UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
(Amendment No. ___)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
SEABOARD CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than
the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction
applies:___________________________________________________
(2) Aggregate number of securities to which transaction
applies:___________________________________________________
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11
(set forth the amount on which the filing fee is calculated
and state how it was determined):__________________________
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(5) Total fee paid:____________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided
by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously.
Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its
filing.
(1) Amount previously paid:____________________________________
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(4) Date filed:________________________________________________
SEABOARD CORPORATION
9000 West 67th Street
Shawnee Mission, Kansas 66202
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 23, 2007
Notice is hereby given that the 2007 Annual Meeting
of Stockholders of Seaboard Corporation, a Delaware
corporation, will be held at the Sheraton Needham Hotel,
100 Cabot Street, Needham, Massachusetts, on Monday,
April 23, 2007, commencing at 9:00 a.m., local time, and
thereafter as it may from time to time be adjourned, for
the following purposes:
1. To elect five directors to hold office until the
2008 annual meeting of stockholders and until their
respective successors are duly elected and qualified;
2. To consider and act upon ratification and approval
of the selection of KPMG LLP as the independent auditors
of Seaboard for the year ending December 31, 2007; and
3. To transact such other business as properly may come
before the meeting.
The Board of Directors has fixed the close of
business on Monday, March 5, 2007, as the record date for
determination of the stockholders entitled to notice of,
and to vote at, the annual meeting.
If you do not expect to attend the annual meeting in
person, please sign and date the enclosed proxy, and
return it in the enclosed addressed envelope.
By order of the Board of
Directors,
David M. Becker,
Vice President, General
Counsel and Secretary
March 12, 2007
SEABOARD CORPORATION
9000 West 67th Street
Shawnee Mission, Kansas 66202
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
APRIL 23, 2007
March 12, 2007
Date, Time and Place of the Meeting
This proxy statement is furnished in connection with
the solicitation of proxies for use at the annual
meeting of stockholders of Seaboard Corporation
("Seaboard") to be held on Monday, April 23, 2007,
commencing at 9:00 a.m., local time, and at any
adjournment thereof. The meeting is called for the
purposes set forth in the foregoing Notice of Annual
Meeting, and will be held at the Sheraton Needham
Hotel, 100 Cabot Street, Needham, Massachusetts.
Stockholders Entitled to Vote at the Meeting
Stockholders of record as of the close of business
on the March 5, 2007 record date are entitled to notice
of, and to vote at, the annual meeting and at any
adjournment thereof. Seaboard had 1,261,367.24 shares
of common stock, $1.00 par value, outstanding and
entitled to vote as of the record date. Each such
share of common stock is entitled to one vote on each
matter properly to come before the annual meeting.
This proxy statement and the enclosed form of proxy
were first sent or given to stockholders on or about
March 12, 2007.
Quorum Requirement
A quorum of stockholders is necessary to hold a
valid meeting. A majority of our outstanding shares of
common stock on the record date, or 630,684 shares,
will be needed to establish a quorum for the annual
meeting. Votes cast at the annual meeting will be
tabulated by persons duly appointed to act as
inspectors of election and voting for the annual
meeting. The inspectors of election and voting 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 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 Seaboard that it does not have
authority to vote such shares on that matter.
Attending the Meeting and Voting in Person
If you plan to attend the annual meeting and vote in
person, we will give you a ballot when you arrive.
However, if your shares are held in the name of your
broker, bank or other nominee (commonly referred to as
being held in "street" name), proof of ownership may be
required for you to be admitted to the meeting. A
recent brokerage statement or letter from a bank or
broker are examples of proof of ownership. If you want
to vote your shares of common stock held in street name
in person at the meeting, you will have to get a
written proxy in your name from the broker, bank or
other nominee who holds your shares.
Voting by Proxy
The Board of Directors solicits your proxy in the
form enclosed for use at the annual meeting. Any
stockholder giving a proxy in the enclosed form may
revoke it at any time before it is exercised. A
stockholder may revoke his or her proxy by delivering
to the Secretary of Seaboard a written notice of
revocation or a duly executed proxy bearing a later
date, or by attending the meeting and voting in person.
A completed and signed proxy in the enclosed form, if
received in time for voting and not revoked, will be
voted at the annual meeting in accordance with the
instructions of the stockholder. Where a stockholder's
voting instructions are not 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 for 2007. The Board of Directors
does not know of any matters that will be brought
before the meeting other than those referred to 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 discretion and
judgment. If your shares of common stock are held in
street name, you will receive instructions from your
broker, bank or other nominee that you must follow in
order to have your shares voted. Seaboard will bear
all expenses in connection with the solicitation of
proxies, including preparing, assembling, and mailing
this proxy statement. After the initial mailing of
this proxy statement, proxies may be solicited by mail,
telephone, facsimile transmission or personally by
directors, officers, employees or agents of Seaboard.
Brokerage houses and other custodians, nominees and
fiduciaries will be requested to forward soliciting
materials to beneficial owners of shares held of record
by them, and their reasonable out-of-pocket expenses
will be paid by Seaboard.
Vote Required
A favorable plurality of votes cast (a number
greater than those cast for any other candidates) 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
other proposals set forth herein require the
affirmative vote of a majority of the shares present at
the meeting. 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.
2
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information
as of January 31, 2007 regarding the beneficial
ownership of Seaboard's common stock by Seaboard
Flour LLC ("Seaboard Flour"), the only person known to
us to own beneficially 5 percent or more of Seaboard's
common stock. Unless otherwise indicated, all
beneficial ownership consists of sole voting and sole
investment power.
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
Seaboard Flour (1) 893,948.24 70.9%
822 Boylston Street, Suite 301
Chestnut Hill, MA 02467
(1) S. Bresky, President and Chief Executive
Officer of Seaboard, H. Bresky (S. Bresky's father
and Chairman of the Board) and other members of the
Bresky family, including trusts created for their
benefit, beneficially own approximately 99.5 percent
of the common units of Seaboard Flour. S. Bresky is
the co-trustee and beneficiary of some of the trusts
owning Seaboard Flour units, and may be deemed to
have indirect beneficial ownership of Seaboard's
common stock held by Seaboard Flour by virtue of his
position as manager of Seaboard Flour, with the
right to vote Seaboard shares owned by Seaboard
Flour.
Until November 1, 2006, H. Bresky, through his
direct and indirect ownership of Seaboard and
Seaboard Flour, controlled Seaboard. In particular,
H. Bresky was the sole manager of Seaboard Flour,
and as such, pursuant to the Limited Liability
Company Agreement of Seaboard Flour, made all the
voting and investment decisions with respect to the
shares of Seaboard owned by Seaboard Flour. On
November 1, 2006, H. Bresky resigned as sole manager
of Seaboard Flour, and S. Bresky was appointed as
his successor, resulting in S. Bresky having the
right to make the voting and investment decisions
with respect to the shares of Seaboard owned by
Seaboard Flour. No consideration was exchanged in
conjunction with this change of beneficial ownership
of the shares of Seaboard Flour.
SHARE OWNERSHIP OF MANAGEMENT AND DIRECTORS
The following table sets forth certain information
as of January 31, 2007 regarding the beneficial
ownership of Seaboard's common stock by each of our
directors and director nominees, each of our executive
officers named in the Summary Compensation Table on
page 1 and all of our directors and executive officers
as a group.
3
Name of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
Steven J. Bresky 906,347.24 (1) 71.9%
H. Harry Bresky 9,861 (2) *
David A. Adamsen 20 *
Douglas W. Baena 100 *
Kevin M. Kennedy 15 *
Joseph E. Rodrigues 200 *
Robert L. Steer - 0 - *
Rodney K. Brenneman - 0 - *
Edward A. Gonzalez - 0 - *
David M. Dannov 10 *
All directors and executive 906,742.24 (1) 71.9%
officers as a group (16 persons)
(1) The shares reported include 2,538 shares of
Seaboard's common stock owned directly;
893,948.24 shares of Seaboard's common stock that
may be attributed to S. Bresky by virtue of his
position as sole manager of Seaboard Flour, with the
right to vote Seaboard shares owned by Seaboard
Flour; 5,611 shares of Seaboard's common stock may
be attributed to S. Bresky as the holder of a
co-power of attorney with respect to such shares;
and 4,250 shares of Seaboard's common stock that may
be attributed to him as co-trustee of the "Bresky
Foundation" trust. Approximately 99.5 percent of
the common units of Seaboard Flour are held by
S. Bresky, H. Bresky and other members of the Bresky
family, including trusts created for their benefit.
(2) Includes 5,611 shares owned directly by
H. Bresky and 4,250 shares of Seaboard's common
stock that may be attributed to him as co-trustee of
the "Bresky Foundation" trust. S. Bresky is also
shown above as the owner of these shares. These
shares exclude 5,285 shares, or 0.4 percent of the
class, held by H. Bresky's spouse.
* Less than one percent.
ITEM 1: ELECTION OF DIRECTORS
Our Board of Directors intends to reduce the number
of directors from six to five at a Board of Directors
meeting held immediately following the annual meeting
of stockholders. Accordingly, stockholders are being
asked to elect only five directors at the annual
meeting, and proxies cannot be voted for more than five
directors. 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.
4
Director
Name Age Principal Occupations and Positions Since
Steven J. Bresky 53 Director and President and Chief Executive 2005
Officer (since July 2006), Senior Vice
President, International Operations
(2001-2006), Seaboard Corporation; Manager,
Seaboard Flour (since 2006).
David A. Adamsen 55 Director and Chairman of Audit Committee, 1995
Seaboard Corporation; Vice President-
Wholesale/Franchise & Manufacturing
(since 2005), The Penn Traffic Co., retail
and wholesale food distribution company; Vice
President-Group General Manager, Northeast
Region (2001-2005), Dean Foods Company, dairy
specialty food processor and distributor.
Douglas W. Baena 64 Director and Member of Audit Committee, 2001
Seaboard Corporation; Chief Executive
Officer (since 1997), CreditAmerica, Inc.
Kevin M. Kennedy 47 Director and Member of Audit Committee,
Seaboard Corporation; Chief Financial
Officer (since 2005), Seaspan Corporation,
vessel chartering company; President and
Chief Investment Officer (2001-2005), Great
Circle Management LLC, private equity fund.
Joseph E. Rodrigues 70 Director, former Executive Vice President 1990
and Treasurer (retired 2001), Seaboard
Corporation.
There are no arrangements or understandings between
any nominee and any other person pursuant to which such
nominee was nominated.
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 (unless the authority to
vote for all nominees or for the particular nominee who
has ceased to be a candidate has been withheld), 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.
The Board of Directors recommends that you vote for
the election as directors of the five persons listed
above.
5
BOARD OF DIRECTORS INFORMATION
Meetings of the Board
The Board of Directors held eight meetings in fiscal
2006, four of which were telephonic meetings. Other
actions of the Board of Directors were taken by
unanimous written consent as needed. Each director
(other than H. Bresky) attended more than 75 percent 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.
Seaboard does not have any policy requiring
directors to attend Seaboard's annual meeting of
stockholders, although, generally, the directors have
attended Seaboard's annual stockholders' meetings. All
directors attended the 2006 annual meeting.
Controlled Corporation
Seaboard is a "controlled corporation," as defined
in the rules of the American Stock Exchange, because
more than 50 percent of the voting power of Seaboard is
owned by Seaboard Flour. As such, Seaboard is exempted
from many of the requirements regarding Board of
Director committees and independence. The members of
our Board of Directors who are independent within the
meaning of the American Stock Exchange listing
standards are Joseph E. Rodrigues, David A. Adamsen,
Douglas W. Baena and Kevin M. Kennedy.
Committees of the Board
Seaboard's Board of Directors has established an
Audit Committee. There currently are no other standing
executive, compensation, nominating or other committees
of Seaboard's Board of Directors, or committees
performing similar functions of the Board.
6
Audit Committee. Seaboard's Board of Directors has
established an Audit Committee comprised solely of
independent directors. The members of the Audit
Committee are David A. Adamsen, Douglas W. Baena and
Kevin M. Kennedy. Mr. Adamsen is Chairman of the Audit
Committee. The Audit Committee selects and retains
independent auditors and assists the Board in its
oversight of the integrity of Seaboard's financial
statements, including the performance of our
independent auditors in their audit of our annual
financial statements. The Audit Committee meets with
management and the independent auditors, as may be
required. The independent auditors have full and free
access to the Audit Committee without the presence of
management. The Board of Directors has determined that
Kevin M. Kennedy is an "audit committee financial
expert" and is "independent," each within the meaning
of the listing standards of the American Stock
Exchange. Mr. Kennedy is a financial expert, based on
his experience as Chief Financial Officer of a New York
Stock Exchange company. In addition, Mr. Kennedy holds
a Masters Degree in Business Administration and worked
for Bank of New York, where he conducted financial
analysis and managed a corporate loan portfolio, and
for GE Capital Services Structured Finance Group, Inc.,
where he supervised the financial analysis of potential
customers and structured complex transactions. He also
was President and Chief Investment Officer of Great
Circle Capital LLC, where he was a member of the
management committee, responsible for financial
reporting of a private equity fund. The Audit
Committee held four meetings in fiscal 2006, two of
which were telephonic meetings.
Compensation Committee. In December 2006,
Seaboard's Board of Directors dispensed with its
Compensation Committee, which had been established for
purposes of studying the adoption of one or more
long-term incentive plans. The Compensation Committee
was dissolved because the Board determined that it does
not intend to support the adoption of a long-term
incentive plan at this time. It is the view of the
Board of Directors that Seaboard need not have a
Compensation Committee because Seaboard is controlled
by a single shareholder, Seaboard Flour, and because
the full Board of Directors is able to perform the
functions relative to executive compensation. Each
director, other than H. Bresky, participated in
consideration of executive and director compensation
for 2006.
Director Nominations
The Board of Directors believes it is not necessary
to have a separate nominating committee because of the
low turnover of Board of Director seats and because the
entire Board of Directors participates in the
consideration of director nominees. There currently is
no charter that establishes procedures for the Board's
consideration of director nominees. The Board believes
that it should be comprised of directors with varied,
complementary backgrounds, and that directors should,
at a minimum, have expertise that may be useful to
Seaboard. Directors should also possess the highest
personal and professional ethics, and should be willing
and able to devote the required amount of time to
Seaboard's business. In determining whether a director
should be retained and stand for re-election, the Board
also considers that member's performance and
contribution to the Board during his tenure with the
Board. Seaboard's policy is to consider nominees who
are submitted by stockholders on a case-by-case basis.
All nominees, including those submitted by
stockholders, will be evaluated using generally the
same methods and criteria, although those methods and
criteria are not standardized and may vary from time to
time.
7
Communication with the Board
The Board of Directors has not established a formal
process for stockholders to follow to send
communications to the Board or its members, as
Seaboard's policy has been to forward to the directors
any stockholder correspondence it receives that is
addressed to them. Stockholders who wish to
communicate with the directors may do so by sending
their correspondence addressed to the director or
directors at Seaboard's headquarters at 9000 West
67th Street, Shawnee Mission, Kansas 66202, Attention:
General Counsel. All such correspondence will be
compiled and submitted to our Board or the individual
directors, as applicable, on a periodic basis.
Compensation of Directors
The following table shows the compensation received
by each member of our Board of Directors (other than
those who are named executive officers in the Summary
Compensation table on page 1) for service on the Board
in 2006.
Director Compensation Table (1)
Fees Earned
or Paid in Cash
David A. Adamsen $45,000
Douglas W. Baena $41,000
Kevin M. Kennedy $41,000
Joseph E. Rodrigues $33,000
(1) H. Bresky and S. Bresky do not receive any
compensation for serving as directors, and thus, are
not included in the table.
For 2006, each non-employee director received $7,500
quarterly and an additional $2,000 per quarter for
service on the Audit Committee of the Board. The
Chairman of the Audit Committee also received an
additional $1,000 per quarter. Each non-employee
director also receives an additional $1,000 per
telephonic meeting lasting longer than one hour,
excluding regular quarterly meetings held
telephonically. All director compensation represents
fees paid in cash only. Beginning in 2007, the
quarterly compensation for each non-employee director
will increase to $10,000, and each non-employee
director will receive an additional $1,500 per
in-person meeting or telephonic meeting in excess of
one hour. All other fees will remain the same.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table shows all compensation earned,
during the fiscal years indicated, by the current and
former Chief Executive Officers, the Chief Financial
Officer and the three other highest paid executive
officers of Seaboard (the "Named Executive Officers")
for such period in all capacities in which they have
served:
8
Summary Compensation Table
Change in
Pension Value
And Non-Qualified
Name Deferred
and Compensation All Other
Principal Salary(1) Bonus(2) Earnings(3) Compensation(4) Total
Position Year ($) ($) ($) ($) ($)
H. Harry Bresky(5)
Retired, formerly
President,
Chief Executive
Officer 2006 825,962 1,000,000 3,439,367 195,134 5,460,463
Steven J. Bresky(5)
President,
Chief Executive
Officer 2006 484,135 1,200,000 1,103,952 74,613 2,862,700
Robert L. Steer
Senior Vice
President, Chief
Financial Officer 2006 484,135 1,000,000 696,916 93,817 2,274,868
Rodney K. Brenneman
President, Seaboard
Foods LP 2006 409,231 1,000,000 446,070 86,626 1,941,927
Edward A. Gonzalez
President, Seaboard
Marine Ltd. 2006 298,558 650,000 134,274 51,649 1,134,481
David M. Dannov(6)
President, Seaboard
Overseas Trading
Group 2006 201,605 310,000 122,604 38,206 672,415
(1) Salary includes amounts deferred at the election
of the Named Executive Officers under Seaboard's 401(k)
Retirement Savings Plan, the Seaboard Corporation
Non-Qualified Deferred Compensation Plan and the
Executive Deferred Compensation Plan, such plans being
described below under "Benefit Plans."
(2) Reflects guaranteed bonus, under Employment
Agreements described below (except for H. Bresky), and
discretionary bonus earned and includes amounts
deferred at the election of the Named Executive
Officers under Seaboard's 401(k) Retirement Savings
Plan, the Seaboard Corporation Non-Qualified Deferred
Compensation Plan and the Executive Deferred
Compensation Plan described below under "Benefit
Plans."
9
(3) Reflects the actuarial increase in the present
value of the Named Executive Officer's benefits under
all retirement plans, for which information is provided
in the Pension Benefits table on page 1, determined
using interest rate and mortality rate assumptions
consistent with those used in Seaboard's financial
statements: H. Bresky, $3,216,999; S. Bresky,
$990,491; R. Steer, $586,459; R. Brenneman, $401,258;
E. Gonzalez, $134,274; and D. Dannov, $119,506. Also
reflects the above-market earnings on non-qualified
deferred compensation under the Executive Deferred
Compensation Plan described below (for H. Bresky), and
under the Investment Option Plan described below (for
all Named Executive Officers), in the following
amounts: H. Bresky, $222,368; S. Bresky, $113,461;
R. Steer, $110,457; R. Brenneman, $44,812; and
D. Dannov, $3,098.
(4) Included in All Other Compensation are the
benefits earned under the Non-Qualified Deferred
Compensation Plan and the Executive Deferred
Compensation Plan for 2006, such plan being described
below under "Benefit Plans." These amounts for 2006
are as follows: H. Bresky $80,791; S. Bresky $39,176;
R. Steer $38,732; R. Brenneman $36,404; E. Gonzalez,
$17,487; and D. Dannov, $6,080.
Also included in All Other Compensation are the
amounts paid in 2007 for unused 2006 paid time off
in the following amounts: H. Bresky, $77,077;
S. Bresky, $5,596; R. Steer, $18,654; R. Brenneman,
$15,769; E. Gonzalez, $11,538; and D. Dannov,
$5,192.
Also included in All Other Compensation is
Seaboard's contributions to its 401(k) Retirement
Savings Plan on behalf of the Named Executive
Officers, amounts paid for disability and life
insurance and individual perquisites, including
amounts paid as an automobile allowance and fuel
card usage, with a gross-up for related taxes. For
H. Bresky, All Other Compensation also includes a
perquisite in an amount equal to the taxable
compensation per the Internal Revenue Service's
Annual Lease Value Table for two company-owned
vehicles assigned to him for his personal use for a
portion of 2006, with a gross-up for related taxes,
and the taxable equivalent, grossed up for related
taxes, for personal usage of Seaboard's airplane.
Reimbursement for taxes owed on the above-stated
items total as follows for each of the Named
Executive Officers: H. Bresky, $10,523; S. Bresky,
$8,911; R. Steer, $9,475; R. Brenneman, $9,780;
E. Gonzalez, $18; and D. Dannov, $6,756.
(5) H. Bresky retired as President and Chief Executive
Officer in July 2006, at which time, S. Bresky was
promoted to these positions.
(6) D. Dannov was promoted to President of Seaboard
Overseas and Trading Group in August 2006.
EMPLOYMENT ARRANGEMENTS
WITH NAMED EXECUTIVE OFFICERS
Seaboard and each of the Named Executive Officers,
other than H. Bresky, are parties to an Employment
Agreement.
10
Each of the Employment Agreements contains the
following principal terms: (i) a current term of five
years, commencing July 1, 2006, renewed annually for a
like term of five years, unless Seaboard furnishes a
written notice of non-renewal; (ii) payment of a
minimum base salary in the amounts of $440,000 for
S. Bresky and R. Steer; $370,000 for R. Brenneman;
$225,000 for E. Gonzalez and D. Dannov; (iii) payment
of an annual minimum bonus in the amounts of $450,000
for S. Bresky and R. Steer; $400,000 for R. Brenneman;
and $250,000 for E. Gonzalez and D. Dannov; (iv) upon
the death or termination of the employee's employment
by Seaboard due to disability or for "Cause" (as
defined) or by the employee without "Good Reason" (as
defined), payment to the employee of his accrued salary
and pro-rata bonus (based on the amount paid for the
previous year) through the date of termination
(collectively, "Accrued Compensation"), payable within
30 days of termination; (v) upon an involuntary
termination of the employee's employment without
"Cause," or a resignation by the employee for "Good
Reason," payment to the employee of his Accrued
Compensation and a severance ("Severance") equal to his
then salary and most recent bonus for the balance of
the term of the Employment Agreement, but not for less
than one year with respect to salary, with the
Severance based on the employee's salary paid in
installments at the regular payroll payment dates for
one year, with the balance of the Severance based on
salary and the Severance based on the employee's bonus
paid pursuant to a lump sum at the one year anniversary
date of the termination; (vi) confidentiality,
non-competition and non-solicitation provisions which
apply during the employee's employment and for a period
of one year after the termination of such employment,
or two years, if the employee voluntarily resigns for
any reason other than for "Good Reason"; (vii) in the
event the employee breaches any of the confidentiality,
non-competition or non-solicitation provisions,
Seaboard will not pay the Severance, and the employee
must return all Severance already received; (viii) upon
an involuntary termination of the employee's employment
without "Cause," or a resignation by the employee for
"Good Reason," Seaboard must provide outplacement
services for up to 90 days, with an estimated cost to
Seaboard of $35,000 if the termination occurred
December 31, 2006; and (ix) under Seaboard's Executive
Retirement Plan, years of service credit accrues for
the term of the severance period, and the final average
earnings calculation under this plan is determined
utilizing the base salary and bonus paid during the
severance period.
Following is a summary of the amounts which would be
paid by Seaboard to each Named Executive Officer (other
than H. Bresky) if, on December 31, 2006, his
employment was involuntarily terminated without
"Cause," or if he resigned for "Good Reason":
11
Accrued Bonus
through 12/31/06 Severance Payable Lump Sum Severance
-Payable 30 days Over One Year Payable One Year
After Termination Date in Installments After Termination
($) ($) ($)
Steven J. Bresky 1,000,000 485,000 6,197,500
Robert L. Steer 1,000,000 485,000 6,197,500
Rodney K. Brenneman 1,000,000 410,000 5,935,000
Edward A. Gonzalez 500,000 300,000 3,300,000
David M. Dannov 250,000 225,000 1,912,500
The Board of Directors has approved for each of the
Named Executive Officers the right to use Seaboard's
airplane for personal use. S. Bresky and H. Bresky
each have been allotted 30 hours of flight time for
personal use. Each of the other Named Executive
Officers have been allotted 10 hours of flight time for
personal use, and the right to use additional flight
time hours for personal use by reimbursing Seaboard for
the variable incremental cost to Seaboard for this
flight time (primarily the occupied hourly rate charge
and the fuel surcharge). Seaboard also will pay each
of the Named Executive Officers a "tax gross-up" of the
estimated federal and state income taxes each will
incur as a consequence of this benefit.
BENEFIT PLANS
Executive Retirement Plan
The Seaboard Corporation Executive Retirement Plan
(the "Executive Retirement Plan") provides retirement
benefits for a select group of the officers and
managers, including the Named Executive Officers. The
Executive Retirement Plan was amended effective
November 2004 to give credit for all years of service
with Seaboard, both before and after becoming a
participant. For years of service before becoming a
participant (pre-participation service), the benefit is
equal to 0.65 percent of the final average remuneration
(salary plus bonus) of the participant, plus 0.5
percent of final average remuneration of the
participant in excess of Social Security Covered
Compensation, all multiplied by the participant's
pre-participation service. For years of service
after becoming a participant (post-participation
service), the benefit is equal to 2.5 percent of the
final average remuneration of the participant,
multiplied by the participant's years of post-
participation service. This amount is reduced by the
following: (i) the amount such participant has accrued
under the Seaboard Corporation Pension Plan (described
below); (ii) the amount, if any, of frozen benefits
earned under the Executive Retirement Plan prior to
December 31, 1996, pursuant to the Frozen Executive
Benefit Plan described below; (iii) the benefit earned
under the Executive Retirement Plan from 1994 though
1996 that resulted in cash payments from the Plan that
were based on the cost to purchase such benefit; and
(iv) the amount of any benefit described in the
Supplemental Executive Retirement Plan for H. Bresky
described below. Benefits under the Executive
Retirement Plan are currently unfunded. As of
December 31, 2006, all of the Named Executive
Officers were fully vested, as defined in the Executive
Retirement Plan. Payment of Executive Retirement Plan
benefits begins upon the
12
earlier of: normal retirement at age 62 or older,
death, separation of service (provided the employee is
at least 55 years old, has at least 10 years of
service and has been a participant in the plan for
5 years after November 2004) or any change of control
of Seaboard. Subject to certain conditions, the
benefit is paid pursuant to a "Single Lump Sum
Payment," which is equivalent in value to the benefit
described above, payable in "Single Life Annuity" form.
The Executive Retirement Plan allows for optional forms
of payment under certain circumstances. The Pension
Benefits table below shows the present value of the
accumulative benefit that would be payable under the
Executive Retirement Plan at the earliest unreduced age
(i.e., age 62) for pre-participation and
post-participation service (note that each Named
Executive began participation on January 1, 1994, with
the exception of E. Gonzalez, who became a participant
on January 1, 2005).
The compensation for purposes of determining the
pension benefits consists of salary and bonus. None of
the benefits payable contain an offset for social
security benefits.
In February 2007, H. Bresky received a lump sum
payment under the Executive Retirement Plan equal to
$8,708,779 as his benefit under this plan.
Following is a summary of the present value of the
additional Executive Retirement Plan benefits for each
Named Executive Officer (other than H. Bresky) under
his Employment Agreement if, on December 31, 2006, his
employment was involuntarily terminated without
"Cause," or if he resigned for "Good Reason":
Present Value of Executive
Retirement Plan Benefit (1)
Name ($)
Steven J. Bresky 3,673,740
Robert L. Steer 2,342,578
Rodney K. Brenneman 1,722,975
Edward A. Gonzalez 764,285
David M. Dannov 496,110
(1) Assumes a retirement age of 62 for each Named
Executive Officer. The value of the accrued benefit
is based on the same assumptions used for
determining the present value of the accumulated
benefit of the Pension Benefits, as set forth in the
Pension Benefits table on page 1 below. Pursuant to
the Employment Agreement for each Named Executive
Officer, years of service credit accrues for the
term of the severance period, and the final average
earnings calculation is determined using the base
salary and bonus paid during the severance period.
Frozen Executive Benefit Plan
H. Bresky is 100 percent vested in an Executive
Benefit Plan, frozen effective December 31, 1996, in
which commencing August 2006, H. Bresky began receiving
an annual benefit of $22,500 (payable in biweekly
installments). The form of benefit payment is pursuant
to
13
a "Ten-Year Certain and Continuous Annuity." This
means H. Bresky will receive a monthly annuity benefit
for his lifetime and, if he dies while in the ten-year
certain period, the balance of the ten-year benefit
will be paid to his designated beneficiary. The amount
of benefit payable under the Executive Benefit Plan
reduced the benefit payable to H. Bresky under the
Executive Retirement Plan.
Seaboard Corporation Pension Plan
The Seaboard Corporation Pension Plan ("the Plan")
provides defined benefits for its domestic salaried and
clerical employees upon retirement. Beginning in
fiscal 1997, each of the individuals named in the
Summary Compensation Table participates in this Plan.
Benefits under this Plan generally are based upon the
number of years of service and a percentage of final
average remuneration (salary plus bonus), subject to
limitation under applicable federal law. As of
December 31, 2006, all of the Named Executive Officers
were fully vested, as defined in the Plan. Under the
Plan, the benefit payment for a married participant is
pursuant to a "50 Percent Joint and Survivor Annuity."
This means the participant will receive a monthly
annuity benefit for his/her lifetime, and an eligible
surviving spouse will receive a lifetime annuity equal
to 50 percent of the participant's benefit. The
payment of the benefit for an unmarried participant is
pursuant to a "Single Life Annuity." The Plan allows
for optional forms of payment under certain
circumstances. The normal retirement age under the
Plan is age 65. However, unreduced benefits are
available at age 62 with five years of service. The
Pension Benefits table below shows the present value of
the accumulated benefits that would be payable under
the Plan at the earliest unreduced commencement age
(i.e., age 62).
The compensation for purposes of determining the
pension benefits consists of salary and bonus. None of
the benefits payable contain an offset for social
security benefits.
Each of the Named Executive Officers is 100 percent
vested under a particular defined benefit ("Benefit")
that was frozen at December 31, 1993 as part of the
Plan. A definitive actuarial determination of the
benefit amounts was made in 1995. The annual amounts
payable upon retirement after attaining age 62 under
this Benefit are as follows: S. Bresky $32,796,
R. Steer $15,490; R. Brenneman $6,540; E. Gonzalez
$2,643; and D. Dannov $8,346. Under this Benefit, the
payment of the benefit for a married participant is
pursuant to a "Ten-Year Certain and Continuous
Annuity." This means the participant would receive a
monthly annuity benefit for his/her lifetime and, if
the participant dies while in the ten-year certain
period, the balance of the ten-year benefit would be
paid to his/her designated beneficiary. The payment of
the benefit for an unmarried participant is pursuant to
a "Single Life Annuity." If the participant dies while
employed by Seaboard or after retirement, but before
the commencement of benefits, monthly payments would be
made to the participant's beneficiary in the form of a
100 percent joint and survivor benefit. The Plan
allows for optional forms of payment under certain
circumstances.
Commencing August 2006, pursuant to the Plan,
H. Bresky began receiving an annual benefit of
$124,376.16 (payable in monthly installments). The
form of benefit is pursuant to a "Joint and Survivor
Annuity." This means H. Bresky will receive a monthly
annuity benefit for his lifetime, and if he
pre-deceases his wife, she would continue to receive
the same benefit until her death.
14
Supplemental Executive Retirement Plan for
H. Harry Bresky
Commencing August 2006, H. Bresky began receiving a
supplementary annual pension in the amount of $410,088
per year (payable in biweekly installments). Under
this agreement, the benefit payment is pursuant to a
"Ten-Year Certain and Continuous Annuity." This means
H. Bresky will receive a monthly annuity benefit for
his lifetime and, if H. Bresky dies while in the
ten-year certain period, the balance of the ten-year
benefit will be paid to his designated beneficiary.
The amount of benefit payable under this agreement
reduces the benefit payable to H. Bresky under the
Executive Retirement Plan described above.
Pension Benefits
The following table sets forth the Years of Credit
Service, the Present Value of the Accumulated Benefit,
and the Payments during the last Fiscal Year pursuant
to the above-described retirement plans for each of the
Named Executive Officers.
Present Payments
Years of Value of During
Credited Accumulated Last Fiscal
Service Benefit Year
Name Plan Name (#) ($) ($)
H. Harry Bresky Executive Retirement Plan 58 8,708,779 - 0 -
Seaboard Corporation Pension Plan 34 1,097,581 123,917
Frozen Executive Benefit Plan N/A 177,237 9,523
Supplemental Executive Retirement
Plan for H. Harry Bresky N/A 3,230,345 173,499
Steven J. Bresky Executive Retirement Plan(1) 27 2,970,069 - 0 -
Seaboard Corporation Pension Plan 24 384,393 - 0 -
Robert L. Steer Executive Retirement Plan(1) 22 1,948,502 - 0 -
Seaboard Corporation Pension Plan 19 176,237 - 0 -
Rodney K. Executive Retirement Plan(1) 17 1,069,672 - 0 -
Brenneman Seaboard Corporation Pension Plan 14 101,654 - 0 -
Edward A. Executive Retirement Plan(1) 17 176,181 - 0 -
Gonzalez Seaboard Corporation Pension Plan 17 97,168 - 0 -
David M. Executive Retirement Plan(1) 19 365,846 - 0 -
Dannov Seaboard Corporation Pension Plan 16 127,238 - 0 -
(1) Credited years of post-participation service
for each of the Named Executive Officers is
13 years, with the exception of E. Gonzalez whose
credited years of post-participation service is two
years. The credited years of pre-participation
service for each of the Named Executive Officers is
as follows: S. Bresky 14; R. Steer 9; R. Brenneman
4; E. Gonzalez 15; and D. Dannov 6.
15
Non-Qualified Deferred Compensation Plan
In 2005, Seaboard adopted the Seaboard Corporation
Non-Qualified Deferred Compensation Plan (the "Deferred
Compensation Plan"), which gives a select group of
management or highly-compensated employees the right to
defer salary and bonus, to be paid by Seaboard at a
later time, all in accordance with applicable ERISA and
income tax laws and regulations. No income taxes are
payable by the participants on amounts deferred
pursuant to the Deferred Compensation Plan until they
are paid to the participant. The Deferred Compensation
Plan also provides for a company contribution to be
credited to participants in an amount equal to
Seaboard's 401(k) Retirement Savings Plan matching
percentage, currently 3 percent, of each participant's
deferral pursuant to the Plan, and of each
participant's annual compensation in excess of the Tax
Code limitation on the amount of compensation that can
be taken into account under Seaboard's 401(k)
Retirement Savings Plan. The amount of such limitation
in 2006 for Seaboard was $210,000. All amounts
deferred and all company contributions credited are
included in the amounts reported in the Summary
Compensation Table above.
Non-Qualified Deferred Compensation Plan
Aggregate
Executive Registrant Aggregate Balance
Contributions Contributions Earnings Aggregate at Last
in Last in Last in Last Withdrawals/ Fiscal
Fiscal Year(1) Fiscal Year Fiscal Year Distributions Year End
Name ($) ($) ($) ($) ($)
Steven J. Bresky 328,800 18,854 30,493 - 0 - 378,147
Robert L. Steer 317,800 21,524 31,210 - 0 - 370,534
Rodney K. Brenneman 323,300 15,014 31,062 - 0 - 369,376
Edward A. Gonzalez 70,000 7,188 5,409 - 0 - 82,597
David M. Dannov - 0 - 2,886 288 - 0 - 3,174
(1) Represents bonus earned in 2005 and deferred
when paid in 2006, except for E. Gonzalez which
represents 2006 salary deferred.
Investment Option Plan
For the years 2001-2004, Seaboard established the
Investment Option Plan which allowed executives to
reduce their compensation in exchange for an option to
acquire interests measured by reference to two
alternative investments. However, as a result of
U.S. tax legislation passed in October 2004, reductions
to compensation after 2004 were no longer allowed. The
exercise price for each investment option was
established based upon the fair market value of the
underlying investment on the date of grant.
16
Investment Option Plan (1)
Net
Aggregate Aggregate
Aggregate Balance Exercise Balance
Earnings Aggregate at Last Price at Last
in Last Withdrawals/ Fiscal for Fiscal
Fiscal Year(2) Distributions Year End Option Year End
Name ($) ($) ($) ($) ($)
H. Harry Bresky 505,823 - 0 - 5,030,911 918,132 4,112,779
Steven J. Bresky 464,936 - 0 - 4,381,841 783,672 3,598,169
Robert L. Steer 460,068 - 0 - 4,335,967 758,737 3,577,230
Rodney K. Brenneman 183,800 - 0 - 1,912,093 362,680 1,549,413
Edward A. Gonzalez - 0 - - 0 - - 0 - - 0 - - 0 -
David M. Dannov 12,964 - 0 - 122,185 21,629 100,556
(1) Neither Registrant nor any of the Named
Executive Officers made any contributions to the
Investment Option Plan in 2006.
(2) Includes above-market earnings, the amount of
which for each of the Named Executive Officers for
2006 is included in the Summary Compensation Table
(see Footnote 3 thereof).
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 $1 million (the
maximum allowable deductible amount under
Section 162(m) of the Code), and who the Board has
designated to participate in the plan. To date, the
Board has only designated H. Bresky as a participant in
the plan. Beginning in 2005, the Executive Deferred
Compensation Plan also provides for a company
contribution to be credited to a participant in an
amount equal to Seaboard's 401(k) matching percentage
(currently 3%) of the amount deferred pursuant to the
Plan, and in addition, such matching percentage
(currently 3%) of the participant's annual compensation
in excess of the Tax Code limitation on the amount of
compensation that can be taken into account under
Seaboard's 401(k) Retirement Savings Plan. The amount
of such limitation in 2006 for Seaboard was $210,000.
All amounts deferred and all company contributions
credited are included in the amounts deferred in the
Summary Compensation Table above.
17
Executive Deferred Compensation Plan
Aggregate
Executive Registrant Aggregate Balance
Contributions Contributions Earnings Aggregate at Last
in Last in Last in Last Withdrawals/ Fiscal
Fiscal Year(1) Fiscal Year Fiscal Year(2) Distributions Year End(3)
Name ($) ($) ($) ($) ($)
H. Harry Bresky 2,000,000 131,793 343,089 - 0 - 4,646,567
(1) Represents bonus earned in 2005 and deferred when
paid in 2006.
(2) Interest on the balance deferred pursuant to
the Plan accrues at 8 percent per annum, which is
considered above market. The amount of the
above-market interest for 2006, $94,453, is included
in the Summary Compensation table (see Footnote 3
thereof).
(3) This amount was paid to H. Bresky in
February 2007, together with applicable interest.
Retiree Medical Benefit Plan
The Seaboard Corporation Retiree Medical Benefit
Plan provides family medical insurance to certain
members of management, including each Named Executive
Officer, upon his retirement in the event he has
attained age 50, and has completed at least 15 years of
service. This benefit is also furnished in the event
the Named Executive Officer's employment is
involuntarily terminated (other than if the Named
Executive Officer unlawfully converted a material
amount of funds), or in the event of a change of
control of Seaboard. H. Bresky began receiving this
benefit as of November 1, 2006 at a cost to Seaboard
totaling $46,716 for 2006.
Following is a summary of the present value cost to
Seaboard of this benefit, assuming that this benefit
was triggered and said medical insurance began to be
furnished on December 31, 2006.
18
Present Value of
Retiree Medical Benefit(1)
Name ($)
H. Harry Bresky 82,355
Steven J. Bresky 250,054
Robert L. Steer 289,734
Rodney K. Brenneman 302,580
Edward A. Gonzalez 305,723
David M. Dannov(2) - 0 -
(1) To calculate the present value of this benefit, the
assumptions for claims costs, health care trend,
aging on claims, mortality and interest rate are the
same as were used to accrue a liability on
Seaboard's balance sheet.
(2) D. Dannov became eligible to become a participant in
the plan in 2007.
Executive Long-Term Disability Plan
The Seaboard Corporation Executive Long-Term
Disability Plan provides disability pay continuation to
certain members of management, including R. Steer,
R. Brenneman, E. Gonzalez and D. Dannov upon a
long-term illness or injury that prevents the
participant from being able to perform his duties.
Benefits are payable following a 90 day elimination or
waiting period. In conjunction with the Seaboard
Corporation Group Long-Term Disability Plan, benefits
payable are equal to 70 percent of participant's salary
and bonus, up to $23,000 per month for R. Steer and
R. Brenneman, and up to $18,000 per month for
E. Gonzalez and D. Dannov.
COMPENSATION DISCUSSION AND ANALYSIS
Overview of Compensation Program
The Board of Directors has responsibility for
establishing, implementing and monitoring adherence
with Seaboard's compensation philosophy. The Board
ensures that the total compensation paid to the Named
Executive Officers is fair, reasonable and competitive.
Compensation Philosophy and Objectives
Seaboard maintains the philosophy that determination
of compensation for its executive officers by the Board
of Directors is primarily based upon recognition that
these officers are responsible for implementing
Seaboard's long-term strategic objectives. The Board
evaluates both performance and compensation to ensure
that Seaboard maintains its ability to attract and
retain superior employees in key positions, and that
compensation provided to key employees remains
competitive relative to compensation paid to similarly
situated executives of our peer companies. Seaboard
does not maintain any equity compensation plans, such
as stock grants or stock options, unlike most of
Seaboard's peer companies.
19
Seaboard has entered into employment agreements with
each of the Named Executive Officers (other than
H. Bresky), agreeing to pay a minimum base salary and
bonus and severance in the event of any termination by
Seaboard without cause, and non-competition provisions
which restrict the employee from accepting employment
with competitors of Seaboard. The Board believes that
this balance of providing assurance to the executives
of minimum compensation, coupled with restrictions on
leaving the Company and taking alternative employment
is consistent with Seaboard's objective to attract and
retain top executive employees.
It is the Board's philosophy that the compensation
of its Named Executive Officers should not be subject
to dramatic increases or decreases based on short-term
operating performance. For example, in years when
Seaboard has higher than historical average operating
results, bonuses of the Named Executive Officers are
generally higher, but not reflective of the potential
compensation that would have been paid to the executive
through equity compensation if Seaboard maintained any
equity compensation plans. Likewise, bonuses for
executives generally do not decline significantly in a
year when Seaboard has lower than historical average
operating results.
Setting Executive Compensation
Based on the foregoing objectives, the Board of
Directors establishes compensation based upon a review
of Company performance, compensation market data and
individual performance. In furtherance of this,
Watson Wyatt & Company, an outside global human
resources consulting firm, conducts an annual review of
Seaboard's total compensation program for the Named
Executive Officers. The Watson Wyatt report sets forth
a competitive market assessment of the Named Executive
Officers, utilizing published survey data and a
comparison of total compensation against a peer group
of publicly-traded and privately-held companies
(collectively, the "Compensation Peer Group"). The
Compensation Peer Group comprises companies in the same
general industries as that of Seaboard and/or similarly
sized companies in terms of total revenues. The
companies comprising the Compensation Peer Group are:
- Westlake Chemical Corp. - Smithfield Foods Inc.
- Greif Inc. - Pilgrims Pride Corp.
- Gold Kist Inc. - Hormel Foods Corp.
- FMC Corp. - Weatherford International Ltd.
- Sensient Technologies Corp. - Potash Corp. of Saskatchewan, Inc.
- Premium Standard Farms Inc. - McCormick & Co. Inc.
A significant factor in determining total
compensation is that most of the Compensation Peer
Group provides long-term incentive compensation, such
as stock grants or stock options. Seaboard does not
maintain any equity compensation plans.
20
2006 Executive Compensation Components
For the fiscal year ended December 31, 2006, the
principal components of compensation for the Named
Executive Officers were:
- Base salary;
- Bonus;
- Retirement and other benefits; and
- Perquisites and other personal benefits.
Salaries and Bonuses. To establish the base
salaries and bonuses for the Named Executive Officers,
the Board of Directors primarily considers:
- Market data provided by Watson Wyatt;
- Individual review of the executive's compensation,
both individually and relative to other officers;
- Individual performance of the executive; and
- Seaboard's operating results.
To determine the specific salary and bonus, a
comparison to the public survey data and the total
compensation by the Competitive Peer Group is
undertaken. The 2006 bonuses of the Named Executive
Officers are reflective of the continued higher than
historical average operating results of Seaboard for
2006 and an evaluation of the market data. The amount
of bonuses is more dependent upon Seaboard's operating
results than base salaries. The bonuses also recognize
that if Seaboard maintained an equity compensation
plan, such as a stock option plan, because of
Seaboard's operating results and the increase in the
market price of its shares, the compensation earned
would have been significant.
Retirement and Other Benefits. Each of the Named
Executive Officers is a participant in the Executive
Retirement Plan. The benefit under this plan is equal
to 2.5 percent of the final average remuneration
(salary plus bonus) of the participant, multiplied by
the participant's years of service in the plan after
January 1, 1997. The exact amount of the benefit, the
offsets thereto, and the benefit for years of service
prior to January 1, 1997 are set forth in more detail
on pages 1 to 1 of Seaboard's Proxy statement.
Seaboard also maintains a tax-qualified retirement
savings plan, to which all U.S.-based employees,
including the Named Executive Officers, are able to
contribute the lesser of up to 22 percent of their
annual compensation, or the limit prescribed by the
Internal Revenue Service. Seaboard will match
100 percent of the first 3 percent of compensation that
is contributed to the Plan. All matching contributions
vest fully after completing 5 years of service.
21
The Named Executive Officers, in addition to certain
other executives, are entitled to participate in the
Non-Qualified Deferred Compensation Plan, which gives
participants the right to defer salary and bonus to be
paid by Seaboard at a later time, all in accordance
with applicable ERISA and income tax laws and
regulations.
Seaboard also maintains for each of the Named
Executive Officers and certain other executives the
Seaboard Corporation Retiree Medical Benefit Plan,
which provides family medical insurance to each
participant upon his retirement in the event he has
(i) attained age 50, and has at least 15 years of
service; or (ii) in the event the participant's
employment is involuntarily terminated (other than if
the participant unlawfully converted a material amount
of funds); or (iii) in the event of a change of control
of Seaboard.
The Board believes that Seaboard's retirement and
other benefits are consistent with the philosophy of
Seaboard to provide security and stability of
employment to the Named Executive Officers as a
mechanism to attract and retain these employees.
Perquisites and Other Personal Benefits. Seaboard
provides the Named Executive Officers with perquisites
and other benefits that the Board believes are
reasonable and consistent with its overall compensation
program to better enable Seaboard to attract and retain
superior employees for key positions. These include an
automobile allowance and gas charging privileges, life
insurance, disability insurance, personal use of the
Company's airplane up to a specified number of hours,
and paid time off and pay for unused paid time off.
Tax Implications
Pursuant to Section 162(m) of the Internal Revenue
Code, compensation in excess of $1 million paid to the
Named Executive Officers (except for H. Bresky) is not
deductible by Seaboard, subject to certain exceptions.
The Board of Directors has considered the effect of
Section 162(m) of the Code on Seaboard's executive
compensation, and to assure that Seaboard does not lose
deductions for compensation paid to the Named Executive
Officers, the Named Executive Officers (except for
H. Bresky) have agreed to defer, pursuant to the
Non-Qualified Deferred Compensation Plan, any
compensation in excess of $1 million.
COMPENSATION COMMITTEE REPORT
The entire Board of Directors, other than H. Bresky,
(in the absence of a compensation committee) has
reviewed and discussed the Compensation Discussion and
Analysis set forth above with management, and based on
this review and discussions, has determined that the
Compensation Discussion and Analysis be included in
Seaboard's Annual Report on Form 10-K and this proxy
statement.
The Board of Directors is responsible for
establishing the compensation for each of the Named
Executive Officers. To assist the Board of Directors
in determining 2006 bonuses and 2007 salaries for the
Named Executive Officers, Seaboard retained
Watson Wyatt & Company to conduct a Competitive Market
Assessment. At the request of Robert Steer, Seaboard's
Senior Vice President, Chief Financial Officer,
Peter Mirakian Sr., Seaboard's Director of Human
Resources, engaged Watson Wyatt to conduct a survey of
the compensation of the top five
22
executives at peer companies, and to conduct a
general survey of the compensation for the five most
highly-paid positions at Seaboard. Watson Wyatt then
prepared a report summarizing the peer analysis
and surveys, and conducted a comparative analysis
to the compensation being paid by Seaboard for these
positions. A draft of the report was reviewed by
P. Mirakian, Steven J. Bresky, Seaboard's President
and Chief Executive Officer, and R. Steer, and the
final report was delivered to the Board of Directors.
S. Bresky and R. Steer discussed recommended 2006
bonuses and 2007 salaries for each of the Named
Executive Officers, and a recommended 2006 bonus for
H. Bresky, considering the Watson Wyatt report,
Seaboard's performance, and each Named Executive
Officer's performance during 2006. S. Bresky then sent
a letter to each of the other Board of Director
members, setting forth the 2006 bonuses and 2007
salaries he recommended that the Board approve for each
of the Named Executive Officers and the 2006 bonus he
recommended for H. Bresky, who had retired in
July 2006. The 2006 bonuses and 2007 salaries for the
Named Executive Officers were determined based on
discussions by the Board of Directors at a meeting at
which it reviewed the Watson Wyatt report and
S. Bresky's recommendation letter. S. Bresky and
David M. Becker, Seaboard's General Counsel,
participated in the meeting. R. Steer participated
only to describe to the Board of Directors the process
utilized to retain Watson Wyatt and to describe his
discussions with S. Bresky as to the recommended
2006 bonuses and 2007 salaries, and then he left the
meeting.
The members of the Board of Directors reviewing and
discussing the Compensation Disclosure and Analysis are
as follows:
Steven J. Bresky Joseph E. Rodrigues David A. Adamsen
Douglas W. Baena Kevin M. Kennedy
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
The Board of Directors first appointed a
Compensation Committee in December 2005, and it was
dissolved in December 2006. The Compensation Committee
was not involved with determining executive
compensation for 2006. Instead, the full Board of
Directors (other than H. Bresky) participated in the
consideration of executive and director compensation.
S. Bresky is a member of the Board of Directors of
Seaboard and participates in decisions by the Board
regarding executive compensation.
During 2006, Seaboard paid our director,
J. Rodrigues, $544,396 under the Executive Retirement
Plan, the Seaboard Corporation Pension Plan and an
individual retirement plan.
Related Party Transactions Procedures
Seaboard has no formal policy or procedure that must
be followed prior to any transaction, arrangement or
relationship with a related person, as defined by
SEC regulations (e.g., directors, executive officers,
any 5 percent shareholder, or immediate family member
of any of the foregoing).
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Seaboard has a written conflict of interest policy,
which requires directors, officers and employees to
conduct their non-work activities in a manner that does
not conflict with the best interests of Seaboard.
Annually, all officers and salaried employees are
required to complete a form disclosing all known
conflicts of interest. Seaboard's Director of Human
Resources and Seaboard's General Counsel review and
approve any disclosed conflicts of interest. In the
event any of the executive officers disclosed any
conflict of interest, Seaboard's General Counsel would
discuss the conflict with Seaboard's Senior Vice
President, Chief Financial Officer and/or Seaboard's
President and Chief Executive Officer. In the event
the conflict involved Seaboard's President and Chief
Executive Officer and was otherwise material, the
conflict would be reviewed and approved by Seaboard's
Board of Directors.
In addition to the procedures to review conflicts of
interest, annually, Seaboard requires each director,
nominee for a director and officer of Seaboard to
complete a questionnaire which requires disclosure of
any transaction or loan exceeding $120,000 between
Seaboard and such person or any member of such person's
immediate family. Any such matters which were
disclosed would be reviewed by Seaboard's General
Counsel and discussed with Seaboard's President and
Chief Executive Officer and/or Senior Vice President,
Chief Financial Officer, and/or Seaboard's Board of
Directors, depending on the materiality of the matter.
During 2006, there were no such related party
transactions in excess of $120,000.
The standards applied pursuant to the
above-described procedures are to provide comfort that
any conflict of interest or related party transaction
is on an arms-length basis which is fair to the
Company. This is principally accomplished by ensuring
that the Seaboard person entering into or approving the
transaction on behalf of Seaboard is independent of the
person with the conflict of interest or engaging in the
related party transaction with Seaboard.
ITEM 2: SELECTION OF INDEPENDENT AUDITORS
The Audit Committee of the Board of Directors has
selected the independent registered public accounting
firm of KPMG LLP as Seaboard's independent auditors to
audit the books, records and accounts of Seaboard for
the year ending December 31, 2007. Stockholders will
have an opportunity to vote at the annual meeting on
whether to ratify the Audit Committee's decision in
this regard. Seaboard has been advised by KPMG LLP
that neither it nor any member or associate has any
relationship with Seaboard or with any of its
affiliates other than as independent accountants and
auditors.
Submission of the selection of the independent
auditors to the stockholders for ratification will not
limit the authority of the Audit Committee to appoint
another independent certified public accounting firm to
serve as independent auditors if the present auditors
resign or their engagement otherwise is terminated.
Submission to the stockholders of the selection of
independent auditors is not required by Seaboard's
bylaws.
A representative of KPMG LLP is expected to be
present at the annual meeting. Such representative
will have an opportunity to make a statement if he or
she desires to do so and will be available to respond
to appropriate questions.
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The Board of Directors recommends that you vote for
approval of the selection of KPMG LLP.
Independent Auditors' Fees
The following table presents fees for professional
audit services rendered by KPMG LLP for the audit of
Seaboard's annual financial statements for 2006 and
2005, and fees billed for other services rendered by
KPMG LLP during such years.
Type of Fee 2006 2005
Audit Fees(1) $1,578,130 $1,488,878
Audit-Related Fees(2) 20,540 16,353
Tax Fees(3) 223,623 175,643
All Other Fees(4) 6,414 2,758
(1) Audit Fees, including those for statutory
audits, include the aggregate fees paid by us during
2006 and 2005 for professional services rendered by
KPMG LLP for the audit of our annual financial
statements and internal controls over financial
reporting, and the review of financial statements
included in our quarterly reports on Form 10-Q.
(2) Audit Related Fees include the aggregate fees
paid by us during 2006 and 2005 for assurance and
related services by KPMG LLP that are reasonably
related to the performance of the audit or review of
our financial statements and not included in Audit
Fees.
(3) Tax Fees include the aggregate fees paid by us
during 2006 and 2005 for professional services
rendered by KPMG LLP for tax compliance, tax advice
and tax planning, including IRS audit support and
transfer pricing studies.
(4) All Other Fees represent miscellaneous services
performed in certain foreign countries.
Pre-Approval of Audit and Permissible Non-Audit
Services
The Audit Committee has established a policy to
pre-approve all audit and permissible non-audit
services. Prior to the engagement of the independent
auditor, the Audit Committee pre-approves the services
by category of service. Fees are estimated and the
Audit Committee requires the independent auditor and
management to report actual fees as compared to
budgeted fees by category of service. The Audit
Committee has delegated pre-approval authority to the
Audit Committee Chairman for engagements of less than
$25,000. For informational purposes only, any
pre-approval decisions made by the Audit Committee
chairman are reported at the Audit Committee's next
scheduled meeting. The percentage of audit-related
fees, tax fees and all other fees that were approved by
the Audit Committee for fiscal 2006 was 100 percent of
the total fees incurred.
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Audit Committee Report to Stockholders
The Audit Committee of Seaboard is comprised of
three directors who are "independent," as defined by
the American Stock Exchange, and operates under a
written charter. The Audit Committee Charter is
available on Seaboard's website at
www.seaboardcorp.com.
The Audit Committee has reviewed the audited
financial statements for fiscal year 2006 and discussed
them with management and with the independent auditors,
KPMG LLP. The Audit Committee also discussed with
KPMG LLP the matters required to be discussed by
Statement on Auditing Standards No. 61, "Professional
Standards," as amended.
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.
The Audit Committee has reviewed the independent
auditors' fees for audit and non-audit services for
fiscal year 2006. 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.
Based on its review of the audited financial
statements and the various discussions referred to
above, the Audit Committee recommended to the Board of
Directors that the audited financial statements be
included in Seaboard's Annual Report on Form 10-K for
the year ended December 31, 2006.
The foregoing has been furnished by the Audit
Committee:
David A. Adamsen (Chair) Douglas W. Baena
Kevin M. Kennedy
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 Seaboard and written representations that
no other reports were required, Seaboard believes that
during fiscal 2006 all reports of ownership required
under Section 16(a) of the Securities Exchange Act of
1934 for
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directors and executive officers of Seaboard and
beneficial owners of more than 10 percent of
Seaboard's common stock have been timely filed.
STOCKHOLDER PROPOSALS
It is anticipated that the 2008 annual meeting of
stockholders will be held on April 28, 2008. Any
stockholder who intends to present a proposal at the
2008 annual meeting must deliver the proposal to
Seaboard at 9000 West 67th Street, Shawnee Mission,
Kansas 66202, Attention: David M. Becker by the
applicable deadline below:
- If the stockholder proposal is intended for
inclusion in Seaboard's proxy materials for that
meeting, Seaboard must receive the proposal no event
later than November 27, 2007. Such proposal must also
comply with the other requirements of the proxy
solicitation rules of the Securities and Exchange
Commission.
- If the stockholder proposal is to be presented
without inclusion in Seaboard's proxy materials for
that meeting, Seaboard must receive the proposal no
event later than February 25, 2008.
Proxies solicited in connection with the 2008 annual
meeting of stockholders will confer on the appointed
proxies discretionary voting authority to vote on
stockholder proposals that are not presented for
inclusion in the proxy materials, unless the proposing
stockholder notifies Seaboard by February 25, 2008 that
such proposal will be made at the meeting.
The Board of Directors does not provide a process
for stockholders to send communications to the Board
because it believes that the process available under
applicable federal securities laws for stockholders to
submit proposals for consideration at the annual
meeting is adequate.
FINANCIAL STATEMENTS
The consolidated financial statements of Seaboard
for the fiscal year ended December 31, 2006, together
with corresponding consolidated financial statements
for the fiscal year ended December 31, 2005, are
contained in the Annual Report which is mailed to
stockholders with this proxy statement. The Annual
Report is not to be regarded as proxy solicitation
material.
ADDITIONAL INFORMATION
Any stockholder desiring additional information
about Seaboard and its operations may, upon written
request, obtain a copy of Seaboard'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. Seaboard's
Annual Report to the Securities and Exchange Commission
on Form 10-K is also available on Seaboard's Internet
website at www.seaboardcorp.com.
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HOUSEHOLDING OF PROXY MATERIALS
The Securities and Exchange Commission has adopted
rules that permit companies and intermediaries
(including brokers) to satisfy the delivery
requirements for proxy statements and annual reports
with respect to two or more stockholders sharing the
same address by delivering a single proxy statement
addressed to those stockholders. This process, which
is commonly referred to as "householding," potentially
means extra convenience for stockholders and cost
savings for companies.
This year, a number of brokers with account holders
who are stockholders of Seaboard may be "householding"
our proxy materials. A single proxy statement may be
delivered to multiple stockholders sharing an address
unless contrary instructions have been received from
the affected stockholders. Once you have received
notice from your broker that it will be "householding"
communications to your address, "householding" will
continue until you are notified otherwise or until you
notify your broker or us that you no longer wish to
participate in "householding." If, at any time, you no
longer wish to participate in "householding" and would
prefer to receive a separate proxy statement and annual
report in the future you may (i) notify your broker;
(ii) direct your written request to: Shareholder
Relations, Seaboard Corporation, 9000 West 67th Street,
Shawnee Mission, Kansas 66202; or (iii) contact
Shareholder Relations at (913) 676-8800. Stockholders
who currently receive multiple copies of the proxy
statement at their address and would like to request
"householding" of their communications should contact
their broker. In addition, we will promptly deliver,
upon written or oral request to the address or
telephone number above, a separate copy of the annual
report and proxy statement to a stockholder at a shared
address to which a single copy of the documents was
delivered.
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