not transfer the notes and you may not pledge them as collateral
for any of your debts.
If your legal name changes, you will need to complete a Form W-9 and a
signature guarantee to change the name on your account.
You cannot hold the notes in a retirement savings plan as described in
Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended.
ACCOUNT INFORMATION
You will receive regular quarterly statements showing a summary of all of
your transactions. Redemption checks will not be returned to you but the check
numbers and dollar amounts will appear on your statements.
HOW TO INVEST
You must request an application package by calling us at the toll-free
number, 1-800-507-9000. Upon request of an application, you will receive the
Prospectus, the Program Description, an IRS W-9 Certification Form and an
application, which you will need to complete and return to us. Your initial
investment must be for a minimum of $250. After your account is opened,
additional investments may be made at any time without charge by check or by
wire transfer. By signing and returning the application form and the IRS W-9
Certification Form, together with a check for your investment amount, to our
designated lockbox, you consent to be bound by the terms of the program, as
described in the Program Description, as amended from time to time by us.
BY CHECK MAILED TO AGENT BANK. Your investment will be credited and
interest will begin to accrue on the first business day after the bank receives
your check. Your funds will be available for withdrawal the morning of the sixth
business day following your deposit. Investments made by check cannot be
redeemed for
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five business days after the check is first credited to your account or, if
later, until the check clears. All checks must be payable to "TruServ Investment
Program." No third-party checks will be accepted.
All investments must be made in U.S. dollars drawn on a U.S. bank. You must
be a U.S. citizen and provide a valid U.S. federal identification number. You
may withdraw your funds at any time.
BY WIRE TRANSFER. You may wire transfer your investment to the bank. Wire
transfers received by 10:00 a.m. CST will be processed the same day. Wire
transfers received after 10:00 a.m. CST will be credited to your account the
following business day. Wire transfers should be addressed to:
ABA071000152
The Northern Trust Company, Chicago, Illinois
TruServ Investment Program
Further Advise--(your account number)
HOW TO REDEEM
You may redeem any part of your account at any time. The methods of
redemption are as follows:
1) Redemption by check;
2) Written redemption;
3) Wire redemption; or
4) Redemption due to balance below minimum investment.
You may close your account only by using the written redemption method.
REDEMPTION BY CHECK. You may make redemption checks payable to anyone in
the amount of $250 or more. If the amount of the redemption check is greater
than the balance in your account or less than $250, the check will not be
honored. Your redemption will be made on the day the agent bank receives your
redemption check for payment. If your account is held jointly, only one
signature will be required on a redemption check unless otherwise specified. The
check redemption feature does not create a deposit or a banking relationship
with either us or with the agent bank.
WRITTEN REDEMPTION. You may redeem all or any part of your account, subject
to a $250 minimum, by written request, including your signature. A check for the
requested amount (or in an amount equal to the balance of your account if the
account is being closed) will be mailed to the registered account address.
WIRE REDEMPTION. You may redeem any part of your account, subject to a
$2,500 minimum, by wire transfer if you have authorized the wire redemption
option. Wire redemption proceeds can only be wired to the U.S. bank account you
have designated on your application. To change this designation, a written
request signed by all registered owners (including joint owners) of the account,
with all signatures guaranteed by a financial institution, must be submitted to
the agent bank. Funds will be wired no later than the next business day after
receipt of your wire redemption request, provided your request is received by
2:00 p.m. EST on any business day. If your designated bank is not a member of
the Federal Reserve system, there may be a delay in wiring funds. Each wire
transfer will incur a processing charge from the agent bank, and may also incur
an additional charge from other institutions handling the transfer. The agent
bank's records of the wire instructions are binding.
REDEMPTION DUE TO BALANCE BELOW MINIMUM INVESTMENT. If your account balance
falls below the $250 minimum, you will receive notice that the account is below
the minimum and will be closed at the end of the next monthly cycle. If
additional investments increasing the account balance to at least $250 are not
made, the account will then be closed at the end of the next cycle and an
official bank check issued for the balance plus interest.
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<PAGE> 9
FEES
There are no account maintenance fees or charges for checks or check
redemption, no sales loads and no charges for investing or ongoing management
other then as described below. Fees will be debited directly from your account.
<TABLE>
<S> <C>
Additional fees (subject to change)
Wire transfer fee--per wire transfer ($2,500 minimum)..... $ 15.00
Non-sufficient funds (NSF) deposit--per check............. $ 10.00
Stop payment.............................................. $ 15.00
Overnight delivery........................................ $ 12.00
</TABLE>
TRUSERV INVESTMENT PROGRAM COMMITTEE
The TruServ Investment Program committee consists of certain of our
officers designated by our Board of Directors. The committee has the full power
and authority to amend this program as described under "Termination, Suspension,
or Modification." The committee may also interpret program provisions, adopt
program rules and regulations and make certain determinations. The members of
the committee are our Vice President of Finance and Assistant Treasurer. Members
of the committee receive no additional compensation for their services.
TERMINATION, SUSPENSION OR MODIFICATION
We expect the program to continue indefinitely but reserve the right to
suspend or terminate the program at any time. We also reserve the right to
modify, suspend or terminate any of the investment options and redemption
options described earlier. Written notice of any material modification,
suspension or termination will be provided to you at least fifteen days prior to
the effective date.
USE OF PROCEEDS
We plan to use the proceeds from the sale of the notes for general working
capital, including the purchase of merchandise for resale to our members.
PLAN OF DISTRIBUTION
We are offering the notes exclusively to current TruServ members who own
Class A common stock and to current holders of certain TruServ Corporation
Variable Denomination Fixed Rate Redeemable Term Notes. You may purchase the
notes in variable amounts with $250 being the initial minimum denomination note.
The availability of the program will be communicated to you through a
mailing. Upon request of an application package, you will receive the
Prospectus, IRS W-9 Certification Form and application form to be returned to
the address as specified on the application form. The application will include
the Investor's registration form. By signing and returning the application form
and IRS W-9 Certification Form, together with a check made payable to the
"TruServ Investment Program" for the invested amount to the address as specified
on the application form, you will consent to be bound by the terms of the
program, as described in the Prospectus, as amended from time to time by the
Company.
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CERTAIN TERMS OF THE NOTES
GENERAL
The notes are issued under an indenture between us and our trustee, U.S.
Bank Trust National Association. We have summarized selected provisions of the
indenture below. This summary is not complete. The form of the indenture has
been filed as an exhibit to the Registration Statement, and you should read the
indenture for provisions that may be important to you. In the summary below, we
have included references to section numbers of the indenture, so that you can
easily locate these provisions. Capitalized terms used in the summary have the
meanings specified in the indenture. We will send you, at no charge, a copy of
the indenture upon written or oral request directed to Leonard G. Kuhr, Senior
Vice President and Chief Financial Officer, TruServ Corporation, 8600 West Bryn
Mawr Avenue, Chicago, Illinois 60631-3505 or telephone number (773) 695-5000.
MODIFICATION OF THE INDENTURE
The indenture permits us and the trustee, with the consent of the holders
of not less than 66 2/3% of the aggregate principal amount of the notes
outstanding at that time, to add, change in any manner or eliminate any of the
provisions of the indenture or to modify in any way the rights of the note
holders. However, we may not add or modify any provision that would, among other
things:
1) change the character of the notes from being payable upon demand;
2) reduce the principal amount of any note; or
3) reduce the aggregate principal amount of the notes outstanding, the
holders of which need to consent to our adding, changing or eliminating
any provision of the indenture (Section 802).
EVENT OF DEFAULT
An event of default is defined in the indenture as non-payment of any
principal or interest amount on any note when due. An administrative error is
not considered an event of default unless the error has continued uncorrected
for sixty days after written notice of the error was sent to the agent bank or
trustee, with a copy to us. The trustee is the sole judge of whether the error
has been corrected. Other events of default include default in the performance
of any other note covenant after sixty days written notice to us of the default
and certain events of bankruptcy, insolvency or reorganization. The indenture
requires us to file an annual written statement with the trustee as to the
presence or absence of certain defaults under the terms thereof. Within ninety
days after a default has occurred, the trustee will notify note holders of all
uncured and unwaived defaults of which it is aware. However, if we default on
the payment of principal or interest on any note, the trustee will be protected
in withholding such notice if it, in good faith, determines that the withholding
of notice is in the interests of the note holders. The indenture provides that,
while an event of default continues, either the trustee or the holders of 50% of
more of the aggregate principal amount of the outstanding notes may declare the
principal of all such notes to be immediately due and payable. However, under
certain conditions, the holders of a majority of the principal amount of the
outstanding notes may annul the declaration. The indenture also provides that
past defaults, except for an uncured default in payment of principal or
interest, may be waived on behalf of the note holders by the holders of a
majority of the principal amount of outstanding notes (Section 501).
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<PAGE> 11
CONCERNING THE TRUSTEE
The trustee acts as trustee under one other of our indentures. A number of
series of subordinated, unsecured notes are currently outstanding under this
indenture.
LIMITATIONS ON SUITS
You may not file a lawsuit with respect to the indenture, unless:
1) you have first given notice to the trustee of a continuing event of
default;
2) note holders of at least 50% of the outstanding principal amount of the
notes have made written request to the trustee to institute the action;
3) note holders requesting the action have offered to indemnify the trustee
against the costs, expenses, and liabilities that will be incurred as
part of the action;
4) the trustee has failed to institute the action for at least sixty days;
and
5) no direction inconsistent with such written request has been given to
the trustee during that sixty-day period by note holders holding a
majority of the principal amount of the notes (Section 507).
NOTE SUBORDINATION
The notes will be subordinated in right of payment to senior notes, bank
debt, amounts due trade creditors and other debt. Because they are unsecured,
they rank equally with all of our other unsecured and subordinated debt (Section
901).
OPTIONAL REDEMPTION BY US
We can redeem the notes in whole or in part at any time. If we choose to
redeem the notes, we will pay you the principal amount of the notes plus accrued
and unpaid interest to the redemption date. Any partial note redemption will be
effected by lot or pro rata or by any other method that the trustee deems fair
and appropriate. Interest on all redeemed notes will cease to accrue on and
after the effective date of redemption (Sections 303 and 305).
SATISFACTION AND DISCHARGE
Satisfaction and discharge of the indenture will occur when:
1) we terminate the program in accordance with its terms and all the notes
become due and payable;
2) we deposit the entire amount needed to pay all the notes, including
principal and interest due or to become due to the date of payment; and
3) we pay all other sums payable under the terms of the indenture (Section
401).
AGENT BANK AND ADMINISTRATION
We have engaged The Northern Trust Company as the agent bank to service the
program. The agent bank will send the following information to you:
1) investment confirmation;
2) quarterly statements listing all notes held and all transaction
information on a year-to-date basis;
3) Form 1099INT; and
4) Form 1099B, if applicable.
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<PAGE> 12
Additionally, the agent bank will provide an automated voice-response
system at a toll free number (1-800-507-9000). You may call this number to
obtain aggregate account information. The agent bank will also process
redemption requests, respond to inquiries and provide you with information on
your notes and accounts. Additional or other inquiries from you to the agent
bank will be forwarded to us.
TAXES
The program is not qualified under Section 401(a) of the Internal Revenue
Code. Accordingly, you will have to report all interest credited to your notes
or paid to you as taxable income for federal income tax purposes. No part of the
taxable interest is excludable from taxable income.
Your December statement sent by the agent bank each year will state the
full amount reportable as taxable income. The agent bank will also file tax
information returns as required by law. State and local income taxes and tax
reporting also may apply. You are individually responsible for complying with
applicable federal, state and local tax laws and should consult with your
individual tax advisor regarding the tax consequences that may apply to your
particular situation.
LEGAL MATTERS
The legality of the notes has been passed upon for us by Messrs. Arnstein &
Lehr, Chicago, Illinois.
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE
BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY STATE
IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON
MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM
IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Where You Can Find More Information........ 2
Reports to Security Holders................ 2
Documents Included and Incorporated by
Reference................................ 2
Summary.................................... 3
Consolidated Ratio of Earnings to Fixed
Charges.................................. 4
Risk Factors............................... 4
Subordination of Notes................... 4
Competition.............................. 4
Volatile Pricing of
Merchandise/Inventory................. 4
Regional Market Variations............... 4
Environmental............................ 4
Member Base.............................. 5
Access to Capital........................ 5
Key Personnel............................ 5
The TruServ Variable Denomination Floating
Rate Demand Note Investment Program...... 6
How to Invest.............................. 6
How to Redeem.............................. 7
Use of Proceeds............................ 8
Plan of Distribution....................... 8
Certain Terms of the Notes................. 9
Agent Bank and Administration.............. 10
Taxes...................................... 11
Legal Matters.............................. 11
</TABLE>
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
$36,505,962
TRUSERV CORPORATION
VARIABLE DENOMINATION
FLOATING RATE
DEMAND NOTES
FOR INFORMATION CONCERNING
THE TRUSERV
INVESTMENT PROGRAM,
WRITE TO:
THE TRUSERV INVESTMENT PROGRAM
P.O. BOX 75928
CHICAGO, ILLINOIS 60675-7598
OR CALL:
TOLL FREE NUMBER 1-800-507-9000
PROSPECTUS
------------------------
DATED
---------------------------------------------------------
---------------------------------------------------------
<PAGE> 14
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following are the actual or estimated expenses in connection with the
issuance and distribution of the Variable Denomination Floating Rate Demand
Notes being registered:
<TABLE>
<S> <C>
Registration Fee............................................ $ -0-
Printing of Registration Statement and Prospectus........... 16,000
Accounting Fees and Expenses................................ 10,000
Legal Fees.................................................. 10,000
Trustee Fee................................................. 3,000
Fees and Expenses for Qualifying Securities under "Blue Sky"
Laws of
Various States............................................ 35,000
-------
Total....................................................... $74,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Certificate of Incorporation, as amended, provides that the
Company shall indemnify, in accordance with and to the full extent permitted by
the Delaware General Corporation Law, any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(including, without limitation, an action by or in the right of the Company), by
reason of the fact that such person is or was a director, officer, employee or
agent of the Company, or is or was serving at the request of the Company as a
director, officer, employee or agent of another Company, partnership, joint
venture, trust or other enterprise, against any liability or expense actually
and reasonably incurred by such person in respect thereof. Such indemnification
is not exclusive of any other right of such director, officer, or employee to
indemnification provided by law or otherwise.
Additionally, pursuant to Section 145(a)-(g) of the Delaware General
Corporation Law which empowers a corporation to indemnify its directors,
officers, employees and agents, the Board of Directors of the Company on July
23, 1973 adopted a By-Law (Article XIII, Indemnification of Directors, Officers
and Employees--Exhibit 2-A to Registration Statement on Form S-4 (No. 333-18397)
and incorporated herein by reference) providing for such indemnification. The
following is a summary of the most significant provisions of said By-Law:
As against third parties, the Company shall indemnify any director,
officer, employee or agent for any expenses (including attorneys' fees,
judgments, fines and amounts paid in settlement) actually and reasonably
incurred in defending any threatened, pending or completed suit or proceeding,
whether civil, criminal, administrative or investigative brought against such
person by reason of the fact that he was or is a director, officer, employee or
agent, if such person acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interest of the Company, and with respect to
any criminal action or proceeding if he had no reasonable cause to believe his
conduct unlawful.
In any action or suit by or in the right of the Company, the Company shall
indemnify any director, officer, employee or agent who is or was a party or
threatened to be made a party to such threatened, pending or completed action or
suit, for expenses (including attorney's fees and amounts paid in settlement)
reasonably and actually incurred in connection with the defense or settlement of
such suit or action, if such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interest of the Company,
except that no indemnification shall be made if such person has been adjudged to
be liable for negligence or misconduct in the performance of his duty to the
Company unless and only to the extent that the Court of Chancery of Delaware or
the court where the suit was brought finds that in view of all the circumstances
of the case, such person is entitled to indemnification.
II-1
<PAGE> 15
Any indemnification, unless ordered by a court, shall be made by the
Company only as authorized in the specific case upon a determination that
indemnification is proper in the circumstances because the party to be
indemnified has met the applicable standard of conduct. Such determination shall
be made by the Board of Directors by a majority vote of a quorum, consisting of
directors who were not parties of such action, suit or proceeding, or if such a
quorum is not obtainable, or even if obtainable, if a quorum of disinterested
directors so directs, by independent legal counsel in a written opinion, or by
the stockholders.
Additionally, the Company's Certificate of Incorporation eliminates
personal liability of directors to the Company or its stockholders for monetary
damages for breach of fiduciary duty of care. The amendment provides that a
director of the Company shall not be liable to the Company or its stockholders
for monetary damages for breach of fiduciary duty as a director, except to the
extent such exemption from liability or limitation thereof is not permitted
under the Delaware General Corporation Law as the same exists or may hereafter
be amended.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 is concerned, see Item 17 "Undertakings" below.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
4-A Trust Indenture between TruServ Corporation and First Trust
of Illinois (formerly Bank of America). Incorporated by
reference--Exhibit T3C to TruServ Corporation Form T-3 (No.
22-26210).
4-B Instalment note form. Incorporated by reference--Exhibit 4-F
to Registration Statement on Form S-2 (No. 2-82836).
5 Opinion of Messrs. Arnstein & Lehr (previously filed.)
10-A Current Form of "Retail Member Agreement with TruServ
Corporation" between the Company and its Members that offer
primarily hardware and related items. Incorporated by
reference--Exhibit 10-A to Post-Effective Amendment No. 11
to Registration Statement on Form S-2 to Form S-4 (No.
333-18397).
10-B Current form of "Subscription to Shares of TruServ
Corporation". Incorporated by reference--Exhibit 10-B to
Post Effective Amendment No. 5 to Registration Statement on
Form S-2 to Form S-4 (No. 333-18397).
10-C TruServ Corporation Defined Lump Sum Pension Plan (as
amended and restated effective as of January 1, 1998).
Incorporated by reference--Exhibit 10-C to the registrant's
Annual Report on Form 10-K for the Fiscal year ended
December 31, 1999 (File No. 2-20910).
10-D TruServ Corporation Employees' Savings and Compensation
Deferral Plan (as amended and restated effective July 1,
2000). Incorporated by reference--Exhibit 10-D to
Post-Effective Amendment No. 11 to Registration Statement on
Form S-2 to Form S-4 (No. 333-18397).
10-E TruServ Corporation Supplemental Retirement Plan between
TruServ Corporation and selected executives of the Company
(as amended effective July 24, 1998). Incorporated by
reference--Exhibit 10-E to Post-Effective Amendment No. 10
to Registration Statement on Form S-2 to Form S-4 (No.
333-18397).
10-F Retail Conversion Funds Agreement dated as of December 9,
1996 between the Company and SCC. Incorporated by
reference--Exhibit 10-L to Registration Statement on Form
S-4 (No. 333-18397).
10-G Employment Agreement between SCC and Donald J. Hoye dated
September 1, 1996--Incorporated by reference to Exhibit 10-P
to Amendment No. 2 to Registration Statement on Form S-4
(No. 333-18397).
10-H Amended and Restated Trust Indenture between TruServ
Corporation and First Trust National Association for
$50,000,000 principal amount of Variable Denomination
Floating Rate Demand Notes. Incorporated by
reference--Exhibit 4-K to Registration Statement on Form S-2
(No. 333-26727).
</TABLE>
II-2
<PAGE> 16
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
10-I Credit Agreement dated July 1, 1997 for $300,000,000
Revolving credit between TruServ Corporation, various
financial institutions, and Bank of America. Incorporated by
reference--Exhibit 4-J to Post Effective Amendment No. 5 to
Registration Statement on Form S-2 to Form S-4 (No.
333-18397).
10-J Third amendment to Credit Agreement dated July 1, 1997 for
$300,000,000 Revolving credit between TruServ Corporation,
various financial institutions, and Bank of America.
Incorporated by reference on Exhibit 4-K to the registrant's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1999 (File No. 2-20910).
10-K Amended and Restated Credit Agreement dated as of April 14,
2000 for $300,000,000 Revolving Credit between TruServ
Corporation, various Financial Institutions and Bank of
America. Incorporated by reference--Exhibit 4-K to Post
Effective Amendment No. 10 to Registration Statement on Form
S-2 to Form S-4 (No. 333-18397).
10-L Amended and Restated Private Shelf Agreement between TruServ
Corporation and Prudential Insurance Company of America
dated November 13, 1997 for $150,000,000. Incorporated by
reference--Exhibit 4-K to Post Effective Amendment No. 5 to
Registration Statement on Form S-2 to Form S-4 (No.
333-18397).
10-M Amendment dated May 12, 1999 to the Amended and Restated
Private Shelf Agreement between TruServ Corporation and
Prudential Insurance Company of America dated November 13,
1997 for $150,000,000. Incorporated by reference on Exhibit
4-M to the registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1999 (File No. 2-20910).
10-N Amendment dated April 14, 2000 to the Amended and Restated
Private Shelf Agreement between TruServ Corporation and
Prudential Insurance Company of America dated November 13,
1997 for $150,000,000. Incorporated by reference on Exhibit
4-N to Post-Effective Amendment No. 10 to Registration
Statement of Form S-2 to Form S-4 (No. 333-18397).
10-O Credit Agreement dated September 10, 1998 for $105,000,000
Note Purchase Agreement between TruServ Corporation and
various Purchasers. Incorporated by reference--Exhibit 4-L
to Post-Effective Amendment No. 6 to Registration Statement
on Form S-4 (No. 333-18397).
10-P Amendment No. 1 to Credit Agreement dated September 10, 1998
for $105,000,000 Note Purchase Agreement between TruServ
Corporation and various Purchasers. Incorporated by
reference on Exhibit 4-O to the registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1999
(File No. 2-20910).
10-Q Amendment and Restatement dated April 14, 2000 to Credit
Agreement dated September 10, 1998 for $105,000,000 Note
Purchase Agreement between TruServ Corporation and various
Purchasers. Incorporated by reference on Exhibit 4-Q to
Post-Effective Amendment No. 10 to Registration Statement of
Form S-2 to Form S-4 (No. 333-18397).
10-R Participation Agreement dated April 30, 1998 for $40,000,000
between TruServ Corporation, various financial institutions
and Bank of Montreal. Incorporated by reference--Exhibit 4-M
to Post-Effective Amendment No. 6 to Registration Statement
on Form S-4 (No. 333-18397).
10-S Credit Agreement dated September 30, 1998 for $100,000,000
Revolving Credit between TruServ Corporation, various
financial institutions and Bank of America. Incorporated by
reference--Exhibit 4-N to Post-Effective Amendment No. 6 to
Registration Statement on Form S-4 (No. 333-18397).
*12 Schedule of Computation of Consolidated Ratio of Earnings to
Fixed Charges for the Thirty-Nine Weeks Ended September 30,
2000 and October 2, 1999 and for the Fiscal Years 1999,
1998, 1997, 1996 and 1995 (included on II-7).
13-A Annual Report on Form 10-K for the year ended December 31,
1999. Incorporated by reference (File No. 2-20910).
13-B Quarterly Report on Form 10-Q for the quarter ended
September 30, 2000. Incorporated by reference (File No.
2-20910).
23-A Consent of Arnstein & Lehr--Incorporated by reference to
Exhibit 23-A to Amendment No. 1 to Registration Statement on
Form S-2 (No. 333-26727).
*23-B Consent of Ernst & Young LLP (included on page II-8).
</TABLE>
II-3
<PAGE> 17
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
99-A Application Form and Related Materials for TruServ Variable
Denomination Floating Rate Demand Note Investment Program.
Incorporated by reference to Exhibit 23-A to Amendment No. 4
to Registration Statement on Form S-2 (No. 333-26727).
</TABLE>
* Filed herewith.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any Prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions described in Item 15, or otherwise,
the Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-4
<PAGE> 18
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING THIS POST EFFECTIVE AMENDMENT NUMBER 7 TO FORM S-2 AND
HAS DULY CAUSED THIS AMENDMENT TO REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON NOVEMBER 13, 2000.
TRUSERV CORPORATION
By: /s/ LEONARD G. KUHR
------------------------------------
Leonard G. Kuhr
Senior Vice President and Chief
Financial Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
TO REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ DONALD J. HOYE* President, Chief Executive November 13, 2000
----------------------------------------------------- Officer and Director
Donald J. Hoye
/s/ LEONARD G. KUHR* Senior Vice President and November 13, 2000
----------------------------------------------------- Chief Financial Officer
Leonard G. Kuhr
/s/ JOE W. BLAGG* Chairman of the Board and November 13, 2000
----------------------------------------------------- Director
Joe W. Blagg
/s/ JAMES D. BURNETT* Director November 13, 2000
-----------------------------------------------------
James D. Burnett
/s/ JAY B. FEINSOD* Director November 13, 2000
-----------------------------------------------------
Jay B. Feinsod
/s/ WILLIAM H. HOOD* Director November 13, 2000
-----------------------------------------------------
William H. Hood
/s/ JAMES HOWENSTINE* Director November 13, 2000
-----------------------------------------------------
James Howenstine
/s/ JERRALD T. KABELIN* Director November 13, 2000
-----------------------------------------------------
Jerrald T. Kabelin
/s/ PETER G. KELLY* Director November 13, 2000
-----------------------------------------------------
Peter G. Kelly
/s/ ROBERT J. LADNER* Director November 13, 2000
-----------------------------------------------------
Robert J. Ladner
</TABLE>
II-5
<PAGE> 19
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ GEORGE V. SHEFFER* Director November 13, 2000
-----------------------------------------------------
George V. Sheffer
/s/ DENNIS A. SWANSON* Director November 13, 2000
-----------------------------------------------------
Dennis A. Swanson
/s/ JOHN M. WEST, JR.* Director November 13, 2000
-----------------------------------------------------
John M. West, Jr.
/s/ BARBARA B. WILKERSON* Director November 13, 2000
-----------------------------------------------------
Barbara B. Wilkerson
Director
-----------------------------------------------------
Bryan R. Ableidinger
Director
-----------------------------------------------------
Benjamin J. Andre
Director
-----------------------------------------------------
Harold A. Douthih
</TABLE>
*By: /s/ LEONARD G. KUHR
-------------------------------
Leonard G. Kuhr, Pursuant to
power
of attorney previously granted
II-6
<PAGE> 20
EXHIBIT 12
TRUSERV CORPORATION
SCHEDULE OF COMPUTATION OF CONSOLIDATED RATIO
OF EARNINGS TO FIXED CHARGES
FOR THE THIRTY-NINE WEEKS ENDED SEPTEMBER 30, 2000 AND OCTOBER 2, 1999 AND
FOR THE FISCAL YEARS 1999, 1998, 1997, 1996 AND 1995
(000'S OMITTED)
<TABLE>
<CAPTION>
THIRTY-NINE WEEKS ENDED FOR THE FISCAL YEARS
------------------------------------ ----------------------------------------------------
SEPTEMBER 30, 2000 OCTOBER 2, 1999 1999 1998 1997 1996 1995
------------------ --------------- --------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net earnings after tax... $12,446 $ (416) $(131,143) $20,480 $42,716 $52,410 $59,037
Add: Tax provision....... 288 298 17,020 597 1,600 362 176
------- ------- --------- ------- ------- ------- -------
Pretax income............ 12,734 (118) (114,123) 21,077 44,316 52,772 59,213
------- ------- --------- ------- ------- ------- -------
Add:Fixed charges
Interest paid to
members.............. 8,407 10,532 14,498 16,390 17,865 18,460 20,627
Other interest
paid................. 42,906 34,906 46,204 38,710 19,100 10,175 9,298
------- ------- --------- ------- ------- ------- -------
Total interest
expense.............. 51,313 45,438 60,702 55,100 36,965 28,635 29,925
------- ------- --------- ------- ------- ------- -------
Rental expenses...... 22,865 23,597 31,702 28,291 19,890 14,971 10,063
% of rental
expenses............. 33.33% 33.33% 33.33% 33.33% 33.33% 33.33% 33.33%
------- ------- --------- ------- ------- ------- -------
Applicable rental
expenses............. 7,621 7,865 10,566 9,430 6,629 4,990 3,354
------- ------- --------- ------- ------- ------- -------
Total fixed
charges.............. 58,934 53,303 71,268 64,530 43,594 33,625 33,279
------- ------- --------- ------- ------- ------- -------
Pretax earnings/(loss)
before fixed charges... $71,668 $53,185 $ (42,855) $85,607 $87,910 $86,397 $92,492
======= ======= ========= ======= ======= ======= =======
Ratio of pretax
earnings/(loss) to
fixed charges.......... 1.22 1.00 (0.60)(a) 1.33 2.02 2.57 2.78
======= ======= ========= ======= ======= ======= =======
</TABLE>
---------------
(a)For 1999, earnings were insufficient to cover fixed charges by
$131,143,000.
II-7
<PAGE> 21
EXHIBIT 23-B
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in Post-Effective Amendment
No. 7 to the Registration Statement (Form S-2 No. 333-26727) and related
Prospectus of TruServ Corporation for the registration of $36,505,962 of
Variable Denomination Floating Rate Demand Notes of our report dated April 14,
2000, with respect to the consolidated financial statements of TruServ
Corporation included in its Annual Report (Form 10-K) for the year ended
December 31, 1999, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Chicago, Illinois
November 9, 2000
II-8
