DEF 14A 1 proxy01a.txt THE 2001 PROXY STATEMENT SEABOARD CORPORATION 9000 West 67th Street Shawnee Mission, Kansas 66202 NOTICE OF ANNUAL MEETING OF STOCKHOLDERS APRIL 23, 2001 Notice is hereby given that the 2001 Annual Meeting of Stockholders of Seaboard Corporation, a Delaware corporation, will be held at the Sheraton Newton Hotel, 320 Washington Street, Newton, Massachusetts, on Monday, the 23rd day of April, 2001, at 10 o'clock in the forenoon for the following purposes: 1. To elect five Directors of the Company. 2. To consider and act upon the selection of KPMG LLP as independent auditors of the Company. 3. To transact any other business which may properly come before the meeting, or any adjournment thereof. The close of business on Friday, March 2, 2001, has been fixed as the record date for determination of stockholders entitled to notice of, and to vote at, the Annual Meeting. The books for the transfer of stock will not be closed. If you do not expect to be present personally at the Annual Meeting, please sign, date and return the enclosed proxy in the enclosed addressed envelope. By order of the Board of Directors, MARSHALL L. TUTUN, Secretary March 9, 2001 SEABOARD CORPORATION 9000 West 67th Street Shawnee Mission, Kansas 66202 PROXY STATEMENT ANNUAL MEETING OF STOCKHOLDERS APRIL 23, 2001 March 9, 2001 This Proxy Statement is furnished in connection with the solicitation of proxies to be used at the Annual Meeting of Stockholders of Seaboard Corporation (the "Company") to be held on April 23, 2001, and at any adjournment thereof, for the purposes set forth in the foregoing Notice of Annual Meeting. The close of business on Friday, March 2, 2001, has been fixed as the record date for the determination of stockholders entitled to notice of, and to vote at, the Annual Meeting, and at any adjournment thereof. This Proxy Statement is first being sent to stockholders on or about March 22, 2001. The consolidated financial statements of the Company for the fiscal year ended December 31, 2000, together with corresponding consolidated financial statements for the fiscal year ended December 31, 1999, are contained in the Annual Report which is mailed to stockholders herewith. Proxies in the form enclosed are solicited by the Board of Directors of the Company. Any stockholder giving a proxy in the enclosed form has the power to revoke it at any time before it is exercised. A stockholder's right to revoke his or her proxy is not limited by, or subject to, compliance with any specified formal procedure. He or she may revoke his or her proxy by delivering a written revocation or a duly executed proxy bearing a later date, or by attending the meeting and voting in person. A proxy in such form, if received in time for voting and not revoked, will be voted at the Annual Meeting in accordance with the direction of the stockholder. Where a choice is not so specified, the shares represented by the proxy will be voted "for" the election of the nominees for Director listed herein and "for" ratification of the selection of KPMG LLP as independent auditors of the Company. The Board of Directors does not know of any matters which will be brought before the meeting other than those specifically set forth in the Notice of Annual Meeting. However, if any other matter properly comes before the meeting, it is intended that the persons named in the enclosed form of proxy, or their substitutes acting thereunder, will vote on such matter in accordance with their best judgment. Votes cast at the Annual Meeting will be tabulated by persons duly appointed to act as inspectors of election for the Annual Meeting. The inspectors of election will treat shares represented by a properly signed and returned proxy as present at the Annual Meeting for purposes of determining a quorum, without regard to whether the proxy is marked as casting a vote or abstaining. Likewise, the inspectors of election will treat shares of stock represented by "broker non-votes" as present for purposes of determining a quorum. Broker non-votes are proxies with respect to shares held in record name by brokers or nominees, as to which (i) instructions have not been received from the beneficial owners or persons entitled to vote, (ii) the broker or nominee does not have discretionary voting power under applicable national securities exchange rules or the instrument under which it serves in such capacity, and (iii) the record holder has indicated on the proxy card or otherwise notified the Company that it does not have authority to vote such shares on that matter. A favorable plurality of votes cast is necessary to elect members of the Board of Directors. Accordingly, abstentions or broker non-votes as to the election of Directors will not affect the election of the candidates receiving the plurality of votes. The remaining proposals set forth herein require the affirmative vote of the majority of the shares present. Shares represented by broker non-votes as to such matters are treated as not being present for the purposes of such matters, while abstentions as to such matters are treated as being present but not voting in the affirmative. Accordingly, the effect of broker non-votes is only to reduce the number of shares considered to be present for the consideration of such matters, while abstentions will have the same effect as votes against the matter. The Company will bear all expenses in connection with the solicitation of proxies, including preparing, assembling, and mailing of the Proxy Statement. The Company had 1,487,519.75 shares of Common Stock, $1.00 par value, outstanding and entitled to vote as of March 2, 2001. A majority, or 743,760 of such shares, constitutes a quorum for the Annual Meeting. PRINCIPAL STOCKHOLDERS The following table sets forth the number of shares of the Company's Common Stock beneficially owned by stockholders owning more than five percent of such Common Stock as of January 31, 2001. Unless otherwise indicated, all beneficial ownership consists of sole voting and sole investment power. Name and Address Percent of Beneficial Owner Amount of Stock of Class Seaboard Flour Corporation(1) 1,120,511.75 75.3 822 Boylston Street Suite 301 Chestnut Hill, MA 02467 Dimensional Fund Advisors Inc.(2) 106,710.00 7.2 1299 Ocean Avenue 11th Floor Santa Monica, CA 90401 (1)Mr. H. Harry Bresky, President and Chief Executive Officer of the Company, and other members of the Bresky family, including trusts created for their benefit, have beneficial ownership of 215,103.83 shares, or 94.9%, of the Common Stock of Seaboard Flour Corporation. Such family members in addition have beneficial ownership of a total of 34,515 shares, or 2.3%, of the Company's Common Stock which is not included in the amount owned by Seaboard Flour Corporation. Because of such ownership of Common Stock of Seaboard Flour Corporation by the Bresky family, Mr. H. Harry Bresky may be deemed to have indirect beneficial ownership of the Common Stock of the Company held by Seaboard Flour Corporation. (2)Beneficial ownership by Dimensional Fund Advisors Inc. ("Dimensional") is based on a Schedule 13G that was filed with the Securities and Exchange Commission on February 2, 2001. According to the Schedule 13G, Dimensional furnishes investment advice to four investment companies and serves as investment manger to certain other trusts and accounts which own these securities. Dimensional disclaims beneficial ownership of these securities. ITEM 1: ELECTION OF DIRECTORS In February 2001, the Board of Directors increased the number of Directors from four to five and elected Mr. Douglas W. Baena as the fifth Board Member. Mr. Baena was also elected as a Member of the Audit Committee to fill the vacancy created by the resignation of Mr. Joe E. Rodrigues from the committee. Unless otherwise specified, proxies will be voted in favor of the election as Directors of the following five persons for a term of one year and until their successors are elected and qualified. All nominees are currently Directors. Mr. H. Harry Bresky has served as a Director continuously since 1959, and was reelected by the stockholders at the last annual meeting. Mr. H. Harry Bresky is the father of Mr. Steven J. Bresky. Mr. Joe E. Rodrigues has served as a Director since 1990 and was reelected by the stockholders at the last annual meeting. Mr. Thomas J. Shields has served as a Director since 1992 and was reelected by the stockholders at the last annual meeting. Mr. David A. Adamsen has served as Director since 1995 and was reelected by the stockholders at the last annual meeting. Mr. Baena was elected to the Board of Directors in February 2001 as described above. There are no arrangements or understandings between any nominee and any other person pursuant to which such nominee was nominated. As of January 31, 2001, the five nominees beneficially owned securities of the Company in the amounts shown: Amount of Stock(1) Common Percent Name Principal Occupations and Positions Stock of Class H.Harry Bresky Director, Chairman of the Board, 5,611(2) 0.377 Age 75 President and Chief Executive Officer, Seaboard Corporation; President, Treasurer and Director, Seaboard Flour Corporation. Joe E. Rodrigues Director (since 1990); Former Executive 200 0.013 Age 64 Vice President and Treasurer (retired February 2001), Seaboard Corporation. Thomas J. Shields Director and Chairman of Audit Committee 39 0.003 Age 53 (since 1992), Seaboard Corporation; President (since 1991), Shields & Company, Inc., investment banking firm; Director (since 1999), Clean Harbors Environmental Services, Inc., environmental services company; Director (since 1997), B.J.'s Wholesale Club, Inc., warehouse merchandising company; Director (since 1996), Versar, Inc., environmental consulting company. David A. Adamsen Director and Member of Audit Committee 20 0.001 Age 49 (since 1995), Seaboard Corporation; Vice President - Sales and Marketing, Northeast Region (since 1999), Vice President of Special Projects (1998 to 1999), Dean Foods Company, dairy specialty-food processor and distributor; President and General Manager (1986 to 1998), Penny Curtiss Baking Co., bakery processing plant; Vice President - Manufacturing (1994 to 1998), The Penn Traffic Co., retail and wholesale food distribution company.(3) Douglas W. Baena Director and Member of Audit Committee 0 0 Age 58 (since February 2001), Seaboard Corporation; Chief Executive Officer (since 1999), Ameristar Capital Corporation, financial services company; Chief Executive Officer (1997-1999), CreditAmerica Inc., venture capital company; Chief Executive Officer (1994-1997), Mako Marine International, manufacturing company. Beneficial ownership of all Directors and executive officers as a group (10 individuals). 8,658(4) 0.582 (1)The number of shares shown in this table does not include indirect beneficial ownership of Common Stock of the Company attributable to Mr. H. Harry Bresky's ownership of Seaboard Flour Corporation stock as more fully described under the Principal Stockholders section herein. 101,785.25 shares of Seaboard Flour Corporation stock are held in various Trusts for the benefit of Mr. Bresky's issue. Except for certain annuities to be received from certain of the Trusts, Mr. Bresky disclaims any beneficial ownership of these shares. (2)These shares exclude 5,285 shares (0.4% of the class) held by Mr. H. Harry Bresky's wife, and annuities to be received by her from certain of the trusts referred to in (1) above, as to which Mr. Bresky disclaims any beneficial interest. (3)On March 1, 1999, The Penn Traffic Co. announced that it had filed in the Bankruptcy Court for the District of Delaware a petition for relief under Chapter 11 of the United States Bankruptcy Code. (4)In addition to the ownership of shares by the individuals shown in this table, these shares include 2,538 shares (0.2% of class) owned by Mr. Steven J. Bresky and 250 shares (0.02% of class) owned by Mr. Robert L. Steer. No other executive officer named in the Executive Compensation and Other Information section herein owns any shares. In case any person or persons named herein for election as Directors are not available for election at the Annual Meeting, proxies may be voted for a substitute nominee or nominees, as well as for the balance of those named herein. Management has no reason to believe that any of the nominees for the election as Director will be unavailable. COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS The Board of Directors held 16 meetings in fiscal 2000, 11 of which were telephonic meetings. Other actions of the Board of Directors were taken by unanimous written consent as needed. The Audit Committee held five meetings in fiscal 2000, three of which were telephonic meetings. Each Director attended more than 75% of the aggregate of the total number of meetings of the Board of Directors and the total number of meetings held by all committees of the Board on which he served. The Company has no nominating or compensation committee. Each non-employee Director receives $7,500 quarterly and an additional $2,000 per meeting of the Audit Committee of the Board (excluding telephonic meetings). AUDIT COMMITTEE REPORT The Audit Committee of the Company is comprised of three independent directors, as defined by the American Stock Exchange, and operates under a written charter adopted by the Board of Directors (Exhibit A). The Audit Committee has reviewed and discussed the audited financial statements for fiscal year 2000 with management and with the independent auditors, including matters required to be discussed by Statement on Auditing Standards No. 61, "Communication with Audit Committees," as amended. The Audit Committee has reviewed the independent auditors' fees for audit and non-audit services for fiscal year 2000. The Audit Committee considered whether such non-audit services are compatible with maintaining independent auditor independence. Such fees were $712,418 for audit, $34,170 for financial information design and implementation, and $879,235 for all other. The Audit Committee has received the written disclosures and the letter from the independent auditors required by Independence Standards Board Standard No. 1, "Independence Discussions with Audit Committees," as amended, and have discussed with the independent auditors their independence. Based on its review of the audited financial statements and the various discussions noted above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company's Annual Report on Form 10- K for the fiscal year ended December 31, 2000. The foregoing has been furnished by the Audit Committee: Thomas J. Shields (chair) David A. Adamsen Douglas W. Baena EXECUTIVE COMPENSATION AND OTHER INFORMATION The following table shows all compensation earned, during the fiscal years indicated, by the Chief Executive Officer and the four other highest paid executive officers of the Company (the "Named Executive Officers") for such period in all capacities in which they have served: SUMMARY COMPENSATION TABLE Annual Compensation Name Other(3) (4) and (1) (2) Annual All Other Principal Salary Bonus Compensation Compensation Position Year ($) ($) ($) ($) H. Harry Bresky 2000 700,000 600,000 30,900 5,100 President 1999 650,000 500,000 49,228 4,800 (Chief Executive Officer) 1998 603,399 400,000 46,651 4,800 Joe E. Rodrigues 2000 520,668 275,000 17,169 5,100 Executive Vice President 1999 494,697 250,000 29,551 4,800 and Treasurer 1998 484,308 225,000 27,509 4,800 (retired February 2001) Rick J. Hoffman 2000 381,500 225,000 11,775 5,100 Vice President 1999 355,538 200,000 19,551 4,800 1998 338,279 175,000 20,123 4,800 Steven J. Bresky 2000 326,212 200,000 8,616 5,100 Vice President 1999 274,020 150,000 15,017 4,800 1998 266,888 175,000 13,372 4,800 Robert L. Steer 2000 302,654 225,000 9,410 5,100 Vice President 1999 251,692 200,000 12,385 4,800 Chief Financial Officer 1998 227,998 150,000 8,428 4,800 (1)Salary includes amounts deferred at the election of the Named Executive Officers under the Company's 401(k) retirement savings plan. (2)Reflects bonus earned for each fiscal year presented. For 2000, amounts include compensation reduced at the election of the Named Executive Officers under the Company's Investment Option Plan described herein. For 1999, includes amount of Mr. H. Harry Bresky's bonus deferred under the Executive Deferred Compensation Plan described herein. (3)Other Annual Compensation earned represents benefits under the Supplemental Executive Benefit Plan described herein. (4)All Other Compensation represents the Company contributions to the Company's 401(k) retirement savings plan on behalf of the Named Executive Officers. Excludes perquisites and other benefits, unless the aggregate amount of such compensation exceeds the lesser of either $50,000 or 10% of the total of annual salary and bonus reported for the Named Executive Officer. RETIREMENT PLANS Executive Retirement Plan. The Seaboard Corporation Executive Retirement Plan (the "Executive Retirement Plan") provides retirement benefits for a select group of officers and managers including the Named Executive Officers. Effective January 1, 1997, the Executive Retirement Plan provides that participants will accrue a benefit in an amount equal to 2.5% of the final average remuneration (salary plus bonus) of the participant multiplied by the years of service from January 1, 1997, reduced by the amount such participant has accrued under the Seaboard Corporation Pension Plan (described below) available to all full time employees of the Company, which benefit is payable beginning at normal retirement. Benefits under the plan are unfunded. As of December 31, 2000, all of the Named Executive Officers are fully vested and have three years of service as defined in the Executive Retirement Plan. Under this Plan, the automatic form of benefit payment, for a married participant, is pursuant to a "50% Joint and Survivor Annuity." This means the participant will receive a monthly annuity benefit for his/her lifetime and an eligible surviving spouse shall receive a lifetime annuity equal to 50% of the participant's benefit. The automatic form of benefit payment for an unmarried participant is pursuant to a "Single Life Annuity." The Plan allows for optional forms of payment under certain circumstances. The table below shows annual benefits by remuneration and years of service beginning with fiscal 1997. EXECUTIVE RETIREMENT PLAN TABLE YEARS OF SERVICE FROM JANUARY 1, 1997 REMUNERATION 15 20 25 30 35 $ 125,000 28,000 37,300 46,500 55,900 65,200 $ 150,000 33,100 44,000 55,100 66,000 77,100 $ 175,000 38,900 51,900 64,900 77,900 90,800 $ 200,000 48,300 64,400 80,500 96,600 112,700 $ 225,000 57,700 76,900 96,100 115,400 134,600 $ 250,000 67,100 89,400 111,800 134,100 156,500 $ 300,000 85,800 114,400 143,000 171,600 200,200 $ 400,000 123,300 164,400 205,500 246,600 287,700 $ 450,000 142,100 189,400 236,800 284,100 331,500 $ 500,000 160,800 214,400 268,000 321,600 375,200 Frozen Executive Retirement Plan Benefit. Mr. H. Bresky is 100% vested in an Executive Retirement Plan frozen effective December 31, 1996 in which he has accrued an annual benefit of $22,500 upon his retirement. Under this Plan, the automatic form of benefit payment is pursuant to a "Ten-year Certain and Continuous Annuity." This means Mr. Bresky will receive a monthly annuity benefit for his lifetime and should Mr. Bresky die while in the ten-year certain period, the balance of the ten-year benefit will be paid to his designated beneficiary. If Mr. Bresky dies while employed by the Company or after retirement, but before the commencement of benefits, monthly payments shall be made to Mr. Bresky's beneficiary in the form of a 100% joint and survivor benefit. The Plan allows for optional forms of payment under certain circumstances. Seaboard Corporation Pension Plan. The Seaboard Corporation Pension Plan (the "Plan") provides defined benefits for its domestic salaried and clerical employees. Beginning in fiscal 1997, each of the individuals named in the Summary Compensation Table participates in the Plan. Benefits under the Plan are generally based upon the number of years of service and a percentage of final average remuneration (salary plus bonus) but are limited by federal law. As of December 31, 2000, all of the Named Executive Officers are fully vested and have three years of service as defined in the Plan. Under the Plan, the automatic form of benefit payment, for a married participant, is pursuant to a "50% Joint and Survivor Annuity." This means the participant will receive a monthly annuity benefit for his/her lifetime and an eligible surviving spouse shall receive a lifetime annuity equal to 50% of the participant's benefit. The automatic form of benefit payment for an unmarried participant is pursuant to a "Single Life Annuity." The Plan allows for optional forms of payment under certain circumstances. The table below shows benefits by remuneration and years of service. PENSION PLAN TABLE YEARS OF SERVICE FROM JANUARY 1, 1997 REMUNERATION 15 20 25 30 35 $ 125,000 18,900 25,200 31,600 37,900 44,200 $ 150,000 23,200 31,000 38,700 46,500 54,200 $ 175,000 26,700 35,600 44,500 53,400 62,300 $ 200,000 26,700 35,600 44,500 53,400 62,300 $ 225,000 26,700 35,600 44,500 53,400 62,300 $ 250,000 26,700 35,600 44,500 53,400 62,300 $ 300,000 26,700 35,600 44,500 53,400 62,300 $ 400,000 26,700 35,600 44,500 53,400 62,300 $ 450,000 26,700 35,600 44,500 53,400 62,300 $ 500,000 26,700 35,600 44,500 53,400 62,300 Frozen Retirement Plan. Each of the Named Executive Officers in the Summary Compensation Table is 100% vested under a certain defined benefit plan which was frozen at December 31, 1993. A definitive actuarial determination of the benefit amounts was made in 1995. The annual amounts payable upon retirement after attaining age 62 under this predecessor defined benefit plan are as follows: H. Bresky $120,108, Rodrigues $61,602, Hoffman $32,063, S. Bresky $32,796 and Steer $15,490. Under this Plan, the automatic form of benefit payment, for a married participant, is pursuant to a "Ten-year Certain and Continuous Annuity." This means the participant will receive a monthly annuity benefit for his/her lifetime and should the participant die while in the ten- year certain period, the balance of the ten-year benefit will be paid to his/her designated beneficiary. If the participant dies while employed by the Company or after retirement, but before the commencement of benefits, monthly payments shall be made to the participants beneficiary for a period of ten years. The Plan allows for optional forms of payment under certain circumstances. Supplemental Retirement Plans. The Supplemental Executive Benefit Plan, formerly the Supplemental Executive Retirement Plan, provides for discretionary investment options under the Investment Option Plan, described below, for 2000 and cash compensation for 1999 and 1998 in an amount equal to 3% of a participant's annual compensation in excess of $170,000 for 2000 and $160,000 for 1999 and 1998. Additionally, the amounts paid pursuant to this plan for 1999 and 1998 are grossed up to cover 100% of a participant's estimated income tax liability on the benefit. The amounts of benefits payable, including the gross up for taxes, under the Supplemental Executive Benefit Plan is reported in the Summary Compensation Table herein. In addition to the Supplemental Executive Benefit Plan, the Company has agreed to provide a supplementary pension benefit to Messrs. H. Bresky and Rodrigues. Mr. Rodrigues is entitled to a supplementary annual pension equal to 4% of his total compensation (base compensation and all prescribed allowances and bonuses) during his employment with the Company. Mr. Rodrigues retired in February 2001 and is entitled to receive annual estimated benefits for his lifetime of $370,465 under this supplementary plan. During his retirement, the benefit will increase annually based on the change in the Consumer Price Index. Mr. H. Bresky is entitled to a supplementary annual pension in the amount of $410,088 per year. Under this Plan, the automatic form of benefit payment is pursuant to a "Ten-year Certain and Continuous Annuity." This means Mr. Bresky will receive a monthly annuity benefit for his lifetime and should Mr. Bresky die while in the ten-year certain period, the balance of the ten-year benefit will be paid to his designated beneficiary. If Mr. Bresky dies while employed by the Company or after retirement, but before the commencement of benefits, monthly payments shall be made to Mr. Bresky's beneficiary for a period of ten years. Under these plans, payment of benefits commences with the executive's retirement from the Company. Investment Option Plan. The Investment Option Plan allows executives to reduce their compensation in exchange for options to buy shares of certain mutual funds. In addition, the Company may grant discretionary investment options under the Investment Option Plan, which do not require a reduction to executive compensation. The exercise price for each investment option is established based upon the fair market value of the underlying investment at the date of grant. Executive Deferred Compensation Plan. The Executive Deferred Compensation Plan requires the deferral of salary and bonus on a pre-tax basis for executives whose compensation exceeds the maximum allowable deductible amount under Section 162(m) of the Code ($1 million for 2000 and 1999). None of the benefits payable under the aforementioned plans contain an offset for social security benefits. REPORT OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION The following information is to provide shareholders and other interested parties with a clear understanding of the Company's philosophy regarding executive compensation and to provide insight behind fundamental compensation decisions. The Company maintains the philosophy that determination of compensation for its executive officers by the Board of Directors is primarily based upon a recognition that these officers are responsible for implementing the Company's long-term strategic objectives. The Company's goals with respect to its executive compensation policies described below are to attract and retain top executive employees. Base compensation, increases thereto and bonus compensation for executive officers as presented in the Summary Compensation Table herein are determined by the following factors: Competitive compensation ranges at or above the 50th percentile of a select group of comparable firms. This group is comprised of comparable sized firms in the food processing, and grain industries. While this group contains some of the same firms listed in the peer group index in the total return graphs herein, it is not identical. The diversity and complexity of the Company's businesses. Compensation decisions for the Chief Executive Officer and other executive officers are not principally based on Company performance. As Chief Executive Officer, Mr. H. Harry Bresky's base compensation and bonus are also determined based on a survey of the select group of firms referenced above. An analysis of the data presented in this survey shows that the typical base compensation for Chief Executive Officers of these entities is comparable at about the 50th percentile to the base compensation and bonus paid to Mr. H. Harry Bresky. Discretionary bonuses for executive officers, including the Chief Executive Officer, may not exceed 100% of each executive's base compensation. Pursuant to Section 162(m) of the Internal Revenue Code, compensation in excess of $1 million paid to Mr. Bresky in 2000 and 1999 is not deductible by the Company. The Board of Directors has considered the effect of Section 162(m) of the Code on the Corporation's executive compensation. As such, to assure that the Corporation does not lose deductions for compensation paid, the Board of Directors has adopted the Executive Deferred Compensation Plan described above, requiring the executive to defer receipt of any compensation in excess of $1 million that is not deductible. In 2000, no deferral was required as Mr. Bresky elected under the Investment Option Plan to reduce his compensation below $1 million. The foregoing report has been furnished by the Board of Directors: H. Harry Bresky Joe E. Rodrigues Thomas J. Shields David A. Adamsen COMPANY PERFORMANCE The Securities and Exchange Commission requires a five-year comparison of stock performance for the Company with that of an appropriate broad equity market index and similar industry index. The Company's Common Stock is traded on the American Stock Exchange, and one appropriate comparison is with the American Stock Exchange Market Value Index performance. Because there is no single industry index to compare stock performance, the companies comprising the Dow Jones Food and Marine Transportation Industry indices were chosen as the second comparison. The following graph shows a five-year comparison of cumulative total return for the Company, the American Stock Exchange Market Value Index and the companies comprising the Dow Jones Food and Marine Transportation Industry indices weighted by market capitalization for the five fiscal years commencing December 31, 1995, and ending December 31, 2000. COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG SEABOARD CORPORATION, AMERICAN STOCK EXCHANGE MARKET VALUE INDEX, AND DOW JONES FOOD AND MARINE TRANSPORTATION INDUSTRY INDICES Seaboard Industry American Stock Exchange Corporation Index* Market Value Index 12/31/00 59 148 179 12/31/99 73 130 174 12/31/98 159 158 136 12/31/97 165 161 127 12/31/96 99 117 102 12/31/95 100 100 100 * Industry Index: A weighted average by market capitalization of the companies comprising the Dow Jones Food and Marine Transportation Industry indices. The total cumulative return assumes that the value of the investment in the Company's Common Stock and each index was $100 on December 31, 1995, and that all dividends were reinvested. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The Board of Directors has no compensation committee. Messrs. H. Bresky and Rodrigues are members of the Board of Directors of the Company and participate in decisions by the Board regarding executive compensation. During the Company's fiscal year ended December 31, 2000, the Company and Seaboard Flour Corporation were indebted to each other in varying amounts. Advances due from Seaboard Flour Corporation to the Company bear interest at the prime lending rate while advances due to Seaboard Flour Corporation from the Company bear interest at the Company's short-term borrowing rate. The largest net amount outstanding from the Company to Seaboard Flour Corporation during the year was $16,922 at January 29, 2000. The largest net amount outstanding from Seaboard Flour Corporation to the Company during the year was $4,971,103 at October 28, 2000. The net amount outstanding at January 27, 2001, was from Seaboard Flour Corporation to the Company in the amount of $6,097,952. Such borrowings were primarily used for working capital purposes. ITEM 2: SELECTION OF INDEPENDENT AUDITORS The persons named in the accompanying proxy intend, unless otherwise instructed, to vote the proxies to ratify the selection of KPMG LLP, certified public accountants, as independent auditors of the Company for the next fiscal year. The selection of this firm has been recommended by the Audit Committee of the Board of Directors of the Company. The Company has been advised by such firm that neither it nor any member or associate has any relationship with the Company or with any of its affiliates other than as independent accountants and auditors. Submission to the stockholders of the selection of auditors is not required by the By-Laws, and the Directors would vote to select KPMG LLP as independent auditors of the Company even if not approved by the stockholders. Representatives of KPMG LLP will be present at the Annual Meeting with the opportunity to make any statement desired and will be available to answer questions from stockholders. OTHER MATTERS The notice of meeting provides for the election of Directors, the selection of independent auditors and for the transaction of such other business as may properly come before the meeting. As of the date of this Proxy Statement, the Board of Directors does not intend to present to the meeting any other business, and it has not been informed of any business intended to be presented by others. However, if any other matters properly come before the meeting, the persons named in the enclosed proxy will take action and vote proxies, in accordance with their judgment of such matters. Action may be taken on the business to be transacted at the meeting on the date specified in the notice of meeting or on any date or dates to which such meeting may be adjourned. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Based solely on a review of the copies of reports furnished to the Company and written representations that no other reports were required, the Company believes that during fiscal 2000 all reports of ownership required under Section 16(a) of the Securities Exchange Act of 1934 for Directors and executive officers of the Company and beneficial owners of more than 10% of the Company's Common Stock have been timely filed, with one exception. David Adamsen, filed a Form 4 late to report one purchase of 20 shares of Company stock. STOCKHOLDER PROPOSALS Any stockholder proposals for consideration at next year's annual meeting of stockholders must be received by the Company at its executive offices, 9000 West 67th Street, Shawnee Mission, Kansas 66202, no later than November 9, 2001, except that if the next year's annual meeting date is changed by more than 30 calendar days from the regularly scheduled date, the Company must receive such a proposal within a reasonable time before the Board of Directors makes its proxy solicitation. ADDITIONAL INFORMATION Any stockholder desiring additional information about the Company and its operations may, upon written request, obtain a copy of the Company's Annual Report to the Securities and Exchange Commission on Form 10-K without charge. Requests should be directed to Shareholder Relations, Seaboard Corporation, 9000 West 67th Street, Shawnee Mission, Kansas 66202. The Company's Annual Report to the Securities and Exchange Commission on Form 10-K is also available on the Company's Internet website at www.seaboardcorp.com. APPENDIX A Seaboard Corporation Charter of the Audit Committee of the Board of Directors I. Audit Committee Purpose The Audit Committee is appointed by the Board of Directors to assist the Board in fulfilling its oversight responsibilities. The Audit Committee's primary duties and responsibilities are to: Monitor the integrity of the Company's financial reporting process and systems of internal controls regarding finance, accounting, and legal compliance. Monitor the independence and performance of the Company's independent auditors and internal auditing department. Provide an avenue of communication among the independent auditors, management, the internal auditing department, and the Board of Directors. The Audit Committee has the authority to conduct any investigation appropriate to fulfilling its responsibilities, and it has direct access to the independent auditors as well as anyone in the organization. The Audit Committee has the ability to retain, at the Company's expense, special legal, accounting or other consultants or experts it deems necessary in the performance of its duties. II. Audit Committee Composition and Meetings Audit Committee members shall meet the requirements of the National Association of Securities Dealers / American Stock Exchange. The Audit Committee shall be comprised of three or more directors as determined by the Board, each of whom shall be an independent nonexecutive director, free from any relationship that would interfere with the exercise of his or her independent judgement. All members of the Committee shall have a basic understanding of finance and accounting and be able to read and understand fundamental financial statements, and at least one member of the Committee shall have accounting or related financial management expertise. Audit Committee members shall be appointed by the Board. If an audit committee Chair is not designated or present, the members of the Committee may designate a Chair by majority vote of the Committee membership. The Committee shall meet at least four times annually, either in person or telephonically, or more frequently as circumstances dictate. The Audit Committee Chair shall prepare and/or approve an agenda in advance of each meeting. The Committee should meet privately in executive session at least annually with management, the director of the internal auditing department, the independent auditors, and as a committee to discuss any matters that the Committee or each of these groups believe should be discussed. In addition, the Committee, or at least its Chair, should communicate with management and the independent auditors quarterly to review the Company's financial statements and significant findings based upon the auditors limited review procedures. III. Audit Committee Responsibilities and Duties Review Procedures 1. Review and reassess the adequacy of the Charter at least annually. Submit the charter to the Board of Directors for approval and have the document published at least every three years in accordance with SEC regulations. 2. Review the Company's annual audited financial statements prior to filing or distribution. Review should include discussion with management and independent auditors of significant issues regarding accounting principles, practices, and judgements. 3. In consultation with the management, the independent auditors, and the internal auditors, consider the integrity of the Company's financial reporting processes and controls. Discuss significant financial risk exposures and the steps management has taken to monitor, control, and report such exposures. Review significant findings prepared by the independent auditors and the internal auditing department together with management's responses. 4. Review with financial management and the independent auditors the Company's quarterly financial statements prior to filing or distribution. Discuss any significant changes to the Company's accounting principles and any items required to be communicated by the independent auditors recommended in accordance with SAS 61 (see item 9). Independent Auditors 5. The independent auditors are ultimately accountable to the Audit Committee and the Board of Directors. The Audit Committee shall review the independence and performance of the auditors and annually recommend to the Board of Directors the appointment of the independent auditors or recommend or approve any discharge of auditors when circumstances warrant. 6. Approve the audit engagement letter, fees and other significant compensation to be paid to the independent auditors. 7. On an annual basis, the Committee should review and discuss with the independent auditors all significant relationships they have with the Company that could impair the auditors' independence. The Independent Auditors shall be required to furnish the Audit Committee, each year, with a written report of all its relationships with the Company. 8. Review the independent auditors audit plan discuss scope, staffing, locations, reliance upon management, and internal audit and general audit approach. 9. Prior to releasing the year-end earnings, discuss the results of the audit with the independent auditors. Discuss certain matters required to be communicated to audit committees in accordance with AICPA SAS 61. 10.Consider the independent auditors' judgments about the quality and appropriateness of the Company's accounting principles as applied in its financial reporting. Internal Audit Department and Legal Compliance 11.Review the plan, changes in plan, activities, organizational structure, and qualifications of the internal audit department, as needed. 12.Review the appointment, performance, and replacement of the senior internal audit executive. 13.Review significant reports prepared by the internal audit department together with management's response and follow- up to these reports. 14.On at least an annual basis, review with the Company's counsel, any legal matters that could have a significant impact on the organization's financial statements, the Company's compliance with applicable laws and regulations, and inquiries received from regulators or governmental agencies. Other Audit Committee Responsibilities 15.Annually prepare a report to shareholders as required by the Securities and Exchange Commission. The report should be included in the Company's annual proxy statement. 16.Perform any other activities consistent with this Charter, the Company's by-laws, and governing law, as the Committee or the Board deems necessary or appropriate. 17.Maintain minutes of meetings and periodically report to the Board of Directors on significant results of the foregoing activities.