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. 1 )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
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.
[Not Applicable]
[ ] 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.
[Not Applicable]
SEABOARD CORPORATION
9000 West 67th Street
Shawnee Mission, Kansas 66202
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 24, 2006
Notice is hereby given that the 2006 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 24, 2006, 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 six directors to hold office until the 2007
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, 2006;
3. To consider and act upon approval of a proposed
amendment to and restatement of Seaboard's
Article Third, Section 3 of Seaboard's
Restated Certificate of Incorporation and
(relating to authorized business purposes) ;
4. To consider and act upon approval of a proposed
amendment to Article Third, Section 4 of Seaboard's
Restated Certificate of Incorporation (relating to
pre-emptive rights and conversion rights);
5. To consider and act upon approval of a proposed
amendment to Article Third, Section 5 of Seaboard's
Restated Certificate of Incorporation (relating to
Seaboard's perpetual existence);
6. To consider and act upon approval of a proposed
amendment to Article Third, Section 6 of Seaboard's
Restated Certificate of Incorporation (relating to
insulation of stockholders from Seaboard's debts);
7. To consider and act upon approval of a proposed
amendment to Article Third, Section 7 of Seaboard's
Restated Certificate of Incorporation (relating to
the powers of the Board of Directors);
8. To consider and act upon approval of a proposed
amendment to Article Third, Section 8 of Seaboard's
Restated Certificate of Incorporation (relating to
a director's self-interest in transactions);
9. To consider an act upon approval of a proposed
amendment to Article Third, Section 8 of Seaboard's
Restated Certificate of Incorporation (relating to
indemnification of directors and officers);
10. To consider and act upon approval of a proposed
amendment and restatement of Seaboard's Restated
Certificate of Incorporation; and
11. 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 6, 2006, 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 23 April 6 , 2006
SEABOARD CORPORATION
9000 West 67th Street
Shawnee Mission, Kansas 66202
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
APRIL 24, 2006
March 23 April 6 , 2006
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 24, 2006,
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 6, 2006 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 23 April 6 , 2006.
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.
1
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,
"for" ratification of the selection of KPMG LLP as
independent auditors for 2006, and "for" approval of
each of the proposed amendment
amendments to and restatement of Seaboard's
Certificate of Incorporation described herein. 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
remaining 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
2
consideration of such matters, while abstentions will
have the same effect as votes against the matter.
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information
as of January 31, 2006 (unless otherwise indicated)
regarding the beneficial ownership of Seaboard's common
stock by each 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. 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 LLC ("Seaboard Flour").
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) H. Bresky, President and Chief Executive
Officer of Seaboard, S. Bresky (H. Bresky's son and
Senior Vice President) 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 (formerly
Seaboard Flour Corporation). S. Bresky is the
co-trustee and beneficiary of some of the trusts
owning shares of Seaboard Flour stock. H. Bresky
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. In addition to the shares shown as
being owned by Seaboard Flour, H. Bresky and other
members of the Bresky family beneficially own a
total of 30,094 shares, or 2.4 percent, of
Seaboard's common stock.
SHARE OWNERSHIP OF MANAGEMENT AND DIRECTORS
The following table sets forth certain information
as of January 31, 2006 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 7 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
H. Harry Bresky 903,809.24 (1) (2) 71.7%
Steven J. Bresky 2,538 *
David A. Adamsen 20 *
Douglas W. Baena 100 *
Kevin M. Kennedy 15 *
Joe E. Rodrigues 200 *
All directors &
executive officers 906,732.24 (1) 71.9%
as a group (15 persons)
(1) The shares reported include 893,948.24 shares
of Seaboard's common stock that may be attributed to
H. Bresky by virtue of his position as manager of
Seaboard Flour, with the right to vote Seaboard
shares owned by Seaboard Flour, 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 H. Bresky or in various
trusts for the benefit of H. Bresky's spouse,
S. Bresky and his issue and/or other Bresky family
members.
(2) 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 has fixed the number of
directors at six. Unless otherwise specified, proxies
will be voted in favor of the election as directors of
these six persons for a term of one year and until
their successors are elected and qualified.
Director
Name Age Principal Occupations and Positions Since
H. Harry Bresky 80 Director, Chairman of the Board, President 1959
and Chief Executive Officer (since 2001),
President (from 1967-2001), Seaboard
Corporation; Manager, Seaboard Flour
(since 2002); President (1987-2002),
Treasurer (1973-2002),
Seaboard Flour Corporation.
Steven J. Bresky 52 Director and Senior Vice President, 2005
International Operations (since February
2001), Vice President (1989-2001),
Seaboard Corporation.
4
David A. Adamsen 54 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),
Vice President-Sales and Marketing,
Northeast Region (1999-2001), Dean Foods
Company, dairy specialty-food processor
and distributor.
Douglas W. Baena 63 Director and Member of Audit Committee, 2001
Seaboard Corporation; Chief Executive
Officer (since 1997), CreditAmerica, Inc.,
venture capital company; Chief Executive
Officer (1999-2001), Ameristar Capital
Corporation, financial services company.
Kevin M. Kennedy 46 Director and Member of Audit Committee, 2003
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;
Managing Director (Head Marine Financing)
(1999-2001), GE Capital Services Structured
Finance Group, Inc.
Joe E. Rodrigues 69 Director, former Executive Vice President 1990
and Treasurer (retired 2001), Seaboard
Corporation.
H. Bresky is the father of Steven J. Bresky, Senior
Vice President, International Operations. 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 six persons listed
above.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
Meetings of the Board
The Board of Directors held four meetings in fiscal
2005, one of which was a telephonic meeting. Other
actions of the Board of Directors were taken by
unanimous written consent as needed. Each director
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.
5
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
six directors attended the 2005 annual meeting.
Committees of the Board
Seaboard's Board of Directors has established an
Audit Committee and a Compensation 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.
Audit Committee. Seaboard's Board of Directors has
established an Audit Committee. Members of the Audit
Committee currently 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 rules and regulations of the Securities and
Exchange Commission. 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 six meetings in fiscal
2005, three of which were telephonic meetings.
Compensation Committee. In December 2005,
Seaboard's Board of Directors established a
Compensation Committee for purposes of studying the
adoption of one or more long-term incentive plans and
administering any such plans which are adopted. The
Board has not designated any other functions of the
Compensation Committee. The members of the
Compensation Committee currently are David A. Adamsen,
Douglas W. Baena and Kevin M. Kennedy. The
Compensation Committee did not hold any meetings during
2005.
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. The Board of Directors includes directors
who are not "independent" under the applicable American
Stock Exchange listing standards. 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
6
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. 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. 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.
Compensation of Directors
Each non-employee director receives $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 receives an additional $1,000 per
quarter. Each non-employee director also receives an
additional $1,000 per telephonic meeting lasting longer
than one hour, excluding regular quarterly meetings
held telephonically.
7
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table shows all compensation earned,
during the fiscal years indicated, by the Chief
Executive Officer and the four other highest paid
executive officers of Seaboard (the "Named Executive
Officers") for such period in all capacities in which
they have served:
SUMMARY COMPENSATION TABLE
Annual Compensation
Name Other (3)
and Annual All Other(4)
Principal Salary(1) Bonus(2) Compensation Compensation
Position Year ($) ($) ($) ($)
H. Harry Bresky 2005 1,098,116 2,000,000 108,538 45,371
President 2004 1,002,000 1,500,000 59,101 31,200
Chief Executive Officer 2003 945,000 800,000 55,239 28,127
Steven J. Bresky 2005 470,981 1,000,000 30,895 57,681
Senior Vice President, 2004 413,358 600,000 25,072 18,960
International Operations 2003 393,231 300,000 23,853 17,820
Robert L. Steer 2005 456,173 1,000,000 34,693 54,197
Senior Vice President, 2004 415,538 600,000 26,459 17,880
Treasurer and 2003 391,846 300,000 24,591 20,755
Chief Financial Officer
Rodney K. Brenneman 2005 383,538 1,000,000 28,731 37,455
President, Seaboard 2004 342,868 500,000 21,282 9,900
Foods LP 2003 325,962 200,000 16,331 12,000
Edward A. Gonzalez(5) 2005 220,962 500,000 18,120 6,150
President, Seaboard 2004 119,808 149,615 9,078 5,383
Marine Ltd. 2003 115,000 59,423 8,622 5,683
(1) Salary includes amounts for unused vacation to be
paid to the Named Executive Officers and 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, the Executive Deferred Compensation
Plan and the Investment Option Plan, such plans being
described below under "Benefit Plans."
(2) Reflects bonus earned for each fiscal year
presented and includes compensation reduced at the
election of the Named Executive Officers under
Seaboard's 401(k) retirement savings plan, the Seaboard
Corporation Non-Qualified Deferred Compensation Plan,
the Executive Deferred Compensation Plan and the
Investment Option Plan described below under "Benefit
Plans."
8
(3) Included in Other Annual Compensation are the
benefits earned under the Non-Qualified Deferred
Compensation Plan and the Executive Deferred
Compensation Plan (for 2005), and under the
Supplemental Executive Benefit Plan (for
2004 and 2003), such plans being described below under
"Benefit Plans." These amounts for 2005 are as
follows: H. Bresky $71,793; S. Bresky $8,990; R. Steer
$11,990; R. Brenneman $5,315; and E. Gonzalez $5,088.
These amounts for 2004 are as follows: H. Bresky $22,680;
S. Bresky $2,441; R. Steer $3,586; R. Brenneman $6,386;
and E. Gonzalez $0. These amounts for 2003 are as
follows: H. Bresky $24,223; S. Bresky $2,977; R. Steer
$0; R. Brenneman $3,779; and E. Gonzalez $0.
Also included in Other Annual Compensation are
amounts paid as an automobile allowance, except for
H. Bresky, which amount represents 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.
These amounts for 2005 are as follows: H. Bresky
$29,775; S. Bresky $19,000; R. Steer $19,000;
R. Brenneman $19,000; and E. Gonzalez $9,988. These
amounts for 2004 are as follows: H. Bresky $29,775;
S. Bresky $19,000; R. Steer $19,000; R. Brenneman
$10,900; and E. Gonzalez $7,200. These amounts for
2003 are as follows: H. Bresky $24,573; S. Bresky
$19,000; R. Steer $19,000; R. Brenneman $10,900; and
E. Gonzalez $7,200.
(4) Included in all Other Compensation are Seaboard's
contributions to its 401(k) Retirement Savings Plan and
Investment Option Plan on behalf of the Named Executive
Officers. The amounts for 2005 are as follows:
(i) 401(k) retirement savings plan: H. Bresky $6,150,
S. Bresky $6,150, R. Steer $6,150, R. Brenneman $6,150,
and E. Gonzalez $6,150; and (ii) Investment Option
Plan: S. Bresky $16,500, R. Steer $13,500, R. Brenneman
$15,000 and E. Gonzalez $0. The amounts for 2004 are
as follows: (i) 401(k) retirement savings plan:
H. Bresky $6,000, S. Bresky $6,000, R. Steer $6,000,
R. Brenneman $6,000 and E. Gonzalez $5,383; and
(ii) Investment Option Plan: H. Bresky $25,200,
S. Bresky $12,960, R. Steer $11,880, R. Brenneman
$3,900 and E. Gonzalez $0. The amounts for 2003 are as
follows: (i) 401(k) retirement savings plan: H. Bresky
$6,000, S. Bresky $6,000, R. Steer $5,593, R. Brenneman
$6,000 and E. Gonzalez $5,683; and (ii) Investment
Option Plan: H. Bresky $22,127, S. Bresky $11,820,
R. Steer $15,162, R. Brenneman $6,000 and E. Gonzalez
$0. In addition for 2005 only, includes amounts paid
in 2005 on behalf of the Named Executive Officers for
past employees' FICA taxes on amounts deferred under
the Investment Option Plan as follows: H. Bresky
$39,221, S. Bresky $35,031, R. Steer $34,547,
R. Brenneman $16,305 and E. Gonzalez $0.
(5) Mr. Gonzalez was promoted to President of Seaboard
Marine Ltd. in January 2005.
EMPLOYMENT AGREEMENTS
WITH NAMED EXECUTIVE OFFICERS
Seaboard and each of the Named Executive Officers,
other than Mr. H. Bresky, are parties to an Employment
Agreement.
9
Each of the Employment Agreements contains the
following principal terms: (i) with respect to
Messrs. S. Bresky, Steer and Brenneman, a term of five
years, commencing July 1, 2005, renewed annually for a
like term of five years, unless Seaboard furnishes a
written notice of non-renewal, and with respect to
Mr. Gonzalez, a term of three years, commencing July 1,
2005, renewed annually for a like term of three years,
unless Seaboard furnishes a written notice of
non-renewal; (ii) payment of a minimum base salary in
the amounts of $440,000 for Mr. S. Bresky and
Mr. Steer, $370,000 for Mr. Brenneman and $225,000 for
Mr. Gonzalez; (iii) payment of an annual minimum bonus
in the amounts of $450,000 for Mr. S. Bresky and
Mr. Steer, $400,000 for Mr. Brenneman, and $250,000 for
Mr. Gonzalez; (iv) 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, with respect to
Messrs. S. Bresky, Steer and Brenneman, if the employee
voluntarily resigns for any reason other than for "Good
Reason" (as defined) (v) upon an involuntary
termination of the employee' employment without "Cause"
(as defined) or a resignation by the employee for "Good
Reason," payment to the employee of 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; and (vi) 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.
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 Executive Retirement Plan for
H. H. Bresky described below. Benefits under the
Executive Retirement Plan are currently unfunded. As
of December 31, 2005, 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 earlier of: normal retirement
at age 62 or older, death, separation of service
(provided the employee is at least
10
55 years old and has at least 10 years of service) 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 tables below show the amount of
benefit a participant could earn under the
Executive Retirement Plan 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). For
simplification, the tables reflect annual payments for
retirement at age 62 in 2005. Because Social Security
Covered Compensation varies depending on year of birth,
the benefits shown for pre-participation service would
be slightly smaller for a participant with the same pay
and service that attains age 62 later than 2005 and
slightly larger for a participant that attained age 62
prior to 2005. The post-participation service table
reflects the offset under (i) above related to the
benefit earned under the Seaboard Corporation Pension
Plan for post-participation service. See the summary
below for an explanation of the benefits payable from
the Seaboard Corporation Pension Plan. Any benefit
payable from the Seaboard Corporation Pension Plan
earned prior to 1994 and any of the offsets summarized
in (ii) through (iv) above are not reflected in the
tables as these amounts depend on the specific
arrangements applicable to each employee. The amounts
shown are based on a "Single Life Annuity" form of
payment reflecting various remuneration and years of
service.
EXECUTIVE RETIREMENT PLAN TABLE
YEARS OF POST-PARTICIPATION SERVICE
REMUNERATION 15 20 25 30 35
$ 150,000 34,500 45,900 57,400 68,800 80,400
$ 200,000 44,500 59,400 74,200 89,100 103,900
$ 300,000 81,200 108,200 135,300 162,400 189,400
$ 400,000 118,700 158,200 197,800 237,400 276,900
$ 500,000 156,200 208,200 260,300 312,400 364,400
$ 600,000 193,700 258,200 322,800 387,400 451,900
$ 750,000 250,000 333,200 416,600 499,900 583,200
$ 1,000,000 343,700 458,200 572,800 687,400 801,900
$ 1,250,000 437,500 583,200 729,100 874,900 1,020,700
$ 1,500,000 531,200 708,200 885,300 1,062,400 1,239,400
$ 2,000,000 718,700 958,200 1,197,800 1,437,400 1,676,900
$ 2,500,000 906,200 1,208,200 1,510,300 1,812,400 2,114,400
$ 3,000,000 1,093,700 1,458,200 1,822,800 2,187,400 2,551,900
The compensation for purposes of determining the
pension benefits consists of salary and bonus.
Credited years of post-participation service for each
of the Named Executive Officers is 12 years with the
exception of E. Gonzalez whose credited years of
post-participation service is one year. None of the
benefits payable contain an offset for social security
benefits.
11
EXECUTIVE RETIREMENT PLAN TABLE
YEARS OF SERVICE BEFORE JANUARY 1, 1994 (Pre-participation Service)
REMUNERATION 5 10 15 45
$ 150,000 7,300 14,600 21,800 65,500
$ 200,000 10,200 20,300 30,500 91,400
$ 300,000 15,900 31,800 47,700 143,100
$ 400,000 21,700 43,300 65,000 194,900
$ 500,000 27,400 54,800 82,200 246,600
$ 600,000 33,200 66,300 99,500 298,400
$ 750,000 41,800 83,600 125,300 376,000
$ 1,000,000 56,200 112,300 168,500 505,400
$ 1,250,000 70,500 141,100 211,600 634,700
$ 1,500,000 84,900 169,800 254,700 764,100
$ 2,000,000 113,700 227,300 341,000 1,022,900
$ 2,500,000 142,400 284,800 427,200 1,281,600
$ 3,000,000 171,200 342,300 513,500 1,540,400
The compensation for purposes of determining the
pension benefits consists of salary and bonus. The
credited years of pre-participation service for each of
the Named Executive Officers is as follows: H. Bresky
45.58, S. Bresky 14, R. Steer 9, R. Brenneman 4 and
E. Gonzalez 15. None of the benefits payable contain
an offset for social security benefits.
Frozen Executive Benefit Plan
Mr. H. Bresky is 100 percent vested in an Executive
Benefit Plan, frozen effective December 31, 1996, in
which Mr. H. Bresky has accrued an annual benefit of
$22,500 upon his retirement. Under the Executive
Benefit Plan, the automatic form of benefit payment is
pursuant to a "Ten-Year Certain and Continuous
Annuity." This means Mr. 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. If Mr. H. Bresky dies while employed by
Seaboard or after retirement, but before the
commencement of benefits, monthly payments would be
made to his beneficiary in the form of a 100 percent
joint and survivor benefit. The Executive Benefit Plan
allows for optional forms of payment under certain
circumstances. The amount of benefit payable under the
Executive Benefit Plan reduces the benefit payable to
Mr. 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, 2005, all of the Named Executive Officers
were fully vested, as defined in the Plan.
12
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. For consistency with the Executive
Retirement Plan, the table below shows benefits by
remuneration and years of service for an employee
retiring at age 62 in 2005.
PENSION PLAN TABLE
YEARS OF SERVICE FROM JANUARY 1, 1997
REMUNERATION 15 20 25 30 35
$ 125,000 17,500 23,400 29,200 35,000 40,900
$ 150,000 21,800 29,100 36,400 43,700 50,900
$ 175,000 26,100 34,900 43,600 52,300 61,000
$ 200,000 30,500 40,600 50,800 60,900 71,100
More than $220,000 31,300 42,900 53,600 64,400 75,100
The compensation for purposes of determining the
pension benefits consists of salary and bonus.
Credited years of service for each of the Named
Executive Officers is eight years. None of the
benefits payable contain an offset for social security
benefits.
Each of the Named Executive Officers in the Summary
Compensation Table 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: H. Bresky $120,108, S. Bresky $32,796,
R. Steer $15,490, R. Brenneman $6,540 and E. Gonzalez
$2,643. 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.
Supplemental Executive Retirement Plan for
H. Harry Bresky
Mr. H. Bresky is entitled to receive a supplementary
annual pension in the amount of $410,088 per year.
Under this agreement, the benefit payment is pursuant
to a "Ten-Year Certain and Continuous Annuity." This
means Mr. H. Bresky will receive a monthly annuity
benefit for his lifetime and, if Mr. H. Bresky dies
while in the ten-year certain period, the balance of
the
13
ten-year benefit will be paid to his designated
beneficiary. If Mr. H. Bresky dies while employed by
Seaboard or after retirement, but before the
commencement of benefits, monthly payments
would be made to Mr. H. Bresky's beneficiary for a
period of ten years. Payment of benefits commences upon
Mr. H. Bresky's retirement from Seaboard. The amount
of benefit payable under this agreement reduces the
benefit payable to Mr. H. Bresky under the Executive
Retirement Plan described above.
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 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 2005 for Seaboard was $205,000.
All amounts deferred and all company contributions
credited are included in the amounts reported in the
Summary Compensation Table above.
Supplemental Executive Benefit Plan
For the years 2004 and 2003 and prior years,
Seaboard had in place the Supplemental Executive
Benefit Plan pursuant to which the Named Executive
Officers received discretionary investment options
under the Investment Option Plan (described below) in
an amount equal to 3 percent 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 the 401(k) retirement savings
plan of Seaboard. The amount of such limitations for
the years 2004 and 2003 was $200,000. The amounts of
benefits paid for the years 2004 and 2003 under the
Supplemental Executive Benefit Plan are reported in the
Summary Compensation Table above for such years. The
Supplemental Executive Benefit Plan was terminated
effective January 1, 2005.
Investment Option Plan
For the years 2004 and 2003 and prior years
beginning with 2001, Seaboard has in place the
Investment Option Plan which allowed executives to
reduce their compensation in exchange for options to
buy shares of certain mutual funds and/or pooled
separate accounts. 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. The
amounts deferred for the years 2004 and 2003 pursuant
to the Investment Option Plan are reported in the
Summary Compensation Table above for such years.
14
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) Plan. The amount of such limitation
in 2005 for Seaboard was $205,000. All amounts
deferred and all company contributions credited are
included in the amounts deferred in the Summary
Compensation Table above.
Retiree Medical Benefit Plan
The Seaboard Corporation Retiree Medical Benefit
Plan provides family medical insurance to the Named
Executive Officers upon the retirement, involuntary
termination of employment, change of control or death
of the participant.
Executive Long-Term Disability Plan
The Seaboard Corporation Executive Long-Term
Disability Plan provides disability pay continuation to
certain members of management, including Mr. Steer,
Mr. Brenneman and Mr. Gonzalez, 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
$18,000 per month for Mr. Gonzalez and up to $23,000
per month for Mr. Steer and Mr. Brenneman.
REPORT OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
The following information is to provide stockholders
and other interested parties with a clear understanding
of Seaboard's philosophy regarding executive
compensation and to provide insight behind fundamental
compensation decisions.
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. Seaboard'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 companies in an
independent market assessment which included peer group
15
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, while Seaboard does not, the Board
also considers this factor in its compensation
decisions. This peer 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 Seaboard's
businesses.
The amount of the bonus for the Chief Executive
Officer and other executive officers is partially based
on company performance.
As Chief Executive Officer, Mr. H. 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. Bresky.
Pursuant to Section 162(m) of the Internal Revenue
Code, compensation in excess of $1 million paid 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 the Corporation's
executive compensation, and determined that Mr. H.
Bresky should be a participant in the Plan. As such,
to assure that Seaboard does not lose deductions for
compensation paid to Mr. H. Bresky, the Board of
Directors has adopted the Executive Deferred
Compensation Plan described above, requiring Mr. H.
Bresky to defer receipt of any compensation in excess
of $1 million that is not deductible. In 2005 and
2004, the amounts deferred by Mr. H. Bresky were
$2,245,496 and $1,498,407, respectively. In 2003, no
deferral was required because Mr. H. Bresky had 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 David A. Adamsen
Douglas W. Baena Kevin M. Kennedy Steven J. Bresky
COMPANY PERFORMANCE
The Securities and Exchange Commission requires a
five-year comparison of stock performance for Seaboard
with that of an appropriate broad equity market index
and similar industry index. Seaboard'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 (the
"Peer Group") were chosen as the second comparison.
The following graph shows a five-year comparison of
cumulative total return for Seaboard, the American
Stock Exchange Market Value Index and the companies
comprising the Dow Jones
16
Food and Marine Transportation Industry indices
weighted by market capitalization for the five fiscal
years commencing December 31, 2000, and ending December
31, 2005. The information presented in the performance
graph is historical in nature and is not intended
to represent or guarantee future returns.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG SEABOARD CORPORATION,
THE AMEX MARKET VALUE
(U.S. & FOREIGN) INDEX AND A PEER GROUP
The graph depicts data points below.
*$100 invested on 12/31/00 in stock or index-
including reinvestment of dividends.
Fiscal year ending December 31.
17
The comparison of cumulative total returns presented
in the above graph was plotted using the following
index values and common stock price values:
12/31/00 12/31/01 12/31/02 12/31/03 12/31/04 12/31/05
Seaboard Corporation $100.00 $197.05 $157.47 $185.86 $661.78 $1,004.17
AMEX Market Value $100.00 $119.04 $132.57 $176.02 $214.97 $ 319.96
(U.S. & Foreign)
Peer Group $100.00 $103.77 $105.97 $116.23 $139.65 $ 132.77
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
The Board of Directors first appointed a
Compensation Committee in December 2005, and therefore,
the Compensation Committee was not involved with
determining executive compensation for 2005. Mr. H.
Bresky is a member of the Board of Directors of
Seaboard and participates in decisions by the Board
regarding executive compensation.
Upon Mr. Rodrigues' retirement as Executive Vice
President and Treasurer in February 2001, Seaboard
entered into a consulting agreement with Mr. Rodrigues
for various services related to certain of Seaboard's
foreign investments. During 2005, 2004 and 2003,
Seaboard did not pay any consulting fees to
Mr. Rodrigues and reimbursed him $0, $0 and $6,708,
respectively, for out-of-pocket expenses. Also, during
2005, 2004 and 2003, Seaboard paid Mr. Rodrigues
$462,844, $450,024 and $442,780, respectively, under
various retirement plans.
Seaboard Flour maintains a deposit with Seaboard to
pay for any miscellaneous operating expenses incurred
by Seaboard on behalf of Seaboard Flour. The largest
amount on deposit during 2005 was $26,859 on January
29, 2005. As of December 31, 2005, Seaboard owed
Seaboard Flour $24,237.
During 2002, Seaboard consummated a transaction
("Transaction") with its parent company, Seaboard
Flour, pursuant to which Seaboard effectively
repurchased 232,414.85 shares of its common stock owned
by Seaboard Flour for $203.26 per share. Of the total
consideration of $47,241,000, Seaboard Flour was
required under the terms of the Transaction immediately
to pay $11,260,000 to Seaboard to repay in full all
indebtedness owed by Seaboard Flour to Seaboard, and to
use the balance of the consideration to pay bank
indebtedness of Seaboard Flour and Transaction
expenses. During the fourth quarter of 2002, Seaboard
cancelled 534,547 shares of common stock held in
treasury, including shares previously held by Seaboard
Flour.
The Transaction was approved by Seaboard's Board of
Directors 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, the Seaboard Flour's ownership interest
dropped from 75.3 percent to 70.7 percent.
As a part of the Transaction, Seaboard Flour
transferred to Seaboard 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. Seaboard also received tax net operating
losses ("NOLs"), with a benefit totaling $8,317,416,
which allow Seaboard to reduce the
18
amount of future income taxes it otherwise would pay.
To the extent Seaboard receives cash payments as a
result of the transferred rights or reduces its federal
income taxes payable by utilizing the NOLs, Seaboard
agreed to issue to Seaboard Flour new shares of common
stock with a value equal to the cash received and/or
the NOL utilized. The value of the common stock for
purposes of determining the number of shares issued is
equal to the ten day rolling average closing price,
determined as of the twentieth day prior to the issue
date. The maximum number of shares of common stock
which may be issued to Seaboard Flour under the
Transaction is capped at 232,414.85, the number of
shares which were originally purchased from Seaboard
Flour. As of December 31, 2005, Seaboard had not
received any cash payments from the subsidiary of
Seaboard Flour. The right to receive such payments
expires September 17, 2007.
On September 15, 2005, Seaboard filed tax returns
utilizing the NOLs which resulted in a $8,317,416
reduction in its federal income tax. Based on terms of
the Transaction, the price of the shares of Seaboard's
common stock to be issued to the Parent Company is
equal to the ten day rolling average closing price
prior to October 1, 2005, which was $1,317.44. This
resulted in Seaboard issuing 6,313.34 shares to Parent
Company on November 3, 2005. Seaboard accounted for
this income tax benefit by reducing current taxes
payable in the amount of $8,317,416 and recording
additional paid in capital.
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, 2006. Stockholders will
have an opportunity to vote at the annual meeting on
whether to ratify the Audit Committee 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.
The Board of Directors recommends that you vote for
approval of the selection of KPMG LLP.
19
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 2005 and
2004, and fees billed for other services rendered by
KPMG LLP during such years.
Type of Fee 2005 2004
Audit Fees (1) $1,488,878 $1,327,535
Audit-Related Fees (2) 16,353 145,498
Tax Fees (3) 175,643 338,513
All Other Fees (4) 2,758 1,080
(1) Audit Fees, including those for statutory
audits, include the aggregate fees paid by us during
2005 and 2004 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 2005 and 2004 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, including employee benefit plan audits for
2004.
(3) Tax Fees include the aggregate fees paid by us
during 2005 and 2004 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 2005 is 100 percent of
the total fees incurred.
20
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. A copy of the Audit Committee Charter
was attached to the proxy statement with respect to the
2005 annual meeting of stockholders.
The Audit Committee has reviewed the audited
financial statements for fiscal year 2005 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, "Communication
with Audit Committees," 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 2005. 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, 2005.
The foregoing has been furnished by the Audit
Committee:
David A. Adamsen (chair) Douglas W. Baena Kevin M. Kennedy
ITEM 3: PROPOSALS TO AMEND THE RESTATED CERTIFICATE
OF INCORPORATION
General
On March 6, 2006, the Board of Directors unanimously
adopted a resolution setting forth approving a
proposed series of amendments to Seaboard's
Restated Certificate of Incorporation for Seaboard.
Seaboard's stockholders are being asked to approve such
amendment and restatement at the annual meeting.
The text of the proposed Certificate, , all of
Incorporation is which amendments are set forth
in Exhibit A to this proxy statement. If the a
proposed new Restated Cerfiticate of Incorporation.
In accordance with the rules of the Securities
and Exchange Commission, the proposed amendments
have been "unbundled" so that each amendment
arguably of a material nature may be considered and
voted upon by the stockholders separately. These
amendments are
21
described in Items 3, 4, 5, 6, 7, 8
and 9 of this proxy statement. If each of the amendments
described in those Items is approved by the
stockholders at the annual meeting, then the stockholders
will be asked to consider and vote upon a proposed
amendment and restatement of Seaboard's Restated Certificate
of Incorporation that incorporates those amendments as
well as a series of other amendments which individually
and in the aggregate are immaterial. This proposed
amendment and restatement of Seaboard's Restated
Certificate of Incorporation is described in Item 10 of
this proxy statement. Seaboard's
stockholders are being asked to approve each of the
amendments described in Items 3, 4, 5, 6, 7, 8, 9 and
10 of this proxy statement at the annual meeting.
If any or all of the proposed amendments are
adopted by the stockholders, Seaboard will cause the
a Certificate of Amendment or Amendment and
Restatement of Seaboard's Restated Certificate
of Incorporation , as the case may be, consistent
with the text of each amendment adopted, to be filed
with the office of the Delaware Secretary of State as
promptly as practicable after the annual meeting.
The description of the proposed Restated Certificate
of Incorporation contained in this proxy statement is
qualified in its entirety by reference to Exhibit A.
ITEM 3: AMENDMENT TO ARTICLE THIRD, SECTION 3 OF THE
RESTATED CERTIFICATE OF INCORPORATION
Description of the Amendment
The proposed amendment and restatement of Seaboard's
Restated Certificate of Incorporation would provide for
the indemnification of our directors and officers to
the fullest extent allowed by Delaware law. In addition,
the proposed amendment and restatement would simplify
Seaboard's Restated Certificate of Incorporation by
removing provisions which are obsolete or which do
not need to be included pursuant to Delaware law.
Among the simplification amendments are the following:
The replacement of a list of authorized business
purposes for Seaboard with a provision authorizing
Seaboard to engage in any lawful act or activity for
which Delaware corporations may be organized.
The elimination of the lengthy recitation of pre emptive
rights and the reservation of shares of issuance upon
conversion of bonds, both of which are unnecessary since
Seaboard's stockholders do not have pre emptive rights
and Seaboard has no convertible bonds outstanding.
The elimination of the statement concerning Seaboard's
perpetual existence, which statement is unnecessary since
Seaboard's perpetual existence already is provided for
under Delaware law.
The elimination of the statement concerning the private
property of Seaboard's stockholders not being subject
to Seaboard's debts, which statement is unnecessary
since Delaware law already insulates stockholders from
the debts of a corporation in which they hold stock.
22
The elimination of statements concerning the manner in
which the Board of Directors acts upon matters in which
a director has personal interest, which statements are
unnecessary since Delaware law already specifies the
manner for handling such matters.
The elimination of statements concerning the powers of
the Board of Directors (other than the statement concerning
the power to adopt, amend or repeal Seaboard's Bylaws),
which statements are unnecessary since the powers of the
Board of Directors already are provided for under Delaware
law. The statement concerning the power of the Board of
Directors to adopt, amend or repeal Seaboard's Bylaws was
retained since that power must appear in the Restated
Certificate of Incorporation in order to exist.
Currently, Article Third, Section 3 of Seaboard's
Restated Certificate of Incorporation provides a
lengthy recitation of specific businesses, objects or
purposes, Article Third, Section 3 of Seaboard's
Restated Certificate of Incorporation authorizes
Seaboard to have and exercise all of the powers
conferred by the laws of Delaware upon corporations
formed under the Delaware General Corporation Law. In
light of this general authority to engage in any lawful
act or activity under Delaware law, the listing of
specific businesses, objects or purposes in or for
which Seaboard is authorized to engage is somewhat
superfluous.
The proposed amendment to Article Third, Section 3
of Seaboard's Restated Certificate of Incorporation
would simplify the purpose clause by eliminating the
listing of specific businesses, objects or purposes in
or for which Seaboard is authorized to engage. Although
such a listing is permissible, the Delaware General
Corporation Law does not require such a listing to be
included in Seaboard's Restated Certificate of
Incorporation. In place of such listing, the proposed
amendment to Article Third, Section 3 would provide
that Seaboard's purpose is to engage in any lawful act
or activity for which corporations may be organized
under the Delaware General Corporation Law.
The text of the proposed amendment to Article Third,
Section 3 of Seaboard's Restated Certificate of
Incorporation is set forth in Exhibit A to this proxy
statement. The description of the proposed amendment
to Article Third, Section 3 of Seaboard's Restated
Certificate of Incorporation contained herein is
qualified in its entirety by reference to Exhibit A.
Purposes and Effects of the Proposed Amendment
The principal purpose of the proposed amendment and
restatement of our Restated Certificate of Incorporation
to Article Third, Section 3 is to simplify
Seaboard's Restated Certificate of Incorporation by
removing provisions which are obsolete or which do not
need to be included pursuant to Delaware law. In
addition, the proposed amendment and restatement would
clarify that our directors and officers may be indemnified
to the fullest extent allowed by Delaware law. As such,
the proposed amendment and restatement of our Restated
Certificate of Incorporation would The lengthy
listing of specific businesses, objects or purposes in
or for which Seaboard is authorized to engage is not
required by the Delaware General Corporation Law, and
the elimination of that listing will not affect
Seaboard's ability under Delaware law to engage in any
of
23
the business activities in which it is engaged. The
proposed amendment to Article Third, Section 3 would
have little immediate , if any, effect on
the rights of stockholders.
The Board of Directors recommends that you vote for
approval of the proposed amendment to Article Third,
Section 3 of Seaboard's Restated Certificate of
Incorporation for Seaboard .
ITEM 4: AMENDMENT TO ARTICLE THIRD, SECTION 4 OF THE
RESTATED CERTIFICATE OF INCORPORATION
Description of the Amendment
The only shares of capital stock that Seaboard is
authorized to issue is its common stock. Currently,
Article Third, Section 4 of Seaboard's Restated
Certificate of Incorporation provides that no
stockholder, by reason of his or her share ownership,
has any pre-emptive or preferential right to purchase
any shares of capital stock, securities convertible
into such shares or options or warrants to purchase
such shares. In addition, Article Third, Section 4
provides that Seaboard's common stock is subject to any
conversion rights that may be granted to the purchasers
of bonds issued by Seaboard, as such conversion rights
are defined in the applicable document defining the
rights of bondholders, and provides for the reservation
of shares for issuance upon conversion of such bonds.
The proposed amendment to Article Third, Section 4
of Seaboard's Restated Certificate of Incorporation
would eliminate the obsolete and superfluous provisions
described above. In particular, the proposed amendment
would delete the provision in Article Third, Section 4
to the effect that stockholders do not have pre-emptive
rights to purchase any Seaboard securities. It would
also delete the provisions relating to the conversion
rights of Seaboard bondholders. The provision denying
pre-emptive rights is an unnecessary recitation of what
effectively is already provided for under Delaware law.
The Delaware General Corporation Law provides that
stockholders of Delaware corporations do not have pre-
emptive rights unless such rights are specifically
granted to them under the corporation's Certificate of
Incorporation. It is not necessary to affirmatively
state in the Certificate of Incorporation that pre-
emptive rights are denied. The provisions relating to
the conversion rights of Seaboard bondholders also may
be deleted since Seaboard has no convertible bonds
outstanding. After giving effect to the proposed
amendment, Article Third, Section 4 would specify only
the number and par value of the shares of common stock
that Seaboard is authorized to issue.
The text of the proposed amendment to Article Third,
Section 4 of Seaboard's Restated Certificate of
Incorporation is set forth in Exhibit B to this proxy
statement. The description of the proposed amendment
to Article Third, Section 4 of Seaboard's Restated
Certificate of Incorporation contained herein is
qualified in its entirety by reference to Exhibit B.
Purposes and Effects of the Proposed Amendment
The principal purpose of the proposed amendment to
Article Third, Section 4 is to simplify Seaboard's
Restated Certificate of Incorporation by removing
provisions which are obsolete or which do not need to
be included pursuant to Delaware law.
24
By deleting the provision in Seaboard's Restated
Certificate of Incorporation denying pre-emptive
rights, the rights of stockholders relating to the
issue of pre-emptive rights would be unchanged.
Similarly, the deletion of provisions relating to the
conversion rights of Seaboard
bondholders would have little, if any, effect on the
rights of stockholders since Seaboard has no
convertible bonds outstanding.
The Board of Directors recommends that you vote for
approval of the proposed amendment to Article Third,
Section 4 of Seaboard's Restated Certificate of
Incorporation.
ITEM 5: AMENDMENT TO ARTICLE THIRD, SECTION 5 OF THE
RESTATED CERTIFICATE OF INCORPORATION
Description of the Amendment
Currently, Article Third, Section 5 of Seaboard's
Restated Certificate of Incorporation provides the
Seaboard is to have a perpetual existence. It is
proposed that Article Third, Section 5 be amended by
deleting that Section in its entirety.
The provision in Article Third, Section 5 that
Seaboard is to have a perpetual existence is obsolete
and superfluous. It is an unnecessary recitation of
what is already provided for under Delaware law. The
Delaware General Corporation Law provides that a
Delaware corporation has a perpetual existence unless a
limited period of existence for the corporation is
specified in its Certificate of Incorporation. It is
not necessary to affirmatively state in the Certificate
of Incorporation that the corporation has a perpetual
existence.
The text of the proposed amendment to Article Third,
Section 5 of Seaboard's Restated Certificate of
Incorporation is set forth in Exhibit C to this proxy
statement. The description of the proposed amendment
to Article Third, Section 5 of Seaboard's Restated
Certificate of Incorporation contained herein is
qualified in its entirety by reference to Exhibit C.
Purposes and Effects of the Proposed Amendment
The principal purpose of the proposed amendment to
Article Third, Section 5 is to simplify Seaboard's
Restated Certificate of Incorporation by removing
provisions which are obsolete or which do not need to
be included pursuant to Delaware law. The proposed
amendment to Article Third, Section 5 would not affect
the rights of stockholders.
The Board of Directors recommends that you vote for
approval of the proposed amendment to Article Third,
Section 5 of Seaboard's Restated Certificate of
Incorporation.
ITEM 6: AMENDMENT TO ARTICLE THIRD, SECTION 6 OF THE
RESTATED CERTIFICATE OF INCORPORATION
Description of the Amendment
Currently, Article Third, Section 6 of Seaboard's
Restated Certificate of Incorporation provides that the
private property of the stockholders shall not be
subject to the payment of Seaboard's corporate debts.
It is proposed that Article Third, Section 6 be amended
by deleting that Section in its entirety.
25
The provision in Article Third, Section 6 that
Seaboard is obsolete and superfluous. It is an
unnecessary recitation of what is already provided for
under Delaware law; namely that
stockholders are not subject to the debts of a
corporation in which they hold shares. It is not
necessary to affirmatively state in the Certificate
of Incorporation that stockholders are insulated from
a corporation's debts.
The text of the proposed amendment to Article Third,
Section 6 of Seaboard's Restated Certificate of
Incorporation is set forth in Exhibit D to this proxy
statement. The description of the proposed amendment
to Article Third, Section 6 of Seaboard's Restated
Certificate of Incorporation contained herein is
qualified in its entirety by reference to Exhibit D.
Purposes and Effects of the Proposed Amendment
The principal purpose of the proposed amendment to
Article Third, Section 6 is to simplify Seaboard's
Restated Certificate of Incorporation by removing
provisions which are obsolete or which do not need to
be included pursuant to Delaware law. The proposed
amendment to Article Third, Section 6 would have
little, if any, effect on the rights of stockholders.
The Board of Directors recommends that you vote for
approval of the proposed amendment to Article Third,
Section 6 of Seaboard's Restated Certificate of
Incorporation.
ITEM 7: AMENDMENT TO ARTICLE THIRD, SECTION 7 OF THE
RESTATED CERTIFICATE OF INCORPORATION
Description of the Amendment
Currently, Article Third, Section 7 provides a
listing of powers conferred upon our Board of Directors
that is stated to be "[i]n furtherance, and not in
limitation of the powers conferred by statute." These
powers include the power to adopt, amend or repeal our
Bylaws, to authorize mortgages and liens on our
property, to establish a reserve of funds for any
proper purpose, to designate one or more committees of
the Board and to authorize the sale, lease or exchange
of our properties and assets. Of the powers identified
in this listing, only the power to adopt, amend or
repeal our Bylaws must be specifically provided for in
Seaboard's Restated Certificate of Incorporation if
that is a power that is to be conferred on the Board.
Article Third, Section 7 currently grants this power to
the Board. All other powers listed in Article Third,
Section 7 are not required to be included in Seaboard's
Restated Certificate of Incorporation in order for them
to be conferred upon our Board of Directors.
Although a listing of the powers conferred upon our
Board is permissible, the Delaware General Corporation
Law generally does not require such a listing to be
included in Seaboard's Restated Certificate of
Incorporation. However, the power to adopt, amend or
repeal our Bylaws must be specifically provided for in
Seaboard's Restated Certificate of Incorporation if it
is a power that is to be conferred on the Board. The
proposed amendment to Article Third, Section 7 of
Seaboard's Restated Certificate of Incorporation would
eliminate the listing of the powers conferred upon our
Board of Directors, with the exception of the power to
adopt, amend or repeal our Bylaws which would be
retained.
26
The text of the proposed amendment to Article Third,
Section 7 of Seaboard's Restated Certificate of
Incorporation is set forth in Exhibit E to this proxy
statement. The description of the
proposed amendment to Article Third, Section 7 of
Seaboard's Restated Certificate of Incorporation
contained herein is qualified in its entirety by
reference to Exhibit E.
Purposes and Effects of the Proposed Amendment
The principal purpose of the proposed amendment to
Article Third, Section 7 is to simplify Seaboard's
Restated Certificate of Incorporation by removing
provisions which are obsolete or which do not need to
be included pursuant to Delaware law. With the
exception of the power to adopt, amend or repeal our
Bylaws, the listing of specific powers conferred upon
our Board is not required by the Delaware General
Corporation Law in order for those powers to be so
conferred. The proposed amendment to Article Third,
Section 7 would have little, if any, effect on the
rights of stockholders.
The Board of Directors recommends that you vote for
approval of the proposed amendment to Article Third,
Section 7 of Seaboard's Restated Certificate of
Incorporation.
ITEM 8: AMENDMENT TO ARTICLE THIRD, SECTION 8 OF THE
RESTATED CERTIFICATE OF INCORPORATION
Description of the Amendment
Currently, the first two paragraphs of Article
Third, Section 8 of Seaboard's Restated Certificate of
Incorporation describes the effect of a director's self-
interest in transactions involving Seaboard or its
affiliates or in corporations with whom Seaboard or its
affiliates have any dealing. These paragraphs provide
that:
Our directors will not be disqualified from
holding any office with, or directly or indirectly
dealing or contracting with, Seaboard or its
affiliates.
Any dealing or contract involving Seaboard or its
affiliates in which a director has an interest,
whether directly or indirectly through such
director's interest in another corporation, will
not be voided by reason of such interest.
Our directors will not be required to account to
Seaboard for any profit or benefit enjoyed by any
such director that results from any of the
foregoing dealings or contracts involving Seaboard
or its affiliates.
Our directors are required to disclose to the
other members of our Board the nature of any
interest referred to above at or before the
meeting of the Board at which the dealing,
contract or arrangement is authorized (or at a
subsequent meeting of the Board if such director's
interest arises later), and an interested director
does not have a vote on any dealing, contract or
arrangement in which such director has an interest.
It is proposed that Article Third, Section 8 be
amended by deleting the first and second paragraphs of
that Section in their entirety. The provisions set
forth in those paragraphs are superfluous as they cover
topics that already are provided for under Delaware
law.
27
The text of the proposed amendment to Article Third,
Section 8 of Seaboard's Restated Certificate of
Incorporation is set forth in Exhibit F to this proxy
statement. The description of the
proposed amendment to Article Third, Section 8 of
Seaboard's Restated Certificate of Incorporation
contained herein is qualified in its entirety by
reference to Exhibit F.
Purposes and Effects of the Proposed Amendment
The principal purpose of the proposed amendment to
Article Third, Section 8 is to simplify Seaboard's
Restated Certificate of Incorporation by removing
provisions which are obsolete or which do not need to
be included pursuant to Delaware law. The proposed
amendment to Article Third, Section 8 would have
little, if any, effect on the rights of stockholders.
The Board of Directors recommends that you vote for
approval of the proposed amendment to Article Third,
Section 8 of Seaboard's Restated Certificate of
Incorporation.
ITEM 9: FURTHER AMENDMENT TO ARTICLE THIRD, SECTION 8
OF THE RESTATED CERTIFICATE OF INCORPORATION
Description of the Amendment
Currently, Article Third, Section 8 of Seaboard's
Restated Certificate of Incorporation provides that
Seaboard will indemnify each of its directors and
officers, and each director and officer of Seaboard's
subsidiaries whose election or appointment it has voted
for or expressly approved, for and against all
liabilities and expenses incurred by such director or
officer in any action, suit or proceeding in which he
or she may be involved by reason of his or her service
as such a director or officer. Such indemnification is
not available for liabilities or expenses to the extent
that such director or officer is finally adjudged in
such action, suit or proceeding to be liable as a
result of being derelict in the performance of his or
her duty as such director or officer. Such
indemnification also is not available for amounts paid,
or liabilities or expenses incurred, in any matter
settled by compromise unless such compromise is
approved by the disinterested members of the Board of
Directors.
The proposed amendment to Article Third, Section 8
of Seaboard's Restated Certificate of Incorporation
would simplify the indemnification provision by
providing that indemnification would be provided to the
fullest extent permitted by applicable law. In so
doing, the limitations on indemnification described
above for situations where the director or officer is
adjudged to be derelict in the performance of his or
her duty or where a settlement by compromise is not
approved by the disinterested members of the Board of
Directors would be determined in the manner provided by
the Delaware General Corporation Law. This would
result in indemnification being available if the
director or officer acted in good faith and in a manner
he or she reasonably believed to be in or not opposed
to the best interests of Seaboard, and in the case of a
criminal matter that such person had no reason to
believe that his or her conduct was unlawful. The
proposed amendment also would extend the availability
of indemnification for directors and officers of
Seaboard's subsidiaries to include persons who serve at
the request of Seaboard as a director or officer of
another corporation partnership, joint venture, trust,
limited liability company or other enterprise.
Finally, the proposed amendment clarifies that Seaboard
is not required
28
to indemnify a person who otherwise is entitled to
indemnification in connection with a proceeding
commenced by such person unless he or she is authorized
to do so in advance by the Board of Directors.
The text of the proposed amendment to Article Third,
Section 8 of Seaboard's Restated Certificate of
Incorporation is set forth in Exhibit G to this proxy
statement. The description of the proposed amendment
to Article Third, Section 8 of Seaboard's Restated
Certificate of Incorporation contained herein is
qualified in its entirety by reference to Exhibit G.
Purposes and Effects of the Proposed Amendment
The principal purpose of the proposed amendment to
Article Third, Section 8 is to simplify Seaboard's
Restated Certificate of Incorporation by removing
provisions which are obsolete or which do not need to
be included pursuant to Delaware law. In addition, the
proposed amendment extends the availability of
indemnification to persons who serve at the request of
Seaboard as a director or officer of another
corporation partnership, joint venture, trust, limited
liability company or other enterprise, and limits the
availability of indemnification for proceedings
commenced by a person otherwise eligible to be
indemnified. The proposed amendment to Article Third,
Section 8 would have little, if any, effect on the
rights of stockholders.
The Board of Directors recommends that you vote for
approval of the proposed amendment to Article Third,
Section 8 of Seaboard's Restated Certificate of
Incorporation.
ITEM 10: AMENDMENT AND RESTATEMENT OF RESTATED
CERTIFICATE OF INCORPORATION
Description of the Amendment
As explained above, the stockholders are being given
the opportunity at the annual meeting to consider and
vote upon a number of amendments to Seaboard's Restated
Certificate of Incorporation. Each such amendment that
arguably is of a material nature is described in Items
3, 4, 5, 6, 7, 8 and 9 of this proxy statement. If
each of those amendments is approved by the
stockholders at the annual meeting, then the
stockholders will be asked to consider and vote upon a
proposed amendment and restatement of Seaboard's
Restated Certificate of Incorporation that incorporates
those amendments as well as a series of additional
amendments which individually and in the aggregate are
immaterial. These additional amendments include
amendments intended to correct grammatical errors, to
provide consistency in the capitalization of terms, to
provide for the use of language that is gender neutral,
to renumber paragraphs as appropriate, to eliminate
obsolete or redundant terminology, and to accurately
identify the name and address of Seaboard's current
registered agent.
The text of the proposed amendment and restatement
of Seaboard's Restated Certificate of Incorporation is
set forth in Exhibit H to this proxy statement. The
description of the proposed amendment and restatement
contained herein is qualified in its entirety by
reference to Exhibit H.
Purposes and Effects of the Proposed Amendment
29
The principal purpose of the proposed amendment and
restatement of our Restated Certificate of
Incorporation is to reflect all of the amendments
described in Items 3, 4, 5, 6, 7, 8 and 9 of this
proxy statement that are approved by stockholders at
the annual meeting and to correct grammatical errors,
to provide consistency in the capitalization of terms,
to provide for the use of language that is gender
neutral, to renumber paragraphs as appropriate, to
eliminate obsolete or redundant terminology, and to
accurately identify the name and address of Seaboard's
current registered agent, all of which is intended to
simplify Seaboard's Restated Certificate of
Incorporation. The proposed amendment and restatement
of our Restated Certificate of Incorporation would have
little, if any, effect on the rights of stockholders.
The Board of Directors recommends that you vote for
approval of the proposed amendment and restatement of
Seaboard's Restated Certificate of Incorporation.
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, including
consideration of a stockholder proposal, 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, except for the stockholder's proposal, 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 2005 all reports of ownership required
under Section 16(a) of the Securities Exchange Act of
1934 for 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 2007 annual meeting of
stockholders will be held on April 23, 2007. Any
stockholder who intends to present a proposal at the
2007 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:
30
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 13 December 7 , 2006.
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 January 27 February 20 ,
2007.
Proxies solicited in connection with the 2007 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 January 27 February
20 , 2007 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, 2005, together
with corresponding consolidated financial statements
for the fiscal year ended December 31, 2004, 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.
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
31
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.
32
Exhibit A
PROPOSED AMENDMENT TO ARTICLE THIRD, SECTION 3 OF THE
RESTATED CERTIFICATE OF INCORPORATION OF SEABOARD
CORPORATION
Article Third, Section 3 of the Restated
Certificate of Incorporation hereby is amended to read
in its entirety as follows:
3. The purpose of the Corporation is to
engage in any lawful act or activity for which
corporations may be organized under the General
Corporation Law of Delaware.
33
Exhibit B
PROPOSED AMENDMENT TO ARTICLE THIRD, SECTION 4 OF THE
RESTATED CERTIFICATE OF INCORPORATION OF SEABOARD
CORPORATION
Article Third, Section 4 of the Restated
Certificate of Incorporation hereby is amended to read
in its entirety as follows:
4. The total number of shares which the
Corporation shall have authority to issue is four
million (4,000,000) shares of common stock of the
par value of $1 per share.
34
Exhibit C
PROPOSED AMENDMENT TO ARTICLE THIRD, SECTION 5 OF THE
RESTATED CERTIFICATE OF INCORPORATION OF SEABOARD
CORPORATION
Article Third, Section 5 of the Restated
Certificate of Incorporation hereby is amended by
deleting that Section in its entirety.
35
Exhibit D
PROPOSED AMENDMENT TO ARTICLE THIRD, SECTION 6 OF THE
RESTATED CERTIFICATE OF INCORPORATION OF SEABOARD
CORPORATION
Article Third, Section 6 of the Restated
Certificate of Incorporation hereby is amended by
deleting that Section in its entirety.
36
Exhibit E
PROPOSED AMENDMENT TO ARTICLE THIRD, SECTION 7 OF THE
RESTATED CERTIFICATE OF INCORPORATION OF SEABOARD
CORPORATION
Article Third, Section 7 of the Restated
Certificate of Incorporation hereby is amended to read
in its entirety as follows:
7. In furtherance, and not in limitation of
the powers conferred by statute, the Board of
Directors is authorized to adopt, amend or repeal
the By Laws of the Corporation.
37
Exhibit F
PROPOSED AMENDMENT TO ARTICLE THIRD, SECTION 8 OF THE
RESTATED CERTIFICATE OF INCORPORATION OF SEABOARD
CORPORATION
Article Third, Section 8 of the Restated
Certificate of Incorporation hereby is amended by
deleting the first and second paragraphs of that
Section in their entirety.
38
Exhibit G
PROPOSED AMENDMENT TO ARTICLE THIRD, SECTION 8 OF THE
RESTATED CERTIFICATE OF INCORPORATION OF SEABOARD
CORPORATION
Article Third, Section 8 of the Restated
Certificate of Incorporation hereby is amended by
deleting the last three paragraphs of that Section in
their entirety and substituting and inserting in the
place of those deleted paragraphs three new paragraphs
that read in their entirety as follows:
To the fullest extent permitted by applicable
law, the Corporation shall indemnify and reimburse
each Director and officer of the Corporation, and
each person who is or was serving at the request
of the Corporation as a director or officer of
another corporation partnership, joint venture,
trust, limited liability company or other
enterprise, for and against all liabilities and
expenses imposed upon or reasonably incurred by
him or her in connection with any action, suit or
proceeding which he or she may be involved or with
which he or she may be threatened by reason of his
or her being or having been a Director or officer
of the Corporation or of his or her being or
having been a director or officer of another
corporation, partnership, joint venture, trust,
limited liability company or other enterprise at
the request of the Corporation. The right of
indemnification and reimbursement of each such
person shall continue whether or not he or she
continues to be such Director or officer at the
time such liabilities or expenses are imposed upon
or incurred by him or her and shall include,
without being limited to, attorneys' fees, court
costs, judgments and compromise settlements. The
right of reimbursement for liabilities and
expenses so imposed or incurred shall include the
right to receive such reimbursement in advance of
the final disposition of any such action, suit or
proceeding upon the Corporation's receipt of an
undertaking by or on behalf of such Director or
officer to repay such amount if it shall be
ultimately determined that he or she is not
entitled to be indemnified by the Corporation
pursuant to law or this paragraph.
Notwithstanding the foregoing, the
Corporation shall be required to indemnify a
person otherwise entitled to indemnification under
this Certificate of Incorporation in connection
with a proceeding (or part thereof) commenced by
such person only if the commencement of such
proceeding (or part thereof) by such person was
authorized in advance by the Board of Directors.
The rights of indemnification and
reimbursement hereby provided shall not be
exclusive of other rights to which any Director or
officer may be entitled. As used in this article
the terms "Director" and "officer" shall include
their respective heirs, executors and
administrators.
39
Exhibit H
PROPOSED AMENDMENT AND RESTATEMENT OF THE RESTATED
CERTIFICATE OF INCORPORATION OF SEABOARD CORPORATION
RESTATED CERTIFICATE OF INCORPORATION
OF
SEABOARD CORPORATION
It is hereby certified:
FIRST: 1. The present name of the corporation
(hereinafter called the "Corporation") is SEABOARD
CORPORATION.
2. The name under which the Corporation was
originally incorporated is HATHAWAY BAKERIES, INC., and
the date of filing the original Certificate of
Incorporation of the Corporation with the Secretary of
State of the State of Delaware is July 24, 1946.
SECOND: The provisions of the Certificate of
Incorporation of the Corporation, as heretofore amended
and/or supplemented, hereby are further amended and
hereby are restated and integrated into the single
instrument which is hereinafter set forth, and which is
entitled "Restated Certificate of Incorporation of
Seaboard Corporation."
THIRD: The Board of Directors of the Corporation
proposed, and the Stockholders of the Corporation
adopted, this Restated Certificate of Incorporation
pursuant to the provisions of Sections 242 and 245 of
the General Corporation Law of the State of Delaware in
the form set forth as follows:
1. The present name of the corporation (hereinafter
called the "Corporation") is SEABOARD CORPORATION.
2. The principal office of the Corporation in the
State of Delaware is located at the offices of its
resident agent, in the City of Wilmington, County of
New Castle. The name and address of its resident agent
is Corporation Service Company, 2711 Centerville Road,
Suite 400, Wilmington, Delaware 19808.
3. The purpose of the Corporation is to engage in any
lawful act or activity for which corporations may be
organized under the General Corporation Law of
Delaware.
40
4. The total number of shares which the Corporation
shall have authority to issue is four million
(4,000,000) shares of common stock of the par value of
$1 per share.
5. In furtherance, and not in limitation of the
powers conferred by statute, the Board of Directors is
authorized to adopt, amend or repeal the By-Laws of the
Corporation.
6. To the fullest extent permitted by applicable law,
the Corporation shall indemnify and reimburse each
Director and officer of the Corporation, and each
person who is or was serving at the request of the
Corporation as a director or officer of another
corporation partnership, joint venture, trust, limited
liability company or other enterprise, for and against
all liabilities and expenses imposed upon or reasonably
incurred by him or her in connection with any action,
suit or proceeding which he or she may be involved or
with which he or she may be threatened by reason of his
or her being or having been a Director or officer of
the Corporation or of his or her being or having been a
director or officer of another corporation,
partnership, joint venture, trust, limited liability
company or other enterprise at the request of the
Corporation. The right of indemnification and
reimbursement of each such person shall continue
whether or not he or she continues to be such Director
or officer at the time such liabilities or expenses are
imposed upon or incurred by him or her and shall
include, without being limited to, attorneys' fees,
court costs, judgments and compromise settlements. The
right of reimbursement for liabilities and expenses so
imposed or incurred shall include the right to receive
such reimbursement in advance of the final disposition
of any such action, suit or proceeding upon the
Corporation's receipt of an undertaking by or on behalf
of such Director or officer to repay such amount if it
shall be ultimately determined that he or she is not
entitled to be indemnified by the Corporation pursuant
to law or this paragraph.
Notwithstanding the foregoing, the
Corporation shall be required to indemnify a person
otherwise entitled to indemnification under this
Certificate of Incorporation in connection with a
proceeding (or part thereof) commenced by such person
only if the commencement of such proceeding (or part
thereof) by such person was authorized in advance by
the Board of Directors.
The rights of indemnification and
reimbursement hereby provided shall not be exclusive of
other rights to which any Director or officer may be
entitled. As used in this article the terms "Director"
and "officer" shall include their respective heirs,
executors and administrators.
7. Meetings of stockholders may be held without the
State of Delaware if the By-Laws so provide. The books
of the Corporation may be kept (subject to any
provision contained in the statutes) outside of the
State of Delaware at such place or places as may be
from time to time designated by the Board of Directors
or in the By-Laws of the Corporation. Elections of
Directors need not be by ballot unless the By-Laws
shall otherwise provide.
8. No Director shall be personally liable to the
Corporation or its stockholders for monetary damages
for any breach of fiduciary duty by such Director as a
director.
41
Notwithstanding the foregoing sentence, a
Director shall be liable to the extent provided by
applicable law (i) for breach of the Director's duty of
loyalty to the Corporation or its stockholders;
(ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation
of law; (iii) pursuant to Section 174 of the Delaware
General Corporation Law; or (iv) for any transaction
from which the Director derived an improper personal
benefit. Neither the amendment nor repeal of this
article, nor the adoption of any provision of the
Certificate of Incorporation inconsistent with this
article shall eliminate or reduce the effect of this
article in respect of any matter occurring, or any
cause of action, suit or claim that, but for the
article, would accrue or arise, prior to such
amendment, repeal or adoption of an inconsistent
provision.
9. The Corporation reserves the right to amend,
alter, change or repeal any provision contained in this
Certificate of Incorporation in the manner now or
hereafter prescribed by statute, and all rights
conferred upon stockholders herein are granted subject
to this reservation.
IN WITNESS WHEREOF, said Seaboard Corporation has
caused this Certificate to be signed by H. Harry
Bresky, its President, and attested by David M. Becker,
its Secretary, this ____ day of April, 2006.
SEABOARD CORPORATION
By:
H. Harry Bresky, President
Attest:
David M. Becker, Secretary
42
SEABOARD CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS - APRIL 24, 2006
The undersigned hereby appoints H. Harry Bresky and
Robert L. Steer and each of them, proxies with full
power of substitution, to vote as designated below, on
behalf of the undersigned all shares of Stock which the
undersigned may be entitled to vote at the Annual
Meeting of Stockholders of Seaboard Corporation (the
"Company") on April 24, 2006, and any adjournments
thereof, with all power that the undersigned would
possess if personally present. In their discretion, the
proxies are hereby authorized to vote upon such other
business as may properly come before the meeting and
any adjournments or postponements thereof.
This Proxy will be voted in accordance with
specification made. If no choices are indicated, this
proxy will be voted FOR all listed nominees and FOR all
proposals listed below.
A. ELECTION OF DIRECTORS
1. The Board of Directors recommends a vote FOR the
listed nominees.
For Withhold For Withhold
H. Harry Bresky [] [] Douglas W. Baena [] []
Steven J. Bresky [] [] Kevin M. Kennedy [] []
David A. Adamsen [] [] Joe E. Rodrigues [] []
B. PROPOSALS
The Board of Directors recommends a vote FOR the
following proposals.
2. Ratify the appointment of KPMG LLP as independent
auditors of the Company
[] FOR [] AGAINST [] ABSTAIN
3. Approval of the a proposed amendment to and
restatement Article Third, Section 3 of the
Company's Seaboard's Restated Certificate of
Incorporation (relating to authorized business
purposes)
[] FOR [] AGAINST [] ABSTAIN
(to be signed on reverse)
4. Approval of a proposed amendment to Article Third,
Section 4 of Seaboard's Restated Certificate of
Incorporation (relating to pre-emptive rights and
conversion rights)
[] FOR [] AGAINST [] ABSTAIN
5. Approval of a proposed amendment to Article Third,
Section 5 of Seaboard's Restated Certificate of
Incorporation (relating to Seaboard's perpetual
existence)
[] FOR [] AGAINST [] ABSTAIN
6. Approval of a proposed amendment to Article Third,
Section 6 of Seaboard's Restated Certificate of
Incorporation (relating to insulation of stockholders
from Seaboard's debts)
[] FOR [] AGAINST [] ABSTAIN
7. Approval of a proposed amendment to Article Third,
Section 7 of Seaboard's Restated Certificate of
Incorporation (relating to the powers of the Board of
Directors)
[] FOR [] AGAINST [] ABSTAIN
8. Approval of a proposed amendment to Article Third,
Section 8 of Seaboard's Restated Certificate of
Incorporation (relating to a director's self-interest
in transactions)
[] FOR [] AGAINST [] ABSTAIN
9. Approval of a proposed amendment to Article Third,
Section 8 of Seaboard's Restated Certificate of
Incorporation (relating to indemnification of directors
and officers)
[] FOR [] AGAINST [] ABSTAIN
10. Approval of a proposed amendment and restatement
of Seaboard's Restated Certificate of Incorporation
[] FOR [] AGAINST [] ABSTAIN
PLEASE MARK (ON REVERSE SIDE), SIGN, DATE AND RETURN
THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
Please sign exactly as name appears hereon. When shares
are held by joint tenants, both should sign. When
signing as attorney, executor, trustee or other
representative capacity, please give full title as
such. If a corporation, please sign in full corporate
name by President or other authorized officer.
The signer hereby revokes all proxies heretofore given
to vote at said meeting or any adjournment thereof.
Signature of Stockholder
Signature of Stockholder
Date:__________________, 2006.
2