-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, VEFaaGssJ6ZWxeDFa5ljOi/rC+ZNpD4/etmFPUxcUgJxN9m3tqeqgJB77XbbiEqP WMEtpiD9E93CjLecdBkdcQ== 0000088121-94-000019.txt : 19941031 0000088121-94-000019.hdr.sgml : 19941031 ACCESSION NUMBER: 0000088121-94-000019 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19940910 FILED AS OF DATE: 19941025 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SEABOARD CORP /DE/ CENTRAL INDEX KEY: 0000088121 STANDARD INDUSTRIAL CLASSIFICATION: 2015 IRS NUMBER: 042260388 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-03390 FILM NUMBER: 94554884 BUSINESS ADDRESS: STREET 1: 9000 W. 67TH STREET CITY: SHAWNEE MISSION STATE: KS ZIP: 66201 BUSINESS PHONE: 913-676-8939 MAIL ADDRESS: STREET 1: 9000 W. 67TH STREET CITY: SHAWNEE MISSION STATE: KS ZIP: 66201 FORMER COMPANY: FORMER CONFORMED NAME: SEABOARD ALLIED MILLING CORP DATE OF NAME CHANGE: 19820328 FORMER COMPANY: FORMER CONFORMED NAME: HATHAWAY BAKERIES INC DATE OF NAME CHANGE: 19710315 10-Q 1 1994 3RD QUARTER 10-Q FILING FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended September 10, 1994 ........................................................ Commission file number 1-3390 ........................................................ Seaboard Corporation ............................................................................. (Exact name of registrant as specified in its charter) Delaware 04-2260388 ............................................................................. (State or other jurisdiction of (IRS Employer incorporation or organization). Identification No.) 200 Boylston Street, Newton, MA 02167 ............................................................................. (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 617-332-8492 .......................... ............................................................................. Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x . No ___. Indicate number of shares outstanding of each of the issuer's classes of common stock, as of latest practicable date. Common stock of $1 par value, 1,487,520 shares outstanding, as of September 10, 1994. Total pages in filing - 13 pages SEABOARD CORPORATION AND SUBSIDIARIES Condensed Consolidated Balance Sheets September 10, 1994 and December 31, 1993 (Thousands of Dollars)
Part 1 - Financial Information September 10, December 31, 1994 1993 ------------- ------------ Assets Current assets: Cash and cash equivalents $ 4,790 $ 7,110 Short-term investments 227,412 215,902 Receivables, net 96,284 92,714 Inventories 68,148 70,961 Deferred income taxes 7,899 7,671 Other current assets 10,783 8,374 ---------- --------- Total current assets 415,316 402,732 ---------- --------- Investments in and advances to foreign subsidiaries not consolidated 28,492 28,520 ---------- --------- Property, plant and equipment 383,737 354,932 Accumulated depreciation (165,881) (149,494) ---------- --------- Net property, plant and equipment 217,856 205,438 ---------- --------- Other assets 9,928 10,642 ---------- --------- Total assets $ 671,592 $ 647,332 ========== ========= Liabilities and Stockholders' Equity Current liabilities: Notes payable and current maturities of long-term debt $ 18,194 $ 25,272 Accounts payable 37,080 44,787 Income taxes payable 12,270 8,757 Other current liabilities 49,525 47,469 -------- ------- Total current liabilities 117,069 126,285 Long-term debt, less current maturities 196,360 194,506 Deferred income taxes 21,555 20,440 Deferred grants 4,481 - Accrued pension plan liabilities, net of current portion 5,296 1,745 -------- -------- Total liabilities 344,761 342,976 -------- -------- Stockholders' equity: Common stock of $1 par value. Authorized 4,000,000 shares; issued 1,789,599 shares 1,790 1,790 Shares held in treasury, at par value (302) (302) -------- ------- 1,488 1,488 Additional capital 4,440 4,440 Unrealized loss on debt securities, (net of deferred income taxes of $350) (678) - Retained earnings 321,581 298,428 -------- -------- Total stockholders' equity 326,831 304,356 -------- -------- Total liabilities and stockholders' equity $ 671,592 $ 647,332 ======== ======== See notes to condensed consolidated financial statements.
Page 2 SEABOARD CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Earnings Twelve weeks ended September 10, 1994 and September 11, 1993 (Thousands of dollars except per share amounts)
September 10, September 11, 1994 1993 ------------- ------------- Net sales $ 214,952 $ 250,197 Cost of sales and operating expenses 183,405 225,317 ------------- ----------- Gross income 31,547 24,880 ------------ ----------- Selling, general and administrative expenses 22,939 22,027 ------------ ----------- Operating income 8,608 2,853 ------------ ----------- Other income (expense): Interest income 2,068 1,469 Interest expense (2,713) (1,840) Miscellaneous (856) 1,038 ------------ ------------ Total other income (expense) (1,501) 667 ------------ ------------ Earnings before income taxes 7,107 3,520 ------------ ------------ Income tax expense (benefit): Current 1,380 2,935 Deferred 646 (1,064) ------------ ------------ Total income taxes 2,026 1,871 ------------ ------------ Net earnings $ 5,081 $ 1,649 ============ ============ Earnings per common share $ 3.42 $ 1.11 ============ ============ Dividends declared per common share $ .25 $ .25 ============ ============ Average number of shares outstanding 1,487,520 1,487,520 ============ ============ See notes to condensed consolidated financial statements.
Page 3 SEABOARD CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Earnings Thirty-six weeks ended September 10, 1994 and September 11, 1993 (Thousands of dollars except per share amounts)
September 10, September 11, 1994 1993 ------------- ------------- Net sales $ 687,366 $ 791,918 Cost of sales and operating expenses 579,818 700,961 ------------- --------- Gross income 107,548 90,957 ------------- --------- Selling, general and administrative expenses 71,678 69,308 ------------- --------- Operating income 35,870 21,649 ------------- --------- Other income (expense): Interest income 5,727 5,241 Interest expense (9,262) (4,727) Miscellaneous 3,556 354 ------------- --------- Total other income 21 868 ------------- --------- Earnings before income taxes and cumulative effect of a change in accounting principle 35,891 22,517 ------------- --------- Income tax expense (benefit): Current 10,385 9,613 Deferred 1,237 (1,682) ------------- --------- Total income taxes 11,622 7,931 ------------- --------- Earnings before cumulative effect of a change in accounting principle 24,269 14,586 Cumulative effect on prior years of changing the method of accounting for deferred income taxes - 20,074 ------------- --------- Net earnings $ 24,269 $ 34,660 ============= ========= Earnings per common share: Income before cumulative effect of a change in accounting principle $ 16.32 $ 9.81 Cumulative effect on prior years of changing the method of reporting deferred income taxes - 13.49 ------------- --------- Earnings per common share $ 16.32 $ 23.30 ============= ========= Dividends declared per common share $ .75 $ .75 ============= ========= Average number of shares outstanding 1,487,520 1,487,520 ============= ========== See notes to condensed consolidated financial statements.
Page 4 SEABOARD CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows Thirty-six weeks ended September 10, 1994 and September 11, 1993 (Thousands of Dollars)
September 10, September 11, 1994 1993 ------------- ------------- Net cash provided by operating activities $ 43,676 $ 41,769 ---------- --------- Cash flows from investing activities: Purchase of investments (586,700) - Proceeds from the sale and maturity of investments 574,162 - Net (investment in) short-term investments - (2,258) Capital expenditures, net (34,316) (56,195) Notes receivable 2,689 (3,622) Investments and advances to foreign subsidiaries not consolidated 28 (539) Acquisition of business - (5,500) Cash acquired in acquisition of business - 2,202 ------------ --------- Net cash used by investing activities (44,137) (65,912) ----------- ---------- Cash flows from financing activities: Notes payable to bank (1,552) 5,181 Proceeds from long-term debt 3,792 26,500 Principal payments (7,464) (849) Deferred grants 4,481 - Dividends paid (1,116) (744) ----------- ---------- Net cash (used) provided by financing activities (1,859) 30,088 ----------- ---------- Net increase (decrease) in cash and cash equivalents (2,320) 5,945 Cash and cash equivalents at beginning of year 7,110 9,838 ----------- ---------- Cash and cash equivalents at end of quarter $ 4,790 $ 15,783 ============ ======== Disclosure of accounting policy: For purposes of the Condensed Consolidated Statements of Cash Flows, the Company considers all demand deposits and overnight investments as cash. See Notes to Condensed Consolidated Financial Statements.
Page 5 SEABOARD CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements Note 1 - - ------ In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position as of September 10, 1994, the results of operations for the twelve and thirty-six weeks and the statement of cash flows for the thirty-six weeks ended September 10, 1994 and September 11, 1993, respectively. Note 2 - - ------ The results of operations for the twelve and thirty-six weeks ended September 10, 1994 and September 11, 1993 are not necessarily indicative of the results to be expected for the full year. Note 3 - - ------ The following is a summary of inventories at September 10, 1994 and December 31, 1993 (in thousands):
September 10, December 31, 1994 1993 ----------- ----------- At lower of last-in, first-out (LIFO) cost or market: Live poultry $ 22,652 $ 22,545 Dressed poultry 12,699 8,278 Feed and baking ingredients, packaging supplies and other 6,380 7,200 --------- -------- 41,731 38,023 LIFO allowance (2,528) (3,834) --------- -------- Total inventories at lower of LIFO cost or market 39,203 34,189 -------- -------- At lower of first-in, first-out (FIFO) cost or market: Crops in production, fertilizers and pesticides 6,079 11,376 Grain, flour and feed 6,643 3,170 Dressed pork 3,276 8,587 Live hogs 6,465 3,037 Other 6,482 7,467 ------- ------- Total inventories at lower of FIFO cost or market 28,945 33,637 --------- -------- Grain, at market - 3,135 ----------- ----------- Total inventories $ 68,148 $ 70,961 ========== ===========
Page 6 SEABOARD CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements Note 4 - - ------ Effective January 1, 1994, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity Securities." SFAS No. 115 requires certain investments to be categorized as either Trading, Available-for-Sale, or Held-to-Maturity. Investments in the Trading category are carried at fair value with unrealized gains and losses included in income. Investments in the Available-for-Sale category are carried at fair value with unrealized gains and losses recorded as a separate component of stockholders' equity. Investments in the Held-to-Maturity category are carried at amortized cost. Short-term investments at January 1, 1994 included $215,902,000 in debt securities, for which cost approximated fair value and, therefore, the impact of adopting this standard was not material to the consolidated financial statements of the Company. At September 10, 1994, the Company categorized all short-term investments as Available-for-Sale. Note 5 - - ------ On or about August 31, 1994, the Company mailed to its stockholders a Summary of a Proposed Settlement in the stockholder derivative action brought by Alan R. Kahn against the Company and certain subsidiaries, its parent Seaboard Flour Corporation and Messrs. H. Harry Bresky, Otto Bresky, Jr. and Charles M. Goldman in their capacity as Directors of the Company at the time of the related party transactions complained of. This action is pending in Delaware Chancery Court. On October 13, 1994, a hearing was held in Delaware Chancery Court on the proposed settlement, under which the defendants would pay the Company $10.8 million in full settlement of all claims. The Company would pay, from such amount, plaintiff's legal fees in the amount of $2.0 million if approved by Delaware Chancery Court. An Objection to the Proposed Settlement was filed by stockholders of Seaboard Flour Corporation (SFC) who objected to the terms of the proposed Release to be given as part of the Stipulation of Settlement on the ground that it might be construed to bar certain claims by SFC or its shareholders. The objectors did not object to the terms of the settlement other than the scope of the Release, and the Court indicated its tentative approval of the unobjected to portion of the Settlement. Final approval of the Settlement by Delaware Chancery Court has been deferred pending a resolution of the Objection. Page 7 Third Quarter 1994 Management's Discussion and Analysis of Financial Condition and Results of Operations --------------------------------------------- Liquidity and Capital Resources - - ------------------------------- Liquidity, as measured by current ratio and working capital, has increased since December 31, 1993. Comparative figures are as follows: September 10, 1994 December 31, 1993 ------------------ ----------------- Current Ratio 3.55 3.19 Working Capital $298,247 $276,447 (in thousands) The Company invested $34.1 million in property, plant and equipment through September 10, 1994 in the food production and processing segment. Capital expenditures of $14.0 million were for construction of hog production facilities in Northeastern Colorado and the Oklahoma Panhandle and a hog processing plant in Guymon, Oklahoma. Cumulative capital expenditures for these facilities have totaled $40.3 million since 1992. The Company expects additional expenditures for facilities and working capital to total $83.2 million in the next two years, of which approximately $27.6 million is currently under contract. This expansion will be funded primarily with term debt. Through September 10, 1994 capital expenditures of $4.3 million were made at the Company's poultry processing plant in Western Kentucky to complete an expansion of processing capacity. Cumulative capital expenditures related to the expansion totaled $11.2 million and were funded with cash. Other capital expenditures in the food production and processing segment through September 10, 1994 included $15.8 million in general replacement and upgrade of plant and equipment. Capital expenditures in the transportation segment through September 10, 1994, totaled $5.3 million and were for routine replacement and upgrade of equipment used in the Company's ocean liner service and were funded with cash. Subsequent to September 10, 1994, the Company purchased a cargo vessel for $13.4 million in cash to be used in its ocean liner service. As of September 10, 1994 and December 31, 1993, the Company had $14.5 million and $16.1 million, respectively, outstanding under the Company's short-term uncommitted, unsecured credit lines from banks totalling $132.0 million. Page 8 Liquidity and Capital Resources (continued) - - ------------------------------- Deferred grants totalling $4.5 million at September 10, 1994, represent economic development funds donated to the Company by local government agencies. Use of these funds is limited to construction of a hog processing facility in Guymon, Oklahoma. Deferred grants will be amortized over the life of the assets acquired with the funds. The Company expects to receive additional grant funds of $8.0 million for future construction expenditures. The Company has entered into operating lease agreements for certain buildings and equipment to be used in hog production. Total rentals are expected to be approximately $3.5 million annually beginning in 1995. Most farm leases are for a five year term and are renewable month-to-month after the initial lease term. Superior Farms, L.L.C., a newly formed subsidiary of the Company, has commenced site selection for hog production facilities that will supply hogs to the Guymon processing plant. These facilities would be located in Southwest Kansas, Southeast Colorado and the Oklahoma Panhandle. Construction of the facilities, equipment and working capital requirements would total approximately $207.0 million. The Company plans to provide $26.0 million of equity for a one-third interest subject to Superior Farms raising through a private placement offering an additional $52.0 million of equity. The balance of $132.0 million would be obtained through long-term financing. Cumulative expenditures for these facilities have been immaterial, and no material construction commitments have been made. Management intends to continue its policy of expansion and growth in the agribusiness and ocean transportation industries and believes the Company's liquidity and capital resources are adequate for its intended operations. Results of Operations - - --------------------- Net sales for the twelve and thirty-six weeks ended September 10, 1994 decreased by $35.2 million and $104.6 million, respectively, compared to the same periods one year earlier. Operating income increased by $5.8 million in the third quarter and $14.2 million year-to-date compared to the same periods one year ago. The segment distribution of the increase (decrease) in net sales and operating income compared to the prior year is as follows (in thousands): Net Sales Operating Income ----------------------- ----------------------- Quarter Year-to-date Quarter Year-to-date ----------------------- ----------------------- Food production and processing $(45,018) $(140,291) $ 3,407 $ 4,154 Transportation 8,156 30,536 1,008 7,849 Other 1,617 5,203 1,340 2,218 --------- ---------- -------- -------- $(35,245) $(104,552) $ 5,755 $14,221 ========= ========== ======== ======== Page 9 Results of Operations (continued) - - --------------------- Food Production and Processing Segment The decrease in net sales in the food production and processing segment is primarily the result of discontinuing the slaughter of hogs and lambs at the Company's Minnesota processing plant in March, 1994. In addition, sales from a flour mill in Zaire are no longer included in the Company's consolidation after the Company sold shares, reducing the investment to a minority interest. Beginning in December 1993, the Company began using the equity method of accounting for the mill in Zaire. Net sales of poultry products increased during the quarter and year-to-date, partially offsetting the decreases described above. The increase in net sales of poultry products was primarily related to increased sales volume while average sales prices remained comparable to previous periods. The increase in production resulted primarily from the expansion of the Company's poultry processing plant in Western Kentucky. Operating income within the food production and processing segment increased during the quarter compared to the same quarter one year earlier. Decreasing corn and soybean meal prices have resulted in lower finished feed cost during the quarter compared to the same quarter one year ago. Production of poultry products increased compared to the same period one year ago resulting in further increases to operating income. Year-to-date operating income increased compared to the same period one year earlier primarily as a result of increased production of poultry products during the second and third quarter of 1994. The increased production and third quarter declines in corn and soybean meal prices have resulted in improved margins on the Company's products. Prior year operating income reflects operating losses from the Minnesota processing plant's hog kill. The hog kill was discontinued in March, 1994. Transportation Segment Net sales and operating income in the transportation segment increased for the quarter and year-to-date compared to the same periods one year earlier. The increases resulted from new scheduled services to South America and the Caribbean Basin and increased Southbound volume within existing services in Central America. Recent economic instability in Venezuela has resulted in lower cargo volume from that market. The Company has been successful in replacing the volume in other markets, therefore, the effect of the Venezuelan economic situation on the Company's sales and operating income has not been material. Page 10 Results of Operations (continued) - - --------------------- Selling, General and Administrative Expenses Selling, general and administrative expenses increased by $0.9 million and $2.4 million for the quarter and year-to-date, respectively, compared to the same periods one year earlier. The increase is primarily related to general price level increases and additional marketing and administrative support of expanded shipping routes and product lines. Other Interest expense increased for the quarter and year-to-date by $0.9 million and $4.5 million, respectively, compared to the same periods one year ago. The increase is primarily related to the issuance of $100.0 million in Senior Notes in December 1993, the proceeds of which were invested in short-term investments. Miscellaneous income includes a $2.9 million gain from liquidating an interest rate exchange agreement during the second quarter. The Company entered into the interest rate exchange agreement as an anticipatory hedge against interest rate risk associated with variable rate financing. The anticipated liability to be hedged was not entered into and the Company currently has no plans to incur any other variable rate debt with similar characteristics. Accordingly, the Company terminated the agreement and discontinued deferral accounting. The Company does not believe its businesses have been materially adversely affected by inflation. Page 11 SEABOARD CORPORATION AND SUBSIDIARIES PART II - OTHER INFORMATION ------------------------------------- Item 1. Legal Proceedings. ----------------- See Note 5 of the Notes to Condensed Consolidated Financial Statements. Item 5. Other Information ----------------- During the twelve-week period ending September 10, 1994, Director Robert J. McDonough passed away. The Board of Directors intends to elect a replace- ment as soon as possible. Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits required to be filed by item 601 of Regulation S-K and by Item 6(a) of Instruction. 10.1 Seaboard Corporation Executive Retirement Plan dated October 18, 1994. 10.2 Summary of Benefits for Excess 401(k) Contributions. 27 Financial Data Schedule (b) Reports on Form 8-K. Seaboard Corporation has not filed any reports on Form 8-K during the twelve week period ended September 10, 1994. Page 12 PART II - OTHER INFORMATION --------------------------- SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DATE: October 24, 1994 Seaboard Corporation by: /s/ Rick J. Hoffman ----------------------------------------- Rick J. Hoffman, Vice President by: /s/ Jesse H. Bechtold ------------------------------------------- Jesse H. Bechtold, Chief Accounting Officer Page 13 EX-10 2 EX 10.1 SEABOARD CORP. EXECUTIVE RETIREMENT PLAN SEABOARD CORPORATION EXECUTIVE RETIREMENT PLAN ARTICLE I ESTABLISHMENT AND PURPOSE OF PLAN Section 1.1. Plan Establishment. Seaboard Corporation, a Delaware corporation, hereby establishes the Seaboard Corporation Executive Retirement Plan effective January 1, 1994. Section 1.2. Purpose of Plan. The purpose of the Seaboard Corporation Executive Retirement Plan is to provide supplemental retirement benefits to certain employees of Seaboard Corporation or certain affiliated companies who are members of a select group of management or highly compensated employees and who are designated by the President or Executive Vice President of Seaboard Corporation as Participants hereunder. ARTICLE II DEFINITIONS As used herein: Section 2.1. "Accrued Benefit" shall mean the aggregate of the benefits accrued each year by a Participant under the provisions of Section 4.1. Section 2.2. "Actuarial (or Actuarially) Equivalent" shall have the meaning given to such term in the Seaboard Corporation Pension Plan dated June 28, 1994, as may be amended from time to time. Section 2.3. "Code" shall mean the Internal Revenue Code of 1986, as from time to time amended. Section 2.4. "Committee" shall mean the committee established by the Company to administer the Plan. Section 2.5. "Company" shall mean Seaboard Corporation. Section 2.6. "Compensation" shall mean the total salary and bonus received by the Participant from the Company for the Participant's services in a given Year. Compensation shall include the amount of any elective deferrals made by the Participant in such Year pursuant to any plan if such amount is not includible in gross income under Code Sections 125 or 401(k). Notwithstanding the foregoing, a Participant's Compensation in any Year shall not exceed the sum of $300,000, with said sum to be adjusted on or before the first day of each Year commencing January 1, 1995 to such amount as is determined by the Committee from time to time. Section 2.7. "Designated Beneficiary" shall mean the individual identified by the Participant on a form furnished by the Committee and delivered to the Committee as the Participant's beneficiary under optional payment forms described in Sections 6.5 (b) and (c), if either of such optional payment forms is chosen. Section 2.8. "Disabled" or "Disability" means having a physical or mental condition resulting from bodily injury, disease or mental disorder which renders a Participant incapable of continuing any gainful occupation and which condition constitutes total disability under the federal Social Security Act. Section 2.9. "Eligible Employee" shall mean an employee of the Company or other Employer whom the Committee determines to be in a select group of management or highly compensated employees within the meaning of the Employee Retirement Income Security Act of 1974 as from time to time amended. An employee shall no longer constitute an Eligible Employee if such employee is no longer employed by the Company or other Employer, even if transferred to the employ of a Related Company which is not an Employer. Section 2.10. "Employer" shall mean the companies set forth on Exhibit A attached hereto, as may be amended from time to time. Section 2.11. "Participant" shall mean an Employee who has met the requirements for participation under Article III hereunder. Section 2.12. "Plan" shall mean the Seaboard Corporation Executive Retirement Plan as contained herein and as from time to time amended. Section 2.13. "Related Company" shall mean any company which is a member of a controlled group of corporations, within the meaning of Code 414(b), of which the Company is a member. Section 2.14. "Ten Year C & C Annuity" shall mean an annuity payable to the Participant monthly for the Participant's life with 120 monthly payments guaranteed to the Participant or to the Participant's Designated Beneficiary in the event of the Participant's death prior to the completion of 120 monthly payments. Section 2.15. "Vest" shall have the meaning set forth in Section 4.2 below. Section 2.16 "Year" shall mean a 12-month period beginning each January 1 and ending each succeeding December 31. Section 2.17. "Year of Service" shall mean each whole or partial Year during which a Participant is employed by the Company or a Related Company and during which the Participant completes at least 1,000 hours of service with the Company or such Related Company. ARTICLE III PARTICIPATION Section 3.1. Commencement of Participation. An Eligible Employee who is designated by the President or Executive Vice President of the Company as a Participant in the Plan shall accrue a benefit as provided in Section 4.1 below effective as of the date specified by the President or Executive Vice President. Such Participant shall not accrue any benefit under the Seaboard Corporation Pension Plan dated June 28, 1994, as may be amended, while accruing a benefit as a Participant in this Plan. Section 3.2. Termination of Participation. If a Participant is no longer an Eligible Employee, as determined by the Committee, or if the President or Executive Vice President of the Company determines that a Participant shall no longer be a Participant in the Plan, then the Participant shall cease to accrue a benefit under the Plan. Notwithstanding that the participation of a Participant in the Plan is terminated hereunder, the Participant shall continue to be a Participant hereunder only with respect to the Accrued Benefit of the Participant which was accrued prior to such termination. ARTICLE IV DETERMINATION OF BENEFIT Section 4.1. Accrual of Benefit. A Participant will accrue an annual benefit (the "Accrued Benefit") each year in an amount equal to 2 1/2% of the Participant's Compensation for such Year. Section 4.2. Entitlement to Benefit. The Accrued Benefit shall Vest and thus be payable as provided herein when a Participant has completed five (5) or more Years of Service or has attained age 55. A Participant shall be credited with a Year of Service (for purposes of Vesting) for service provided during the initial Year of being employed regardless of the number of hours of service provided by the Participant during such Year and even though such Eligible Employee was not a Participant in the Plan during such Year. The Accrued Benefit shall also automatically Vest in a Participant upon the Participant becoming Disabled, or upon the Participant's death provided that such Participant is survived by a spouse at the time of such death. Any Participant whose Accrued Benefit does not Vest as provided above shall not be entitled to any benefit under this Plan. ARTICLE V FORMS OF PAYMENT OF BENEFIT ACCRUED BEFORE AGE 62 YEAR-END Section 5.1. Benefit Based on Ten Year C & C Annuity. As soon as practicable after the end of each Year in which a Participant is entitled to a benefit under the provisions of Section 4.2 above, the Company shall purchase for the benefit of such Participant an annuity contract (or add to an existing annuity contract) from an insurance company having an A.M. Best rating of at least A which would provide beginning at age 62 for an annual payment under a Ten Year C & C Annuity payment option of an amount which the Committee determines would approximate the Accrued Benefit for the Year then ended. The Accrued Benefit with respect to the period before a Participant is Vested shall upon such Participant becoming Vested be included in the annuity which is purchased for the Year in which the Participant became Vested. Participants shall not be paid any benefits as provided in this Article V for service provided after December 31 of the year in which the Participant reaches age 62, which benefit shall be paid exclusively as provided in Article VI below. When purchasing annuity contracts hereunder, the Committee shall take into account that a portion of the annuity payments will not be subject to federal or state income taxes. The Committee shall take this fact into account by assuming that the combined federal and state marginal income tax rate during the period in which the annuity will be paid will be equal to the current combined federal and state income tax rate for the Year the annuity is earned (using the income tax rate for the state in which the compensation was earned) based on income equal to 60% of such Participant's Compensation for such Year and by considering what portion of the annuity will not be subject to federal or state income taxes. The determination by the Committee as to the amount of the annuity which will approximate each Accrued Benefit shall be final and conclusive and the Company shall not have any liability to the Participants, even if the assumptions as to income tax rates and the amount which is free from income taxes turn out to be erroneous assumptions. All annuity contracts purchased by the Company for a Participant shall be exclusively owned by such Participant. Upon the purchase of an annuity contract for a Participant hereunder, the Company shall have no further liability to the Participant with respect to the Accrued Benefit for which the annuity contract was purchased. Section 5.2. Participant Option to Elect Variable Annuity. The Committee shall give Participants the right to elect to receive an annuity or similar product that the Committee deems viable whereby the amount of the annuity will vary depending upon the return achieved on the principal of the annuity. The amount paid into such annuity or other similar product shall be equal to the amount that would have been paid to purchase the annuity defined in Section 5.1 above. Section 5.3. Income Tax Considerations. In addition to the purchase of the annuity contract for the benefit of Participants pursuant to Section 5.1 above, the Company shall pay to each Participant (which amount will be withheld and paid to the appropriate taxing authorities) the amount of income taxes (both state and federal) which the Committee estimates the Participant will pay on account of the receipt of such annuity contract (the "Gross-Up"). The determination by the Committee as to the amount of the Gross-Up shall be final and conclusive and the Company shall not have any liability to the Participants, even if the assumptions as to income tax rates are not accurate. Section 5.4. Optional Form of Benefit. Notwithstanding that the Accrued Benefit is to be based on a Ten Year C & C Annuity, the Participant shall have the right to elect any other payout option which is available pursuant to the terms of the annuity purchased for such Participant. ARTICLE VI FORMS OF PAYMENT OF BENEFIT ACCRUED AFTER AGE 62 YEAR-END Section 6.1. Benefit Based on Ten Year C & C Annuity. For service provided after December 31 of the Year in which the Participant reaches age 62, beginning the first of the next month after the Participant's retirement from the Company, the Participant shall receive a Company life annuity providing for an annual payment in the form specified in this Article VI but in an amount which is the Actuarial Equivalent of the payment of the Accrued Benefit pursuant to a Ten Year C & C Annuity payment option. Section 6.2. Automatic Form for Married Participants. If a Participant is married at retirement, the annuity to be paid hereunder shall be in the form of a joint and survivor annuity whereby a monthly annuity shall be paid to the Participant for his lifetime, and his spouse, if surviving at the Participant's death, shall be entitled to receive thereafter a lifetime annuity in an amount which is 50% of the monthly amount which had been payable to the Participant. The amount payable to the Participant shall be determined so that the aggregate annuity payments expected to be made to the Participant and his spouse shall be the Actuarial Equivalent of the Participant's benefit determined under Section 6.1. Section 6.3. Spouse's Death Benefit. A Participant who dies after reaching age 62 but prior to retirement and who is survived by a spouse shall have his death benefit paid to his surviving spouse in the form of a pre-retirement survivor annuity. The pre-retirement death benefit will be that payable to the spouse as if the Participant had retired and elected to receive his annuity in the form of a 100% joint and survivor annuity on the day before he died. The pre-retirement survivor annuity shall commence the month following the Participant's death. Section 6.4. Automatic Form for Unmarried Participants. If a Participant is not married at age 62, then the annuity to be paid hereunder shall be in the form of a single life annuity payable monthly which shall be the Actuarial Equivalent of the Participant's benefit determined under Section 6.1. Section 6.5. Optional Form of Benefit. Subject to the requirements of Section 6.6 below, a Participant can elect for the payment option of the annuity to be in one of the following forms of payment in lieu of the form otherwise specified above: (a) A single life annuity payable no less frequently than annually. (b) A Ten Year C & C Annuity. (c) If the Participant is married, a life annuity payable no less frequently than annually for the life of the Participant and with a survivor annuity payable no less frequently than annually for the remaining life of the Participant's spouse which survivor annuity is either 75% or 100% of the annuity during the Participant's life. Benefits paid under any of the foregoing options will be the Actuarial Equivalent of the Participant's benefit determined under Section 6.1. The foregoing options must be elected before the Participant reaches the age of 62; provided, however, an election can be made or amended thereafter in the event of a change of circumstances with respect to the Participant, such as a change in marital or health status. Section 6.6. Election Not to Take the 50% Joint and Survivor Annuity. No Participant who is married as of the date payment of such benefit will commence can elect to receive his benefit in any form other than in the form of a 50% joint and survivor annuity under Section 6.2 unless such Participant's spouse has executed a written waiver consenting to any such election. Section 6.7. Spendthrift. The interest in this Plan, or any benefits provided under this Article VI, of or to any Participant or his beneficiary shall in no event be subject to sale, assignment, hypothecation, or transfer by such Participant or his beneficiary, and each Participant or his beneficiary is hereby prohibited from anticipating, pledging, assigning or alienating his interest in this Plan or in any account or benefit hereunder. The interest of any Participant or of his beneficiary shall not be liable or subject to the debts, liabilities, or obligations of the Participant or the beneficiary, nor shall the same or any part thereof be subject to any judgment rendered nor to any levy, execution, attachment, garnishment, or other legal process. ARTICLE VII ADMINISTRATION The Company shall appoint a Committee to administer the Plan. The Committee shall consist of one or more individuals who may or may not be employees of the Company. The Committee shall have the sole and absolute discretion to interpret the Plan and determine the benefits hereunder. The Committee shall be authorized to establish rules and procedures as it deems advisable or necessary for the administration of the Plan. The Committee shall establish a reasonable claims procedure which shall include a procedure for the appeal of a denied claim. All decisions of the Committee shall be final, conclusive, and binding upon all persons having any interest in the Plan. In the administration of the Plan, the Committee may, from time to time, (i) delegate its duties, (ii) employ agents and delegate to them such duties as it sees fit, and (iii) consult with legal counsel, who may be legal counsel to the Company. ARTICLE VIII MISCELLANEOUS Section 8.1. Employment. The adoption of the Plan does not give any person any right to be retained in the employ of the Company, and no rights granted under the Plan shall be construed as creating a contract of employment. The right and power of the Company to dismiss or discharge any person is expressly reserved. Section 8.2. No Trust Relationship. Nothing contained herein and no actions taken pursuant to the Plan shall create or be construed to create a trust of any kind or a fiduciary relationship between the Company and any Participant. The Company shall not be considered a trustee by reason of the Plan. Section 8.3. Amendment and Termination. The Company can amend or terminate the Plan at any time in its sole discretion; provided, however, no amendment or termination of the Plan shall affect the rights of any Participant to the payment of benefits which have accrued at the time of such amendment or termination. Section 8.4. Governing Law. The provisions of the Plan shall be governed, construed, enforced, and administered in accordance with the laws of the State of Kansas. Section 8.5. Headings. The headings have been inserted for convenience only and shall not affect the meaning or interpretation of the Plan. IN WITNESS WHEREOF, the Company has caused the Plan to be executed as of this 18th day of October, 1994, by its duly authorized agent. SEABOARD CORPORATION By: /s/ Rick J. Hoffman _____________________ Rick J. Hoffman Vice President EXHIBIT A Seaboard Corporation Seaboard Trading & Shipping (Division) A & W Interlining Services Corporation Lewis Pad & Binding Company (Division) Seaboard Overseas Limited Seaboard Export Corporation Seaboard Marine Ltd. Port of Miami Cold Storage, Inc. (formerly Dodge Island Terminal) Chestnut Hill Farms, Inc. Seaboard Ship Management, Inc. Harinas de Puerto Rico, Inc. Seaboard Farms (Poultry Division Companies) Seaboard Farms of Oklahoma, Inc. (Pork Division) EX-10 3 EX 10.2 SUMMARY OF BENEFITS FOR EXCESS 401K CONTR. SUMMARY OF BENEFITS FOR EXCESS 401K CONTRIBUTIONS - - -------------------------------------------------- The executive officers of the Company, along with certain other management employees of the Company, receive, as additional compensation, an amount equal to three percent on an after tax basis of each such participant's eligible compensation in excess of $150,000, but not on any such earnings in excess of $300,000; and in addition, each such participant receives from the Company a "gross up" payment to reimburse such participant for the estimated federal and state income taxes such participant will have to pay on account of receipt of this benefit. This benefit was established effective January 1, 1994. EX-27 4 EX 27 FINANCIAL DATA SCHEDULE
5 1000 9-MOS DEC-31-1994 JAN-01-1994 SEP-10-1994 4790 227412 104755 8471 68148 415316 383737 165881 671592 117069 196360 1488 0 0 325343 671592 687366 687366 579818 579818 71678 1097 9262 35891 11622 24269 0 0 0 24269 16.32 16.32
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