SEABOARD CORPORATION
9000 West 67th Street
Shawnee Mission, Kansas 66202
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 28, 199727, 1998
Notice is hereby given that the 19971998 Annual Meeting of Stockholders
of Seaboard Corporation, a Delaware corporation, will be held at the
Sheraton Tara Hotel, 320 Washington Street, Newton, Massachusetts, on
Monday, the 28th27th day of April, 1997,1998, at 10 o'clock in the forenoon for
the following purposes:
1. To elect four Directors of the Company.
2. To consider and act upon the selection of KPMG Peat Marwick LLP as
independent auditors of the Company.
3. To transact any other business which may properly come before the
meeting, or any adjournment thereof.
The close of business on Monday, March 3, 1997,2, 1998, has been fixed as the
record date for determination of stockholders entitled to notice of, and
to vote at, the Annual Meeting. The books for the transfer of stock will
not be closed.
If you do not expect to be present personally at the Annual Meeting,
please sign, date and return the enclosed proxy in the enclosed addressed
envelope.
By order of the Board of Directors,
MARSHALL L. TUTUN, Secretary
March 27, 199726, 1998
SEABOARD CORPORATION
9000 West 67th Street
Shawnee Mission, Kansas 66202
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
APRIL 28, 199727, 1998
March 27, 199726, 1998
This Proxy Statement is furnished in connection with the solicitation
of proxies to be used at the Annual Meeting of Stockholders of Seaboard
Corporation (the "Company") to be held on April 28, 1997,27, 1998, and at any
adjournment thereof, for the purposes set forth in the foregoing Notice
of Annual Meeting.
The close of business on Monday, March 3, 1997,2, 1998, has been fixed as the
record date for the determination of stockholders entitled to notice of,
and to vote at, the Annual Meeting, and at any adjournment thereof.
This Proxy Statement is first being sent to stockholders on or about
March 27, 1997.26, 1998. The consolidated financial statements of the Company for
the fiscal year ended December 31, 1996,1997, together with corresponding
consolidated financial statements for the fiscal year ended December 31,
1995,1996, are contained in the Annual Report which is mailed to stockholders
herewith.
Proxies in the form enclosed are solicited by the Board of Directors
of the Company. Any stockholder giving a proxy in the enclosed form has
the power to revoke it at any time before it is exercised. A
stockholder's right to revoke his or her proxy is not limited by, or
subject to, compliance with any specified formal procedure. He or she
may revoke his or her proxy by delivering a written revocation or a duly
executed proxy bearing a later date, or by attending the meeting and
voting in person. A proxy in such form, if received in time for voting
and not revoked, will be voted at the Annual Meeting in accordance with
the direction of the stockholder. Where a choice is not so specified,
the shares represented by the proxy will be voted "for" the election of
the nominees for Director listed herein, and "for" ratification of the
selection of KPMG Peat Marwick LLP as independent auditors of the
Company. The Board of Directors does not know of any matters which will
be brought before the meeting other than those specifically set forth in
the Notice of Annual Meeting. However, if any other matter properly
comes before the meeting, it is intended that the persons named in the
enclosed form of proxy, or their substitutes acting thereunder, will vote
on such matter in accordance with their best judgment.
Votes cast at the Annual Meeting will be tabulated by persons duly
appointed to act as inspectors of election for the Annual Meeting. The
inspectors of election will treat shares represented by a properly signed
and returned proxy as present at the Annual Meeting for purposes of
determining a quorum, without regard to whether the proxy is marked as
casting a vote or abstaining. Likewise, the inspectors of election will
treat shares of stock represented by "broker non-votes" as present for
purposes of determining a quorum. Broker non-votes are proxies with
respect to shares held in record name by brokers or nominees, as to which
(i) instructions have not been received from the beneficial owners or
persons entitled to vote, (ii) the broker or nominee does not have
discretionary voting power under applicable national securities exchange
rules or the instrument under which it serves in such capacity, and (iii)
the record holder has indicated on the proxy card or otherwise notified
the Company that it does not have authority to vote such shares on that
matter.
A favorable plurality of votes cast is necessary to elect members of
the Board of Directors. Accordingly, abstentions or broker non-votes as
to the election of Directors will not affect the election of the
candidates receiving the plurality of votes.
The remaining proposal set forth herein requires the affirmative vote
of the majority of the shares present. Shares represented by broker non-votesnon-
votes as to such matters are treated as not being present for the
purposes of such matters, while abstentions as to such matters are
treated as being present but not voting in the affirmative. Accordingly,
the effect of broker non-votes
2 is only to reduce the number of shares
considered to be present for the consideration of such matters, while
abstentions will have the same effect as votes against the matter.
The Company will bear all expenses in connection with the solicitation
of proxies, including preparing, assembling, and mailing of the Proxy
Statement.
The Company had 1,487,519.75 shares of Common Stock, $1.00 par value,
outstanding and entitled to vote as of March 3, 1997.2, 1998. A majority, or
743,760 of such shares, constitutes a quorum for the Annual Meeting.
PRINCIPAL STOCKHOLDERS
The following table sets forth the number of shares of the Company's
Common Stock beneficially owned by stockholders owning more than five
percent of such Common Stock as of January 31, 1997.1998. Unless otherwise
indicated, all beneficial ownership consists of sole voting and sole
investment power.
Name and Address Percent
of Beneficial Owner Amount of Stock of Class
------------------- --------------- --------
Seaboard Flour Corporation (1) 1,120,511.75 75.3
200 Boylston Street
Chestnut Hill, MA 02167
Franklin Mutual Advisors, Inc.(2) 95,587.00 6.4
51 John F. Kennedy Parkway
Short Hills, NJ 07078
(1) Mr. H. Harry Bresky, President of the Company, his brother Otto
Bresky, Jr., and sister, Marjorie B. Shifman, own and have sole voting
power over 80,60836,358 shares, 81,09580,203 shares and 16,43415,951 shares,
respectively, of the common stockCommon Stock of Seaboard Flour Corporation.
These individuals and other members of the Bresky family, including
trusts created for their benefit, have beneficial ownership of 220,604219,229
shares, or 95.0%, of the common stockCommon Stock of Seaboard Flour Corporation.
Such family members in addition have beneficial ownership of a total
of 34,815 shares, or 2.3%, of the Company's Common Stock which is not
included in the amount owned by Seaboard Flour Corporation. Because
of such ownership of common stockCommon Stock of Seaboard Flour Corporation by the
Bresky family, Mr. H. Harry Bresky may be deemed to have indirect
beneficial ownership of the Common Stock of the Company held by
Seaboard Flour Corporation.
(2) Beneficial ownership by Franklin Mutual Advisors, Inc. ("FMAI") is
based on an initial Schedule 13G that was filed with the Securities
and Exchange Commission on February 12, 1997. On November 1, 1996,
FMAI acquired certain assets of Heine Securities Corporation ("HSC")
which owned certain shares of the Company previously reported on prior
Schedule 13G filings by HSC. Franklin Resources, Inc. ("FRI"), the
parent holding company of FMAI, and Charles B. Johnson and Rupert H.
Johnson, Jr., principal shareholders of FRI, may be deemed to be
beneficial owners of the securities held by FMAI, but each disclaims
any economic interest or beneficial ownership of such shares.
Based solely on a review of the copies of reports furnished to the
Company and written representations that no other reports were required,
the Company believes that during fiscal 1996,1997, all reports of ownership
required under Section 16(a) of the Securities Exchange Act of 1934 for
Directors and executive officers of the Company and beneficial owners of
more than ten
percent10% of the Company's Common Stock have been timely filed.
2
ITEM 1: ELECTION OF DIRECTORS
The Board of Directors has fixed the number of Directors at four.
Unless otherwise specified, proxies will be voted in favor of the
election as Directors of the following four persons for a term of one
year and until their successors are elected and qualified. All nominees
are currently Directors. Mr. H. Harry Bresky has served as a Director
continuously since 1959, and was reelected by the stockholders at the
last annual meeting. Mr. H. Harry Bresky is the father of Mr. Steven J.
Bresky. Mr. Joe E. Rodrigues has served as a Director since 1990 and was
reelected by the stockholders at the last annual meeting. Mr. Thomas J.
Shields has served as a Director since 1992 and was reelected by the
stockholders at the last annual meeting. Mr. David A. Adamsen has served
as Director since 1995 and was reelected by the stockholders at the last
annual meeting. There are no arrangements or understandings between any
nominee and any other person pursuant to which such nominee was
nominated. As of January 31, 1997,1998, the four nominees beneficially owned
securities of the Company in the amounts shown:
Amount of Stock (1)
--------------------
Principal Occupations Common Percent
Name and Positions Stock of Class
---- --------------------- -------- --------
H. Harry Bresky Director and President, 5,611 (2) 0.4
Age 7172 Seaboard Corporation;
President, Treasurer and
Director, Seaboard Flour
Corporation.
Joe E. Rodrigues Director (since 1990) and 200 0.01
Age 6061 Member of Audit Committee
(since 1992), Executive Vice
President and Treasurer,
Seaboard Corporation.
Thomas J. Shields Director and Member of Audit 0 0
Age 4950 Committee (since 1992),
Seaboard Corporation; President
(since 1991), Shields & Co., Inc.,
investment banking firm; Director,
(since 1992)1997), B.J.'s Wholesale
Club, Inc., warehouse merchandising
company; Director (1992 to 1997),
Waban, Inc., warehouse merchandising
company.company; Director (since 1996),
Versar, Inc., environmental
consulting company.
David A. Adamsen Director and Member of Audit 0 0
Age 4546 Committee (since 1995),
Seaboard Corporation; Vice President
of Special Projects (since 1998),
Dean Foods Company, dairy specialty-
food processor and distributor;
President and General Manager (since 1986)(1986
to 1998), Penny Curtiss Baking Co.,
bakery processing plant; Vice
President-
Manufacturing (since 1994)President-Manufacturing (1994 to
1998), The Penn Traffic Co., retail
and wholesale food distribution
company.
Beneficial ownership of all Directors and executive
officers as a group (8 individuals). 8,349 (3) 0.6
(1) The number of shares shown in this table does not include indirect
beneficial ownership of Common Stock of the Company attributable to
Mr. H. Harry Bresky's ownership of Seaboard Flour Corporation stock
as more fully described under the Principal Stockholders section
herein. Mr. H. Harry Bresky had record and beneficial ownership of
80,60836,358 shares (34.7%(15.8%) of the outstanding common stockCommon Stock of Seaboard
Flour Corporation as of January 31, 1997.1998. In addition, 21,77765,427 shares
are held in two trustsvarious Trusts for the benefit of Mr. Bresky's issue.
Except for certain annuities to be received from two of the Trusts,
Mr. Bresky disclaims any beneficial ownership of suchthese shares.
3
(2) These shares exclude 5,285 shares (0.4 percent(0.4% of the class) held by Mr. H.
Harry Bresky's wife, as to which Mr. Bresky disclaims any beneficial
interest.
(3) In addition to the ownership of shares by the individuals shown in
this table, these shares include 2,538 shares (.2 percent(0.2% of class) owned by Mr.
Steven J. Bresky. No other executive officer named in the Executive
Compensation and Other Information section herein owns any shares.
In case any person or persons named herein for election as Directors
are not available for election at the Annual Meeting, proxies may be
voted for a substitute nominee or nominees, as well as for the balance
of those named herein. Management has no reason to believe that any of
the nominees for the election as Director will be unavailable.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Audit Committee consists of three members: Messrs. Thomas J.
Shields, David A. Adamsen and Joe E. Rodrigues, all of whom are nominees
for Director listed herein. The primary function of the Audit Committee
is to ensure the effectiveness of the Company's internal control
structure and financial reporting process. The Company has no nominating
or compensation committee.
The Board of Directors held eight meetings in fiscal 1996,1997, four of
which were telephonic meetings. Other actions of the Board of Directors
were taken by unanimous written consent as needed. The Audit Committee
held one meeting in fiscal 1996.1997. Each Director attended more than 75%
of the aggregate of the total number of meetings of the Board of
Directors and the total number of meetings held by all committees of the
Board on which he served.
Each non-employee Director receives $5,000 quarterly and an additional
$1,500 per meeting of the Audit Committee of the Board.
4
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table shows all cash compensation paid by the Company,earned, during the fiscal
years indicated, toby the Chief Executive Officer and the four other
highest paid executive officers of the Company for such period in all
capacities in which they have served:
SUMMARY COMPENSATION TABLE
Annual Compensation
|
----------------------------------|
|
Name Other (2) | (3) (4)
and (1) (2) Annual | All Other
Principal Salary Bonus Compensation | Compensation
Position Year ($) ($) ($) | ($)
- -------------------------------------------------------------------------------
H. Harry Bresky 1997 558,963 400,000 7,786 4,800
President 1996 539,119 185,000 8,174 4,500
President(Chief Executive 1995 517,226 370,000 8,130 4,500
(Chief Executive 1994 487,950 360,000 7,686 4,500
Officer)
Joe E. Rodrigues 1997 451,819 200,000 7,786 4,800
Executive Vice 1996 474,093 100,000 97,724 4,500
Executive VicePresident and 1995 450,426 200,000 118,993 4,500
Treasurer
Rick J. Hoffman 1997 298,801 200,000 6,838 4,800
Vice President and 1994 430,646 196,100 97,186 4,500
Treasurer 1996 299,160 50,000 44,400 4,500
Rick J. Hoffman 1995 262,667 100,000 57,029 4,500
Vice President 1994 226,985 90,100 35,963 4,500
Steven J. Bresky 1997 243,771 150,000 3,549 4,800
Vice President 1996 254,081 50,000 48,998 4,500
Vice President 1995 217,172 100,000 57,751 4,500
1994 202,939 79,500 28,883 4,500
Robert L. Steer (4)(5) 1997 173,701 100,000 -- 4,736
Vice President - 1996 139,269 50,000 16,814 4,500
Vice President -Finance 1995 112,344 30,000 15,252 3,990
Finance 1994 107,435 20,000 7,579 3,543
(1) Salary includes amounts deferred at the election of the named
executive officers under the Company's 401(k) retirement savings plan.
(2) Reflects bonus earned for each fiscal year presented.
(3) Other Annual Compensation earned for fiscal 1997 represents benefits
under the Supplemental Executive Retirement Plan described herein.
Other Annual Compensation earned for fiscal 1996 represents
benefits under thean Executive Retirement Plan and the Supplemental
Executive Retirement Plan described herein. The amounts of these
benefits for fiscal 1996 are as follows: (i) Executive Retirement
Plan: Rodrigues $89,550, Hoffman $36,226, S. Bresky $40,824, and Steer
$15,475; and (ii) Supplemental Executive Retirement Plan: H. Bresky
$8,174, Rodrigues $8,174, Hoffman $8,174, S. Bresky $8,174 and Steer
$1,339.
Other Annual Compensation earned for fiscal year 1995 represents
benefits under thean Executive Retirement Plan and the Supplemental
Executive Retirement Plan described herein. The amounts of these
benefits for fiscal year 1995 are as follows: (i) Executive
Retirement Plan: Rodrigues $110,863, Hoffman $48,899, S. Bresky
$50,562, and Steer $15,252; and (ii) Supplemental Executive Retirement
Plan: H. Bresky $8,130, Rodrigues $8,130, Hoffman $8,130 and S.
Bresky $7,189.
Other Annual Compensation for fiscal year 1994 represents benefits
under the Executive Retirement Plan and the Supplemental Executive
Retirement Plan described herein. The amounts of these benefits for
fiscal year 1994 are as follows: (i) Executive Retirement Plan:
Rodrigues $89,500, Hoffman $28,277, S. Bresky $27,065, and Steer $7,579;
and (ii) Supplemental Executive Retirement Plan: H. Bresky $7,686,
Rodrigues $7,686, Hoffman $7,686 and S. Bresky $1,818.
5
(3)(4) All Other Compensation represents the Company contributions to the
Company's 401(k) retirement savings plan on behalf of the named
executive officers. (4)Excludes perquisites and other benefits, unless
the aggregate amount of such compensation exceeds the lesser of either
$50,000 or 10% of the total of annual salary and bonus reported for
the Named Executive Officer.
(5) Mr. Steer was elected by the Board of Directors of the Company as Vice
President - Finance effective April 22, 1996.
RETIREMENT PLANS
EXECUTIVE RETIREMENT PLAN. The Seaboard Corporation Executive Retirement
Plan (the "Executive Retirement Plan") provides retirement benefits for
a select group of officers and managers including the Chief Executive
Officer and the four other highest paid executive officers. Pursuant toEffective
January 1, 1997, the Executive Retirement Plan beginning January 1, 1994, each participant accrues an
annualprovides that participants
will accrue a benefit payable beginning at age 62, in an amount equal to 2.5% of such participant's compensation each year. The benefit does not accrue on
compensation in excess of $300,000 per year; however, such $300,000 cap may
be increased annually at the discretionfinal average
remuneration (salary plus bonus) of the retirement committee, which
consists of four individuals selectedparticipant multiplied by the
Boardyears of Directors who are
officers or managersservice from January 1, 1997, reduced by the amount such
participant has accrued under the Seaboard Corporation Pension Plan
(described below) available to all full time employees of the Company.
For participants age 62 andCompany,
which benefit is payable beginning at normal retirement. Benefits under
the benefit will be provided through
the purchase annuallyplan are unfunded. As of an annuity contract with benefits payable for life
with a ten-year certain provision. Alternatively, the participant may elect
to receive a cash payment equal to the purchase priceDecember 31, 1997, all of the annuity
contract. In addition, the Company pays to each participant (which amount
will be withheldNamed
Officers are fully vested and paid to the appropriate taxing authorities) 100%have one year of the
income tax liability, which the retirement committee estimates the
participant will payservice as defined in the
current year as a resultExecutive Retirement Plan. The table below shows annual benefits by
remuneration and years of the receipt of such
annuity contract.service beginning with fiscal 1997.
EXECUTIVE RETIREMENT PLAN TABLE
YEARS OF SERVICE FROM JANUARY 1, 1997
REMUNERATION 15 20 25 30 35
$ 125,000 27,500 36,700 45,800 55,100 64,200
$ 150,000 32,600 43,400 54,300 65,100 76,100
$ 175,000 40,200 53,600 67,100 80,500 93,800
$ 200,000 49,600 66,100 82,700 99,200 115,700
$ 225,000 59,000 78,600 98,300 118,000 137,600
$ 250,000 68,400 91,100 114,000 136,700 159,500
$ 300,000 87,100 116,100 145,200 174,200 203,200
$ 400,000 124,600 166,100 207,700 249,200 290,700
$ 450,000 143,400 191,100 239,000 286,700 334,500
$ 500,000 162,100 216,100 270,200 324,200 378,200
The cost of the annuity contract, including the gross up
for taxes,benefits provided under the Executive Retirement Plan for fiscal year 1996 is reportedyears
prior to 1997 are included in the Summary Compensation Table herein.
For service provided afterabove,
except with respect to Mr. H. Bresky, whose benefit is described below
under Frozen Executive Retirement Plan Benefit.
FROZEN EXECUTIVE RETIREMENT PLAN BENEFIT. Mr. H. Bresky is 100% vested
in an Executive Retirement Plan frozen effective December 31, of the year1996 in
which a participant
reaches age 62, the benefit is payable pursuant to an annuity payable by the
Company beginning the first of the next month after the participant's
retirement from the Company. The participant will accruehe has accrued an annual benefit of $22,500 upon his retirement
payable in the form of a single life annuity with a ten-year certain
provision equal to 2.5%provision.
SEABOARD CORPORATION PENSION PLAN. The Seaboard Corporation Pension Plan
provides defined benefits for its domestic salaried and clerical
employees. Beginning in fiscal 1997, each of the participant's annual compensation, subject
toindividuals named in
the cap discussed above, for eachSummary Compensation Table participates in the Seaboard Corporation
Pension Plan. Benefits under the plan are generally based upon the number
of years of service and a percentage of final average remuneration
(salary plus bonus) but are limited by federal law. As of December 31,
1997, all of the Named Officers are fully vested and have one year of
service subsequent to his 62nd
birthday after adoptionas defined in the Seaboard Corporation Pension Plan. The table
below shows benefits by remuneration and years of the plan. As Mr. H. Bresky has reached his 62nd
birthday, he qualifies under this section of the Executive Retirement Plan,
and has accrued for service provided since Januaryservice.
PENSION PLAN TABLE
YEARS OF SERVICE FROM JANUARY 1, 1994 an annual
benefit upon his retirement of $22,500.1997
REMUNERATION 15 20 25 30 35
$ 125,000 19,400 25,800 32,300 38,700 45,200
$ 150,000 23,700 31,600 39,500 47,400 55,200
$ 175,000 25,400 33,900 42,300 50,800 59,300
$ 200,000 25,400 33,900 42,300 50,800 59,300
$ 225,000 25,400 33,900 42,300 50,800 59,300
$ 250,000 25,400 33,900 42,300 50,800 59,300
$ 300,000 25,400 33,900 42,300 50,800 59,300
$ 400,000 25,400 33,900 42,300 50,800 59,300
$ 450,000 25,400 33,900 42,300 50,800 59,300
$ 500,000 25,400 33,900 42,300 50,800 59,300
FROZEN RETIREMENT PLAN. Each of the individuals named in the Summary
Compensation Table is 100% vested under a certain defined benefit plan
which was frozen inat December 31, 1993. A definitive actuarial
determination of the benefit amounts was made in 1995. The annual
amounts payable upon retirement after attaining age 62 under this
predecessor defined benefit plan are as follows: H. Bresky $120,108,
Rodrigues $61,602, Hoffman $32,063, S. Bresky $32,796 and Steer $15,490.
The benefits are payable for life with a ten-year certain provision.
SUPPLEMENTAL RETIREMENT PLANS. The Supplemental Executive Retirement
Plan provides for cash compensation in an amount equal to 3% of a
participant's annual compensation in excess of $150,000$160,000 ($150,000 for
fiscal 1996 and 1995) but not greater than $300,000. Additionally, the
amounts paid pursuant to this plan are grossed up to cover 100% of a
participant's estimated income tax liability on the benefit. The amounts
of benefits payable, including the gross up for taxes, under the
Supplemental Executive Retirement Plan for fiscal year 1996 is reported in the Summary
Compensation Table herein.
In addition to the Supplemental Executive Retirement Plan, the Company
has agreed to provide a supplementary pension benefit to
Messrs. H. Bresky and Rodrigues. Mr. Rodrigues is entitled to a
supplementary annual pension equal to 4% of his total compensation (base
compensation and all prescribed allowances and bonuses) during his
employment with the Company. As of January 1, 1997,1998, Mr. Rodrigues was
entitled to receive annual estimated benefits of $257,000$267,169 under this
supplementary plan upon his retirement.
6 Subsequent to his retirement,
the benefit will increase annually based on the change in the Consumer
Price Index. Mr. H. Bresky is entitled to a supplementary annual pension
for life with a ten-year certain provision in the amounts of $410,088 per
year. Under these plans, payment of benefits commences with the
executive's retirement from the Company.
None of the benefits payable under the aforementioned plans contain
an offset for social security benefits.
REPORT OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The following information is to provide shareholders and other
interested parties with a clear understanding of the Company's philosophy
regarding executive compensation and to provide insight behind
fundamental compensation decisions.
The Company maintains the philosophy that determination of
compensation for its executive officers by the Board of Directors is
directly and materially performance based with a recognition that these
officers are responsible for implementing the Company's long-term
strategic objectives. The Company's goals with respect to its executive
compensation policies described below are to attract and retain top
executive employees.
Base compensation and increases thereto for executive officers as
presented in the Summary Compensation Table herein are determined by the
following factors:
*- - Competitive salary ranges at or above the 50th percentile of
comparable sized firms. Because the industries in which Seaboard most
actively operates (food and marine transportation) do not correlate
precisely with any one category in the national salary surveys
utilized by the Company, the compensation peer group is not the same
as the peer group index in the Comparison of Five-Year Cumulative
Total Return graph herein.
*- - The state of the economy, which includes the performance of companies
in similar industries and such key economic factors as the Consumer
Price Index for Urban Wage Earners ("CPI-W").
*- - The diversity and complexity of the Company's businesses.
*- - An assessment of corporate performance, which includes such measures
as revenue, profitability, return on assets, return on equity, cost
containment, financial risk and achievement of non-financial strategic
objectives.
*- - An assessment of the officer's performance based on various competency
factors and the tracking of individual performance objectives.
Except for promotion, significant change in responsibility, or extraordinary
performance, increases in executive compensation are generally made within a
range established each year on the basis of economic factors such as increases
in the CPI-W or costs of living (in 1997, 0 to 5%). Increases in Mr. H. Harry
Bresky's compensation are usually granted at the upper end of the range.
Increases in the compensation of other officers have generally been established
within the range by consideration of the remaining factors outlined above,
although the range may be exceeded by up to 1% in cases of superior
performance. The Company does not ascribe particular weights to any of the
factors in its consideration.
As Chief Executive Officer, Mr. H. Harry Bresky's base compensation
is determined by a review of the Company's progress in meeting its goals
and objectives and a review of a management compensation survey prepared
by an independent consulting service. An analysis of the data presented
in this survey shows that the typical base compensation for Chief Executive
Officers of manufacturing entities with similar revenues is comparable at about the 50th
percentile to the base compensation paid to Mr. H. Harry Bresky.
Discretionary bonuses for executive officers, including the Chief
Executive Officer, are determined by the Board of Directors in accordance
with an executive bonus plan and an annual assessment of the Company's
financial performance and each officer's individual contribution to that
performance. Aggregate bonuses for employees not otherwise compensated
by a particular operating division, which includes Messrs. H. Bresky,
Rodrigues, and Steer,
7 are computed at 2/100ths of a percent of sales and
2% of earnings before taxes for the Company as a whole. The
determination of the bonus pool for employees compensated by a particular
division, which includes Messrs. Hoffman and S. Bresky, is based on a
two-part formula. The first part, referred to as "the basic bonus,"
is computed as a ratio of sales by operating division to total corporate
sales applied to the basic bonus amount as determined by the Board of
Directors. The second part of the contribution, referred to as "the
supplemental bonus," is based on the return on net assets employed in
excess of 10% of the average assets employed by the division, subject to
a maximum cap determined each year by the Board of Directors for each
line of business. The allocation of the operating division bonuses is
made by the division head subject to the approval of the Executive Vice
President of the Company. Furthermore, no executive officer may receive
a bonus greater than 100% of his base compensation.
The foregoing report has been furnished by the Board of Directors:
H. Harry Bresky
Joe E. Rodrigues
Thomas J. Shields
David A. Adamsen
COMPANY PERFORMANCE
The Securities and Exchange Commission requires a five-year comparison
of stock performance for the Company with that of an appropriate broad
equity market index and similar industry index. The Company's Common
Stock is traded on the American Stock Exchange, and one appropriate
comparison is with the American Stock Exchange Market Value Index
performance. Because there is no single industry index to compare stock
performance, the companies comprising the Dow Jones Food and Marine
Transportation Industry indices were chosen as the second comparison.
The following graph shows a five-year comparison of cumulative total
return for the Company, the American Stock Exchange Market Value Index
and the companies comprising the Dow Jones Food and Marine Transportation
Industry indices weighted by market capitalization for the five fiscal
years commencing December 31, 1991,1992, and ending
December 31, 1996:1997:
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG
SEABOARD CORPORATION, AMERICAN STOCK EXCHANGE MARKET VALUE INDEX,
AND DOW JONES FOOD AND MARINE TRANSPORTATION INDUSTRY INDICES
Seaboard Corporation
American Stock
Seaboard Industry Exchange Market
Corporation Index Value Index
----------- -------- ----------------
1996 230 153 148
1995 228 131 139
1994 138 103 110
1993 158 12/31/97 243 203 177
12/31/96 146 151 146
12/31/95 121
1992 157 102145 129 137
12/31/94 88 101 109
12/31/93 100 93 120
12/31/92 100 100 100
*Industry Index: A weighted average by market capitalization of the
companies comprising the Dow Jones Food and Marine Transportation
Industry indices.
The total cumulative return assumes that the value of the investment
in the Company's Common Stock and each index was $100 on December 31,
1991,1992, and that all dividends were reinvested.
8
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board of Directors has no compensation committee. Messrs. H.
Bresky and Rodrigues are members of the Board of Directors of the Company
and participate in decisions by the Board regarding executive
compensation.
The Company engages in shipping operations. Through wholly owned
subsidiaries the Company and Seaboard Flour Corporation provide certain
services relating to these operations. Mr. H. Bresky is the President,
Treasurer, Director and principal stockholder of Seaboard Flour
Corporation. During fiscal year 1996,1997, Carlos Shipping Limited, a wholly
owned subsidiary of Seaboard Flour Corporation, paid the Company $77,667$86,000
for ship management fees. The Company paid Carlos Shipping Limited
$2,313,577$1,656,280 for time and voyage charter fees related to the vessel, MV
African Azalea, from which Carlos Shipping Limited reimbursed $1,327,255$1,498,466
for ship operating costs advanced by the Company. The Company believes
these fees to be prevailing market rates.
During the Company's fiscal year ended December 31, 1996,1997, the Company
and Carlos Shipping Limited were indebted to each other in varying
amounts for expenses primarily related to chartering and management
services. Interest was charged on such indebtedness related to the
management services at the prime lending rate. The largest net amount
outstanding during the year was from Carlos Shipping Limited to the Company
was $333,851 at August 10, 1996, in the amount of $369,179, and the net amount
outstanding at February 1, 1997, was from Carlos Shipping Limited to the
Company in the amount of $50,840.2, 1997. The largest net amount outstanding during
the year from the Company to Carlos Shipping Limited was $66,556 at
March 23, 1996November 29, 1997. The net amount outstanding at January 31, 1998, was
from Carlos Shipping Limited to the Company in the amount of $272,216. Interest was charged on such indebtedness related
to the management services at the prime lending rate.$56,131.
During the Company's fiscal year ended December 31, 1996,1997, the Company
and Seaboard Flour Corporation were indebted to each other in varying
amounts. Advances due from Seaboard Flour Corporation to the Company
bear interest at the prime lending rate while advances due to Seaboard
Flour Corporation from the Company bear interest at one month LIBOR plus
3540 basis points. The largest net amount outstanding from the Company to
Seaboard Flour Corporation during the year was $8,258,465, and the net amount outstanding$1,010,392 at FebruaryNovember 1,
1997, was from the Company to Seaboard Flour Corporation in the amount of
$510,838.1997. The largest net amount outstanding from Seaboard Flour Corporation
to the Company during the year was $4,149,407$1,360,479 at November 30, 1996.June 28, 1997. The net
amount outstanding at January 31, 1998, was from Seaboard Flour
Corporation to the Company in the amount of $975,699. Such borrowings
were primarily used for working capital purposes.
ITEM 2: SELECTION OF INDEPENDENT AUDITORS
The persons named in the accompanying proxy intend, unless otherwise
instructed, to vote the proxies to ratify the selection of KPMG Peat
Marwick LLP, certified public accountants, as independent auditors of the
Company for the next fiscal year. The selection of this firm has been
recommended by the Audit Committee of the Board of Directors of the
Company. The Company has been advised by such firm that neither it nor
any member or associate has any relationship with the Company or with any
of its affiliates other than as independent accountants and auditors.
Submission to the stockholders of the selection of auditors is not
required by the By-Laws, and the Directors would vote to select KPMG Peat
Marwick LLP as independent auditors of the Company even if not approved
by the stockholders.
Representatives of KPMG Peat Marwick LLP will be present at the Annual
Meeting with the opportunity to make any statement desired and will be
available to answer questions from stockholders.
9
OTHER MATTERS
The notice of meeting provides for the election of Directors, the
selection of independent auditors and for the transaction of such other
business as may properly come before the meeting. As of the date of this
Proxy Statement, the Board of Directors does not intend to present to the
meeting any other business, and it has not been informed of any business
intended to be presented by others. However, if any other matters
properly come before the meeting, the persons named in the enclosed proxy
will take action and vote proxies, in accordance with their judgment of
such matters.
Action may be taken on the business to be transacted at the meeting
on the date specified in the notice of meeting or on any date or dates
to which such meeting may be adjourned.
STOCKHOLDER PROPOSALS
Any stockholder proposals for consideration at next year's annual
meeting of stockholders must be received by the Company at its executive
offices, 9000 West 67th Street, Shawnee Mission, Kansas 66202, no later
than November 27, 1997,26, 1998, except that if the next year's annual meeting
date is changed by more than 30 calendar days from the regularly
scheduled date, the Company must receive such a proposal within a
reasonable time before the Board of Directors makes its proxy
solicitation.
ADDITIONAL INFORMATION
Any stockholder desiring additional information about the Company and
its operations may, upon written request, obtain a copy of the Company's
Annual Report to the Securities and Exchange Commission on Form 10-K
without charge. Requests should be directed to Shareholder Relations,
Seaboard Corporation, 9000 West 67th Street, Shawnee Mission, Kansas
66202. 10The Company's Annual Report to the Securities and Exchange
Commission on Form 10-K is also available on the internet at
www.seaboardcorp.com.