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THE ANDERSONS, INC.
_________________________
PROSPECTUS
_________________________
$5,000,000 7.7 % Ten-Year Debentures
$5,000,000 7.0 % Five-Year Debentures
SUBJECT TO A $1,000 MINIMUM PRINCIPAL AMOUNT REQUIREMENT
Interest will be payable to the registered holder annually on each
anniversary of the original issue date of a Debenture. Interest will begin to
accrue at the original issue date of a Debenture, which is the first day of the
month following the month in which payment for the Debenture is received by The
Andersons, Inc. The Debenture may be redeemed in whole or in part, without
premium, at any time upon payment of principal and accrued interest. No
sinking fund will be provided for the Debentures which will be unsecured
obligations of the Company. Except for the rate of interest and years to
maturity, the terms and conditions of the Debentures are identical. See
"Description of Debentures."
The Debentures will not be listed on any national securities exchange.
The Company does not expect an over-the-counter market to develop for the
Debentures.
Investors should carefully consider the factors set forth under the
caption "Certain Risk Factors," beginning on page 4 hereof.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
____________________
Underwriting
Price to Discounts Proceeds to Company(1)
Public and Commissions Maximum Minimum
Per Debenture 100% None 100% None
Total $10,000,000 None $10,000,000 None
____________
(1) Before deduction of expenses payable by the Company, estimated at
$29,030.
The Debentures are offered on a continuous basis direct by the Company and
no minimum principal amount of Debentures will be required for the offering to
become effective. No commissions or remuneration will be paid for any selling
activities hereunder. Subscriptions or inquiries should be directed to the
principal administrative offices of The Andersons, Inc., as follows:
THE ANDERSONS, INC.
Assistant Treasurer
480 West Dussel Drive
Maumee, Ohio 43537
(419) 893-5050
The date of this Prospectus is September 29, 1997
TABLE OF CONTENTS
Available Information 2
Incorporation of Certain Information by Reference 3
Prospectus Summary 4
Certain Risk Factors 5
Use of Proceeds 8
Capitalization 9
Legal Matters 9
Description of Debentures 10
Plan of Distribution 12
Legal Matters 12
Experts 12
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). In accordance
therewith, the Company is required to file reports and other information with
the Securities and Exchange Commission (the "SEC"). Reports, proxy statements
and other information filed by the Company as well as the Registration
Statement, including the exhibits thereto, can be inspected and copied at the
public reference facilities maintained by the SEC at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the regional offices of the SEC
at 75 Park Place, New York, New York 10007 and Northwestern Atrium Center, 500
W. Madison Street, Suite 1400, Chicago, Illinois 60661. The SEC also maintains
a Web site that contains reports, proxy and information statements and other
information regarding registrants, like the company, that file electronically
with the SEC (site address http://www.sec.gov).
This Prospectus constitutes part of a registration statement on Form S-2
(the "Registration Statement") filed by the Company with the Securities and
Exchange Commission (the "Commission") under the 1933 Act, as amended (the
"Securities Act"). This Prospectus does not contain all the information set
forth in the Registration Statement. For further information with respect to
the Company and the Debentures, reference is made to the Registration
Statement. This Prospectus incorporates certain information by reference to
the Company's current Annual Report on Form 10-K, Annual Report to Shareholders
and most recent Quarterly Report on Form 10-Q, which will be delivered with
each Prospectus. Prospective investors should refer to such documents for a
complete description of the Company's business, results of operations and
financial condition, as well as other information highly relevant to an
investment in the securities offered hereby. Statements made in this
Prospectus as to the contents of any contract, agreement or other document
referred to are not necessarily complete. With respect to each such contract,
agreement or other document filed as an exhibit to the Registration Statement,
reference is made to the exhibit for a more complete description of the
document or matter involved, and each such statement shall be, deemed qualified
in its entirety by such reference.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the company with the Commission pursuant
to the Exchange Act are incorporated by reference into this Prospectus: (i)
the Company's Annual Report on Form 10-K for the Year ended December 31, 1996
and The Andersons, Inc., 1996 Annual Report to Shareholders; (ii) the Company's
Quarterly Report on Form 10-Q for the Quarter ended March 31, 1997; (iii) the
Company's Quarterly Report on Form 10-Q for the Quarter ended June 30, 1997;
and (iv) the Company's Current Report on Form 8-K dated March 21, 1997.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document which also is 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
Prospectus.
The Company will provide, without charge, to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the oral or written
request of such person, a copy (without exhibits, unless such exhibits are
specifically incorporated by reference into the information that this
Prospectus incorporates) of any and all information that has been incorporated
by reference in this Prospectus. Written or telephone requests for such
information should be directed to The Andersons, Inc., 480 West Dussel Drive,
Maumee, Ohio 43537, Attention: Assistant Corporate Treasurer
(Telephone Number (419)891-6415).
PROSPECTUS SUMMARY
The following is a summary only and should be read in light of the more
detailed financial and other information incorporated by reference into this
prospectus. The Company's current Annual Report on Form 10-K, Annual Report to
Shareholders and most recent Quarterly Report on Form 10-Q will be delivered
with each Prospectus. Except as otherwise indicated, all financial information
is presented on the basis of generally accepted accounting principles.
Prospective investors are urged to read this Prospectus, and the documents
incorporated by reference herein, in its entirety. See "Certain Risk Factors"
for a discussion of certain factors that should be considered by prospective
investors in the Debentures offered hereby.
This Prospectus and all documents incorporated by reference contain
various "forward-looking statements" that reflect the Company's current views
with respect to future events and financial performance. These forward-looking
statements are subject to certain risks and uncertainties, including but not
limited to those identified below, which could cause actual results to differ
materially from historical results or those anticipated. The words "believe,"
"expect," "anticipate" and similar expressions identify forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of their dates. The Company
undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
The following factors could cause actual results to differ materially from
historical results or those anticipated: weather; supply and demand of
commodities including grains, fertilizer and other basic raw materials; market
prices for grains and the potential for increased margin requirements;
regulatory agency review of grain contracts; grain contract default litigation;
competition; economic conditions and competition in its retail stores' markets;
interest rates; and income taxes.
THE COMPANY
The Andersons, Inc. (the "Company") is a diversified company operating in
three segments. The Agriculture Group engages in grain merchandising, the
operation of terminal grain elevator facilities, distribution of agricultural
fertilizer and the operation of retail farm centers. The Retail Group operates
six stores and a distribution center. The Processing and Manufacturing Group
includes production and distribution of lawn fertilizer and corn cob products,
railcar leasing and repair, as well as several smaller businesses. Together
with its predecessor partnerships ("The Andersons"), the Company has been in
existence since 1947 and has offered debentures under similar terms to this
offering for many years. The principal administrative offices of the Company
are located at 480 West Dussel Drive, Maumee, Ohio 43537. The general
telephone number is (419) 893-5050.
THE OFFERING
Securities $5,000,000 principal amount 7.7 % Ten-Year Debentures.
$5,000,000 principal amount 7.0 % Five-Year Debentures.
Offered directly by the Company. Subject to a $1,000
minimum principal amount requirement.
Redemption Redeemable at maturity or at the option of the Company for
principal plus accrued interest.
Use of Proceeds Payment of current maturities of long-term debt, add to
working capital and general corporate purposes.
<TABLE>
<CAPTION>
RATIO OF EARNINGS TO FIXED CHARGES AND SUMMARY FINANCIAL INFORMATION
(In thousands, except for ratio)
<C> <C> <C> <C> <C> <C> <C>
Six Months
Ended June 30 Year Ended December 31
1997 1996 1996 1995 1994 1993 1992
Operating Results
Total sales and
revenue $436,955 $601,942 $1,154,956 $1,097,730 $971,638 $800,345 $771,380
Gross Profit 70,200 81,712 159,231 153,554 149,364 130,253 117,423
Operating,
Administrative
and General
Expense 65,505 66,847 133,637 129,210 125,472 112,768 100,956
Interest Expense 4,412 9,162 13,703 14,019 8,395 6,168 6,325
Income from
continuing
operations (a) 177 2,649 6,406 6,273 9,285 6,986 6,284
Ratio of earnings
to fixed charges 1.05 1.55 1.77 1.63 2.45 2.29 2.14
Balance Sheet Data
Total assets 278,955 361,898 346,591 455,518 344,809 360,586 259,294
Working capital 57,025 62,510 61,649 58,897 57,623 47,795 40,940
Long-term debt 68,419 71,074 68,568 74,139 71,217 52,259 46,077
Owners' equity 71,262 70,130 73,249 67,260 64,870 56,256 51,970
</TABLE>
(a) Includes pro forma income taxes of $3.9 million, $5.9 million, $4.1
million and $3.8 million for 1995, 1994, 1993, and 1992, respectively.
Income taxes for 1996 includes a charge of $812 thousand to establish deferred
income taxes on the assets and liabilities of The Andersons (predecessor
partnership). See Note 1 to the consolidated financial statements of the
Company.
CERTAIN RISK FACTORS
Prospective purchasers should consider carefully, in addition to the other
information contained in this Prospectus, the following factors before
purchasing the Debentures offered hereby.
Seasonality; Weather Conditions
The Company operates in three primary segments; Agriculture, Retail and the
Processing and Manufacturing Group. The Agriculture Group's success is highly
dependent on the weather in the eastern corn belt (Ohio, Michigan, Indiana and
Illinois), primarily during the spring planting season through the summer
(wheat) and fall (corn and soybean) harvests. The Group is a merchandiser of
grain and a supplier of agricultural inputs and services.
The Retail Group's business is also seasonal with a majority of sales
generated in the second and fourth quarters. The Processing and Manufacturing
Group's lawn fertilizer division, which manufactures and distributes lawn
fertilizer for home and professional use, is also seasonal with the majority of
its sales occurring in the first and second quarter. Poor weather conditions
during the spring adversely affect consumer purchases of do-it-yourself lawn
care products.
Agribusiness Industry
The Company hedges its grain inventories and contracts in order to limit its
exposure to changing prices. This hedging program includes the use of
derivative commodity contracts on the Chicago Board of Trade and requires the
Company to maintain significant short-term lines of credit with several banks.
Unfavorable weather conditions, as well as other forces affecting the supply
and demand of grain, expose the Company to liquidity pressures due to rapidly
rising futures market prices. This occurred in 1995 and 1996 and the Company
responded by implementing additional monitoring mechanisms over its hedging
programs, limiting its purchasing programs, implementing measures to limit
margin requirements and arranging for additional lines of credit. Although
the futures market has returned to more normal price levels, the Company
continues to monitor market prices and margin requirements and is prepared to
take steps to limit margin requirements if necessary.
Government Policy
The agribusiness industry is affected from time to time by government
agricultural policies. Government-sponsored price supports and acreage set-
aside programs are two examples of policies that may affect the Company's
business. There can be no assurance that government policies will not change
from time to time in a manner adverse to the Company's business.
In addition, several of the Company's business activities are subject to
stringent U.S. environmental regulations. The Company is also involved in the
manufacture, handling, transportation, storage and disposal of materials that
are or may be classified as hazardous by applicable laws and regulations.
While the Company endeavors to comply in all material respects with applicable
environmental, safety and health regulations, there can be no assurance that
existing environmental regulations will not be revised or that new regulations
will not be adopted or become applicable that may have a material adverse
effect on the Company's business or financial condition.
Grain Purchase Contracts
The Company's grain purchasing program relies on forward purchase contracts
with producers to generate a significant percentage of the bushels it handles.
Forward purchase contracts take many forms and include hybrid cash contracts
(commonly referred to as "Hedged To-Arrive" or "HTA" contracts). These
contracts were developed by grain elevators and merchants in response to
perceived interest by producers in more pricing flexibility and risk management
tools. With the price escalation that occurred in the commodity markets, most
cash contracts held by producers in 1996 were negatively affected. Hybrid cash
contracts, while only a subset of forward purchase contracts used by the
Company and the industry as a whole, have recently received publicity as they
have a higher level of risk and are impacted to a higher degree by futures
price escalation.
Poor crop conditions and exceptionally high market prices in the 1995 and
1996 harvests in the Company's drawing areas resulted in defaults by some
producers on their sale contracts to the Company through non-delivery of grain
and non-payment of related accounts receivable. The Company has established
reserves for producer defaults as it became aware of problems and has worked
with its producers to resolve problem contracts. There are, however, several
cases in litigation and/or arbitration. See "Legal Matters". The Company
continues to monitor current producer contracts for potential defaults and non-
delivery.
The Company is also monitoring industry-wide litigation and public comment by
regulatory agencies on this issue. The Commodity Futures Trading Commission is
investigating industry contracting practices including those of the Company.
See "Legal Matters".
Competition
The markets for the Company's products are highly competitive. In the
agribusiness industry the Company competes with other grain merchandisers,
grain processors and end-users for the purchase of grain, as well as with other
grain merchandisers, private elevator operators and cooperatives for the sale
of grain. While the Company has substantial market share in the eastern corn
belt, many of its competitors are significantly larger and compete in wider
markets. In its fertilizer business, the Company competes with regional
cooperatives, manufacturers, wholesalers and multi-state retail/wholesale chain
store organizations. Many of these competitors also have considerably larger
resources than the Company.
The Company's retail business is highly competitive. The Company competes
with a variety of retailers, primarily mass merchandisers and do-it-yourself
home centers in its three markets. Some of these competitors are larger than
the Company and operate more stores in a wider geographical area.
The Company's processing and manufacturing group competes with other
manufacturers of lawn fertilizer and corn-cob processors. Competition in the
railcar marketing business is with financing organizations, railcar
manufacturers and railroads.
Absence of Public Market for Debentures; Effect of Interest Rate Changes
The Company does not intend to list the Debentures on any national securities
exchange or to seek the admission thereof to trading in the National
Association of Securities Dealers Automated Quotation System. The Company does
not expect any trading market to develop. Accordingly, no assurance can be
given that any market will develop for the Debentures. If a holder of the
Debentures desires to sell, there can be no assurances given that a willing
buyer could be found or at what price they might be sold. In addition,
increases in general interest rates would adversely affect any market that may
develop. See "Description of Debentures".
Subordinated Obligations; Additional Leverage not Restricted
The Company's obligations under the Indenture are subordinate and junior in
right of payment to all senior indebtedness of the Company. The Debentures are
of equal rank with other debenture bonds of the Company due through 2007 at
interest rates ranging from 6.5% to 8.7%. The Indenture does not limit the
Company's ability to incur additional indebtedness or issue other securities
which would be senior to the Debentures. See "Description of Debentures".
Call Feature of the Debentures
The Debentures are redeemable at maturity by the holder for principal plus
accrued interest. The Company has the option to call the Debentures at any
time, paying principal plus interest at the date that they are called, and, in
fact, has done that occasionally. No assurances can be given that the
Debentures will not be called prior to their maturity date. A holder of the
Debentures has no option to require the company to purchase their Debentures.
See "Description of Debentures".
Absence of Debenture Rating
The Debentures have not been rated by an independent rating organization.
The Company has no plans to seek an independent rating at this time.
USE OF PROCEEDS
The offering is not underwritten and no assurance can be given as to the
amount of proceeds that may be realized by the Company from this offering or
when any such proceeds may be received. The net proceeds from the sale of the
Debentures will be used for the payment of current maturities of long-term debt
as scheduled. Following are the current maturities as of August 31, 1997 (in
thousands):
Debenture bonds, 1997-1998, interest rates ranging from 6.5% to 10% $3,152
Note payable, due quarterly with balance due in 2004, interest
rate 7.8% 1,592
Note payable, variable rate (6.7% at June 30, 1997), payable quarterly
with balance due in 2004 1,344
Industrial development revenue bonds:
Due 1999 with annual sinking fund payment, interest rate 6.5% 900
Due 2004 with annual payments, variable rate (5.7% at June 30, 1997) 881
Other 120
Total $7,989
Proceeds received from the sale of Debentures will be used first to retire
the previously issued Debentures maturing in the remainder of 1997. This
represents $.7 million of the $3.1 million noted above. Secondly, proceeds
will be applied to the $0.9 million annual payments due on the industrial
development revenue bonds. The quarterly payments on the notes payable and the
previously issued Debentures maturing in 1998 will be paid from any additional
amounts received.
If less than $8 million of Debentures are sold, the Company expects to fund
its current maturities of long-term debt through cash provided by operations
or, if adequate cash is not generated from operations, through borrowings on
the Company's various lines of credit. The Company has available short-term
lines of credit totaling $250 million used primarily to finance working capital
and a long-term revolving line of credit of $20 million. At August 31, 1997, a
total of $64 million was drawn on the available lines of credit. Any proceeds
in excess of $8 million will be added to working capital. The offering is not
conditioned upon the sale of any minimum amount of Debentures.
CAPITALIZATION
The following table sets forth the consolidated capitalization of the Company
in thousands, as of June 30, 1997. No effect has been given in the table below
to the receipt of any proceeds from the offering described herein, since the
amount of proceeds and when the proceeds will be received is uncertain.
Long-term debt:
Notes payable $ 40,189
Debenture bonds ($2,660 called and retired in August 1997) 17,229
Industrial development revenue bonds 10,570
Other 431
Total long-term debt 68,419
Minority interest 578
Shareholders' equity:
Common shares 84
Additional paid-in capital 66,659
Retained earnings 6,782
Treasury stock (2,263)
Total shareholders' equity 71,262
Total capitalization $140,259
See Notes 5, 6, 8, 9 and 11 to the Consolidated Financial Statements for
additional information as to the lines of credit, long-term debt, owners'
equity, leases and commitments of the Company.
LEGAL MATTERS
The Company, like others in the agriculture industry, utilizes
different types of contracts with producers (including contracts commonly
referred to as "Hedged To-Arrive" or "HTA" contracts) to purchase grain. Some
grain producers have defaulted or threatened default on certain of these
contracts, arguing that their contracts are unenforceable. The Company
believes that this is due, in large part, to unprecedented high grain prices
experienced in 1996 and in some cases, crop shortages due to poor weather in
some of the primary growing areas served by the Company. The Company currently
is engaged in litigation and/or arbitration with several defaulting producers,
including one purported class action filed on May 16, 1996 in the United States
District Court for the Northern District of Illinois, Eastern Division, Case
no. 96C2936, Harter, et. al., v. Iowa Grain Company and The Andersons
Investment Services Corp., d.b.a. The Andersons, Inc., wherein enforceability
of the delivery obligation under certain grain contracts has been raised as an
issue. The Harter lawsuit seeks declaratory and injunctive relief and
compensatory, exemplary and punitive damages of an unspecified amount. The
Court, in Harter, ordered arbitration by the National Grain and Feed
Association and dismissed Iowa Grain Company as a defendant. The Company
currently has several arbitration cases before the National Grain and Feed
Association. The Company has also received several favorable rulings in the
arbitration proceedings. The Company believes its grain contracts are
enforceable obligations and intends to enforce them. Although no assurance can
be given that the current litigation and arbitration will not result in
liability or loss, the Company continues to believe that it has valid claims
and defenses in the lawsuits and proceedings in which it is involved.
Pursuant to subpoenas duces tecum served by the Commodities Futures
Trading Commission (the "CFTC"), the Company has produced certain records,
including names and phone numbers of certain customers, and the depositions of
certain employees and former employees have been taken in the matter of
"Certain Transactions and Practices Among Grain Elevators, et. al., Involving
Futures Contracts."
In light of the Company's current and prior use of Hedged To-Arrive contracts,
related industry-wide litigation, and current conditions of the industry as a
whole, there can be no assurance that other litigation will not be brought,
that a class will not be certified or that other CFTC proceedings will not be
instituted. There currently is no reasonable basis to predict the amount of
future liability or loss, if any, that may arise from such litigation or CFTC
proceedings.
DESCRIPTION OF DEBENTURES
The Debentures offered hereby are to be issued under an Indenture, dated as
of October 1, 1985, as supplemented by a Fifteenth Supplemental Indenture,
dated as of January 2, 1996, between the Company (previous Supplemental
Indentures were with the Partnership) and Fifth Third Bank, as Trustee (the
"Trustee"). Under the Fifteenth Supplemental Indenture the current successor
Company assumed all Partnership obligations under the Indenture, including
the payment of principal and interest on the previously issued debentures.
Except for the rate of interest and years to maturity, the terms and conditions
of the Debentures, including all debentures previously issued under the
Indenture, are identical. The following summaries of certain provisions of the
Indenture are not complete definitions and are subject to and qualified by
reference to all the provisions of and definitions in the Indenture, a copy of
which is filed as an exhibit to the Registration Statement. Wherever
particular Sections or defined terms of the Indenture are referred to, it is
intended that such Sections or defined terms shall be incorporated herein by
reference.
General
The Debentures are not limited in principal amount by the Indenture either in
the aggregate or as to any series. The Debentures will be unsecured direct
obligations of the Company and any successor entities. In this connection, the
Indenture provides that the Company shall not consolidate with or merge into
any other corporation or convey or transfer its properties and assets
substantially as an entirety to any corporation or other entity or person,
unless the successor expressly assumes, by a supplemental indenture, the due
and punctual payment of the principal of, and interest on, all outstanding
debentures issued under the Indenture, including the Debentures. Due and
punctual payments of principal and interest were assumed by the Company on all
of the outstanding debentures of the Partnership as part of the Fifteenth
Supplemental Indenture and the merger.
Although it has no present plans, understandings or arrangements, the Company
may in the future, in order to meet capital requirements, issue unsecured debt,
which by its terms would be senior to the Debentures. Upon any insolvency or
bankruptcy proceedings, or any other receivership, liquidation, reorganization
or similar proceedings, the holders of any such senior debt, or of any secured
debt of the Company would be entitled to receive payment in full before the
holders of the Debentures are entitled to receive any payment of principal or
interest on the Debentures. The Indenture contains no restriction against the
issuance by the Company of additional indebtedness, including unsecured debt
senior to the Debentures, or secured debt. The Debentures are of equal rank
with other debenture bonds of the Company due through 2006 at interest rates
ranging from 6.5% to 8.7%. See Note 6 of the Notes to the Consolidated
Financial Statements with respect to the Company's secured borrowings.
The Indenture contains no minimum working capital, current ratio or other
such requirements, or any protective provisions in the event of a highly
leveraged transaction. No such transactions are contemplated.
The Debentures will be issued as of the first of the month next following the
month in which payment for the Debentures is received by the Company. The
Debentures offered hereby will be due five years or ten years from their
Original Issue Date, subject to the right of the Company to redeem the
Debentures at any time by payment of the principal amount plus accrued interest
to the date of redemption (Section 1101) and will bear interest at the rate per
annum shown on the front cover of this Prospectus, payable annually, commencing
one year from their Original Issue Date, to the holder of record at the close
of business on the fifteenth day next preceding the Interest Payment Date.
(Section 301.) Principal and interest will be payable, and the Debentures will
be transferable, at the office of the Trustee, Corporate Trust Services, Mail
Drop 1090D2, 38 Fountain Square Plaza, Cincinnati, Ohio, 45263, provided that
any payment of interest or principal may be made at the option of the Company
by check mailed to the address of the person entitled thereto as it appears on
the Debenture Register. (Sections 301 and 307.)
The Debentures will be issued only in fully registered form without coupons
in denominations of $1,000 or any multiple thereof. (Section 302.) No service
charge will be made for any transfer or exchange of Debentures, but the Company
may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. (Section 305.) The debentures do not
carry a CUSIP number.
Debentures may be issued in series from time to time upon the written order
of the Company in such aggregate principal amount as is authorized by the Board
of Directors of the Company. (Section 311.) The Debentures do not provide for
any sinking fund.
Modification and Waiver
Modification and amendment of the Indenture may be made by the Company and
the Trustee with the consent of the holders of 66 2/3% in principal amount of
the outstanding Debentures, and, in case one or more but less than all the
series of Debentures issued under the Indenture are so affected, of at least 66
2/3% in principal amount of the Debentures of each series affected thereby
consenting as a separate class. No such modification or amendment may, without
the consent of the holder of each Debenture affected thereby, (a) change
the stated maturity date of the principal of, or any installment of interest
on, any Debenture; (b) reduce the principal amount of, or the interest on, any
Debenture; (c) change the place or currency of payment of principal or interest
on any Debenture; (d) impair the right to institute suit for the enforcement of
any payment on or with respect to any Debenture; (e) reduce the above-stated
percentage of holders of Debentures necessary to modify or amend the Indenture;
or (f) modify the foregoing requirements or reduce the percentage of
outstanding Debentures necessary to waive any past default to less than a
majority. The holders of 66 2/3% in principal amount of the outstanding
Debentures may waive compliance by the Company with certain restrictions.
(Sections 902 and 1006.)
Events of Default
The following will be events of default: (a) failure to pay principal when
due; (b) failure to pay any interest when due, continued for 30 days; (c)
failure to perform any other covenant of the Company, continued for 60 days
after written notice; and (d) certain events in bankruptcy, insolvency or
reorganization. The Trustee may withhold notice to the holders of Debentures
of any default (except in the payment of principal or interest) on the
Debentures if it considers such withholding to be in the interests of the
holders. (Section 501 and 602.)
If a default shall happen and be continuing, either the Trustee or the
holders of at least 25% in principal amount of the Debentures may accelerate
the maturity of all outstanding Debentures, and prior to acceleration of
maturity of the Debentures, the holders of a majority in principal amount may
waive any past interest. The holders of a majority in principal amount of the
outstanding Debentures may waive a default resulting in acceleration of the
Debentures, but only if all defaults have been remedied and all payments due
(other than by acceleration) have been made. (Sections 502 and 513.)
Each holder of a Debenture has the unconditional right to receive the payment
of principal and interest when due and to institute suit for the enforcement of
such payment. (Section 508.)
The Trustee
Subject to provisions relating to its duties in the case of default, the
Trustee is under no obligation to exercise any of its rights or powers under
the Indenture at the request, order or direction of any holders, unless such
holders have offered to the Trustee reasonable indemnity. (Section 603.)
Subject to such provisions for indemnification, the holders of a majority in
principal amount of the outstanding Debentures will be entitled to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or of exercising any trust or power conferred upon the Trustee.
(Section 512.)
The Company is required to furnish to the Trustee annually a statement as to
performance or fulfillment of covenants, agreements or conditions in the
Indenture and as to the absence of default. (Section 1004.)
PLAN OF DISTRIBUTION
This offering of Debentures is not underwritten. There can be no assurance
that any minimum amount of Debentures will be sold pursuant to the offering
contemplated hereby. The Debentures are being sold by the Company for its own
account and no commissions or remuneration will be paid for any selling
activities in connection with the sale of the Debentures contemplated hereby.
LEGAL MATTERS
The legality of the Debentures offered hereby and matters with respect to
Ohio law have been passed on by Beverly J. McBride, Esq., Vice President,
General Counsel and Secretary of the Company. Beverly J. McBride holds 39,099
common shares of the Company as well as options to purchase an additional 6,260
common shares.
EXPERTS
The consolidated financial statements of The Andersons, Inc., incorporated by
reference in The Andersons, Inc.'s Annual Report (Form 10-K) for the year ended
December 31, 1996, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon incorporated by reference
therein and incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
__________________________________________________
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, and if given or
made, such information or representations must not be relied upon as having
been authorized. This Prospectus does not constitute an offer to sell or the
solicitation of an offer to buy any securities other than the Debentures to
which it relates or an offer to or solicitation of any person in any
jurisdiction in which such offer or solicitation is unlawful. Neither the
delivery of this prospectus nor any sale made hereunder shall under any
circumstances imply that information contained herein is correct at any time
subsequent to its date. The Registrant will comply with its obligations under
applicable securities laws to file and deliver any necessary supplement to this
prospectus.
SUBSCRIPTION AGREEMENT
FOR 7.7% TEN-YEAR DEBENTURES AND 7.0% FIVE-YEAR DEBENTURES OF
THE ANDERSONS, INC.
(I)(We) hereby subscribe for:
______________________________ multiple(s) of 7.7% Ten-Year Debentures
______________________________ multiple(s) of 7.0% Five-Year Debentures
of The Andersons, Inc. at face value. Each multiple is $1,000. Herewith find
$_________________ in full payment thereof.
The Debentures should be registered and issued in the following mode of
ownership: (ONLY ONE MODE OF OWNERSHIP MAY BE SELECTED)
1. ______________________ an individual.
(Name)
2. ______________________ and ______________________ as joint tenants with
(Name) (Name) right of survivorship
and not as tenants
in common.
3. ______________________ and ______________________ as tenants in common.
(Name) (Name)
4. ______________________ as custodian for ___________________ under the
(Name) (Name) Uniform Gifts
to Minors Act,
as applicable.
5. ______________________ trustee for ____________________.
(Name) (Name)
Trust Name ___________________ Date of Trust ______________
6. ______________________ TOD __________________ subject to STA TOD Rules.
(Name) (Name)
I acknowledge receipt of a copy of the current Prospectus of The
Andersons, Inc. with respect to the offering of the above Debentures subscribed
for hereby which will be issued, and interest will begin to accrue, as of the
first day of the month following the month in which payment of the Debentures
has been received by The Andersons, Inc. Under the penalties of perjury,
I certify that the information listed below is true, correct and complete.
Dated __________________________ Signed _______________________________
Signed _______________________________
Please print name, address, social security number and telephone number of
registered owner(s).
_________________________________ ___________________________________
(Name) (Name)
_________________________________ ___________________________________
(Street) (Street)
_________________________________ ___________________________________
(City, State, Zip Code) (City, State, Zip Code)
_________________________________ ___________________________________
(Social Security Number or (Social Security Number or
Federal I.D. Number) Federal I.D. Number)
_________________________________ ___________________________________
(Area Code)(Telephone Number) (Area Code)(Telephone Number)
Make check payable to: The Andersons, Inc. You are required to complete the W-
9 Form on the reverse side of
Mail to: The Andersons, Inc., this subscription.
Assistant Treasurer,
PO Box 119, Maumee, Ohio 43537
W-9 Form
Important Tax Information
We ask that you complete this substitute form W-9, sign in the space provided,
and return it, with the subscription agreement to: The Andersons, Inc.
PO Box 119
Maumee, Ohio 43537
A) Is your name and address correct on the preceding subscription form?
_____ Yes _____ No (If No, please correct it on the subscription agreement.)
B) Taxpayer Identification Number (TIN). - Enter your TIN in the space
provided below:
Employer Identification Number ___ ___ - ___ ___ ___ ___ ___ ___ ___
-OR-
Social Security Number ___ ___ ___ - ___ ___ - ___ ___ ___ ___
C) Please check the appropriate box: [] Individual / Sole Proprietor
[] Corporation
[] Partnership
[] Other ____________
D) Certification: Under penalties of perjury, I certify that:
1. The number shown on this form is my correct taxpayer identification
number (or I am waiting for a number to be issued to me), and
2. I am not subject to backup withholding because: (a) I am exempt from
backup withholding, or (b) I have not been notified by the Internal
Revenue Service that I am subject to backup withholding as a result of a
failure to report all interest or dividends, or (c) the IRS has notified
me that I am no longer subject to backup withholding.
Certification instructions: You must cross out item 2 above if you have been
notified by the IRS that you are currently subject to backup withholding
because of underreporting interest or dividends on your tax return.
Signature: _________________________ Title:__________________ Date: _______
