PAGE 1
ARCHER-DANIELS-MIDLAND COMPANY
4666 Faries Parkway, Decatur, Illinois 62526
________________________________________________________________
____________
NOTICE OF ANNUAL MEETING
________________________________________________________________
____________
To All Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Stockholders of
Archer-Daniels-Midland Company, a Delaware corporation, will be
held at the JAMES R. RANDALL RESEARCH CENTER(formerly
ADM/LAKEVIEW OFFICE), 1001 BRUSH COLLEGE ROAD, DECATUR,
ILLINOIS, on Thursday, October 22, 1998, at 10:00 A.M., for the
following purposes:
(1) To fix the number of Directors and to elect Directors
to hold
office until the next Annual Meeting of Stockholders
and until
their successors are duly elected and qualified;
(2) To ratify the appointment by the Board of Directors of
Ernst &
Young LLP as independent accountants to audit the
accounts of the
Company for the fiscal year ending June 30, 1999;
(3) If properly presented, to consider and act upon the
Stockholder's
proposal set forth in the proxy statement; and
(4) To transact such other business as may properly come
before the
meeting.
By Order of the Board
of Directors
D. J. Smith, Secretary
September 16, 1998
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ARCHER-DANIELS-MIDLAND COMPANY
4666 Faries Parkway, Decatur, Illinois 62526
September 16, 1998
PROXY STATEMENT
General Matters
The accompanying proxy is SOLICITED BY THE BOARD OF
DIRECTORS of Archer-Daniels-Midland Company (the "Company") for
the Annual Meeting of Stockholders of the Company to be held at
the JAMES R. RANDALL RESEARCH CENTER (formerly ADM/LAKEVIEW
OFFICE), 1001 BRUSH COLLEGE ROAD, DECATUR, ILLINOIS, on
Thursday, October 22, 1998, at 10:00 A.M. This Proxy Statement
and the enclosed form of proxy are first being mailed to
Stockholders on or about September 16, 1998.
The cost of solicitation of proxies will be borne by the
Company. Georgeson & Company Inc. has been retained by the
Company to assist in solicitation of proxies at a fee of
$16,500, plus reasonable out-of-pocket expenses. Solicitation
other than by mail may be made by officers or by regular
employees of the Company or by employees of Georgeson & Company
Inc. by personal or telephone solicitation, the cost of which is
expected to be nominal. The Company will reimburse brokerage
firms and other securities custodians for their reasonable
expenses in forwarding proxy materials to their principals.
Only holders of shares of Common Stock of record at the
close of business on August 24, 1998 will be entitled to notice
of and to vote at the meeting and at all adjournments thereof.
At the close of business on August 24, 1998, the Company had
outstanding 568,417,508 shares of Common Stock, each share being
entitled to one vote.
Attendance to the Annual Meeting will be limited to
Stockholders. If you are a Stockholder of record and plan to
attend, please detach the admission ticket from the bottom of
your proxy card and bring it with you to the Annual Meeting.
The number of people admitted will be determined by how the
shares are registered, as indicated on the admission ticket. If
you are a Stockholder whose shares are held by a broker, bank or
other nominee, please request an admission ticket by writing to:
Archer-Daniels-Midland Company Shareholder Relations, 4666
Faries Parkway, Decatur, IL 62526-5666. Evidence of your stock
ownership, which you can obtain from your bank or stockbroker,
must accompany your letter. Stockholders who are not pre-
registered will only be admitted to the meeting upon
verification of stock ownership. The number of tickets sent
will be determined by the manner in which shares are registered.
If your request is received by October 16, 1998, an admission
ticket will be mailed to you. All other admission tickets can
be obtained at the registration table located at the James R.
Randall Research Center (formerly ADM/Lakeview Office) lobby
beginning at 8:30 A.M. on the day of the Annual Meeting.
Shares represented by proxies in the form enclosed,
properly executed, will be voted. Proxies may be revoked at any
time prior to being voted.
Principal Holders of Voting Securities
The following Stockholder is known to the Company to be the
beneficial owner of more than 5% of the outstanding Common Stock
of the Company, based upon filings thereof with the Securities
and Exchange Commission.
Name and Address of Beneficial Owner Amount
Percent of Class
State Farm Mutual Automobile Insurance 46,047,686
8.10%
Company and Related Entities
Bloomington, Illinois 61701
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Election of Directors
It is intended that proxies solicited by the Board of
Directors will, unless otherwise directed, be voted to fix at
twelve (12) the number of Directors to be elected and to elect
the nominees named below.
The nominees proposed for election to the Board of
Directors are all presently members of the Board. Mr. Shreve M.
Archer, Jr., a member of the Board since 1948, retired as a
member of the Board of Directors and was elected as a Director
Emeritus effective July 23,1998.
The proxies (unless otherwise directed) will be voted
for the election of the nominees named herein as Directors to
hold office until the next succeeding Annual Meeting of
Stockholders and until their successors are duly elected and
qualified. In the event any nominee for Director becomes
unavailable, it is intended that the persons named in the proxy
may vote for a substitute who will be designated by the Board of
Directors. The Board has no reason to believe that any nominee
will be unable to serve as a Director. All present members have
served continuously as Directors from the year stated.
The nominees, their age, position with the Company,
principal occupation, directorships of other publicly-owned
companies, the year in which each first became a Director, and
the number of shares of Common Stock of the Company beneficially
owned, directly or indirectly, by each are shown in the
following table. Except for Ms. Mollie Hale Carter and Messrs.
Richard Burt and Andrew Young, all of the nominees have been
Executive Officers of their respective companies or employed as
otherwise specified below for at least the last five years. Ms.
Carter was a Senior Investment Officer for the John Hancock
Mutual Life Insurance Company from 1987 until 1997 at which time
she became Chairman of Sunflower Bank in Salina, Kansas and Vice
President of Star A, Inc. Until 1994, Mr. Richard Burt was a
partner with McKinsey & Company specializing in international
business strategy and telecommunications at which time he became
Chairman of International Equity Partners and later in 1998
formed IEP Advisors, LLP of which he serves as Chairman.
Ambassador Andrew Young served as Vice-Chairman of the Law
Companies Group from January 1990 until 1996 when he retired
from this position to serve as Co-Chairman of the Atlantic
Committee for the Olympic Games. In January 1997, Ambassador
Young was appointed as Co-Chairman of GoodWorks International
and in 1998 was appointed Chairman of that company.
The affirmative vote of a majority of the outstanding
shares of Common Stock of the Company present in person or
represented by proxy at the meeting and entitled to vote on the
election of Directors is required for the election of Directors.
For this purpose, a Stockholder voting through a proxy who
abstains with respect to the election of Directors is considered
to be present and entitled to vote on the election of Directors
at the meeting, and is in effect a negative vote, but a
Stockholder (including a broker) who does not give authority to
a proxy to vote, or withholds authority to vote, on the election
of Directors shall not be considered present and entitled to
vote on the election of Directors.
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<TABLE>
<CAPTION>
Name, Age, Principal Occupation or Year First Common Percent
Position, Directorships of Other Elected as Stock of
Publicly-Owned Companies Director Owned Class
<S> <C> <C> <C>
D. O. Andreas, 80, Chairman 1966 24,647,4 (1)(2) 4.34
of the Board. He is a 85 (3)
Director of Hollinger
International, Inc.
*Mollie Hale Carter, 36, 1996 11,908,7 (2)(4) 2.10
Chairman, Sunflower Bank 42
and Vice President, Star A,
Inc. (farming and ranch
operation).
*G. O. Coan, 62, Chief 1995 3,169,22 (2)(5) **
Executive Officer of Gold 9
Kist Inc. (a farmer-owned
cooperative). He is a
Director of SunTrust Banks
Inc. and Cotton States Life
Insurance Company.
*G. Allen Andreas, 55, 1997 3,392,62 (1)(6) **
President and Chief Executive 4
Officer of the Company.
John R. Block, 63, President, 1996 2,728 (2) **
Food Distributors
International. He is a
Director of Deere & Company
and Hormel Foods Corporation.
J. K. Vanier, 70, Chief 1978 10,110,5 (2)(7) 1.78
Executive Officer, Western 91
Star Ag. Resources,
Inc.(investments and
livestock).
M. Brian Mulroney, 59, Senior 1993 8,197 (2) **
Partner in the law firm of
Ogilvy Renault. He is a
Director of Barrick Gold
Corporation, Petrofina S.A.,
The TrizecHahn Corporation,
Cendant Corporation and
Quebecor Printing, Inc.
O. G. Webb, 62, farmer. 1991 2,761,83 (2)(8) **
Chairman of the Board and 1
President, GROWMARK, Inc.
(farmer-owned cooperative).
Richard Burt, 51, Chairman of 1996 2,431 (2) **
IEP Advisors, LLP(a direct
investment and advisory
services organization). Mr.
Burt is a Director of
Hollinger International,
Inc., Wierton Steel
Corporation, Paine Webber
Mutual Funds, Powerhouse
Technologies, Inc. and
Homestead Mining Company.
F. Ross Johnson, 66, Chairman 1989 166,119 (2) **
of RJM Group, Inc. (an
international management and
advisory organization). He
is a Director of American
Express Company, Power
Corporation of Canada and
Noma Industries of Canada.
*Robert S. Strauss, 79, 1992 42,418 (2) **
Partner in the law firm of
Akin, Gump, Strauss, Hauer &
Feld. Mr. Strauss is a
Director of Hollinger
International, Inc. and
Gulfstream.
Andrew Young, 66, Chairman of 1997 5,091 (2) **
GoodWorks International (a
specialty consulting group).
Mr. Young is a Director of
Delta Airlines, Inc., Argus
Inc., Host Marriott
Corporation, Cox
Communication Inc. and Thomas
Nelson, Inc.
* Member of the Executive Committee
** Less than 1% of outstanding shares
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<FN>
(1) Includes shares allocated as a beneficiary under the
Company's Tax Reduction Act Stock Ownership Plan (TRASOP) and
ADM Savings & Investment Plan.
(2) Includes stock units allocated under the Company's Stock
Unit Plan for Nonemployee Directors that are deemed to be the
equivalent of outstanding shares of Common Stock for bookkeeping
and valuation purposes.
(3) Includes 22,362,285 shares in which Mr. Andreas disclaims
any beneficial interest, in trust for members of his family of
which he is a Trustee and in a partnership of which Mr. Andreas
is the Managing Partner which includes 159,521 shares held for
Mr. G. Allen Andreas.
(4) Includes 4,101,617 shares owned by or in trust for members
of Ms. Carter's family in which Ms. Carter disclaims beneficial
interest in 21,264 shares. Includes 4,399,595 shares owned by
Star A, Inc. and 3,375,405 shares owned by Star E, Inc., family
corporations, with respect to which Ms. Carter disclaims any
beneficial interest in 4,094,703 shares and 3,187,882 shares,
respectively.
(5) Includes 3,161,601 shares owned by Gold Kist Inc. and 161
shares owned by a member of Mr. Coan's family in which Mr. Coan
disclaims any beneficial interest.
(6) Includes 3,133,775 shares, in which Mr. Andreas disclaims
any beneficial interest, in trust for members of his family of
which he is a Trustee or has sole or shared voting power.
Includes 40,771 shares that are unissued but are subject to
stock options exercisable within 60 days from the date of this
Proxy Statement.
(7) Includes 17,296 shares owned by members of Mr. Vanier's
family in which he disclaims any beneficial interest. Includes
6,487,295 shares in various trusts of which Mr. Vanier is one of
the Trustees and in a corporation in which Mr. Vanier and
members of his family have certain beneficial interests (see
footnote 4; Mr. Vanier is the brother of Ms. Carter's mother and
3,375,405 of the reported shares were also reported by Ms.
Carter).
(8) Includes 2,755,172 shares owned by GROWMARK, Inc. in which
Mr. Webb disclaims any beneficial interest.
</TABLE>
B. D Kraft, M. L. Andreas, C. T. Bayless and R. P. Reising
are four of the five highest paid Executive Officers of the
Company but are not Directors of the Company.
B. D Kraft beneficially owns 2,816,348 shares of Common
Stock of the Company, which number includes (1) shares allocated
to him as a beneficiary under the Company's TRASOP, ADM Savings
& Investment Plan and Tabor Employees Profit Sharing Plan, (2)
86,517 shares in trusts for members of his immediate family of
which he is a Co-Trustee and in which he disclaims any
beneficial interest, and (3) 39,852 shares that are subject to
stock options exercisable within 60 days from the date of this
Proxy Statement.
M. L. Andreas beneficially owns 1,629,553 shares of Common
Stock of the Company, which number includes (1) shares allocated
to him as a beneficiary under the Company's TRASOP and ADM
Savings & Investment Plan, (2) 1,132,652 shares owned by Andreas
Corporation with respect to which he disclaims any beneficial
interest in 940,102 shares, (3) 116,647 shares in trusts for
members of his family and in which he disclaims any beneficial
interest, and (4) 30,854 shares that are subject to stock
options exercisable within 60 days from the date of this Proxy
Statement.
C. T. Bayless beneficially owns 121,719 shares of Common
Stock of the Company, which number includes (1) shares allocated
to him as a beneficiary under the Company's TRASOP and ADM
Savings & Investment Plan, (2) 178 shares owned by a member of
his family with respect to which he disclaims any beneficial
interest, and (3) 41,018 shares that are unissued but are
subject to stock options exercisable within 60 days from the
date of this Proxy Statement.
R. P. Reising beneficially owns 96,365 shares of Common
Stock of the Company, which number includes (1) shares allocated
to him as a beneficiary under the Company's TRASOP and ADM
Savings & Investment Plan, (2) 1,113 shares owned by a member of
his family with respect to which he disclaims any beneficial
interest, and (3) 9,026 shares that are unissued but are subject
to stock options exercisable within 60 days from the date of
this Proxy Statement.
Common Stock beneficially owned by all Directors and
Executive Officers as a group, numbering 40 persons including
those listed above is 62,601,268 shares representing 11.01% of
the outstanding shares, of which 583,041 shares are unissued but
are subject to stock options exercisable within 60 days from the
date of this Proxy Statement.
G. Allen Andreas, President and Chief Executive Officer of
the Company, is a nephew of D. O. Andreas. M. L. Andreas is a
nephew of D. O. Andreas. G. Allen Andreas and M. L. Andreas are
cousins. Mollie Hale Carter is a niece of J. K. Vanier.
Information Concerning Committees and Meetings
During the last fiscal year the Board of Directors of the
Company held five regularly scheduled meetings and one special
meeting. Mr. Young attended less than seventy-five percent of
the aggregate number of meetings of the Board and those
committees of which he is a member.
During the last fiscal year, the Board had Audit,
Compensation, Nominating, Succession, Public Policy, Corporate
Governance, and Special Committees. The Audit Committee
consisted of Messrs. Coan, Block, Burt, Young and Ms. Carter;
the Compensation Committee consisted of Messrs. Webb, Block,
Coan, Johnson and Vanier; the Nominating Committee consisted of
Ms. Carter and Messrs. Burt, Coan and Young; the Succession
Committee consisted of Messrs. Webb, Archer, Coan, Johnson,
Strauss and Vanier; the Public Policy Committee consisted of
Messrs. Mulroney, Archer, Block, Webb and Young; the Corporate
Governance Committee consisted of Messrs. Coan, Archer, Block,
Burt, Johnson, Mulroney, Strauss, Vanier, Webb, Young and Ms.
Carter; and the Special Committee which was dissolved in
September 1997 consisted of Messrs. Mulroney, Johnson, Vanier
and Webb.
The Audit Committee, which met four times during the fiscal
year, reviews (1) the overall plan of the annual independent
audit, (2) financial statements, (3) scope of audit procedures,
(4) the performance of the Company's independent accountants and
internal auditors,(5) auditors' evaluation of internal controls,
and (6) matters of legal compliance.
The Compensation Committee, which met four times during the
fiscal year, reviews and establishes compensation of Officers,
approves direct compensation in the amount of $150,000 or more
annually to any employee and approves modifications and changes
in employee benefit plans affecting benefits salaried employees
receive under such plans. All of its actions are submitted to
the Board for approval.
The Nominating Committee, which met once during the fiscal
year, considers and recommends nominees to the Board. The
Committee will consider nominees recommended by a Stockholder
provided the Stockholder submits the nominee's name in writing
addressed to the Secretary of the Company listing the nominee's
qualifications together with a statement signed by the nominee
indicating a willingness to serve.
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Executive Compensation
The following table sets forth information concerning the Company's
Chief Executive Officer and the four other most highly paid Executive
Officers of the Company.
<TABLE>
Summary Compensation Table
__________________________
<CAPTION>
Long All
Annual Compensation Term Other
Name and Principal Fiscal Other Annual Compen- Compen-
Position Year Salary Bonus Compensation sation sation
$ $ $ #(1) $(2)
____ _________ _____ ____________ _______ _______
<S> <C> <C> <C> <C> <C> <C>
G. Allen 199 2,128,49 -0- N/A -0- 8,333
Andreas, Chief 819 5 -0- N/A 105,000 6,000
Executive 97 -0- N/A -0- 6,000
Officer and 199 803,282
President 6
598,570
B. D Kraft, 199 861,502 -0- N/A -0- 8,333
Senior Vice 819 765,661 -0- N/A 21,000 6,000
President 97 695,796 -0- N/A -0- 6,000
199
6
M. L. Andreas, 199 701,186 -0- N/A -0- 8,333
Senior Vice 819 655,234 -0- N/A 15,750 6,000
President and 97 619,480 -0- N/A -0- 6,000
Assistant to 199
the Chairman 6
C. T. Bayless, 199 628,728 -0- N/A -0- 8,333
Executive Vice 819 461,900 -0- N/A 31,500 6,000
President 97 412,463 -0- N/A -0- 6,000
199
6
R. P. Reising, 199 554,454 -0- N/A -0- 8,333
Senior Vice 819 438,660 -0- N/A 15,750 6,000
President 97 389,368 -0- N/A -0- 6,000
199
6
<FN>
(1) Number of options granted in fiscal year indicated and
adjusted for all stock dividends and stock splits paid to date.
(2) These amounts represent the Company's matching contribution
under the ADM Savings & Investment Plan, a 401(k) plan. This is
a contributory plan available to all salaried employees, as well
as hourly employees at specific locations, who have completed
one year of service with the Company. For the period January 1,
1997 through June 30, 1997, employees could contribute 1% to 6%
of regular earnings. The Company's matching contribution was
equal to 100% of the first 2% and 50% of the next 4% of the
employee's contribution. For the period July 1, 1997 through
December 31, 1997, employees could contribute 1% to 10% of
regular earnings. The Company's matching contribution is equal
to 100% of the first 4% and 50% of the next 2% of the employee's
contribution. The maximum employee contribution for calendar
1997 is $9,500. The employees' and the Company's contributions
are used to purchase Common Stock of the Company from the
Company. All contributions are fully vested to the
participants; however, there are withdrawal restrictions.
</TABLE>
During the last fiscal year, compensation for nonemployee
Directors consisted of an annual retainer of $100,000, at least
one-half of which will be paid in stock units pursuant to the
Company's Stock Unit Plan for Nonemployee Directors.
For each of the fiscal years in the two-year period
commencing July 1, 1997 and ending June 30, 1999, D. O. Andreas
will receive $800,000 per year for acting as the Chairman of the
Board of Directors. Thereafter, for so long as Mr. Andreas
continues in the position of Chairman, he will receive $300,000
per year. In accordance with the provisions of the Company's
Stock Unit Plan for Nonemployee Directors, at least 50% of the
first $100,000 of such compensation will be paid in the form of
stock units.
For the period July 1, 1997 through June 30, 1998 the
Executive Officers named above were not granted any stock
options.
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<TABLE>
Aggregated Option Exercises in Fiscal Year and
Fiscal Year-End Option Values (1)
<CAPTION>
Name Shares Value Number of Unexercised Value of Unexercised
Acquired on Realized Options at Fiscal Year In-the-Money Options
Exercise ($) End (#) at Fiscal Year End ($)
(#)
_____________ ___________ _________ _________ ___________ _________ ___________
___ __ __ __ __ __ __
<S> <C> <C> <C> <C> <C> <C>
Exercisab Unexercisab Exercisab Unexercisab
le le le le
G. A. Andreas - - 36,913 116,488 178,705 363,848
B. D Kraft - - 35,030 47,611 197,846 189,539
M. L. Andreas - - 26,996 37,155 151,860 149,101
C. T. Bayless - - 36,196 56,945 201,002 214,805
R. P. Reising 19,308 150,808 5,168 37,155 27,624 149,101
<FN>
(1) Table reflects adjustments for stock dividends and stock splits paid to
date.
</TABLE>
The Company has a Retirement Plan for Salaried Employees (the "Plan"). The
Company made a contribution to the Plan for calendar and Plan year 1997 equal to
the required minimum ERISA contribution. The following table shows the
estimated annual benefits payable as a life annuity, upon normal retirement, to
persons in specified salary and years-of-service classifications:
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<TABLE>
<CAPTION>
5 Year Average Base For Years of Credited Service Shown
Below
Compensation 10 20 30
35
<S> <C> <C> <C> <C>
$200,000 $ 29,699 $ 59,399 $ 89,098 $
103,948
400,000 61,699 123,399 185,098
215,948
600,000 93,699 187,399 281,098
327,948
800,000 125,699 251,399 377,098
439,948
1,000,000 157,699 315,399 473,098
551,948
1,200,000 189,699 379,399 569,098
663,948
1,400,000 221,699 443,399 665,098
775,948
1,600,000 253,699 507,399 761,098
887,948
1,800,000 285,699 571,399 857,098
999,948
2,000,000 317,699 635,399 953,098
1,111,948
2,200,000 349,699 699,399 1,049,098
1,223,948
2,400,000 381,699 763,399 1,145,098
1,335,948
2,600,000 413,699 827,399 1,241,098
1,447,948
2,800,000 445,699 891,399 1,337,098
1,559,948
3,000,000 477,699 955,399 1,433,098
1,671,948
</TABLE>
The pension amount is based on the final average monthly
compensation (average of the 60 consecutive months of the last
180 months which produce the highest average). For purposes of
the Plan, the term "compensation" is defined as base
compensation ("Salary" as shown in the Summary Compensation
Table) paid during the Plan year. The pension amount is
calculated as follows: final average monthly compensation times
56%, less 50% of primary Social Security payable at age 65 and
proportionately reduced for service of less than 35 years and
additional early retirement reduction when the pension commences
prior to age 65. The normal retirement age under the Plan is
age 65 with 5 years of service. The 5 year average compensation
for purposes of the Plan of each of the five highest paid
Executive Officers of the Company and the number of years of
service rounded to the nearest year and credited to each of them
under the Plan was as follows: G. A. Andreas $687,000 (25
years); B. D Kraft $692,309 (22 years); M. L. Andreas $602,973
(26 years); C. T. Bayless $413,607 (35 years); R. P. Reising
$386,940 (23 years).
Various provisions of the Internal Revenue Code of 1986
limit the amount of benefits payable under a qualified pension
plan. When these limits operate to reduce a pension benefit
payable under the Plan, the Company will provide additional
amounts so that the total annual pension will be as provided in
the Plan.
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Compensation Committee Report
The Board of Directors of the Company has a Compensation
Committee (formerly the Salary, Stock Option and Succession
Committee) comprised of five outside directors. The Committee
reviews and establishes compensation of officers, approves the
direct compensation in the amount of $150,000 or more annually
to any employee and approves modifications and changes in
employee benefit plans with respect to the benefits salaried
employees receive under such plans. All of its actions are
submitted to the Board for ratification.
The Company's compensation program is informal and rather
simple consisting principally of salary and from time to time,
not necessarily annually, an award of incentive stock options.
Charges for the personal use of Company facilities, if any,
gross-up an executive's cash remuneration. Options for stock
are at the market price on the date of grant and are exercisable
in increments usually over a five year term but none can be
acquired during the first year. Bonuses and incentive awards
are not a part of the compensation program, nor do any
executives, including the Chief Executive Officer, have
employment contracts.
Compensation is not related to the market performance of
the Company's stock or to the annual profit performance of the
Company. Stock prices are not only reflective of earnings but
are influenced by such factors as interest rates, fluctuations
in foreign currencies, trading of corporate equities as
commodities by large financial institutions and funds, comments
and recommendations of security analysts, government actions
(i.e. tax and fiscal policies) and market makers' perceptions of
an entire industry. The performance of a Company in the basic
food industry may be affected by plantings, global weather (such
as floods and droughts), foreign nations' actions, including
trade negotiations, and the Federal Government's programs,
policies and restrictions. Management cannot manage the
vagaries of the equity markets or the outside influences that
relate to the production of food for human and animal
consumption.
The Company's compensation program is designed so that the
annual compensation for its employees and for its executives
remains competitive with that for comparable employment,
responsibilities and performance in major industries, not only
in the U.S. but on a world-wide basis. The Committee,
consisting entirely of outside directors who are investors and
business leaders, is familiar with compensation packages and
also familiarizes itself with various forms and types of
remuneration primarily from publications including general news
reports, periodicals and reports of other public corporations.
The Committee in its deliberations considers all of the
factors listed above and in addition the following principles:
a. an individual's on-the-job performance;
b. the Company's ability to pay and its growth record;
c. cost-of-living increases; and
d. in the case of all individuals except the Chief
Executive, the recommendations of management and a
person's supervisors.
The compensation for the Chief Executive Officer was
established by the Committee considering all of the factors
previously described. The Committee proposed and the Board
approved an annual salary of $2.4 million and options for 50,000
shares under the 1991 Incentive Stock Option Plan for G. A.
Andreas at the July 1998 board meeting. Henceforth the
Corporate Governance Committee, comprised of all of the non-
management directors, shall evaluate the performance of the
Chief Executive Officer consistent with these guidelines and
certain specific CEO evaluation criteria established by the
Corporate Governance Committee. The evaluation of the Corporate
Governance Committee will be forwarded to the Compensation
Committee which will establish the compensation for the Chief
Executive Officer for ratification by the Board of Directors.
Section 162(m) of the Internal Revenue Code generally
disallows a tax deduction to public corporations for
compensation paid in excess of $1,000,000 annually to the
corporation's chief executive officer and four other most highly
compensated executive officers. One of the exceptions to this
deduction limit is for qualifying "performance-based"
compensation. The Company's 1996 Stock Option Plan, approved by
the stockholders at the Company's 1996 annual meeting, has been
designed to qualify as a performance-based compensation plan
satisfying this exception. However, other compensation paid to
the Company's executive officers may be subject to the deduction
limitation. The Committee believes, in order to retain the
flexibility to compensate its executive officers in a
competitive environment in accordance with the principles
discussed above, that it would be inadvisable to adopt a strict
policy of compliance with Section 162(m) in all cases. The
Committee will, however, continue to consider future
opportunities for compliance with Section 162(m) that it feels
are in the best interests of the Company and its stockholders.
The Committee also believes that the amount of any expected loss
of a tax deduction under Section 162(m) will be insignificant to
the Company's overall tax position.
Glenn Webb, Chairman
J. R. Block
G. O. Coan
F. R. Johnson
J. K. Vanier
9
PAGE 10
<TABLE>
Comparison of Five Year Cumulative Total Return
Among Archer-Daniels-Midland Company (ADM), the S & P Foods
Index
and the S & P 500 Index
<CAPTION>
Measurement Period ADM S & P Foods S & P 500
(Fiscal Year Covered) Index
Index
__________________ ___ __________ _________
<S> <C> <C> <C>
Measurement Pt - 06/30/93 $100.00 $100.00 $100.00
FYE 06/30/94 $104.33 $100.13 $101.41
FYE 06/30/95 $131.52 $129.39 $127.84
FYE 06/30/96 $143.21 $152.21 $161.09
FYE 06/30/97 $186.67 $212.84 $216.99
FYE 06/30/98 $163.07 $267.49 $282.43
</TABLE>
$100 invested on 06/30/93 in stock or index
including reinvestment of dividends.
Fiscal year ending June 30.
Graph produced in accordance with SEC regulations by Research
Data Group, Inc.
10
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Certain Relationships and Related Transactions
Mr. J. K. Vanier has a beneficial interest in farms and
ranches in Kansas and other states. During the last fiscal year
the farms and ranches made sales of grain totaling $84,192.00 to
the Company on terms and conditions that were no more favorable
than those afforded by any other customer.
During the fiscal year ended June 30, 1998, the Company
retained the services of the law firms of Akin, Gump, Strauss,
Hauer & Feld of which Robert S. Strauss is a partner and Ogilvy
Renault of which M. Brian Mulroney is the senior partner. The
Company may continue to retain the services of, and refer
specific matters to, these firms during the next fiscal year.
11
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Auditors
The firm of Ernst & Young LLP, independent certified public
accountants, has audited the records of the Company for many
years. The Board of Directors wishes to continue the services
of this firm for the fiscal year ending June 30, 1999, and the
Stockholders' ratification of such appointment is requested.
Representatives of Ernst & Young LLP will attend the Annual
Meeting, will have the opportunity to make a statement if they
desire to do so, and will be available to respond to appropriate
questions.
Section 16(a) Beneficial Ownership Reporting Compliance
Based solely upon a review of copies of reports furnished
to the Company during the fiscal year ended June 30, 1998, the
following persons filed the number of late reports or failed to
file reports/representing the number of transactions set forth
after his or her name: J. C. Ielase 1 report/1 transaction, W.
Camp 1 report/1 transaction, and all nonemployee Directors 2
transactions/1 report each.
Stockholder's Proposal
The following proposal and supporting statement have been
submitted by John J. Gilbert and Margaret R. Gilbert, 29 East
64th Street, New York, New York 10021-7043 and Martin Glotzer,
7061 North Kedzie, Chicago, Illinois 60645. John J. Gilbert
holds 659 shares of Company stock and/or Margaret R. Gilbert
holds 441 shares of Company stock, and both trustees U/W of
Samuel Rosenthal hold 641 shares of Company stock and both
representing an additional family interest of 709 shares, and/or
Martin Glotzer who holds 110 shares of Company stock:
RESOLVED: That the stockholders of Archer-Daniels-Midland
Company, assembled in annual meeting in person and by
proxy, hereby request the Board of Directors to take the
steps necessary to provide for cumulative voting in the
election of directors, which means each stockholder shall
be entitled to as many votes as shall equal the number of
shares he or she owns multiplied by the number of directors
to be elected, and he or she may cast all of such votes for
a single candidate, or any two or more of them as he or she
may see fit.
REASONS
Strong support along the lines we suggest were shown at the
1996 annual meeting when 24.4%, 91,366,745 shares, were
cast in favor of this proposal.
We believe the board of directors of Archer-Daniels should
adopt cumulative voting in the election of directors as
part of its program of corporate governance.
Provision for cumulative voting brings to the corporate
system a means by which a significant group of
stockholders, though in the minority, can elect candidates
of its choice, making a more diverse board of directors.
If you agree, please mark your proxy for this resolution;
proxies not marked will be voted consistent with the
Company's discretionary authority.
RECOMMENDATION OF THE BOARD OF DIRECTORS AGAINST THE PROPOSAL
The Board of Directors believes that each director should
be chosen for his or her qualifications and ability to serve
the Company and all of its Stockholders. Cumulative voting
introduces the possibility of a director being committed to
serve the special interests of a small fraction responsible for
the director's election rather than the best interest of the
Stockholders as a whole. The present system of voting for the
election of directors avoids the conflict created when a
director is elected by a narrow constituency.
The Board of Directors recommends that Stockholders vote
AGAINST this Stockholder proposal. Proxies solicited by the
Board of Directors will be so voted unless Stockholders specify
a different choice.
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Deadline for Submission of Stockholder Proposals
Proposals of Stockholders intended to be presented at the
next Annual Meeting must be received by the Secretary, Archer-
Daniels-Midland Company, 4666 Faries Parkway, Decatur, Illinois,
62526, no later than May 19, 1999.
Other Matters
It is not contemplated or expected that any business other
than that pertaining to the subjects referred to in this Proxy
Statement will be brought up for action at the meeting, but in
the event that other business does properly come before the
meeting calling for a Stockholders' vote, the Proxy Committee
will vote thereon according to its best judgment in the interest
of the Company.
By Order of the Board
of Directors
ARCHER-DANIELS-MIDLAND
COMPANY
D. J. Smith, Secretary
September 16, 1998
13
PAGE 14
Please Fill In and Sign the
Accompanying
Form of Proxy and Mail as Soon as
Possible
In the Enclosed Addressed Envelope.
No Postage is Necessary.
ANNUAL MEETING OF STOCKHOLDERS
YOU ARE URGED TO ATTEND THE ANNUAL MEETING OF STOCKHOLDERS
THIS YEAR. IT WILL BE HELD AT 10:00 A.M. ON THURSDAY, OCTOBER
22, 1998, AT THE JAMES R. RANDALL RESEARCH CENTER (FORMERLY
ADM/LAKEVIEW OFFICE), 1001 BRUSH COLLEGE ROAD, DECATUR,
ILLINOIS.
ATTENDANCE TO THE ANNUAL MEETING WILL BE LIMITED TO
STOCKHOLDERS. IF YOU ARE A STOCKHOLDER OF RECORD AND PLAN TO
ATTEND, PLEASE DETACH THE ADMISSION TICKET FROM THE BOTTOM OF
YOUR PROXY CARD AND BRING IT WITH YOU TO THE ANNUAL MEETING.
THE NUMBER OF PEOPLE ADMITTED WILL BE DETERMINED BY HOW THE
SHARES ARE REGISTERED, AS INDICATED ON THE ADMISSION TICKET. IF
YOU ARE A STOCKHOLDER WHOSE SHARES ARE HELD BY A BROKER, BANK OR
OTHER NOMINEE, PLEASE REQUEST AN ADMISSION TICKET BY WRITING TO:
ARCHER-DANIELS-MIDLAND COMPANY SHAREHOLDER RELATIONS, 4666
FARIES PARKWAY, DECATUR, IL 62526-5666. EVIDENCE OF YOUR STOCK
OWNERSHIP, WHICH YOU CAN OBTAIN FROM YOUR BANK OR STOCKBROKER,
MUST ACCOMPANY YOUR LETTER. STOCKHOLDERS WHO ARE NOT PRE-
REGISTERED WILL ONLY BE ADMITTED TO THE MEETING UPON
VERIFICATION OF STOCK OWNERSHIP. THE NUMBER OF TICKETS SENT
WILL BE DETERMINED BY THE MANNER IN WHICH SHARES ARE REGISTERED.
IF YOUR REQUEST IS RECEIVED BY OCTOBER 16, 1998, AN ADMISSION
TICKET WILL BE MAILED TO YOU. ALL OTHER ADMISSION TICKETS CAN
BE OBTAINED AT THE REGISTRATION TABLE LOCATED AT THE JAMES R.
RANDALL RESEARCH CENTER (FORMERLY ADM/LAKEVIEW OFFICE) LOBBY
BEGINNING AT 8:30 A.M. ON THE DAY OF THE ANNUAL MEETING.
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PAGE 15
ARCHER-DANIELS-MIDLAND COMPANY
(LOGO) ADM 4666 Faries Parkway, Decatur, IL 62526
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
The undersigned hereby appoints D. O. Andreas, M. H. Carter, and
G. O. Coan as Proxies, with the power of substitution, to
represent and to vote, as designated below, all the shares of
the undersigned held of record on August 24, 1998, at the Annual
Meeting of Stockholders to be held on October 22, 1998 and any
adjournments thereof.
The Board of Directors recommends that Stockholders vote FOR the
following:
1. ELECTION OF DIRECTORS
FOR ___ all nominees listed below (except as indicated
below)
WITHHOLD AUTHORITY ___ to vote for all nominees listed below
(INSTRUCTION: To withhold authority to vote for any individual
nominee strike a line through the nominee's name in the list
below.)
D. O. Andreas, G. O. Coan, G. A. Andreas, J. K. Vanier, A.
Young, R. Burt, O. G. Webb, F. R. Johnson, R. S. Strauss, M. B.
Mulroney, J. R. Block, M. H. Carter;
2. Ratify the appointment of Ernst & Young LLP as
independent accountants for the fiscal year ending June 30,
1999;
FOR __ AGAINST __ ABSTAIN __
The Board of Directors recommends that Stockholders vote AGAINST
the
following:
3. Adopt Stockholder's Proposal
FOR __ AGAINST __ ABSTAIN __
all as more fully referred to in the Proxy Statement with
respect to such meeting, and upon such other matters as may
properly come before such meeting.
4. Do you plan to attend the meeting? YES __ NO __
This Proxy when properly executed will be
voted in the manner directed herein by the
undersigned Stockholder. If no direction
is made, this Proxy will be voted for
Proposals 1 and 2, and against Proposal 3.
Please sign exactly as name(s) appear below.
___________________________
When shares are held by joint tenants, both Signature
should sign. When signing as attorney,
executor, administrator, trustee or guardian,
please give full title as such. If a
___________________________
corporation, please sign in full corporate Signature if
held jointly
name by President or other authorized officer.
If a partnership, please sign in partnership
name by authorized person. DATED:
______________, 1998
PLEASE
MARK, SIGN,
DATE AND
RETURN THE
PROXY CARD
PROMPTLY
USING THE
ENCLOSED ENVELOPE
15
