As filed with the Securities and Exchange Commission on February 26, 1996
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
THE ANDERSONS, INC.
(Exact name of registrant as specified in its charter)
Ohio 34-1562374
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
480 West Dussel Drive,
Maumee, Ohio 43537
(Address of Principal Executive Offices) (Zip Code)
THE ANDERSONS, INC.
LONG-TERM PERFORMANCE COMPENSATION PLAN
(Full title of the plans)
Beverly J. McBride
The Andersons, Inc.
480 West Dussel Drive
Maumee, Ohio 43537
(Name and address of agent for service)
(419) 893-5050
(Telephone number, including area code, of agent for service)
Copy to:
Willard G. Fraumann, P.C.
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
(312) 861-2000
CALCULATION OF REGISTRATION FEE
Title of Proposed maximum Proposed maximum Amount of
securities to Amount to be price per aggregate registration
be registered registered share (1) offering price (1) fee
Common Shares, 500,000
no par value shares $12.50 $6,250,000.00 $2,155.17
(1) Estimated pursuant to Rule 457(h) solely for the purpose of calculating
the aggregate offering price and the amount of the registration fee, based upon
the conversion ratio per common share issued in the January 2, 1996 merger of
the Registrant's predecessor entities.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
Omitted from this Registration Statement in accordance with Rule 428
under the Securities Act of 1933 (the "Securities Act") and the Note to Part I
of Form S-8.
Item 2. Registrant Information and Employee Plan Annual Information.
Omitted from this Registration Statement in accordance with Rule 428
under the Securities Act and the Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
The following documents filed by The Andersons, Inc. (the
"Corporation") with the Securities and Exchange Commission (the "Commission")
are incorporated herein by reference except to the extent any statement or
information therein is modified , superseded or replaced by a statement or
information contained in this document or in any other subsequently filed
document incorporated herein by reference:
(a) The Corporation's Registration Statement on Form S-4, dated
October 26, 1995, filed with the Commission on October 26, 1995 (the "S-4
Registration Statement") relating to the merger (the "Merger") of The
Andersons, an Ohio limited partnership (the "Partnership"), with and into the
Corporation, pursuant to which all securities of the Partnership and the
Corporation were converted into the Corporation's common shares, no par value
(the "Common Shares").
(b) The description of the Corporation's Common Shares contained in
Item 1 of the Corporation's Registration Statement on Form 8-A filed with the
Commission pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), on October 19, 1995.
(c) All reports and other documents subsequently filed by the
Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act,
prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference herein
and to be a part hereof from the date of the filing of such reports and
documents.
Any statement contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes
of this Registration Statement to the extent that a statement contained herein
or in any other subsequently filed document which also is incorporated or
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Beverly J. McBride, general counsel and corporate secretary of the
Corporation, passed upon certain legal matters in connection with the Merger.
Ms. McBride owns 38,001 Common Shares.
Item 6. Indemnification of Directors and Officers.
Section 1701.59 of the Ohio General Corporation Law, inter alia,
empowers an Ohio corporation to indemnify 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 (other than an action by or in the right of the
corporation) by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him or her in connection with such action, suit or proceeding if he
or she acted in good faith and in a manner he or she reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his or
her conduct was unlawful. Similar indemnity is authorized for such person
against expenses (including attorneys' fees) actually and reasonably incurred
in connection with the defense or settlement of any such threatened, pending or
completed action or suit if such person acted in good faith and in a manner he
or she reasonably believed to be in or not opposed to the best interests of the
corporation, and provided further that (unless a court of competent
jurisdiction otherwise provides) such person shall not have been adjudged
liable to the corporation. Any such indemnification may be made only as
authorized in each specific case upon a determination by the shareholders or
disinterested directors or by independent legal counsel in a written opinion
that indemnification is proper because the indemnitee has met the applicable
standard of conduct.
Section 1701.59 further authorizes a corporation to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee or agent of another
corporation or enterprise, against any liability asserted against him or her
and incurred in any such capacity, or arising out of his or her status as such,
whether or not the corporation would otherwise have the power to indemnify him
or her under Section 1701.59. The Company maintains policies insuring its and
its subsidiaries' officers and directors against certain liabilities for
actions taken in such capacities, including certain liabilities under the
Securities Act of 1933.
Article IV of the Code of Regulations of the Company provides for
indemnification of the directors and officers of the Company to the full extent
permitted by law, as now in effect or later amended. In addition, the Code of
Regulations provi de for indemnification against expenses incurred by a
director or officer to be paid by the Company in advance of the final
disposition of such action, suit or proceeding; provided, however, that if
required by the Ohio General Corporation Law, an advancement of expenses will
be made only upon receipt of an undertaking by or on behalf of the director or
officer to repay such amount if it shall be ultimately determined that he or
she is not entitled to be indemnified by the Company. The Code of Regulations
further provide for a contractual cause of action on the part of directors and
officers of the Company with respect to indemnification claims which have not
been paid by the Company.
Article Sixth of the Company's Restated Articles of Incorporation
limits to the fullest extent permitted by the Ohio General Corporation Law as
the same exists or may have been amended, the personal liability of the
Company's directors to the Company or its shareholders for monetary damages
for a breach of their fiduciary duty as directors. Section 1701.59 of the Ohio
General Corporation Law currently provides that such provisions do not
eliminate the liability of a director (i) for a breach of the director's duty
of loyalty to the Company or its shareholders; (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law; (iii) under Section 1701.59 of the Ohio General Corporation Law (relating
to the declaration of dividends and purchase or redemption of shares in
violation of the Ohio General Corporation Law); or (iv) for any transaction
from which the director derived an improper personal benefit.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit Number Description of Document
4.1 Articles of Incorporation of the Corporation (incorporated by
reference from Exhibit 3.3 of the S-4 Registration Statement).
4.3 The Andersons, Inc. Long-Term Performance Compensation Plan,
effective as of January 2, 1996.
5.1 Opinion of Beverly J. McBride with respect to the legality of
certain shares of the Common Stock being registered.
23.1 Consent of Independent Auditors.
23.2 Consent of Beverly J. McBride (included in opinion filed as
Exhibit 5.1).
24.1 Power of Attorney (included in Part II of Registration
Statement).
Item 9. Undertakings.
(a) 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 to include any material information with respect to
the plan of distribution in the Share Purchase Plan not previously disclosed in
this Registration Statement or any material change to such information in this
Registration Statement; (2) that, for the purpose of determining any liability
under the Securitie s Act, 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; and (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.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connectio n with the securities
being registered, the Registrant 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 a
gainst public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-8 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Maumee, State of Ohio, on February 26, 1996.
THE ANDERSONS, INC.
By: \s\Richard P. Anderson
Its: President and CEO
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard P. Anderson and Thomas H. Anderson and
each of them signing singly, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments to
this Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connecti on therewith, with the Commission, granting
unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite or necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or their substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement and Power of Attorney has been signed by the following persons in the
capacities and as of the date indicated.
* * * * *
Signature Title Date
\s\Richard P. Anderson
Richard P. Anderson President and Chief Executive 2/26/96
Officer, Director
\s\Thomas H. Anderson
Thomas H. Anderson Chairman of the Board, Director 2/26/96
\s\Gary L. Smith
Gary L. Smith Treasurer 2/26/96
\s\Richard R. George
Richard R. George Corporate Controller and Principal 2/26/96
Accounting Officer
\s\Daniel T. Anderson
Daniel T. Anderson Director 2/26/96
\s\Donald E. Anderson
Donald E. Anderson Director 2/26/96
\s\Michael J. Anderson
Michael J. Anderson Director 2/26/96
\s\Richard M. Anderson
Richard M. Anderson Director 2/26/96
\s\John F. Barrett
John F. Barrett Director 2/26/96
\s\Dale W. Fallat
Dale W. Fallat Director 2/26/96
\s\Paul M. Kraus
Paul M. Kraus Director 2/26/96
Rene C. McPherson Director 2/26/96
\s\Donald M. Mennel
Donald M. Mennel Director 2/26/96
\s\David L. Nichols
David L. Nichols Director 2/26/96
\s\Janet M. Schoen
Janet M. Schoen Director 2/26/96
APPENDIX B
THE ANDERSONS, INC.
LONG-TERM PERFORMANCE COMPENSATION PLAN
SECTION I
Purpose
1.1 Purpose. The purpose of The Andersons, Inc. Long-Term Performance
Compensation Plan (the "Plan") is to provide competitive Long-Term
Compensation to Participants that aligns their interests with
shareholder interests through share ownership and investment in the
Company , and to encourage long-term growth in shareholder value through
the achievement of specified financial objectives.
1.2 Rule 16b-3 Plan. With respect to persons subject to Section 16 of the
Act ("Section 16 Persons"), transactions under this Plan are intended to
comply with all applicable conditions of Rule 16b-3 or its successors
promulgated under the Act. To the extent any provision of the Plan or
action by the Committee fails to so comply, it shall be deemed null and
void, to the extent permitted by law and deemed advisable by the
Committee. Moreover, in the event the Plan does not include a provision
required by Rule 16b-3 to be stated therein, such provision (other than
one relating to eligibility requirements, or the price and amount of
awards) shall be deemed automatically to be incorporated by reference
into the Plan insofar as Participants who are Section 16 Persons are
concerned.
1.3 Effectiveness of the Plan. The Plan will be effective upon the
consummation of the Merger, subject to prior approval of the Plan by the
Company's shareholders. The Plan will remain in effect until the
earlier of the termination date set forth in Section 11.2 hereof or such
time as it is amended or terminated by the Board of Directors of the
Company in accordance with the terms of Section 11.2 hereof, except that
no Incentive Stock Option may be granted under the Plan on or after ten
years from the effective date of the Plan.
SECTION II
Definitions
Unless the context indicates otherwise, the following terms have the meanings
set forth below.
2.1 "Act" means the Securities and Exchange Act of 1934, as amended.
2.2 "Award" means Options, Performance Awards, or cash granted pursuant to
the Plan.
2.3 "Board" means the Board of Directors of the Company.
2.4 "Cause" means, with respect to any certain Participant:
(a) The willful and continued failure by such Participant to
substantially perform his or her duties with respect to the Company
(other than any such failure resulting from his or her incapacity
due to physical or mental illness), or
(b) the willful engaging by such Participant in conduct which is demon
demonstrably and materially injurious to the Company, monetarily or
otherwise. For purposes of this definition, no act, or failure to
act shall be deemed "willful" if done or omitted to be done by the
Participant in good faith and in the reasonable belief that such
act or omission was in the best interest of the Company.
2.5 "Change in Control" means the occurrence of any of the following events:
(a) any "person" or "group" (as those terms are used in Sections 13(d)
and 14(d) of the Act) other than an Exempt Person becomes the
"beneficial owner" (as such term is defined in Rule 13d-3
promulgated under the Act) (a "Beneficial Owner"), directly or
indirectly, of securities of the Company representing 20% or more
of the combined voting power of the Company's then outstanding
voting securities;
(b) the Company's shareholders approve a merger or consolidation of the
Company with any other Person (other than a merger or consolidation
which would result in all or a portion of the voting securities of
the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 50% of
the combined voting power of the voting securities of the Company
or such surviving entity outstanding immediately after such merger
or consolidation) or the shareholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale
or disposition by the Company of all or substantially all the
Company's assets;
(c) during any period of two consecutive years, individuals who were
members of the Board at the beginning of such period (together with
any individuals who became members of the Board after the beginning
of such period whose election to the Board or whose nomination for
election by the shareholders of the Company was approved by a vote
of at least a majority of the directors then still in office who
were either members of the Board at the beginning of such period or
whose election as a member of the Board was previously so approved)
for any reason cease to constitute a majority of the Board then in
office; or
(d) any other events determined by the Committee to constitute a Change
in Control.
2.6 "Code" means the Internal Revenue Code of 1986, as amended.
2.7 "Committee" means the Compensation Committee of the Board.
2.8 "Common Shares" means the common shares, no par value per share, of the
Company, or any other class of capital shares which the Company may
authorize and issue from time to time, and as may be made subject to
this Plan in the sole discretion of the Board.
2.9 "Company" means collectively The Andersons Management Corp. (whose
corporate name from and after the effective date of the Merger shall be
"The Andersons, Inc."), any successor entity in a merger or
consolidation, and any of its Subsidiaries, which elects to participate
in the Plan with the approval of the Board.
2.10 "Disability" means permanent and total disability as defined under
Section 22(e)(3) of the Code.
2.11 "Exempt Person" shall mean (i) any Person that is a holder of Common
Shares immediately after giving effect to the Merger; (ii) to the extent
a Person described in (i) above is an individual, such Person's spouse,
descendants (including descendants by adoption), spouses of descendants,
trustee of trusts established for the benefit of such Person, spouses
and/or descendants (acting in their capacity as trustees of such
trusts), and executors of estates of such Person, spouses and/or
descendants (acting in their capacity as executors of such estates);
(iii) any Person of which Persons described in (i) and/or (ii) above
(a) own more than eighty percent (80%) of the voting shares or other
voting interests thereof and (b) of which Persons described in (i)
and/or (ii) above own shares or other interests representing more than
eighty percent (80%) of the total value of the shares or other interests
of such Person; (iv) each Participant; (v) each employee benefit plan of
the Company and (vi) any Person organized, appointed or established
pursuant to the terms of any such benefit plan described in (v) above.
For purposes of this definition, "spouses" shall include widows and
widowers until first remarried and "descendants" shall include
descendants by adoption.
2.12 "Fair Market Value" as of a certain date means the fair market value of
the Common Shares as determined by the Committee in its sole discretion.
In making such determination, the Committee may use any of the
reasonable valuation methods defined in Treasury Regulation Section
1.421-7(e)(2).
2.13 "Grant Date" as used with respect to Options, means the date as of which
such Options are granted by the Committee pursuant to the Plan.
2.14 "Incentive Stock Option" or "ISO" means an Option conforming to the
requirements of Section 422 of the Code.
2.15 "Long-Term Compensation" means an annual compensation amount determined
by the Committee for each Participant and delivered in the form of
Options, Performance Awards and/or cash at the discretion of the
Committee.
2.16 "Merger" means the merger of The Andersons, an Ohio limited partnership,
with and into the Company.
2.17 "Nonqualified Stock Option" or "NQO" means an Option granted pursuant to
the Plan other than an Incentive Stock Option.
2.18 "Non-Employee Director" means any individual who is a member of the
Board and who is not a regular full time or part time employee of the
Company.
2.19 "Option" means an option to purchase Common Shares granted by the
Committee pursuant to the Plan, which may be designated as either an
"Incentive Stock Option" or a "Nonqualified Stock Option."
2.20 "Participant" has the meaning set forth in Section V hereof.
2.21 "Performance Goals" means specific, objective financial performance
measures set by the Committee with respect to an individual Participant
or group of Participants.
2.22 "Person" means an individual, a partnership, a limited liability
company, a corporation, an association, a joint stock company, a trust,
an unincorporated organization and any other entity or group.
2.23 "Plan" means The Andersons, Inc. Long-Term Performance Compensation Plan
as set forth herein and as may be amended from time to time, subject to
Section 11.1 hereof.
2.24 "Retirement" means a Participant's voluntarily leaving the employment of
the Company after his or her Early Retirement Date as defined in the
Company's Retirement Plan, or any predecessor plan, under which the
Participant has a vested right to an accrued benefit or any other
voluntary termination of a Participant's employment with the approval of
the Committee.
2.25 "Subsidiary" means a subsidiary corporation as defined in Section 424(f)
of the Code.
2.26 "Target Performance Award" means a portion of a Participant's Long-Term
Compensation, as determined by the Committee, expressed as a specific
dollar amount or as a number of Common Shares based upon the Fair Market
Value of the Common Shares on the first day of the Performance Period.
SECTION III
Administration of the Plan
3.1 The Committee. The Plan shall be administered by the Committee. The
members of the Committee shall be appointed from time to time by, and
shall serve at the discretion of, the Board of Directors. At all times
during which the Company has a class of securities registered under
Section 12 of the Act, the Committee shall consist of not less than
three Non-Employee Directors and the Committee shall be comprised solely
of Non-Employee Directors who are both "disinterested persons" under
Rule 16b-3 promulgated under the Act and "outside directors" within the
meaning of Code Section 162(m).
3.2 Authority of the Committee. The Committee shall have all powers and
discretion necessary or appropriate to administer the Plan and to
control its operation, including, but not limited to, the power (a) to
determine which employees shall be granted Awards, (b) to prescribe the
terms, conditions and vesting schedule, if any, of such Awards, (c) to
determine the amount and form of Awards granted to Participants, (d) to
interpret the Plan and the Awards, (e) to adopt rules for the
administration, interpretation and application of the Plan as are
consistent therewith, and (f) to interpret, amend or revoke any such
rules subject to Section 11.1 hereof.
The Committee, in its sole discretion and on such terms and conditions
as it may provide, may delegate its duties in order to provide for the
day-to-day administration of the Plan. The Committee shall control the
general administration of the Plan with all powers necessary to enable
it to carry out its duties in that respect; provided, however, that the
Committee may not delegate its authority and powers (a) with respect to
Section 16 Persons, (b) in any way which would jeopardize the Plan's
qualification under Rule 16b-3, or (c) in any way which is impermissible
under Code Section 162(m) or the rules and regulations promulgated
thereunder.
3.3 Decisions Binding. All determinations and decisions made by the
Committee shall be final, conclusive, and binding on all Persons, and
shall be given the maximum deference permitted by law.
SECTION IV
Shares Subject to the Plan
4.1 Shares Subject to Plan. The Company shall reserve 500,000 Common Shares
(the "Plan Shares") for issuance under this Plan, subject to adjustment
pursuant to Section 4.2 hereof. Plan Shares may be Common Shares now or
hereafter authorized yet unissued or Common Shares already authorized,
issued and owned or purchased by the Company. If and to the extent that
any rights with respect to Plan Shares shall not be exercised by any
Participant for any reason or if such rights shall terminate as provided
herein, Plan Shares that have not been allocated to such Participant
under the Plan shall again become available for allocation to
Participants as provided herein.
4.2 Change in Capitalization. In the event of a change in the
capitalization of the Company due to a share split, share dividend,
recapitalization, merger, consolidation, combination, or similar event
or as the Committee shall in its sole discretion deem appropriate, the
aggregate number of Plan Shares and the terms of any existing Awards
shall be adjusted by the Committee to reflect such change.
SECTION V
Eligibility
The Committee shall, in its sole discretion, select regular full time or part
time employees of the Company for participation in the Plan. Employees so
selected shall be deemed "Participants" for purposes hereof. No member of
the Committee shall be eligible to participate in the Plan other than as
provided in Section VII.
SECTION VI
Stock Options Granted to Employees
6.1 Grant of Options to Employees. Options may be granted to Participants,
subject to the provisions of the Plan, at any time and from time to
time, as determined by the Committee in its sole discretion. The
Committee, in its sole discretion, shall determine the number of Options
granted to each Participant; provided, however, that in any one calendar
year, the Committee shall not grant to any one Participant, Options to
purchase a number of Common Shares in excess of 150,000. The Committee
may grant ISOs, NQOs, or a combination thereof.
6.2 Option Agreement. Each Option shall be evidenced by a written option
agreement (an "Option Agreement") that shall specify the Option price,
the expiration date of the Option, the number of shares to which the
Option pertains, any conditions to exercise of the Option, and such
other terms and conditions as the Committee, in its discretion, shall
determine. The Option Agreement also shall specify whether the Option
is intended to be an ISO or a NQO.
6.3 Option Price. The price for each Common Share deliverable upon the
exercise of an Option (the "Option Price") shall not be less than 100%
of the Fair Market Value of the Company's Common Shares as of the date
the Option is granted; provided, however, that with respect to ISOs, if
at the time that an ISO is granted, the Participant (together with
Persons whose share ownership is attributable to the Participant
pursuant to Section 424(d) of the Code) owns shares possessing more than
10% of the total combined voting power of all classes of the Company's
or any of its Subsidiaries' capital shares, the Option Price of the ISO
shall be not less than one hundred and ten percent (110%) of the Fair
Market Value of a share on the date that the ISO is granted.
6.4 Exercise of Options. Options granted under the Plan shall be
exercisable at such times, and subject to such restrictions and
conditions, as the Committee shall determine in its sole discretion,
except that any outstanding Options at the time of a Change in Control
will be immediately exercisable without regard to any vesting
restrictions attached to such Options. A Person electing to exercise an
Option shall give written notice of such election to the Company in such
form as the Committee may require.
6.5 Expiration of Options. Each Option shall terminate upon the first to
occur of the events listed in this section.
(a) the date for termination of such Option set forth in the Option
Agreement applicable to such Option;
(b) the expiration of ten years from the date such Option was granted;
(c) the expiration of one year from the date of the Optionee's
Termination of Employment for a reason other than the Optionee's
death, Disability or Retirement, or for Cause, it being understood
that the exercise of an Incentive Stock Option at any time after
ninety (90) days from the date of such Termination of Employment
shall result in the loss of favorable tax treatment for the
optionee with respect to such ISO under the Code;
(d) The expiration of one year from the date of the Optionee's death,
Disability or Retirement if such events occur while the Optionee is
in the employ of the Company; or
(e) Termination of employment for Cause.
6.6 Payment. The Option Price upon exercise of any Option shall be payable
to the Company in full in cash. The Committee, in its sole discretion,
also may permit exercise (a) by tendering previously acquired Common
Shares having an aggregate Fair Market Value at the time of exercise
equal to the total Option Price (provided that the Common Shares which
are tendered must have been held by the Participant or his or her
Permitted Transferees for at least six (6) months prior to their tender
to satisfy the Option Price), or (b) by any other means which the
Committee, in its sole discretion determines to both provide legal
consideration for the Common Shares, and to be consistent with the
purposes of the Plan.
As soon as practicable after receipt of a written notification of
exercise and full payment for the Common Shares purchased, the Company
shall deliver to the Participant or his or her Permitted Transferees
certificates (in the Participant's or such Permitted Transferee's name)
representing such Common Shares.
6.7 Nontransferability of Options. Options granted under this Section VI
shall not be transferable other than by will or the laws of descent and
distribution and during the Participant's lifetime shall be exercisable
only by the Participant or by his or her guardian or legal
representative; provided, however, that a Participant may (a) in a
manner specified by the Committee, designate in writing a beneficiary to
exercise his or her Option after the Participant's death, provided that
no such designation shall be effective unless received by the office of
the Company designated for that purpose prior to the Participant's
death, and (b) if the Option Agreement expressly permits, transfer an
Option (other than an Incentive Stock Option) for no consideration to
any (i) member of the Participant's Immediate Family, (ii) trust solely
for the benefit of members of the Participant's Immediate Family or
(iii) partnership whose only partners are members of the Participant's
Immediate Family. Each transferee in a transfer or designation
described in clauses (a) and (b) above is referred to with respect to a
certain Participant as such Participant's "Permitted Transferee." Each
Permitted Transferee shall remain subject to all of the terms and
conditions applicable to such Option prior to such transfer. For
purposes of this Section VI, the term, "Immediate Family" means a
Participant's spouse and lineal ascendants and descendants, and adopted
children.
6.8 Certain Additional Provisions for Incentive Stock Options.
(a) The aggregate Fair Market Value (determined at the time the Option
is granted) of the Common Shares with respect to which ISOs are
exercisable for the first time by any Participant during any
calendar year shall not exceed $100,000.
(b) ISOs may be granted only to persons who are employees of the
Company at the time of grant.
(c) No ISO may be exercised after the expiration of ten years from the
date such ISO was granted; provided, however, that if the ISO is
granted to a Participant who, together with Persons whose stock
ownership is attributed to the Participant pursuant to Section
424(d) of the Code, owns shares possessing more than 10% of the
total combined voting power of all classes of the Company's or any
of its Subsidiaries' capital shares, the ISO may not be exercised
after the expiration of five years from the date that it was
granted.
SECTION VII
Stock Options Granted to Non-Employee Directors
7.1 Initial Grant of Options to Non-Employee Directors; Continuing
Eligibility. On the later of the effective date of the Plan or the
date on which such person first becomes a member of the Board, whether
through election by the shareholders of the Company or appointment by
the Board to fill a vacancy, each Non-Employee Director shall
automatically be granted an NQO to purchase 1,000 Common Shares (the
"Initial Grant"). In addition to the Initial Grant, each Non-Employee
Director who assumes office during a calendar year with respect to which
Options would otherwise be granted to such Non-Employee Director
pursuant to Section 7.2 below had such Non-Employee Director been a
director for the entire calendar year, such Non-Employee Director shall
be granted an Option to purchase a number of Common Shares equal to that
which is to be granted to Non-Employee Directors who serve for the
entirety of such calendar year pursuant to Section 7.2 below, prorated
to reflect the number of days such Non-Employee Director serves as a
member of the Board during such calendar year. No Options shall be
granted to any Non-Employee Director who is not still in office at the
time of such grant.
7.2 Option Formula. In addition to the Initial Grant, an Option (an "Annual
Option") will be granted each year to each Non-Employee Director in
respect of each fiscal year of the Company beginning with the fiscal
year ending December 31, 1996 during which such Non-Employee Director
serves as a member of the Board. The number of Common Shares subject to
each Annual Option shall be based on the Company's return on equity
("Return On Equity") for the fiscal year with respect to which the
Annual Option is granted and shall be determined according to the
following schedule:
Return On Equity Common Shares Subject to Annual Option
0% to 9.99% 0
10% to 17.49% 500
17.50% to 24.99% 750
25% and above 1,000
Return On Equity shall be calculated according to the following formula:
Net Income Before Taxes
Return On Equity = ------------------------------------
Weighted Average Shareholders Equity
Net Income Before Taxes is equal to income before income taxes as
reported on the Company's audited consolidated income statement for the
fiscal year ended December 31 of the year in respect of which Options
are to be granted; and Weighted Average Shareholders Equity is equal to
the sum of the Company's shareholders equity including retained earnings
as of December 31 of the year in respect of which Options are to be
granted plus shareholders equity including retained earnings as of
December 31 of the prior year, the total then divided by two.
Annual Options shall be granted on or about March 15 of the year
following the fiscal year in respect of which such Annual Option is
being granted to all eligible Non-Employee Directors still serving as
members of the Board on such date.
7.3 Option Price. The price for each Common Share deliverable upon the
exercise of an Option granted to a Non-Employee Director (the "Non-
Employee Director Option Price") shall be 100% of the Fair Market Value
of the Common Shares on the date such Option is granted.
7.4 Terms of Options. Options granted to Non-Employee Directors have a term
of five years. Each Option shall be evidenced by an option agreement (a
"Non-Employee Director Option Agreement") between the Company and the
Non-Employee Director to whom such Option is granted.
7.5 Vesting; Exercise of Options. No Option granted to Non-Employee
Directors shall be exercisable prior to the first anniversary of the
grant of such Option other than as set forth below. Each such Option
shall vest and become exercisable on the first anniversary of the grant
of such Option so long as the Non-Employee Director to whom such Option
has been granted is still a member of the Board. In the event such Non-
Employee Director has resigned as a director of the Company or been
removed at a special meeting of the Company's shareholders prior to the
end of such Non-Employee Director's elected term of office, such
unvested Options shall be cancelled and shall never become exercisable.
In the event such Non-Employee Director ceases to be a member of the
Board for any reason other than such Non-Employee Director's resignation
or removal at a special meeting of the Company's shareholders, including
by reason of such Non-Employee Director's death, Disability or failure
to stand for reelection to the Board, such Option shall vest and become
immediately exercisable upon such Non-Employee Director's ceasing to be
a member of the Board, and shall remain exercisable only for the one
year period set forth in Section 7.6(b) below.
An Option may be exercised by giving written notice of exercise to the
Company, specifying the number of Common Shares to be purchased and
tendering payment to the Company of the Non-Employee Director Option
Price. Payment for shares issued upon exercise of an Option may be made
by tendering cash or previously acquired Common Shares having an
aggregate Fair Market Value at the time of exercise equal to the total
Option Price or a combination thereof. Options may not be exercised
with respect to a fractional number of Common Shares.
7.6 Expiration of Options. Each Option granted to a Non-Employee Director
shall terminate upon the first to occur of the events listed below:
(a) The expiration of five years from the date the Option was granted;
(b) If a Non-Employee Director ceases to serve as a director of the
Company, the expiration of one year after the date he or she ceases
to be a director.
(c) If the Board (excluding the Non-Employee Director accused of such
misconduct) determines that a Non-Employee Director has not acted
in good faith or in a manner he or she reasonably believed to be in
or not opposed to the best interests of the Company; or, with
respect to any criminal action or proceeding, determines a Non-
Employee Director had reasonable cause to believe his or her
conduct was unlawful.
7.7 Nontransferability of Options. Options granted under this Section VII
shall not be transferable other than by will or the laws of descent and
distribution and during the Non-Employee Director's lifetime shall be
exercisable only by the Non-Employee Director or by his or her guardian
or legal representative; provided, however, that a Non-Employee Director
may (a) in a manner specified by the Committee, designate in writing a
beneficiary to exercise his or her Option after his or her death,
provided that no such designation shall be effective unless received by
the office of the Company designated for that purpose prior to the Non-
Employee Director's death, and (b) if the Non-Employee Director Option
Agreement expressly permits, transfer an Option for no consideration to
any (i) member of the Non-Employee Director's Immediate Family, (ii)
trust solely for the benefit of members of the Non-Employee Director's
Immediate Family or (iii) partnership whose only partners are members of
the Non-Employee Director's Immediate Family. Each transferee in a
transfer or designation described in clauses (a) and (b) above is
referred to with respect to a certain Non-Employee Director as such Non-
Employee Director's "Permitted Transferee." Each Permitted Transferee
shall remain subject to all of the terms and conditions applicable to
such Option prior to such permitted transfer. For purposes of this
Section VII, the term, "Immediate Family" means a Non-Employee
Director's spouse and lineal ascendants and descendants, and adopted
children.
7.8 Other Provisions. The Non-Employee Director's Option Agreement may
contain such other terms, provisions and conditions not inconsistent
with the Plan as may be determined by the Board.
SECTION VIII
Performance Award
8.1 Establishing Target Performance Awards. The Committee may, at any time
and from time to time, grant awards of Common Shares, cash, or both
("Performance Awards"), to Participants on a contingency basis. The
Committee shall have complete discretion in determining the size and
composition of Performance Awards to be granted to a Participant or
group of Participants and the appropriate period over which performance
is to be measured ("Performance Period"). Prior to each Performance
Period, the Committee shall determine (a) the Target Performance Award
available for each Participant or group of Participants, (b) specific
Performance Goals to be achieved during the Performance Period, and (c)
the percentage of Performance Awards to be paid in relation to various
Performance Goals achieved during the Performance Period.
8.2 Must Achieve Threshold Performance. No individual Performance Awards
will be paid under the Plan with respect to any Performance Period
unless the Company as a whole achieves a threshold level of performance
during such Performance Period, as specified by the Committee.
8.3 Payment of Earned Performance Awards. Performance Awards earned under
the Plan will be delivered to Participants in the form of Common Shares
or cash at the discretion of the Committee. Where the Performance Award
is expressed as a specific dollar amount, Performance Awards will be
converted to Common Shares based upon the Fair Market Value of the
Common Shares on the date the Performance Award is to be delivered to
such Participant. All portions of Performance Awards earned will be
paid to Participants within 60 days following the conclusion of the
Performance Period.
8.4 Vesting of Performance Awards. Except as set forth in Section 8.6,
Participants in the Plan have no vested rights to Performance Awards
earned under the Plan until the end of the Performance Period. In order
to be eligible to receive a Performance Award, a Participant: (i) must
be actively employed by the Company as of the end of the Performance
Period, (ii) must have terminated employment during the Performance
Period due to death, Retirement, or Disability while an active
Participant, or (iii) must have been an active Participant at the time
of a Change in Control. Exceptions to the conditions set forth in
clauses (i) and (ii) above may be made in the sole discretion of the
Committee.
8.5 Effect of Retirement, Death, or Disability. Participants whose active
employment is terminated by reason of death, Retirement, or Disability
during any Performance Period will receive prorated Performance Awards
earned with respect to such Performance Period proportionate to the
number of days they were actively employed by the Company during any
such Performance Period.
8.6 Effect of Change of Control. In the event of a Change of Control, each
Participant who has theretofore been granted a Performance Award shall
receive, within 60 days of such Change in Control, a prorated amount of
such Participant's total Performance Award, proportionate to the number
of days such Participant was actively employed by the Company during the
applicable Performance Period prior to such Change in Control, provided
such Participant has met his or her Performance Goal applicable to such
Performance Period and the Company as a whole has met its threshold
level of performance pursuant to Section 8.2 applicable to such
Performance Period, each as adjusted on a pro forma basis to reflect the
length of the Performance Period as shortened by such Change in Control.
Nothing in this Section 8.6 shall be construed as limiting a
Participant's opportunity to earn the remainder of his or her
Performance Award for such Performance Period if the Company continues
to maintain the Plan after such Change in Control, or to earn additional
Performance Awards in the event the Company institutes a new performance
plan after such Change in Control.
8.7 Effect of Position Changes. Any Participant whose Performance Goals are
adjusted in connection with a reclassification or change in such
Participant's employment status within the Company (i.e., a promotion or
transfer) will be entitled to receive a prorated amount of his or her
total Performance Award to the extent earned, based on the number of
days served in such Participant's position prior to such
reclassification or change.
8.8 Mid-hires or Transfers. An employee of the Company who becomes a
Participant on or before June 30 of any calendar year will be eligible
to participate in the Plan effective with the Performance Period
beginning immediately prior to the date such employee becomes an active
Participant. Such Participant's award will be prorated to reflect the
number of days of active employment during the initial Performance
Period. Employees hired after June 30 of any year will not be eligible
to participate in the Plan until the commencement of the next
Performance Period immediately following the date such employee begins
employment with the Company.
SECTION IX
No Right to Continued Employment
Participation in the Plan shall confer no rights to continued employment with
the Company, nor shall it restrict the rights of the Company to terminate a
Participant's employment relationship at any time for cause or without cause.
SECTION X
Withholding Taxes
As a condition of delivery of cash or Common Shares upon exercise of an
Option or payment of a Performance Award, the Company shall be entitled to
require that the Participant and/or his or her Permitted Transferees (without
regard to whether the Participant has transferred the Award in accordance
with the Plan or otherwise) satisfy federal, state and local tax withholding
requirements as follows:
(a) Cash Remittance. Whenever Common Shares are to be issued upon the
exercise of an Option or payment of Award, the Company shall have
the right to require the Participant and/or his or her Permitted
Transferees to remit to the Company in cash an amount sufficient to
satisfy federal, state and local withholding tax requirements, if
any, attributable to such exercise or payment, prior to the
delivery of any certificate or certificates for such shares. In
addition, the Company shall have the right to withhold from any
cash payment required to be made pursuant thereto an amount
sufficient to satisfy the federal, state and local withholding tax
requirements.
(b) Share Withholding or Remittance. In lieu of the remittance
required by Section X(a) hereof or, if greater, the Participant's
estimated federal, state and local tax obligations associated with
an Award hereunder, a Participant who is granted an Award may, to
the extent approved by the Committee, irrevocably elect by written
notice to the Company at the office of the Company designated for
that purpose, to (i) have the Company withhold Common Shares from
any Award hereunder or (ii) deliver other previously owned Common
Shares, the Fair Market Value of which as of the date on which any
such tax is determined shall be equal to the amount to be withheld,
if any, rounded down to the nearest whole share attributable to
such exercise, occurrence or grant; provided, however, that no
election to have Common Shares withheld from any Award shall be
effective with respect to an Award which was transferred by such
Participant to a Permitted Transferee or otherwise.
(c) Participants Subject to Section 16(b). Notwithstanding any other
provision herein, a share withholding election in connection with
the exercise of an Option may be made by a Participant who is
subject to Section 16(b) of the Act subject to the following
additional restrictions: (1) it may not be made within six months
after the grant of such Option (except in the case of the Death or
Disability of the Participant) and (2) it must be made either (a)
six months or more prior to the date as of which the amount of tax
to be withheld is determined (the "Tax Date"), or (b) within a ten
day "window period" preceding the Tax Date beginning on the third
business day following the release of the Company's quarterly or
annual summary statement of sales and earnings.
SECTION XI
Amendment or Termination of the Plan
11.1 Amendment. The Board may, from time to time but not more often than
once every six months (other than to comport with changes in the Code,
the Employee Retirement Income Security Act of 1974 or the rules and
regulations promulgated thereunder), amend, modify or suspend the Plan,
but no such amendment, modification or suspension without the approval
of the shareholders shall:
(a) increase the maximum number (determined as provided in the Plan) of
Plan Shares, other than as provided in Section 4.2 hereof; or
(b) materially increase the benefits accruing to Participants under the
Plan, or materially modify the requirements as to eligibility for
participation in the Plan.
The Committee shall be authorized to make minor or administrative
modifications to the Plan as well as modifications to the Plan that may be
dictated by requirements of federal or state laws applicable to the Company
or that may be authorized or made desirable by such laws.
11.2 Termination. The Plan shall terminate on the tenth anniversary of the
effective date of the Plan; provided, however, that the Plan shall be
subject to termination prior to such anniversary on the date set forth
in a resolution of the Board terminating the Plan. No termination of
the Plan shall materially alter or impair the right of any Participant
to receive Awards previously granted hereunder without such
Participant's consent. In the event of a termination of the Plan, (i)
each Participant who has theretofore been granted a Performance Award
shall be entitled to receive, within 60 days of such termination, a
prorated amount of such Participant's total Performance Award,
proportionate to the number of days such Participant was actively
employed by the Company during the applicable Performance Period prior
to such termination, provided such Participant has met his or her
Performance Goal applicable to such Performance Period and the Company
as a whole has met its threshold level of performance pursuant to
Section 8.2 applicable to such Performance Period, each as adjusted on a
pro forma basis to reflect the length of such Performance Period as
shortened by such termination and (ii) all Options granted hereunder
shall continue to be valid and binding obligations of the Company going
forward on the same terms and conditions as set forth herein and in the
applicable Option Agreements.
In the event of a reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation, distribution of
assets, or any other change in the corporate structure or shares of the
Company, the Committee shall make such adjustment as it deems
appropriate in the number and kind of Plan Shares, and in the exercise
price of outstanding Options. In the event of any merger, consolidation
or other reorganization in which the Company is not the surviving or
continuing corporation or in which a Change in Control is to occur, all
of the Company's obligations regarding Options and Performance Awards
that were granted hereunder and that are outstanding on the date of such
event shall, on such terms as may be approved by the Committee prior to
such event, be assumed by the surviving or continuing corporation or
cancelled in exchange for property (including cash) in amounts
determined by the Committee.
[The Andersons Letterhead]
February 26, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: The Andersons, Inc.
Registration Statement on Form S-8
Ladies and Gentlemen:
I am general counsel to The Andersons, Inc., an Ohio
corporation (the "Corporation"), and have advised the Corporation in
connection with the proposed registration by the Corporation of 500,000 of its
common shares, no par value (the "Shares"), pursuant to a Registration
Statement on Form S-8, filed with the Securities and Exchange Commission (the
"Commission") on February 26, 1996 under the Securities Act of 1933, as
amended (the "Act") (such Registration Statement, as amended or supplemented,
is hereinafter referred to as the "Registration Statement"). The Shares are
to be issued and sold by the Corporation to certain employees of the
Corporation pursuant to The Andersons, Inc. Long Term Performance Compensation
Plan (the "Plan").
For purposes of the opinions contained in this letter, I have
examined and relied upon such corporate proceedings, documents, records and
matters of law as I have deemed necessary or appropriate for the expression of
the opinions cont ained herein. In addition, for purposes hereof, I have
assumed with your permission and without independent investigation that all
factual information supplied to me for the purpose hereof is complete and
accurate and that no changes will be made in the definitive form of the
documents I have reviewed in draft form which would impact my opinions.
Based upon and subject to the foregoing, I hereby advise you
that in my opinion:
1. The Corporation is a corporation validly existing and in good
standing under the General Corporation Law of the State of
Ohio.
2. The Shares are duly authorized, and, when (i) the Registration
Statement becomes effective under the Act and (ii) the Shares
have been duly executed and delivered on behalf of the
Corporation and issued in accordance with the terms of the
Plan upon receipt of the consideration to be paid therefor,
the Shares will be validly issued, fully paid and
nonassessable.
I am qualified to practice law in the State of Ohio and do not
herein express any opinion as to any laws other than the laws of the State of
Ohio, as such laws are constituted on the date of this opinion.
I do not find it necessary for the purposes of this opinion,
and accordingly I do not purport to cover herein, the application of the
securities or "Blue Sky" laws of the various states to the issuance and sale of
the Shares.
I hereby consent to the filing of this letter as an exhibit to
the Registration Statement. In giving this consent, I do not admit that I come
within the category of persons whose consent is required under Section 7 of the
'33 Act or the rules and regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
\s\Beverly J. McBride
Beverly J. McBride
Exhibit 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration
Statement (Form S-8) pertaining to the Andersons, Inc. Long-Term Performance
Compensation Plan of our reports dated February 6, 1995, with respect to the
financial statements of The Andersons Management Corp. (the Corporation)
and the consolidated financial statements of The Andersons for the year
ended December 31, 1994, included in the Corporation's Registration
Statement (Form S-4) dated October 26, 1995, filed with the Securities
and Exchange Commission.
Ernst & Young LLP
Toledo, Ohio
February 26, 1996
