SEABOARD CORPORATION
9000 West 67th Street
Shawnee Mission, Kansas 66202
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 26, 1999
Notice is hereby given that the 1999 Annual Meeting of
Stockholders of Seaboard Corporation, a Delaware corporation,
will be held at the Sheraton Tara Hotel, 320 Washington Street,
Newton, Massachusetts, on Monday, the 26th day of April, 1999, at
10 o'clock in the forenoon for the following purposes:
1. To elect four Directors of the Company.
2. To consider and act upon the selection of KPMG LLP as
independent auditors of the Company.
3. To consider a stockholder proposal to recommend a
stock split to the Board of Directors.
4. To transact any other business which may properly come
before the meeting, or any adjournment thereof.
The close of business on Friday, March 5, 1999, has been
fixed as the record date for determination of stockholders
entitled to notice of, and to vote at, the Annual Meeting. The
books for the transfer of stock will not be closed.
If you do not expect to be present personally at the Annual
Meeting, please sign, date and return the enclosed proxy in the
enclosed addressed envelope.
By order of the Board of
Directors,
MARSHALL L. TUTUN, Secretary
March 25, 1999
SEABOARD CORPORATION
9000 West 67th Street
Shawnee Mission, Kansas 66202
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
APRIL 26, 1999
March 25, 1999
This Proxy Statement is furnished in connection with the
solicitation of proxies to be used at the Annual Meeting of
Stockholders of Seaboard Corporation (the "Company") to be held
on April 26, 1999, and at any adjournment thereof, for the
purposes set forth in the foregoing Notice of Annual Meeting.
The close of business on Friday, March 5, 1999, has been fixed
as the record date for the determination of stockholders entitled
to notice of, and to vote at, the Annual Meeting, and at any
adjournment thereof.
This Proxy Statement is first being sent to stockholders on or
about March 25, 1999. The consolidated financial statements of
the Company for the fiscal year ended December 31, 1998, together
with corresponding consolidated financial statements for the
fiscal year ended December 31, 1997, are contained in the Annual
Report which is mailed to stockholders herewith.
Proxies in the form enclosed are solicited by the Board of
Directors of the Company. Any stockholder giving a proxy in the
enclosed form has the power to revoke it at any time before it is
exercised. A stockholder's right to revoke his or her proxy is
not limited by, or subject to, compliance with any specified
formal procedure. He or she may revoke his or her proxy by
delivering a written revocation or a duly executed proxy bearing
a later date, or by attending the meeting and voting in person.
A proxy in such form, if received in time for voting and not
revoked, will be voted at the Annual Meeting in accordance with
the direction of the stockholder. Where a choice is not so
specified, the shares represented by the proxy will be voted
"for" the election of the nominees for Director listed herein, an
"abstention" with respect to approval of the stockholder proposal
and "for" ratification of the selection of KPMG LLP as
independent auditors of the Company. The Board of Directors does
not know of any matters which will be brought before the meeting
other than those specifically set forth in the Notice of Annual
Meeting. However, if any other matter properly comes before the
meeting, it is intended that the persons named in the enclosed
form of proxy, or their substitutes acting thereunder, will vote
on such matter in accordance with their best judgment.
Votes cast at the Annual Meeting will be tabulated by persons
duly appointed to act as inspectors of election for the Annual
Meeting. The inspectors of election will treat shares
represented by a properly signed and returned proxy as present at
the Annual Meeting for purposes of determining a quorum, without
regard to whether the proxy is marked as casting a vote or
abstaining. Likewise, the inspectors of election will treat
shares of stock represented by "broker non-votes" as present for
purposes of determining a quorum. Broker non-votes are proxies
with respect to shares held in record name by brokers or
nominees, as to which (i) instructions have not been received
from the beneficial owners or persons entitled to vote, (ii) the
broker or nominee does not have discretionary voting power under
applicable national securities exchange rules or the instrument
under which it serves in such capacity, and (iii) the record
holder has indicated on the proxy card or otherwise notified the
Company that it does not have authority to vote such shares on
that matter.
A favorable plurality of votes cast is necessary to elect
members of the Board of Directors. Accordingly, abstentions or
broker non-votes as to the election of Directors will not affect
the election of the candidates receiving the plurality of votes.
The remaining proposals set forth herein require the
affirmative vote of the majority of the shares present. Shares
represented by broker non-votes as to such matters are treated as
not being present for the purposes of such matters, while
abstentions as to such matters are treated as being present but
not voting in the affirmative. Accordingly, the effect of broker
non-votes is only to reduce the number of shares considered to be
present for the consideration of such matters, while abstentions
will have the same effect as votes against the matter.
The Company will bear all expenses in connection with the
solicitation of proxies, including preparing, assembling, and
mailing of the Proxy Statement.
The Company had 1,487,519.75 shares of Common Stock, $1.00 par
value, outstanding and entitled to vote as of March 5, 1999. A
majority, or 743,760 of such shares, constitutes a quorum for the
Annual Meeting.
PRINCIPAL STOCKHOLDERS
The following table sets forth the number of shares of the
Company's Common Stock beneficially owned by stockholders owning
more than five percent of such Common Stock as of January 31,
1999. Unless otherwise indicated, all beneficial ownership
consists of sole voting and sole investment power.
Name and Address Percent
of Beneficial Owner Amount of Stock of Class
Seaboard Flour Corporation(1) 1,120,511.75 75.3
200 Boylston Street
Chestnut Hill, MA 02167
Franklin Mutual Advisors, Inc.(2) 93,500.00 6.3
51 John F. Kennedy Parkway
Short Hills, NJ 07078
(1) Mr. H. Harry Bresky, President of the Company, his brother
Otto Bresky, Jr., and sister, Marjorie B. Shifman, own and have
sole voting power over 37,456.25 shares, 79,310.83 shares and
15,467.75 shares, respectively, of the Common Stock of Seaboard
Flour Corporation. These individuals and other members of the
Bresky family, including trusts created for their benefit, have
beneficial ownership of 217,853.83 shares, or 94.9%, of the
Common Stock of Seaboard Flour Corporation. Such family
members in addition have beneficial ownership of a total of
34,815 shares, or 2.3%, of the Company's Common Stock which is
not included in the amount owned by Seaboard Flour Corporation.
Because of such ownership of Common Stock of Seaboard Flour
Corporation by the Bresky family, Mr. H. Harry Bresky may be
deemed to have indirect beneficial ownership of the Common
Stock of the Company held by Seaboard Flour Corporation.
(2) Beneficial ownership by Franklin Mutual Advisors, Inc.
("FMAI") is based on an amended Schedule 13G that was filed
with the Securities and Exchange Commission on January 29,
1999. According to the Schedule 13G, these securities are
beneficially owned by one or more open-ended investment
companies or other managed accounts which, pursuant to advisory
contracts, are advised by FMAI. FMAI disclaims any economic
interest or beneficial ownership in these securities.
Based solely on a review of the copies of reports furnished to
the Company, and written representations that no other reports
were required, the Company believes that during fiscal 1998, all
reports of ownership required under Section 16(a) of the
Securities Exchange Act of 1934 for Directors and executive
officers of the Company, and beneficial owners of more than 10%
of the Company's Common Stock, have been timely filed.
ITEM 1: ELECTION OF DIRECTORS
The Board of Directors has fixed the number of Directors at
four. Unless otherwise specified, proxies will be voted in favor
of the election as Directors of the following four persons for a
term of one year and until their successors are elected and
qualified. All nominees are currently Directors. Mr. H. Harry
Bresky has served as a Director continuously since 1959, and was
reelected by the stockholders at the last annual meeting. Mr. H.
Harry Bresky is the father of Mr. Steven J. Bresky. Mr. Joe E.
Rodrigues has served as a Director since 1990 and was reelected
by the stockholders at the last annual meeting. Mr. Thomas J.
Shields has served as a Director since 1992 and was reelected by
the stockholders at the last annual meeting. Mr. David A.
Adamsen has served as Director since 1995 and was reelected by
the stockholders at the last annual meeting. There are no
arrangements or understandings between any nominee and any other
person pursuant to which such nominee was nominated. As of
January 31, 1999, the four nominees beneficially owned securities
of the Company in the amounts shown:
Amount of Stock (1)
Common Percent
Name Principal Occupations and Positions Stock of Class
H.Harry Bresky Director and President, Seaboard Corporation; 5,611(2) 0.4
Age 73 President, Treasurer and Director,
Seaboard Flour Corporation.
Joe E. Rodrigues Director (since 1990) and Member of Audit 200 0.01
Age 62 Committee (since 1992), Executive Vice
President and Treasurer, Seaboard Corporation.
Thomas J. Shields Director and Chairman of Audit Committee (since 39 0.002
Age 51 1992), Seaboard Corporation; President
(since 1991), Shields & Company, Inc.,
investment banking firm; Director (since
1997), B.J.'s Wholesale Club, Inc., warehouse
merchandising company; Director (1992 to 1997),
Waban, Inc., warehouse merchandising company;
Director (since 1996), Versar, Inc.,
environmental consulting company.
David A. Adamsen Director and Member of Audit Committee (since 0 0
Age 47 1995), Seaboard Corporation; Vice President
of Special Projects (since 1998), Dean Foods
Company, dairy specialty-food processor and
distributor; President and General Manager
(1986 to 1998), Penny Curtiss Baking Co.,
bakery processing plant; Vice President-
Manufacturing (1994 to 1998), The Penn Traffic
Co., retail and wholesale food distribution
company. (3)
Beneficial ownership of a ll Directors and executive officers as
a group (8 in dividuals). 8,388(4) 0.6
(1) The number of shares shown in this table does not include
indirect beneficial ownership of Common Stock of the Company
attributable to Mr. H. Harry Bresky's ownership of Seaboard
Flour Corporation stock as more fully described under the
Principal Stockholders section herein. Mr. H. Harry Bresky had
record and beneficial ownership of 37,456.25 shares (16.3%) of
the outstanding Common Stock of Seaboard Flour Corporation as
of January 31, 1999. In addition, 63,231 shares are held in
various Trusts for the benefit of Mr. Bresky's issue. Except
for certain annuities to be received from two of the Trusts,
Mr. Bresky disclaims any beneficial ownership of these shares.
(2) These shares exclude 5,285 shares (0.4% of the class) held
by Mr. H. Harry Bresky's wife, as to which Mr. Bresky disclaims
any beneficial interest.
(3) On March 1, 1999, The Penn Traffic Co. announced that it
had filed in the Bankruptcy Court for the District of Delaware
a petition for relief under Chapter 11 of the United States
Bankruptcy Code seeking to implement a prenegotiated financial
restructuring with the holders of its senior and subordinated
notes.
(4) In addition to the ownership of shares by the individuals
shown in this table, these shares include 2,538 shares (0.2% of
class) owned by Mr. Steven J. Bresky. No other executive
officer named in the Executive Compensation and Other
Information section herein owns any shares.
In case any person or persons named herein for election as
Directors are not available for election at the Annual Meeting,
proxies may be voted for a substitute nominee or nominees, as
well as for the balance of those named herein. Management has no
reason to believe that any of the nominees for the election as
Director will be unavailable.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Audit Committee consists of three members: Messrs.
Thomas J. Shields, David A. Adamsen and Joe E. Rodrigues, all of
whom are nominees for Director listed herein. The primary
function of the Audit Committee is to ensure the effectiveness of
the Company's internal control structure and financial reporting
process. The Company has no nominating or compensation
committee.
The Board of Directors held nine meetings in fiscal 1998, four
of which were telephonic meetings. Other actions of the Board of
Directors were taken by unanimous written consent as needed. The
Audit Committee held one meeting in fiscal 1998. Each Director
attended more than 75% of the aggregate of the total number of
meetings of the Board of Directors and the total number of
meetings held by all committees of the Board on which he served.
Each non-employee Director receives $5,000 quarterly and an
additional $1,500 per meeting of the Audit Committee of the
Board. During 1998, the non-employee Directors each received an
additional $1,500 for attending a special meeting to discuss the
sale of the Company's Puerto Rican businesses.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table shows all compensation earned, during the
fiscal years indicated, by the Chief Executive Officer and the
four other highest paid executive officers of the Company for
such period in all capacities in which they have served:
SUMMARY COMPENSATION TABLE
Annual Compensation
Name Other (3) (4)
and (1) (2) Annual All Other
Principal Salary Bonus Compensation Compensation
Position Year ($) ($) ($) ($)
H. Harry Bresky 1998 603,399 400,000 46,651 4,800
President 1997 558,963 400,000 7,786 4,800
(Chief Executive Officer) 1996 539,119 185,000 8,174 4,500
Joe E. Rodrigues 1998 484,308 225,000 27,509 4,800
Executive Vice President 1997 451,819 200,000 7,786 4,800
and Treasurer 1996 474,093 100,000 97,724 4,500
Rick J. Hoffman 1998 338,279 175,000 20,123 4,800
Vice President 1997 298,801 200,000 6,838 4,800
1996 299,160 50,000 44,400 4,500
Steven J. Bresky 1998 266,888 175,000 13,372 4,800
Vice President 1997 243,771 150,000 3,549 4,800
1996 254,081 50,000 48,998 4,500
Robert L. Steer (5) 1998 227,998 150,000 8,428 4,800
Vice President 1997 173,701 100,000 - 4,800
Chief Financial Officer 1996 139,269 50,000 16,814 4,500
(1) Salary includes amounts deferred at the election of the
named executive officers under the Company's 401(k) retirement
savings plan.
(2) Reflects bonus earned for each fiscal year presented.
(3) Other Annual Compensation earned for fiscal 1998 and 1997
represents benefits under the Supplemental Executive Retirement
Plan described herein.
Other Annual Compensation earned for fiscal 1996 represents
benefits under an Executive Retirement Plan and the
Supplemental Executive Retirement Plan described herein. The
amounts of these benefits for fiscal 1996 are as follows: (i)
Executive Retirement Plan: Rodrigues $89,550, Hoffman $36,226,
S. Bresky $40,824, and Steer $15,475; and (ii) Supplemental
Executive Retirement Plan: H. Bresky $8,174, Rodrigues $8,174,
Hoffman $8,174, S. Bresky $8,174 and Steer $1,339.
(4) All Other Compensation represents the Company
contributions to the Company's 401(k) retirement savings plan
on behalf of the named executive officers. Excludes
perquisites and other benefits, unless the aggregate amount of
such compensation exceeds the lesser of either $50,000 or 10%
of the total of annual salary and bonus reported for the Named
Executive Officer.
(5) Mr. Steer was elected by the Board of Directors of the
Company as Vice President Finance effective April 22, 1996.
Effective April 27, 1998, Mr. Steer's title changed to Vice
President Chief Financial Officer.
RETIREMENT PLANS
Executive Retirement Plan. The Seaboard Corporation Executive
Retirement Plan (the "Executive Retirement Plan") provides
retirement benefits for a select group of officers and managers
including the Chief Executive Officer and the four other highest
paid executive officers. Effective January 1, 1997, the
Executive Retirement Plan provides that participants will accrue
a benefit in an amount equal to 2.5% of the final average
remuneration (salary plus bonus) of the participant multiplied by
the years of service from January 1, 1997, reduced by the amount
such participant has accrued under the Seaboard Corporation
Pension Plan (described below) available to all full time
employees of the Company, which benefit is payable beginning at
normal retirement. Benefits under the plan are unfunded. As of
December 31, 1998, all of the Named Officers are fully vested and
have two years of service as defined in the Executive Retirement
Plan. Under this Plan, the automatic form of benefit payment,
for a married participant, is pursuant to a "50% Joint and
Survivor Annuity." This means the participant will receive a
monthly annuity benefit for his/her lifetime and an eligible
surviving spouse shall receive a lifetime annuity equal to 50% of
the participant's benefit. The automatic form of benefit payment
for an unmarried participant is pursuant to a "Single Life
Annuity." While these represent the automatic forms of payment,
the Plan does allow optional forms under certain circumstances.
The table below shows annual benefits by remuneration and years
of service beginning with fiscal 1997.
EXECUTIVE RETIREMENT PLAN TABLE
YEARS OF SERVICE FROM JANUARY 1, 1997
REMUNERATION 15 20 25 30 35
$ 125,000 27,700 36,900 46,100 55,300 64,500
$ 150,000 32,800 43,600 54,600 65,400 76,400
$ 175,000 40,300 53,800 67,300 80,800 94,100
$ 200,000 49,700 66,300 82,900 99,500 116,000
$ 225,000 59,100 78,800 98,500 118,300 137,900
$ 250,000 68,500 91,300 114,200 137,000 159,800
$ 300,000 87,200 116,300 145,400 174,500 203,500
$ 400,000 124,700 166,300 207,900 249,500 291,000
$ 450,000 143,500 191,300 239,200 287,000 334,800
$ 500,000 162,200 216,300 270,400 324,500 378,500
The benefits provided under the Executive Retirement Plan for
years prior to 1997 are included in the Summary Compensation
Table above, except with respect to Mr. H. Bresky, whose benefit
is described below under Frozen Executive Retirement Plan
Benefit.
Frozen Executive Retirement Plan Benefit. Mr. H. Bresky is 100%
vested in an Executive Retirement Plan frozen effective December
31, 1996 in which he has accrued an annual benefit of $22,500
upon his retirement Under this Plan, the automatic form of
benefit payment is pursuant to a "Ten-year Certain and Continuous
Annuity." This means Mr. Bresky will receive a monthly annuity
benefit for his lifetime and should Mr. Bresky die while in the
ten-year certain period, the balance of the ten-year benefit will
be paid to his designated beneficiary. If Mr. Bresky dies while
employed by the Company or after retirement, but before the
commencement of benefits, monthly payments shall be made to Mr.
Bresky's beneficiary in the form of a 100% joint and survivor
benefit. While this is the form of payment, the Plan does allow
optional forms under certain circumstances.
Seaboard Corporation Pension Plan. The Seaboard Corporation
Pension Plan provides defined benefits for its domestic salaried
and clerical employees. Beginning in fiscal 1997, each of the
individuals named in the Summary Compensation Table participates
in the Seaboard Corporation Pension Plan. Benefits under the plan
are generally based upon the number of years of service and a
percentage of final average remuneration (salary plus bonus) but
are limited by federal law. As of December 31, 1998, all of the
Named Officers are fully vested and have two years of service as
defined in the Seaboard Corporation Pension Plan. Under this
Plan, the automatic form of benefit payment, for a married
participant, is pursuant to a "50% Joint and Survivor Annuity."
This means the participant will receive a monthly annuity benefit
for his/her lifetime and an eligible surviving spouse shall
receive a lifetime annuity equal to 50% of the participant's
benefit. The automatic form of benefit payment for an unmarried
participant is pursuant to a "Single Life Annuity." While these
represent the automatic forms of payment, the Plan does allow
optional forms under certain circumstances. The table below
shows benefits by remuneration and years of service.
PENSION PLAN TABLE
YEARS OF SERVICE FROM JANUARY 1, 1997
REMUNERATION 15 20 25 30 35
$ 125,000 19,200 25,600 32,000 38,500 44,900
$ 150,000 23,500 31,400 39,200 47,100 54,900
$ 175,000 25,300 33,700 42,100 50,500 59,000
$ 200,000 25,300 33,700 42,100 50,500 59,000
$ 225,000 25,300 33,700 42,100 50,500 59,000
$ 250,000 25,300 33,700 42,100 50,500 59,000
$ 300,000 25,300 33,700 42,100 50,500 59,000
$ 400,000 25,300 33,700 42,100 50,500 59,000
$ 450,000 25,300 33,700 42,100 50,500 59,000
$ 500,000 25,300 33,700 42,100 50,500 59,000
Frozen Retirement Plan. Each of the individuals named in the
Summary Compensation Table is 100% vested under a certain defined
benefit plan which was frozen at December 31, 1993. A definitive
actuarial determination of the benefit amounts was made in 1995.
The annual amounts payable upon retirement after attaining age 62
under this predecessor defined benefit plan are as follows: H.
Bresky $120,108, Rodrigues $61,602, Hoffman $32,063, S. Bresky
$32,796 and Steer $15,490. Under this Plan, the automatic form
of benefit payment, for a married participant, is pursuant to a
"Ten-year Certain and Continuous Annuity." This means the
participant will receive a monthly annuity benefit for his/her
lifetime and should the participant die while in the ten-year
certain period, the balance of the ten-year benefit will be paid
to his/her designated beneficiary. If the participant dies while
employed by the Company or after retirement, but before the
commencement of benefits, monthly payments shall be made to the
participants beneficiary for a period of ten years. While this
is the automatic form of payment, the Plan does allow optional
forms under certain circumstances.
Supplemental Retirement Plans. The Supplemental Executive
Retirement Plan provides for cash compensation in an amount equal
to 3% of a participant's annual compensation in excess of
$160,000 ($150,000 for fiscal 1996 but not greater than $300,000
for 1997 and 1996). Additionally, the amounts paid pursuant to
this plan are grossed up to cover 100% of a participant's
estimated income tax liability on the benefit. The amounts of
benefits payable, including the gross up for taxes, under the
Supplemental Executive Retirement Plan is reported in the Summary
Compensation Table herein.
In addition to the Supplemental Executive Retirement Plan, the
Company has agreed to provide a supplementary pension benefit to
Messrs. H. Bresky and Rodrigues. Mr. Rodrigues is entitled to a
supplementary annual pension equal to 4% of his total
compensation (base compensation and all prescribed allowances and
bonuses) during his employment with the Company. As of
January 1, 1999, Mr. Rodrigues was entitled to receive annual
estimated benefits for his lifetime of $294,542 under this
supplementary plan upon his retirement. Subsequent to his
retirement, the benefit will increase annually based on the
change in the Consumer Price Index. Mr. H. Bresky is entitled to
a supplementary annual pension in the amount of $410,088 per
year. Under this Plan, the automatic form of benefit payment is
pursuant to a "Ten-year Certain and Continuous Annuity." This
means Mr. Bresky will receive a monthly annuity benefit for his
lifetime and should Mr. Bresky die while in the ten-year certain
period, the balance of the ten-year benefit will be paid to his
designated beneficiary. If Mr. Bresky dies while employed by the
Company or after retirement, but before the commencement of
benefits, monthly payments shall be made to Mr. Bresky's
beneficiary for a period of ten years. Under these plans,
payment of benefits commences with the executive's retirement
from the Company.
None of the benefits payable under the aforementioned plans
contain an offset for social security benefits.
REPORT OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The following information is to provide shareholders and other
interested parties with a clear understanding of the Company's
philosophy regarding executive compensation and to provide
insight behind fundamental compensation decisions.
The Company maintains the philosophy that determination of
compensation for its executive officers by the Board of Directors
is directly and materially performance based with a recognition
that these officers are responsible for implementing the
Company's long-term strategic objectives. The Company's goals
with respect to its executive compensation policies described
below are to attract and retain top executive employees.
Base compensation and increases thereto for executive officers
as presented in the Summary Compensation Table herein are
determined by the following factors:
Competitive salary ranges at or above the 50th percentile of
a select group of comparable firms. This group is comprised of
comparable sized firms in the food processing, marine
transportation, and grain industries. While this group contains
some of the same firms listed in the peer group index in the
total return graphs herein, it is not identical.
The state of the economy, which includes the performance of
companies in similar industries and such key economic factors as
the Consumer Price Index for Urban Wage Earners ("CPI-W").
The diversity and complexity of the Company's businesses.
An assessment of corporate performance, which includes such
measures as revenue, profitability, return on assets, return on
equity, cost containment, financial risk and achievement of non-
financial strategic objectives.
An assessment of the officer's performance based on various
competency factors and the tracking of individual performance
objectives.
As Chief Executive Officer, Mr. H. Harry Bresky's base
compensation is determined by a review of the Company's
progress in meeting its goals and objectives, and a survey of the
select group of firms referenced above. An analysis of the data
presented in this survey shows that the typical base compensation
for Chief Executive Officers of these entities is comparable at
about the 50th percentile to the base compensation paid to Mr. H.
Harry Bresky.
Discretionary bonuses for executive officers, including the
Chief Executive Officer, are determined by the Board of Directors
in accordance with an executive bonus plan and an annual
assessment of the Company's financial performance and each
officer's individual contribution to that performance. In
establishing the amount of executive officer bonuses, the Board
uses guidelines established in the executive incentive program
outlined below. However, the Board has the discretion to
consider other factors as it deems appropriate. Aggregate
bonuses for employees not otherwise compensated by a particular
operating division, which includes Messrs. H. Bresky, Rodrigues,
and Steer, are computed at 2/100ths of a percent of sales and 2%
of earnings before taxes for the Company as a whole. The
determination of the bonus pool for employees compensated by a
particular division, which includes Messrs. Hoffman and S.
Bresky, is based on a two-part formula. The first part, referred
to as "the basic bonus," is computed as a ratio of sales by
operating division to total corporate sales applied to the basic
bonus amount as determined by the Board of Directors. The second
part of the contribution, referred to as "the supplemental
bonus," is based on the return on net assets employed in excess
of 10% of the average assets employed by the division. The
allocation of the operating division bonuses is made by the
division head subject to the approval of the Executive Vice
President of the Company. Furthermore, no executive officer may
receive a bonus greater than 100% of his base compensation.
Pursuant to Section 162(m) of the Internal Revenue Code,
compensation in excess of $1 million paid to Mr. Bresky in 1998
is not deductible by the Company. The Board of Directors
considered the non-deductibility of Mr. Bresky's excess
compensation when determining his bonus for 1998.
The foregoing report has been furnished by the Board of
Directors:
H. Harry Bresky
Joe E. Rodrigues
Thomas J. Shields
David A. Adamsen
COMPANY PERFORMANCE
The Securities and Exchange Commission requires a five-year
comparison of stock performance for the Company with that of an
appropriate broad equity market index and similar industry index.
The Company's Common Stock is traded on the American Stock
Exchange, and one appropriate comparison is with the American
Stock Exchange Market Value Index performance. Because there is
no single industry index to compare stock performance, the
companies comprising the Dow Jones Food and Marine Transportation
Industry indices were chosen as the second comparison.
The following graph shows a five-year comparison of cumulative
total return for the Company, the American Stock Exchange Market
Value Index and the companies comprising the Dow Jones Food and
Marine Transportation Industry indices weighted by market
capitalization for the five fiscal years commencing December 31,
1993, and ending December 31, 1998:
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG
SEABOARD CORPORATION, AMERICAN STOCK EXCHANGE MARKET VALUE INDEX,
AND DOW JONES FOOD AND MARINE TRANSPORTATION INDUSTRY INDICES
Seaboard Corporation
American Stock
Seaboard Industry Exchange Market
Corporation Index Value Index
----------- --------- ---------------
12/31/98 233 218 151
12/31/97 242 224 148
12/31/96 146 163 122
12/31/95 145 139 115
12/31/94 88 109 91
12/31/93 100 100 100
*Industry Index: A weighted average by market capitalization of the
companies comprising the Dow JOnes Food and Marine Transportation
Industry indices.
The total cumulative return assumes that the value of the
investment in the Company's Common Stock and each index was $100
on December 31, 1993, and that all dividends were reinvested.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board of Directors has no compensation committee. Messrs.
H. Bresky and Rodrigues are members of the Board of Directors of
the Company and participate in decisions by the Board regarding
executive compensation.
The Company engages in shipping operations. Through wholly
owned subsidiaries, the Company and Seaboard Flour Corporation
provide certain services relating to these operations. Mr. H.
Bresky is the President, Treasurer, Director and principal
stockholder of Seaboard Flour Corporation. During fiscal year
1998, Carlos Shipping Limited, a wholly owned subsidiary of
Seaboard Flour Corporation, paid the Company $86,000 for ship
management fees. The Company paid Carlos Shipping Limited
$2,491,924 for time and voyage charter fees related to the
vessel, MV African Azalea, from which Carlos Shipping Limited
reimbursed $1,449,324 for ship operating costs advanced by the
Company. The Company believes these fees to be prevailing market
rates.
During the Company's fiscal year ended December 31, 1998, the
Company and Carlos Shipping Limited were indebted to each other
in varying amounts for expenses primarily related to chartering
and management services. Interest was charged on such
indebtedness related to the management services at the prime
lending rate. The largest net amount outstanding during the year
from Carlos Shipping Limited to the Company was $224,789 at March
28, 1998. The largest net amount outstanding during the year from
the Company to Carlos Shipping Limited was $146,229 at December
31, 1998. The net amount outstanding at January 31, 1999, was
from the Company to Carlos Shipping Limited in the amount of
$93,380.
During the Company's fiscal year ended December 31, 1998, the
Company and Seaboard Flour Corporation were indebted to each
other in varying amounts. Advances due from Seaboard Flour
Corporation to the Company bear interest at the prime lending
rate while advances due to Seaboard Flour Corporation from the
Company bear interest at the Company's short-term borrowing rate.
The largest net amount outstanding from the Company to Seaboard
Flour Corporation during the year was $6,438,596 at September 26,
1998. The largest net amount outstanding from Seaboard Flour
Corporation to the Company during the year was $2,912,557 at May
2, 1998. The net amount outstanding at January 31, 1999, was
from Seaboard Flour Corporation to the Company in the amount of
$1,440,546. Such borrowings were primarily used for working
capital purposes.
ITEM 2: SELECTION OF INDEPENDENT AUDITORS
The persons named in the accompanying proxy intend, unless
otherwise instructed, to vote the proxies to ratify the selection
of KPMG LLP, certified public accountants, as independent
auditors of the Company for the next fiscal year. The selection
of this firm has been recommended by the Audit Committee of the
Board of Directors of the Company. The Company has been advised
by such firm that neither it nor any member or associate has any
relationship with the Company or with any of its affiliates other
than as independent accountants and auditors. Submission to the
stockholders of the selection of auditors is not required by the
By-Laws, and the Directors would vote to select KPMG LLP as
independent auditors of the Company even if not approved by the
stockholders.
Representatives of KPMG LLP will be present at the Annual
Meeting with the opportunity to make any statement desired and
will be available to answer questions from stockholders.
ITEM 3: STOCKHOLDER PROPOSAL
An individual stockholder, whose name and address and number
of shares held will be furnished by the Company promptly, upon
receipt of any request therefor, has notified the Company that
the stockholder intends to introduce the following proposal at
the 1999 Annual Meeting. The proposal and supporting statement,
for which the Board of Directors and Company accept no
responsibility, are set forth below:
"RESOLVED, that the shareholders of SEABOARD CORPORATION
present or voting by proxy at the 1999 annual meeting hereby
recommend to the Board of Directors that such Board initiate
and complete the steps necessary to increase the number of
common shares outstanding by way of a share split to achieve a
broader base of owners and improve the marketability of the
stock.
SUPPORTING STATEMENT
Seaboard currently has 1,487,519.75 shares outstanding of
which 1,120,511.75 or 75.3% is owned by the Seaboard Flour
Corporation controlled by the Bresky family. That leaves a
relatively small float of 367,008.00 shares. In addition,
Franklin Mutual Advisors holds another 95,587.00 shares or
6.4% of the class. The small float results in several events:
1.Large price movements on very small volume.
2.Lack of institutional interest due to unavailability of
shares.
3.Lack of individual interest due to an unusually high
share price.
In the event the float was considerably larger, institutions
and individuals may take an active interest in evaluating the
merits of the Company and purchase the stock. There is also
the possibility that select investment firms would institute
research coverage. If the stock was more widely held, the
price may more closely reflect the intrinsic value of the
business."
OTHER MATTERS
The notice of meeting provides for the election of Directors,
the selection of independent auditors, a vote on the stockholder
proposal, and for the transaction of such other business as may
properly come before the meeting. As of the date of this Proxy
Statement, the Board of Directors does not intend to present to
the meeting any other business, and it has not been informed of
any business intended to be presented by others. However, if any
other matters properly come before the meeting, the persons named
in the enclosed proxy will take action and vote proxies, in
accordance with their judgment of such matters.
Action may be taken on the business to be transacted at the
meeting on the date specified in the notice of meeting or on any
date or dates to which such meeting may be adjourned.
STOCKHOLDER PROPOSALS
Any stockholder proposals for consideration at next year's
annual meeting of stockholders must be received by the Company at
its executive offices, 9000 West 67th Street, Shawnee Mission,
Kansas 66202, no later than November 25, 1999, except that if the
next year's annual meeting date is changed by more than 30
calendar days from the regularly scheduled date, the Company must
receive such a proposal within a reasonable time before the Board
of Directors makes its proxy solicitation.
ADDITIONAL INFORMATION
Any stockholder desiring additional information about the
Company and its operations may, upon written request, obtain a
copy of the Company's Annual Report to the Securities and
Exchange Commission on Form 10-K without charge. Requests should
be directed to Shareholder Relations, Seaboard Corporation, 9000
West 67th Street, Shawnee Mission, Kansas 66202. The Company's
Annual Report to the Securities and Exchange Commission on Form
10-K is also available on the Company's internet website at
www.seaboardcorp.com.
