SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Sec tion 14(a) of the Securities
Exchange Act f 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, For Use of the commission Only (as permitted by Rule 14a-
6(e)(2))
THE ANDERSONS, INC.
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-
11.
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
THE ANDERSONS, INC.
480 West Dussel Drive
Maumee, Ohio 43537
March 31, 1998
Dear Shareholder:
You are cordially invited to attend the annual meeting of shareholders
which will be held on Thursday, May 14, 1998, at 7:00 p.m., local time, at the
Andersons Activities Building, 1833 South Holland-Sylvania Road, Maumee, Ohio.
A notice of meeting, proxy statement and proxy card are included with
this letter. The matters listed in the notice of meeting are more fully
described in the proxy statement.
It is important that your shares are represented and voted at the annual
meeting, regardless of the size of your holdings. Accordingly, please mark,
sign and date the enclosed proxy card and return it promptly in the enclosed
envelope. If you attend the annual meeting, you may revoke your proxy in
writing and vote your shares in person, if you wish.
Sincerely,
/s/Richard P. Anderson
Richard P. Anderson
Chairman, Board of Directors
THE ANDERSONS, INC.
480 West Dussel Drive
Maumee, Ohio 43537
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 14, 1998
The annual meeting (the "Annual Meeting") of shareholders of The
Andersons, Inc. (the "Corporation") will be held on Thursday, May 14, 1998, at
7:00 p.m., local time, at the Andersons Activities Building, 1833 South
Holland-Sylvania Road, Maumee, Ohio, to consider and take action with respect
to the following matters:
1. The election of eleven directors to serve until the next annual
meeting or until their successors are duly elected and qualified.
2. The ratification of the appointment of Ernst & Young LLP as
independent auditors for the year ending December 31, 1998.
3. The transaction of such other business as may properly come before
the Annual Meeting and any adjournments or postponements thereof.
Holders of record of the Corporation's Common Shares at the close of
business on March 2, 1998, are entitled to receive notice of and to vote on
all matters presented at the Annual Meeting and at any adjournments or
postponements thereof.
By order of the Board of Directors
March 31, 1998 /s/Beverly J. McBride
Beverly J. McBride
Secretary
Whether or not you plan to attend the Annual Meeting in person and regardless
of the number of shares you own, please mark, sign and date the enclosed proxy
card and mail it promptly in the envelope provided to ensure that your shares
will be represented. If you attend the Annual Meeting, you may revoke your
proxy in writing and vote your shares in person, if you wish.
THE ANDERSONS, INC.
480 West Dussel Drive
Maumee, Ohio 43537
PROXY STATEMENT
Annual Meeting of Shareholders
May 14, 1998
This proxy statement (the "Proxy Statement") is being furnished to the
holders of common shares, no par value (the "Common Shares"), of The
Andersons, Inc. (the "Corporation") in connection with the solicitation of
proxies on behalf of the Board of Directors of the Corporation (the "Board of
Directors" or "Board") for the annual meeting (the "Annual Meeting") of
shareholders to be held on May 14, 1998 at the Andersons Activities Building,
1833 South Holland-Sylvania Road, Maumee, Ohio, and at any adjournments or
postponements thereof. Proxy Statements and proxy cards are being mailed to
shareholders on or about March 31, 1998.
When you sign and return the enclosed proxy card, the shares represented
thereby will be voted as indicated on the proxy card. If there is no contrary
indication, the shares represented will be voted FOR the slate of directors
described herein, FOR the ratification of Ernst & Young LLP as the
Corporation's independent auditors for the year ending December 31, 1998 and,
as to any other business as may properly be brought before the Annual Meeting
and any adjournments or postponements thereof, in accordance with the judgment
of the person or persons voting on such matter or matters.
Returning your completed proxy card will not prevent you from revoking
your proxy in writing and voting in person at the Annual Meeting should you be
present and wish to do so. In addition, you may revoke your proxy any time
before it is voted by written notice to the Secretary of the Corporation prior
to the Annual Meeting or by submission of a later-dated proxy card.
Each outstanding Common Share entitles the holder thereof to one vote.
On March 2, 1998, the record date, there were 7,986,065 Common Shares
outstanding. The presence in person or by proxy of a majority of such Common
Shares shall constitute a quorum. Abstentions and proxies held in street name
by brokers that are not voted on all proposals to come before the Annual
Meeting ("broker non-votes") will be treated as present for purposes of
establishing a quorum. Under the Corporation's Code of Regulations, the
nominees for director receiving the greatest number of votes shall be elected
and thus abstentions and broker non-votes will have no impact on the election,
except to the extent that the failure to cast a vote for a nominee may result
in a smaller number of votes cast for other nominees being able to carry the
election. With respect to the ratification of Ernst & Young LLP as the
Corporation's independent auditors for the year ending December 31, 1998, such
ratification requires the affirmative vote of a majority of the common shares
present and eligible to vote at the Annual Meeting. Thus, a broker non-vote
or abstention will count as a vote against such proposal.
ELECTION OF DIRECTORS
The Board of Directors is currently comprised of twelve directors, one of
whom is not standing for reelection. The Board of Directors has nominated and
recommends the election of each of the nominees set forth below. Directors so
elected will serve until the next annual meeting or until their earlier
removal or resignation. Each nominee is currently a Director of the
Corporation. The Board of Directors expects all nominees named below to be
available for election. In case any nominee is not available, the proxy
holders may vote for a substitute, unless the Board of Directors reduces the
number of directors.
Directors will be elected at the Annual Meeting by a plurality of the
votes cast at the Annual Meeting by the holders of shares represented in
person or by proxy. There is no right to cumulate voting as to any matter,
including the election of directors.
The following sets forth information as to each director and nominee for
director, including age, as of March 31, 1998, principal occupation and
employment during the past five years, directorships in other publicly held
companies, membership on committees of the Board of Directors and period of
service as a director of the Corporation.
The Board of Directors recommends a vote "FOR" the election of each of the
nominees set forth below to the Board of Directors.
Nominees for Board of Directors
Thomas H. Anderson, 74, was named Chairman Emeritus in 1996. He served
as Chairman of the Board from 1987, when the Corporation was formed, until
1996. He formerly held the position of Manager-Company Services of The
Andersons for several years, was named Senior Partner in 1987 and served as a
general partner of The Andersons and a member of its Managing Committee from
1947 through 1987.
Richard P. Anderson, 68, has been a Director of the Corporation since its
inception in 1987. He is also a director of ChemFirst Corporation. He was
named Chief Executive Officer in 1987 and Chairman of the Board in 1996. He
served as Managing Partner of The Andersons from 1984 to 1987, after serving
as a general partner of The Andersons and a member of its Managing Committee
from 1947 through 1987.
Donald E. Anderson, 71, was elected a Director of the Corporation in
1990. Mr. Anderson was in charge of scientific research for the Corporation
from 1980 until his retirement in 1992. He served as a general partner of The
Andersons from 1947 through 1987.
Michael J. Anderson, 46, began his employment with The Andersons in 1978,
serving in several capacities in the Grain Group and holding the position of
Vice President and General Manager Grain Group from 1990 to February 1994. He
served as Vice President and General Manager of the Retail Group from 1994 to
1996 when he was named President and Chief Operating Officer. He has served
as a Director of the Corporation since 1988.
Richard M. Anderson, 41, has served as a Director since 1988. He began
his employment with The Andersons in 1986 as Planning Analyst and was named
the Manager of Technical Development in 1987. Mr. Anderson served as Vice
President and General Manager of the Industrial Products Group from 1990 until
1996 when he was named Vice President and General Manager, Processing Division
of the Processing and Manufacturing Group.
John F. Barrett, 49, was elected a Director of the Corporation in 1992.
He has served in various capacities at The Western and Southern Life Insurance
Company, including Executive Vice President and Chief Financial Officer and
President and Chief Operating Officer, and currently serves as Chief Executive
Officer. Mr. Barrett is also a director of Cincinnati Bell, Inc. and Fifth
Third Bancorp.
Paul M. Kraus, 65, has served as a Director of the Corporation since
1988. He has been a member of the Toledo, Ohio law firm of Marshall & Melhorn
since 1962.
Donald L. Mennel, 52, was elected as a Director of the Corporation in
February, 1998. He has served as President of The Mennel Milling Company
since 1984. He has served as a member of the Federal Grain Inspection Service
Advisory Board and is past chairman of the Eastern Soft Wheat Technical Board.
He is also a director of Fostoria Industries.
David L. Nichols, 56, was elected as a Director of the Corporation in
1995. He has served in various capacities with Mercantile Stores Company,
Inc. and is currently Chairman and Chief Executive Officer, a position he has
held since 1992. He is also a director of the Federal Reserve Bank,
Cleveland, Ohio.
Dr. Sidney A. Ribeau, 50, was named a Director of the Corporation in
February, 1997. He has served as President of Bowling Green State University
since 1995. Prior to that, he served as Vice President for Academic Affairs
at California State Polytechnic University, Pomona.
Charles A. Sullivan, 62, was named a Director of the Corporation in 1996.
He serves as Chairman and Chief Executive Officer of Interstate Bakeries
Corporation. He is also a director of UMB Bank of Kansas City and Sealright
Co. Inc.
Donald E., Richard P. and Thomas H. Anderson are brothers; Paul M. Kraus
is their brother-in-law. Michael J. and Richard M. Anderson are nephews of
Donald E., Richard P. and Thomas H. Anderson.
Board and Committee Meetings
The Board of Directors held six meetings (exclusive of committee
meetings) during the preceding fiscal year. The Board of Directors has
established the following committees, the functions and current members of
which are noted below. Each director attended 75% or more of the number of
meetings of the Board of Directors held during the preceding fiscal year and
any committees on which such director served, except for Donald E. Anderson
who missed two of six Board meetings and David Nichols who missed one of two
Compensation Committee meetings.
Audit Committee. The Audit Committee of the Board of Directors consists
of David L. Nichols (chair), Charles A. Sullivan and Sidney A. Ribeau. The
Audit Committee, among other duties, reviews the internal and external
financial reporting of the Corporation, reviews the scope of the independent
audit and considers comments by the auditors regarding internal controls
and accounting procedures and management's response to those comments. The
Audit Committee met three times during the preceding fiscal year.
Compensation Committee. The Compensation Committee consists of John F.
Barrett (chair), David L. Nichols and Charles A. Sullivan. The Compensation
Committee reviews and makes recommendations to the Board of Directors
regarding salaries, compensation and benefits of executive officers and key
employees of the Corporation and, under the Company's Long Term Performance
Plan, grants options to purchase Common Shares of the Corporation. The
Compensation Committee met twice during the preceding fiscal year.
Nominating Committee. The Nominating Committee consists of Thomas H.
Anderson (chair), Richard P. Anderson, Donald E. Anderson, Michael J.
Anderson, Richard M. Anderson, John F. Barrett, Paul M. Kraus, Donald L.
Mennel, David L. Nichols, Sidney A. Ribeau and Charles A. Sullivan. The
Nominating Committee selects and reviews candidates to be nominated to the
Board, reports to the Board regarding the qualifications of such candidates,
and recommends a slate of directors to be submitted to the shareholders for
approval. The Nominating Committee met twice in 1997 and recommends the
election to the Board of each nominee named in this Proxy Statement. The
Nominating Committee will consider individuals recommended by shareholders as
potential future nominees to the Board. The names of such individuals,
together with a full statement of their qualifications, should be mailed to
the Nominating Committee care of the Secretary of the Corporation at 480 West
Dussel Drive, Maumee, Ohio 43537.
Compensation of Directors
Directors who are not employees of the Corporation and who are not
Anderson family members receive an annual retainer of $15,000. Directors who
are not employees of the Corporation receive a fee of $1,000 for each Board
Meeting attended as well as the annual shareholders meeting. There are three
committees of the Board of Directors: the Audit Committee, the Compensation
Committee and the Nominating Committee. The chairperson of these committees
receives a retainer of $3,000 provided he or she is not an employee of the
Corporation. Members of the committees, including the chairpersons, who are
not employees of the Corporation receive $750 for each meeting attended.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Corporation's officers, directors and/or persons who beneficially
own more than ten percent of a registered class of the Corporation's equity
securities to file reports of securities ownership and changes in such
ownership with the Securities and Exchange Commission (the "SEC"). Officers,
directors and greater-than-ten-percent beneficial owners also are required by
rules promulgated by the SEC to furnish the Corporation with copies of all
Section 16(a) forms they file.
Based solely upon a review of the copies of such forms furnished to the
Corporation, or written representations that all such filings that were
required were filed, the Corporation believes that during the preceding year,
its officers, directors and greater-than-ten-percent beneficial owners
complied with all applicable Section 16(a) filing requirements.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors, upon recommendation by the Audit Committee, has
appointed Ernst & Young LLP as independent auditors to examine the financial
statements of the Corporation for the year ending December 31, 1998 and to
perform other appropriate accounting services.
A proposal will be presented at the Annual Meeting to ratify the
appointment of Ernst & Young LLP as the Corporation's independent auditors.
One or more members of that firm are expected to be present at the Annual
Meeting to respond to questions and to make a statement if they desire to do
so. If the shareholders do not ratify this appointment by the affirmative
vote of a majority of the shares represented in person or by proxy at the
Annual Meeting, other independent auditors will be considered by the Board of
Directors upon recommendation by the Audit Committee.
The Board of Directors recommends a vote "FOR" ratification of the appointment
of Ernst & Young LLP as the Corporation's independent auditors.
OTHER BUSINESS
At the date of this Proxy Statement, the Corporation has no knowledge of
any business other than that described above that will be presented at the
Annual Meeting. If any other business should properly come before the Annual
Meeting, the proxies will be voted in the discretion of the proxy holders.
SECURITY OWNERSHIP
The following information with respect to the outstanding Common Shares
beneficially owned by each director and nominee for director of the
Corporation, the chief executive officer and the four other most highly
compensated executive officers, and the directors and executive officers as a
group and all beneficial owners of more than five percent of the Common Shares
is furnished as of February 28, 1998.
Common Shares
Number of Percent
Name Shares(1) of
(3) Class(2)
Thomas H. Anderson(4) 251,545 3.15
Richard P. Anderson(5) 479,109 5.89
Donald E. Anderson(6) 152,439 1.91
Michael J. Anderson(7) 157,468 1.96
Christopher J. Anderson(9) 120,068 1.50
Richard M. Anderson 105,790 1.32
John F. Barrett 5,088 *
Joseph L. Braker 38,252 *
Paul M. Kraus(8) 115,159 1.44
Donald L. Mennel 300 *
Beverly J. McBride 45,434 *
David L. Nichols 2,500 *
Dr. Sidney A. Ribeau 3,000 *
Charles A. Sullivan 11,690 *
All directors and executive 1,697,044 20.53
officers as a group (21 persons)
(1) "Beneficial owner" generally means any person who, directly or
indirectly, has or shares voting power or investment power with respect
to a security. The Corporation believes that, except as otherwise
indicated, each shareholder has sole voting and investment power with
respect to shares listed as beneficially owned by such shareholder.
(2) Percentages less than one percent are denoted by an asterisk.
(3) Includes shares that may be acquired within 60 days under the Company's
Stock Option Plans as follows: Mr. Thomas H. Anderson 10,040 shares; Mr.
Richard P. Anderson 147,202 shares; Mr. Donald E. Anderson 500 shares;
Mr. Michael J. Anderson 34,982 shares; Mr. Christopher J. Anderson
9,600 shares; Mr. Richard M. Anderson 6,640 shares; Mr. Barrett 1,500
shares; Mr. Braker 19,300 shares; Mr. Kraus 1,500 shares; Ms. McBride
6,335 shares; Mr. Nichols 1,500 shares; Dr. Ribeau 1,000 shares; Mr.
Sullivan 1,190 shares; with aggregate shares that may be acquired within
60 days for all Executive Officers and Directors as a group being
279,242.
(4) Includes 120,711 Common Shares held by Mrs. Mary P. Anderson, trustee,
Mr. Anderson's spouse.
(5) Includes 156,897 Common Shares held by Mrs. Frances H. Anderson, Mr.
Anderson's spouse; 4,548 Common Shares held by Key Trust Company, trustee
for Richard P. Anderson trust for Michigan State University, a trust for
whom the principal beneficiary is Mrs. Frances H. Anderson; and 4,548
shares held by Key Trust Company, trustee for Richard P. Anderson trust
for The Ohio State University, a trust for whom the principal beneficiary
is Mrs. Frances H. Anderson. Mr. Anderson disclaims beneficial ownership
of such Common Shares.
(6) Includes 75,958 Common Shares held by Mrs. Una Anderson, Mr. Anderson's
spouse.
(7) Includes 53,546 Common Shares held by Mrs. Carol H. Anderson; Mr.
Anderson's spouse; 2,000 Common Shares held by Michael J. Anderson, Jr.,
Mr. Anderson's son; 2,000 Common Shares held by Laura J. Anderson, Mr.
Anderson's daughter; 2,000 Common Shares held by Colin J. Anderson, Mr.
Anderson's son; 4,548 Common Shares held by Key Trust Company, trustee
for Michael J. Anderson trust for Michigan State University, a trust for
whom the principal beneficiary is Mrs. Carol H. Anderson; and 4,548
shares held by Key Trust Company, trustee for Michael J. Anderson trust
for University of Illinois, a trust for whom the principal beneficiary is
Mrs. Carol H. Anderson. Mr. Anderson disclaims beneficial ownership of
such Common Shares.
(8) Includes 55,983 Common Shares held by Mrs. Carol J. Kraus, Mr. Kraus'
spouse. Mr. Kraus disclaims beneficial ownership of such Common Shares.
(9) Includes 4,548 Common Shares held by Key Trust Company, trustee for
Christopher J. Anderson trust for Harvard Business School, a trust for
whom the principal beneficiary is Mrs. Susan Anderson; and 4,548 shares
held by Key Trust Company, trustee for Christopher J. Anderson trust for
Ohio State University, a trust for whom the principal beneficiary is Mrs.
Susan Anderson. Mr. Anderson disclaims beneficial ownership of such
Common Shares.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following summary compensation table sets forth the compensation of the
Corporation's chief executive officer and four other most highly compensated
executive officers (the "named executive officers") for the years ended
December 31, 1995, December 31, 1996 and December 31, 1997.
Summary Compensation Table
Long Term All Other
Annual Compensation Compensation Compensation
Name and Position Year Salary Bonus Option Grants (a)
Richard P. 1997 $250,000 $ -- 64,754 $4,750
Anderson 1996 385,834 91,000 15,890 4,500
Chairman of the 1995 363,333 60,000 -- 4,620
Board and Chief
Executive Officer
Joseph L. Braker 1997 236,376 -- 9,000 4,750
President 1996 236,376 50,000 9,600 4,500
Agriculture Group 1995 235,876 45,000 -- 4,620
Michael J. 1997 233,290 -- 19,261 4,750
Anderson 1996 224,419 65,000 9,600 4,500
President and 1995 211,628 20,000 -- 4,620
Chief Operating
Officer
Christopher J. 1997 163,000 40,000 6,000 4,750
Anderson 1996 141,631 35,000 3,200 4,249
President 1995 119,620 15,000 3,334
Processing
and Manufacturing
Group
Beverly J. 1997 152,362 -- 3,350 4,750
McBride 1996 145,812 17,000 2,910 4,374
Vice President, 1995 138,472 15,000 3,995
General Counsel
and Secretary
(a) Corporation's matching contributions to its 401(k) retirement plan.
Option Grants
The following table sets forth information on grants of stock options
during the year ended December 31, 1997 to the executive officers named in the
Summary Compensation Table. No stock appreciation rights were granted in
1997.
1997 Option Grants
Potential Realizable Value
at Assumed Annual rates
of Stock Price Appreciation
Individual Grants for Option Term(c)
% of
Total
Options
Number Granted
of to
Securities Employees
Underlying in Exercise
Options Fiscal or Base Expiration
Granted Year Price Date 5% 10%
Richard P. 42,254(b) 24.88% $8.875 1/2/07 $235,836 $597,659
Anderson 22,500(a) 13.25% $9.125 2/18/02 $ 56,723 $125,345
Joseph L. 9,000(a) 5.30% $9.125 2/18/02 $ 22,689 $ 50,138
Braker
Michael J. 6,761(b) 3.98% $8.875 1/2/07 $ 37,735 $ 95,630
Anderson 12,500(a) 7.36% $9.125 2/18/02 $ 31,513 $ 69,636
Christopher 6,000(a) 3.53% $9.125 2/18/02 $ 15,126 $ 33,425
J. Anderson
Beverly J. 3,350(a) 1.97% $9.125 2/18/02 $ 8,445 $ 18,662
McBride
(a) These options, granted on February 18, 1997, were 40% vested at the date
of grant, 30% after one year and 30% after two years. Annual growth of 5%
results in a stock price of $11.65 per share and 10% results in a price of
$14.70 per share for the five-year option term. See (c) for a discussion of
these annual growth factors used in calculating potential realizable value.
(b) These options, granted on January 2, 1997, were 100% vested immediately
and were taken in lieu of salary. Annual growth of 5% results in a stock price
of $14.46 per share and 10% results in a price of $23.02 per share for the
ten-year option term. See (c) for a discussion of these annual growth factors
used in calculating potential realizable value.
(c) Potential realizable value is based on the assumed annual growth of the
Company's Common Stock for the option term. Actual gains, if any, on stock
option exercises are dependent on the future performance of the stock. There
can be no assurance that the amounts reflected in this table will be achieved.
Pension Plans
The Corporation has a Defined Benefit Pension Plan (the "Pension Plan")
which covers substantially all employees who work greater than 1,000 hours
annually. Benefits are payable annually upon retirement at age 65 or older.
A discount of six percent per year is applied for retirement before age 65.
The annual benefit is equal to the employee's years of service multiplied by
(a) 1% of average compensation (for five highest consecutive years out of the
last ten years of service) plus (b) 0.5% of average compensation in excess of
the Social Security covered compensation. The compensation covered by the
Pension Plan is equal to the employee's base pay plus bonus, which in the
Summary Compensation Table is the executive's salary and bonus, but beginning
in 1989, was limited by the Internal Revenue Code. Each of the named
executives has nine years of credited service.
In addition, the Corporation has a Supplemental Retirement Plan (the
"Supplemental Plan") which is a non-qualified deferred compensation plan
designed to cover all employees (primarily executives) who are participants in
the Pension Plan and whose salary exceeds the Internal Revenue Code limit or
who have taken options in lieu of salary. Benefits under this Supplemental
Plan are calculated exactly as in the Pension Plan but without the Internal
Revenue Code limit and then the Pension Plan benefit is subtracted to
determine the Supplemental Plan benefit.
The table below reflects the total benefits that an employee would receive
under the Pension Plan and the Supplemental Plan for the indicated average
compensation and years of service upon retirement at age 65 and election of a
single life annuity.
Average Approximate Annual Retirement Benefit
Five-Year Based Upon the Indicated Years of Service
Compensation
5 Years 10 Year 15 Years 25 Years 30 Years
$ 50,000 $ 3,100 $ 6,200 $ 9,300 $15,500 $ 18,600
100,000 6,900 13,700 20,600 34,300 41,100
150,000 10,600 21,200 31,800 53,000 63,600
200,000 14,400 28,700 43,100 71,800 86,100
250,000 18,100 36,200 54,300 90,500 108,600
300,000 21,900 43,700 65,600 109,300 131,100
350,000 25,600 51,200 76,800 128,000 153,600
400,000 29,400 58,700 88,100 146,800 176,100
450,000 33,100 66,200 99,300 165,500 198,600
500,000 36,900 73,700 110,600 184,300 221,100
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors (the "Committee") is
pleased to present its report on executive compensation. The Committee
reviews and makes recommendations to the Board of Directors regarding
salaries, compensation and benefits of executive officers and key employees of
the Corporation and grants options to purchase Common Shares of the
Corporation. This Committee report documents the components of the
Corporation's executive officer compensation programs and describes the bases
upon which compensation will be determined by the Committee with respect to
the executive officers of the Corporation, including the executive officers
that are named in the compensation tables (the "Named Executives").
This Committee report shall not be deemed incorporated by reference by any
general statement incorporating by reference this Proxy Statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act
of 1934, except to the extent that the Corporation specifically incorporates
this information by reference, and shall not otherwise be deemed filed under
such Acts.
Compensation Philosophy. The compensation philosophy of the Corporation is
to endeavor to directly link executive compensation to continuous improvements
in corporate performance and increases in shareholder value. The Committee
has adopted the following objectives as guidelines for compensation decisions.
Display a willingness to pay levels of compensation that are
necessary to attract and retain highly qualified executives.
Be willing to compensate executive officers in recognition of
superior individual performance, new responsibilities or new
positions within the Corporation.
Take into account historical levels of executive compensation and
the overall competitiveness of the market for high quality executive
talent.
Implement a balance between short- and long-term compensation to
complement the Corporation's annual and long-term business
objectives and strategy and encourage executive performance in
furtherance of the fulfillment of those objectives.
Provide variable compensation opportunities based on the performance
of the Corporation, encourage share ownership by executives and
align executive remuneration with the interests of shareholders.
Compensation Program Components. The Committee regularly reviews the
Corporation's compensation program to ensure that pay levels and incentive
opportunities are competitive with the market and reflect the performance of
the Corporation. The particular elements of the compensation program for
executive officers are further explained below.
Base Salary and Bonus. The Corporation's base pay levels are largely
determined by evaluating the responsibilities of the position held and the
experience of the individual and by comparing the salary scale with
companies of similar size and complexity. Actual base salaries are kept
within a competitive salary range for each position that is established
through job evaluation and market comparisons and approved by the Committee
as reasonable and necessary.
Long-Term Compensation Plan. The Corporation sponsors a Long-Term
Performance Compensation Plan that provides certain of the Corporation's
employees with share options and/or performance awards based on the
performance of the Corporation as a whole and of each recipient
individually. The exercise price of such options is the market price of
the Common Shares on the date of the grant. The Long-Term Performance
Compensation Plan has been designed to provide the benefits of equity-based
performance compensation.
Employee Benefit Plans. The Corporation sponsors an Employee Share
Purchase Plan that provides the Corporation's employees with the
opportunity to purchase Common Shares through a payroll deduction plan.
Chief Executive Officer Compensation. The 1997 fiscal year cash
compensation for Mr. Richard P. Anderson, the Corporation's Chairman of the
Board and Chief Executive Officer, was set by the Compensation Committee of
the Board of Directors based on past compensation practices and policies.
Taking these practices and policies into account, Mr. Anderson's annual base
salary was set at $400,000 ($150,000 taken in options in lieu of salary) for
1997, and he received no bonus for 1997. In the future, the Committee will
undertake responsibility for establishing Mr. Anderson's annual cash
compensation. In doing so, the Committee will consider a number of factors,
including prior compensation arrangements, corporate performance, individual
performance and competitive standards.
Summary. After its review of all existing programs, the Committee
continues to believe that the total compensation program for executives of the
Corporation is focused on increasing values for shareholders and enhancing
corporate performance. The Committee currently believes that the compensation
of executive officers is properly tied to share appreciation through the Long-
Term Performance Compensation Plan. The Committee believes that executive
compensation levels at the Corporation are competitive with the compensation
programs provided by other corporations with which the Corporation competes.
The foregoing report has been approved by all members of the Committee.
COMPENSATION COMMITTEE John F.
Barrett (chair), David L. Nichols
and Charles A. Sullivan
PERFORMANCE GRAPH
The graph below compares the total shareholder return on Company Common
Stock to the cumulative total return for the NASDAQ U.S. Index and to the
cumulative total return the NASDAQ Non-Financial Index. The indices reflect
the year-end market value of an investment in the stock of each company in the
index, including additional shares assumed to have been acquired with cash
dividends, if any.
The graph assumes a $100 investment in The Andersons, Inc. Common Stock
on February 29, 1996 (first month-end after trading began) and also assumes
investments of $100 in each of the NASDAQ U.S. and the NASDAQ Non-Financial
indices, respectively, on February 29, 1996. The value of these investments
on the following calendar year ends is shown in the table below the graph.
The Andersons, Inc. Performance Graph
Base Period Cumulative Returns
February 29, 1996 1997
1996
The Andersons, Inc. $100.00 $ 79.61 $ 78.22
NASDAQ U.S. $100.00 $117.91 $135.57
NASDAQ Non-Financial $100.00 $117.50 $157.13
SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Proposals of shareholders intended to be presented at the annual meeting
in 1999 must be received by the Secretary of the Corporation, at the address
below, not later than December 1, 1998 to be considered for inclusion in the
Corporation's 1999 proxy materials.
ADDITIONAL INFORMATION
This solicitation is being made by the Corporation. All expenses of the
Corporation in connection with this solicitation will be borne by the
Corporation. In addition to the solicitation by mail, proxies may be
solicited by directors, officers and other employees of the Corporation by
telephone, telex, in person or otherwise, without additional compensation.
The Corporation will request brokerage firms, nominees, custodians and
fiduciaries to forward proxy materials to the beneficial owners of shares held
of record by such persons and will reimburse such persons and the
Corporation's transfer agent for their reasonable out-of-pocket expenses in
forwarding such materials.
The Corporation will furnish without charge to each person whose proxy is
being solicited, upon the written request of any such person, a copy of the
Corporation's Annual Reports on Form 10-K for the fiscal year ended December
31, 1997, as filed with the Securities and Exchange Commission, including the
financial statements and schedules thereto. Requests for copies of such
Annual Reports on Form 10-K should be directed to the Secretary of the
Corporation at the address below.
Please complete the enclosed proxy card and mail it in the enclosed
postage-paid envelope as soon as possible.
By order of the Board of Directors
/s/Beverly J. McBride
Beverly J. McBride
Secretary
THE ANDERSONS, INC.
480 West Dussel Drive
Maumee, Ohio 43537
March 31, 1998
PROXY
Solicited by the Board of Directors
THE ANDERSONS, INC.
480 West Dussel Drive
Maumee, Ohio 43537
The undersigned hereby appoints Matthew C. Anderson, John P. Kraus and
Beverly J. McBride, and each of them, proxies, with power of substitution and
revocation, acting by a majority of those present and voting or if only one is
present and voting then that one, to vote the share(s) of The Andersons, Inc.
which the undersigned is entitled to vote, at the Annual Meeting of
shareholders to be held on May 14, 1998 and at any adjournment or
postponements thereof, with all the powers the undersigned would possess if
present, with respect to the following:
Important - This Proxy must be signed and dated on the reverse side.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 AND 2.
1.Election of directors FOR all nominees WITHHOLD AUTHORITY
(except as indicated) to vote for all nominees
Nominees: Donald E. Anderson, Michael J. Anderson, Richard M. Anderson,
Richard P. Anderson, Thomas H. Anderson, John F. Barrett, Paul M. Kraus,
Donald L. Mennel, David L. Nichols, Dr. Sidney A. Ribeau, Charles A. Sullivan
(To withhold authority to vote for any nominee, strike out that
nominee's name.)
2.Ratification of the appointment of Ernst & Young LLP as the Corporation's
independent auditors.
FOR AGAINST ABSTAIN
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR ALL NOMINEES LISTED AND FOR THE RATIFICATION OF ERNST & YOUNG LLP AS THE
CORPORATION'S INDEPENDENT AUDITORS FOR THE YEAR ENDING DECEMBER 31, 1998.
Please sign exactly as names
appear on this Proxy. Joint
owners should each sign.
Trustees, executors, etc.
should indicate the capacity
in which they are signing.
[] I plan to attend the meeting.
Signature(s)___________________________
Dated:______________________, 1998
