UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to _______
_____________
Commission File Number 1-3390
Seaboard Corporation
(Exact name of registrant as specified in its charter)
Delaware 04-2260388
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
9000 W. 67th Street, Shawnee Mission, Kansas 66202
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (913) 676-8800
Not Applicable
(Former name, former address and former fiscal year, if changed
since last report.)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X . No ___.
There were 1,487,520 shares of common stock, $.01 par value
per share, outstanding on
April 30, 1999.
Total pages in filing - 16 pages
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
SEABOARD CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
March 31, 1999 and December 31, 1998
(Thousands of dollars)
(Unaudited)
March 31, December 31,
1999 1998
Assets
Current assets:
Cash and cash equivalents $ 16,708 $ 20,716
Short-term investments 129,917 155,763
Receivables, net 177,415 181,583
Inventories 240,826 214,846
Deferred income taxes 14,692 14,604
Prepaid expenses and deposits 21,521 13,757
Total current assets 601,079 601,269
Investments in and advances to foreign affiliates 28,407 28,416
Net property, plant and equipment 558,197 559,749
Other assets 35,396 33,700
Total assets $1,223,079 $1,223,134
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable to banks $ 162,612 $ 158,980
Current maturities of long-term debt 18,511 18,608
Accounts payable 55,060 73,481
Other current liabilities 130,747 114,395
Total current liabilities 366,930 365,464
Long-term debt, less current maturities 329,452 329,469
Deferred income taxes 45,681 44,147
Other liabilities 29,246 28,580
Total non-current and deferred liabilities 404,379 402,196
Minority interest 1,351 5,682
Stockholders' equity:
Common stock of $1 par value,
Authorized 4,000,000 shares;
issued 1,789,599 shares 1,790 1,790
Less 302,079 shares held in treasury (302) (302)
1,488 1,488
Additional capital 13,214 13,214
Accumulated other comprehensive income (115) (81)
Retained earnings 435,832 435,171
Total stockholders' equity 450,419 449,792
Total liabilities and stockholders' equity $1,223,079 $1,223,134
See notes to condensed consolidated financial statements.
SEABOARD CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
Three months ended March 31, 1999 and 1998
(Thousands of dollars except per share amounts)
(Unaudited)
March 31, March 31,
1999 1998
Net sales $ 367,607 $ 446,532
Cost of sales and operating expenses 327,311 398,056
Gross income 40,296 48,476
Selling, general and administrative expenses 30,000 36,215
Operating income 10,296 12,261
Other income (expense):
Interest income 1,852 1,616
Interest expense (9,591) (7,812)
Income (loss) from foreign affiliates 85 (2,576)
Minority interest 474 -
Miscellaneous 611 620
Total other income (expense), net (6,569) (8,152)
Earnings before income taxes 3,727 4,109
Income tax expense 2,694 1,245
Net earnings $ 1,033 $ 2,864
Earnings per common share $ .69 $ 1.93
Dividends declared per common share $ .25 $ .25
Average number of shares outstanding 1,487,520 1,487,520
See notes to condensed consolidated financial statements.
SEABOARD CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
Three months ended March 31, 1999 and 1998
(Thousands of dollars)
(Unaudited)
March 31, March 31,
1999 1998
Cash flows from operating activities:
Net earnings $ 1,033 $ 2,864
Adjustments to reconcile net earnings to
cash from operating activities:
Depreciation and amortization 14,574 15,334
(Income) loss from foreign affiliates (85) 2,576
Gain from sale of fixed assets (608) (484)
Deferred income taxes 1,469 (949)
Changes in current assets and liabilities:
Receivables, net of allowance 4,168 (9,947)
Inventories (25,980) 21,005
Prepaid expenses and deposits (7,764) (4,011)
Current liabilities exclusive of debt (2,069) (15,751)
Other, net (2,222) (925)
Net cash from operating activities (17,484) 9,712
Cash flows from investing activities:
Purchase of investments (99,497) (66,758)
Proceeds from the sale or maturity of investments 125,286 66,118
Capital expenditures (14,887) (12,644)
Proceeds from sale of fixed assets 1,508 4,332
Notes receivable 28 394
Additional investment in a controlled subsidiary (2,202) -
Investments in and advances to foreign affiliates 94 (8,997)
Investment in domestic affiliate - (2,500)
Net cash from investing activities 10,330 (20,055)
Cash flows from financing activities:
Notes payable to bank, net 3,632 11,176
Principal payments of long-term debt (114) (262)
Dividends paid (372) (372)
Net cash from financing activities 3,146 10,542
Net change in cash and cash equivalents (4,008) 199
Cash and cash equivalents at beginning of year 20,716 8,552
Cash and cash equivalents at end of quarter $ 16,708 $ 8,751
See notes to condensed consolidated financial statements.
SEABOARD CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
Note 1 - Accounting Policies and Basis of Presentation
The consolidated financial statements include the accounts of Seaboard
Corporation and its domestic and foreign subsidiaries (the "Company").
All significant intercompany balances and transactions have been
eliminated in consolidation. The Company's investments in non-
controlled affiliates are accounted for by the equity method. The
unaudited consolidated financial statements should be read in
conjunction with the consolidated financial statements of the Company
for the year ended December 31, 1998 as filed in its Annual Report on
Form 10-K.
The accompanying unaudited consolidated financial statements include
all adjustments (consisting only of normal recurring accruals) which,
in the opinion of management, are necessary for a fair presentation of
financial position, results of operations and cash flows. Results of
operations for interim periods are not necessarily indicative of
results to be expected for a full year.
For the three months ended March 31, 1999 and 1998, other
comprehensive income adjustments consisted of an immaterial unrealized
gain on available-for-sale securities and foreign currency cumulative
translation adjustment, net of tax.
Note 2 - Inventories
The following is a summary of inventories at March 31, 1999 and
December 31, 1998 (in thousands):
March 31, December 31,
1999 1998
At lower of last-in, first-out (LIFO) cost or market:
Live poultry $ 24,569 $ 24,840
Dressed poultry 24,574 22,961
Feed ingredients, packaging
supplies and other 5,106 5,813
54,249 53,614
LIFO allowance 4,662 2,811
Total inventories at lower of LIFO cost
or market 58,911 56,425
At lower of first-in, first-out (FIFO) cost or market:
Live hogs 74,749 75,887
Grain, flour and feed 31,471 8,196
Sugar produced and in process 24,576 26,025
Crops in production and related materials 10,300 11,233
Dressed pork 6,340 8,486
Other 34,479 28,594
Total inventories at lower of FIFO cost
or market 181,915 158,421
Total inventories $240,826 $214,846
Significant decreases in commodity prices during 1999 and 1998 have
eliminated the LIFO reserve as overall poultry feed costs have
decreased below base year levels. This change in LIFO reserve is
reflected in earnings as a reduction in cost of sales.
Note 3 - Contingencies
The Company is a defendant in a pending arbitration proceeding and
related litigation in Puerto Rico brought by the owner of a chartered
barge and tug which were damaged by fire after delivery of the cargo.
Damages of $47.6 million are alleged. The Company is vigorously
defending the action and believes that it has no responsibility for
the loss. The Company also believes that it would have a claim for
indemnity if it were held liable for any loss.
The Company is subject to various other legal proceedings related to
the normal conduct of its business. In the opinion of management,
none of these actions is expected to result in a judgment having a
materially adverse effect on the consolidated financial statements of
the Company.
Note 4 - Segment Information
The following tables set forth specific financial information about
each segment as reviewed by the Company's management. Operating
income for segment reporting is prepared on the same basis as that
used for consolidated operating income. Operating income is used as
the measure of evaluating segment performance because management does
not consider interest and income tax expense on a segment basis.
The Company accounted for its investment in Tabacal using the equity
method through December 1998. Effective December 31, 1998, the
Company obtained voting control over a majority of the capital stock
of Tabacal. Accordingly, during 1999 the operating results of Tabacal
are accounted for as a consolidated subsidiary. Due to the
significance of Tabacal's operating results, it is reported as an
additional segment (Sugar and Citrus) in 1999. The December 31, 1998,
total assets by segment information has been restated to reflect
Tabacal as a separate segment. No comparative 1998 segment operating
result information is provided as Tabacal's results were reported
under the equity method in 1998.
Sales to External Customers
Three Months Ended March 31,
(Thousands of dollars) 1999 1998
Poultry $ 110,671 $ 125,188
Pork 120,163 121,736
Marine 70,221 77,043
Commodity Trading and Milling 41,699 82,625
Sugar and Citrus 5,132 -
All Other 19,721 39,940
Segment/Consolidated Totals $ 367,607 $ 446,532
Operating Income
Three Months Ended March 31,
(Thousands of dollars) 1999 1998
Poultry $ 6,489 $ 607
Pork 4,791 (2,373)
Marine 2,355 6,924
Commodity Trading and Milling 1,338 2,825
Sugar and Citrus (3,878) -
All Other 236 4,365
Segment Totals 11,331 12,348
Reconciliation to consolidated totals-
Corporate Items (1,035) (87)
Consolidated Totals $ 10,296 $ 12,261
Total Assets
March 31, December 31,
(Thousands of dollars) 1999 1998
Poultry $ 188,363 $ 188,558
Pork 386,171 387,699
Marine 86,833 99,609
Commodity Trading and Milling 135,834 108,822
Sugar and Citrus 164,128 162,094
All Other 99,208 107,029
Segment Totals 1,060,537 1,053,811
Reconciliation to consolidated totals-
Corporate items 162,542 169,323
Consolidated Totals $1,223,079 $1,223,134
Administrative services provided by the corporate office are primarily
allocated to the individual segments based on revenues. Corporate
assets include short-term investments, certain investments in and
advances to foreign affiliates, fixed assets, deferred tax amounts and
other miscellaneous items. Corporate operating losses represent
certain operating costs not specifically allocated to individual
segments.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
LIQUIDITY AND CAPITAL RESOURCES
March 31, December 31,
1999 1998
Current ratio 1.64:1 1.65:1
Working capital $234.1 $235.8
Cash from operating activities for the three months ended March 31,
1999, decreased $27.2 million compared to the same period one year
earlier. The decrease in cash flows was primarily related to changes
in certain components of working capital and, to a lesser extent, the
timing of normal receipts and payments. Within the Commodity Trading
and Milling segment there were several more voyages in transit at
March 31, 1999 than at December 31, 1998, resulting in an increase in
inventory balances and a partially offsetting increase in deferred
revenue balances. During the first quarter of 1998 the sell-off of a
build-up of poultry leg-quarter inventory and a decrease in voyages in
transit resulted in a decrease in inventories during that period.
The Company invested $14.9 million in property, plant and equipment
for the three months ended March 31, 1999, of which $3.3 million was
expended in the Poultry segment, $3.1 million in the Pork segment,
$4.2 million in the Marine segment, $2.0 million in the Sugar and
Citrus segment, and $2.3 million in other businesses of the Company.
The Company invested $3.3 million primarily for the expansion projects
at the Mayfield, Kentucky and Chattanooga, Tennessee, poultry
facilities. The Company anticipates spending $53.5 million over the
next nine months for these expansions and to make general upgrades to
other poultry facilities. Management anticipates these expenditures
will be financed by internally generated cash.
The Company invested $3.1 million primarily for improvements to the
pork processing plant. The Company plans to invest $10.7 million over
the next nine months for general upgrades to the pork processing plant
and continued expansion of hog production facilities.
Capital expenditures in the Marine segment totaled $4.2 million to
purchase a vessel previously chartered and for general replacement and
upgrades of property and equipment. Over the next nine months, the
Company anticipates spending $9.3 million for the purchase of an
additional vessel currently chartered and for general replacement and
upgrades of property and equipment.
The Company invested $2.0 million in the Sugar and Citrus segment
primarily for improvements to existing operations and expansion of
sugarcane fields. Over the next nine months, the Company anticipates
spending $13.0 million for additional improvement and expansion.
Capital expenditures in the other segments for the three months ended
March 31, 1999 included $2.3 million in general modernization and
efficiency upgrades of plant and equipment.
During the first quarter of 1999, the Company invested $2.2 million to
acquire additional shares of a Bulgarian winery. The Company
originally purchased a controlling interest in the winery in October
1998.
In the first quarter of 1999, the Company's one-year revolving credit
facilities totaling $145.0 million, maturing during the first quarter
of 1999 were increased to $153.3 million and extended for an
additional year. In addition, the existing five-year revolving credit
facility totaling $25.0 million was increased to $26.7 million. As of
March 31, 1999, the Company had $141.0 million outstanding under one-
year revolving credit facilities totaling $153.3 million and $21.6
million outstanding under short-term uncommitted credit lines totaling
$126.0 million.
Management intends to continue seeking opportunities for expansion in
the industries in which it operates and believes that the Company's
liquidity, capital resources and borrowing capabilities are adequate
for its current and intended operations.
RESULTS OF OPERATIONS
Net sales for the three months ended March 31, 1999 decreased by $78.9
million compared to the three months ended March 31, 1998. Operating
income decreased by $2.0 million compared to the same quarter one year
ago.
As of December 31, 1998, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 131, "Disclosures about Segments of an
Enterprise and Related Information." Accordingly, certain 1998
quarterly segment information below has been reclassified to conform
with the new presentations.
Poultry Segment
Three Months Ended March 31,
(Dollars in millions) 1999 1998
Net sales $ 110.7 125.2
Operating income $ 6.5 0.6
Net sales of poultry products during the first quarter of 1999
decreased $14.5 million compared to the first quarter of 1998. This
decrease is primarily a result of decreased leg-quarter sales volume
and price, partially offset by an increase in the sales volume and
prices of further processed products. Decreased leg-quarter sales in
1999 are primarily attributable to the continued Russian economic
crisis and the sell off of a build-up of leg-quarter inventories in
the first quarter of 1998. As Russia is a large importer of leg
quarters, the decrease in volume exported to Russia is increasing
domestic supply, thereby lowering domestic leg-quarter prices. Sales
volume and, to a lesser extent, prices of further processed products
increased in the first quarter of 1999 compared to the first quarter
of 1998. The Company continues to emphasize further processed
products, generally involving the processing of smaller birds but
resulting in higher per pound prices. Although management is unable
to predict future poultry prices, it is anticipated that prices will
generally remain favorable during 1999, with the exception of leg
quarters.
Operating income for the Poultry segment increased $5.9 million in the
first quarter of 1999 compared to the first quarter of 1998, primarily
as a result of lower finished feed costs, partially offset by lower
leg-quarter sales prices. Although management cannot predict finished
feed costs, it is anticipated that feed ingredient costs should
continue to be favorable for most of 1999.
Pork Segment
Three Months Ended March 31,
(Dollars in millions) 1999 1998
Net sales $ 120.2 121.7
Operating income $ 4.8 (2.4)
Net sales for the Pork segment decreased $1.5 million in the first
quarter of 1999 compared to the first quarter of 1998. Lower pork
prices were largely offset by an increase in sales volume. Lower
sales prices for most pork products have resulted from an industry
wide excess supply of live hogs and, to a lesser extent, pricing
pressure from the Asian economic situation. The increase in sales
volume is the result of the hog processing plant operating at full
capacity on a double-shift basis during the first quarter of 1999.
The plant employed a second shift during the first quarter of 1998,
but did not achieve full double-shift capacity until the third quarter
of 1998. Although management cannot predict pork prices, it is
anticipated that market conditions will be more favorable to the
Company during the remainder of 1999 compared to 1998.
Operating income for the Pork segment increased $7.2 million in the
first quarter of 1999 compared to the first quarter of 1998 primarily
as a result of a decrease in the cost of third party hogs processed
and, to a lesser extent, a decrease in the cost of Company raised
hogs. The decrease in the cost of Company raised hogs is primarily
the result of lower grain prices. Although management cannot predict
grain prices, it is anticipated that grain prices should continue to
be favorable for most of 1999.
Marine Segment
Three Months Ended March 31,
(Dollars in millions) 1999 1998
Net sales $ 70.2 77.0
Operating income $ 2.4 6.9
Net sales for the Marine segment decreased $6.8 million in the first
quarter of 1999 compared to the first quarter of 1998. Cargo volumes
and applicable cargo rates decreased in 1999 compared to 1998
primarily as a result of weakening economic conditions in certain
South American markets the Company serves and, to a lesser extent,
from lingering trade disruptions of northbound fruit cargo relating to
Hurricane Mitch in Central America.
Operating income from the Marine segment decreased $4.5 million in the
first quarter of 1999 compared to the first quarter of 1998, primarily
as a result of lower cargo volumes and rates discussed above.
Management expects that these situations will continue to have a
negative effect on financial results through at least the first half
of 1999. A new U.S. shipping law, The Ocean Reform Act of 1998, will
go into effect in May 1999 and will permit shipping companies to enter
into unregulated confidential rate agreements with shippers.
Management is not able to predict the impact of this new law on 1999
financial results.
Commodity Trading and Milling Segment
Three Months Ended March 31,
(Dollars in millions) 1999 1998
Net sales $ 41.7 82.6
Operating income $ 1.3 2.8
Net sales for the Commodity Trading and Milling segment decreased
$40.9 million in the first quarter of 1999 compared to the first
quarter of 1998. The decrease is primarily a result of lower soybean
sales, lower wheat sales to certain foreign affiliates and, to a
lesser extent, a decrease in commodity prices sold in foreign markets.
Operating income for this segment decreased $1.5 million in the first
quarter of 1999 compared to the first quarter of 1998, primarily due
to the decrease in wheat sales to certain foreign affiliates.
Sugar and Citrus Segment
Three Months Ended March 31,
(Dollars in millions) 1999 1998
Net sales $ 5.1 -
Operating income $ (3.9) -
As discussed in Note 4 to the Condensed Consolidated Financial
Statements, comparative operating results for the Sugar and Citrus
segment are not presented as Tabacal was accounted for on the equity
method in 1998. However, lower sugar prices have resulted in
significantly lower revenues and higher losses in the first quarter
1999 compared to 1998. In the first quarter of 1998, the loss from
foreign affiliates attributable to Tabacal was $2.0 million. To
reduce future operating costs, management plans certain employee
layoffs during the second quarter expected to result in related
severance charges of approximately $3 to $4 million. Failure of sugar
prices to return to historical levels could lower future expected cash
flows to the extent that the carrying amount of Tabacal's long-lived
asset values might be impaired. Any such impairment may require a
write down of the related asset values with a corresponding charge to
earnings sometime during 1999 or 2000. Although management cannot
predict future sugar prices, it is anticipated that market conditions
will continue to have a negative effect on Tabacal resulting in
additional losses for the remainder of 1999.
Other Operations
Three Months Ended March 31,
(Dollars in millions) 1999 1998
Net sales $ 19.7 39.9
Operating income $ 0.2 4.4
Net sales for all other segments decreased $20.2 million in the first
quarter of 1999 compared to the first quarter of 1998. The decrease
is primarily a result of the sale of the Puerto Rican baking
operations in December 1998, partially offset by the revenues of the
Bulgarian winery acquired late in 1998.
Operating income for all other segments decreased $4.2 million in the
first quarter of 1999 compared to the first quarter of 1998. This
decrease primarily reflects the Puerto Rican baking operations sold in
December 1998, lower operating income from the produce division and
small losses from the Bulgarian winery acquired late in 1998.
Selling, General and Administrative Expenses
Selling, general and administrative (SG&A) expenses decreased $6.2
million to $30.0 million for the first quarter of 1999 compared to the
first quarter of 1998. The decrease is primarily a result of the
Puerto Rican baking operations sold in December 1998, partially offset
by the winery acquired late in 1998 and consolidation of Tabacal
results in 1999. As a percentage of revenues, SG&A increased slightly
to 8.2% in the first quarter of 1999 from 8.1% in the first quarter of
1998.
Interest Expense
Interest expense increased $1.8 million in the first quarter of 1999
compared to the first quarter of 1998. The increase is primarily a
result of increased long-term borrowings and higher overall borrowing
rates. Increased long-term borrowings are primarily the result of the
consolidation, effective December 1998, of the existing debts of
Tabacal and the Bulgarian winery.
Income (loss) from Foreign Affiliates
Losses from foreign affiliates for the first quarter of 1998 were
primarily attributable to the operations of Tabacal. As discussed in
Note 4 to the Condensed Consolidated Financial Statements, Tabacal is
included in 1999 consolidated operations.
Minority Interest
Minority interest represents the minority shareholders' share of the
operating results of the Bulgarian winery acquired in the fourth
quarter of 1998.
Income Tax Expense
The effective tax rate increased to 72% in the first quarter of 1999
from 30% in the first quarter of 1998. This increase is primarily
attributable to an increase in losses from foreign entities for which
no tax benefit is available.
Other Financial Information
In 1998, the Company expanded the scope of its original Year 2000
assessment and has completed the assessment of its primary mainframe
computer systems, both hardware and software. Resolution of issues
identified within the primary mainframe computer systems, including
all necessary testing, is expected to be completed by mid-1999. The
Company is in the advanced stages of assessing other computer and
electronic information systems throughout its operations, with the
objective of addressing any issues deemed critical to operations by
mid-1999. Certain equipment with embedded chip technology cannot be
tested or guaranteed by the manufacturer for Year 2000 compliance.
Consequently, general contingency plans are being developed for
certain locations including lists of spare parts to have on hand and
work around options in case of failure. Although not deemed critical
to consolidated operations, computer systems at certain international
locations are being reviewed and upgrades are planned or in process.
The failure to identify or resolve any significant Year 2000 issue in
a timely manner could have a material adverse effect on the Company,
including an interruption in, or a failure of, certain normal business
activities or operations.
The Company is also in the process of communicating with significant
suppliers and customers to determine the extent to which the Company
is vulnerable to failure of those third parties to resolve their own
Year 2000 issues. The Company does not anticipate the cost of Year
2000 compliance by suppliers to be passed on to the Company and has
not been informed of any material risks related to third party Year
2000 compliance. The Company is developing general contingency plans
for some instances of third party noncompliance including limited
backup utility sources to support live inventories for a short period
of time. However, the failure of a significant third party supplier
or customer to resolve its Year 2000 issues in a timely manner could
have a material adverse effect on the Company, such as business
disruptions resulting from noncompliance by a local utility (either
electric, gas or water) or chartered vessel service.
Based upon assessments completed to date, the Company believes that
the total costs, including equipment replacements and internal costs
consisting primarily of payroll related costs, to resolve Year 2000
issues will not be material to the Company's consolidated financial
statements. Not all assessments are complete at this date and the
discovery of a significant Year 2000 issue unknown at this time could
materially alter this estimate.
Derivative Information
The Company is exposed to various types of market risks from its day-
to-day operations. Primary market risk exposures result from changing
interest rates and commodity prices. Changes in interest rates impact
the cash required to service variable rate debt. Changes in commodity
prices impact the cost of necessary raw materials as well as the
selling prices of finished products. The Company uses interest rate
swaps to manage risks of increasing interest rates. The Company uses
corn, wheat, soybeans and soybean meal futures and options to manage
risks of increasing prices of raw materials. The Company uses hog
futures and options to manage risks of fluctuating prices of third
party hogs acquired for processing. The Company is also subject to
foreign currency exchange rate risk on a short-term note payable
denominated in foreign currency. This risk is managed through the use
of a foreign currency forward exchange agreement. The Company's
market risk exposure related to these items has not changed
substantially since December 31, 1998.
SEABOARD CORPORATION AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The annual meeting of stockholders was held on April 26, 1999 in
Newton, Massachusetts. Two items were submitted to a vote of
stockholders as described in the Company's Proxy Statement dated March
25, 1999. The table below briefly describes the proposals and results
of the stockholders' vote.
Votes in Votes
Favor Against Abstain
1. To elect:
H. Harry Bresky, 1,443,476.75 0 1,530
Joe E. Rodrigues 1,443,096.75 0 1,910
David A. Adamsen 1,443,096.75 0 1,910
and Thomas J. Shields 1,443,476.75 0 1,530
as directors.
2. To ratify selection of
KPMG LLP
as independent auditors. 1,443,503.75 20 1,483
A shareholder proposal to recommend a stock split which had been
included in the Company's proxy statement was not presented to the
meeting as the proponent did not attend the meeting either in person
or by duly qualified representative.
SEABOARD CORPORATION AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
2.1 - Registrant's By-laws, as amended.
10.1 - Registrant's Executive Deferred Compensation Plan dated
January 1, 1999
(b) Reports on Form 8-K. Seaboard Corporation has not filed any
reports on Form 8-K during the quarter ended March 31, 1999.
This Form 10-Q contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995, which include
statements concerning projection of revenues, income or loss, capital
expenditures, capital structure or other financial items, statements
regarding the plans and objectives of management for future
operations, statements of future economic performance, statements of
the assumptions underlying or relating to any of the foregoing
statements and other statements which are other than statements of
historical fact. These statements appear in a number of places in
this Form 10-Q and include statements regarding the intent, belief or
current expectations of the Company and its management with respect to
(i) the cost and timing of the completion of new or expanded
facilities, (ii) the Company's financing plans, (iii) the price of
feed stocks and other materials used by the Company, (iv) the price
for the Company's products and services, (v) the effect of Tabacal on
the consolidated financial statements of the Company, (vi) the impact
of Year 2000 issues, or (vii) other trends affecting the Company's
financial condition or results of operations. Readers are cautioned
that any such forward-looking statements are not guarantees of future
performance and involve risks and uncertainties, and that actual
results may differ materially as a result of various factors. The
accompanying information contained in this Form 10-Q under the heading
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" identifies important factors which could cause
such differences.
PART II - OTHER INFORMATION
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
DATE: May 7, 1999
Seaboard Corporation
by: /s/ Robert L. Steer
Robert L. Steer, Vice President-Chief
Financial Officer (Authorized officer
and principal financial and accounting
officer)
SEABOARD CORPORATION
BY-LAWS
OFFICES
1. The principal office shall be in the City of Wilmington,
County of New Castle, State of Delaware, and the name of the
resident agent in charge thereof is The Corporation Trust
Company.
2. The corporation may also have an office in Chestnut Hill,
Massachusetts, and also offices at such other places as the board
of directors may from time to time determine or the business of
the corporation may require.
STOCKHOLDERS' MEETINGS
3. All meetings of the stockholders for the election of
directors shall be held in the City of Boston, Commonwealth of
Massachusetts, at such place as may be fixed from time to time by
the board of directors, or at such other place either within or
without the State of Delaware as shall be designated from time to
time by the board of directors and stated in the notice of the
meeting. Meetings of stockholders for any other purpose may be
held at such time and place, within or without the State of
Delaware, as shall be stated in the notice of the meeting or a
duly executed waiver of notice thereof.
4. An annual meeting of stockholders, commencing with the year
1989, shall be held on the fourth Monday of April in each year,
if not a legal holiday, and if a legal holiday then on the next
secular day following, at 10 o'clock A.M., at which they shall
elect, by a plurality vote, a Board of Directors, and transact
such other business as may properly be brought before the
meeting.
5. Written notice of the annual meeting shall be served upon or
mailed to each stockholder entitled to vote thereat at such
address as appears on the books of the corporation, at least ten
days prior to the meeting.
6. At least ten days before every election of directors, a
complete list of the stockholders entitled to vote at said
election, arranged in alphabetical order, with the residence of
each and the number of voting shares held by each, shall be
prepared by the secretary. Such list shall be open at the place
where the election is to be held for said ten days, to the
examination of any stockholder, and shall be produced and kept at
the time and place of election during the whole time thereof, and
subject to the inspection of any stockholder who may be present.
7. Special meetings of the stockholders for any purpose or
purposes, unless otherwise prescribed by statute or by the
certificate of incorporation, may be called by the president and
shall be called by the president or secretary at the request in
writing of a majority of the board of directors, or at the
request in writing of three or more stockholders owning in amount
one tenth of the entire capital stock of the corporation issued
and outstanding and entitled to vote. Such request shall state
the purpose or purposes of the proposed meeting.
8. Written notice of a special meeting of stockholders, stating
the time and place and object thereof, shall be served upon or
mailed to each stockholder entitled to vote thereat at such
address as appears on the books of the corporation, at least ten
days before such meeting.
9. Business transacted at all special meetings shall be
confined to the objects stated in the call.
10. The holders of a majority in amount of the stock issued and
outstanding and entitled to vote thereat, present in person or
represented by proxy, shall be requisite and shall constitute a
quorum at all meetings of the stockholders for the transaction of
business except as otherwise provided by statute, by the
certificate of incorporation or by these by-laws. If, however,
such quorum shall not be present or represented at any meeting of
the stockholders, the stockholders, entitled to vote thereat,
present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall
be present or represented any business may be transacted which
might have been transacted at the meeting as originally notified.
11. When a quorum is present at any meeting, the vote of the
holders of a majority of the stock having voting power present in
person or represented by proxy shall decide any question brought
before such meeting, unless the question is one upon which by
express provision of the statutes or of the certificate of
incorporation or of these by-laws, a different vote is required
in which case such express provision shall govern and control the
decision of such question.
12. At any meeting of the stockholders every stockholder having
the right to vote shall be entitled to vote in person, or by
proxy appointed by an instrument in writing subscribed by such
stockholder and bearing a date not more than six months prior to
said meeting, unless said instrument provides for a longer
period. Each stockholder shall have one vote for each share of
stock having voting power, registered in his name on the books of
the corporation, and except where the transfer books of the
corporation shall have been closed or a date shall have been
fixed as a record date for the determination of its stockholders
entitled to vote, no share of stock shall be voted on at any
election of directors which shall have been transferred on the
books of the corporation within twenty days next preceding such
election of directors.
13. Whenever the vote of stockholders at a meeting thereof is
required or permitted to be taken in connection with any
corporate action by any provisions of the statutes or of the
certificate of incorporation or of these by-laws, the meeting and
vote of stockholders may be dispensed with, if all the
stockholders who would have been entitled to vote upon the action
if such meeting were held, shall consent in writing to such
corporate action being taken.
DIRECTORS
14. The number of directors of the corporation constituting the
full board of directors shall be no less than three (3) and no
more than fifteen (15), the exact number to be determined by the
Board of Directors from time to time. Within the foregoing
limits, between elections by stockholders the board of directors
may change the number of directors constituting the full board of
directors. Directors need not be stockholders of the
corporation. Each director, including a director elected to fill
a vacancy, shall hold office until his successor has been duly
elected and qualified unless he sooner shall have resigned or
been removed from office.
15. The directors may hold their meetings and keep the books of
the corporation, except the original or duplicate stock ledger,
outside of Delaware, at the office of the corporation in Chestnut
Hill, Massachusetts, or at such other places as they may from
time to time determine.
16. A vacancy or newly created directorship, as the case may be,
shall be deemed to exist in the Board of Directors in case of the
death, resignation, disqualification, or removal of any director,
or if the authorized number of directors is increased, or if the
stockholders fail at any meeting of stockholders at which
directors are to be elected to elect the full authorized number
of directors to be elected at that meeting. Vacancies and newly
created directorships in the board of directors may be filled by
a majority of the remaining directors, though fewer than a
quorum, or by a sole remaining director. Upon the resignation of
one or more directors from the board of directors to be effective
at a future date, a majority of the directors then in office,
including those who have so resigned, shall have the power to
fill such vacancy or vacancies, the vote thereon to take effect
when such resignation or resignations become effective. No
reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of his
term of office; provided, however, that such director, or the
entire board of directors, may be removed from office, with or
without cause, by the holders of a majority of shares then
entitled to vote at an election of directors.
17. The property and business of the corporation shall be
managed by its board of directors which may exercise all such
powers of the corporation and do all such lawful acts and things
as are not by statute or by the certificate of incorporation or
by these by-laws directed or required to be exercised or done by
the stockholders.
COMMITTEES OF DIRECTORS
18. The board of directors may, by vote of a majority of their
entire number, elect from their own number an executive committee
of not less than three nor more than five members, which
committee may be vested with the management of the current and
ordinary business of the corporation, including the declaration
of dividends, the fixing and altering of the powers and duties of
the several officers and agents of the corporation, the election
of additional officers and agents, and the filling of vacancies
other than in the board of directors, and with power to authorize
purchases, sales, contracts, offers, conveyances, transfers and
negotiable instruments. A majority of the executive committee
shall constitute a quorum for the transaction of business but a
less number may adjourn any meeting from time to time, and the
meeting may be held as adjourned without further notice. The
executive committee may make rules not inconsistent herewith for
the holding and conduct of its meetings.
19. The board of directors may, by resolution or resolutions
passed by a majority of the whole board, designate other
committees, each committee to consist of three or more of the
directors of the corporation, which to the extent provided in
said resolution or resolutions, shall have and may exercise the
powers of the board of directors in the management of the
business and affairs of the corporation, and may have power to
authorize the seal of the corporation to be affixed to all papers
which may require it. Such committee or committees shall have
such name or names as may be determined from time to time by
resolution adopted by the board of directors.
20. All committees shall keep their regular minutes of their
proceedings and report the same to the board, who shall have
power to rescind any vote or resolution passed by any committee
but no such rescission shall have retroactive effect.
COMPENSATION OF DIRECTORS
21. Directors, as such, shall not receive any stated salary for
their services, but, by resolution of the board a fixed sum and
expenses of attendance, if any, may be allowed for attendance at
each regular or special meeting of the board; provided that
nothing herein contained shall be construed to preclude any
director from serving the corporation in any other capacity and
receiving compensation therefor.
22. Members of Executive or other committees may be allowed like
compensation for attending committee meetings.
MEETINGS OF THE BOARD
23. The first meeting of each newly elected board shall be held
at such time and place either within or without the State of
Delaware as shall be fixed by the vote of the stockholders at the
annual meeting and no notice of such meeting shall be necessary
to the newly elected directors in order legally to constitute the
meeting provided a quorum shall be present, or they may meet at
such place and time as shall be fixed by the consent in writing
of all the directors.
24. Regular meetings of the board may be held without notice at
such time and place either within or without the State of
Delaware as shall from time to time be determined by the board.
25. Special meetings of the board may be called by the president
on two days' notice to each director, either personally or by
mail or by telegram; special meetings shall be called by the
president or secretary in like manner and on like notice on the
written request of two directors.
26. At all meetings of the board a majority of the entire board
shall be necessary and sufficient to constitute a quorum for the
transaction of business and the act of a majority of the
directors present at any meeting at which there is a quorum shall
be the act of the board of directors, except as may be otherwise
specifically provided by statute or by the certificate of
incorporation or by these by-laws. If a quorum shall not be
present at any meeting of directors the directors present thereat
may adjourn the meeting from time to time without notice other
than announcement at the meeting, until a quorum shall be
present.
27. No notice of directors' meeting shall be necessary if all
directors are present or waive notice of the meeting.
NOTICES
28. Whenever under the provisions of the statutes or of the
certificate of incorporation or of these by-laws, notice is
required to be given to any director or stockholder, it shall not
be construed to mean personal notice, but such notice may be
given in writing, by mail, by depositing the same in a post
office or letter box, in a post-paid sealed wrapper, addressed to
such director or stockholder at such address as appears on the
books of the corporation, or, in default of other address, to
such director or stockholder at the General Post Office in the
City of Wilmington, Delaware, and such notice shall be deemed to
be given at the time when the same shall be thus mailed.
29. Whenever any notice is required to be given under the
provisions of the statutes or of the certificate of
incorporation, or of these by-laws, a waiver thereof in writing
signed by the person or persons entitled to said notice, whether
before or after the time stated therein, shall be deemed
equivalent thereto.
OFFICERS
30. The officers of the corporation shall be chosen by the
directors and shall be a president, a secretary and a treasurer.
Two or more offices may be held by the same person, except that
where the offices of president and secretary are held by the same
person, such person shall not hold any other office.
31. The board of directors at its first meeting after each
annual meeting of stockholders shall choose a president from its
members, a secretary and a treasurer, none of whom need be a
member of the board.
32. The board of directors or Executive Committee may appoint
such other officers and agents as it shall deem necessary, who
shall hold their offices for such terms and shall exercise such
powers and perform such duties as shall be determined from time
to time by the board or Executive Committee.
33. The Board of Directors shall have authority (a) to fix the
compensation, whether in the form of salary, bonus, stock options
or otherwise, of all officers and employees of the Corporation,
either specifically or by formula applicable to particular
classes of officers or employees, and (b) to authorize officers
of the Corporation to fix the compensation of officers of the
Corporation who are not "named executive officers" of the
Corporation within the meaning of Item 402 of Regulation S-K
promulgated under the Securities Act of 1933 and the Securities
Exchange Act of 1934. The Board of Directors shall have
authority to appoint a Compensation Committee and may delegate to
such committee any or all of its authority relating to
compensation. The appointment of an officer shall not create any
employment or contract rights in that officer.
34. The officers of the corporation shall hold office until
their successors are chosen and qualify in their stead. Any
officer elected or appointed by the board of directors may be
removed at any time by the affirmative vote of a majority of the
whole board of directors. If the office of any officer becomes
vacant for any reason, the vacancy shall be filled by the board
of directors.
THE PRESIDENT
35. The president shall be the chief executive officer of the
corporation; he shall preside at all meetings of the stockholders
and directors, shall be ex oficio a member of all standing
committees, shall have general and active management of the
business of the corporation, and shall see that all orders and
resolutions of the board are carried into effect.
36. He shall execute bonds, mortgages and other contracts
requiring a seal, under the seal of the corporation, except where
required or permitted by law to be otherwise signed and executed
and except where the signing and execution thereof shall be
expressly delegated by the board of directors to some other
officer or agent of the corporation.
VICE-PRESIDENTS
37. Any vice-presidents in the order of their seniority shall,
in the absence or disability of the president, perform the duties
and exercise the powers of the president, and shall perform such
other duties as the board of directors or Executive Committee
shall prescribe.
THE SECRETARY AND ASSISTANT SECRETARIES
38. The secretary shall attend all sessions of the board and all
meetings of the stockholders and record all votes and the minutes
of all proceedings in a book to be kept for that purpose and
shall perform like duties for the standing committees when
required. He shall give, or cause to be given, notice of all
meetings of the stockholders and special meetings of the board of
directors, and shall perform such other duties as may be
prescribed by the board of directors or president, under whose
supervision he shall be. He shall keep in safe custody the seal
of the corporation and, when authorized by the board, affix the
same to any instrument requiring it and, when so affixed, it
shall be attested by his signature or by the signature of the
treasurer or an assistant secretary.
39. Any assistant secretaries in order of their seniority shall,
in the absence or disability of the secretary, perform the duties
and exercise the powers of the secretary and shall perform such
other duties as the board of directors or Executive Committee
shall prescribe.
THE TREASURER AND ASSISTANT TREASURERS
40. The Treasurer shall have the custody of the corporate funds
and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation
and shall deposit all moneys and other valuable effects in the
name and to the credit of the corporation in such depositories as
may be designated by the board of directors.
41. He shall disburse the funds of the corporation as may be
ordered by the board, or Executive Committee, taking proper
vouchers for such disbursements, and shall render to the
president and directors, at the regular meetings of the board, or
whenever they may require it, an account of all his transactions
as treasurer and of the financial condition of the corporation.
42. If required by the board of directors, he shall give the
corporation a bond (which shall be renewed every six years) in
such sum and with such surety or sureties as shall be
satisfactory to the board for the faithful performance of the
duties of his office and for the restoration to the corporation,
in case of his death, resignation, retirement, or removal from
office, of all books, papers, vouchers, money and other property
of whatever kind in his possession or under his control belonging
to the corporation.
43. Any assistant treasurers in the order of their seniority
shall, in the absence or disability of the treasurer, perform the
duties and exercise the powers of the treasurer and shall perform
such other duties as the board of directors or Executive
Committee shall prescribe.
CERTIFICATES OF STOCK
44. The certificates of stock of the corporation shall be
numbered and shall be entered in the books of the corporation as
they are issued. They shall exhibit the holder's name and number
of shares and shall be signed by the president and the treasurer.
If any stock certificate is signed (1) by a transfer agent or an
assistant transfer agent or (2) by a transfer clerk acting on
behalf of the corporation and a registrar, the signature of any
such officer may be facsimile.
TRANSFERS OF STOCK
45. Upon surrender to the corporation or any transfer agent of
the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or
authority to transfer, it shall be the duty of the corporation to
issue a new certificate to the person entitled thereto, cancel
the old certificate and record the transaction upon its books.
CLOSING OF TRANSFER BOOKS
46. The board of directors shall have power to close the stock
transfer books of the corporation for a period not exceeding
fifty days preceding the date of any meeting of stockholders or
the date for payment of any dividend or the date for the
allotment of rights or the date when any change or conversion or
exchange of capital stock shall go into effect or for a period of
not exceeding fifty days in connection with obtaining the consent
of stockholders for any purpose; provided, however, that in lieu
of closing the stock transfer books as aforesaid, the board of
directors may fix in advance a date, not exceeding fifty days
preceding the date of any meeting of stockholders, or the date
for the payment of any dividend, or the date for the allotment of
rights, or the date when any change or conversion or exchange of
capital stock shall go into effect, or a date in connection with
obtaining such consent, as a record date for the determination of
the stockholders entitled to notice of, and to vote at, any such
meeting, and any adjournment thereof, or entitled to receive
payment of any such dividend, or to any such allotment of rights,
or to exercise the rights in respect of any such change,
conversion or exchange of capital stock, or to give such consent,
and in such case such stockholders and only such stockholders as
shall be stockholders of record on the date so fixed shall be
entitled to such notice of, and to vote at, such meeting and any
adjournment thereof, or to receive payment of such dividend, or
to receive such allotment of rights, or to exercise such rights,
or to give such consent, as the case may be, notwithstanding any
transfer of any stock on the books of the corporation after any
such record date fixed as aforesaid.
REGISTERED STOCKHOLDERS
47. The corporation shall be entitled to treat the holder of
record of any share or shares of stock as the holder in fact
thereof and, accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such share or shares
on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by
the laws of Delaware.
LOST CERTIFICATE
48. The board of directors or Executive Committee may direct a
new certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the corporation
alleged to have been lost or destroyed, upon making of an
affidavit of that fact by the person claiming the certificate of
stock to be lost or destroyed. When authorizing such issue of a
new certificate or certificates, the board of directors or
Executive Committee may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost
or destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as it shall
require and/or give the corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against
the corporation with respect to the certificate alleged to have
been lost or destroyed.
DIVIDENDS
49. Dividends upon the capital stock of the corporation, subject
to the provisions of the certificate of incorporation, if any,
may be declared by the board of directors at any regular or
special meeting, pursuant to law. Dividends may be paid in cash,
in property, or in shares of the capital stock, subject to the
provisions of the certificate of incorporation.
50. Before payment of any dividend, there may be set aside out
of any funds of the corporation available for dividends such sum
or sums as the directors from time to time, in their absolute
discretion, think proper as a reserve fund to meet contingencies,
or for equalizing dividends, or for repairing or maintaining any
property of the corporation, or for such other purpose as the
directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such
reserve in the manner in which it was created.
DIRECTORS' ANNUAL STATEMENT
51. The board of directors shall present at each annual meeting
and when called for by vote of the stockholders at any special
meeting of the stockholders, a full and clear statement of the
business and condition of the corporation.
CHECKS
52. All checks or demands for money and notes of the corporation
shall be signed by such officer or officers or such other person
or persons as the board of directors or Executive Committee may
from time to time designate.
FISCAL YEAR
53. The fiscal year shall be the calendar year, beginning with
the calendar year ending December 31, 1986.
SEAL
54. The corporate seal shall have inscribed thereon the name of
the corporation, the year of its organization and the words
"Corporate Seal, Delaware". Said seal may be used by causing it
or a facsimile thereof to be impressed or affixed or reproduced
or otherwise.
AMENDMENTS
55. These by-laws may be altered or repealed at any regular
meeting of the stockholders or at any special meeting of the
stockholders at which a quorum is present or represented,
provided notice of the proposed alteration or repeal be contained
in the notice of such special meeting, by the affirmative vote
of a majority of the stock entitled to vote at such meeting and
present or represented thereat, or by the affirmative vote of a
majority of the board of directors at any regular meeting of the
board or at any special meeting of the board if notice of the
proposed alteration or repeal be contained in the notice of such
special meeting; provided, however, that no change of the time or
place of the meeting for the election of directors shall be made
within sixty days next before the day on which such meeting is to
be held, and that in case of any change of such time or place,
notice thereof shall be given to each stockholder in person or by
letter mailed to his last known post office address at least
twenty days before the meeting is held.
INDEMNIFICATION
56. Mandatory Indemnification of Officers and Directors.
The Corporation shall indemnify and reimburse each director and
officer of the Corporation, and each director and officer of a
subsidiary whose election or appointment it has voted for or
expressly approved, who is elected, appointed or continued in
office after February 22, 1993, for and against all liabilities
and expenses imposed upon or reasonably incurred by him in
connection with any action, suit or proceeding in which he may be
involved or with which he may be threatened by reason of his
being or having been a director or officer of the Corporation or
of a subsidiary or his acts and omissions as such officer or
director of the Corporation or of a subsidiary. The right of
indemnity and reimbursement of each such person shall continue
whether or not he continues to be such director or officer at the
time such liabilities or expense are imposed upon or incurred by
him and shall include, without being limited to, attorney's fees,
court costs, judgments and compromise settlements. The right of
reimbursement for liabilities and expenses so imposed or incurred
shall include the right to receive such reimbursement in advance
of the final disposition of any such action, suit or proceeding
upon the Corporation's receipt of an undertaking by or on behalf
of such director or officer to repay such amount if it shall be
ultimately determined that he is not entitled to be indemnified
by the Corporation pursuant to law or this paragraph.
In no case shall such indemnification and reimbursement
cover (a) liabilities or expenses imposed or incurred in
connection with any matter as to which such director or officer
shall be finally determined in such action, suit or proceeding to
be liable by reason of his having been derelict in the
performance of his duty as such director or officer, or (b)
amounts paid to the Corporation or to a subsidiary and expenses
incurred in connection with the proceeding or claim on account of
which such payment is made, unless such reimbursement is provided
for in compromise settlement approved in a manner described in
clause (c) next following, or (c) liabilities or expenses imposed
or incurred in connection with any matter which shall be settled
by compromise (including settlement by consent decree or
judgment) if under such compromise such director or officer is
required to make any payment, unless such compromise shall, after
notice that it involves such reimbursement, be approved as in the
best interest of the Corporation by vote of the board of
directors of the Corporation at a meeting in which no director
against whom any action, suit or proceeding on the same or
similar grounds is then pending participates, or by vote or
written approval of the holders of a majority of the shares of
stock of the Corporation then outstanding and entitled to vote,
for this purpose not counting as outstanding any shares of stock
held or controlled by any such director or officer of the
Corporation against whom any action, suit or proceeding on the
same or similar grounds is then pending; provided, however, that
no indemnification shall be made in respect of any claim, issue
or matter as to which such a person shall have been adjudged to
be liable for negligence or misconduct in the performance of his
or her duty to the Corporation unless and only to the extent that
the Court of Chancery of the State of Delaware or the court in
which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which the
Court of Chancery of the State of Delaware or such other court
shall deem proper.
The rights of indemnification and reimbursement hereby
provided shall not be exclusive of other rights to which any
director or officer may be entitled. As used in this paragraph
the terms "director" and "officer" shall include their respective
heirs, executors and administrators.
57. Discretionary Indemnification.
(a) Actions By Third Parties. The Corporation shall
have the right, but not the obligation, to indemnify, up to and
including the full extent set forth in this paragraph, any person
who was or is a party, or is threatened to be made a party to, or
is otherwise involved in, any pending or completed action, suit
or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the
Corporation) by reason of the fact that he or she is or was an
employee or agent of the Corporation, or was serving at the
request of the Corporation as a director, officer, partner,
member, trustee, employee or agent of another corporation,
partnership, joint venture, limited liability company, trust or
other enterprise (whether or not for profit) including serving as
Trustee of an employee benefit plan of the Corporation or other
entity described in this subparagraph, (whether or not such
employee benefit plan is governed by ERISA), against all
liability, losses, expenses (including attorneys' fees),
judgments, fines, and amounts paid in settlement actually and
reasonably incurred by him or her in connection with such action,
suit or proceeding if he or she acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to
the best interest of the Corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe
his or her conduct was unlawful. The termination of any action,
suit or proceeding against any such person by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that he or
she did not act in good faith and in a manner which he or she
reasonably believed to be in or not opposed to the best interest
of the Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his or her
conduct was unlawful.
(b) Actions by or on Behalf of the Corporation. The
Corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that he or
she is or was an employee or agent of the Corporation, or is or
was serving at the request of the Corporation as a director,
officer, partner, member, trustee, employee or agent of another
corporation, partnership, joint venture, limited liability
company, trust or other enterprise or entity (whether or not for
profit) against expenses (including attorneys' fees) actually and
reasonably incurred by him or her in connection with the defense
or settlement of such action or suit if he or she acted in good
faith and in a manner he or she reasonably believed to be in or
not opposed to the best interests of the Corporation; except that
no indemnification shall be made in respect of any claim, issue
or matter as to which such a person shall have been adjudged to
be liable for negligence or misconduct in the performance of his
or her duty to the Corporation unless and only to the extent that
the Court of Chancery of the State of Delaware or the court in
which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly
and reasonably entitled to indemnify for such expenses which the
Court of Chancery of the State of Delaware or such other court
shall deem proper.
(c) Indemnification for Expenses of Successful
Defense. To the extent that (i) in the case of actions, suits or
proceedings relating to acts or omissions occurring prior to July
1, 1997, any director, officer, employee or agent of the
Corporation, or (ii) in the case of actions, suits or proceedings
relating to acts or omissions occurring on or after such date,
any present or former director or officer of this Corporation or
of a subsidiary has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in
paragraphs 56 or 57(b) of these Bylaws, or in defense of any
claim, issue or matter therein, he or she shall be indemnified
against expenses (including attorneys' fees) actually and
reasonably incurred by him or her in connection with such
defense. The Corporation shall have the right, but not the
obligation, to indemnify any person described in paragraphs 57(a)
or (b) who has been successful on the merits or otherwise in
defense of any action, suit or proceeding for which
indemnification has been provided under paragraphs 57(a) or (b),
or in defense of any claim, issue or matter therein, against
expenses (including attorneys' fees) actually and reasonably
incurred by him or her in connection with such defense.
(d) Authorization. Any indemnification under
paragraphs 56 or 57 of these Bylaws (unless ordered by a court)
shall be made by the Corporation only as authorized in the
specific case upon a determination that indemnification of the
director, officer, partner, member, trustee, employee or agent is
proper in the circumstances because such person has met the
applicable standard of conduct set forth in paragraphs 56 or 57,
as the case may be. Such determination shall be made, with
respect to a person who is a director or officer of the
Corporation at the time of such determination: (i) by a majority
vote of the directors who were not parties to such action, suit
or proceeding, even though less than a quorum, (ii) by a
committee of such directors designated by majority vote of such
directors, even though less than a quorum, or (iii) if there are
no such directors, or if such directors so direct, by independent
legal counsel in written opinion, or (iv) by the stockholders.
(e) Expense Advance. Expenses (including attorney's
fees) incurred by present or former officers or directors of the
Corporation in defending any civil, criminal, administrative or
investigative action, suit or proceeding may be paid by the
Corporation in advance of the final disposition of such action,
suit or proceeding as authorized in one of the manners provided
in paragraph 57(d) of these Bylaws upon receipt of an undertaking
by or on behalf of such person to repay such amount, if it shall
ultimately be determined that he or she is not entitled to be
indemnified by the Corporation as authorized in these Bylaws.
Such expenses (including attorneys' fees) incurred by other
employees or agents of the Corporation may be so paid upon such
terms and conditions, if any, as the Corporation deems
appropriate.
(f) Nonexclusivity. The indemnification and
advancement of expenses provided by, or granted pursuant to,
these Bylaws shall not be deemed exclusive of any other rights to
which those seeking indemnification or advancement of expenses
may be entitled under any statute, bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to
action in an official capacity and as to action in another
capacity while holding such office, and shall continue as to a
person who has ceased to be a director, officer, partner, member,
trustee, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
(g) Insurance. The Corporation shall have power to
purchase and maintain insurance on behalf of any person who is or
was a director, officer, employee or agent of the Corporation, or
is or was serving at the request of the Corporation as a
director, officer, partner, member, trustee, employee or agent of
another corporation, partnership, joint venture, limited
liability company, trust or other enterprise or non-profit entity
against any liability asserted against, and incurred by, him or
her in any such capacity, or arising out of his or her status as
such, whether or not the Corporation would have the power to
indemnify such person against such liability under the provisions
of these Bylaws or Section 145 of the Delaware General
Corporation Law.
(h) "The Corporation". For the purposes of paragraphs
56 or 57 of these Bylaws references to "the Corporation" shall
include, in addition to the resulting corporation and, to the
extent that the Board of Directors of the resulting corporation
so decides, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have
had power and authority to indemnify its directors, officers and
employees or agents, so that any person who is or was a director,
officer, employee or agent of such a constituent corporation or
is or was serving at the request of such constituent corporation
as director, officer, partner, member, trustee, employee or agent
of another corporation, partnership, joint venture, limited
liability company, trust or other enterprise or non-profit
entity, shall stand in the same position under the provisions of
these Bylaws with respect to the resulting or surviving
corporation as he or she would have had with respect to such
constituent corporation if its separate existence had continued.
(i) Other Indemnification. The Corporation's
obligation, if any, to indemnify any person who was or is serving
at its request as a director, officer, partner, member, trustee,
employee or agent of another corporation, partnership, joint
venture, limited liability company, trust or other enterprise or
non-profit entity shall be reduced by any amount such person may
collect as indemnification from such other corporation,
partnership, joint venture, limited liability company, trust or
other enterprise or non-profit entity or from insurance.
(j) Other Definitions. For purposes of paragraphs 56
or 57 of these Bylaws references to "other enterprises" shall
include employee benefit plans; references to "fines" shall
include any excise taxes assessed on a person with respect to an
employee benefit plan; and references to "serving at the request
of the Corporation" shall include any service as a director,
officer, partner, member, trustee, employee or agent of the
Corporation which imposes duties on, or involves services by,
such director, officer, partner, member, trustee, employee, or
agent with respect to an employee benefit plan, its participants,
or beneficiaries; and a person who acted in good faith and in a
manner he or she reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall
be deemed to have acted in a manner "not opposed to the best
interests of the Corporation" as referred to in these Bylaws.
(k) Continuation of Indemnification. The
indemnification and advancement of expenses provided by, or
granted pursuant to, these Bylaws shall, unless otherwise
provided when authorized or ratified, continue as to a person who
has ceased to be a director, officer, officer, partner, member,
trustee, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
(l) Amendment or Repeal. Neither the amendment nor
repeal of paragraphs 56 or 57 of these Bylaws nor the adoption of
any provision of the Corporation's Certificate of Incorporation
inconsistent with paragraphs 56 or 57 of these Bylaws shall
reduce, eliminate or adversely affect any right or protection
hereunder of any person in respect of any act or omission
occurring prior to the effectiveness of such amendment, repeal or
adoption.
SEABOARD CORPORATION
EXECUTIVE DEFERRED COMPENSATION PLAN
EFFECTIVE: JANUARY 1, 1999
ARTICLE I
PURPOSE AND EFFECTIVE DATE
1.0.1 Title. This Plan shall be known as the Seaboard
Corporation Executive Deferred Compensation Plan.
1.0.2 Purpose. The purpose of the Plan is to defer salary
and bonus on a pre-tax basis for certain designated Executives
whose Compensation exceeds the maximum allowable deductible
amount of compensation for that Plan Year under Section 162(m) of
the Code and Treasury Regulations thereunder. The Plan is
intended to constitute an unfunded "top hat" arrangement under
Title I of ERISA as well as for income tax purposes.
1.0.3 Effective Date. The effective date of this Plan shall
be January 1, 1999.
ARTICLE II
DEFINITIONS AND CONSTRUCTION OF THE PLAN DOCUMENT
2.0.1 Annual Deferral Amount. "Annual Deferral Amount" shall
mean that portion of an Executive's salary or bonus for a Plan
Year which shall be deferred pursuant to this Plan. In the event
of an Executive's Termination of Employment prior to the end of a
Plan Year, such year's Annual Deferral Amount shall be the actual
amount, if any, deferred prior to such event.
2.0.2 Beneficiary. "Beneficiary" shall mean the person,
persons, the estate or other legal entity of or established by an
Executive entitled to receive any benefits under this Plan in the
event of the Executive's death.
2.0.3 Board. "Board" shall mean the Board of Directors of
the Company.
2.0.4 Bookkeeping Account or Bookkeeping Account Balance.
"Bookkeeping Account" or "Bookkeeping Account Balance" shall mean
with respect to an Executive the sum of (i) his Deferred
Compensation, plus (ii) earnings credited in accordance with all
the applicable earnings crediting provisions of this Plan, less
(iii) all distributions. This account shall be a bookkeeping
entry only and shall be utilized solely as a device for the
measurement and determination of the amounts to be paid to an
Executive pursuant to this Plan.
2.0.5 Change of Control. "Change of Control" shall mean an
event or transaction which results in one or more of the
following:
(a) the acquisition by any person or entity (other than by the
Company or one of its subsidiaries) of more than fifty percent
(50%) of either the outstanding shares of common stock or the
combined voting power of the Company's then outstanding voting
securities entitled to vote generally in the election of
directors;
(b) the liquidation of the Company or the sale of more than
eighty-five percent (85%) of the assets of the Company to an
unrelated person or entity; or
(c) the approval by the shareholders of the Company of a
reorganization, merger, or consolidation with respect to which
persons who were the stockholders of the Company immediately
prior to such reorganization, merger, or consolidation do not,
immediately thereafter, own more than fifty percent (50%) of the
combined voting power entitled to vote generally in the election
of the directors of the reorganized, merged or consolidated
entity's then outstanding voting securities; provided, however,
any such merger or consolidation with Seaboard Flour Corporation
shall not constitute a Change of Control.
2.0.6 Code. "Code" shall mean the Internal Revenue Code of
1986, as may be amended from time to time.
2.0.7 Company. "Company" shall mean Seaboard Corporation
and, for purposes of all references herein to an Executive's
Compensation or his employer's deduction, shall include every
member of the Company's affiliated group, as determined under
Section 1504 of the Code.
2.0.8 Compensation. "Compensation" shall mean an Executive's
applicable "employee remuneration" as defined in 162(m)(4) of the
Code and the Treasury Regulations issued thereunder.
2.0.9 Crediting Rate. "Crediting Rate" shall have the meaning
specified in Section 4.0.2.
2.10 Deferred Compensation. "Deferred Compensation" shall mean
the sum of all of an Executive's Annual Deferral Amounts.
2.11 Executive. "Executive" shall mean any member of management
or highly compensated employee who is defined as a "covered
employee" under Section 162(m)(3) of the Code with respect to any
Plan Year, and who is designated to participate in the Plan by
the Board.
2.12 Plan. "Plan" shall mean the Seaboard Corporation Executive
Deferred Compensation Plan, as described in this instrument and
as amended from time to time.
2.13 Plan Administrator. "Plan Administrator" shall mean the
Company or such person or persons designated by the Company to
act in such capacity.
2.14 Plan Year. "Plan Year" shall mean a calendar year, with the
first Plan Year commencing on January 1, 1999.
2.15 Termination of Employment. "Termination of Employment"
shall mean the termination of the Executive's employment as an
employee of the Company and any division, subsidiary or affiliate
thereof.
2.16 Valuation Date. "Valuation Date" shall mean the last day of
each calendar quarter and on the date of distribution of the
Bookkeeping Account pursuant to Article V.
2.17 Gender and Number. Wherever the context so requires,
masculine pronouns include the feminine and singular words shall
include the plural.
2.18 Titles. Titles of the Articles of this Plan are included
for ease of reference only and are not to be used for the purpose
of construing any portion or provision of this Plan document.
ARTICLE III
DEFERED COMPENSATION
3.0.1 Deferred Compensation. Each Executive shall have a
portion of his salary and bonus deferred in accordance with the
terms and conditions of this Plan.
3.0.2 Amount of Deferred Compensation. The amount of
Compensation which shall be deferred each Plan Year under the
Plan shall equal the excess of such Executive's Compensation for
any Plan Year (including any bonus that may be paid with respect
to such Plan Year in the following year and that, but for
Section 162(m) of the Code, would be deductible by the Company in
such current Plan Year) over one million dollars ($1,000,000) (or
such other amount specified in Section 162(m) of the Code),
unless the Board determines a different amount shall be deferred.
3.0.3 Time of Deferrals. Compensation shall not be deferred
in any Plan Year until the Executive has been paid Compensation
with respect to such Plan Year equal to or exceeding one million
dollars ($1,000,000).
3.0.4 Vesting. An Executive shall be fully vested at all
times in his Deferred Compensation plus earnings thereon.
ARTICLE IV
BOOKKEEPING ACCOUNT AND CREDITING RATE
4.0.1 Bookkeeping Account. Compensation deferred with
respect to an Executive under Section 3.0.1 herein shall be
credited to a Bookkeeping Account maintained for each Executive,
and distributions pursuant to Article V or VI shall be subtracted
from the Executive's Bookkeeping Account.
4.0.2 Crediting Rate. On each Valuation Date, each
Executive's Bookkeeping Account shall be credited with an amount
equal to the deemed earnings which would have been realized by
the Company if such Bookkeeping Account were invested in an
investment vehicle earning a rate or return equal to the eight
percent (8%) (the "Crediting Rate").
Such earnings shall be determined pursuant to the
method or methods deemed appropriate by the Plan Administrator in
its discretion, which methods vary from time to time, as deemed
appropriate by the Plan Administrator. The method prescribed
herein to determine the Crediting Rate applicable to the
Executive's Bookkeeping Account shall in no way require that the
Company make any investment of Company assets in such investment
nor entitle the Executive to any rights or interest in any
investment held by the Company outright or in trust.
ARTICLE V
DISTRIBUTION
5.0.1 Distribution of Bookkeeping Account Balance. Upon
Termination of Employment, an Executive shall be entitled to the
balance in his Bookkeeping Account payable in accordance with the
provisions of sections 5.0.2 and 5.0.3 herein.
5.0.2 Form of Distribution. All distributions of an
Executive's Bookkeeping Account shall be made in cash.
5.0.3 Timing of Distribution. Distributions shall be paid in
a lump sum as soon as administratively feasible in the Plan Year
immediately following the Plan Year of the Executive's
Termination of Employment. Notwithstanding the above, in the
event of a Change of Control, the balance in an Executive's
Bookkeeping Account shall become immediately distributable to the
Executive within thirty (30) days after the Change of Control.
5.0.4 Death Prior to Commencement of Benefit Payments. In
the event of an Executive's death prior to the payment of his
Bookkeeping Account hereunder, an amount equal to the Executive's
Bookkeeping Account Balance shall be paid to the Executive's
designated Beneficiary in a lump sum as soon as administratively
feasible after the Executive's death.
5.0.5 Hardship Distributions. At the request of an Executive
before or after the Executive's Termination of Employment before
distribution of his Account Balance, the Company may, in its sole
discretion, accelerate and cause all or part of the value of an
Executive's Bookkeeping Account under this Plan to be paid.
Accelerated payments at the request of the Executive may be
allowed only in the event of a severe and unforeseeable emergency
as determined by the Company in its sole discretion, including
but not limited to, a disability. Such payment shall cause the
Executive's Bookkeeping Account to be reduced by the amount
distributed to the Executive. An accelerated distribution may
include the amount needed to pay federal, state or local income
taxes reasonably anticipated to result from the payment.
ARTICLE VI
BENEFICIARY
6.0.1 Beneficiary Designation. An Executive shall designate
a Beneficiary to receive benefits under the Plan on an
appropriate form provided by the Plan Administrator. If more
than one Beneficiary is named, the share and/or precedence of
each Beneficiary shall be indicated. An Executive shall have the
right to change the Beneficiary by submitting to the Plan
Administrator a new Beneficiary designation form.
6.0.2 Proper Beneficiary. If the Plan Administrator has any
doubt as to the proper Beneficiary to receive payments hereunder,
the Plan Administrator shall have the right to withhold such
payments until the matter is finally adjudicated. However, any
payment made by the Plan Administrator, in good faith and in
accordance with this Plan, shall fully discharge the Company from
all further obligations with respect to that payment.
6.0.3 Minor or Incompetent Beneficiary. In making any
payments to or for the benefit of any minor or an incompetent
Beneficiary, the Plan Administrator, in its sole and absolute
discretion, may make a distribution to a legal or natural
guardian or other relative of a minor or court appointed Plan
Administrator of such incompetent. Alternatively, it may make a
payment to any adult with whom the minor or incompetent
temporarily or permanently resides. The receipt by a guardian,
Plan Administrator, relative or other person shall be a complete
discharge to the Company. Neither the Company nor the Plan
Administrator shall have any responsibility to see to the proper
application of any payments so made.
6.0.4 No Beneficiary Designation. If an Executive fails to
designate a Beneficiary as provided in Section 6.0.1 above, or if
all designated Beneficiaries predecease the Executive or die
prior to complete distribution of the Executive's Account
Balance, then the Executive's designated Beneficiary shall be
deemed to be his surviving spouse. If the Executive has no
surviving spouse, the benefits remaining under the Plan to be
paid to a Beneficiary shall be payable to the Executive's estate.
ARTICLE VII
ADMINISTRATION OF THE PLAN
7.0.1 Finality of Determination. Subject to the Plan, the
Plan Administrator shall, from time to time, establish rules,
forms and procedures for the administration of the Plan. Except
as herein otherwise expressly provided, the Plan Administrator
shall have the exclusive right to interpret the Plan and to
decide any and all matters arising thereunder or in connection
with the administration of the Plan, and it shall endeavor to
act, whether by general rules or by particular decisions, so as
not to discriminate in favor of or against any person. The
decisions, actions and records of the Plan Administrator shall be
conclusive and binding upon the Company and all persons having or
claiming to have any right or interest in or under the Plan, and
cannot be overruled by a court of law unless arbitrary or
capricious.
7.0.2 Certificates and Reports. The members of the Plan
Administrator and the officers and directors of the Company shall
be entitled to rely on all certificates and reports made by any
duly appointed accountants, and on all opinions given by any duly
appointed legal counsel, which legal counsel may be counsel for
the Company.
7.0.3 Indemnification and Exculpation. The Company shall
indemnify and hold harmless any person or entity designated to
act as the Plan Administrator or its designee and each current
and former member of the Board against any and all expenses and
liabilities (to the extent not indemnified under any liability
insurance contract or other indemnification agreement) which the
person incurs on account of any act or failure to act in
connection with the good faith administration of the Plan.
Expenses against which the Plan Administer, its designee or a
member of the Board shall be indemnified hereunder shall include,
without limitation, the amount of any settlement or judgment,
costs, counsel fees, and related charges reasonably incurred in
connection with a claim asserted, or a proceeding brought or
settlement thereof. The foregoing right of indemnification shall
be in addition to any other rights to which the Plan
Administrator, its designee or such member of the Board may be
entitled as a matter of law, but shall be conditioned upon the
person's notifying the Company of the claim of liability within
sixty (60) days of the notice of that claim and offering the
Company the right to participate in and control the settlement
and defense of the claim.
7.0.4 Expenses. The expenses of administering the Plan shall
be borne by the Company.
7.0.5 FICA and Other Taxes. For each Plan Year in which an
Annual Deferral Amount is being credited to an Executive's
Bookkeeping Account, the Company shall ratably withhold from that
portion of the Executive's Compensation that is not being
deferred, the Executive's share of FICA and other employment
taxes attributable to such Annual Deferral Amount in accordance
with the Treasury Regulations under Section 3121(v) of the Code.
ARTICLE VIII
CLAIMS PROCEDURE
8.0.1 Written Claim. Benefits shall be paid in accordance
with the provisions of this Plan. The Executive, or a designated
recipient or any other person claiming through the Executive may
make a written request for benefits under this Plan. Any such
claim shall be mailed or delivered to the Plan Administrator.
Such claim shall be reviewed by the Plan Administrator or a
delegate.
8.0.2 Denied Claim. If the claim is denied, in full or in
part, the Plan Administrator shall provide a written notice
within ninety (90) days setting forth the specific reasons for
denial, and any additional material or information necessary to
perfect the claim, and an explanation of why such material or
information is necessary, and appropriate information and
explanation of the steps to be taken if a review of the denial is
desired.
8.0.3 Review Procedure. If the claim is denied and a review
is desired, the Executive (or Beneficiary) shall notify the Plan
Administrator in writing within sixty (60) days after receipt of
the written notice of denial. In requesting a review, the
Executive or Beneficiary may request a review of pertinent
documents with regard to the benefits created under this
agreement, may submit any written issues and comments, may
request an extension of time for such written submission of
issues and comments, and may request that a hearing be held, but
the decision to hold a hearing shall be within the sole
discretion of the Plan Administrator.
8.0.4 Plan Administrator Review. The decision on the review
of the denied claim shall be rendered by the Plan Administrator
within sixty (60) days after the receipt of the request for
review (if no hearing is held) or within sixty (60) days after
the hearing if one is held. The decision shall be written and
shall state the specific reasons for the decision including
reference to specific provisions of this Plan on which the
decision is based.
ARTICLE IX
NATURE OF COMPANY'S OBLIGATION
9.0.1 Company's Obligation. The Company's obligations under
this Plan shall be an unfunded and unsecured promise to pay. The
Company shall not be obligated under any circumstances to fund
its obligations under this Plan.
9.0.2 Creditor Status. Any assets which the Company may
acquire or set aside to help cover its financial liabilities
under the Plan are and must remain general assets of the Company
subject to the claims of its creditors. Neither the Company nor
this Plan gives an Executive or Beneficiary any beneficial
ownership interest in any asset of the Company. All rights of
ownership in any such assets are and remain in the Company. All
Plan Executives and Beneficiaries shall be unsecured general
creditors of the Company.
ARTICLE X
MISCELLANEOUS
10.0.1 Written Notice. Any notice given under the Plan shall
be in writing and shall be mailed by United States mail, postage
prepaid. If notice is to be given to the Company, such notice
shall be addressed to the Plan Administrator at Seaboard
Corporation. If notice is to be given to the Executive, such
notice shall be sent to the Executive's last known address.
10.0.2 Change of Address. Any Executive may, from time to
time, change the address to which notices shall be mailed by
giving written notice of such new address.
10.0.3 Merger, Consolidation or Acquisition. The Plan shall
be binding upon the Company, its assigns, and any successor to
the Company which shall succeed to substantially all of its
assets and business through merger, acquisition or consolidation,
and upon an Executive, a Beneficiary, assigns, heirs, executors
and administrators.
10.0.4 Amendment and Termination. The Company retains the
sole and unilateral right to terminate, amend, modify, or
supplement this Plan, in whole or part, at any time. However,
except as provided herein, no Company action under this right
shall reduce the Bookkeeping Account of any Executive or
Beneficiary.
10.0.5 Employment. This Plan does not provide a contract of
employment between the Company and the Executive, and the Company
reserves the right to terminate the Executive's employment for
any reason, at any time, notwithstanding the existence of this
Plan.
10.0.6 Non-transferability. Except insofar as required or
prohibited by applicable law, no sale, transfer, alienation,
assignment, pledge, collateralization or attachment of any
benefits under this Plan shall be valid or recognized by the
Company. Neither the Executive or designated Beneficiary shall
have any power to hypothecate, mortgage, commute, modify, or
otherwise encumber in advance of any of the benefits payable
hereunder, nor shall any of said benefits be subject to seizure
for the payment of any debts, judgments, alimony, or maintenance,
owed by the Executive or Beneficiary, or be transferable by
operation of law in the event of bankruptcy, insolvency, or
otherwise.
10.0.7 Tax Withholding. The Company may withhold from a
payment any federal, state, or local taxes required by law to be
withheld with respect to such payment and such sum as the Company
may reasonably estimate as necessary to cover any taxes for which
the Company may be liable and which may be assessed with regard
to such payment.
10.0.8 Acceleration of Payment. The Company reserves the
right to accelerate the payment of any benefits payable under
this Plan at any time without the consent of the Executive, the
Executive's estate, a Beneficiary or any other person claiming
through the Executive.
10.0.9 Applicable Law. This Plan shall be governed by the
laws of the State of Kansas to the extent not pre-empted by
federal law.
IN WITNESS WHEREOF, the Company has caused this instrument
to be executed by its duly authorized officer on this 15th day
of March, 1999, effective as of the 1st day of January, 1999.
SEABOARD CORPORATION
By: /s/ J. E. Rodrigues
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