SEABOARD CORPORATION
9000 West 67th Street
Shawnee Mission, Kansas 66202
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 28, 2003
Notice is hereby given that the 2003 Annual Meeting of
Stockholders of Seaboard Corporation, a Delaware corporation,
will be held at the Sheraton Newton Hotel, 320 Washington Street,
Newton, Massachusetts, on Monday, the 28th day of April, 2003, at
9 o'clock in the forenoon for the following purposes:
1. To elect five Directors of the Company.
2. To consider and act upon the selection of KPMG LLP as
independent auditors of the Company.
3. To transact any other business which may properly come
before the meeting, or any adjournment thereof.
The close of business on Monday, March 10, 2003, has been
fixed as the record date for determination of stockholders
entitled to notice of, and to vote at, the Annual Meeting. The
books for the transfer of stock will not be closed.
If you do not expect to be present personally at the Annual
Meeting, please sign, date and return the enclosed proxy in the
enclosed addressed envelope.
By order of the Board of
Directors,
MARSHALL L. TUTUN, Secretary
March 27, 2003
SEABOARD CORPORATION
9000 West 67th Street
Shawnee Mission, Kansas 66202
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
APRIL 28, 2003
March 27, 2003
This Proxy Statement is furnished in connection with the
solicitation of proxies to be used at the Annual Meeting of
Stockholders of Seaboard Corporation (the "Company") to be held
on April 28, 2003, and at any adjournment thereof, for the
purposes set forth in the foregoing Notice of Annual Meeting.
The close of business on Monday, March 10, 2003, 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 31, 2003. The consolidated financial statements of
the Company for the fiscal year ended December 31, 2002, together
with corresponding consolidated financial statements for the
fiscal year ended December 31, 2001, are contained in the Annual
Report which is mailed to stockholders herewith.
Proxies in the form enclosed are solicited by the Board of
Directors of the Company. Any stockholder giving a proxy in the
enclosed form has the power to revoke it at any time before it is
exercised. A stockholder's right to revoke his or her proxy is
not limited by, or subject to, compliance with any specified
formal procedure. He or she may revoke his or her proxy by
delivering a written revocation or a duly executed proxy bearing
a later date, or by attending the meeting and voting in person.
A proxy in such form, if received in time for voting and not
revoked, will be voted at the Annual Meeting in accordance with
the direction of the stockholder. Where a choice is not so
specified, the shares represented by the proxy will be voted
"for" the election of the nominees for Director listed herein and
"for" ratification of the selection of KPMG 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 there under, 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 1,255,053.90 shares of Common Stock, $1.00 par
value, outstanding and entitled to vote as of March 10, 2003. A
majority, or 627,527 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,
2003. 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 LLC (1) 888,096.90 70.8
822 Boylston Street
Suite 301
Chestnut Hill, MA 02467
Dimensional Fund Advisors Inc. (2) 101,180.00 8.1
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
(1)Mr. H. Harry Bresky, President and Chief Executive Officer
of the Company, and other members of the Bresky family,
including trusts created for their benefit, have beneficial
ownership of approximately 99.5% of the Common Units of
Seaboard Flour LLC (formerly Seaboard Flour Corporation). Such
family members, in addition, have beneficial ownership of a
total of 34,015 shares, or 2.7%, of the Company's Common Stock
which is not included in the amount owned by Seaboard Flour
LLC. Because of such ownership of Common Units of Seaboard
Flour LLC 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 LLC.
(2)Beneficial ownership by Dimensional Fund Advisors Inc.
("Dimensional") is based on a Schedule 13G that was filed with
the Securities and Exchange Commission on February 12, 2003.
According to the Schedule 13G, Dimensional furnishes investment
advice to four investment companies and serves as investment
manager to certain other trusts and accounts which own these
securities. Dimensional disclaims beneficial ownership of
these securities.
SHARE OWNERSHIP OF MANAGEMENT
Information as to beneficial ownership of the Company's equity
securities by directors, nominees, executive officers of the
Company named in the Summary Compensation Table on Page 6 and all
directors and executive officers of the Company as a group as of
January 31, 2003 is shown below:
Amount of Stock (1)
Common Percent
Name Stock of Class
H. Harry Bresky 5,611 (2) *
Joe E. Rodrigues 200 *
Thomas J. Shields 39 *
David A. Adamsen 20 *
Douglas W. Baena 100 *
Kevin M. Kennedy 0 0
Steven J. Bresky 2,538 *
Robert L. Steer 250 *
John Lynch 55 *
Beneficial ownership of all Directors and executive
officers as a group (11 individuals) 8,813 *
(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 LLC Common Units as more fully described under the
Principal Stockholders section herein. Common Units of
Seaboard Flour LLC stock are held in various Trusts for the
benefit of Mr. Bresky's spouse and/or issue. Except for
certain annuities to be received from certain of the Trusts,
Mr. Bresky disclaims any beneficial ownership of these Units.
(2)These shares exclude 5,285 shares (0.4% of the class) held
by Mr. H. Harry Bresky's wife, and annuities to be received by
her from certain of the trusts referred to in (1) above, as to
which Mr. Bresky disclaims any beneficial ownership.
* Less than one percent.
ITEM 1: ELECTION OF DIRECTORS
The Board of Directors has fixed the number of directors at
five. Unless otherwise specified, proxies will be voted in favor
of the election as Directors of the following five persons for a
term of one year and until their successors are elected and
qualified. Mr. H. Harry Bresky has served as a Director
continuously since 1959, and was re-elected 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 re-elected by the stockholders at the
last annual meeting. Mr. David A. Adamsen has served as Director
since 1995 and was re-elected by the stockholders at the last
annual meeting. Mr. Douglas W. Baena has served as Director
since 2001 and was re-elected by the stockholders at the last
annual meeting. The Board of Directors has nominated Mr. Kevin M.
Kennedy to be elected as a director to replace Mr. Thomas J. Shields,
who is not standing for re-election. There are no arrangements
or understandings between any nominee and any other person
pursuant to which such nominee was nominated.
Name Principal Occupations and Positions
H. Harry Bresky Director, Chairman of the Board, President and
Age 77 Chief Executive Officer, Seaboard Corporation; Manager,
Seaboard Flour LLC.
Joe E. Rodrigues Director (since 1990); Former Executive Vice President and
Age 66 Treasurer (retired 2001), Seaboard Corporation.
David A. Adamsen Director and Member of Audit Committee (since 1995),
Age 51 Seaboard Corporation; Vice President-Group General Manager,
Northeast Region (since 2001), Vice President-Sales and
Marketing, Northeast Region (1999-2001), Vice President
of Special Projects (1998-1999), Dean Foods Company, dairy
specialty-food processor and distributor; Vice President-
Manufacturing (1994-1998), The Penn Traffic Co., retail
and wholesale food distribution company.
Douglas W. Baena Director and Member of Audit Committee (since 2001),
Age 60 Seaboard Corporation; Chief Executive Officer (since 1997),
CreditAmerica, Inc., venture capital company; Chief
Executive Officer (1999-2001), Ameristar Capital
Corporation, financial services company; Chief Executive
Officer (1994-1997), Mako Marine International,
manufacturing company.
Kevin M. Kennedy President and Chief Investment Officer (since 2001),
Age 43 Great Circle Management LLC, a private equity fund;
Managing Director (Head of Marine Financing) (1999-2001),
Vice President (Head of Marine Financing) (1997-1999),
GE Capital Services Structured Finance Group, Inc.
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 Board of Directors held nine meetings in fiscal 2002, five
of which were telephonic meetings. Other actions of the Board of
Directors were taken by unanimous written consent as needed. The
Audit Committee held six meetings in fiscal 2002, four of which
were telephonic meetings. 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. The Company has no nominating
or compensation committee.
Each non-employee Director receives $7,500 quarterly and an
additional $2,000 per meeting of the Audit Committee of the Board
(excluding telephonic meetings). In addition, during fiscal
2002, Mr. Shields and Mr. Adamsen were each paid $25,000 for
participating on a special committee of the Board of Directors
related to the transaction with Seaboard Flour Corporation as
discussed below.
AUDIT COMMITTEE REPORT
The Audit Committee of the Company is comprised of three
independent directors, as defined by the American Stock Exchange,
and operates under a written charter adopted by the Board of
Directors.
The Audit Committee has reviewed and discussed the audited
financial statements for fiscal year 2002 with management and
with the independent auditors, including matters required to be
discussed by Statement on Auditing Standards No. 61,
"Communication with Audit Committees," as amended.
The Audit Committee has reviewed the independent auditors'
fees for audit and non-audit services for fiscal year 2002. The
Audit Committee considered whether such non-audit services are
compatible with maintaining independent auditor independence and
has concluded that they are compatible at this time. Such fees
were $498,233 for audit, and $342,158 for all other, including
$290,254 for non-audit services and $51,904 for audit related
services. Non-audit services consisted primarily of tax
compliance and related tax services. There were no fees paid for
financial information design and implementation.
The Audit Committee has received the written disclosures and
the letter from the independent auditors required by Independence
Standards Board Standard No. 1, "Independence Discussions with
Audit Committees," as amended, and have discussed with the
independent auditors their independence. The Audit Committee has
concluded that the independent auditors currently meet applicable
independence standards.
Based on its review of the audited financial statements and
the various discussions noted above, the Audit Committee
recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-
K for the fiscal year ended December 31, 2002.
The foregoing has been furnished by the Audit Committee:
Thomas J. Shields (chair)
David A. Adamsen
Douglas W. Baena
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table shows all compensation earned, during the
fiscal years indicated, by the Chief Executive Officer and the
four other highest paid executive officers of the Company (the
"Named Executive Officers") for such period in all capacities in
which they have served:
SUMMARY COMPENSATION TABLE
Annual Compensation
Name Other (3) (4)
and (1) (2) Annual All Other
Principal Salary Bonus Compensation Compensation
Position Year ($) ($) ($) ($)
H. Harry Bresky 2002 900,000 800,000 27,051 23,949
President 2001 800,000 800,000 27,053 14,948
Chief Executive Officer 2000 700,000 600,000 30,900 5,100
Steven J. Bresky 2002 379,000 300,000 - 19,927
Senior Vice President, 2001 345,539 300,000 - 15,796
International Operations 2000 326,212 200,000 8,616 5,100
Robert L. Steer 2002 379,000 300,000 - 20,163
Senior Vice President, 2001 344,577 300,000 - 16,517
Treasurer and 2000 302,654 225,000 9,410 5,100
Chief Financial Officer
John Lynch 2002 340,100 200,000 28,502 5,100
President, Seaboard 2001 335,677 200,000 32,534 5,100
Marine Ltd. 2000 321,638 150,000 35,750 5,100
Rodney K. Brenneman (5) 2002 310,727 200,000 4,189 11,100
President, Seaboard 2001 249,583 200,000 5,810 5,100
Farms, Inc. 2000 202,410 125,000 5,043 5,100
(1)Salary includes amounts deferred at the election of the
Named Executive Officers under the Company's 401(k) retirement
savings plan and, for 2002 and 2001, under the Company's
Investment Option Plan described herein.
(2)Reflects bonus earned for each fiscal year presented and
includes compensation reduced at the election of the Named
Executive Officers under the Company's Investment Option Plan
described herein.
(3)Other Annual Compensation earned represents benefits under
the Supplemental Executive Benefit Plan described herein. For J.
Lynch in 2002, 2001 and 2000, amount includes $10,102, $17,449
and $23,205, respectively, for imputed taxable interest on an
employee loan described herein.
(4)All Other Compensation represents the Company contributions
to the Company's 401(k) retirement savings plan and, for 2002
and 2001, Investment Option Plan on behalf of the Named Executive
Officers. The amounts for fiscal 2002 are as follows: (i) 401(k)
retirement savings plan: H. Bresky $5,100, S. Bresky $ 4,495, R.
Steer $5,001, J. Lynch $5,100 and R. Brenneman $5,100; and ii)
Investment Option Plan: H. Bresky $18,849, S. Bresky $15,432, R.
Steer $15,162 and R. Brenneman $6,000. The amounts for fiscal
2001 are as follows: (i) 401(k) retirement savings plan: H.
Bresky $5,100, S. Bresky $4,714, R. Steer $4,775, J. Lynch $5,100
and R. Brenneman $5,100; and (ii) Investment Option Plan: H.
Bresky $9,848, S. Bresky $11,082 and R. Steer $11,742. 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. Brenneman was promoted to President of Seaboard Farms,
Inc. in June, 2001.
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 Named 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, 2002, all of the Named Executive Officers are
fully vested 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." The Plan
allows for optional forms of payment 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 28,300 37,700 47,100 56,600 66,000
$ 150,000 33,400 44,400 55,600 66,700 77,800
$ 175,000 38,400 51,200 64,000 76,800 89,600
$ 200,000 43,500 57,900 72,400 86,900 101,400
$ 225,000 52,900 70,400 88,000 105,700 123,300
$ 250,000 62,300 82,900 103,700 124,400 145,200
$ 300,000 81,000 107,900 134,900 161,900 188,900
$ 400,000 118,500 157,900 197,400 236,900 276,400
$ 450,000 137,300 182,900 228,700 274,400 320,200
$ 500,000 156,000 207,900 259,900 311,900 363,900
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. The Plan allows for optional forms of payment under
certain circumstances.
Seaboard Corporation Pension Plan. The Seaboard Corporation
Pension Plan (the "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 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, 2002, all of the
Named Executive Officers are fully vested as defined in the Plan.
Under the 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."
The Plan allows for optional forms of payment 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 18,600 24,800 31,000 37,200 43,400
$ 150,000 22,900 30,600 38,200 45,800 53,500
$ 175,000 27,200 36,300 45,400 54,500 63,500
$ 200,000 31,500 42,100 52,600 63,100 73,600
$ 225,000 31,500 42,100 52,600 63,100 73,600
$ 250,000 31,500 42,100 52,600 63,100 73,600
$ 300,000 31,500 42,100 52,600 63,100 73,600
$ 400,000 31,500 42,100 52,600 63,100 73,600
$ 450,000 31,500 42,100 52,600 63,100 73,600
$ 500,000 31,500 42,100 52,600 63,100 73,600
Frozen Retirement Plan. Each of the Named Executive Officers 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, S. Bresky $32,796, R. Steer
$15,490, J. Lynch $25,872, and R. Brenneman $6,540. 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 participant's beneficiary in the
form of a 100% joint and survivor benefit. The Plan allows for
optional forms of payment under certain circumstances.
Supplemental Retirement Plans. The Supplemental Executive
Benefit Plan provides for discretionary investment options under
the Investment Option Plan, described below and cash compensation
for 2002, 2001 and 2000 for J. Lynch and R. Brenneman, in an
amount equal to 3% of a participant's annual compensation in
excess of $170,000. Additionally, the cash compensation 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 Benefit Plan is reported in the
Summary Compensation Table herein.
In addition to the Supplemental Executive Benefit Plan, the
Company has agreed to provide a supplementary pension benefit to
Mr. H. Bresky. 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.
Investment Option Plan. The Investment Option Plan allows
executives to reduce their compensation in exchange for options
to buy shares of certain mutual funds. In addition, the Company
may grant discretionary investment options under the Investment
Option Plan, which do not require a reduction to executive
compensation. The exercise price for each investment option is
established based upon the fair market value of the underlying
investment at the date of grant.
Executive Deferred Compensation Plan. The Executive Deferred
Compensation Plan requires the deferral of salary and bonus on a
pre-tax basis for executives whose compensation exceeds the
maximum allowable deductible amount under Section 162(m) of the
Code ($1 million).
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 primarily based upon 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, increases thereto, and bonus compensation
for executive officers as presented in the Summary Compensation
Table herein are determined by the following factors:
Competitive compensation ranges at or above the average of a
select group of comparable firms in an market assessment which
included peer group analysis and comparison of national survey
data. As most of the peer group companies offer their executives
long-term stock incentives, in addition to base and bonus
compensation, and Seaboard does not, the Board also considers
this factor in its compensation decisions. This group is
comprised of comparable sized firms in the food processing 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 diversity and complexity of the Company's businesses.
Compensation decisions for the Chief Executive Officer and
other executive officers are not principally based on Company
performance.
As Chief Executive Officer, Mr. H. Harry Bresky's base
compensation and bonus are also determined based on a survey of
the select group of firms referenced above. An analysis of the
data presented in this survey shows that the typical total cash
compensation for Chief Executive Officers of these entities is
comparable to the base compensation and bonus paid to Mr. H.
Harry Bresky.
Discretionary bonuses for executive officers, including the
Chief Executive Officer, may not exceed 100% of each executive's
base compensation.
Pursuant to Section 162(m) of the Internal Revenue Code,
compensation in excess of $1 million paid to Mr. Bresky is not
deductible by the Company. The Board of Directors has considered
the effect of Section 162(m) of the Code on the Corporation's
executive compensation. As such, to assure that the Corporation
does not lose deductions for compensation paid, the Board of
Directors has adopted the Executive Deferred Compensation Plan
described above, requiring the executive to defer receipt of any
compensation in excess of $1 million that is not deductible. In
2002, 2001 and 2000, no deferral was required as Mr. Bresky
elected under the Investment Option Plan to reduce his
compensation below $1 million.
The foregoing report has been furnished by the Board of
Directors:
H. Harry Bresky
Joe E. Rodrigues
Thomas J. Shields
David A. Adamsen
Douglas W. Baena
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,
1997, and ending December 31, 2002.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG
SEABOARD CORPORATION, THE AMEX COMPOSITE INDEX
AND A PEER GROUP
Seaboard Industry American Stock Exchange
Corporation Index* Market Value Index
12/31/02 57 93 120
12/31/01 71 92 124
12/31/00 36 88 131
12/31/99 44 79 128
12/31/98 96 97 101
12/31/97 100 100 100
* 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, 1997, and that all dividends were
reinvested.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board of Directors has no compensation committee. Mr. H.
Bresky is a member of the Board of Directors of the Company and
participates in decisions by the Board regarding executive
compensation.
On February 2, 2000, the Company loaned Mr. Lynch $400,000 to
purchase his primary residence. The promissory note is payable
on demand, bears no interest and is secured by a mortgage on the
home. In accordance with Internal Revenue Service regulations,
Mr. Lynch's annual compensation includes an amount for imputed
interest as reported in the Summary Compensation Table herein.
Upon Mr. Rodrigues retirement as Executive Vice President and
Treasurer in February 2001, the Company entered into a consulting
agreement with Mr. Rodrigues for various services related to
certain of the Company's foreign investments. During 2002 and
2001, the Company paid Mr. Rodrigues $10,000 and $82,000 ,
respectively, for consulting fees and reimbursed him $6,935 and
$35,479, respectively, for out-of-pocket expenses. Also, during
2002 and 2001, the Company paid Mr. Rodrigues $431,992 and
$365,532, respectively, under various retirement plans.
During the Company's fiscal year ended December 31, 2002,
Seaboard Flour Corporation (Seaboard Flour) was indebted to the
Company in varying amounts. On January 25, 2002 and February 13,
2002, the Company formalized the amounts owing by Seaboard Flour
Corporation to the Company by Seaboard Flour issuing Promissory
Notes (the "Seaboard Flour Notes") payable to the Company in the
aggregate face amount of $10,653,518. The Seaboard Flour Notes
were payable upon demand and were secured by pledge of 100,000
shares of Company stock owned by Seaboard Flour. Under the
Seaboard Flour Notes, interest accrued at the greater of the
prime lending rate or 7.88%, compounded quarterly if interest was
not paid. Prior to January 25, 2002, interest accrued at the
prime lending rate. The largest balance outstanding (principal
and accrued interest) from Seaboard Flour to the Company during
the year was $11,259,623 at October 18, 2002. On October 18,
2002, the Seaboard Flour Notes were paid in full through the
transaction discussed below.
In addition to the Seaboard Flour Notes, varying amounts were
due from Seaboard Flour for reimbursement of miscellaneous
operating expenses. During the year 2002, the largest amount of
reimbursements due from Seaboard Flour was $69,876 as of October
18, 2002. Subsequent to October 18, 2002, Seaboard Flour
maintains a deposit with the Company to pay for any miscellaneous
operating expenses incurred by the Company on behalf of Seaboard
Flour. As of December 31, 2002, the Company owed Seaboard Flour
$51,260.
On October 18, 2002, the Company consummated a transaction
with its parent company, Seaboard Flour, pursuant to which the
Company effectively repurchased 232,414.85 shares of its common
stock owned by Seaboard Flour for $203.26 per share. Of the total
consideration of $47,240,643, Seaboard Flour was required under
the terms of the transaction immediately to pay $11,259,623 to
the Company to repay in full all indebtedness owed by Seaboard
Flour to the Company, and to use the balance of the consideration
to pay bank indebtedness of Seaboard Flour and transaction
expenses. Pursuant to the structure of the transaction, the
Company issued 888,096.90 new shares of the Company in exchange
for 1,120,511.75 shares owned by Seaboard Flour and the other
consideration described. The shares issued were exempt from
registration pursuant to Section 4(2) of the Securities Act of
1933.
The transaction was approved by the Board of Directors of the
Company, after receiving the recommendation in favor of the
transaction by a special committee of independent directors. The
special committee was advised by independent legal counsel and an
independent investment banking firm. As a result of the
transaction, Seaboard Flour's ownership interest in the Company
dropped from 75.3% to 70.8%.
As a part of the transaction, Seaboard Flour also transferred
to the Company rights to receive possible future cash payments
from a subsidiary of Seaboard Flour, based primarily on the
future sale of real estate and the benefit of other assets owned
by that subsidiary. To the extent the Company receives cash
payments in the future as a result of those transferred rights,
the Company will issue to Seaboard Flour, at the ten day rolling
average closing price, determined as of the twentieth day prior
to the issue date, new shares of the Company's common stock. The
maximum number of shares of the Company's common stock which may
be issued to Seaboard Flour under this transaction is capped and
cannot exceed the number of shares which were purchased from
Seaboard Flour.
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.
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.
OTHER MATTERS
The notice of meeting provides for the election of Directors,
the selection of independent auditors and for the transaction of
such other business as may properly come before the meeting. As
of the date of this Proxy Statement, the Board of Directors does
not intend to present to the meeting any other business, and it
has not been informed of any business intended to be presented by
others. However, if any other matters properly come before the
meeting, the persons named in the enclosed proxy will take action
and vote proxies, in accordance with their judgment of such
matters.
Action may be taken on the business to be transacted at the
meeting on the date specified in the notice of meeting or on any
date or dates to which such meeting may be adjourned.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 2002 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.
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 7, 2003, 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.