INTERNATIONAL HOME FOODS INC, S-1/A, 1997-10-27

INTERNATIONAL HOME FOODS INC
S-1/A, 1997-10-27
CANNED, FROZEN & PRESERVD FRUIT, VEG & FOOD SPECIALTIES

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 27, 1997

REGISTRATION NO. 333-36249

================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------

AMENDMENT NO. 1

FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
INTERNATIONAL HOME FOODS, INC.
(Exact name of registrant as specified in its charter)

<TABLE>
<C> <C> <C>
DELAWARE 2032 13-3377322
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>

1633 LITTLETON ROAD
PARSIPPANY, NEW JERSEY 07054

(973) 359-9920

(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------------

C. DEAN METROPOULOS
INTERNATIONAL HOME FOODS, INC.
1633 LITTLETON ROAD
PARSIPPANY, NEW JERSEY 07054

(973) 359-9920

(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------------

Copies to:

<TABLE>
<S> <C>
A. WINSTON OXLEY EDWARD D. SOPHER
JAMES A. KRAUSE AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
VINSON & ELKINS L.L.P. 590 MADISON AVENUE
3700 TRAMMELL CROW CENTER NEW YORK, NEW YORK 10022
2001 ROSS AVENUE (212) 872-1000
DALLAS, TEXAS 75201-2975
(214) 220-7700
</TABLE>

---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this registration statement becomes effective.
---------------------
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
---------------------
CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
==============================================================================================================
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED OFFERING PRICE(1)(2) REGISTRATION FEE(3)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock, $.01 par value per share...................... $297,655,000 $90,198
==============================================================================================================
</TABLE>

(1) In accordance with Rule 457(o) under the Securities Act of 1933, the number
of shares being registered and the proposed maximum offering price per share
are not included in this table.
(2) Estimated solely for the purpose of calculating the registration fee.

(3) $69,697 was paid in connection with the original filing of the Registration
Statement on September 24, 1997.

---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
================================================================================
<PAGE> 2

EXPLANATORY NOTE

This registration statement contains two forms of prospectus: one (the
"U.S. Prospectus") to be used in connection with an offering in the United
States and Canada (the "U.S. Offering") of Common Stock of International Home
Foods, Inc. (the "Company") (which includes Common Stock subject to the U.S.
Underwriters' over-allotment option) and one (the "International Prospectus") to
be used in connection with a concurrent international offering outside the
United States and Canada (together with the U.S. Offering, the "Offering") of
Common Stock of the Company. The U.S. Prospectus and the International
Prospectus will be identical in all respects except that they contain different
front and back cover pages. The form of the U.S. Prospectus is included herein
and is followed by those pages to be used in the International Prospectus that
differ from those in the U.S. Prospectus. Each of the pages to be used in the
International Prospectus included herein is labeled "Alternative Page for
International Prospectus." Final forms of such prospectuses will be filed with
the Securities and Exchange Commission pursuant to Rule 424(b).

<PAGE> 3

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED OCTOBER 27, 1997

PROSPECTUS

, 1997

13,622,500 SHARES

[INTERNATIONAL HOME FOODS LOGO]

INTERNATIONAL HOME FOODS, INC.

COMMON STOCK

Of the 13,622,500 shares of common stock, $0.01 par value ("Common Stock"),
being offered hereby, 10,526,359 shares are being sold by International Home
Foods, Inc. ("International Home Foods," "IHF" or the "Company") and 3,096,141
shares are being sold by a subsidiary of American Home Products Corporation (the
"Selling Stockholder"). The Company will not receive any of the proceeds from
the sale of shares by the Selling Stockholder. See "Principal and Selling
Stockholders."

Of the 13,622,500 shares of Common Stock being offered hereby, 10,898,000
shares are being offered initially in the United States and Canada (the "U.S.
Offering") by the U.S. Underwriters (as defined herein) and 2,724,500 shares are
being offered initially outside the United States and Canada (the "International
Offering," and, together with the U.S. Offering, the "Offering") by the
International Managers (as defined herein). The initial public offering price
and the underwriting discounts and commissions of the U.S. Offering and the
International Offering are identical. See "Underwriting."

Prior to the Offering, there has been no public market for the Common
Stock. It is currently estimated that the initial public offering price will be
between $18.00 and $20.00 per share. See "Underwriting" for information relating
to the factors to be considered in determining the initial public offering
price.

The shares of Common Stock offered hereby have been approved for listing on
the New York Stock Exchange, subject to notice of issuance, under the symbol
"IHF."

SEE "RISK FACTORS" BEGINNING ON PAGE 11 HEREIN FOR A DISCUSSION OF CERTAIN
MATTERS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
PRICE UNDERWRITING PROCEEDS PROCEEDS
TO THE DISCOUNTS AND TO THE TO THE
PUBLIC COMMISSIONS(1) COMPANY(2) SELLING STOCKHOLDER
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share.......................... $ $ $ $
Total(3)........................... $ $ $ $
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) The Company and the Selling Stockholder have agreed to indemnify the
Underwriters (as defined herein) against certain liabilities, including
liabilities under the Securities Act of 1933. See "Underwriting."

(2) Before deducting expenses estimated at $2,000,000, which will be paid by the
Company.

(3) The Company and the Selling Stockholder have granted to the U.S.
Underwriters an option, exercisable within 30 days of the date hereof, to
purchase up to 2,043,375 additional shares of Common Stock at the Price to
the Public less Underwriting Discounts and Commissions, solely to cover
over-allotments, if any. If such option is exercised in full, the total
Price to the Public, Underwriting Discounts and Commissions, Proceeds to the
Company and Proceeds to the Selling Stockholder will be $ , $ , $
and $ , respectively. See "Underwriting."

The shares offered hereby are being offered by the several U.S. Underwriters
when, as and if delivered to and accepted by the U.S. Underwriters and subject
to various prior conditions, including their right to reject orders in whole or
in part. It is expected that delivery of share certificates for the shares
offered hereby will be made in New York, New York on or about , 1997.

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
BT ALEX. BROWN
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON
GOLDMAN, SACHS & CO.
MORGAN STANLEY DEAN WITTER
<PAGE> 4

[The inside cover will contain art work of colored brand trademarks and
logos of the Company including "Chef Boyardee(R)," "Bumble Bee(R)," "PAM(R),"
"Polaner(R) All Fruit," "Original Ro*Tel(R)," "Campfire(R)," "Ranch Style(R),"
"Crunch 'n Munch(R)," "Gulden's(R)," "Luck's," "Dennison's(R) Since 1915,"
"Jiffy Pop(R)," "Wheatena(R)," "Maypo(R)" and "G. Washington's(R)."]

CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
SPECIFICALLY, THE UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THE OFFERING AND
MAY BID FOR AND PURCHASE SHARES OF COMMON STOCK IN THE OPEN MARKET. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

---------------------

"Chef Boyardee," "Bumble Bee," "PAM," "Polaner," "Franklin Crunch 'n Munch"
(hereinafter "Crunch 'n Munch"), "Gulden's," "Campfire," "Marshmallow Munchie,"
"Ranch Style," "Luck's," "Dennison's," "Ro*Tel," "Jiffy Pop" and "G.
Washington's" are registered trademarks of the Company. Registration of the Chef
Jr. trademark is pending. "Wheatena," "Maypo" and "Maltex" are registered
trademarks licensed to the Company. This Prospectus also includes trademarks of
companies other than the Company.
<PAGE> 5

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and financial statements,
including the notes thereto, appearing elsewhere in this Prospectus. Except as
otherwise indicated, (i) all references to market, category, segment sales,
market share percentages and market positions reflect grocery sales dollars for
the 52-week period ended September 27, 1997, as gathered by A.C. Nielsen
("Nielsen") for United States and Mexico markets, (ii) the information provided
in this Prospectus assumes no exercise of the U.S. Underwriters' over-allotment
option and (iii) references to the Company include the Company and its
subsidiaries. "Aggregate net sales" includes the effect of (i) the acquisition
(the "Bumble Bee Acquisition") of the assets and certain liabilities of Bumble
Bee Seafoods, Inc. and its operating subsidiaries ("Bumble Bee Seafoods"), (ii)
the purchase of Heritage Brands Holding, Inc. ("Heritage"), (iii) the purchase
of Productos Del Monte S.A. de C.V. ("Productos Del Monte") and (iv) the
purchase of Creative Products, Inc. ("Creative Products") as if they had
occurred at the beginning of the period discussed. The branded canned seafood
business acquired in the Bumble Bee Acquisition is referred to herein as the
Bumble Bee Business. All information in this Prospectus reflects a 5.3292 for
one reverse stock split effected prior to the closing of the Offering. Certain
statements contained in this summary and elsewhere in this Prospectus,
including, but not limited to, information with respect to the Company's
business and liquidity and capital resources, are forward-looking statements.

BUSINESS

OVERVIEW

The Company is a leading North American manufacturer and marketer of a
diversified, well-established portfolio of shelf-stable food products with
popular brand names, including Chef Boyardee prepared foods, Bumble Bee premium
canned seafood, PAM cooking spray, Polaner fruit spreads and spices and Gulden's
mustard. In the United States, 11 of the Company's 14 principal branded product
lines command the number one position in their defined markets. For the fiscal
year ended December 31, 1996, these 11 branded product lines accounted for
$863.2 million or 58.3% of the Company's aggregate net sales. Many of the
Company's brands also command leading market positions in Canada, Mexico and
Puerto Rico. The Company's portfolio of leading brands provides the Company with
a strong presence in the United States as well as an attractive platform for
continued international expansion. The Company's brand name business is
complemented by growing food service and private label businesses and sales to
the U.S. military.

In November 1996, the Company was the subject of a leveraged
recapitalization pursuant to which affiliates of Hicks, Muse, Tate & Furst
Incorporated ("Hicks Muse") and C. Dean Metropoulos, the Company's new Chairman
and Chief Executive Officer, acquired control of the Company (the "IHF
Acquisition") from American Home Products Corporation ("American Home
Products"), the parent of the Selling Stockholder. Under Mr. Metropoulos'
direction, the Company has implemented a strategy to increase sales and profits
by (i) growing sales of existing brands, (ii) expanding distribution into
alternative markets, (iii) completing strategic acquisitions and (iv) achieving
cost savings. The Company's pro forma as adjusted net sales and operating profit
for the fiscal year ended December 31, 1996 were $1,338.4 million and $157.7
million, respectively. For the nine month period ended September 30, 1997, the
Company's pro forma as adjusted net sales were $1,022.9 million, and the
Company's pro forma as adjusted operating profit, before giving effect to a
non-cash stock option compensation charge of $51.9 million, was $134.5 million.
See "Unaudited Pro Forma Financial Statements."

PAM cooking spray, Polaner fruit spreads and spices, Gulden's mustard, Maypo,
Wheatena and Maltex hot cereals and G. Washington's dry seasonings and broths.
In the growing market for southwestern cuisine, the Company's products include
Ro*Tel canned tomatoes with green chilies and strong regional brands such as
Ranch Style and Luck's canned beans and Dennison's chili. In the snack foods
category, the Company's brands include Crunch 'n Munch glazed popcorn and
pretzels, Campfire marshmallows and marshmallow crisp rice bars and Jiffy Pop
unpopped popcorn. The Company, through its Productos Del Monte subsidiary, is
also a leading processor and marketer of branded catsup, canned vegetables and
bottled salsa in Mexico.

The Company's recognizable portfolio of leading brands provides a critical
mass of brand name sales that (i) allows the Company to realize synergies in
manufacturing, marketing, distribution and raw material sourcing, (ii) creates a
position of strength with retailers that is critical in maintaining and securing
valuable retail shelf space for its products and (iii) provides a strong
platform for introducing product line extensions and new products. The following
table sets forth market positions and market shares of the Company's principal
product lines, along with certain competitors' market share information.

MARKET POSITION OF PRINCIPAL PRODUCT LINES

<TABLE>
<CAPTION>
MARKET SHARE NUMBER TWO
------------------------------- COMPETITOR'S
PRODUCT LINE CATEGORY/SEGMENT POSITION PERCENTAGE PERCENTAGE
------------ ---------------- ------------------ ---------- ------------
<S> <C> <C> <C> <C>
UNITED STATES
CHEF BOYARDEE BRANDED PRODUCTS
Chef Boyardee.................. Canned Pasta....................... #1 57% 37%
Chef Boyardee.................. Pizza Mixes........................ #1 69% 15%
BUMBLE BEE BRANDED PRODUCTS
Bumble Bee..................... Canned White Meat Tuna............. #1 40% 34%
Bumble Bee..................... Canned Light Meat Tuna............. #3 16% NA
Bumble Bee..................... Canned Salmon...................... #1 21% 9%
SPECIALTY BRANDS
PAM............................ Cooking Spray...................... #1 52% 13%
Polaner........................ Fruit-Juice-Sweetened Spreads...... #1 48% 32%
Gulden's....................... Brown Mustard...................... #1 50% 25%
SOUTHWESTERN CUISINE
Ro*Tel......................... Canned Tomatoes with Green
Chilies............................ #1 76% 11%
Ranch Style.................... Canned Beans(1).................... #1 in Southwest(2) 27% 13%
Luck's......................... Canned Beans(1).................... #1 in Southeast(2) 30% 26%
Dennison's..................... Canned Chili....................... #4 in West(2)(3) 18% NA
SNACK FOODS
Crunch 'n Munch................ Glazed Popcorn..................... #1 37% 32%
Campfire....................... Marshmallow Crisp Rice Bars........ #3 7% NA
MEXICO
Productos Del Monte............ Catsup............................. #1 46% 29%
</TABLE>

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(1) The canned beans category includes both the pork and beans and miscellaneous
beans categories. In their respective regions, Ranch Style leads both
categories with a total market share of 27%, and Luck's leads the
miscellaneous beans category with a market share of 30%.

(2) The Company defines (i) the Southwest region to include Nielsen reported
information for Texas, Oklahoma, New Mexico and Arizona, (ii) the Southeast
region to include Nielsen reported information for Georgia, Alabama, North
Carolina, South Carolina, Kentucky, Tennessee and Virginia and (iii) the
West region to include Nielsen reported information for Colorado, Wyoming,
Idaho, Nevada, California, Oregon, Arizona, Washington and Utah.

(3) Dennison's has the #2 market share in California, which represents
approximately 74% of Dennison's net sales.

4
<PAGE> 7

BUSINESS STRATEGY

The Company's objectives are to increase sales and earnings by (i) growing
sales of existing brands through expansion of the Company's product offerings
and refocused marketing efforts, (ii) expanding distribution in food service,
private label and international markets, (iii) completing strategic acquisitions
and (iv) continuing to achieve cost savings.

- Leverage Leading Brands. The Company intends to expand its product
offerings by leveraging its existing portfolio of leading brands.
Management believes that (i) Chef Boyardee and Bumble Bee can serve as a
strong platform to expand the Company's product line into other
quick-meal products, (ii) Dennison's, Ranch Style, Luck's and Ro*Tel can
be utilized to develop a broader southwestern cuisine business and (iii)
Crunch 'n Munch, Campfire and Jiffy Pop can be the cornerstone of a
diversified snack foods business. In addition, management has formulated
a number of new products in its existing product lines to capitalize on
the growing trends toward healthy and convenient foods. In the last 12
months, the Company has introduced 10 new products under its existing
brand names, two of which were the first fat-free or 99% fat-free entries
into the categories in which they compete.

- Refocus Marketing Efforts. To revitalize its established brand names, the
Company has refocused its marketing and packaging efforts. Specifically,
the Company has (i) changed its marketing and promotional campaigns to
more effectively address its target markets, (ii) increased advertising
expenditures to enhance brand equity and (iii) introduced new packaging
for a majority of its products. Since 1995, the Company has refocused its
marketing efforts by emphasizing consumer advertising (a "pull" strategy)
and de-emphasizing trade spending and discounting (a "push" strategy). As
a result, advertising costs as a percentage of total marketing expenses
increased from 16.3% in 1994 to 25.7% in the first nine months of 1997
while trade promotion expenses as a percentage of total marketing
expenditures declined from 63.5% to 59.8%. The Company recently
introduced several new television advertising campaigns, such as those
promoting Chef Boyardee as an ideal "fourth meal" to be served after
school and PAM cooking spray as a flavorful, healthy alternative to
cooking oils, butter and margarine. Since the new Chef Boyardee
television campaign was introduced in November 1996, consumer sales of
Chef Boyardee's principal product group, the "All Family" product line,
has increased significantly, with consumer sales through September 1997
increasing 7.7% over the comparable 1996 period. In addition, the Company
recently began television advertising for its Ranch Style brand for the
first time in five years. The Company has also redesigned the packaging
of a majority of its products to emphasize the brand name, contemporize
the presentation and make the products visually more appealing to
consumers.

- Expand into Food Service, Private Label and International
Markets. Management believes that the food service and private label
businesses, which together represent 8.8% of the Company's aggregate 1996
net sales, offer significant growth opportunities. Management believes
that it can further develop these businesses by utilizing the Company's
established sales and distribution capabilities and excess plant
capacity. As part of this strategy, the Company recently acquired
Creative Products, the leading manufacturer of cooking spray sold to
private label and food service customers in the U.S. Management believes
that Creative Products' dedicated private label and food service sales
force can help the Company increase sales of many of its other products
in these markets. In addition, management believes that attractive
opportunities exist to expand the Company's sales in international
markets with growing economies and attractive demographics. The Company
recently acquired Productos Del Monte, a leading producer and distributor
of branded catsup, canned vegetables and bottled salsa in Mexico. The
Company plans to leverage the infrastructure of Productos Del Monte as a
platform to expand the Company's southwestern cuisine, cooking spray,
canned pasta and canned seafood products into Mexico.

that additional strategic acquisition opportunities exist and that
incremental revenue and earnings can be generated by leveraging the
Company's production, distribution, sales and administrative
capabilities. In addition, an important element of management's
evaluation of a strategic acquisition is the potential savings attainable
through rationalization of the target company's cost structure.

- Continue to Achieve Cost Savings. Since the IHF Acquisition, the Company
has achieved annualized net cost savings of approximately $25.3 million,
including approximately $11.1 million associated with the integration of
the Bumble Bee Business. These savings have been achieved primarily
through (i) reductions in overhead and duplicative administrative, sales
and other personnel ($15.5 million), (ii) streamlining production,
distribution, research and administrative functions ($7.3 million) and
(iii) savings in packaging and brokerage expenses ($2.5 million). To
achieve these cost savings, the Company incurred one time charges of
approximately $5.0 million, most of which was recognized in the year ended
December 31, 1996. Management expects to be able to achieve further cost
savings by continuing these initiatives.

COMPETITIVE STRENGTHS

Management believes that the Company has the following competitive
strengths that will enable it to execute its business strategy effectively.

- Well-Positioned Products in Growing Markets. The Company's diversified
portfolio of branded products is well-positioned to meet the growing
demand for convenient and healthy foods. Many of the Company's products,
such as Chef Boyardee canned pasta and Bumble Bee canned seafood, are
quick and easy to prepare and nutritionally sound. As such, management
believes these products are particularly appealing to families with
children. Many of the Company's other brands also benefit from the trend
toward healthier eating, including PAM, Polaner, Ro*Tel and Ranch Style.
The Company has introduced several new products that capitalize on the
trend toward fat-free foods such as Chef Boyardee 99% Fat-Free, Crunch 'n
Munch Fat-Free and Luck's Fat-Free Beans. In addition, the Company's
strong southwestern cuisine products provide a platform to capitalize on
the cuisine's growing national popularity. Furthermore, through the
acquisition of Productos Del Monte, the Company has established a
presence in the growing Mexico market for processed food products.

- Well-Developed Infrastructure with Capacity for Growth. The Company's
manufacturing plants and distribution network have significant excess
capacity that can be utilized to support the (i) growth of the Company's
existing branded and nonbranded businesses, (ii) introduction of new
products and entry into new markets and (iii) integration of strategic
acquisitions. The Company's principal manufacturing facilities in Milton,
Pennsylvania and Vacaville, California are operating at approximately 55%
and 28% of their respective capacities (based on a five-day, two-shift
work schedule). In addition, the Company has a comprehensive U.S. sales
force and distribution network which management believes has the capacity
to support substantial increases in volume. Management believes this
sales and distribution network enables the Company to meet or exceed
customer service requirements by delivering 85% of its sales volume to
customers within 24 hours and 100% within 48 hours.

- Strong Management. The Company's senior management team is comprised of
food and consumer product industry veterans led by C. Dean Metropoulos,
the Company's Chairman and CEO, and John Bess, the Company's President and
COO. Mr. Metropoulos is CEO of The Morningstar Group, Inc. ("Morningstar")
and has been CEO of several other food companies, including Stella Foods,
Inc. ("Stella"). During Mr. Metropoulos' tenure at Morningstar and Stella,
he implemented successful sales growth and cost reduction strategies which
dramatically increased sales and earnings at both companies. Many of these
strategies are similar to those that are being implemented by the Company.
Mr. Bess has extensive experience in growing established brand names by
implementing aggressive consumer based marketing programs. Mr. Bess has 21
years of management and consumer marketing experience at The Procter &
Gamble Company ("Procter & Gamble"), most recently serving as Vice
President and Managing Director of Worldwide Strategic Planning for
Procter & Gamble's global hair
6
<PAGE> 9

care business, which generated 1996 sales of $2.6 billion. In addition,
the Company's six general managers overseeing brand performance have an
average of approximately 20 years of experience in the food industry.

- Strong Profit Margins to Fund Growth. Management believes that the
Company's strong operating profit margins provide financial resources
necessary to fund the Company's internal growth strategy. From 1991
through 1996 (prior to the Bumble Bee Acquisition), the Company achieved
an average annual operating profit margin of 15.2%. As a result of the
Company's strong operating profit margins, the Company generated cash flow
from operations of $146.0 million in 1996. Management believes that its
high operating profit margins and cash flow from operations result from
the Company's leading market position in high margin food categories as
well as the cost efficiencies gained from significant historical
investment in the Company's manufacturing and distribution network. The
Company's strong financial performance and its relatively low capital
expenditure requirements are expected to generate significant cash flow to
fund the Company's internal growth strategy.

OWNERSHIP AND MANAGEMENT

Upon completion of the Offering, Hicks Muse will beneficially own
approximately 58.0% and C. Dean Metropoulos will beneficially own approximately
4.7% of the outstanding shares of Common Stock. None of Hicks Muse, Mr.
Metropoulos or their related entities is selling any shares in the Offering. See
"Principal and Selling Stockholders."

Hicks Muse is a private investment firm based in Dallas, New York, St.
Louis and Mexico City that specializes in acquisitions, recapitalizations and
other principal investing activities. Hicks Muse has a distinctive investment
philosophy emphasizing growth of sales and earnings in existing portfolio
companies by pursuing strategic acquisitions. Since the firm's inception in
1989, Hicks Muse has completed or has pending 148 transactions having a combined
transaction value exceeding $24.1 billion. Of the completed or pending
transactions, 44 have been acquisitions of platform companies such as
International Home Foods and 104 have been strategic acquisitions by a platform
company such as the Bumble Bee Acquisition by International Home Foods. This
strategy has been successfully employed in a number of Hicks Muse portfolio
companies such as Berg Electronics, Inc. and Chancellor Media Corporation. In
International Home Foods, Hicks Muse has combined its financial experience with
the operating management experience of Mr. Metropoulos. Hicks Muse and Mr.
Metropoulos have established an exclusive relationship to pursue acquisitions of
food companies that Mr. Metropoulos will manage. See "Risk Factors -- Control by
Principal Stockholder; Relationship with Principal Stockholder and Management;
Allocation of Corporate Opportunities."
7
<PAGE> 10

THE OFFERING

<TABLE>
<S> <C>
Common Stock Offered:

By the Company
U.S. Offering................... 8,421,087 shares
International Offering.......... 2,105,272 shares
-----------
Subtotal................... 10,526,359 shares

By the Selling Shareholder
U.S. Offering................... 2,476,913 shares
International Offering.......... 619,228 shares
-----------
Subtotal................... 3,096,141 shares

Total.............................. 13,622,500 shares
-----------

Common Stock to be outstanding after
the Offering(1).................... 75,576,596 shares

Use of proceeds...................... Repayment of indebtedness under the Company's senior secured
credit facilities (the "Senior Bank Facilities").

New York Stock Exchange symbol....... IHF
</TABLE>

- ---------------

(1) Excludes 7,295,822 shares of Common Stock issuable upon exercise of
outstanding stock options granted to certain employees of the Company. The
Company has reserved an additional 1,148,199 shares of Common Stock for
issuance in connection with options that may be granted under the Company's
1997 Stock Option Plan (the "Stock Option Plan"). See "Management -- Benefit
Plans."

RISK FACTORS

Prospective purchasers of the Common Stock should consider carefully all of
the information set forth in this Prospectus and, in particular, should evaluate
the specific factors set forth under the caption "Risk Factors" beginning on
page 11, which provides a discussion of certain risks involved in an investment
in the Common Stock.
8
<PAGE> 11

SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA

The following table sets forth summary historical and pro forma as adjusted
financial data of the Company for the periods ended and as of the dates
indicated. The summary historical statement of operations data for the years
ended December 31, 1994, 1995 and 1996 and the summary historical balance sheet
data as of December 31, 1996 are derived from the audited financial statements
of the Company included elsewhere in this Prospectus. The summary historical
statement of operations data for the nine month periods ended September 30, 1996
and 1997 and the summary historical balance sheet data as of September 30, 1997
are derived from the unaudited financial statements of the Company included
elsewhere in this Prospectus and which, in the opinion of management, include
all adjustments necessary for a fair presentation. The selected historical
statement of operations data for the year ended December 31, 1993 are derived
from the audited financial statements of the Company not included in the
Prospectus. The summary historical statement of operations data for the year
ended December 31, 1992 are derived from the unaudited financial statements of
the Company which are not included in this Prospectus and which, in the opinion
of management, include all adjustments necessary for a fair presentation. The
summary pro forma as adjusted financial data reflect adjustments, where
appropriate, to the historical financial data of the Company to give effect to
(i) the IHF Acquisition, (ii) the Bumble Bee Acquisition and (iii) the Offering
as if each had occurred on January 1, 1996. This information should be read in
conjunction with the Company's historical consolidated financial statements, and
the unaudited pro forma financial statements and related notes thereto appearing
elsewhere in this Prospectus and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------------------------------------------- ----------------------------------
1992 1993 1994 1995 1996(1)(2) 1996 1997(1)(2)
------------------------- -------------------------
PRO FORMA PRO FORMA
ACTUAL AS ADJUSTED ACTUAL AS ADJUSTED
(IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Net sales................ $865.8 $935.7 $997.3 $ 818.9 $ 942.8 $ 1,338.4 $704.1 $ 843.9 $ 1,022.9
Cost of goods sold....... 402.6 432.0 463.1 398.2 444.9 723.1 333.9 412.9 538.1
------ ------ ------ ------- ----------- ----------- ------ ----------- -----------
Gross profit............. 463.2 503.7 534.2 420.7 497.9 615.3 370.2 431.0 484.8
Marketing expenses:
Advertising............ 36.8 33.2 32.8 42.4 58.6 59.0 43.0 45.9 46.0
Consumer promotion..... 26.2 21.5 25.5 23.5 17.5 19.0 13.3 15.0 16.7
Trade promotion........ 101.0 118.7 127.6 102.0 101.0 182.9 74.6 106.6 145.2
Other.................. 15.2 16.5 14.9 18.5 14.4 20.1 9.3 10.9 12.4
------ ------ ------ ------- ----------- ----------- ------ ----------- -----------
Total marketing
expenses......... 179.2 189.9 200.8 186.4 191.5 281.0 140.2 178.4 220.3
Other operating expenses:
Selling................ 43.3 47.2 52.3 45.9 46.3 55.5 33.6 34.0 38.0
Storage, packing and
shipping............. 51.0 57.6 63.4 55.3 55.2 53.4 41.2 44.0 43.4
Administrative......... 17.0 20.5 23.2 23.6 19.7 30.8 14.2 20.1 25.8
General and other...... 16.4 35.2 35.3 40.9 32.0 36.9 21.3 21.8 22.8
Stock option
compensation(3)...... -- -- -- -- -- -- -- 51.9 51.9
------ ------ ------ ------- ----------- ----------- ------ ----------- -----------
Total other
operating
expenses(1)(2)... 127.7 160.5 174.2 165.7 153.2 176.6 110.3 171.8 181.9
------ ------ ------ ------- ----------- ----------- ------ ----------- -----------
Operating profit......... 156.3 153.3 159.2 68.6 153.2 157.7(4) 119.7 80.8 82.6
Interest expense......... -- -- -- -- 17.1 86.0 -- 79.2 75.1
Interest income and
other, net............. -- -- -- -- 0.2 0.3 -- 1.6 --
Provision for income
taxes.................. 56.7 60.9 63.3 29.4 53.3 33.8 45.5 1.3 8.5
------ ------ ------ ------- ----------- ----------- ------ ----------- -----------
Net income (loss)........ $ 99.6 $ 92.4 $ 95.9 $ 39.2 $ 83.0 $ 38.2 $ 74.2 $ 1.9 $ (1.0)
====== ====== ====== ======= =========== =========== ====== =========== ===========
Income per common share(5)................................... $ 1.34 $ 0.03
Weighted average number of shares outstanding(5)............. 61,922,990 63,301,986
(Unaudited) Pro forma income (loss) per common share(5)...... $ 1.08 $ 0.50 $ 0.02 $ (0.01)
Pro forma weighted average number of shares outstanding(5)... 77,056,605 77,056,605 77,056,605 77,056,605
BALANCE SHEET DATA (END OF PERIOD):
Working capital (excluding current portion of long-term
debt)...................................................... $ 107.6 $ 181.1 $ 181.1
Total assets................................................. 968.3 1,184.7 1,173.6
Long-term debt (including current portion)................... 1,070.0 1,191.5 1,006.5
Stockholders' equity (deficit)............................... (264.2) (262.4) (88.5)
OTHER FINANCIAL DATA:
Depreciation and
amortization........... $ 11.8 $ 25.0 $ 26.4 $ 30.2 $ 19.0 $ 23.7 $ 13.7 $ 21.9 $ 22.6
Capital expenditures..... 18.6 22.0 31.1 24.2 11.9 13.4 8.5 8.6 8.6
</TABLE>

9
<PAGE> 12

(1) Operating expenses for historical periods include certain nonrecurring
charges recognized by the Company in connection with the IHF Acquisition and
subsequent management initiatives aggregating $6.0 for the year ended
December 31, 1996, consisting of: severance expense ($3.2), costs associated
with change of corporate name and relabeling of the Company's products
($1.2), expenses of hiring and relocating of certain senior executives
($1.2) and other costs ($0.4). Nonrecurring charges recognized in the nine
months ended September 30, 1997 amounted to $1.7, consisting of additional
severance ($0.7), relocation expense ($0.7) and relabeling costs ($0.3).
Operating expenses for the nine months ended September 30, 1997 also include
a non-cash stock option compensation charge of $51.9.

(2) Operating expenses on a pro forma as adjusted basis for the year ended
December 31, 1996 include the nonrecurring charges referred to in Note (1)
above, plus the following nonrecurring charges in connection with the
integration of the Bumble Bee Business: $4.9, consisting of purchase
accounting adjustments ($2.5), write-off of deferred financing fees ($1.1)
and management fees paid to the former owners of the business ($1.3). For
the nine months ended September 30, 1997, such nonrecurring charges amounted
to $0.9, consisting of management fees paid to the former owners of the
business ($0.6) and severance ($0.3).

(3) Represents non-cash compensation expense associated with stock options
granted to the Company's senior management and other employees. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Nine Months Ended September 30, 1997 Compared to Nine Months
Ended September 30, 1996."

(4) Operating profit for the year ended December 31, 1996 on a pro forma as
adjusted basis was $157.7. Excluding the effect of the nonrecurring charges
discussed in Notes (1) and (2) above of $10.9, including the $0.5 operating
profit of Heritage for the period prior to its acquisition (January 1, 1996
through October 31, 1996) and including the $25.3 of annualized net cost
savings achieved since the IHF Acquisition, operating profit on a pro forma
as adjusted basis would have been $194.3. The annualized cost savings
primarily reflect elimination of employee positions and facility
consolidations, net of increased corporate overhead. There can be no
assurance the cost savings will be realized.

(5) Due to the change in the Company's capital structure as a result of the IHF
Acquisition, historical share and per share data for periods prior to the
IHF Acquisition are not comparable to or meaningful in the context of future
periods. Pro forma income per common share is based on the weighted average
number of shares of common stock and common stock equivalents outstanding
during the period adjusted for the 5.3292 for one reverse stock split. The
weighted average number of shares outstanding include the shares of common
stock outstanding prior to the Offering and the shares to be issued in the
Offering. Including shares of Common Stock issued in connection with the
acquisition of Productos Del Monte on October 1, 1997 and shares issued upon
exercise of stock options granted after September 30, 1997, the pro forma
weighted average number of shares outstanding would be 80.3 million.

10
<PAGE> 13

RISK FACTORS

This Prospectus contains forward-looking statements. The words
"anticipate," "believe," "expect," "plan," "intend," "estimate," "project,"
"will," "could," "may" and similar expressions are intended to identify
forward-looking statements. Such statements reflect the Company's current views
with respect to future events and financial performance and involve risks and
uncertainties, including without limitation the risks described in this section.
Should one or more of these risks or uncertainties occur, or should underlying
assumptions prove incorrect, actual results may vary materially and adversely
from those anticipated, believed, expected, planned, intended, estimated,
projected or otherwise indicated. Investors should carefully consider the
following risk factors, in addition to the other information contained in this
Prospectus, before purchasing the Common Stock offered hereby.

SUBSTANTIAL LEVERAGE AND STOCKHOLDERS' DEFICIT

The Company is highly leveraged. As of September 30, 1997, pro forma as
adjusted for the Offering and the application of the net proceeds therefrom, the
Company had outstanding indebtedness of $1,006.5 million, including $606.5
million under the Senior Bank Facilities and $400.0 million of the Company's
10 3/8% Senior Subordinated Notes due 2006 ("Senior Subordinated Notes"), and a
stockholders' deficit of $88.5 million. A substantial portion of the cash flow
from the Company's operations will be applied to the service of the Company's
obligations in respect of its indebtedness for the foreseeable future. In
addition to periodic interest payments, the Company is required to make
semiannual repayments of the term loans under its Senior Bank Facilities and is
further required to apply a portion of its excess cash flow to repay the loans
thereunder. See "Description of Indebtedness."

The Company's high degree of leverage could have important consequences to
the holders of the Common Stock, including but not limited to the following: (i)
the Company's ability to obtain additional financing for working capital,
capital expenditures, acquisitions, general corporate purposes or other purposes
may be impaired in the future, (ii) a substantial portion of the Company's cash
flow from operations must be dedicated to the payment of principal and interest
on its indebtedness, thereby reducing the funds available to the Company for
other purposes, (iii) certain of the Company's borrowings are at variable rates
of interest (including borrowings under the Senior Bank Facilities), which
expose the Company to the risk of increased interest rates, (iv) the Company may
be substantially more leveraged than certain of its competitors, which may place
the Company at a competitive disadvantage and (v) the Company's substantial
degree of leverage may limit its flexibility to implement its business strategy
and adjust to changing market conditions, reduce its ability to withstand
competitive pressures and make it more vulnerable to a downturn in general
economic conditions or its business.

The Company's ability to make scheduled payments or to refinance its
obligations with respect to its indebtedness will depend on its financial and
operating performance, which in turn will be subject to prevailing economic
conditions and to certain financial, business and other factors beyond its
control. If the Company's cash flow and capital resources are insufficient to
fund its debt service obligations, the Company may be forced to reduce or delay
planned expansion and capital expenditures, sell assets, obtain additional
equity capital or restructure its debt. There can be no assurance that the
Company's operating results, cash flow and capital resources will be sufficient
for payment of its indebtedness in the future. In the absence of such operating
results and resources, the Company could face substantial liquidity problems and
might be required to dispose of material assets or operations to meet its debt
service and other obligations, and there can be no assurance as to the timing of
such sales or the proceeds that the Company could realize therefrom. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources" and "Description of
Indebtedness."

RESTRICTIVE DEBT COVENANTS

The Senior Bank Facilities and the indenture related to the Senior
Subordinated Notes (the "Indenture") contain a number of significant covenants
that, among other things, restrict the ability of the Company and its
subsidiaries to dispose of assets, incur additional indebtedness, incur
guarantee obligations, repay other indebtedness or amend other debt instruments,
pay dividends, create liens on assets, enter into leases, make investments,
loans or advances, make acquisitions, engage in mergers or consolidations, make
capital

11
<PAGE> 14

expenditures, engage in certain transactions with subsidiaries and affiliates
and otherwise restrict corporate activities. In addition, the Company is
required to comply with specified financial ratios and satisfy certain financial
condition tests. The Company's ability to comply with such agreements may be
affected by events beyond its control, including prevailing economic, financial
and industry conditions. The breach of any of such covenants or restrictions
could result in a default under the Senior Bank Facilities or the Indenture,
which would permit the senior lenders or the holders of the Senior Subordinated
Notes, as the case may be, to declare all amounts borrowed thereunder to be due
and payable, together with accrued and unpaid interest. If the Company were
unable to repay its indebtedness to its senior lenders, such lenders could
proceed against the collateral securing such indebtedness. If the indebtedness
under the Senior Bank Facilities or the Senior Subordinated Notes were to be
accelerated, there can be no assurance that the assets of the Company would be
sufficient to repay in full such indebtedness and the other indebtedness of the
Company.

GENERAL RISKS OF FOOD INDUSTRY

The food products manufacturing industry is subject to the risk of adverse
changes in general economic conditions; adverse changes in local markets
resulting in greater risks inherent in the limited shelf life of food products
in case of oversupply; lack of attractiveness of a particular food product line
after its novelty has worn off; evolving consumer preferences and nutritional
and health-related concerns; federal, state and local food processing controls;
consumer product liability claims; the risk of product tampering; and the
availability and expense of insurance. See "Business."

DEPENDENCE ON RAW MATERIALS

The primary raw materials used in the Company's operations include tin
cans, flour, meat, tuna, salmon, tomatoes, corn, fruit and fruit-juice
concentrates, beans and peanuts. All of the Company's raw materials are
generally available from numerous suppliers, other than white albacore tuna
processed by the Bumble Bee Business, for which there is limited worldwide
supply and number of suppliers. The prices of many of these raw materials are
affected by, among other things, agricultural policies of the United States
government and weather conditions. Movement in the price level of these raw
materials can have a corresponding impact on finished product costs, and hence,
gross margins. The ability of the Company to pass through increases in costs of
raw materials to its customers is dependent upon competitive conditions and
pricing methodologies employed in the various markets in which the Company
operates. See "Business -- Raw Materials."

IMPLEMENTATION OF BUSINESS STRATEGY; STRATEGIC ACQUISITIONS

The Company intends to pursue a business strategy of increasing sales and
earnings in its core business through growing sales of existing brands and
achieving cost savings. No assurance can be given that the Company will be
successful in implementing this strategy. See "Business -- Business Strategy."

The Company also intends to pursue a business strategy of growth through
strategic acquisitions. The Company cannot predict whether it will be successful
in pursuing any acquisition opportunities or what the consequences of any
acquisitions would be. The Company is currently evaluating certain strategic
acquisitions; however, the Company has no binding commitment to acquire any
business or other material assets. No assurance can be given that any strategic
acquisition will be consummated or that, if consummated, it will be successful.
The Company's acquisition strategy involves numerous risks, including
difficulties in the integration of the operations, systems and management of
acquired businesses and the diversion of management's attention from other
business concerns. Under the terms of the Senior Bank Facilities, the Company
may be required to obtain the consent of the lenders in order to consummate
acquisitions in certain circumstances. There can be no assurance as to whether,
or the terms on which, the lenders would grant any such consent. Moreover,
depending on the nature, size and timing of future acquisitions, the Company may
be required to raise additional financing. There can be no assurance that the
Senior Bank Facilities, the Indenture or any other loan agreement to which the
Company may become a party will permit such additional financing, and there can
be no assurance that any additional financing will be available on terms
acceptable to the Company, or at all.

12
<PAGE> 15

COMPETITION

The food products business is highly competitive. Numerous brands and
products compete for shelf space and sales, with competition based primarily on
brand recognition and loyalty, price, quality and convenience. The Company
competes with a significant number of companies of varying sizes, including
divisions or subsidiaries of larger companies. A number of these competitors
have broader product lines as well as substantially greater financial and other
resources available to them and lower fixed costs, and there can be no assurance
that the Company can compete successfully with such other companies. In
addition, many of the Company's competitors may be substantially less leveraged.
Competitive pressures or other factors could cause the Company's products to
lose market share or result in significant price erosion, which could have a
material adverse effect on the Company. See "Business."

CONTROL BY PRINCIPAL STOCKHOLDER; RELATIONSHIP WITH PRINCIPAL STOCKHOLDER AND
MANAGEMENT; ALLOCATION OF CORPORATE OPPORTUNITIES

In connection with the IHF Acquisition, Hicks Muse acquired beneficial
ownership of 80% of the Company's outstanding Common Stock. All of the members
of the Company's Board of Directors were nominated by Hicks Muse. After
completion of the Offering, Hicks Muse and certain of its officers, employees
and affiliates will continue to own or control a majority of the outstanding
shares of Common Stock and, accordingly, will be able to (i) direct the election
of a majority of the members of the Board of Directors of the Company and
therefore direct the management and policies of the Company, (ii) practically
determine the outcome of any corporate or other matter submitted to the
Company's stockholders for approval, including any merger, consolidation, sale
of all or substantially all of the Company's assets or "going private"
transaction and (iii) prevent or cause a change of control of the Company. The
interests of Hicks Muse may conflict with those of other shareholders of the
Company. The Company has recently acquired Productos del Monte from an affiliate
of Hicks Muse. See "Principal and Selling Stockholders" and "Certain
Relationships and Related Transactions." In addition, certain officers and
directors of the Company, including Mr. Metropoulos, also serve as officers or
directors of other portfolio companies of Hicks Muse. Service as a director or
officer of both the Company and another company (other than a subsidiary of the
Company) could create or appear to create potential conflicts of interest when
the director or officer is faced with decisions that could have different
implications for the Company and such other company. A conflict of interest
could also exist with respect to allocation of the time and attention of persons
who are officers of both the Company and one or more other companies. Under
Delaware law, directors and officers have a fiduciary duty to act in good faith
and in what they believe to be in the best interests of the corporation and its
stockholders. Such duties include the duty to refrain from impermissible
self-dealing and to deal fairly with respect to transactions in which such
directors or officers, or other companies with which they are affiliated, have
an interest.

Neither Hicks Muse nor Mr. Metropoulos is restricted from acquiring or
managing other companies in the food business, including companies that may be
competitive with the Company. Hicks Muse has publicly stated that it expects to
commit significant amounts of equity capital to acquire food and other branded
consumer product companies in North America and Latin America that Mr.
Metropoulos will help manage. There is no agreement requiring that any such
acquisition opportunities be pursued through the Company. As a result, conflicts
may exist between the Company on the one hand and Hicks Muse and Mr. Metropoulos
on the other hand with respect to the allocation of corporate opportunities,
including acquisition opportunities. No assurance can be given that any such
conflicts will be resolved in favor of the Company.

GOVERNMENTAL REGULATION

The Company's operations are subject to extensive regulation by the United
States Food and Drug Administration ("FDA"), the United States Department of
Agriculture and other state and local authorities regarding the processing,
packaging, storage, distribution, advertising and labeling of the Company's
products and environmental compliance. The Company's manufacturing facilities
and products are subject to periodic inspection by federal, state and local
authorities. The Company's advertising is subject to regulation by the Federal
Trade Commission ("FTC") pursuant to the Federal Trade Commission Act and
regulations issued thereunder. In addition, the Company is subject to similar
laws in foreign jurisdictions in which it conducts operations. The Company
believes that it is currently in substantial compliance with all material
governmental

13
<PAGE> 16

laws and regulations and maintains all material permits and licenses relating to
its operations. Nevertheless, there can be no assurance that the Company is in
compliance with such laws and regulations or that it will be able to comply with
any future laws and regulations. Failure by the Company to comply with
applicable laws and regulations could subject the Company to civil remedies,
including fines, injunctions, recalls or seizures, as well as potential criminal
sanctions, which could have a material adverse effect on the Company. See
"Business -- Certain Legal and Regulatory Matters."

ENVIRONMENTAL MATTERS

The past and present business operations of the Company and the past and
present ownership and operation of real property by the Company are subject to
extensive and changing federal, state, local and foreign environmental laws and
regulations pertaining to the discharge of materials into the environment and
the handling and disposition of wastes (including solid and hazardous wastes) or
otherwise relating to protection of the environment. Compliance with such laws
and regulations is not expected to have a material impact on the Company's
capital expenditures, earnings or competitive position. No assurance can be
given, however, that additional environmental issues relating to presently known
matters or identified sites or to other matters or sites will not require
additional, currently unanticipated investigation, assessment or expenditures.
See "Business -- Certain Legal and Regulatory Matters -- Environmental."

TRADEMARKS

The Company believes that its trademarks and other proprietary rights are
important to its success and its competitive position. Accordingly, the Company
devotes substantial resources to the establishment and protection of its
trademarks on a worldwide basis. There can be no assurance that the actions
taken by the Company to establish and protect its trademarks and other
proprietary rights will be adequate to prevent imitation of its products by
others or to prevent others from seeking to block sales of the Company's
products as violative of the trademarks and proprietary rights of others.
Moreover, no assurance can be given that others will not assert rights in, or
ownership of, trademarks and other proprietary rights of the Company or that the
Company will be able to successfully resolve such conflicts. In additions, the
laws of certain foreign countries may not protect proprietary rights to the same
extent as do the laws of the United States. See "Business -- Trademarks."

PRODUCT LIABILITY; PRODUCT RECALLS

The Company may be subject to significant liability should the consumption
of any of its products cause injury, illness or death and may be required to
recall certain of its products in the event of contamination or damage to the
products. There can be no assurance that product liability claims will not be
asserted against the Company or that the Company will not be obligated to recall
its products. The Company has not historically incurred material expenditures in
respect of product liability claims and is effectively self-insured against such
liabilities. A product liability judgment against the Company or a product
recall could have a material adverse effect on the Company's business, financial
condition and results of operations.

DILUTION; CERTAIN BENEFITS TO EXISTING STOCKHOLDERS

Persons purchasing shares of Common Stock in the Offering will incur
immediate dilution in the net tangible book value per share of Common Stock of
approximately $14.37 per share. This dilution is calculated based on an assumed
initial public offering price of $19.00 per share (the midpoint of the estimated
offering range). In addition, the exercise of existing stock options would
result in further dilution. Dilution for this purpose represents the difference
between the per share initial public offering price of the Common Stock and the
pro forma as adjusted net tangible book value per share of Common Stock after
giving effect to the Offering and the use of proceeds therefrom. See "Dilution."

The Company's existing stockholders, including Hicks Muse and the Selling
Stockholder, will receive substantial benefits from the Offering. In connection
with the IHF Acquisition, Hicks Muse and certain other investors acquired
beneficial ownership of 80% of the Company's Common Stock for a per share price
of $5.33. The Selling Stockholder, who is not affiliated with Hicks Muse, will
receive substantial net proceeds

14
<PAGE> 17

from the sale of shares in the Offering. See "Principal and Selling
Stockholders," "Certain Relationships and Related Transactions" and "Shares
Eligible for Future Sale."

SHARES ELIGIBLE FOR FUTURE SALE; REGISTRATION RIGHTS

Upon completion of the Offering, the Company will have outstanding
75,576,596 shares of Common Stock. Of these shares, the 13,622,500 shares of
Common Stock sold in the Offering (15,665,875 shares if the U.S. Underwriters'
over-allotment option is exercised in full) will be freely transferable without
restriction under the Securities Act of 1933 (the "Securities Act"), by persons
other than "affiliates" of the Company within the meaning of Rule 144
promulgated under the Securities Act ("Rule 144"). The remaining 61,954,096
shares of Common Stock were issued in reliance on exemptions from the
registration requirements of the Securities Act, and those shares are
"restricted" securities under Rule 144. For purposes of Rule 144, 9,288,423
shares of Common Stock are currently eligible for sale and there will be (i)
49,538,258 shares of Common Stock eligible for sale beginning in November 1,
1997 and (ii) 3,127,415 shares of Common Stock eligible for sale beginning in
October 1, 1998, based on current Securities and Exchange Commission
("Commission") rules and subject to compliance with the manner-of-sale, volume
and other limitations of Rule 144.

The Company is a party to a registration rights agreement (the
"Registration Rights Agreement") with its existing stockholders, which grants
those stockholders, who will hold an aggregate of 61,954,096 shares of Common
Stock immediately after the Offering, the right to require the Company, subject
to certain limitations, to effect up to an aggregate of six "demand"
registrations under the Securities Act for the sale of such stockholders' shares
of Common Stock. All parties to the Registration Rights Agreement have waived
their rights to participate as selling stockholders in the Offering, except the
Selling Stockholder in this Offering. See "Certain Relationships and Related
Transactions" and "Principal and Selling Stockholders."

Each of the Company, its officers and directors, Hicks Muse and its
affiliates, and certain other stockholders of the Company, including the Selling
Stockholder, has agreed that it will not (i) offer, pledge, sell, solicit an
offer to buy, contract to sell, grant any option, right or warrant to purchase,
or otherwise transfer or dispose of, directly or indirectly, or file with the
Commission a registration statement under the Securities Act relating to any
shares of Common Stock, or any securities that are convertible into or
exercisable or exchangeable for Common Stock or (ii) enter into any swap or
other arrangement that transfers all or a portion of the economic consequences
associated with ownership of any Common Stock, for a period of 180 days after
the date of this Prospectus without the prior written consent of Donaldson,
Lufkin & Jenrette Securities Corporation, except pursuant to certain limited
exceptions. See "Shares Eligible for Future Sale" and "Underwriting."

Future sales of substantial amounts of Common Stock, or the perception that
such sales could occur, may affect the market price of the Common Stock
prevailing from time to time.

NO PRIOR PUBLIC MARKET

Prior to the Offering, there has been no public market for the Common Stock
and there can be no assurance that an active public market will develop or be
sustained after the Offering or that the initial public offering price
corresponds to the price at which the Common Stock will trade in the public
market subsequent to the Offering. The initial public offering price for the
Common Stock will be determined by negotiations among the Company, the Selling
Stockholder and the representatives of the Underwriters based upon the
consideration of certain factors set forth herein under "Underwriting." Market
conditions in the food industry and market fluctuations in the stock market
generally may have an adverse impact on the market price of the Common Stock.

15
<PAGE> 18

THE COMPANY

The Company is a leading North American manufacturer and marketer of a
diversified, well-established portfolio of shelf-stable food products with
popular brand names. Prior to November 1, 1996, the Company was an indirect
wholly-owned subsidiary of American Home Products. Effective on November 1,
1996, an affiliate of Hicks Muse acquired 80% of the outstanding capital stock
of the Company from American Home Products for approximately $1,225.6 million in
cash in a transaction treated as a recapitalization for financial accounting
purposes. Also effective on November 1, 1996, the Company acquired all of the
outstanding capital stock of Heritage from an affiliate of Hicks Muse for
approximately $70.8 million in cash in a transaction treated as a purchase for
financial accounting purposes. Heritage manufactures and markets the Company's
Campfire branded products. In connection with these transactions, the Company
incurred approximately $1,070.0 million of indebtedness, consisting of $670.0
million of borrowings under the Senior Bank Facilities and the issuance of
$400.0 million principal amount of the Senior Subordinated Notes. See "Principal
and Selling Stockholders" and "Certain Relationships and Related Transactions."

On July 1, 1997, the Company consummated the acquisition of substantially
all of the assets of Bumble Bee Seafoods for approximately $160.0 million in
cash, plus fees and expenses, and the assumption of certain liabilities,
including trade payables. Bumble Bee is one of the leading brands of premium
canned seafood in the U.S. and the leading brand of canned white meat tuna and
canned salmon in the U.S. The assets acquired consisted primarily of inventory,
accounts receivable, property, plant and equipment and trademarks used by the
Bumble Bee Business for the processing and marketing of the Company's Bumble Bee
canned seafood products. Prior to this transaction, Bumble Bee Seafoods was
highly leveraged and had capital constraints which limited Bumble Bee Seafoods'
ability to source raw materials and most effectively market its products. To
facilitate the purchase of the Bumble Bee Business by the Company free and clear
of existing liens, Bumble Bee Seafoods filed for bankruptcy. In connection with
the transaction, the Company increased its borrowings under the Senior Bank
Facilities by $110.0 million. The remainder of the purchase price was provided
from the Company's available cash on hand. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Bumble Bee
Seafoods" and "Business -- Products and Markets -- Bumble Bee."

On October 1, 1997, the Company acquired Creative Products for
approximately $52.0 million in cash. The acquisition was funded through
borrowings under the Company's Senior Bank Facilities. Creative Products is the
leading manufacturer of cooking spray sold to private label customers and food
service operators. In addition, Creative Products manufactures on a contract
basis a number of health and beauty aid products, including hair mousses, hair
sprays and deodorants. In 1996, Creative Products had net sales of $46.0
million. The acquisition of Creative Products was treated as a purchase for
financial accounting purposes.

In September 1997, the Company signed a letter of intent to acquire a
specialty canned seafood manufacturer and marketer for approximately $26.5
million in cash.

The Company was incorporated on October 28, 1986. The Company's principal
executive offices are located at 1633 Littleton Road, Parsippany, New Jersey
07054, and its main telephone number at that address is (973) 359-9920.

16
<PAGE> 19

USE OF PROCEEDS

The net proceeds to be received by the Company from the Offering (after
deducting the underwriting discounts and commissions and estimated offering
expenses), based on an assumed initial public offering price of $19.00 per
share, the midpoint of the estimated offering range, are estimated to be
approximately $185.0 million. The Company will not receive any of the net
proceeds from the shares of Common Stock to be sold by the Selling Stockholder.

The net proceeds from the Offering will be used by the Company to repay
indebtedness under the Senior Bank Facilities. The Senior Bank Facilities, which
were originally entered into in connection with the IHF Acquisition, currently
bear interest at floating rates plus a margin (Adjusted LIBOR plus 2% in the
case of the revolving credit facility and the Tranche A term loans, and Adjusted
LIBOR plus 2.25% in the case of the Tranche B term loans), and finally mature on
September 30, 2004. The Company expects to amend the Senior Bank Facilities in
connection with the Offering. Affiliates of certain of the Underwriters are
lenders and agents under the Senior Bank Facilities. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources" and "Description of
Indebtedness -- Senior Bank Facilities."

DIVIDEND POLICY

The right of the Company to participate in any distribution of earnings or
assets is subject to the prior claims of the creditors of the Company. The
Senior Bank Facilities and the Indenture contain certain restrictive covenants,
including covenants that restrict or prohibit the Company's ability to pay
dividends and make other distributions. The Company intends to retain future
earnings for use in the Company's business and does not anticipate declaring or
paying any cash or stock dividends on shares of its Common Stock in the
foreseeable future. Further, any determination to declare and pay dividends will
be made by the Board of Directors of the Company in light of the Company's
earnings, financial position, capital requirements and credit agreements and
such other factors as the Board of Directors deems relevant. See "Risk
Factors -- Restrictive Debt Covenants" and "Description of Indebtedness."

DILUTION

As of September 30, 1997, the Company had a deficit in net tangible book
value of $528.0 million or approximately $8.53 per share of Common Stock. Net
tangible book value per share is determined by dividing the tangible net worth
of the Company (tangible assets less total liabilities) by the total number of
shares of Common Stock outstanding. After giving effect to the sale by the
Company of the shares of Common Stock offered hereby at an assumed initial
public offering price of $19.00 per share and the deduction of the estimated
underwriting discount and offering expenses payable by the Company in connection
therewith, but without taking into account any other changes in such net
tangible book value after September 30, 1997, the deficit in net tangible book
value of the Company on a pro forma as adjusted basis as of September 30, 1997,
would have been approximately $335.6 million or $4.63 per share. This represents
an immediate dilution of $3.90 per share to new investors purchasing shares at
the assumed initial public offering price. The following table illustrates the
per share dilution in net tangible book value to new investors. The table
assumes no exercises of any options to purchase Common Stock outstanding at
September 30, 1997.

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share............. $19.00
Net tangible book value (deficit) per share as of
September 30, 1997..................................... $(8.53)
Increase per share attributable to the Offering........... 3.90
------
Net tangible book value (deficit) per share as
adjusted for this Offering............................. (4.63)
------
Net tangible book value dilution per share to new
investors................................................. $14.37
======
</TABLE>

17
<PAGE> 20

The following table summarizes as of the date hereof, after giving effect
to the sale of the shares of Common Stock offered hereby, the number of shares
of Common Stock purchased from the Company, the total consideration paid
therefore and the average price per share paid by the existing stockholders and
by the new investors purchasing shares of Common Stock in this Offering before
deduction of the estimated underwriting discounts and commissions and offering
expenses payable by the Company:

<TABLE>
<CAPTION>
TOTAL
SHARES PURCHASED CONSIDERATION
(IN MILLIONS) (IN MILLIONS) AVERAGE
---------------- ---------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
<S> <C> <C> <C> <C> <C>
Existing stockholders(1)............. 65.0 86.1% $370.0(2) 64.9% $ 5.69
New investors(1)..................... 10.5 13.9% 200.0 35.1% 19.00
---- ----- ------ -----
Total........................... 75.5 100.0% $570.0 100.0%
==== ===== ====== =====
</TABLE>

- ---------------

(1) Sales by the Selling Stockholder in this Offering will reduce the number of
shares held by existing stockholders of the Company to 61,954,096 shares, or
82.0% of the total numbers of shares outstanding after this Offering, and
will increase the number of shares held by new investors to 13,622,500
shares, or 18.0% of the total number of shares of Common Stock outstanding
after this Offering. See "Principal and Selling Stockholders."

(2) Amount assumes that American Home Products acquired its shares of Common
Stock for $5.33 per share, the value of the Common Stock determined in
connection with the IHF Acquisition.

The computations in the table set forth above assume no exercise of
outstanding stock options. On the date of this Prospectus, there were
outstanding options to purchase 7,295,822 shares of Common Stock at a weighted
average exercise price of $6.81 per share.

18
<PAGE> 21

CAPITALIZATION

The following table sets forth the historical capitalization of the Company
as of September 30, 1997, and the unaudited capitalization of the Company, as
adjusted to give effect to the Offering and the application of the net proceeds
therefrom. This table should be read in conjunction with the historical
consolidated financial statements of the Company and the unaudited pro forma
financial statements and related notes thereto included elsewhere in this
Prospectus.

<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1997
-------------------------
ACTUAL AS ADJUSTED
(IN MILLIONS)
<S> <C> <C>
Long-term debt (including current maturities):
Revolving credit facility(1)(2)........................... $ 71.0 $ 61.5
Term loans(2)............................................. 720.5 545.0
10 3/8% Senior Subordinated Notes due 2006................ 400.0 400.0
-------- --------
Total long-term debt.............................. 1,191.5 1,006.5
-------- --------
Stockholders' equity (deficiency)(3):
Preferred stock (no shares issued and outstanding)........ -- --
Voting common stock....................................... 0.6 0.6
Non-voting common stock................................... -- --
Additional paid-in capital(4)............................. (261.3) (76.3)
Retained earnings (accumulated deficit)................... 0.3 (10.8)
Foreign currency translation adjustment................... (2.0) (2.0)
-------- --------
Total stockholders' equity (deficiency)........... (262.4) (88.5)
-------- --------
Total capitalization.............................. $ 929.1 $ 918.0
======== ========
</TABLE>

- ---------------

(1) The revolving credit facility provides for borrowings of up to $140.0
million. In connection with the Offering, the Company expects to amend the
revolving credit facility to provide for borrowings of up to $200.0 million.
See "Description of Indebtedness."

(2) As Adjusted gives effect to the net repayment of (i) $9.5 million of
outstanding borrowings under the revolving credit facility and (ii) $175.5
million of term loan borrowings.

(3) As Adjusted gives effect to the $200.0 million of proceeds from the
Offering, less (i) the related fees and expenses of $15.0 million and (ii) a
$11.1 million extraordinary charge, net of tax benefit, relating to deferred
financing costs of $18.5 million to be written off in connection with the
expected amendment of the Senior Bank Facilities. See "Description of
Indebtedness -- Senior Bank Facilities."

(4) As a result of the IHF Acquisition, the Company has a stockholders'
deficiency for accounting purposes.

19
<PAGE> 22

SELECTED HISTORICAL FINANCIAL AND OPERATING INFORMATION

The following table sets forth selected historical financial and operating
information of the Company for the periods ended and as of the dates indicated.
The selected historical statement of operations data for the years ended
December 31, 1994, 1995 and 1996 and the historical balance sheet data as of
December 31, 1995 and 1996 are derived from the audited financial statements of
the Company included elsewhere in this Prospectus. The selected historical
statement of operations data for the nine months ended September 30, 1996 and
1997 and the selected historical balance sheet data as of September 30, 1997 are
derived from the unaudited financial statements of the Company included
elsewhere in this Prospectus and which, in the opinion of management, include
all adjustments necessary for a fair presentation. The selected historical
statement of operations data for the year ended December 31, 1993 and the
selected historical balance sheet data as of December 31, 1993 and 1994 are
derived from the audited financial statements of the Company not included in
this Prospectus. The selected historical statement of operations data for the
year ended December 31, 1992 and the selected historical balance sheet data as
of September 30, 1996 and December 31, 1992 are derived from the unaudited
financial statements of the Company which are not included in this Prospectus
and which, in the opinion of management, include all adjustments necessary for a
fair presentation. This table should be read in conjunction with the Company's
historical consolidated financial statements and related notes thereto included
elsewhere in this Prospectus and with "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
----------------------------------------------- --------------------
1992 1993 1994 1995 1996 1996 1997
(IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales.............................................. $865.8 $935.7 $997.3 $818.9 $ 942.8 $704.1 $ 843.9
Cost of goods sold..................................... 402.6 432.0 463.1 398.2 444.9 333.9 412.9
------ ------ ------ ------ ----------- ------ -----------
Gross profit........................................... 463.2 503.7 534.2 420.7 497.9 370.2 431.0
Marketing expenses:
Advertising.......................................... 36.8 33.2 32.8 42.4 58.6 43.0 45.9
Consumer promotion................................... 26.2 21.5 25.5 23.5 17.5 13.3 15.0
Trade promotion...................................... 101.0 118.7 127.6 102.0 101.0 74.6 106.6
Other................................................ 15.2 16.5 14.9 18.5 14.4 9.3 10.9
------ ------ ------ ------ ----------- ------ -----------
Total marketing expenses......................... 179.2 189.9 200.8 186.4 191.5 140.2 178.4
Other operating expenses:
Selling.............................................. 43.3 47.2 52.3 45.9 46.3 33.6 34.0
Storage, packing and shipping ....................... 51.0 57.6 63.4 55.3 55.2 41.2 44.0
Administrative....................................... 17.0 20.5 23.2 23.6 19.7 14.2 20.1
General and other.................................... 16.4 35.2 35.3 40.9 32.0 21.3 21.8
Stock option compensation(1)......................... -- -- -- -- -- -- 51.9
------ ------ ------ ------ ----------- ------ -----------
Total other operating expenses................... 127.7 160.5 174.2 165.7 153.2 110.3 171.8
------ ------ ------ ------ ----------- ------ -----------
Operating profit....................................... 156.3 153.3 159.2 68.6 153.2 119.7 80.8
Interest expense....................................... -- -- -- -- 17.1 -- 79.2
Interest income and other, net......................... -- -- -- -- 0.2 -- 1.6
Provision for income taxes............................. 56.7 60.9 63.3 29.4 53.3 45.5 1.3
------ ------ ------ ------ ----------- ------ -----------
Net income............................................. $ 99.6 $ 92.4 $ 95.9 $ 39.2 $ 83.0 $ 74.2 $ 1.9
====== ====== ====== ====== =========== ====== ===========
Income per common share(2)............................. $ 1.34 $ 0.03
Weighted average number of shares outstanding(2)....... 61,922,990 63,301,986
(Unaudited) Pro forma income per common share(2)....... $ 1.08 $ 0.02
Pro forma weighted average number of shares
outstanding(2)....................................... 77,056,605 77,056,605
BALANCE SHEET DATA (END OF PERIOD):
Inventories............................................ $108.7 $134.2 $148.0 $139.9 $ 129.2 $130.5 $ 200.3
Working capital (excluding current portion of long-term
debt)................................................ 128.4 157.9 197.1 120.6 107.6 109.8 181.1
Property, plant and equipment, net..................... 140.5 152.0 169.7 176.8 186.0 173.5 200.9
Total assets........................................... 387.3 496.0 540.5 463.6 968.3 457.2 1,184.7
Long-term debt (including current portion)............. -- -- -- -- 1,070.0 -- 1,191.5
Stockholders' equity (deficit)......................... 330.1 423.6 467.1 385.0 (264.2) 368.6 (262.4)
OTHER FINANCIAL DATA:
Depreciation and amortization.......................... 11.8 25.0 26.4 30.2 19.0 13.7 21.9
Capital expenditures................................... 18.6 22.0 31.1 24.2 11.9 8.5 8.6
</TABLE>

- ---------------

(1) Represents a non-cash compensation expense associated with stock options
granted to the Company's senior management and other employees. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Nine Months Ended September 30, 1997 Compared to Nine Months
Ended September 30, 1996."

(2) Due to the change in the Company's capital structure as a result of the IHF
Acquisition, historical share and per share data for periods prior to the
IHF Acquisition are not comparable to or meaningful in the context of future
periods. Pro forma income per common share is based on the weighted average
number of shares of common stock and common stock equivalents outstanding
during the period adjusted for the 5.3292 for one reverse stock split. The
weighted average number of shares outstanding include the shares of common
stock outstanding prior to the Offering and the shares to be issued in the
Offering. Including shares of Common Stock issued in connection with the
acquisition of Productos Del Monte on October 1, 1997 and shares to be
issued upon exercise of stock options granted after September 30, 1997, the
pro forma weighted average number of common shares outstanding would be 80.3
million.

20
<PAGE> 23

UNAUDITED PRO FORMA FINANCIAL STATEMENTS

The following unaudited pro forma financial statements ("Unaudited Pro
Forma Financial Statements") of the Company are based on the audited and
unaudited historical consolidated financial statements of both the Company and
Bumble Bee Seafoods, which are included elsewhere in this Prospectus.

The Unaudited Pro Forma Balance Sheet has been prepared to give effect to
the Offering as though it occurred as of September 30, 1997. The Unaudited Pro
Forma Statements of Operations give effect to (i) the Bumble Bee Acquisition,
(ii) the Offering and (iii) for the period ended December 31, 1996, the IHF
Acquisition, as if the transactions occurred on January 1, 1996. The Unaudited
Pro Forma Financial Statements do not give effect to the pre-acquisition
operations of Heritage or the operations of Productos Del Monte and Creative
Products.

The Bumble Bee Acquisition was accounted for using the purchase method of
accounting. The total purchase price of the Bumble Bee Business was allocated to
the tangible and intangible assets acquired and liabilities assumed based upon
their respective fair values.

The unaudited pro forma adjustments are based upon available information
and certain assumptions that the Company believes are reasonable. The Unaudited
Pro Forma Financial Statements and accompanying notes should be read in
conjunction with the historical consolidated financial statements of the Company
and Bumble Bee Seafoods, and other financial information pertaining to the
Company including "The Company," "Capitalization" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" included
elsewhere herein. The Unaudited Pro Forma Financial Statements are not
indicative of either future results of operations or the results that might have
occurred if the foregoing transactions had been consummated on the indicated
dates.

21
<PAGE> 24

INTERNATIONAL HOME FOODS, INC.

UNAUDITED PRO FORMA BALANCE SHEET

AS OF SEPTEMBER 30, 1997

(IN MILLIONS)

ASSETS

<TABLE>
<CAPTION>
ADJUSTMENTS
FOR THE PRO FORMA
HISTORICAL OFFERING AS ADJUSTED
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents................................. $ 63.7 $ -- $ 63.7
Accounts receivable, net.................................. 78.9 -- 78.9
Inventories............................................... 200.3 -- 200.3
Prepaid expenses and other current assets................. 22.3 -- 22.3
-------- ------- --------
Total current assets.............................. 365.2 -- 365.2
Property, plant and equipment, net.......................... 200.9 -- 200.9
Intangible assets, net...................................... 234.4 -- 234.4
Deferred income taxes....................................... 350.6 7.4(b) 358.0
Other assets................................................ 33.6 (18.5)(b) 15.1
-------- ------- --------
Total assets...................................... $1,184.7 $ (11.1) $1,173.6
======== ======= ========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

Current Liabilities:
Accounts payable.......................................... $ 38.7 $ -- $ 38.7
Accrued liabilities....................................... 145.4 -- 145.4
Current portion of long-term debt......................... 110.0 (9.5)(a) 100.5
-------- ------- --------
Total current liabilities......................... 294.1 (9.5) 284.6
Long-term debt.............................................. 1,081.5 (175.5)(a) 906.0
Other liabilities........................................... 19.6 -- 19.6
Accrued stock option compensation........................... 51.9 -- 51.9
Stockholders' equity (deficiency)........................... (262.4) 173.9(b) (88.5)
-------- ------- --------
Total liabilities and stockholders' equity
(deficiency).................................... $1,184.7 $ (11.1) $1,173.6
======== ======= ========
</TABLE>

See Accompanying Notes to Unaudited Pro Forma Balance Sheet.

22
<PAGE> 25

INTERNATIONAL HOME FOODS, INC.

NOTES TO THE UNAUDITED PRO FORMA BALANCE SHEET
(IN MILLIONS)

(a) Adjustments reflect the assumed proceeds from the Offering and application
of proceeds therefrom as follows:

<TABLE>
<S> <C>
Gross proceeds from the Offering............................ $200.0
Uses:
Net repayment of term loan borrowings..................... 175.5
Repayment of revolving credit facility.................... 9.5
Fees and expenses......................................... 15.0
------
$200.0
======
</TABLE>

In connection with the Offering, the Company will amend its Senior Bank
Facilities. The net proceeds from the Offering and additional borrowings
under the Tranche A term loan of $43.5 will be used to repay $219.0 of
borrowings under the Tranche B term loan and $9.5 of borrowings under the
revolving credit facility.

(b) Adjustments reflect the effect of the Offering on stockholders' equity
(deficiency) as follows:

<TABLE>
<S> <C>
Gross proceeds from the Offering............................ $200.0
Less:
Fees and expenses......................................... 15.0
Extraordinary charge, net of tax benefit.................. 11.1
------
Net increase in stockholders' equity........................ $173.9
======
</TABLE>

The extraordinary charge consists of the write-off of deferred financing
fees of $18.5 to be recognized in connection with the expected amendment of
the Senior Bank Facilities, less related income tax benefit of $7.4. The
extraordinary charge will be recorded in the period during which the
amendment occurs.

23
<PAGE> 26

INTERNATIONAL HOME FOODS, INC.

UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996

(IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
ADJUSTMENTS
FOR THE
HISTORICAL ADJUSTMENTS IHF
----------------------- FOR THE ACQUISITION
BUMBLE BEE BUMBLE BEE AND THE PRO FORMA
IHF SEAFOODS ACQUISITION PRO FORMA OFFERING AS ADJUSTED(G)(H)(I)
<S> <C> <C> <C> <C> <C> <C>

Net sales............... $ 942.8 $395.6 $ -- $1,338.4 $ -- $ 1,338.4
Cost of goods sold...... 444.9 275.7 2.5(a) 723.1 -- 723.1
---------- ------ ------ -------- ------ -----------
Gross profit.......... 497.9 119.9 (2.5) 615.3 -- 615.3
Marketing expenses...... 191.5 89.5 -- 281.0 -- 281.0
Selling, general and
administrative
expenses.............. 148.9 25.8 (2.4)(b) 172.3 -- 172.3
Provision for
restructuring and
goodwill write-off.... 4.3 63.0 (63.0)(b) 4.3 -- 4.3
---------- ------ ------ -------- ------ -----------
Operating profit...... 153.2 (58.4) 62.9 157.7 -- 157.7
Interest expense........ 17.1 19.3 (10.9)(c) 25.5 60.5(e) 86.0
Other income (expense),
net................... 0.2 0.1 -- 0.3 -- 0.3
---------- ------ ------ -------- ------ -----------
Income (loss) before
provision for
income taxes....... 136.3 (77.6) 73.8 132.5 (60.5) 72.0
Provision for (benefit
from) income taxes.... 53.3 0.4 4.3(d) 58.0 (24.2)(d) 33.8
---------- ------ ------ -------- ------ -----------
Net income (loss)..... $ 83.0 $(78.0) $ 69.5 $ 74.5 $(36.3) $ 38.2
========== ====== ====== ======== ====== ===========
Income per common
share................. $ 1.34
Weighted average number
of common shares...... 61,922,990
==========
Pro forma income per
common share(f)....... $ 1.08 $ 0.50
Pro forma weighted
average number of
common shares(f)...... 77,056,605 77,056,605
========== ===========
</TABLE>

See Accompanying Notes to Unaudited Pro Forma Statements of Operations.

24
<PAGE> 27

INTERNATIONAL HOME FOODS, INC.

UNAUDITED PRO FORMA STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997

(IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
ADJUSTMENTS
PRO FORMA FOR THE
HISTORICAL ADJUSTMENTS IHF
------------------------ FOR THE ACQUISITION
BUMBLE BEE BUMBLE BEE AND THE PRO FORMA
IHF SEAFOODS(J) ACQUISITION PRO FORMA OFFERING AS ADJUSTED(G)(H)(I)
<S> <C> <C> <C> <C> <C> <C>

Net sales............ $ 843.9 $179.0 $ -- $1,022.9 $ -- $ 1,022.9
Cost of goods sold... 412.9 127.5 (2.3)(a) 538.1 -- 538.1
---------- ------ ----- -------- ----- -----------
Gross profit....... 431.0 51.5 2.3 484.8 -- 484.8
Marketing expenses... 178.4 41.9 -- 220.3 -- 220.3
Selling, general and
administrative
expenses........... 119.9 11.2 (1.1)(b) 130.0 -- 130.0
Stock option
compensation
expense............ 51.9 -- -- 51.9 -- 51.9
---------- ------ ----- -------- ----- -----------
Operating profit... 80.8 (1.6) 3.4 82.6 -- 82.6
Interest expense..... 79.2 10.0 (3.8)(c) 85.4 (10.3) (e) 75.1
Other income
(expense), net..... 1.6 (1.6) -- -- -- --
---------- ------ ----- -------- ----- -----------
Income (loss)
before provision
for income
taxes........... 3.2 (13.2) 7.2 (2.8) 10.3 7.5
Provision for income
taxes.............. 1.3 0.2 2.9(d) 4.4 4.1(d) 8.5
---------- ------ ----- -------- ----- -----------
Net income
(loss).......... $ 1.9 $(13.4) $ 4.3 $ (7.2) $ 6.2 $ (1.0)
========== ====== ===== ======== ===== ===========
Income per common
share.............. $ 0.03
Weighted average
number of common
shares............. 63,301,986
==========
Pro forma income
(loss) per common
share(f)........... $ 0.02 $ (0.01)
Pro forma weighted
average number of
common shares(f)... 77,056,605 77,056,605
========== ===========
</TABLE>

See Accompanying Notes to Unaudited Pro Forma Statements of Operations.

25
<PAGE> 28

INTERNATIONAL HOME FOODS, INC.

NOTES TO THE UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS
(IN MILLIONS)

(a) The adjustment reflects the effect of adjusting inventory to estimated fair
value and an increase in depreciation resulting from the adjustment of
property, plant, and equipment to estimated fair value in connection with
the Bumble Bee Acquisition. Property, plant and equipment is depreciated
over approximately 10 years.

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
1996 1997
<S> <C> <C>
Fair value adjustment to inventory................. $2.4 $(2.4)
Increase in depreciation expense................... 0.1 0.1
---- -----
$2.5 $(2.3)
==== =====
</TABLE>

(b) The adjustments reflect (i) the amortization of goodwill associated with the
Bumble Bee Acquisition reduced by the elimination of the amortization of
Bumble Bee Seafoods' historical goodwill and organizational costs and (ii)
the elimination of the write-down of Bumble Bee Seafoods' goodwill. Goodwill
is amortized over 40 years.

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
1996 1997
<S> <C> <C>
Goodwill amortization.............................. $ 1.4 $ 0.7
Elimination of the Bumble Bee Seafoods' historical
goodwill and organizational cost amortization.... (3.8) (1.8)
------ -----
$ (2.4) $(1.1)
====== =====
Elimination of the write-down of Bumble Bee
Seafoods' historical goodwill.................... $(63.0) $ --
====== =====
</TABLE>

(c) The adjustment reflects interest associated with the additional borrowings
under the Senior Bank Facilities for the Bumble Bee Acquisition,
amortization of deferred financing fees and the elimination of interest
related to the pre-acquisition indebtedness of Bumble Bee Seafoods.

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
1996 1997
<S> <C> <C>
Senior Bank Facilities:
Revolving credit facility, $30.0 at 7.16%........ $ 2.2 $ 1.6
Term loan-Tranche A, $80.0 at 7.16%.............. 5.7 4.3
------ ------
Interest expense before amortization of deferred
financing fees................................... 7.9 5.9
Amortization of deferred financing fees(1)......... 0.5 0.3
------ ------
Pro forma interest expense for additional
borrowings.................................... 8.4 6.2
Elimination of Bumble Bee Seafoods' historical
interest expense................................. (19.3) (10.0)
------ ------
Net adjustment................................... $(10.9) $ (3.8)
====== ======
</TABLE>

- ---------------

(1) Adjustment reflects the amortization of incremental deferred financing
fees associated with the Senior Bank Facilities. Deferred financing
fees are amortized by the effective interest method over the term of
the related debt.

26
<PAGE> 29

INTERNATIONAL HOME FOODS, INC.

NOTES TO THE UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS -- (CONTINUED)
(IN MILLIONS)

(2) With respect to the $110.0 of debt incurred in connection with Bumble
Bee Acquisition, the effect of a 1/4% increase or decrease in interest
rates would increase or decrease total interest expense by
approximately $0.28 and $0.21 for the year ended December 31, 1996 and
the nine months ended September 30, 1997, respectively, and would
increase or decrease net income by approximately $0.17 and $0.13 in the
same periods.

(d) The tax effect of the pro forma adjustments is based on the estimated
applicable combined effective tax rate of 40.0% for the periods presented.
The pro forma adjustment related to the elimination of the write-down of
Bumble Bee Seafoods' historical goodwill of $63.0 is not tax effected.

(e) The adjustment reflects the increase in interest expense associated with a
full year of borrowings under the Senior Subordinated Notes, the Senior Bank
Facilities and the amortization of related deferred financing fees incurred
in connection with the IHF Acquisition, net of (i) the historical interest
expense of IHF, (ii) the interest expense related to the net repayment of
$175.5 of term loan borrowings and the repayment of $9.5 of borrowings under
the revolving credit facility and (iii) the related deferred financing fees
incurred in connection with the expected amendment of the Senior Bank
Facilities.

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
1996 1997
<S> <C> <C>
Interest Expense:
Senior Subordinated Notes, $400.0 at 10.375%..... $ 41.5 $ --
Senior Bank Facilities, $670.0 at 7.22%.......... 48.4 --
------ ------
Interest expense................................. 89.9 --
Amortization of deferred financing fees.......... 3.4 (0.2)
------ ------
Pro forma interest expense....................... 93.3 (0.2)
Elimination of interest expense associated with:
IHF historical interest expense............... (17.1) --
Net repayment of $175.5 of term loan
borrowings.................................. (12.7) (9.4)
Repayment of $9.5 of borrowings under the
revolving credit facility................... (0.7) (0.6)
Amortization of deferred financing fees
written off due to amendment to Senior Bank
Facilities.................................. (2.5) (0.2)
Amortization of new deferred financing fees... 0.2 0.1
------ ------
Net adjustment........................... $ 60.5 $(10.3)
====== ======
</TABLE>

(f) Pro forma income per share is based on the weighted average number of shares
of common stock and common stock equivalents outstanding during the period
adjusted for the 5.3292 for one reverse stock split. The pro forma as
adjusted weighted average shares include the shares of common stock
outstanding prior to the Offering and the shares to be issued in the
Offering. Including shares of Common Stock issued in connection with the
acquisition of Productos Del Monte on October 1, 1997 and shares to be
issued upon exercise of stock options granted after September 30, 1997, the
pro forma weighted average number of common shares outstanding would be 80.3
million.

(g) The pro forma statements of operations for the periods ended December 31,
1996 and September 30, 1997 exclude the results of Productos Del Monte and
Creative Products and, for the ten months ended October 31, 1996, Heritage
which was acquired by IHF on November 1, 1996. Productos Del Monte and
Creative Products had net sales of $49.7 and $46.0, respectively, for the
year ended December 31, 1996 and $38.5 and $39.3 for the period ended
September 30, 1997, respectively. For the ten month period ended October 31,
1996, Heritage had net sales of $47.3.

27
<PAGE> 30

INTERNATIONAL HOME FOODS, INC.

NOTES TO THE UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS -- (CONTINUED)
(IN MILLIONS)

(h) Operating expenses for historical periods include certain nonrecurring
charges recognized by the Company in connection with the IHF Acquisition and
subsequent management initiatives aggregating $6.0 for the year ended
December 31, 1996, consisting of severance expense ($3.2), costs associated
with change of corporate name and relabeling of the Company's products
($1.2), expenses of hiring and relocating of certain senior executives
($1.2) and other costs ($0.4). Nonrecurring charges recognized in the nine
months ended September 30, 1997 amounted to $1.7, consisting of additional
severance ($0.7), relocation expense ($0.7), and relabeling costs ($0.3).
Operating expenses for the nine months ended September 30, 1997 also include
a non-cash stock option compensation charge of $51.9.

(i) Operating expenses on a pro forma as adjusted basis for the year ended
December 31, 1996 include the nonrecurring charges referred to in Note (1)
above, plus the following nonrecurring charges in connection with the
integration of the Bumble Bee Business: $4.9, consisting of purchase
accounting adjustments ($2.5), write-off of deferred financing fees ($1.1)
and management fees paid to the former owners of the business ($1.3). For
the nine months ended September 30, 1997, such nonrecurring charges amounted
to $0.9, consisting of management fees paid to the former owners of the
business ($0.6) and severance ($0.3).

(j) The financial results represent the operating activity of Bumble Bee
Seafoods prior to the date of the Bumble Bee Acquisition for the six months
ended June 30, 1997.

28
<PAGE> 31

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL

The following discussion and analysis of financial condition and results of
operations of the Company should be read in conjunction with the consolidated
financial statements and related notes thereto of the Company included elsewhere
in this Prospectus. Periodically, the Company may make statements about the
trends, future plans and the Company's prospects. Actual results may differ from
those described in such forward looking statements based on the risks and
uncertainties facing the Company, including but not limited to changes in the
economic conditions and changes in the food products manufacturing industry and
the other factors described in "Risk Factors."

The Company sells its products primarily to grocery wholesalers and
distributors, grocery stores and supermarkets, convenience stores, drug and mass
merchants and warehouse clubs. Sales are reported net of discounts and returns.
In general, raw material costs constitute between 60.0% and 80.0% of cost of
goods sold for each of the Company's products. The other components of cost of
goods sold are labor and overhead costs. As is customary in the industry, the
Company incurs substantial marketing expenses. Marketing expenses primarily
include (i) trade promotions, which are directed at obtaining retail display
support, achieving key price points and securing retail shelf space, (ii)
advertising, which is comprised of television, newspaper and magazine
advertising, and (iii) consumer promotions, which include targeted coupons and
on-package offers. Selling expenses represent commissions paid to food brokers
and costs of the Company's field sales force.

For financial reporting purposes, the IHF Acquisition was treated as a
leveraged recapitalization, such that the Company's assets and liabilities
remain at their historical bases. The Unaudited Pro Forma Financial Statements
do not include the effect of the recent acquisitions of Productos Del Monte or
Creative Products, each of which has lower gross margins and operating income as
a percentage of net sales than those of the Company historically. However,
management believes it should be able to increase the operating profit margins
of these companies through cost reductions. See "Business -- Business Strategy."

RESULTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, NINE MONTHS ENDED SEPTEMBER 30,
------------------------------------------------------------ ---------------------------------------
1994 1995 1996 1996 1997
------------------ ------------------ ------------------ ------------------ ------------------
% OF % OF % OF % OF % OF
AMOUNT NET SALES AMOUNT NET SALES AMOUNT NET SALES AMOUNT NET SALES AMOUNT NET SALES
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales............ $997.3 100.0% $818.9 100.0% $942.8 100.0% $704.1 100.0% $843.9 100.0%
Cost of goods sold... 463.1 46.4% 398.2 48.6% 444.9 47.2% 333.9 47.4% 412.9 48.9%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Gross profit......... 534.2 53.6% 420.7 51.4% 497.9 52.8% 370.2 52.6% 431.0 51.1%
Marketing expenses:
Advertising........ 32.8 3.3% 42.4 5.2% 58.6 6.2% 43.0 6.1% 45.9 5.4%
Consumer
promotion........ 25.5 2.5% 23.5 2.9% 17.5 1.8% 13.3 1.9% 15.0 1.8%
Trade promotion.... 127.6 12.8% 102.0 12.5% 101.0 10.7% 74.6 10.6% 106.6 12.6%
Other.............. 14.9 1.5% 18.5 2.2% 14.4 1.5% 9.3 1.3% 10.9 1.3%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total marketing
expenses........... 200.8 20.1% 186.4 22.8% 191.5 20.2% 140.2 19.9% 178.4 21.1%
Other operating
expenses:
Selling............ 52.3 5.3% 45.9 5.6% 46.3 4.9% 33.6 4.8% 34.0 4.0%
Storage, packing
and shipping..... 63.4 6.4% 55.3 6.7% 55.2 5.9% 41.2 5.9% 44.0 5.2%
Administrative..... 23.2 2.3% 23.6 2.9% 19.7 2.1% 14.2 2.0% 20.1 2.4%
General and other.. 35.3 3.5% 40.9 5.0% 32.0 3.4% 21.3 3.0% 21.8 2.6%
Stock option
compensation..... -- -- -- -- 51.9 6.2%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total other operating
expenses........... 174.2 17.5% 165.7 20.2% 153.2 16.3% 110.3 15.7% 171.8 20.4%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Income from
operations......... 159.2 16.0% 68.6 8.4% 153.2 16.3% 119.7 17.0% 80.8 9.6%
Interest expense..... -- -- 17.1 1.8% -- 79.2 9.4%
Interest income and
other, net......... -- -- 0.2 -- 1.6 0.2%
Provision for income
taxes.............. 63.3 6.4% 29.4 3.6% 53.3 5.7% 45.5 6.5% 1.3 0.2%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net income........... $95.9 9.6% $39.2 4.8% $83.0 8.8% $74.2 10.5% $ 1.9 0.2%
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
</TABLE>

29
<PAGE> 32

DISCUSSION OF CERTAIN HISTORICAL PERFORMANCE

From 1987 to 1994, the Company's net sales and operating profit increased
at compounded annual rates of 6.4% and 4.4%, respectively. In 1995, however, the
Company experienced a substantial decline in net sales and operating profit. The
Company's net sales and operating profit decreased from $997.3 million and
$159.2 million, respectively, in 1994 to $818.9 million and $68.6 million,
respectively, in 1995. The specific causes of these declines, however, have been
subsequently addressed by the Company, as evidenced by the fact that during 1996
net sales increased to $942.8 million and operating profit increased to $153.2
million.

The decline in net sales and profitability in 1995 stemmed largely from a
prior "push" marketing strategy that relied heavily on trade promotions and
sales discounting. In the fourth quarter of 1994, the Company offered
significant trade incentives to its customers, a practice similarly pursued in
the fourth quarter of 1993. These trade incentives resulted in forward buying by
customers in advance of consumer purchases, thereby significantly increasing
customer inventories of the Company's products by the end of 1994. The reliance
on trade incentives as well as consumer promotions reduced marketing funds
available to support advertising, which builds brand equity and consumer
loyalty, for the Company's core brands. Advertising funds available for the
Company's core products were further diminished by the introduction in 1994 of
Chef Boyardee Sesame Street canned pasta. The Company directed $3.3 million, or
10.0% of its total advertising expense in 1994, to the launch and support of
this product.

During the first quarter of 1995, the Company's net sales were
significantly reduced as retailers sold the excess inventory of the Company's
products that they held at the end of 1994. This reduction was compounded by the
effects of an industry-wide reduction in inventory levels by the supermarket
trade. In addition, the Chef Boyardee Sesame Street product line proved
unsuccessful and was discontinued in 1995. To reduce costs and maintain
profitability in the face of declining sales, the Company significantly reduced
advertising spending during the first half of 1995. This action, coupled with
lower advertising spending for the Company's core brands in 1994, resulted in
market share losses and depressed sales.

In response to the sharp declines in net sales and profitability in the
first half of 1995, the Company undertook a number of initiatives, including
substantially increasing advertising spending beginning in the fourth quarter of
1995 to strengthen consumer brand support. Advertising expense in the fourth
quarter of 1995 was approximately $14.0 million, which represented approximately
one-third of total advertising expense in 1995. The significant increase in
advertising spending in the fourth quarter of 1995 further depressed
profitability in that year but provided a foundation for the Company's growth in
net sales and profitability in 1996 and the first nine months of 1997. In 1996
and 1997 the Company has further increased advertising expense from 1995 levels.

NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1996

Net Sales. For the nine months ended September 30, 1997, net sales were
$843.9 million, an increase of $139.8 million, or 19.9%, over the comparable
1996 period. Approximately $99.9 million and $32.7 million of the nine month
increase was related to Bumble Bee and Campfire sales, respectively, which are
not reflected in the 1996 amounts. The balance of the increase was primarily due
to net increases in sales of the Company's existing brands.

Cost of Goods Sold. For the nine months ended September 30, 1997, cost of
goods sold as a percentage of net sales increased to 48.9% from 47.4% for the
comparable 1996 period. This was primarily attributable to the inclusion of the
results of the Bumble Bee Business, which generally has lower gross margins than
the Company's other product lines, for the third quarter of 1997. The Bumble Bee
Business cost of goods sold as a percentage of net sales was 71.1% for the third
quarter of 1997. Excluding the Bumble Bee Business, cost of goods sold for the
nine months ended September 30, 1997 declined to 46.0% of net sales from 47.4%
of net sales for the comparable 1996 period. This decline in cost of goods sold
as a percentage of net sales primarily resulted from a more favorable sales
volume mix and continuing overall reductions in the Company's manufacturing
costs which reflect management's cost reduction initiatives.

Total Marketing Expenses. Total marketing expenses increased to $178.4
million for the nine months ended September 30, 1997, as compared to $140.2
million for the comparable 1996 period. Expressed as a

30
<PAGE> 33

percentage of net sales, total marketing expenses increased to 21.1% in the 1997
period from 19.9% in the 1996 period. The increase was primarily attributable to
(i) the inclusion of the Bumble Bee Business and Heritage, which have higher
trade promotion expenses as a percentage of net sales than the Company's other
products, and (ii) trade promotion expenses associated with securing retail
shelf space for line extensions of existing products and new products.

Total Other Operating Expenses. Other operating expenses were $171.8
million for the nine months ended September 30, 1997, as compared to $110.3
million in the comparable 1996 period, an increase of $61.5 million or 55.8%.
Other operating expenses for the third quarter of 1997 include a non-cash stock
option compensation charge of $51.9 million. Excluding this non-cash charge,
total other operating expenses as a percentage of net sales declined to 14.2% in
the first nine months of 1997 from 15.7% in the comparable 1996 period,
primarily reflecting management's cost reduction initiatives.

The non-cash stock option compensation charge aggregating $51.9 million
includes $49.7 million relating to indexed stock options granted to senior
management and other employees. When granted, these options had exercise prices
ranging from $5.33 to $5.76 per share that increased over time at a rate of 8%
per year. In the third quarter of 1997, the variable exercise price of these
options was fixed. Other than these variable rate options that were fixed in the
third quarter, no variable rate options have been granted by the Company. In
addition, during the third quarter of 1997 the Company granted stock options
having exercise prices below the estimated fair market value of the Common
Stock, resulting in a non-cash charge of $2.2 million. In the 1997 fourth
quarter, the Company expects to record an additional non-cash stock option
compensation charge related to the grant of stock options having exercise prices
below fair market value, which is estimated to be approximately $1.3 million.

Interest Expense. Interest expense for the nine months ended September 30,
1997 was $79.2 million. There was no interest expense in the comparable 1996
period, as all financing activities of the Company were funded by the former
parent company, American Home Products, which did not allocate interest costs to
its various subsidiaries.

Interest Income and Other, Net. The Company earned $1.6 million on short
term investments of its excess cash during the nine months ended September 30,
1997. As of September 30, 1997, the Company's short term investments were $55.2
million, earning interest at a rate of 6.3%.

Provision for Income Taxes. For the nine months ended September 30, 1997,
income taxes decreased by $44.2 million over the comparable 1996 period due to
lower income before taxes. The effective tax rate increased to 41.0% in 1997
from 38% in 1996 due to higher state and local statutory tax rates. The Company
anticipates sufficient future taxable income to realize deferred tax assets
recorded at September 30, 1997. In the event management determines that
sufficient future taxable income may not be generated to fully realize the
deferred tax assets, the Company will provide a valuation allowance by a charge
to income tax expense in the period of such determination.

Net Income. For the nine months ended September 30, 1997, net income
decreased by $72.3 million versus the comparable 1996 period, primarily
reflecting the factors discussed above.

YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995

Net Sales. The Company's net sales were $942.8 million in 1996, as compared
to $818.9 million in 1995, an increase of $123.9 million. In 1995, net sales
were depressed, particularly in the first quarter, as retailers sold the excess
inventory of the Company's products that they held at the end of 1994. The sales
weakness in 1995 was compounded by the effects of an industry wide reduction in
inventory levels by the supermarket trade. In contrast, during 1996, the
Company's customers did not have excess inventory of the Company's products and
the general inventory reductions pursued by the retail trade in 1996 were not as
significant as those pursued in 1995. As a result, during 1996 the Company's net
sales to the retail trade more closely matched the retail trade's actual sales
to consumers. The Company's net sales in 1996 also benefited from management's
emphasis on improving merchandising and building brand awareness through
increased media advertising. Management believes that these efforts increased
sales across most of the Company's major

31
<PAGE> 34

product lines. Additionally, $7.4 million of the increase in net sales was due
to the inclusion of Heritage sales after the November 1, 1996 acquisition.

Cost of Goods Sold. Cost of goods sold was $444.9 million in 1996 as
compared to $398.2 million in 1995, an increase of $46.7 million or 11.7%.
Expressed as a percentage of net sales, cost of goods sold decreased to 47.2% in
1996 from 48.6% in 1995. The decrease in cost of goods sold as a percentage of
net sales was primarily attributable to a higher absorption of overhead charges
as a result of higher production volumes.

Total Marketing Expenses. Total marketing expenses were $191.5 million in
1996 as compared to $186.4 million in 1995, an increase of $5.1 million or 2.7%.
Expressed as a percentage of net sales, total marketing expense declined to
20.2% in 1996 from 22.8% in 1995 primarily as a result of a reduction in
consumer and trade promotion spending as a percentage of net sales. The
Company's total marketing expenses, excluding media advertising, declined to
14.1% of net sales in 1996 from 17.6% of net sales in 1995 as a result of a
reduction in coupon promotions and improved management of trade promotion
spending. Media advertising during 1996 increased by approximately 38.2% to
$58.6 million, or 6.2% of net sales, from $42.4 million, or 5.2% of net sales
during 1995 as a result of management's renewed emphasis on consumer advertising
to build brand equity and consumer loyalty.

Total Other Operating Expenses. Other operating expenses were $153.2
million in 1996 as compared to $165.7 million in 1995, a decrease of $12.5
million or 7.5%. Expressed as a percentage of net sales, other operating
expenses declined to 16.3% of net sales in 1996 from 20.2% in 1995. Included in
the 1996 other operating expenses was a one-time charge for restructuring and
other charges of $4.3 million. Exclusive of this charge, other operating
expenses decreased in 1996 by $16.8 million or 10.1% and were 15.8% of net
sales. This decrease was principally due to (i) a reduction in the commission
percentage paid to brokers, (ii) improved efficiencies in logistics and
distribution, and (iii) administrative headcount reductions.

Interest Expense. Interest expense for the year ended December 31, 1996 was
$17.1 million, reflecting interest on indebtedness incurred in connection with
the IHF Acquisition completed in November 1996. There was no interest expense in
1995.

Provision for Income Taxes. For the year ended December 31, 1996, income
taxes increased $23.9 million over the comparable period due to higher income
before taxes. The effective tax rate decreased from 42.9% in 1995 to 39.1% in
1996 primarily due to nondeductible intangible amortization in the 1995 period.
The Company anticipates sufficient future taxable income to realize deferred tax
assets recorded at December 31, 1996. In the event management determines that
sufficient future taxable income may not be generated to fully realize the
deferred tax assets, the Company will provide a valuation allowance by a charge
to income tax expense in the period of such determination.

Net Income. For the year ended December 31, 1996, net income increased by
$43.8 million versus the comparable 1995 period. The increase was primarily due
to an increase in income from operations.

YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994

Net Sales. The Company's net sales were $818.9 million in 1995, as compared
to $997.3 million in 1994, a decrease of $178.4 million, or 17.9%. Of the $178.4
million decrease, management believes $104.0 million was attributable to
retailers selling excess inventory of the Company's products during 1995 that
they accumulated by the end of 1994 and to management's strategy of reducing
discounts and incentives which had been offered by the Company to its retail
customers in the fourth quarters of 1994 and 1993. Of the $104.0 million
decrease, (i) approximately $90.0 million related to excess net sales to grocery
retailers in the fourth quarters of 1993 and 1994 and (ii) approximately $14.0
million was due to unusual discounts and incentives given to mass merchandisers
in 1994 which were not repeated in 1995. In addition, management believes that
$56.0 million of the 1995 net sales decrease was due to (i) market share erosion
across many of the Company's major product lines caused by a significant
reduction in media advertising support for these brands in 1994 and the first
half of 1995 and (ii) the failure of the Chef Boyardee Sesame Street canned
pasta product line. Moreover, management believes $18.0 million of the net sales
decrease was due to an industry-wide reduction in inventory levels by the
supermarket trade.

32
<PAGE> 35

Cost of Goods Sold. Cost of goods sold was $398.2 million in 1995, as
compared to $463.1 million in 1994, a decrease of $64.9 million, or 14.0%.
Expressed as a percentage of net sales, cost of goods sold increased to 48.6% in
1995 from 46.4% in 1994. The increase in cost of goods sold as a percentage of
net sales was primarily attributable to underabsorbed overhead charges as a
result of lower production volumes. In addition, the Company estimates that 1995
margins were negatively impacted by approximately $5.0 million related to the
discontinuation of Chef Boyardee Sesame Street canned pasta. This $5.0 million
amount reflects inventory write-offs of $0.7 million, accrued contractual
royalty payments of $1.0 million and a $3.3 million estimate of the reduced
margins realized on sales of the product resulting from price discounting
following its termination.

Total Marketing Expenses. Total marketing expenses were $186.4 million in
1995, as compared to $200.8 million in 1994, a decrease of $14.4 million, or
7.2%. This decrease was primarily due to a decrease in trade and consumer
promotions of $27.6 million, offset in part by an increase in media advertising
of $9.6 million. Expressed as a percentage of net sales, however, total
marketing expenses increased to 22.8% in 1995 from 20.1% in 1994, primarily as a
result of the increase in media advertising expenditures. Management increased
media advertising expenditures by $9.6 million, or 121%, during the last three
months of 1995 over the corresponding 1994 period in an effort to reverse the
erosion in market share of the Company's product lines.

Total Other Operating Expenses. Other operating expenses were $165.7
million in 1995, as compared to $174.2 million in 1994, a decrease of $8.5
million, or 4.9%. Expressed as a percentage of net sales, other operating
expenses increased to 20.2% in 1995 from 17.5% in 1994, primarily as a result of
lower sales, and an increase in general and other expenses of $5.6 million
principally related to an increase in post retirement benefits costs and
severance for administrative headcount reductions.

Provision for Income Taxes. For the year ended December 31, 1995, income
taxes decreased $33.9 million over the comparable period due to lower income
before taxes. The effective tax rate increased to 42.9% from 39.8% primarily due
to an increase in the amortization of intangibles, which was not deductible for
tax purposes.

Net Income. For the year ended December 31, 1995, net income decreased by
$56.7 million versus the 1994 period. This decrease was primarily due to lower
sales.

SEASONALITY AND QUARTERLY RESULTS

The Company's inventory levels are moderately seasonal and affected by the
growing season for commodity products such as tomatoes, fruits, beans and
peanuts. As these products are harvested in August through October, inventory
levels tend to grow during this period. The Company's inventory levels in its
seafoods business are also affected by the seasonal fishing cycle. The Company's
net sales and results of operations are generally not seasonal.

The following table sets forth, on a quarterly basis, certain unaudited
statements of income data for the four quarters of 1996 and the first three
quarters of 1997. Such data is not necessarily indicative of results for any
full year or for any subsequent period.

<TABLE>
<CAPTION>
QUARTER ENDED
------------------------------------------------------------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, MARCH 31, JUNE 30, SEPTEMBER 30,
1996 1996 1996 1996 1997 1997 1997
--------- -------- ------------- ------------ --------- -------- -------------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales.............. $227.3 $222.0 $254.8 $238.7 $244.6 $249.9 $349.5
Cost of goods sold..... 110.5 103.7 119.7 111.0 115.7 115.1 182.2
------ ------ ------ ------ ------ ------ ------
Gross profit........... 116.8 118.3 135.1 127.7 128.9 134.8 167.3
Total marketing
expenses............. 50.6 42.5 47.1 51.3 52.8 56.5 69.1
Total other operating
expenses............. 38.5 33.1 38.7 42.9 38.7 37.3 95.8(1)
------ ------ ------ ------ ------ ------ ------
Operating profit....... $ 27.7 $ 42.7 $ 49.3 $ 33.5 $ 37.4 $ 41.0 $ 2.4
====== ====== ====== ====== ====== ====== ======
</TABLE>

- ---------------

(1) Includes $51.9 million of non-cash stock option compensation expense.

33
<PAGE> 36

BUMBLE BEE SEAFOODS

The Company acquired the Bumble Bee Business on July 1, 1997 from Bumble
Bee Seafoods. See "The Company." Bumble Bee is one of the leading brands of
premium canned seafood in the U.S. and the leading brand of canned white meat
tuna and canned salmon in the U.S. The assets acquired consist primarily of
inventory, accounts receivable, property, plant and equipment and trademarks
used by the Bumble Bee Business for the processing and marketing of Bumble Bee
canned seafood products. Prior to this transaction, Bumble Bee Seafoods was
highly leveraged and had capital constraints which limited its ability to secure
raw materials and most effectively market its products.

Net sales of Bumble Bee Seafoods were $179.0 million in the six month
period ended June 30, 1997, as compared to $209.3 million in the comparable 1996
period. This decline was largely due to the inability of Bumble Bee Seafoods to
purchase raw fish caused by cash constraints resulting from Bumble Bee Seafoods'
highly leveraged capital structure. Cost of goods sold, expressed as a
percentage of net sales, were 71.2% in the six month period ended June 30, 1997,
as compared to 68.1% in the comparable 1996 period. This was primarily caused by
an increase in the raw material cost of light meat tuna. Operating expenses,
expressed as a percentage of net sales, were 29.6% for the nine month period
ended June 30, 1997 and 29.3% for the comparable 1996 period.

The Company's historical financial information does not include the
operations of the Bumble Bee Business prior to the Bumble Bee Acquisition.

LIQUIDITY AND CAPITAL RESOURCES

The Company historically has generated positive cash flows from operations.
In the years ended December 31, 1994, 1995 and 1996 and in the nine months ended
September 30, 1997 the Company generated $83.4 million, $145.5 million, $146.0
million and $86.8 million of cash flows from operations, respectively. Capital
expenditures have amounted to $31.1 million, $24.2 million, $11.9 million and
$8.6 million for the years ended December 31, 1994, 1995 and 1996 and for the
nine months ended September 30, 1997, respectively. In all of 1997, the Company
expects to spend approximately $15.0 million on capital projects to maintain
facilities and also to upgrade its management information systems, which is
expected to be completed in the first quarter of 1998. The Company also has a
$10.2 million balloon royalty payment due in January 1998 under a licensing
agreement related to the Company's cereal products business.

In connection with the IHF Acquisition, the Company entered into the Senior
Bank Facilities and issued the Senior Subordinated Notes. In connection with the
Bumble Bee Acquisition, the Company amended the Senior Bank Facilities, which
currently consists of a $140.0 million revolving credit facility, a $351.5
million Tranche A term loan and a $369.0 million Tranche B term loan. During the
first nine months of 1997, the Company repaid $29.5 million of borrowings under
the term loans. The Company will apply the net proceeds of the Offering to repay
indebtedness under the Senior Bank Facilities.

In connection with the Offering, the Company expects to amend the Senior
Bank Facilities so that they comprise (i) a $200.0 million revolving credit
facility, maturing in 2004 or earlier upon repayment of the term loans; (ii) a
$395.0 million Tranche A term loan facility, maturing in 2004 with mandatory
semi-annual repayments in increasing amounts commencing March 31, 1998; and
(iii) a $150.0 million Tranche B term loan facility, maturing in 2005 with
mandatory semi-annual repayments of $0.2 million through March 31, 2004 and
increasing thereafter. After giving effect to the application of the net
proceeds of the Offering and the expected amendment of the Senior Bank
Facilities, the Company expects to have borrowings outstanding of $61.5 million
under the revolving credit facility, $395.0 million of Tranche A term loans and
$150.0 million of Tranche B term loans. The amended Senior Bank Facilities will
provide for additional term borrowings of $65.0 million under the Tranche A Term
Facility to finance acquisitions. As expected to be amended, scheduled
repayments under the Senior Bank Facilities for 1998 will be $26.4 million. In
addition to scheduled periodic repayments, the Company is also required to make
mandatory repayments of the loans under the Senior Bank Facilities with a
portion of its excess cash flow. Borrowings under the amended Senior Bank
Facilities will bear interest at variable rates, generally based on the adjusted
LIBOR plus applicable margins

34
<PAGE> 37

(1.5% in the case of the revolving credit facility and the Tranche A term loan
facility and 1.75% in the case of the Tranche B term loan facility). See
"Description of Indebtedness -- Senior Bank Facilities."

The Company also has outstanding $400.0 million of 10 3/8% Senior
Subordinated Notes due 2006, without any scheduled repayments of principal prior
to maturity, requiring semi-annual interest payments. See "Description of
Indebtedness -- Senior Subordinated Notes." Both the Senior Bank Facilities and
the terms of the Senior Subordinated Notes contain a number of significant
covenants that, among other things, restrict the ability of the Company to
dispose of assets, incur additional indebtedness, repay other indebtedness or
amend other debt instruments, pay dividends, create liens on assets, enter into
capital leases, make investments or acquisitions, engage in mergers or
consolidations, make capital expenditures, engage in certain transactions with
affiliates and otherwise restrict corporate activities. In addition, under the
Senior Bank Facilities the Company is required to comply with specified minimum
interest coverage, maximum leverage and minimum fixed charge coverage ratios.
See "Description of Indebtedness."

Since the IHF Acquisition, the Company has utilized significant cash flows
from operations and financing activities to implement strategic acquisitions.
The Company acquired Heritage in November 1996, the Bumble Bee Business in July
1997 and Creative Products in October 1997, requiring cash outlays of
approximately $70.0 million, $160.0 million and $52.0 million, respectively. The
acquisition of Heritage was financed through proceeds from the Senior
Subordinated Notes and term loan borrowings under the Senior Bank Facilities at
the time of the IHF Acquisition. The acquisition of the Bumble Bee Business was
financed through term loan borrowings under the Senior Bank Facilities and cash
on hand. The acquisition of Creative Products was financed through borrowings
under the revolving credit facility. The Company acquired Productos Del Monte in
October 1997 for 3,127,415 shares of Common Stock.

The Company believes that cash generated from operations and borrowings
under the Senior Bank Facilities will be sufficient to satisfy working capital
requirements and required capital expenditures. Further expansion of the
business through acquisitions may require the Company to incur additional
indebtedness or issue equity securities. There can be no assurance that
additional debt or equity will be available to the Company, or if available will
be on terms acceptable to the Company.

The Company currently does not use derivative financial instruments for
trading or speculative purposes, nor is the Company a party to leveraged
derivatives. In accordance with the Senior Bank Facilities, the Company is
required to enter into interest rate protection agreements to the extent
necessary to provide that, when combined with the Senior Subordinated Notes, at
least 50% of the Company's aggregate indebtedness is subject to either a fixed
interest rate or interest rate protection agreement through December 1998. To
comply with required interest rate protection provisions, the Company entered
into an interest rate collar transaction that expires in December 1998. The
notional amount of the collar is $135.0 million with the cap set at 8.0% and the
floor set at 5.25%.

RECENT PRONOUNCEMENTS

The American Institute of Certified Public Accountants issued Statement of
Position ("SOP") 96-1, "Environmental Remediation Liabilities" in October 1996.
SOP 96-1 provides authoritative guidance on specific accounting issues in
connection with recognizing, measuring and disclosing environmental cleanup
liabilities. The Company adopted this SOP during the first quarter of 1997;
there was no impact on the Company's results of operations or financial position
upon adoption.

In June 1996, Statement of Financial Accounting Standards ("SFAS") No. 125,
"Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities," was issued to provide accounting and reporting standards for
transfers and servicing of financial assets and extinguishments of liabilities.
This statement became effective for transfers and servicing of financial assets
and extinguishments of liabilities occurring after December 31, 1996. The
Company does not anticipate that the adoption of this statement will have a
material effect on the financial statements.

In March 1997, SFAS 128, "Earnings Per Share," was issued to establish
standards for computing and presenting earnings per share ("EPS"). The statement
applies to entities with publicly held common stock or

35
<PAGE> 38

potential common stock and excludes entities whose publicly traded securities
include only debt. The statement is effective for financial statements issued
for periods ending after December 15, 1997; earlier application is not
permitted. This statement will require presentation of basic and diluted EPS.
The Company anticipates that diluted EPS in accordance with this statement would
approximate EPS as reported.

In June 1997, SFAS 130, "Reporting Comprehensive Income," was issued to
establish standards for reporting and displaying of comprehensive income and its
components in a full set of general-purpose financial statements. This statement
requires disclosure of the components of comprehensive income including, among
other things, foreign currency translation adjustments, minimum pension
liability items and unrealized gains and losses on certain investments in debt
and equity securities. The Company would be required to show components of
comprehensive income in a financial statement displayed as prominently as the
other required financial statements. The statement is effective for fiscal years
beginning after December 15, 1997. The Company anticipates compliance with this
statement in 1998.

In June 1997, SFAS 131 "Disclosures About Segments of an Enterprise and
Related Information," was issued to establish standards for public business
enterprises reporting information regarding operating segments in annual and
interim financial statements issued to shareholders. It also establishes
standards for related disclosures about products and services, geographic areas
and major customers. This statement is effective for financial statements for
periods beginning after December 15, 1997. In the initial year of application,
comparative information for earlier years is to be restated. The Company
operates in one business segment which manufactures and markets a diversified
portfolio of shelf-stable food products, and accordingly, does not believe the
segment reporting aspect of this statement will impact its financial statements.

EXTRAORDINARY ITEM

In connection with the Offering and the expected amendment of the Senior
Bank Facilities, the Company expects to record an extraordinary loss in the
fourth quarter of 1997 associated with the write-off of deferred financing fees
of approximately $11.1 million, net of tax benefit.

36
<PAGE> 39

BUSINESS

OVERVIEW

In November 1996, the Company was the subject of a leveraged
recapitalization pursuant to which affiliates of Hicks Muse and C. Dean
Metropoulos, the Company's new Chairman and Chief Executive Officer, acquired
control of the Company from American Home Products. Under Mr. Metropoulos'
direction, the Company has implemented a strategy to increase sales and profits
by (i) growing sales of existing brands, (ii) expanding distribution into
alternative markets, (iii) completing strategic acquisitions and (iv) achieving
cost savings. The Company's pro forma net sales and operating profit for the
fiscal year ended December 31, 1996 were $1,338.4 million and $157.7 million,
respectively. For the nine month period ended September 30, 1997, the Company's
pro forma as adjusted net sales were $1,022.9 million, and the Company's pro
forma as adjusted operating profit, before giving effect to a non-cash stock
option compensation charge of $51.9 million, was $134.5 million. See "Unaudited
Pro Forma Financial Statements."

In the United States, the Company groups its brands into five general
categories consisting of Chef Boyardee branded products, Bumble Bee branded
products, specialty brands, southwestern cuisine and snack foods. The Company's
two largest brands, the nationally distributed families of Chef Boyardee
prepared foods and Bumble Bee premium canned seafoods, represented 27.0% and
26.7%, respectively, of the Company's aggregate net sales in 1996. Chef Boyardee
is one of the nation's most widely recognized brands and is found in over half
of American homes with children. Bumble Bee is one of the leading brands of
premium canned seafood in the U.S. and is the leading brand of canned white meat
tuna and salmon in the U.S. The Company's strong Chef Boyardee and Bumble Bee
brands are complemented by its specialty brands, including PAM cooking spray,
Polaner fruit spreads and spices, Gulden's mustard, Maypo, Wheatena and Maltex
hot cereals and G. Washington's dry seasonings and broths. In the growing market
for southwestern cuisine, the Company's products include Ro*Tel canned tomatoes
with green chilies and strong regional brands such as Ranch Style and Luck's
canned beans and Dennison's chili. In the snack foods category, the Company's
brands include Crunch 'n Munch glazed popcorn and pretzels, Campfire
marshmallows and marshmallow crisp rice bars and Jiffy Pop unpopped popcorn. The
Company, through its Productos Del Monte subsidiary, is also a leading processor
and marketer of branded catsup, canned vegetables and bottled salsa in Mexico.

The Company's recognizable portfolio of leading brands provides a critical
mass of brand name sales that (i) allows the Company to realize synergies in
manufacturing, marketing, distribution and raw material sourcing, (ii) creates a
position of strength with retailers that is critical in maintaining and securing
valuable retail shelf space for existing and new brands and (iii) provides a
strong platform for introducing product line extensions and new products. The
following table sets forth market positions and market shares of the Company's
principal product lines, along with certain competitors' market share
information.

37
<PAGE> 40

MARKET POSITION OF PRINCIPAL PRODUCT LINES

- ---------------

(3) Dennison's has the #2 market share in California, which represents
approximately 74% of Dennison's net sales.

BUSINESS STRATEGY

38
<PAGE> 41

Since 1995, the Company has refocused its marketing efforts by
emphasizing consumer advertising (a "pull" strategy) and de-emphasizing
trade spending and discounting (a "push" strategy). As a result,
advertising costs as a percentage of total marketing expenses increased
from 16.3% in 1994 to 25.7% in the first nine months of 1997 while trade
promotion expenses as a percentage of total marketing expenditures
declined from 63.5% to 59.8%. The Company recently introduced several new
television advertising campaigns, such as those promoting Chef Boyardee
as an ideal "fourth meal" to be served after school and PAM cooking spray
as a flavorful, healthy alternative to cooking oils, butter and
margarine. Since the new Chef Boyardee television campaign was introduced
in November 1996, consumer sales of Chef Boyardee's principal product
line, the "All Family" product line, has increased significantly, with
consumer sales through September 1997 increasing 7.7% over the comparable
1996 period. In addition, the Company recently began television
advertising for its Ranch Style brand for the first time in five years.
The Company has also redesigned the packaging of a majority of its
products to emphasize the brand name, contemporize the presentation and
make the products visually more appealing to consumers.

- Complete Strategic Acquisitions. The Company will continue to pursue
opportunities to make acquisitions that complement and expand its core
businesses or that enable the Company to enter new markets. Since the IHF
Acquisition, the Company has more aggressively pursued acquisitions and
has acquired (i) Heritage, the manufacturer of the Company's Campfire
branded products, (ii) the Bumble Bee Business, (iii) Productos Del Monte
and (iv) Creative Products. Management believes that additional strategic
acquisition opportunities exist and that incremental revenue and earnings
can be generated by leveraging the Company's production, distribution,
sales and administrative capabilities. In addition, an important element
of management's evaluation of a strategic acquisition is the potential
savings attainable through rationalization of the target company's cost
structure.

- Continue to Achieve Operating Cost Savings. Since the IHF Acquisition,
the Company has achieved annualized net cost savings of approximately
$25.3 million, including approximately $11.1 million associated with the
integration of the Bumble Bee Business. These savings have been achieved
primarily through (i) reductions in overhead and duplicative
administrative, sales and other personnel ($15.5 million), (ii)
streamlining production, distribution, research and administrative
functions ($7.3 million) and (iii) savings in packaging and brokerage
expenses ($2.5 million). To achieve these cost savings, the Company
incurred one time charges of approximately $5.0 million, most of which was
recognized in the year ended December 31, 1996. Management expects to be
able to achieve further cost savings by continuing these initiatives.

COMPETITIVE STRENGTHS

Management believes that the Company has the following competitive
strengths that will enable it to execute its business strategy effectively.

- Well-Positioned Products in Growing Markets. The Company's diversified
portfolio of branded products is well-positioned to meet the growing
demand for convenient and healthy foods. Many of the

39
<PAGE> 42

Company's products, such as Chef Boyardee canned pasta and Bumble Bee
canned seafood, are quick and easy to prepare and nutritionally sound. As
such, management believes these products are particularly appealing to
families with children. Many of the Company's other brands also benefit
from the trend toward healthier eating, including PAM, Polaner, Ro*Tel
and Ranch Style. The Company has introduced several new products that
capitalize on the trend toward fat-free foods such as Chef Boyardee 99%
Fat-Free, Crunch 'n Munch Fat-Free and Luck's Fat-Free Beans. In
addition, the Company's strong southwestern cuisine products provide a
platform to capitalize on the cuisine's growing national popularity.
Furthermore, through the acquisition of Productos Del Monte, the Company
has established a presence in the growing Mexico market for processed
food products.

- Strong Management. The Company's senior management team is comprised of
food industry veterans led by C. Dean Metropoulos, the Company's Chairman
and CEO, and John Bess, the Company's President and COO. Mr. Metropoulos
is CEO of Morningstar and has been CEO of several other food companies,
including Stella. During Mr. Metropoulos' tenure at Morningstar and
Stella, he implemented successful sales growth and cost reduction
strategies which dramatically increased sales and earnings at both
companies. Many of these strategies are similar to those that are being
implemented by the Company. Mr. Bess has extensive experience in growing
established brand names by implementing aggressive consumer based
marketing programs. Mr. Bess has 21 years of management and consumer
marketing experience at Procter & Gamble, most recently serving as Vice
President and Managing Director of Worldwide Strategic Planning for
Procter & Gamble's global hair care business, which generated 1996 sales
of $2.6 billion. In addition, the Company's six general managers
overseeing brand performance have an average of approximately 20 years of
experience in the food industry.

- Strong Profit Margins to Fund Growth. Management believes that the
Company's operating profit margins provide financial resources necessary
to find the Company's internal growth strategy. From 1991 through 1996
(prior to the Bumble Bee Acquisition), the Company achieved an average
annual operating profit margin of 15.2%. As a result of the Company's
strong operating profit margins, the Company generated cash flow from
operations of $146.0 million in 1996. Management believes that its high
operating profit margins and cash flow from operations result from the
Company's leading market position in high margin food categories as well
as the cost efficiencies gained from significant historical investment in
the Company's manufacturing and distribution network. The Company's strong
financial performance and its relatively low capital expenditure
requirements are expected to generate significant cash flow to fund the
Company's internal growth strategy.

INDUSTRY

The U.S. food industry is characterized by relatively stable growth based
on modest price and population increases. Over the last ten years, the industry
has experienced consolidation as competitors have shed non-core business lines
and made strategic acquisitions to complement category positions, maximize
economies of scale in raw material sourcing and production and expand retail
distribution. The importance of sustaining strong relationships with retailers
has become a critical success factor for food companies and is driving many
initiatives such as category management. Food companies with category leadership
positions and

40
<PAGE> 43

strong retail relationships have increasingly benefited from these initiatives
as a way to maintain shelf space and maximize distribution efficiencies.

Consumer demand for food products in the United States is being strongly
influenced by the growth of the "baby boomer" population. The changing
lifestyles and needs of these individuals -- now between the ages of 31 and
50 -- have driven the introduction of nutritious foods that are convenient to
prepare and provide quick family meal alternatives. The primary target market
for convenience foods includes baby boomer parents and approximately 39 million
children between the ages of 5 and 14.

In addition to the U.S. market, certain international markets with
above-average population growth and expanding economies (such as Latin America)
offer substantial growth potential for the industry, especially for companies
with existing international sales of popular U.S. brands. Moreover, the food
service and private label markets provide alternative opportunities for growth
by branded food companies.

PRODUCTS AND MARKETS

In the United States, the Company manufactures and markets popular branded
food products that are leaders within their respective markets. The Company's
domestic branded food business is complemented by a strong presence in Canada,
Mexico and Puerto Rico, growing food service and private label businesses and
sales to the U.S. military.

In the United States, the Company groups its brands into five general
categories consisting of Chef Boyardee branded products, Bumble Bee branded
products, specialty brands, southwestern cuisine and snack foods. The following
table sets forth aggregate net sales and related information for each of these
five general categories and the Company's other markets for the periods
indicated.(1)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, NINE MONTHS ENDED SEPTEMBER 30,
--------------------------------------------------- ---------------------------------
1994 1995 1996 1996 1997
--------------- --------------- --------------- --------------- ---------------
% OF % OF % OF % OF % OF
AMOUNT TOTAL AMOUNT TOTAL AMOUNT TOTAL AMOUNT TOTAL AMOUNT TOTAL
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CHEF BOYARDEE............ $ 452 29.1% $ 354 26.1% $ 400 27.0% $ 306 26.9% $ 308 27.8%
BUMBLE BEE............... 410 26.4% 394 29.1% 396 26.7% 321 28.2% 284 25.6%
SPECIALTY BRANDS
PAM.................... 86 5.5% 67 4.9% 85 5.8% 62 5.4% 58 5.3%
Polaner................ 72 4.6% 60 4.4% 61 4.1% 46 4.0% 39 3.5%
Gulden's............... 18 1.2% 17 1.3% 17 1.1% 13 1.2% 14 1.2%
All Other(2)........... 5 0.4% 4 0.3% 4 0.3% 3 0.3% 3 0.3%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Speciality..... 181 11.7% 148 10.9% 167 11.3% 124 10.9% 114 10.3%
SOUTHWESTERN CUISINE
Ro*Tel................. 26 1.6% 19 1.4% 26 1.8% 18 1.6% 19 1.7%
Ranch Style............ 47 3.1% 41 3.0% 44 3.0% 34 3.0% 35 3.2%
Luck's................. 28 1.8% 27 2.0% 29 1.9% 20 1.8% 20 1.8%
Dennison's............. 27 1.7% 19 1.4% 22 1.5% 16 1.4% 15 1.4%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Southwestern... 128 8.2% 106 7.8% 121 8.2% 88 7.8% 89 8.1%
SNACK FOODS
Crunch 'n Munch........ 53 3.4% 40 3.0% 49 3.3% 36 3.2% 41 3.7%
Campfire............... 40 2.6% 53 3.9% 55 3.7% 41 3.6% 33 3.0%
Jiffy Pop.............. 6 0.4% 5 0.3% 5 0.3% 4 0.3% 4 0.4%
Glazed Pretzels........ -- -- -- -- -- -- -- -- 1 0.1%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Snack.......... 99 6.4% 98 7.2% 109 7.3% 81 7.1% 79 7.2%
OTHER MARKETS
Canada................. 56 3.6% 53 3.9% 49 3.3% 38 3.3% 41 3.7%
Food service and
private label........ 106 6.9% 111 8.2% 131 8.8% 96 8.4% 107 9.7%
Mexico, Puerto Rico and
International........ 100 6.4% 71 5.3% 89 6.0% 68 6.0% 69 6.2%
Military............... 21 1.3% 20 1.5% 20 1.4% 16 1.4% 16 1.4%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Other
Markets........ 283 18.2% 255 18.9% 289 19.5% 218 19.1% 233 21.0%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
AGGREGATE NET
SALES.......... $1,553 100.0% $1,355 100.0% $1,482 100.0% $1,138 100.0% $1,107 100.0%
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
</TABLE>

- ---------------

(1) Aggregate net sales include sales of the Company as well as sales of
Heritage, the Bumble Bee Business, Productos Del Monte and Creative Products
for each of the periods shown.

(2) Includes Wheatena, Maypo and Maltex hot cereals and G. Washington's dry
seasonings and broths.

41
<PAGE> 44

CHEF BOYARDEE (27.0% OF 1996 AGGREGATE NET SALES)

Created by Hector Boiardi in 1929 and acquired by the Company in 1946, Chef
Boyardee is one of the nation's most recognizable brand names. The Chef Boyardee
product line consists of canned pasta, microwave pasta, pizza kits, dry dinners
and pizza and spaghetti sauces. Chef Boyardee products are found in over half of
all American homes with children. Management believes that Chef Boyardee
products appeal to families with children because they are generally convenient,
nutritionally sound and inexpensive relative to other quick meal and snacking
alternatives. Canned pasta is purchased most frequently by women with children
between the ages of 3 and 12.

Chef Boyardee has consistently held the number one share in the $539.1
million canned pasta market. The Company separates the canned pasta category
into two segments: "All Family" and "Kids." The "All Family" segment represents
canned pasta products primarily consumed by children over the age of six as well
as adults. The "Kids" segment represents canned pasta products typically in the
shapes of popular cartoon and comic book characters that are primarily consumed
by children age six and under. The Company's "All Family" canned pasta line
consists primarily of Beef Ravioli and Mini-Ravioli, in both regular and 99%
fat-free product offerings, as well as Spaghetti & Meatballs and Beefaroni, and
accounts for approximately 87% of the Company's canned pasta sales. The
Company's "Kids" canned pasta line features the newly introduced Chef Jr. line
and has been reformulated to appeal to younger children. The Chef Jr. line
includes shapes such as ABCs and 123s, dinosaurs, creatures of the sea, and
licensed characters such as Spiderman, X-Men and Teenage Mutant Ninja Turtles.
The Chef Jr. line accounts for approximately 13% of the Company's canned pasta
sales.

As the table below indicates, Chef Boyardee is the leading brand in the
canned pasta category with a 57% market share, followed by the Campbell Soup
Company's Franco American brand at 37%. The remaining seven percent of this
category is fragmented, with private label accounting for approximately five
percent.

<TABLE>
<CAPTION>
MARKET SHARE
-----------------------------
CHEF FRANCO
SEGMENT SIZE BOYARDEE AMERICAN OTHER
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
"All Family"............................ $335 77% 15% 8%
"Kids".................................. 204 23% 72% 5%
------
Total Canned Pasta................. $539 57% 37% 6%
======
</TABLE>

As indicated in the table above, Chef Boyardee holds a dominant position in
its core "All Family" category while Franco American products have the number
one position in the "Kids" category. Management believes that its "All Family"
products compete primarily within the broader category of prepared or quick
meals.

Management intends to continue to build Chef Boyardee's brand equity
through strong advertising support and packaging that aggressively promote the
Chef Boyardee brand name. In addition, management believes that sales of Chef
Boyardee products can be enhanced by (i) leveraging the Company's dominant
position in the "All Family" category by targeting advertising campaigns toward
children ages 9 to 13, the older segment of the brand's traditional consumer
base, (ii) encouraging greater use of Chef Boyardee products, particularly as an
after school snack, and (iii) promoting the nutritional benefits of Chef
Boyardee, including its 99% fat-free products, versus other quick meal
alternatives.

BUMBLE BEE (26.7% OF 1996 AGGREGATE NET SALES)

Founded in 1899 and acquired by the Company in July 1997, Bumble Bee is one
of the leading brands of premium canned seafood products in the U.S. The Bumble
Bee product line consists principally of canned white meat tuna, canned light
meat tuna and canned salmon. Bumble Bee holds number one shares of the canned
white meat tuna market and the canned salmon market and is the third leading
brand in the canned light meat tuna market. Similar to the Company's Chef
Boyardee product line, management believes that

42
<PAGE> 45

Bumble Bee products appeal to consumers because they are convenient to prepare
and more nutritious relative to other quick meal and snacking alternatives.

The canned tuna market in the U.S. is approximately $1.1 billion and is
generally segmented into two main categories, white meat ($446.9 million) and
light meat ($646.4 million). White meat tuna is processed from albacore tuna and
has a superior quality image and premium price compared to light meat tuna
(which is processed from skipjack and yellowfin tuna) due to its milder flavor,
lighter color and firmer texture. The Company's canned white meat tuna product
line represented 47.9% of the Company's canned tuna sales in 1996 and has
significantly higher gross margins than the Company's light meat tuna products.

As the table below indicates, Bumble Bee is the market leader in the white
meat canned tuna segment with a 40% market share, followed by H.J. Heinz
Company's Starkist brand and Van Camp Seafood Company, Inc.'s Chicken of the Sea
brand. In the light meat canned tuna segment, Bumble Bee is the second leading
brand with a 16% market share. Private label represents 7% and 15% of the canned
white meat market and canned light meat tuna market, respectively. In addition
to Bumble Bee's leading market positions in canned tuna, Bumble Bee is also the
market leader in canned salmon with a 21% market share.

<TABLE>
<CAPTION>
MARKET SHARE
--------------------------------------------------
SEGMENT SIZE BUMBLE BEE STARKIST CHICKEN OF THE SEA OTHER
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Canned White Meat Tuna....... $447 40% 34% 15% 11%
Canned Light Meat Tuna....... $646 16% 50% 16% 18%
</TABLE>

Sales of Bumble Bee products have suffered as a result of being owned by a
financially troubled company that was highly leveraged and had capital
constraints which limited Bumble Bee Seafoods ability to source raw fish and
effectively market its products. To help stimulate sales of Bumble Bee products,
management intends to (i) pursue a consumer-based marketing and advertising
strategy that leverages the equity of the Bumble Bee brand name and promotes the
healthy and convenience features of its products, (ii) introduce complementary
products under the Bumble Bee brand name that emphasize the convenience and
nutritional benefits of canned seafood, (iii) broaden the distribution of Bumble
Bee products to include alternative markets such as food service operators and
(iv) aggressively source albacore tuna for Bumble Bee canned white meat tuna.

SPECIALTY BRANDS (11.3% OF 1996 AGGREGATE NET SALES)

The Company's portfolio of specialty brands consists primarily of PAM,
Polaner and Gulden's, each of which commands leading national positions in its
defined markets. These brands have broad consumer recognition that has been
developed through strong marketing and advertising support.

PAM. PAM established the market for non-stick cooking spray with its
introduction in the 1960s. The Company's PAM products include Original, Butter
and Olive Oil non-stick cooking sprays. The Company's advertising and marketing
strategy for PAM emphasizes that it is the only all-natural cooking spray for
healthy, low-fat cooking. As a result of PAM's image and performance, the brand
enjoys a loyal customer base and a premium price.

In grocery outlets, the non-stick cooking spray category has grown at a
compound annual rate of approximately 11% from 1993 to 1996. Management believes
that this rapid sales growth has been driven by a trend toward healthier eating
and cooking. Several well-known chefs and numerous cookbook and magazine recipes
have advocated cooking sprays in lieu of fattier oils and spreads. PAM is the
market leader in the $160.8 million non-stick cooking spray category with 52% of
the market, while CPC International, Inc.'s Mazola, Procter & Gamble's Crisco
and ConAgra's Wesson have market shares of 13%, 5% and 2%, respectively. Private
label accounts for most of the remaining market share with approximately 20%, of
which Creative Products produces the majority.

Management intends to capitalize on PAM's premium image and the trend
toward healthier eating by identifying and promoting new usage occasions through
print advertising campaigns and on-package and in-

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<PAGE> 46

store recipe suggestions. The Company plans to introduce two new flavors, garlic
and lemon, and a barbecue spray that is formulated to withstand higher heat. In
addition, the Company has begun to distribute PAM in Mexico.

Polaner. The Polaner brand is comprised of a broad array of products
competing within the general fruit spread (including jams, jellies, preserves
and fruit-juice-sweetened spreads) and wet spices markets. The focal point of
the Company's Polaner marketing efforts are the "All-Fruit"
fruit-juice-sweetened line of spreads that accounted for approximately 74% of
all Polaner brand sales in 1996. The Company emphasizes Polaner's premium image
and quality in order to differentiate the brand from its competitors.

Fruit spreads are a $678.9 million category, with the fruit-juice-sweetened
segment representing $85.9 million of the category. The fruit-juice-sweetened
segment consists of premium products that contain less refined sugar than other
spreads such as jams and preserves. The primary consumers of fruit-juice-
sweetened spreads are women over the age of 35 with higher incomes. Since the
Polaner brand was acquired by the Company and expanded to national distribution
less than three years ago, its market share in the fruit-juice-sweetened segment
has increased from 32% in 1993 to 48% currently. Polaner's nearest competitor in
this segment is J.M. Smucker Co.'s Simply Fruit at 32%.

Gulden's. Charles Gulden created Gulden's mustard in New York City in 1862
and received a number of awards in international food competitions. The Company
acquired the brand in 1962. Gulden's mustard is the leader in the brown mustard
segment with a 50% market share, followed by French's Deli Style with a 25%
market share. Brown mustard is a $40.9 million segment of the $269.9 million
mustard category. The brown mustard grocery segment grew at a compound annual
rate of 10% between 1993 and 1996.

Other Grocery Brands. A number of smaller brands complete the Company's
national specialty brands portfolio, including Maypo, Wheatena and Maltex hot
cereals and G. Washington's dry seasonings and broths.

SOUTHWESTERN CUISINE (8.2% OF 1996 AGGREGATE NET SALES)

The Company offers products in the growing southwestern cuisine market on a
national basis with tomato-based items and on a regional basis with beans and
chili. Canned beans and canned chili are $965.5 million and $291.4 million
categories, respectively, with the West and Southwest representing approximately
60% of total U.S. canned chili volume. Tomatoes with green chilies is a $38.7
million category, with the Southwest representing approximately 51% of total
U.S. volume.

A number of the Company's products in the southwestern cuisine categories,
including Dennison's black bean chili with chorizo sausage and beef and Ro*Tel
diced tomatoes with green chilies, are targeted at the U.S. Hispanic population
which is expected to increase 30% between 1996 and 2005 according to the most
recent Bureau of Census report. In addition, management believes that the
growing national market for beans, which is being driven by trends toward
healthier eating, will benefit the Company's Ranch Style brand. In general,
southwestern cuisine products have enjoyed above average growth over the past
five years.

Ro*Tel. The Company's Ro*Tel brand, which consists of diced tomatoes with
green chilies and whole tomatoes with green chilies, has a 76% market share. The
brand was introduced in the early 1940s and acquired by the Company in 1992. The
brand is known as a zesty, robust and flavorful tomato ingredient used primarily
in combination with processed cheese as a dip for tortilla chips. The Company's
marketing strategy for Ro*Tel has primarily consisted of print advertising
campaigns and on-package recipes which feature Ro*Tel as the secret ingredient
that can be used to enhance traditional dishes. The Company recently introduced
two product extensions, "mild" and "extra hot" and has plans to launch two more
flavors in 1997, Mexican Fiesta and Italian Harvest. In addition, management has
initiated a program to expand Ro*Tel sales and is planning to market Ro*Tel in
Mexico.

Ranch Style. Ranch Style beans were created in the early 1930s and soon
became known for their authentic western-style flavor. The Company purchased the
brand in 1983. The Ranch Style product line consists of pork 'n beans, baked
beans, refried beans, other beans, chili and beef-stew. The brand is marketed
primarily in the southwestern United States where it led the region with a 23%
share of the miscellaneous canned bean market and a 39% share of the pork and
beans market. With ingredients that are low in fat and

44
<PAGE> 47

high in protein, Ranch Style products are positioned to satisfy the growing
trend toward healthy eating. The Company expanded the line offering by
introducing four new baked bean items as well as beans with sweet onions. Ranch
Style has had a presence in Mexico for over five years and management believes
that sales of the brand can be expanded in this market. On a combined basis,
Ranch Style leads the canned bean category in the Southwest with a 27% market
share.

Luck's. Luck's was created in the early 1950s in Seagrove, North Carolina.
The Company acquired the product line in 1967. Luck's is the leader in the $62.2
million miscellaneous bean market in the Southeast with a 30% market share. The
Luck's product family primarily includes bean products known for their
traditional southern-style flavor. In July 1997, the Company launched the first
fat-free entries into the miscellaneous beans category with four new Luck's
fat-free items.

Dennison's. The Company's Dennison's product line was originated as a
family recipe by Mrs. May Belle Dennison in 1915 and was purchased by the
Company in 1954. The Dennison's line consists primarily of chili con carne with
and without beans, extra hot chili and recently introduced reduced fat, turkey
and vegetarian chili. These products are marketed as the "Stand Up" chili with a
distinctly extra thick and hearty profile. The brand has traditionally been
marketed in the West where it has an 18% share of the region's $111.1 million
canned chili market.

SNACK FOODS (7.3% OF 1996 AGGREGATE NET SALES)

In the snack food category, the Company's brands include Crunch 'n Munch
glazed popcorn and pretzels, Campfire marshmallows and marshmallow crisp rice
bars and Jiffy Pop unpopped popcorn.

Crunch 'n Munch. Crunch 'n Munch, a combination of popcorn and fresh dry
roasted peanuts coated with a butter toffee glaze, was created in 1966. Crunch
'n Munch, which holds the number one position in the glazed popcorn segment, is
offered in four flavors (Buttery Toffee, Caramel, Almond Supreme and Fat Free
Buttery Toffee). Crunch 'n Munch is positioned as a snack to satisfy the salty
and sweet cravings of consumers. The Company believes that the brand's new
contemporary package design, which emphasizes the Crunch 'n Munch brand name,
and its new fat-free product, as well as further product line extensions such as
the recently introduced Crunch 'n Munch Glazed Pretzels in two flavors (Toffee
and Apple Cinnamon), will allow it to increase its consumer base. Moreover,
management believes that the brand can achieve significantly higher levels of
sales with increased marketing support.

Glazed popcorn is a $74.4 million segment within the $5 billion snack
category, a category which grew at an annual rate of five percent from 1992 to
1995. Glazed popcorn products are purchased by consumers of all ages. Younger
households are more likely to purchase Borden, Inc.'s Cracker Jack brand due to
its appeal to kids, while older households are more likely to purchase Crunch 'n
Munch due to its appeal to adults. Crunch 'n Munch commands a 37% market share,
followed by Cracker Jack at 33%. No other competitor accounts for more than 10%
of the market.

Campfire. The Company's Campfire product line consists of marshmallows and
marshmallow crisp rice bars. The Campfire brand name enjoys broad consumer
recognition, as it is the oldest brand name in the marshmallow category.
Campfire Marshmallow Munchie is the third leading marshmallow crisp rice bar
with an 7% market share of this $166.3 million market, behind Kellogg Company's
Rice Krispies brand with a 60% market share and General Mills, Inc.'s Golden
Graham Treats with a 22% market share. Campfire marshmallow is the second
leading brand in the $113.9 million grocery marshmallow market with a 6% market
share. Favorite Brands, Inc.'s Jet Puff brand is the market leader with a 48%
market share, with private label accounting for the balance of the market.

Management believes that Campfire sales will continue to grow over the next
several years due to (i) growth in the marshmallow crisp rice bar category and
(ii) the Campfire product line gaining a larger share of the branded and private
label marshmallow and marshmallow crisp rice bar markets through expanded
distribution.

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<PAGE> 48

OTHER MARKETS (19.5% OF 1996 AGGREGATE NET SALES)

The Company's branded business in the United States is complemented by a
strong presence in Canada, Mexico and Puerto Rico, growing food service and
private label businesses, and sales to the U.S. military.

Canada. The Company markets Chef Boyardee canned pasta, PAM cooking spray,
Crunch 'n Munch glazed popcorn and certain other products in Canada. The Company
commands the number one market share position in canned pasta, cooking spray and
glazed popcorn sales in Canada, with Chef Boyardee canned pasta, PAM and Crunch
'n Munch.

Food Service. The Company supplies many of its products to restaurants,
institutions, schools, ballparks, the vending trade, distributors and chain
accounts. In addition, the Company has implemented a number of initiatives to
expand the penetration of its branded products in the food service industry,
including broadening its product lines to meet the specialized needs of the food
service industry and increasing its marketing and sales efforts. The Company's
recent acquisition of Creative Products has expanded its product offering and
sales to food service customers. Management believes that opportunities exist to
utilize the Company's excess plant capacity to facilitate additional growth in
food service sales.

Private Label. The primary products manufactured by the Company under
private labels are prepared pasta, jams and jellies, cooking spray and
marshmallow products. Private label represents an additional opportunity for
growth and the utilization of excess plant capacity. Management believes that
the addition of Creative Products' dedicated private label sales force will help
the Company broaden its private label business.

Mexico, Puerto Rico and International. Through the Company's subsidiary,
Productos Del Monte, the Company is a leading manufacturer and marketer of
branded catsup, canned vegetables and bottled salsa in Mexico. The Company
intends to expand sales of its U.S. products in Mexico, initially targeting PAM
and Ranch Style, and plans to use Productos Del Montes sales and distribution
capabilities to achieve this strategy. In addition, the Company markets Chef
Boyardee canned pasta, Crunch 'n Munch and Jiffy Pop in Puerto Rico. Chef
Boyardee, with over 25 years of sales in Puerto Rico, commands 98% of the Puerto
Rico canned pasta market. Moreover, the Company's products are exported to over
35 other countries.

Military. The Company sells many of its products to U.S. military bases
both in the U.S. and internationally. Products sold to the military include Chef
Boyardee canned pasta, PAM cooking spray, Crunch 'n Munch glazed popcorn,
Polaner fruit spreads and Ranch Style beans.

MARKETING, SALES AND DISTRIBUTION

The Company's marketing programs consist of advertising, consumer
promotions and trade promotions. The Company's advertising program is comprised
of television, newspaper and magazine advertising aimed at increasing consumer
awareness of the Company's brands and building customer loyalty. Consumer
promotions include targeted coupons and on-package offers designed to generate
trial usage and increase purchase frequency. The Company's trade promotions
focus on obtaining retail display support, achieving key price points and
securing retail shelf space. The Company intends to continue to focus its
marketing efforts towards building brand equity through consumer advertising and
trial generating activities rather than trade spending and discounting.

The Company sells its products in the United States through its direct
sales force and a network of food brokers. The Company maintains U.S. regional
sales offices in New Jersey, North Carolina, Georgia, Illinois, Texas,
California and Florida. The Company's products reach all major classes of trade,
including grocery wholesalers and distributors, grocery stores and supermarkets,
convenience stores, drug and mass merchants and warehouse clubs. The Company
distributes its products in the United States through 26 distribution points,
nine of which are owned by the Company and 17 of which are leased. The Company's
distribution system uses a combination of common carrier trucking, Company
trucks and inter-modal rail transport. In Canada, the Company operates six
distribution points, one of which is Company-owned. In Mexico, Productos Del
Monte operates five distribution centers. Management believes that the Company's
comprehensive U.S. sales and distribution network enables the Company to deliver
85% of its sales volume to customers within 24

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<PAGE> 49

hours and 100% within 48 hours. Management believes that the Company's sales and
distribution network has the capacity to support substantial increases in
volume.

None of the Company's customers represent more than 10% of the Company's
aggregate net sales.

COMPETITION

RAW MATERIALS

The primary raw materials used in the Company's operations include tin
cans, flour, meat, tomatoes, tuna, salmon, fruit and fruit-juice concentrates,
beans and peanuts. All of the Company's raw materials are widely available from
numerous suppliers, other than white albacore tuna processed by the Bumble Bee
Business, for which there is limited worldwide supply and number of suppliers.

PRODUCTION AND FACILITIES

The Company operates the manufacturing plants described in the following
table. All of these plants are owned by the Company, other than the Utah
facility, which the Company leases under an operating lease with an initial term
that expires in 1999 and containing a renewal option for an additional five year
term. Management believes that the Company's manufacturing plants have
sufficient capacity to accommodate the Company's planned growth over the next
five years.

<TABLE>
<CAPTION>
LOCATION SQUARE FEET PRODUCTS MANUFACTURED
<S> <C> <C>
Milton, Pennsylvania........ 895,000 Canned pasta, microwave products, mustard, glazed
popcorn, pizza kits, dinner kits and sauces
Vacaville, California....... 354,800 Canned pasta, microwave products, tomatoes with
green chilies, chili and tomato paste
Mayaguez, Puerto Rico....... 222,000 Canned tuna
Irapuato, Mexico............ 212,000 Catsup, canned vegetables and bottled salsa
Clearfield, Utah............ 210,000 Marshmallows and marshmallow crisp rice bars
Fort Worth, Texas........... 204,800 Beans and chili
Seagrove, North Carolina.... 198,000 Beans, vegetables, fruit and popcorn
Rossville, Illinois......... 193,000 Cooking spray and health and beauty aids
Niagara Falls, Canada....... 165,500 Canned pasta, pizza kits, dinner kits, sauces and
glazed popcorn
Santa Fe Springs, 122,000
California................ Canned tuna
Manta, Ecuador.............. 66,000 Canned tuna and tuna loins for processing in the
Company's Santa Fe Springs facility
Highspire, Pennsylvania..... 29,000 Cereals
</TABLE>

The Company has also entered into co-packing (third party manufacturing)
agreements with several manufacturers for Bumble Bee canned salmon, Polaner
fruit spreads and spices, PAM cooking spray and G. Washington's dry seasonings
and broths. In 1995, these plants produced approximately eight million cases of
finished product for the Company, as compared to approximately 50 million cases
of products produced by the Company. In addition, the Company owns or leases 37
distribution points throughout North America and Latin America. See "Marketing,
Sales and Distribution."

The Company leases office space in Parsippany, New Jersey, San Diego,
California and Greenwich, Connecticut under operating leases expiring in
November 2006, January 1998 and October 2004, respectively.

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<PAGE> 50

In addition, the Company owns a 30% interest in a water treatment plant adjacent
to its Puerto Rico processing plant.

TRADEMARKS

The Company owns a number of registered trademarks, including Chef
Boyardee, Bumble Bee, PAM, Franklin Crunch 'n Munch, Polaner, Gulden's, Jiffy
Pop, Dennison's, Luck's, Ranch Style, Ro*Tel, Campfire, Marshmallow Munchie and
G. Washington's. Registration of the Chef Jr. trademark is pending. Wheatena,
Maypo and Maltex are registered trademarks licensed to the Company. Management
is not aware of any fact that would have a materially adverse impact on the
continuing use of these trademarks. See "Risk Factors -- Trademarks."

EMPLOYEES

As of October 1, 1997, the Company employed approximately 6,400 people.
Approximately 49% of the Company's employees are unionized. Approximately 56% of
the unionized employees are represented by the United Food & Commercial Workers
International Union (part of the AFL-CIO) and have collective bargaining
agreements which extend into the year 2001. Approximately 25% of the unionized
employees are represented by the Teamsters Union and have recently renegotiated
collective bargaining agreements. During the negotiation in July 1997, the
Teamsters Union employees went on strike for six days. The strike was resolved
and a new collective bargaining agreement that expires December 31, 2000 was
entered into on terms satisfactory to the Company. The Company is not aware of
any pending or threatened National Labor Relations Board arbitration proceedings
relating to the strike.

CERTAIN LEGAL AND REGULATORY MATTERS

Food Safety and Labeling. The Company is subject to the Food, Drug and
Cosmetic Act and regulations promulgated thereunder by the FDA. This
comprehensive regulatory program governs, among other things, the manufacturing,
composition and ingredients, labeling, packaging and safety of food. For
example, the FDA regulates manufacturing practices for foods through its current
"good manufacturing practices" regulations and specifies the recipes for certain
foods. In addition, the Nutrition Labeling and Education Act of 1990 prescribes
the format and content of certain information required to appear on the labels
of food products. The Company is subject to regulation by certain other
governmental agencies, including the U.S. Department of Agriculture. Although
the Company has voluntarily recalled products from time to time in the past, no
such recall has had a material effect on the Company's results of operations.

The operations and products of the Company are also subject to state and
local regulation through such measures as licensing of plants, enforcement by
state health agencies of various state standards and inspection of facilities.
Enforcement actions for violations of federal, state and local regulations may
include seizure and condemnation of products, cease and desist orders,
injunctions or monetary penalties. Management believes that the Company's
facilities and practices are sufficient to maintain compliance with applicable
government regulations, although there can be no assurances in this regard.

Federal Trade Commission. The Company is subject to certain regulations by
the FTC. Advertising of the Company's products is subject to regulation by the
FTC pursuant to the Federal Trade Commission Act and the regulations promulgated
thereunder.

Employee Safety Regulations. The Company is subject to certain health and
safety regulations, including regulations issued pursuant to the Occupational
Safety and Health Act. These regulations require the Company to comply with
certain manufacturing, health and safety standards to protect its employees from
accidents.

Environmental. The Company's operations and properties are subject to a
wide variety of increasingly complex and stringent federal, state and local laws
and regulations governing the use, storage, handling, generation, treatment,
emission, release, discharge and disposal of certain materials, substances and
wastes,

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<PAGE> 51

the remediation of contaminated soil and groundwater, and the health and safety
of employees. As such, the nature of the Company's operations exposes it to the
risk of claims with respect to environmental matters.

The Company has been named as a potentially responsible party (a "PRP") at
two federal Superfund sites. At both sites, the Company has accepted de minimus
settlement offers from the EPA. One such settlement offer has been paid and the
Company expects to pay the other such settlement offer in late 1997.

In April 1997, the Company received an estimate from an independent
environmental consultant in connection with potential clean-up costs at its
facilities (other than those facilities utilized in the Bumble Bee Business).
Such consultant estimated clean-up costs to be between $500,000 and $5.0
million. In 1995, the water treatment plant in Mayaguez, Puerto Rico that is 30%
owned by the Company entered into a consent decree pursuant to which it agreed
to implement remedial capital improvements to improve its waste-water discharge.
The Company will be responsible for 30% of the costs of these improvements,
which are not expected to be material to the Company. Based upon its experience
to date, the Company believes that the future cost of compliance with existing
environmental laws, regulations and decrees, and liability for known
environmental claims, will not have a material adverse effect on the Company's
financial statements as a whole. However, future events, such as changes in
existing laws and regulations or their interpretation, and more vigorous
enforcement policies of regulatory agencies, may give rise to additional
expenditures or liabilities that could be material.

Insurance. The Company maintains general liability, product liability,
property, workers' compensation and other insurance in amounts and on terms that
it believes are customary for companies similarly situated. The Company does not
generally maintain insurance for product liability claims.

Litigation. The Company, in the ordinary course of business, is involved in
various legal proceedings. The Company does not believe the outcome of these
proceedings will have a material adverse effect on the Company's financial
condition or results of operations.

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<PAGE> 52

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table provides information concerning the directors and
executive officers of the Company.

<TABLE>
<CAPTION>
NAME AGE POSITION
<S> <C> <C>
C. Dean Metropoulos.......... 50 Chairman of the Board and Chief Executive Officer
John H. Bess................. 45 President and Chief Operating Officer
William J. Feeney............ 45 Executive Vice President
N. Michael Dion.............. 40 Senior Vice President and Chief Financial Officer
Christopher J. Guida......... 36 Senior Vice President -- Grocery Field Sales
Michael Larney............... 40 Senior Vice President and General Manager -- Chef
Boyardee
Gerardo I. Lopez............. 38 Senior Vice President and General Manager --
Southwestern Cuisine
M. Kelley Maggs.............. 45 Senior Vice President and General Counsel
John Sottile................. 43 Senior Vice President and General Manager --
Specialty Brands
Frank Valdez................. 46 Senior Vice President and General Manager --
Operations
Stephen Van Tassell.......... 41 Senior Vice President -- Snack Foods
Lynne M. Misericordia........ 34 Treasurer
Thomas O. Hicks.............. 51 Director
L. Hollis Jones.............. 43 Director
Michael J. Levitt............ 38 Director
M. L. Lowenkron.............. 66 Director
Alan B. Menkes............... 38 Director
Roger T. Staubach............ 55 Director
Charles W. Tate.............. 52 Director
</TABLE>

Executive officers of the Company are appointed by the Board of Directors
and serve at the Board's discretion. A brief biography of each director and
executive officer follows:

C. Dean Metropoulos has served as Chairman of the Board of Directors and
Chief Executive Officer of the Company since November 1996. Mr. Metropoulos is
the Chief Executive Officer of C. Dean Metropoulos & Co., a management services
company and Morningstar. From 1983 through 1993, Mr. Metropoulos served as
President and Chief Executive Officer of Stella. Prior to 1983, Mr. Metropoulos
served in several executive positions with GTE Corporation, including Vice
President and General Manager-Europe, and Vice President and Controller-GTE
International. Mr. Metropoulos also serves as a director of Morningstar and
Ghirardelli Chocolate Company ("Ghirardelli").

John H. Bess joined the Company in September 1997 as President and Chief
Operating Officer. From 1975 until joining the Company, Mr. Bess held numerous
positions with Procter & Gamble, most recently serving as Vice President and
Managing Director of Worldwide Strategic Planning. Mr. Bess is a graduate of
Clark University and received an M.B.A. in marketing from New York University.

William J. Feeney has been the Company's Executive Vice President since
January 1997. From January 1997 to September 1997, Mr. Feeney managed day-to-day
operations of the Company. He has been with the Company for 25 years, primarily
in sales management, as well as senior positions in marketing. Mr. Feeney
received his A.A.S. from the State University of New York.

N. Michael Dion joined the Company as a Senior Vice President and its Chief
Financial Officer in December 1996. Prior to joining the Company, Mr. Dion
served as the Vice President of Finance for C. Dean Metropoulos & Co. and for
LBJ Holdings, Inc., a Connecticut based baking company. Mr. Dion also served as
a financial advisor to Morningstar and to Ghirardelli. Prior to joining
Metropoulos & Co., Mr. Dion was the

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<PAGE> 53

Vice President of Finance for Stella from 1990 through December 1994. Mr. Dion
is a Certified Public Accountant and holds a B.S. in Business Administration and
Finance and Accounting from the University of Vermont.

Christopher J. Guida has served as the Company's Senior Vice
President -- Grocery Field Sales since November 1996. He joined the Company in
1984. His experience at the Company includes field and broker sales management,
sales training and customer service positions. Mr. Guida received his B.A.
degree from Oaklava University.

Michael Larney joined the Company in 1979 and has served as the Company's
Senior Vice President & General Manager -- Chef Boyardee since November 1996.
From 1979 to 1996, Mr. Larney worked in the Company's grocery field sales
division. Mr. Larney received his B.A. from the University of Connecticut.

Gerardo I. Lopez has served as Senior Vice President & General
Manager -- Southwestern Cuisine since April 1997. Before joining the Company,
Mr. Lopez held a variety of positions, including Area Vice President for
Frito-Lay, at Pepsico from 1986 to 1996. Mr. Lopez graduated with a M.B.A. from
Harvard University and a B.B.A. from George Washington University.

M. Kelley Maggs joined the Company as Senior Vice President and General
Counsel in November 1996. Prior to joining the Company, Mr. Maggs served as Vice
President, Secretary and General Counsel for Stella Foods, Inc. from 1993
through 1996. Before joining Stella he was in private law practice from 1979
through 1993. Mr. Maggs holds a B.A. from Niagara University and a J.D. from
George Mason University.

John Sottile joined the Company in December 1996 as Senior Vice President &
General Manager -- Specialty Brands. Mr. Sottile worked as a Senior Vice
President at Stella from 1989 to 1995. In addition, Mr. Sottile's experience
includes marketing and general management at Joseph E. Seagram & Sons and Kraft
Foods. Mr. Sottile received his M.B.A. from Fordham University.

Frank Valdez joined the Company in September 1997 as Senior Vice President
& General Manager -- Operations. Prior to coming to the Company, Mr. Valdez was
President and Chief Operating Officer for USA Detergents, Inc. from 1995 to
1997. Mr. Valdez served in various positions, including Director of
Manufacturing, with Reckett & Coleman from 1990 to 1995. Mr. Valdez graduated
from the University of Pennsylvania with a M.B.A. and the University of Maryland
with a B.B.A.

Stephen Van Tassel has been the Company's Senior Vice President -- Snack
Foods since August 1, 1996. He joined the Company in 1992, and before becoming
Senior Vice President, held various positions with the Company, primarily in
product management. Before joining the Company, Mr. Van Tassel held positions
with General Mills and ConAgra. Mr. Van Tassel received his B.A. from Bowdoin
College and his M.B.A. from Dartmouth College.

Lynne M. Misericordia has been employed with the Company since August 1985
and was named Treasurer of the Company in November 1996. Ms. Misericordia has
held several other financial positions in the Company since 1992. From 1988 to
1992 she held positions in American Home Products's compliance and finance
departments. Ms. Misericordia received her B.A. from Babson College.

Thomas O. Hicks has been a Director of the Company since November 1996. Mr.
Hicks has been Chairman and Chief Executive Officer of Hicks Muse since
co-founding the firm in 1989. Prior to forming Hicks Muse, Mr. Hicks co-founded
Hicks & Haas Incorporated in 1983 and served as its Co-Chairman and Co-Chief
Executive Officer through 1989. Mr. Hicks also serves as a director of
Chancellor Media Corporation, Berg Electronics Corp., Sybron International
Corporation, Capstar Broadcasting Corporation, CorpGroup Limited, CCI Holdings
and Grupo MVS, S.A. de C.V.

L. Hollis Jones became a Director of the Company on January 3, 1997. Since
August of 1995, Mr. Jones has been the President and Chief Operating Officer of
Morningstar. From January 1994 until July 1995, Mr. Jones was President of his
own management consulting firm, Hollis Jones, Inc. From February 1983 until
forming his own management consulting firm, Mr. Jones held various positions of
increasing responsibility at Campbell Taggart, Inc., a subsidiary of
Anheuser-Busch, including Vice President-General Manager of its

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bakery division from June 1992 to January 1994 and President of its diversified
division from June 1991 to June 1992.

Michael J. Levitt has been a Director of the Company since November 1996.
Mr. Levitt is a Managing Director and Principal of Hicks Muse. Before joining
Hicks Muse, Mr. Levitt was a Managing Director and Deputy Head of Investment
Banking with Smith Barney Inc. from 1993 through 1995. From 1986 through 1993,
Mr. Levitt was with Morgan Stanley & Co. Incorporated, most recently as a
Managing Director responsible for the New York based Financial Entrepreneurs
Group. Mr. Levitt also serves as a director of Atrium Companies, Inc., Sunrise
Television Corp. and Ghirardelli.

M. L. Lowenkron has been a Director of the Company since November 1996.
From January 1995 through June 1996, Mr. Lowenkron served as President and Chief
Executive Officer of G. Heileman Brewing Co. Mr. Lowenkron served as Chairman of
the Board and Chief Executive Officer of A&W Brands, Inc. ("A&W") from December
1991 to October 1993, and served as President of A&W and its predecessors from
1980 to December 1991. Mr. Lowenkron serves as a Director of Hat Brands, Inc.,
and Depuy Inc. Mr. Lowenkron also serves as First Vice Chairman of the National
Easter Seal Society.

Alan B. Menkes has been a Director of the Company since November 1996. Mr.
Menkes is a Managing Director and Principal of Hicks Muse. Before joining Hicks
Muse in 1992, Mr. Menkes was employed by The Carlyle Group, a Washington
D.C.-based private investment firm, most recently as a Senior Vice President.
Mr. Menkes also serves as a director of Hedstrom Holdings, Inc. Mr. Menkes also
serves as a vice president and assistant secretary of the Company.

Roger T. Staubach has been a Director of the Company since November 1996.
Since 1983, Mr. Staubach has served as the Chairman and Chief Executive Officer
of The Staubach Company, a diversified real estate company. Mr. Staubach also
serves as a director of Halliburton Company, Brinker International, Inc., and
Columbus Realty Trust, and as a trustee of American AAdvantage Funds.

Charles W. Tate has been a Director of the Company since November 1996. Mr.
Tate is President of Hicks Muse, which he joined as Managing Director and
Principal in 1991. From 1972 to 1991, Mr. Tate was a Managing Director at Morgan
Stanley & Co. Incorporated in the merchant banking division and in the mergers
and acquisitions department. Mr. Tate also serves as a director of Morningstar
Group, Inc., International Wire Group, Inc., Berg Electronics Corp., DESA
Holdings Corporation, Seguros Comercial America, S.A. de C.V., Vidrio Formas,
S.A. de C.V. and Mandeville Cable Partners Argentina I.

ELECTION AND COMMITTEES OF DIRECTORS

Each of the directors of the Company was appointed by Hicks Muse at the
time of, or shortly after, the IHF Acquisition. The Board of Directors has been
reclassified into three classes. The directors of each class are elected for
three-year terms, with the terms of the three classes staggered so that
directors from a single class are elected at each annual meeting of the
stockholders. Mr. Jones and Mr. Staubach are Class I directors whose terms of
office will expire at the annual meeting of stockholders in 1998; Messrs.
Menkes, Levitt, and Lowenkron are Class II directors whose terms of office will
expire at the annual meeting of stockholders in 1999; and Messrs. Hicks, Tate
and Metropoulos are Class III directors whose terms of office will expire at the
annual meeting of stockholders in 2000.

The Board of the Directors of the Company has three committees: an audit
committee, a compensation committee and an executive committee. The audit
committee's functions include recommending to the Board of Directors the
engagement of the Company's independent public accountants and reviewing with
such accountants the plans for, and the result and scope of, their auditing
engagement. The compensation committee determines the compensation of executive
officers, including bonuses, and administers the Company's Stock Option Plan.
The executive committee is authorized to exercise the powers of the Board of
Directors during the intervals between the meetings of the Board of Directors
and is from time to time delegated certain authority in matters pertaining to
the Company. The audit committee consists of Messrs. Staubach and Lowenkron. The
compensation committee consists of Messrs. Tate, Lowenkron and Staubach. The
executive committee consists of Messrs. Menkes, Metropoulos and Tate.

52
<PAGE> 55

COMPENSATION OF EXECUTIVE OFFICERS

The following table sets forth for 1996 and 1995 the compensation awarded
to or earned by each person serving as the Company's chief executive officer
during 1996 and the four most highly compensated executive officers of the
Company other than the Company's chief executive officer at the end of 1996 (the
"Named Executive Officers").

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
ANNUAL COMPENSATION SECURITIES
--------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS COMPENSATION($)(1)
<S> <C> <C> <C> <C> <C>
C. Dean Metropoulos
Chief Executive Officer(2)...... 1996 150,000 -- 3,518,342(3) --
1995 -- -- -- --
Kenneth J. Martin
President(4).................... 1996 309,616 1,233,333 1,346,914(3) 9,652
1995 280,000 230,000(5) 30,000 7,528
Stephen Van Tassel
Senior Vice President -- Snack
Foods........................ 1996 179,900 60,000 98,822(3) 5,535
1995 174,800 -- 7,000 6,209
Albert J. Soricelli, Jr.
Senior Vice President of New
Ventures and
International(6)............. 1996 166,904 100,000 85,057(3) 5,446
1995 162,000 -- 10,000 5,767
William J. Feeney
Executive Vice President........ 1996 164,808 120,000 141,351 5,388
1995 155,000 -- 6,000 5,014
</TABLE>

- ---------------

(1) Amounts represent employer contributions to savings and retirement plans.

(2) Mr. Metropoulos commenced his employment with the Company on November 1,
1996. Effective September 1, 1997, Mr. Metropoulos has an annual base salary
of $1,375,000 and is entitled to receive an annual bonus of up to the same
amount. In addition, Mr. Metropoulos is eligible to participate in the
Company's benefit plans and also receives certain other perquisites,
including reimbursement of country club dues.

(3) Messrs. Metropoulos, Martin, Van Tassel, Soricelli and Feeney were granted
options to acquire 3,518,342, 1,313,514, 93,822, 75,057, and 131,351 shares
of Common Stock, respectively, and 0, 33,400, 5,000, 10,000 and 10,000
shares of American Home Products common stock, respectively, during 1996.
See "Option Grants in Last Fiscal Year" below.

(4) Mr. Martin resigned from the Company in January 1997. Concurrently with his
resignation, Mr. Martin's options to acquire the Company's stock were
cancelled. Mr. Bess was hired in September 1997 to replace Mr. Martin as
President and Chief Operating Officer. His annual base salary is $300,000
and he is entitled to receive an annual bonus of up to the same amount. In
addition, Mr. Bess is eligible to participate in the Company's benefit
plans. In connection with the hiring of Mr. Bess by the Company, Mr. Bess
was granted options to purchase an aggregate of 469,112 shares of Common
Stock. The exercise price is $10.66 per share. The options vest in equal
increments on each of the first three anniversaries of their grant date and
expire on the tenth anniversary of their date of grant.

(5) Includes cash in the amount of $115,000 and stock of American Home Products
in the amount of $115,000.

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<PAGE> 56

(6) Mr. Soricelli's employment with the Company terminated in the fourth quarter
of 1997. None of his options granted by the Company had vested at the time
of termination.

The following table contains information about stock options granted by the
Company and by American Home Products to the Named Executive Officers in 1996.

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO OPTION TERMS($)(1)
OPTION EMPLOYEES IN EXERCISE PRICE EXPIRATION ---------------------------
NAME GRANTED 1996 PER SHARE DATE(1) 5% 10%
<S> <C> <C> <C> <C> <C> <C>
OPTIONS GRANTED BY THE COMPANY
C. Dean
Metropoulos(2)....... 3,518,342 48.22% $ 5.33 11-01-2006 11,791,774 29,882,671
Kenneth J. Martin(3)... 1,313,514 18.00% 5.33 11-01-2006 4,402,262 11,156,197
Stephen Van Tassel..... 93,822 1.29% 5.33 11-01-2006 314,450 796,850
Albert J. Soricelli,
Jr.(4)............... 75,057 1.03% 5.33 11-01-2006 251,560 637,480
William J. Feeney...... 131,351 1.80% 5.33 11-01-2006 440,230 1,115,590
OPTIONS GRANTED BY AMERICAN HOME PRODUCTS
C. Dean Metropoulos.... -- -- -- -- -- --
Kenneth J. Martin...... 33,400 0.42% $53.0625 05-23-2006 60,462(5) 121,039(5)
Stephen Van Tassel..... 5,000 * $53.0625 05-23-2006 9,126(5) 18,120(5)
Albert J. Soricelli,
Jr.(4)............... 10,000 0.13% $53.0625 05-23-2006 18,252(5) 36,239(5)
William J. Feeney...... 10,000 0.13% $53.0625 05-23-2006 18,252(5) 36,239(5)
</TABLE>

- ---------------

* Less than 1%.

(1) These gains are based on assumed rates of stock price appreciation of 5% and
10% compounded annually from the date the option was granted through
November 1, 2006, the expiration date of the options.

(2) The exercise price of Mr. Metropoulos' options was $5.33 per share on the
date of grant, November 1, 1996 and was increased to $6.40 during the third
quarter of 1997.

(3) Mr. Martin resigned from the Company in January 1997. Concurrently with his
resignation, Mr. Martin's options were cancelled.

(4) Mr. Soricelli's employment with the Company terminated in the fourth quarter
of 1997. None of his options granted by the Company had vested at the time
of termination.

(5) The initial expiration of these options was May 23, 2006. By their terms,
however, these options terminated on January 31, 1997. Potential realizable
value amounts represent hypothetical gains that could be achieved for the
options if they had been exercised at the end of such three month period.
These gains are based on assumed rates of stock price appreciation of 5% and
10% from the date the option was granted through January 31, 1997, the
accelerated expiration date of the options.

54
<PAGE> 57

The following table provides information about the number of shares of
stock of the Company and of American Home Products issued upon exercises by the
Named Executive Officers during 1996 and the value realized by the Named
Executive Officers. The table also provides information about the number and
value of options exercisable for shares of stock of the Company and of American
Home Products held by the Named Executive Officers at December 31, 1996.

AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 1996 DECEMBER 31, 1996 ($)(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
OPTIONS OF THE COMPANY
C. Dean Metropoulos..... -- -- 3,518,342 -- 44,331,109 --
Kenneth J. Martin(2).... -- -- -- 1,313,514 -- 17,955,736
Stephen Van Tassel...... -- -- -- 93,822 -- 1,282,546
Albert J. Soricelli,
Jr.(4)................ -- -- -- 75,057 -- 1,026,029
William J. Feeney....... -- -- -- 131,351 -- 1,795,568
OPTIONS OF AMERICAN HOME PRODUCTS(3)
C. Dean Metropoulos..... -- -- -- -- -- --
Kenneth J. Martin....... 55,000 982,959 0 -- -- --
Stephen Van Tassel...... 10,400 182,475 1,600 -- 32,800 --
Albert J. Soricelli,
Jr.(4)................ 15,400 331,961 9,000 -- 220,219 --
William J. Feeney....... 47,800 1,446,793 11,600 -- 286,125 --
</TABLE>

- ---------------

(1) Based upon a value of the Company's common stock of $19.00 per share and
upon a value of American Home Products common stock of $58.625 per share,
the closing market price on December 31, 1996.

(2) Mr. Martin resigned from the Company in January 1997. Concurrently with his
resignation, Mr. Martin's options were cancelled.

(3) In addition to the amounts set forth in the table above, American Home
Products granted options to Messrs. Martin, Tassel, Soricelli and Feeney in
1996. By their terms, however, these options terminated on January 31, 1997.
Messrs. Martin, Tassel, Soricelli and Feeney received $271,375, $40,625,
$81,250 and $81,250, respectively, in connection with these cancellations.

(4) Mr. Soricelli's employment with the Company terminated in fourth quarter of
1997. None of his options granted by the Company had vested at the time of
termination.

MANAGEMENT BONUSES

Management and certain employees are eligible to receive annual bonuses.
The compensation committee of the Board of Directors determines the amount of
such bonuses.

BENEFIT PLANS

Stock Option Plan. The Stock Option Plan gives certain individuals and key
employees of the Company who are responsible for the continued growth of the
Company an opportunity to acquire a proprietary interest in the Company, and
thus to create in such persons an increased interest in and a greater concern
for the welfare of the Company. The Stock Option Plan provides for the grant of
options to acquire up to 8,444,021 shares of Common Stock. Grants of stock
options with respect to 7,295,822 shares of Common Stock have been made under
the Stock Option Plan.

The Stock Option Plan is administered by the Company's compensation
committee, which is currently comprised of Messrs. Tate, Lowenkron and Staubach.
The compensation committee has authority, subject to

55
<PAGE> 58

the terms of the Stock Option Plan (including the formula grant provisions and
the provisions relating to incentive stock options contained therein), to
determine when and to whom to make grants or awards under the Stock Option Plan,
the number of shares to be covered by the grants or awards, the types and terms
of the grants and awards, and the exercise price of stock options. Moreover, the
compensation committee will have the authority, subject to the provisions of the
Stock Option Plan, to establish such rules and regulations as it deems necessary
for the proper administration of the Stock Option Plan and to make such
determinations and interpretations and to take such action in connection with
the Stock Option Plan and any grants and awards thereunder as it deems necessary
or advisable. The compensation committee's determinations and interpretations
under the Stock Option Plan are final, binding and conclusive on all
participants and need not be uniform and may be made by the compensation
committee selectively among persons who receive, or are eligible to receive,
grants and awards under the Stock Option Plan.

Grants of "incentive stock options" within the meaning of section 422 of
the Internal Revenue Code of 1986, as amended (the "Code") and non-qualified
stock options (options which do not qualify under section 422 of the Code) may
be made under the Stock Option Plan to key employees. Grants of non-qualified
stock options may be made to eligible non-employees (as defined in the Stock
Option Plan).

The exercise price per share of Common Stock under each option is fixed by
the compensation committee on the date of grant; provided, however, that the
exercise price of an incentive stock option granted to a person who, at the time
of grant, owns shares of the Company which possessing more than 10% of the total
combined voting power of all classes of stock of the Company may not be less
than 110% of the fair market value of a share of Common Stock on the date of
grant. No option is exercisable after the expiration of ten years from the date
of grant, unless, as to any non-qualified stock option, otherwise expressly
provided in the option agreement; provided, however, that no incentive stock
option granted to a person who, at the time of grant, owns stock of the Company
possessing more than 10% of the total combined voting power of all classes of
stock of the Company is exercisable after the expiration of five years from the
date of grant.

In the event of a change of control or sale of the Company, all outstanding
stock options may, subject to the sole discretion of the compensation committee,
become exercisable in full at such time or times as the compensation committee
may determine. Each stock option accelerated by the compensation committee would
terminate on such date (not later than the stated exercise date) as the
compensation committee determines.

Unless an option or other agreement provides otherwise, upon the date of
death of an optionee (or upon the termination of an optionee because of such
optionee's disability), the person who acquires the right to exercise the option
of such optionee (or the optionee in the case of disability) must exercise such
option within 180 days after the date of death (or termination in the case in
disability), unless a longer period is expressly provided in such incentive
stock option or a shorter period is established by the compensation committee,
but in no event after the expiration date of such option. Following an
optionee's termination of employment for cause, all stock options held by such
optionee will immediately be canceled as of the date of termination of
employment. Following an optionee's termination of employment for other than
cause, such optionee must exercise his stock option within 30 days after the
date of such termination, unless a longer period is expressly provided in such
stock option or a shorter period is established by the compensation committee,
provided that no incentive stock option shall be exercisable more than three
months after such termination.

The option exercise price may be paid in cash, or, in the discretion of the
compensation committee, by the delivery of shares of Common Stock then owned by
the participant, or by a combination of these methods. Also, in the discretion
of the compensation committee, payment may be made by delivering a properly
executed exercise notice to the Company together with a copy of irrevocable
instructions to a broker to deliver promptly to the Company the amount of sale
or loan proceeds to pay the exercise price.

Except as otherwise expressly provided in any non-qualified stock option,
stock options may be transferred by a participant only by will or by the laws of
descent and distribution and may be exercised only by the participant during his
lifetime.

Retirement Plans. The Company sponsors various retirement plans for
substantially all of its employees. For example, on January 1, 1997, the Company
established defined benefit plans for its salaried and

56
<PAGE> 59

collectively-bargained employees. In addition, the Company also sponsors a
Section 401(k) defined contribution plan for all non-union employees.

COMPENSATION OF DIRECTORS

Directors who are officers, employees or otherwise affiliates of the
Company do not receive compensation for their services as directors.
Non-employee directors receive an annual retainer of $24,000, plus $3,000 for
attending each meeting of the Board of Directors and $1,000 for attending each
committee meeting. At the option of each director, the compensation may be paid
in the any of three methods: (i) in options granted under the Stock Option Plan,
(ii) in cash, or (iii) one-half in cash and one-half in options. Directors of
the Company are entitled to reimbursement of their reasonable out-of-pocket
expenses in connection with their travel to and attendance at meetings of the
board of directors or committees thereof. In connection with their appointment
as directors, Messrs. Lowenkron and Staubach were each granted non-qualified
stock options under the Stock Option Plan to purchase 18,764 shares of Common
Stock for $5.33 per share and Mr. Jones was granted a non-qualified stock option
under the Stock Option Plan to purchase 1,906 shares of Common Stock for $5.33
per share. These options are fully vested and expire 10 years from their date of
grant.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Board of Directors of the Company has appointed Messrs. Tate
(chairman), Lowenkron, and Staubach as members of its Compensation Committee.
None of the members of the Compensation Committee is or has been an officer or
employee of the Company. Mr. Tate is President of Hicks Muse, which in
connection with the IHF Acquisition beneficially acquired approximately 80% of
the Common Stock. See "Principal Stockholders" and "Certain Relationships and
Related Transactions." Messrs. Lowenkron and Staubach have been granted options
to purchase Common Stock of the Company. See "-- Compensation of Directors."

LIMITATIONS OF LIABILITY AND INDEMNIFICATION MATTERS

The Company's Amended and Restated Certificate of Incorporation provides
that no director of the Company shall be personally liable to the Company or its
stockholders for monetary damages for breach of his fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the Company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) in respect of certain unlawful dividend payments or stock redemptions
or purchases or (iv) for any transaction from which the director derived an
improper personal benefit. The effect of these provisions is to eliminate the
rights of the Company and its stockholders (through stockholders' derivative
suits on behalf of the Company) to recover monetary damages against a director
for breach of fiduciary duty as a director (including breaches resulting from
grossly negligent behavior), except in the situations described above.

The Company has entered into indemnification agreements with each of its
directors and executive officers under which the Company will indemnify the
director or officer to the fullest extent permitted by law, and to advance
expenses, if the director or officer becomes a party to or witness or other
participant in any threatened, pending or completed action, suit or proceeding
(a "Claim") by reason of any occurrence related to the fact that the person is
or was a director, officer, employee, agent or fiduciary of the Company or a
subsidiary of the Company or another entity at the Company's request (an
"Indemnifiable Event"), unless a reviewing party (either outside counsel or a
committee appointed by the Board of Directors) determines that the person would
not be entitled to indemnification under applicable law. In addition, if a
change in control or a potential change in control of the Company occurs and if
the person indemnified so requests, the Company will establish a trust for the
benefit of the indemnitee and fund the trust in an amount sufficient to satisfy
all expenses reasonably anticipated at the time of the request to be incurred in
connection with any Claim relating to an Indemnifiable Event. The reviewing
party will determine the amount deposited in the trust. An indemnitee's rights
under his indemnification agreement will not be exclusive of any other rights
under the Company's Amended and Restated Certificate of Incorporation or Amended
and Restated By-laws or applicable law.

The Company believes that these provisions and agreements will assist the
Company in attracting and retaining qualified individuals to serve as directors
and officers.

57
<PAGE> 60

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of October 15, 1997, by (i) each
person the Company knows to be the beneficial owner of 5% or more of the
outstanding shares of Common Stock, (ii) each Named Executive Officer, (iii)
each director of the Company, (iv) all executive officers and directors of the
Company as a group and (v) the Selling Stockholder. Except as indicated in the
footnotes to this table and pursuant to applicable community property laws, the
Company believes that each stockholder named in this table has sole investment
and voting power with respect to the shares set forth opposite such
stockholder's name.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES SHARES BENEFICIALLY
OWNED PRIOR TO THE BEING OWNED AFTER THE
OFFERING(1) OFFERED OFFERING(1)
--------------------- ------------ ---------------------
BENEFICIAL OWNER NUMBER PERCENT NUMBER NUMBER PERCENT
<S> <C> <C> <C> <C> <C>
Hicks Muse Parties(2).................... 43,819,382 67.4% 43,819,382 58.0%
c/o Hicks, Muse, Tate & Furst
Incorporated
200 Crescent Court, Suite 1600
Dallas, Texas 75201
AHP Subsidiary Holding Corporation(3).... 12,384,564 19.0% 3,096,141 9,288,423 12.3%
Five Giralda Farms
Madison, New Jersey 07940
State Treasurer of the State of
Michigan(4)............................ 3,720,061 5.7% 3,720,061 4.9%
Bureau of Investments
430 W. Allegan
Lansing, Michigan 48922
C. Dean Metropoulos(5)................... 3,706,331 5.4% 3,706,331 4.7%
1633 Littleton Road
Parsippany, New Jersey 07054
Kenneth J. Martin........................ -- -- -- --
Stephen Van Tassel(6).................... 31,274 * 31,274 *
Albert J. Soricelli, Jr.................. 18,506 * 18,506 *
William J. Feeney(7)..................... 80,794 * 80,794 *
Thomas O. Hicks(2)....................... 43,819,382 67.4% 43,819,382 58.0%
M.L. Lowenkron(8)........................ 37,563 * 37,563 *
Roger T. Staubach(9)..................... 37,327 * 37,327 *
L. Hollis Jones(10)...................... 3,853 * 3,853 *
Charles W. Tate(11)...................... -- -- -- --
Alan B. Menkes(11)....................... -- -- -- --
Michael J. Levitt(11).................... -- -- -- --
All executive officers and directors as a
group (20 persons)(12)................. 47,922,158 69.6% 47,922,158 60.4%
</TABLE>

- ---------------

* Less than 1%.

(1) Shares beneficially owned and percentage of ownership are based on
65,050,237 shares of Common Stock outstanding before the Offering and
75,576,596 shares of Common Stock outstanding after the Offering.
Beneficial ownership is determined in accordance with the rules of the SEC
and generally includes voting or disposition power with respect to
securities.

(2) Includes (i) 42,092,465 shares owned of record by Hicks, Muse, Tate & Furst
Equity Fund III L.P., a limited partnership of which the ultimate general
partner is Hicks, Muse Fund III Incorporated ("Fund III Inc."); (ii)
1,515,784 shares owned of record by HM/3 Coinvestors, L.P., a limited
partnership of which the ultimate general partner is Fund III Inc.; and
(iii) 211,133 shares owned of record by HM3/IH Partners L.P., a limited
partnership of which the ultimate general partner is Fund III Inc. Thomas
O. Hicks is a controlling stockholder of Fund III Inc. and serves as Chief

58
<PAGE> 61

Executive Officer, Chief Operating Officer, President, Secretary and
Chairman of the Board of Fund III Inc. Accordingly, Mr. Hicks may be deemed
to be the beneficial owner of the Common Stock held by Hicks, Muse, Tate &
Furst Equity Fund III, L.P., HM/3 Coinvestors, L.P., and HM3/IH Partners,
L.P. Mr. Hicks disclaims beneficial ownership of the shares of Common Stock
not owned of record by him.

(3) AHP Subsidiary Holding Corporation is a subsidiary of American Home
Products. In the event the U.S. Underwriters' over-allotment option is
exercised in full, AHP Subsidiary Holding Corporation will sell an
additional 464,421 shares of Common Stock.

(4) The State Treasurer of the State of Michigan holds the shares as custodian
for the Michigan Public School Employees' Retirement System, the Michigan
State Employees' Retirement System, the Michigan State Police Retirement
System, and the Michigan Judges Retirement System.

(5) Includes 3,518,342 shares issuable to Mr. Metropoulos upon the exercise of
stock options that are currently exercisable.

(6) Includes 31,274 shares subject to stock options that are exercisable within
60 days. Excludes 62,548 shares subject to stock options that are not
exercisable within 60 days.

(7) Includes 43,783 shares subject to stock options that are exercisable within
60 days. Excludes 87,568 shares subject to stock options that are not
exercisable within 60 days.

(8) Includes 18,764 shares issuable upon the exercise of stock options that are
currently exercisable.

(9) Includes 18,764 shares issuable upon the exercise of stock options that
are currently exercisable.

(10) Includes 1,973 shares issuable upon the exercise of stock options that are
currently exercisable.

(11) Messrs. Tate, Menkes, and Levitt are officers of Fund III Inc. None of Mr.
Tate, Mr. Menkes or Mr. Levitt has the power to vote or dispose the common
stock of Fund III Inc.

(12) Includes 3,801,168 shares issuable upon the exercise of stock options that
are currently exercisable or exercisable within 60 days.

59
<PAGE> 62

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The descriptions set forth below do not purport to be complete and are
qualified in their entirety by reference to the applicable agreements.

THE IHF ACQUISITION AND RELATED AGREEMENTS

Effective on November 1, 1996, an affiliate ("Hicks Muse Holding") of Hicks
Muse acquired 80% of the outstanding capital stock of the Company from American
Home Products for approximately $1,225.6 million in cash in a transaction
treated as a recapitalization for financial accounting purposes. Concurrently
with this acquisition, the Company acquired all of the outstanding capital stock
of Heritage from an affiliate of Hicks Muse for approximately $70.8 million in
cash, comprised of approximately $40.8 million used to repay existing
indebtedness of Heritage and approximately $30.0 million to acquire the equity
of Heritage. The acquisition of Heritage was treated as a purchase for financial
accounting purposes. The purchase price for Heritage was determined by the
Company based upon the historic operations of Heritage and the benefits the
Company believes will be realized from its acquisition. Heritage was formed in
1994 by the Hicks Muse affiliate to acquire (i) the Campfire marshmallow
business from Borden, Inc. for approximately $5.0 million and (ii) Angela
Maries', Inc., a manufacturer of marshmallow rice crisp bars for approximately
$35.0 million. In connection with the acquisition of the Company by an affiliate
of Hicks Muse and the acquisition by the Company of Heritage, the Company
incurred approximately $1,070.0 million of indebtedness, consisting of $670.0
million of borrowings under the Senior Bank Facilities and the issuance of
$400.0 million of aggregate principal amount of the Senior Subordinated Notes.

In connection with the IHF Acquisition, Hicks Muse Holding, American Home
Products and the Company agreed that, for so long as American Home Products
beneficially owns at least five percent of the common stock of the Company,
Hicks Muse Holding and the Company will, at the request of American Home
Products, use all reasonable efforts to cause there to be nominated and elected
to the Board of Directors of the Company one designee of American Home Products.

Until the earlier of (i) November 1, 2001 and (ii) the date on which a
third party acquires control of the Company, without the consent of Hicks Muse
Holding, American Home Products has agreed not to sell or otherwise dispose of
any of the Common Stock it holds without first notifying Hicks Muse Holding and
affording Hicks Muse Holding an opportunity to offer to buy the shares on terms
proposed by Hicks Muse Holding. In the event that American Home Products rejects
Hicks Muse Holding's offer, American Home Products will be permitted to sell not
less than 90% of the shares it proposed to sell in its notice to Hicks Muse
Holding to a third party on per share terms no less favorable to American Home
Products than those set forth in Hicks Muse Holding's offer; provided that,
before selling such shares at a price per share less than 110% of the price per
share set forth in Hicks Muse Holding's offer, American Home Products will be
required to offer to sell such shares to Hicks Muse Holding at such higher price
per share. These restrictions on transfer will not apply to a sale of shares by
American Home Products under a registration statement filed under the Securities
Act or under Rule 144 under the Securities Act.

Hicks Muse Holding has agreed that, if it proposes to sell or dispose of
shares of Common Stock in a single transaction or series of related
transactions, then it will offer to include in the proposed sale or disposition
a designated number of shares held by American Home Products not to exceed the
product of (i) the number of shares to be sold by Hicks Muse Holding to the
proposed transferee multiplied by (ii) a fraction the numerator of which is the
number of shares held by American Home Products and the denominator of which is
the number of shares held by each of Hicks Muse Holding and American Home
Products in the aggregate. If American Home Products accepts the offer, Hicks
Muse Holdings must reduce, to the extent necessary, the number of shares it
otherwise would have sold in the proposed sale so as to permit American Home
Products to sell the number of shares that it is entitled to sell under the
foregoing terms. American Home Products' "co-sale" rights described above do not
apply to (i) a sale pursuant to a public offering registered under the
Securities Act, (ii) a sale in accordance with Rule 144 under the Securities
Act, (iii) a sale to an affiliate of Hicks Muse or (iv) a sale or sales in a
single transaction or series of related transactions which, in the aggregate, do
not involve more than ten percent of the shares outstanding.

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In connection with the Offering, Hicks Muse Holding will distribute to its
stockholders all of the shares of Common Stock currently held by it, subject to
certain terms of the agreements with American Home Products.

REGISTRATION RIGHTS AGREEMENT

American Home Products, Hicks Muse Holding and the Company have entered
into a Registration Rights Agreement under which each of American Home Products
and Hicks Muse Holding is entitled to exercise three demand and seven
"piggy-back" rights to require the Company to register the common stock of the
Company held by them for sale under the Securities Act. The demand rights may
only be exercised commencing six months after the date of this Prospectus. In
addition, the demand rights may only be exercised with respect to a number of
shares that is at least equal to the lesser of (i) five percent of the number of
shares then outstanding and (ii) that number of shares having an estimated
aggregate offering price of at least $20 million. The exercise of the demand and
piggy-back rights are subject to such other limitations and conditions as are
customary in registration rights agreements. American Home Products has
exercised one of its piggy-back rights in electing to participate in this
Offering.

MONITORING AND OVERSIGHT AGREEMENT

In November 1996, the Company entered into a ten-year agreement (the
"Monitoring and Oversight Agreement") with an affiliate of Hicks Muse ("Hicks
Muse Partners") pursuant to which the Company will pay Hicks Muse Partners an
annual fee of $1.0 million for oversight and monitoring services to the Company.
The annual fee is adjustable at the end of each fiscal year to an amount equal
to 0.1% of the consolidated net sales of the Company, but in no event may the
fee be less than $1.0 million. Messrs. Hicks, Tate, Menkes and Levitt, directors
of the Company, are each principals of Hicks Muse Partners. In addition, the
Company has agreed to indemnify Hicks Muse Partners, its affiliates and
shareholders, and their respective directors, officers, agents, employees and
affiliates from and against all claims, actions, proceedings, demands,
liabilities, damages, judgments, assessments, losses and costs, including fees
and expenses, arising out of or in connection with the services rendered by
Hicks Muse Partners thereunder. The Monitoring and Oversight Agreement makes
available the resources of Hicks Muse Partners concerning a variety of financial
and operational matters. The services that have been and will continue to be
provided by Hicks Muse Partners could not otherwise be obtained by the Company
without the addition of personnel or the engagement of outside professional
advisors. In management's opinion, the fees provided for under the Monitoring
and Oversight Agreement reasonably reflect the benefits received and to be
received by the Company.

FINANCIAL ADVISORY AGREEMENT

In November 1996, the Company entered into an agreement (the "Financial
Advisory Agreement") pursuant to which Hicks Muse Partners provides services as
financial advisor to the Company. Pursuant to the Financial Advisory Agreement,
Hicks Muse Partners is entitled to receive a fee equal to 1.5% of the
"transaction value" (as defined) for each "add-on transaction" (as defined) in
which the Company is involved. The term "transaction value" means the total
value of any add-on transaction, including, without limitation, the aggregate
amount of the funds required to complete the add-on transaction (excluding any
fees payable pursuant to the Financial Advisory Agreement and any fees, if any,
paid to any other person or entity for financial advisory, investment banking,
brokerage or any other similar services rendered in connection with such add-on
transaction) and including the amount of any indebtedness, preferred stock or
similar items assumed (or remaining outstanding). The term "add-on transaction"
means any future proposal for a tender offer, acquisition, sale, merger,
exchange offer, recapitalization, restructuring or other similar transaction
directly or indirectly involving the Company or any of its subsidiaries and any
other person or entity. The Financial Advisory Agreement makes available the
resources of Hicks Muse Partners concerning a variety of financial and
operational matters. The services that have been and will continue to be
provided by Hicks Muse Partners could not otherwise be obtained by the Company
without the addition of personnel or the engagement of outside professional
advisors. In management's opinion, the fees provided for under the Financial
Advisory Agreement reasonably reflect the benefits received and to be received
by the Company.

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The Company has paid Hicks Muse Partners financial advisory fees of
approximately $22.2 million since November 1, 1996.

PRODUCTOS DEL MONTE

On October 1, 1997, the Company acquired Productos Del Monte from an
affiliate of Hicks Muse for 3,127,415 shares of Common Stock. Productos Del
Monte is a leading manufacturer and marketer of branded catsup, canned
vegetables and bottled salsa in Mexico. Productos Del Monte was acquired by a
Hicks Muse affiliate in October 1996 from the Del Monte Corporation for
approximately $40.0 million. The affiliate of Hicks Muse has filed a lawsuit
against the Del Monte Corporation claiming damages in connection with its
acquisition of Productos Del Monte based upon breaches of representations and
warranties contained in the acquisition agreement. In connection with the
acquisition of Productos Del Monte by the Company, the Company will succeed to
the rights of the Hicks Muse affiliate under that lawsuit. Management plans to
leverage the infrastructure of Productos Del Monte as a platform to launch the
Company's southwestern cuisine, cooking spray, canned pasta products and canned
seafood products into Mexico. The purchase price for Productos Del Monte was
determined by the Company based upon the historic operations of Productos Del
Monte and the benefits the Company believes will be realized from its
acquisition. There can be no assurance, however, that these benefits will be
realized. The acquisition of Productos Del Monte was treated as a combination of
entities under common control. Accordingly, the historical accounting values of
Productos Del Monte were carried over for financial accounting purposes. In the
nine months ended September 30, 1997, the Company had sold approximately $0.3
million of Ranch Style beans and PAM cooking spray to Productos Del Monte. These
sales were made at the Company's cost plus 10%.

C. DEAN METROPOULOS & CO.

C. Dean Metropoulos and certain other employees of the Company, including
Mr. Metropoulos' brother, Evan Metropoulos, are also employees of C. Dean
Metropoulos & Co., a food company management firm. In this capacity, these
employees of the Company provide management services for Morningstar and
Ghirardelli, an affiliate of Hicks Muse. The Company is reimbursed for the
actual costs of these services, as well as the actual cost of the overhead of
the Company incurred in connection therewith. In the nine months ended September
30, 1997, the Company had been reimbursed $0.3 million pursuant to this
arrangement.

FORMER AMERICAN HOME PRODUCTS ARRANGEMENTS

Prior to the IHF Acquisition, the Company was a wholly-owned subsidiary of
American Home Products. The Company was provided certain administrative services
and other benefits directly by American Home Products, or charged a pro-rata
share of American Home Products' costs for obtaining these services and benefits
from third parties. These services and benefits included (i) treasury, tax,
legal, environmental, safety, public relations, advertising, audit and other
administrative services, (ii) employee group health, auto, property, product
liability and other insurance coverages, (iii) corporate office space and (iv)
pension plans, post retirement benefits, and defined contribution plans. During
1996, 1995 and 1994 American Home Products charged the Company approximately
$65.5 million, $65.4 million and $55.5 million, respectively, for these services
and other benefits. In connection with the IHF Acquisition, the Company and
American Home Products entered into a six month transitional services agreement
for the continued provision of certain of these services and other benefits for
an aggregate payment of $150,000.

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DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company consists of 300,000,000 shares
of common stock, $0.01 par value per share ("Common Stock"), and 100,000,000
shares of preferred stock, $0.01 par value per share ("Preferred Stock"). Upon
completion of the Offering, 75,576,596 shares of Common Stock will be issued and
outstanding (77,155,550 shares if the U.S. Underwriters exercise their
over-allotment option in full) and no shares of Preferred Stock will be issued
and outstanding. As of November 1, 1997, the Company had outstanding 65,050,237
shares of Common Stock held of record by 31 stockholders.

COMMON STOCK

The rights of the holders of Common Stock are identical in all respects.
All of the shares of Common Stock are validly issued, fully paid and
nonassessable.

The holders of the Common Stock are entitled to one vote for each share
held on all matters submitted to a vote of common stockholders. The shares of
Common Stock do not have cumulative voting rights. Shares of Common Stock have
no preemptive rights, conversion rights, redemption rights or sinking fund
provisions. The Common Stock is not subject to redemption by the Company. All
shares of Common Stock issued in the Offering will be validly issued, fully paid
and nonassessable.

Subject to the rights of the holders of any class of capital stock of the
Company having preference or priority over the Common Stock, the holders of
Common Stock are entitled to dividends in such amounts as may be declared by the
Board of Directors of the Company from time to time out of funds legally
available for such payments and, in the event of liquidation, to share ratably
in any assets of the Company remaining after payment in full of all creditors
and provision for any liquidation preferences on any outstanding preferred stock
ranking prior to the Common Stock.

PREFERRED STOCK

The Company is authorized to issue 100,000,000 shares of Preferred Stock.
The Board of Directors of the Company, in its sole discretion, may designate and
issue one or more series of Preferred Stock from the authorized and unissued
shares of Preferred Stock. Subject to limitations imposed by law or the
Company's Amended and Restated Certificate of Incorporation, the Board of
Directors of the Company is empowered to determine the designation of and the
number of shares constituting a series of Preferred Stock. In addition, the
Company's Board of Directors may designate the dividend rate, the terms and
conditions of any voting and conversion rights, the amounts payable upon
redemption or upon the liquidation, dissolution or winding-up of the Company,
the provisions of any sinking fund for the redemption or purchase of shares, and
the preferences and relative rights among the series of Preferred Stock. Such
rights, preferences, privileges and limitations could adversely effect the
rights of holders of Common Stock.

CERTAIN PROVISIONS OF THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION AND
AMENDED AND RESTATED BYLAWS

The Company's Board of Directors is divided into three classes. The
directors of each class are elected for three-year terms, with the terms of the
three classes staggered so that directors from a single class are elected at
each annual meeting of stockholders. Stockholders may remove a director only for
cause. In general, the Board of Directors, not the stockholders, has the right
to appoint persons to fill vacancies on the Board of Directors.

The Company's Amended and Restated Certificate of Incorporation provides
that stockholders may act only at annual or special meetings of stockholders and
not by written consent. In addition, special meetings of the stockholders, and
any proposals to be considered at such meetings, may be called and proposed
exclusively by the board of directors. The Amended and Restated Certificate of
Incorporation requires the approval by the holders of at least 66 2/3% of the
outstanding voting stock to amend certain of its provisions.

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DELAWARE LAW PROVISIONS

Generally, Section 203 of the General Corporation Law of the State of
Delaware prohibits a publicly held Delaware corporation from engaging in a
"business combination" with an "interested stockholder" for a period of three
years after the date of the transaction in which the person became an interested
stockholder, unless one of the following events occurs: (i) prior to the date of
the business combination, the transaction is approved by the board of directors
of the Company; (ii) upon consummation of the transaction which resulted in the
stockholder becoming an interested stockholder, the interested stockholder owns
at least 85% of the outstanding voting stock; or (iii) on or after such date the
business combination is approved by the board and by the affirmative vote of at
least two-thirds of the outstanding voting stock which is not owned by the
interested stockholder. A "business combination" includes mergers, asset sales
and other transactions resulting in a financial benefit to the stockholder. An
"interested stockholder" is a person who, together with affiliates and
associates, owns (or within three years, did own) 15% or more of the
corporation's voting stock.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is The Bank of New
York.

DESCRIPTION OF INDEBTEDNESS

SENIOR BANK FACILITIES

The description set forth below does not purport to be complete and is
qualified in its entirety by reference to the underlying agreements of the
Senior Bank Facilities, which have been filed as exhibits to the registration
statement of which this Prospectus is a part.

The Chase Manhattan Bank ("Chase"), Bankers Trust Company and Morgan
Stanley Senior Funding, Inc. ("Morgan") are agents of the lenders and lenders to
the Company under the Senior Bank Facilities. The Senior Bank Facilities consist
of (a) a 5 3/4 year Tranche A Senior Secured Term Loan Facility providing for
term loans to the Company in a principal amount of $367.5 million (the "Tranche
A Term Facility"); and (b) an 7 1/4 year Tranche B Senior Secured Term Loan
Facility providing for term loans to the Company in a principal amount of $369.5
million (the "Tranche B Term Facility" and collectively with the Tranche A Term
Facility, the "Term Facilities"); and (c) a Senior Secured Revolving Credit
Facility providing for revolving loans to the Company and the issuance of
letters of credit for the account of the Company in an aggregate principal and
stated amount at any time not to exceed $140.0 million (of which not more than
$30.0 million may be represented by Letters of Credit) (the "Revolving
Facility").

A portion of each Term Facility was drawn on closing of the IHF
Acquisition. The remainder of each Term Facility was drawn as incremental term
loans in connection with the Bumble Bee Acquisition.

Amounts repaid or prepaid under any Term Facility may not be reborrowed.
Loans under the Revolving Facility are available until the earlier of (a) March
31, 2003 (the "Scheduled Revolving Credit Termination Date") and (b) the date on
which the Tranche A Term Loans mature or are repaid in full (the "Revolving
Credit Termination Date"). Letters of Credit under the Revolving Facility are
available at any time. No Letter of Credit shall have an expiration date after
the earlier of (a) one year from the date of its issuance and (b) five business
days before the Scheduled Revolving Credit Termination Date. Letters of Credit
may be renewed for one-year periods, provided that no Letter of Credit shall
extend beyond the time specified in clause (b) of the previous sentence.

Loans under the Tranche A Term Facility amortize in twelve semi-annual
installments commencing September 30, 1997 in the following amounts: (a) $16.0
million for the first installment, (b) $19.0 million for the second and third
installments, (c) $25.5 million for the fourth and fifth installments, (d) $32.0
million for the sixth and seventh installments, (e) $35.0 million for the eighth
installment, (f) $38.5 million for the ninth and tenth installments, (g) $41.5
million for the eleventh installment, and (h) $45.0 million for the twelfth
installment. Loans made under the Tranche B Term Facility amortize in fifteen
semi-annual installments commencing September 30, 1997 in the following amounts:
(a) $500,000 for the first twelve installments,

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(b) $121.0 million for the thirteenth and fourteenth installments and (c) $121.5
million for the fifteenth and final installment.

The Company is required to make mandatory prepayments of loans, and
revolving credit commitments will be mandatorily reduced in amounts, at times
and subject to certain exceptions (a) in respect of 75% of consolidated excess
cash flow of the Company starting with fiscal year 1997 (such amount may be
reduced to 50% of excess cash flow for each fiscal year of the Company
(commencing with the 1998 fiscal year) based upon the achievement of certain
performance targets) and (b) in respect of 100% of the net proceeds of certain
dispositions of material assets or the stock of subsidiaries or the issuance of
capital stock or the incurrence of certain indebtedness by the Company or any of
its subsidiaries (the lenders have waived this requirement with respect to the
proceeds from this Offering). At the Company's option, loans may be prepaid, and
revolving credit commitments may be permanently reduced, in whole or in part at
any time in certain minimum amounts. Prepayments of the Term Loan Facilities
shall be applied to the Tranche A Term Loans, and the Tranche B Term Loans
ratably and to the installments thereof ratably in accordance with the then
remaining number of installments and may not be reborrowed, provided that the
first $40.0 million of optional prepayments of the Term Loans may be applied to
such installments as the Borrower may elect (other than the first twelve
installments in respect of the Tranche B Term Loans).

The obligations of the Company under the Senior Bank Facilities are
unconditionally and irrevocably guaranteed by each of the Company's direct or
indirect domestic subsidiaries (collectively, the "Guarantors"). In addition,
the Senior Bank Facilities are secured by first priority or equivalent security
interests in (i) all the capital stock of, or other equity interests in, each
direct or indirect domestic subsidiary of the Company and 65% of the capital
stock of, or other equity interests in, each direct foreign subsidiary of the
Company, or any of its domestic subsidiaries and (ii) all tangible and
intangible assets (including, without limitation, intellectual property and
owned real property) of the Company and the Guarantors (subject to certain
exceptions and qualifications).

At the Company's option, the interest rates per annum applicable to the
Senior Bank Facilities will be either Adjusted LIBOR (as defined) plus a margin
of (i) 2.00% with respect to the Tranche A Term Facility and the Revolving
Facility and (ii) 2.25% with respect to the Tranche B Term Facility, or the
Alternate Base Rate (as defined) plus a margin of (i) 1.00% with respect to the
Tranche A Term Facility and the Revolving Facility and (ii) 1.25% with respect
to the Tranche B Term Facility. The Alternate Base Rate is the highest of (a)
Chase's Prime Rate, (b) the secondary market rate for three-month certificates
of deposit (grossed up for maximum statutory reserve requirements) plus 1% and
(c) the Federal Funds Effective Rate plus 0.5%.

The Company will pay a commission on the face amount of all outstanding
letters of credit at a per annum rate equal to the Applicable Margin then in
effect with respect to LIBOR loans under the Revolving Facility minus the
Fronting Fee (as defined). A fronting fee equal to 1/4% per annum on the face
amount of each Letter of Credit (the "Fronting Fee") shall be payable quarterly
in arrears to the issuing lender for its own account. Initially the Company will
also pay a per annum fee equal to 0.50% on the undrawn portion of the
commitments in respect of the Revolving Facility (the "Commitment Fee"). The
Commitment Fee shall be subject to determination in accordance with the pricing
grid set forth above after January 1, 1998.

The Senior Bank Facilities also contain a number of significant covenants
that, among other things, restrict the ability of the Company to dispose of
assets, incur additional indebtedness, repay other indebtedness or amend other
debt instruments, pay dividends, create liens on assets, make investments or
acquisitions, engage in mergers or consolidations, make capital expenditures, or
engage in certain transactions with affiliates, amend the Indenture and
otherwise restrict corporate activities. In addition, under the Senior Bank
Facilities the Company is required to comply with specified minimum interest
coverage, maximum leverage and minimum fixed charge coverage ratios.

In connection with the Offering, the Company will repay approximately
$185.0 million of indebtedness under the Senior Bank Facilities and amend and
restate the Senior Bank Facilities. As amended, the Senior Bank Facilities will
comprise (i) a Revolving Facility of $200.0 million, which will mature on March
31, 2004 or earlier upon the maturity or repayment in full of the Tranche A Term
Facility, (ii) a Tranche A Term Facility of $395.0 million, which will mature on
March 31, 2004 and (iii) a Tranche B Term Facility of

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$150.0 million, which will mature on September 30, 2005. The amended Senior Bank
Facilities will provide for additional term borrowings of $65.0 million under
the Tranche A Term Facility to finance acquisitions.

The margins applicable to borrowings under the Adjusted LIBOR interest rate
will be decreased to 1.5% in the case of the Revolving Facility and the Tranche
A Term Facility and 1.75% in the case of the Tranche B Term Facility. The
Tranche A Term Facility will require semiannual repayments commencing March 31,
1998 aggregating $26.0 million in 1998, $38.0 million in 1999, $53.0 million in
2000, $68.0 million in 2001, $76.0 million in 2002, $86.0 million in 2003 and
the remainder on March 31, 1994. The Tranche B Term Facility will require
semiannual repayments commencing March 31, 1998 aggregating $0.4 million in 1998
through 2003, $20.2 million in 2004 and the remaining $127.4 million in 2005.

SENIOR SUBORDINATED NOTES

The Senior Subordinated Notes were issued under an Indenture, dated as of
November 1, 1996, among the Company, certain of its subsidiaries (the
"Subsidiary Guarantors") and the United States Trust Company of New York, as
Trustee (the "Trustee"), a copy of which has been filed as an exhibit to the
registration statement of which this Prospectus is a part. The Indenture is
subject to and governed by the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). The following summary of certain provisions of the
Senior Subordinated Notes does not purport to be complete and is subject to, and
is qualified in its entirety by reference to, all the provisions of the
Indenture (including the definitions of certain terms therein and those terms
made a part thereof by the Trust Indenture Act) and the Senior Subordinated
Notes.

The Senior Subordinated Notes are unsecured, senior subordinated
obligations of the Company, limited to the aggregate principal amount thereof,
and will mature on November 1, 2006. Each note bears interest at the rate of
10 3/8% and is payable semiannually on May 1 and November 1 of each year.

Except as set forth below, the Senior Subordinated Notes are not redeemable
at the option of the Company prior to November 1, 2001. On and after such date,
the Senior Subordinated Notes are redeemable, at the Company's option, in whole
or in part, at any time upon not less than 30 nor more than 60 days prior
notice, at the following redemption prices (expressed in percentages of
principal amount), plus accrued and unpaid interest to the redemption date
(subject to the right of holders of record on the relevant record date to
receive interest due on the relevant interest payment date):

If redeemed during the 12-month period commencing on November 1 of the
years set forth below:

<TABLE>
<CAPTION>
REDEMPTION
PERIOD PRICE
<S> <C>
2001........................................................ 105.188%
2002........................................................ 103.458%
2003........................................................ 101.729%
2004 and thereafter......................................... 100.000%
</TABLE>

In addition, at any time and from time to time prior to November 1, 2000,
the Company may redeem in the aggregate up to $160.0 million principal amount of
Senior Subordinated Notes with the proceeds of one or more equity offerings by
the Company so long as there is a public market at the time of such redemption,
at a redemption price of 110.375%, plus accrued and unpaid interest, if any, to
the redemption date (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest payment date);
provided, however, that at least $200.0 million aggregate principal amount of
the Senior Subordinated Notes must remain outstanding after each such
redemption. At any time on or prior to November 1, 2001, the Senior Subordinated
Notes may also be redeemed as a whole at the option of the Company upon the
occurrence of a change of control at a premium.

The payment of the principal of, premium (if any), and interest on the
Senior Subordinated Notes is subordinated in right of payment, to the payment
when due of all senior indebtedness (as defined in the Indenture) of the
Company, including indebtedness under the Senior Bank Facilities.

Each Subsidiary Guarantor unconditionally guarantees, jointly and
severally, on a senior subordinated basis, the full and prompt payment of
principal of and interest on the Senior Subordinated Notes, and of all other
obligations of the Company under the Indenture. The indebtedness evidenced by
each Subsidiary Guaranty (including the payment of principal of, premium, if
any, and interest on the Senior Subordinated

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Notes) will be subordinated to guarantor senior indebtedness (as defined in the
Indenture) on the same basis as the Senior Subordinated Notes are subordinated
to senior indebtedness.

Change of Control. Upon the occurrence of a change of control, each holder
has the right to require the Company to repurchase all or any part of such
holder's Senior Subordinated Notes at a purchase price in cash equal to 101% of
the principal amount thereof plus accrued and unpaid interest, if any, to the
date of purchase.

Limitation on Incurrence of Additional Indebtedness. Subject to certain
exceptions under the Indenture, the Company shall not, and shall not permit any
of its restricted subsidiaries (as defined in the Indenture) to, incur any
indebtedness; provided, however, that the Company and any of its restricted
subsidiaries may incur indebtedness if on the date thereof the Consolidated
Coverage Ratio (as defined in the Indenture) would be greater than 2.00:1.00, if
such Indebtedness is Incurred on or prior to November 1, 1998 and 2.25:1.00, if
such indebtedness is Incurred thereafter.

Limitation on Restricted Payments. Subject to certain exceptions set forth
in the Indenture, the Company shall not, and shall not permit any of its
restricted subsidiaries, directly or indirectly, to make any restricted payment
(as defined in the Indenture) if at the time the Company or such Restricted
Subsidiary makes such restricted payment:

(i) a default shall have occurred and be continuing (or would result
therefrom);

(ii) the Company is not able to incur an additional $1.00 of indebtedness
pursuant to the "Limitation on Indebtedness" covenant; or

(iii) the aggregate amount of such restricted payment and all other
restricted payments declared or made subsequent to the issue date would exceed
the sum of: (A) 50% of the consolidated net income accrued during the period
from the issue date to the end of the most recent fiscal quarter ending prior to
the date of such restricted payment as to which financial results are available
(but in no event ending more than 135 days prior to the date of such restricted
payment) (or, in case such consolidated net income shall be a deficit, minus
100% of such deficit); (B) the aggregate net proceeds received by the Company
from any person (other than a subsidiary of the Company) subsequent to November
1, 1996; (C) the amount by which indebtedness of the Company is reduced upon the
conversion or exchange (other than by a restricted subsidiary) subsequent to the
issue date of any indebtedness of the Company convertible or exchangeable for
capital stock of the Company (less the amount of any cash, or other property,
distributed by the Company upon such conversion or exchange); (D) the amount
equal to the net reduction in investments made by the Company or any of its
restricted subsidiaries in any person resulting from (i) repurchases or
redemptions of such investments by such person, proceeds realized upon the sale
of such investment to an unaffiliated purchaser, and repayments of loans or
advances or other transfers of assets by such person to the Company or any
restricted subsidiary of the Company or (ii) the redesignation of unrestricted
subsidiaries as restricted subsidiaries not to exceed, in the case of any
unrestricted subsidiary, the amount of investments previously made by the
Company or any restricted subsidiary in such unrestricted subsidiary, which
amount was included in the calculation of the amount of restricted payments;
provided, however, that no amount shall be included under this clause (D) to the
extent it is already included in consolidated net income; and (E) the aggregate
net cash proceeds received by a person in consideration for the issuance of such
person's capital stock which are held by such person at the time such person is
merged with and into the Company in accordance with the "Merger and
Consolidation" covenant subsequent to the issue date; provided, however, that
concurrently with or immediately following such merger the Company uses an
amount equal to such net cash proceeds to redeem or repurchase the Company's
capital stock.

Other Restrictive Covenants. The Indenture contains certain other
restrictive covenants that, among other things, impose limitations (subject to
certain exceptions) on the Company with respect to (i) distributions from
restricted subsidiaries, (ii) sales of assets and subsidiary stock, (iii)
issuances of capital stock of restricted subsidiaries, and (iv) a merger and
consolidation involving the Company.

Events of Default. Each of the following constitutes an event of default
under the Indenture: (i) a default in any payment of interest on any note when
due, continued for 30 days, (ii) a default in the payment of principal of any
note when due at its stated maturity, upon optional redemption, upon required
repurchase,

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upon declaration or otherwise (iii) the failure by the Company to comply with
its obligations under the merger and consolidation covenants of the Indenture,
(iv) the failure by the Company to comply for 30 days after notice with any of
its obligations under the other covenants described in the Indenture, (v) the
failure by the Company to comply for 60 days after notice with its other
agreements contained in the Indenture, (vi) indebtedness of the Company or any
restricted subsidiary is not paid within any applicable grace period after final
maturity or is accelerated by the holders thereof because of a default and the
total amount of such indebtedness unpaid or accelerated exceeds $20 million and
such default shall not have been cured or such acceleration rescinded after a 10
day period (the "cross acceleration provision"), (vii) certain events of
bankruptcy, insolvency or reorganization of the Company or a significant
subsidiary, (viii) any judgment or decree for the payment of money in excess of
$20 million (to the extent not covered by insurance) is rendered against the
Company or a significant subsidiary and such judgment or decree shall remain
undischarged or unstayed for a period of 60 days after such judgment becomes
final and non-appealable or (ix) any Subsidiary Guaranty by a significant
subsidiary ceases to be in full force and effect (except as contemplated by the
terms of the Indenture) or any Subsidiary Guarantor that is a significant
subsidiary denies or disaffirms its obligations under the Indenture or its
Subsidiary Guaranty and such default continues for 10 days. However, a default
under clauses (iv) and (v) will not constitute an event of default until the
Trustee or the holders of 25% in principal amount of the outstanding Senior
Subordinated Notes notify the Company of the default and the Company does not
cure such default within the time specified in clauses (iv) and (v) hereof after
receipt of such notice.

If an event of default occurs and is continuing, the Trustee or the holders
of at least 25% in principal amount of the outstanding Senior Subordinated Notes
may declare the principal of and accrued and unpaid interest, if any, on all the
Senior Subordinated Notes to be due and payable. Upon such a declaration, such
principal and accrued and unpaid interest shall be due and payable immediately.
If an event of default relating to certain events of bankruptcy, insolvency or
reorganization of the Company occurs and is continuing, the principal of and
accrued and unpaid interest on all the Senior Subordinated Notes will become and
be immediately due and payable without any declaration or other act on the part
of the Trustee or any holders. Under certain circumstances, the holders of a
majority in principal amount of the outstanding Senior Subordinated Notes may
rescind any such acceleration with respect to the Senior Subordinated Notes and
its consequences.

SHARES ELIGIBLE FOR FUTURE SALE

Prior to the Offering, there has been no market for the Common Stock. The
sale, or availability for sale, of substantial amounts of Common Stock in the
public market subsequent to the Offering could adversely affect the prevailing
market price of the shares of Common Stock and could impair the Company's
ability to raise additional capital through the sale of equity securities.

Upon completion of the Offering, the Company will have 75,576,596 shares of
Common Stock outstanding. Of these shares, the 13,622,500 shares sold in the
Offering will be freely tradable without restriction or further registration
under the Securities Act, except that any shares purchased by "affiliates" of
the Company, as that term is defined under the Securities Act ("Affiliates"),
may generally only be sold in compliance with the limitations of Rule 144
described below.

The remaining 61,954,096 shares of Common Stock are deemed "Restricted
Shares" under Rule 144. The number of shares of Common Stock available for sale
in the public market is limited by restrictions under the Securities Act and
lock-up agreements under which the holders of such shares have agreed not to
sell or otherwise dispose of any of their shares for a period of 180 days after
the effective date of this Offering (the "Lock-Up Period") without the prior
written consent of Donaldson, Lufkin & Jenrette Securities Corporation. Because
of these restrictions, on the date of this Prospectus, no shares other than
those offered hereby will be eligible for sale. Upon expiration of the Lock-Up
Period, all of the Restricted Shares will become available for sale in the
public market, subject to Rule 144 and Rule 701 of the Securities Act (other
than 3,127,415 shares which will become available for sale in October 1998.)

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<PAGE> 71

In general, under Rule 144 of the Securities Act as currently in effect,
beginning 90 days after this Offering, a person (or persons whose shares are
aggregated) who has beneficially owned "restricted" shares for at least one
year, including a person who may be deemed an affiliate of the Company, is
entitled to sell within any three-month period a number of shares of Common
Stock that does not exceed the greater of 1.0% of the then-outstanding shares of
Common Stock (755,766 shares after giving effect to this Offering) or the
average weekly trading volume of the Common Stock as reported through the New
York Stock Exchange during the four calendar weeks preceding such sale. Sales
under Rule 144 of the Securities Act are subject to certain restrictions
relating to manner of sale, notice and the availability of current public
information about the Company. In addition, under Rule 144(k) of the Securities
Act, a person who is not an affiliate of the Company at any time 90 days
preceding a sale, and who has beneficially owned shares for at least one year,
would be entitled to sell such shares immediately following this Offering
without regard to the volume limitations, manner of sale provisions or notice or
other requirements of Rule 144 of the Securities Act.

Rule 701 under the Securities Act provides that shares of Common Stock
acquired on the exercise of outstanding options may be resold by persons other
than affiliates beginning 90 days after the date of this Prospectus, subject
only to the manner of sale provisions of Rule 144, and by affiliates, beginning
90 days after the date of this Prospectus, subject to all provisions of Rule 144
except its minimum holding period. The Company intends to register on a
registration statement on Form S-8, shortly after the date of this Prospectus,
for a total of 8,444,021 shares of Common Stock reserved for issuance under the
Stock Option Plan.

CERTAIN U.S. TAX CONSIDERATIONS APPLICABLE

TO NON-U.S. HOLDERS OF THE COMMON STOCK

The following is a general discussion of certain U.S. federal income and
estate tax consequences of the ownership and disposition of Common Stock
applicable to Non-U.S. Holders of such Common Stock who acquire and own such
Common Stock as a capital asset within the meaning of section 1221 of the
Internal Revenue Code of 1986, as amended (the "Code"). A "Non-U.S. Holder" is
any person other than (i) a citizen or resident of the United States, (ii) a
corporation or partnership created or organized in the United States or under
the laws of the United States or of any state, or (iii) an estate or trust whose
income is includable in gross income for United States federal income tax
purposes regardless of its source, or (iv) a trust if (a) a court within the
United States is able to exercise primary supervision over the administration of
the trust and (b) one or more United States fiduciaries have the authority to
control all substantial decisions of the trust. For purposes of the withholding
tax on dividends discussed below, a non-resident fiduciary of an estate or trust
will be considered a Non-U.S. Holder. An individual may, subject to certain
exceptions, be deemed to be a resident alien (as opposed to a non-resident
alien) by virtue of being present in the United States on at least 31 days in
the calendar year and for an aggregate of at least 183 days during a three-year
period in the current calendar year (counting for such purposes all of the days
present in the current year, one-third of the days present in the immediately
preceding year, and one-sixth of the days present in the second succeeding
year). Resident aliens are subject to U.S. federal tax as if they were U.S.
citizens and, thus, are not Non-U.S. Holders for purposes of this discussion.

This discussion does not consider specific facts and circumstances that may
be relevant to a particular Non-U.S. Holder's tax position (including the fact
that in the case of a Non-U.S. Holder that is a partnership, the U.S. tax
consequences of holding and disposing of shares of Common Stock may be affected
by certain determinations made at the partner level) and does not consider U.S.
state and local or non-U.S. tax consequences. Further it does not consider
Non-U.S. Holders subject to special tax treatment under the federal income tax
laws (including banks and insurance companies, dealers in securities, and
holders of securities held as part of a "straddle," "hedge" or "conversion
transaction"). In addition, persons that hold the Common Stock through "hybrid
entities" may be subject to special rules and may not be entitled to the
benefits of a U.S. income tax treaty. The following discussion is based on
provisions of the Code and administrative and judicial interpretations as of the
date hereof, all of which are subject to change, possibly on a retroactive
basis, and any change could affect the continuing validity of this discussion.
THE FOLLOWING SUMMARY IS INCLUDED HEREIN FOR GENERAL INFORMATION. ACCORDINGLY,
EACH PROSPECTIVE NON-U.S. HOLDER IS URGED TO CONSULT A TAX ADVISOR WITH RESPECT
TO THE UNITED STATES FEDERAL TAX CONSEQUENCES OF HOLDING AND DISPOSING

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OF COMMON STOCK, AS WELL AS ANY TAX CONSEQUENCES THAT MAY ARISE UNDER THE LAWS
OF ANY U.S. STATE, LOCAL OR OTHER NON-U.S. TAXING JURISDICTION.

DIVIDENDS

In general, dividends paid to a Non-U.S. Holder will be subject to
withholding of U.S. federal income tax at a 30% rate unless such rate is reduced
by an applicable income tax treaty. Dividends that are effectively connected
with such holder's conduct of a trade or business in the United States, or, if a
tax treaty applies, attributable to a permanent establishment or in the case of
an individual a "fixed base," in the United States ("U.S. trade or business
income") are generally subject to U.S. federal income tax at regular rates and
are not generally subject to withholding if the Non-U.S. Holder files the
appropriate form with the payor. Any U.S. trade or business income received by a
non-U.S. corporation may also, under certain circumstances, be subject to an
additional "branch profits tax" at a 30% rate, or such lower rate as may be
applicable under an income tax treaty.

Dividends paid to an address in a foreign country are presumed (absent
actual knowledge to the contrary) to be paid to a resident of such country for
purposes of the withholding discussed above, and under the current
interpretation of U.S. Treasury regulations, for purposes of determining the
applicability of a tax treaty rate. Under final U.S. Treasury regulations,
effective January 1, 1999; however, a Non-U.S. Holder of Common Stock who wishes
to claim the benefit of an applicable treaty rate would be required to satisfy
applicable certification and other requirements, which would include the
requirement that the Non-U.S. Holder file a Form W-8 which contains the holder's
name and address.

A Non-U.S. Holder of Common Stock that is eligible for a reduced rate of
U.S. withholding tax pursuant to an income tax treaty may obtain a refund of any
excess amounts currently withheld by filing an appropriate claim for a refund
with the U.S. Internal Revenue Service.

DISPOSITION OF COMMON STOCK

Except as described below, a Non-U.S. Holder generally will not be subject
to U.S. federal income tax in respect of gain recognized on a disposition of
Common Stock provided that (i) the gain is not U.S. trade or business income;
(ii) the Non-U.S. Holder is not an individual who is present in the United
States for 183 or more days in the taxable year of the disposition and who meets
certain other requirements; (iii) the Non-U.S. Holder is not subject to tax
pursuant to the provisions of U.S. tax law applicable to certain United States
expatriates; and (iv) the Company has not been and does not become a "United
States real property holding corporation" for U.S. federal income tax purposes.
The Company believes that it has not been, is not currently, and is not likely
to become, a United States real property holding corporation. However, no
assurance can be given that the Company will not be a United States real
property holding corporation when a Non-U.S. Holder sells its shares of Common
Stock.

FEDERAL ESTATE TAXES

In general, an individual who is a Non-U.S. Holder for U.S. estate tax
purposes will incur liability for U.S. federal estate tax if the fair market
value of property included in the individual's taxable estate for U.S. federal
estate tax purposes exceeds the statutory threshold amount. For these purposes,
Common Stock owned, or treated as owned, by an individual who is a Non-U.S.
Holder at the time of death will be included in the individual's gross estate
for U.S. federal estate tax purposes, unless an applicable estate tax treaty
provides otherwise.

U.S. INFORMATION REPORTING REQUIREMENTS AND BACKUP WITHHOLDING TAX

The Company must report annually to the Internal Revenue Service and to
each Non-U.S. Holder the amount of dividends paid to, and the tax withheld with
respect to, each Non-U.S. Holder. These reporting requirements apply regardless
of whether withholding was reduced or eliminated by an applicable tax treaty.
Copies of these information returns may also be made available under the
provisions of a specific treaty or agreement to the tax authorities in the
country in which the Non-U.S. Holder resides. Under current

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regulations, the United States backup withholding tax (which generally is a
withholding tax imposed at the rate of 31% on certain payments to persons that
fail to furnish the information required under the United States information
reporting requirements) will generally not apply to dividends paid on the Common
Stock to a Non-U.S. Holder at an address outside the United States. Under final
Treasury regulations, effective January 1, 1999, a Non-U.S. Holder generally
would not be subject to backup withholding at a 31% rate if the beneficial owner
certifies to such owner's foreign status on a valid Form W-8.

Non-U.S. Holders will not be subject to information reporting or backup
withholding with respect to the payment of proceeds from the disposition of
Common Stock effected by a foreign office of a foreign broker provided however
that if the broker is a U.S. person or a "U.S. related person," information
reporting (but not backup holding) would apply unless the broker receives a
statement from the owner, signed under penalties of perjury, certifying its
foreign status or otherwise establishing an exemption or the broker has
documentary evidence in its files as to the Non-U.S. Holder's foreign status and
the broker has no actual knowledge to the contrary. For this purpose, a "U.S.
related person" is (i) a "controlled foreign corporation" for U.S. federal
income tax purposes, (ii) a foreign person 50% or more of whose gross income
from all sources for the three-year period ending with the close of its taxable
year preceding the payment (or for such part of the period that the broker has
been in existence) is derived from activities that are effectively connected
with the conduct of a U.S. trade or business, (iii) a foreign partnership
engaged in a U.S. trade or business in which U.S. persons hold more than 50% of
the income or capital interest, or (iv) certain U.S. branches of foreign banks
or insurance companies.

Non-U.S. Holders will be subject to information reporting and backup
withholding at a rate of 31% with respect to the payment of proceeds from the
disposition of Common Stock effected by to or through the United States office
of a broker, U.S. or foreign, unless the Non-U.S. Holder certifies as to its
foreign status under penalties of perjury or otherwise establishes an exemption.

Any amounts withheld under the backup withholding rules from a payment to a
Non-U.S. Holder will be allowed as a credit against such Non-U.S. Holder's U.S.
federal income tax, and any amounts withheld in excess of such Non-U.S. Holder's
federal income tax liability will be refunded, provided that the required
information is furnished to the Internal Revenue Service.

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UNDERWRITING

Subject to the terms and the conditions of an Underwriting Agreement, dated
, 1997 (the "Underwriting Agreement"), the U.S. Underwriters named
below (the "U.S. Underwriters"), for whom Donaldson, Lufkin & Jenrette
Securities Corporation ("DLJ"), BT Alex. Brown Incorporated, Chase Securities
Inc., Credit Suisse First Boston Corporation, Goldman, Sachs & Co., and Morgan
Stanley & Co. Incorporated are acting as representatives (the "U.S.
Representatives"), and the International Managers named below (the
"International Managers and, together with the U.S. Underwriters, the
"Underwriters"), for whom Donaldson, Lufkin & Jenrette International Limited, BT
Alex. Brown International, a division of Bankers Trust International PLC, Chase
Manhattan International Limited, Credit Suisse First Boston (Europe) Limited,
Goldman, Sachs International and Morgan Stanley & Co. International Limited are
acting as representatives (the "International Representatives," and, together
with the U.S. Representatives, the "Representatives"), have severally but not
jointly agreed to purchase from the Company and the Selling Stockholder an
aggregate of 13,622,500 shares of Common Stock. The number of shares of Common
Stock that each Underwriter has agreed to purchase is set forth opposite its
name below:

<TABLE>
<CAPTION>
NUMBER OF
U.S. UNDERWRITERS SHARES
<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation.........
BT Alex. Brown Incorporated.................................
Chase Securities Inc........................................
Credit Suisse First Boston Corporation......................
Goldman, Sachs & Co.........................................
Morgan Stanley & Co. Incorporated...........................

----------
U.S. Offering Subtotal............................ 10,898,000
----------
</TABLE>

<TABLE>
<CAPTION>
NUMBER OF
INTERNATIONAL MANAGERS SHARES
<S> <C>
Donaldson, Lufkin & Jenrette International Limited..........
BT Alex. Brown International................................
Chase Manhattan International Limited.......................
Credit Suisse First Boston (Europe) Limited.................
Goldman, Sachs International................................
Morgan Stanley & Co. International Limited..................

----------
International Offering Subtotal................... 2,724,500
----------
Total.................................................. 13,622,500
==========
</TABLE>

The Underwriting Agreement provides that the obligations of the several
Underwriters to purchase and accept delivery of the shares of Common Stock
offered hereby are subject to approval by their counsel of certain legal matters
and to certain other conditions. The Underwriters are obligated to purchase and
accept delivery of all the shares of Common Stock offered hereby (other than
those shares covered by the over-allotment option described below) if any are
purchased. The price to the public and underwriting discounts and commissions
per share for the U.S. Offering and the International Offering will be
identical.

The Company and the Selling Stockholder have granted to the U.S.
Underwriters an option, expiring at the close of business on the 30th day after
the date of this Prospectus, to purchase, from time to time, in whole or in
part, up to an aggregate of 2,043,375 additional shares of Common Stock at the
initial public offering price less the underwriting discounts and commissions.
The U.S. Underwriters may exercise such option solely to cover over-allotments,
if any, made in connection with the Offering. To the extent that the U.S.

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<PAGE> 75

Underwriters exercise such option, each U.S. Underwriter will become obligated,
subject to certain conditions, to purchase its pro rata portion of such
additional shares based on such U.S. Underwriters' percentage underwriting
commitment in the U.S. Offering as indicated in the preceding table.

The Company has been advised by the Representatives that the Underwriters
propose to offer the shares of Common Stock to the public initially at the price
to the public set forth on the cover page of this Prospectus and, through the
Representatives, to certain dealers at such price less a concession of
$ per share. The Underwriters and such dealers may allow a discount of
$ per share on sales to certain other dealers. After the initial public
offering, the price to the public and concession and discount to dealers may be
changed by the Representatives.

The Company and the Selling Stockholder have, severally and not jointly,
agreed to indemnify the Underwriters against certain liabilities, including
civil liabilities under the Securities Act, or contribute to payments which the
Underwriters may be required to make in respect thereof.

The Company, its officers and directors, and all stockholders of the
Company, including the Selling Stockholder, have, severally and not jointly,
agreed that they will not (i) offer, sell, pledge, contract to sell, announce
their intention to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of, directly or indirectly, or file with the
Commission a registration statement under the Securities Act relating to any
shares of Common Stock, or any securities that are convertible into, or
exercisable or exchangeable for shares of Common Stock or (ii) enter into any
swap or other arrangement that transfers all or a portion of the economic
consequences associated with the ownership of any Common Stock (regardless of
whether any of the transactions described in clause (i) or (ii) is to be settled
by the delivery of Common Stock, or such other securities, in cash or
otherwise), except to the Underwriters pursuant to the Underwriting Agreement,
for a period of 180 days after the date of this Prospectus without the prior
written consent of DLJ. In addition, during such period, the Company has also
agreed not to file any registration statement with respect to, and each of the
officers, directors and the stockholders of the Company, including the Selling
Stockholder, has agreed not to make any demand for, or exercise any right with
respect to, the registration of any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock without DLJ's
prior written consent. Notwithstanding the foregoing, during such period, (i)
the Company may grant stock options pursuant to the Company's existing stock
option plan consistent with past practice and (ii) the Company may issue shares
of Common Stock upon the exercise of any option or warrant or the conversion of
a security outstanding on the date hereof. In addition, each such officer,
director and stockholder may make a bona fide gift or gifts or may make a
distribution to limited partners or shareholders provided that such transferee
or transferees similarly agrees in writing for the benefit of the
Representatives to the effect set forth in clause (i) and (ii) of the first
sentence of this paragraph for a period of 180 days after the date of this
Prospectus.

Prior to the Offering, there has been no public market for the Common
Stock. The price to the public for the shares of Common Stock will be determined
by negotiations between the Company and the Representatives. The factors to be
considered in determining the price to the public include the history of and the
prospects for the industry in which the Company competes, the past and present
operations of the Company, the historical results of operations of the Company,
the prospects for future earnings of the Company, the recent market prices of
securities of generally comparable companies and the general condition of the
securities markets at the time of the Offering.

The shares of Common Stock offered hereby have been approved for listing on
the New York Stock Exchange under the symbol "IHF", subject to notice of
issuance. In connection with the listing of the Common Stock on the New York
Stock Exchange, the Underwriters will undertake to sell round lots of 100 or
more shares of Common Stock to a minimum of 2,000 beneficial owners.

Pursuant to an Agreement Between U.S. Underwriters and International
Managers (the "Intersyndicate Agreement"), each U.S. Underwriter has represented
and agreed that, with certain exceptions, (i) it is not purchasing any shares of
Common Stock offered hereby for the account of anyone other than a United States
or Canadian Person (as defined below) and (ii) it has not offered or sold, and
will not offer or sell, directly or indirectly, any shares of Common Stock
offered hereby or distribute any prospectus relating to such shares of

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<PAGE> 76

Common Stock outside the United States or Canada or to anyone other than a
United States or Canadian Person. Pursuant to the Intersyndicate Agreement, each
International Manager has represented and agreed that, with certain exceptions,
(i) it is not purchasing any shares of Common Stock offered hereby for the
account of any United States or Canadian Person and (ii) it has not offered or
sold, and will not offer or sell, directly or indirectly, any shares of Common
Stock offered hereby or distribute any prospectus relating to such shares of
Common Stock in the United States or Canada or to any United States or Canadian
Person. With respect to any Underwriter that is both a U.S. Underwriter and an
International Manager, the foregoing representations and agreements (i) made by
it in its capacity as a U.S. Underwriter and (ii) made by it in its capacity as
an International Manager apply only to it in its capacity as an International
Manager. The foregoing limitations do not apply to stabilization transactions
and to certain other transactions specified in the Intersyndicate Agreement. As
used herein, "United States or Canadian Person" means any individual who is a
resident in the United States or Canada, or any corporation, pension,
profit-sharing or other trust or other entity organized under or governed by the
laws of the United States or Canada or of any political subdivision thereof
(other than a foreign branch of any United States or Canadian Person), and
included any United States or Canadian branch of a person other than a United
States or Canadian Person.

Pursuant to the Intersyndicate Agreement, sales may be made between the
syndicates of U.S. Underwriters and International Managers of such number of
shares of Common Stock offered hereby as may be mutually agreed. Unless
otherwise determined by the Representatives, the per share price of any shares
of Common Stock so sold shall be the price to the public set forth on the cover
page hereof, in United States dollars, less an amount not greater than the per
share amount of the concession to dealers set forth above.

Pursuant to the Intersyndicate Agreement, each U.S. Underwriter has
represented and agreed that (i) it has not offered or sold and will not offer or
sell, directly or indirectly, any shares of Common Stock offered hereby in any
province or territory of Canada in contravention of the securities laws thereof
and (ii) without limiting the generality of the foregoing, any offer or sale of
such shares of Common Stock in Canada will be made only pursuant to an exemption
from the requirement to file a prospectus in the province or territory of Canada
in which such offer or sale is made. Each U.S. Underwriter has further agreed to
send to any dealer who purchases from it any shares of Common Stock offered
hereby a notice stating in substance that by purchasing such shares of Common
Stock such dealer represents and agrees that (i) it has not offered or sold and
will not offer or sell, directly or indirectly, any of such shares of Common
Stock in any province or territory of Canada or to, or for the benefit of, any
resident of any province or territory of Canada in contravention of securities
laws thereof, (ii) any offer or sale of such shares of Common Stock in Canada
will be made only pursuant to an exemption from the requirement to file a
prospectus in the province or territory of Canada in which such offer or sale is
made and (iii) it will send to any other dealer to whom it sells any of such
shares of Common Stock a notice containing substantially the same statement as
is contained in this sentence.

Pursuant to the Intersyndicate Agreement, each International Manager has
represented and agreed that (i) it has not offered or sold and, prior to the
date six months after the closing date for the sale of shares of Common Stock to
the International Managers pursuant to the Underwriting Agreement, will not
offer or sell, any shares of Common Stock offered hereby to persons in the
United Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or agent)
for the purposes of their businesses or otherwise in circumstances which have
not resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995; (ii) it
has complied and will comply with all applicable provisions of the Financial
Services Act 1986 with respect to any thing done by it in relation to the shares
of Common Stock offered hereby in, from or otherwise involving the United
Kingdom; and (iii) it has only issued or passed on and will only issue or pass
on in the United Kingdom any document received by it in connection with the
Offering to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996
or is a person to whom the document may otherwise lawfully be issued or passed
on.

Pursuant to the Intersyndicate Agreement, each International Manager has
further represented and agreed that it has not offered or sold and will not
offer or sell, directly or indirectly, any shares of Common

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Stock acquired in connection with the distribution contemplated hereby in Japan
or to or for the account of any resident thereof, except for offers or sales to
Japanese International Managers or dealers and except pursuant to an exemption
from the registration requirements of the Securities and Exchange Law of Japan
and otherwise in compliance with applicable provisions of Japanese law. Each
International Manager has further agreed to send to any dealer who purchases
from it any shares of Common Stock offered hereby a notice stating in substance
that by purchasing such shares of Common Stock such dealer represents and agrees
that (i) it has not offered or sold and will not offer or sell, directly or
indirectly, any of such shares of Common Stock in Japan or to or for the account
of any resident thereof, except for offers or sales to Japanese International
Managers or dealers and except pursuant to an exemption from the registration
requirements of the Securities and Exchange Law of Japan and otherwise in
compliance with applicable provisions of Japanese law and (ii) it will send to
any other dealer to whom it sells any of such shares of Common Stock a notice
containing substantially the same statement as is contained in this sentence.

Other than in the United States, no action has been taken by the Company,
the Selling Stockholder or the Underwriters that would permit a public offering
of the shares of Common Stock offered hereby in any jurisdiction where action
for that purpose is required. The shares of Common Stock offered hereby may not
be offered or sold, directly or indirectly, nor may this Prospectus or any other
offering material or advertisements in connection with the offer and sale of any
such shares of Common Stock be distributed or published in any jurisdiction,
except under circumstances that will result in compliance with the applicable
rules and regulations of such jurisdiction. Persons into whose possession this
Prospectus comes are advised to inform themselves about and to observe any
restrictions relating to the offering of the Common Stock and the distribution
of this Prospectus. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any shares of Common Stock offered hereby in any
jurisdiction in which such an offer or a solicitation is unlawful.

Affiliates of each of BT Alex. Brown Incorporated, BT Alex. Brown
International, Chase Securities Inc., Chase Manhattan International Limited,
Morgan Stanley & Co. Incorporated and Morgan Stanley & Co. International Limited
are agents and lenders under the Senior Bank Facilities and receive customary
fees in such capacity. In addition, affiliates of BT Alex. Brown Incorporated,
BT Alex. Brown International, Chase Securities Inc. and Chase Manhattan
International Limited participated in the equity financing for the IHF
Acquisition and owned 2.9% and 4.3%, respectively, of the Company's Common Stock
outstanding immediately prior to the Offering. BT Alex. Brown Incorporated and
Chase Securities Inc. also acted as initial purchasers of the Senior
Subordinated Notes and received customary compensation in connection therewith.
Affiliates of BT Alex. Brown Incorporated, BT Alex. Brown International, Chase
Securities Inc. and Chase Manhattan International Limited are limited partners
of investment funds managed by Hicks Muse. The Representatives and their
affiliates have in the past rendered other financial services to the Company and
its affiliates and may do so in the future.

Affiliates of certain of the Underwriters are lenders under the Company's
Senior Bank Facilities. Because the proceeds of the Offering will be used by the
Company to repay outstanding amounts under the Senior Bank Facilities, under
Rule 2710 of the Conduct Rules of the National Association of Securities
Dealers, Inc. ("NASD"), a conflict of interest is deemed to exist. This Offering
is being conducted in accordance with Rule 2720 of the Conduct Rules of the NASD
("Rule 2720"), which provides that in the event of such a conflict of interest,
the offering price can be no higher than that recommended by a qualified
independent underwriter meeting certain standards (a "QIU"). In accordance with
this requirement, DLJ has assumed the responsibilities of acting as a QIU and
will recommend a price to the public in compliance with Rule 2720. In connection
with the Offering, DLJ is performing the due diligence investigations and
reviewing and participating in the preparation of this Prospectus and the
Registration Statement of which this Prospectus forms a part. As compensation
for the services of DLJ as a QIU, the Company has agreed to pay DLJ $5,000.

The Representatives, on behalf of the Underwriters, may engage in
over-allotment, stabilizing transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the Exchange Act.
Over-allotment involves syndicate sales in excess of the offering size, which
creates a syndicate short position. Stabilizing transactions permit bids to
purchase the underlying security so long as the stabilizing bids do not exceed a
specified maximum. Syndicate covering transactions involve purchases of
securities in the

75
<PAGE> 78

open market after the distribution has been completed in order to cover
syndicate short positions. Penalty bids permit the Representatives to reclaim a
selling concession from a syndicate member when the securities originally sold
by such syndicate member are purchased in a syndicate covering transaction to
cover syndicate short positions. Such stabilizing transactions, syndicate
covering transactions and penalty bids may cause the price of the securities to
be higher than it would otherwise be in the absence of such transaction.

At the request of the Company, up to 681,125 shares of Common Stock offered
in the U.S. Offering are being reserved for sale at the price to the public as
set forth on the cover page of this Prospectus to the employees, officers and
directors of the Company subject to confirmation after the pricing of the
Offering. The Common Stock sold through the reserved share program will be sold
subject to the same terms and conditions as all other shares of Common Stock
sold in the Offering. The number of shares of Common Stock available for sale to
the general public will be reduced to the extent such persons purchase such
reserved shares. Any shares not so purchased will be offered by the U.S.
Underwriters to the general public on the same basis as the other shares of
Common Stock offered hereby.

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Vinson & Elkins L.L.P., Dallas, Texas. Certain legal
matters in connection with the Offering will be passed upon for the Underwriters
by Akin, Gump, Strauss, Hauer & Feld, L.L.P., New York, New York.

EXPERTS

The consolidated balance sheet of International Home Foods, Inc. and
Subsidiaries as of December 31, 1996 and the consolidated statements of
operations and parent company's investment and advances, changes in
stockholders' deficiency, and cash flows for the year ended December 31, 1996,
included in this Prospectus, have been included herein in reliance on the report
of Coopers & Lybrand L.L.P., independent accountants, given on the authority of
that firm as experts in accounting and auditing.

The combined balance sheet of the Company as of December 31, 1995 and the
combined statements of operations and parent company's investment and advances
and of cash flows for each of the two years in the period ended December 31,
1995, included in this Prospectus, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in the report with respect thereto,
and are included herein in reliance upon the authority of said firm as experts
in accounting and auditing in giving said report.

The financial statements of Bumble Bee Seafoods, Inc. as of December 31,
1995 and 1996, and for each of the years in the three-year period ended December
31, 1996, have been included herein and in the registration statement in
reliance upon the report of KPMG Peat Marwick LLP, independent certified public
accountants, appearing elsewhere herein, and upon the authority of said firm as
experts in accounting and auditing. The report of KPMG Peat Marwick LLP contains
an explanatory paragraph that states that Bumble Bee Seafoods' notes payable and
subordinated note payable were due and payable in May 1996 and nonpayment has
constituted events of default. Bumble Bee Seafoods does not currently have funds
to retire these obligations. Such conditions raise substantial doubt about
Bumble Bee Seafoods' ability to continue as a going concern. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

AVAILABLE INFORMATION

The Company has filed with the Commission a registration statement (the
"Registration Statement") under the Securities Act with respect to the shares of
Common Stock offered hereby. As permitted by the rules and regulations of the
Commission, this Prospectus does not contain all of the information set forth in
the Registration Statement. For further information with respect to the Company
and the Common Stock offered hereby, reference is made to the Registration
Statement, including the exhibits and schedules filed therewith. Statements
contained in this Prospectus concerning the provisions of any contract,
agreement or other document referred to herein or therein are not necessarily
complete, but contain a summary of the

76
<PAGE> 79

material terms of such contracts, agreements or other documents. With respect to
each contract, agreement or other document filed as an exhibit to the
Registration Statement, reference is made to the exhibit for the complete
contents of the exhibit, and each statement concerning its provisions is
qualified in its entirety by such reference. The Registration Statement may be
inspected, without charge, at the offices of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549 and at its regional offices at 7 World Trade
Center, New York, New York, 10048 and Citicorp Center, 500 West Madison Street,
Chicago, Illinois 60661-2551. Copies of such materials may also be obtained by
mail at prescribed rates from the Public Reference Section of the Commission at
its principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. Copies
of such materials may also be obtained from the web site that the Commission
maintains at www.sec.gov.

The Company intends to furnish its stockholders with annual reports
containing audited financial statements and quarterly reports for each of the
first three quarters of each fiscal year containing interim unaudited financial
information.

77
<PAGE> 80

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INTERNATIONAL HOME FOODS, INC.
REPORT OF INDEPENDENT ACCOUNTANTS........................... F-2
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS.................... F-3
CONSOLIDATED FINANCIAL STATEMENTS:
Consolidated Balance Sheets as of December 31, 1995 and
1996 and
September 30, 1997 (unaudited)......................... F-4
Consolidated Statements of Operations and Parent Company's
Investment and Advances for the years ended December
31, 1994, 1995 and 1996 and for the nine month periods
ended September 30, 1996 and 1997 (unaudited).......... F-5
Consolidated Statements of Changes in Stockholders' Equity
(Deficiency) for the year ended December 31, 1996 and
for the nine month period ended September 30, 1997
(unaudited)............................................ F-6
Consolidated Statements of Cash Flows for the years ended
December 31, 1994, 1995 and 1996 and for the nine month
periods ended September 30, 1996 and 1997
(unaudited)............................................ F-7
Notes to Consolidated Financial Statements................ F-8
BUMBLE BEE SEAFOODS, INC.
INDEPENDENT AUDITORS' REPORT................................ F-28
CONSOLIDATED FINANCIAL STATEMENTS:
Consolidated Balance Sheets as of December 31, 1995 and
1996 (audited) and
June 30, 1997 (unaudited).............................. F-29
Consolidated Statements of Operations and Accumulated
Deficit for the years ended December 31, 1994, 1995 and
1996 (audited) and for the six month periods ended June
30, 1996 and 1997 (unaudited).......................... F-30
Consolidated Statements of Cash Flows for the years ended
December 31, 1994, 1995 and 1996 (audited) and for the
six month periods ended June 30, 1996 and 1997
(unaudited)............................................ F-31
Notes to the Consolidated Financial Statements............ F-32
</TABLE>

F-1
<PAGE> 81

REPORT OF INDEPENDENT ACCOUNTANTS

The accompanying consolidated financial statements of International Home
Foods, Inc. have been prepared to give effect to the reverse stock split
described in Note 16(b). When the reverse stock split has occurred we will issue
the following report.

COOPERS & LYBRAND L.L.P.

To the Board of Directors and Stockholders of International Home Foods, Inc.:

We have audited the accompanying consolidated balance sheet of
International Home Foods, Inc. and Subsidiaries as of December 31, 1996 and the
related consolidated statements of operations and parent company's investment
and advances, changes in stockholders' deficiency, and cash flows for the year
ended December 31, 1996. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of International
Home Foods, Inc. and Subsidiaries as of December 31, 1996, and the consolidated
results of their operations and their cash flows for the year ended December 31,
1996, in conformity with generally accepted accounting principles.

Parsippany, New Jersey
April 18, 1997 except as to Note 15,

which is as of May 2, 1997 and

Note 16(b) which is as of November , 1997

F-2
<PAGE> 82

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To American Home Products Corporation:

We have audited the accompanying combined balance sheet of American Home
Food Products identified in Notes 1 and 2, as of December 31, 1995, and the
related combined statements of operations and parent company's investment and
advances, and cash flows for each of the two years in the period ended December
31, 1995. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of American
Home Food Products as of December 31, 1995 and the combined results of their
operations and their cash flows for each of the two years in the period ended
December 31, 1995, in conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

New York, New York
October 11, 1996

F-3
<PAGE> 83

INTERNATIONAL HOME FOODS, INC.

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(SEE NOTES 1 AND 2)

<TABLE>
<CAPTION>
DECEMBER 31
--------------------- SEPTEMBER 30,
1995 1996 1997
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents.............................. $ -- $ 45,859 $ 63,720
Accounts receivable, net of allowances................. 45,674 48,801 78,883
Inventories............................................ 139,850 129,205 200,262
Prepaid expenses and other current assets.............. 3,832 8,197 8,297
Deferred income taxes.................................. -- 11,571 13,967
-------- ---------- ----------
Total current assets........................... 189,356 243,633 365,129
Property, plant and equipment, net....................... 176,755 186,002 200,929
Intangible assets, net................................... 97,443 153,938 234,382
Deferred income taxes.................................... -- 353,034 350,626
Other assets............................................. 93 31,664 33,639
-------- ---------- ----------
Total assets................................... $463,647 $ 968,271 $1,184,705
======== ========== ==========
LIABILITIES, PARENT COMPANY'S
INVESTMENT AND ADVANCES AND
STOCKHOLDERS' EQUITY (DEFICIENCY)

CURRENT LIABILITIES:
Due to banks........................................... $ -- $ 9,278 $ 7,127
Current portion of long-term debt...................... -- 26,000 110,000
Accounts payable....................................... 13,092 18,679 38,691
Amount payable to minority stockholder................. -- 16,556 --
Accrued salaries, wages and benefits................... 9,272 14,379 18,701
Accrued advertising and promotion...................... 27,465 38,127 58,506
Accrued interest....................................... -- 10,843 22,798
Other accrued liabilities.............................. 18,902 28,151 38,304
-------- ---------- ----------
Total current liabilities...................... 68,731 162,013 294,127
Long-term debt........................................... -- 1,044,000 1,081,500
Post retirement benefits obligation...................... -- 16,689 18,511
Accrued stock option compensation........................ -- -- 51,915
Other noncurrent liabilities, primarily accrued
royalties.............................................. 9,919 9,764 1,072
-------- ---------- ----------
Total liabilities.............................. 78,650 1,232,466 1,447,125
-------- ---------- ----------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIENCY) (NOTE 16):
Preferred stock -- par value $.01 per share;
authorized, 100,000,000 shares; no shares issued or
outstanding......................................... $ -- $ -- $ --
Common stock -- par value $.01 per share; authorized,
300,000,000 shares; issued and outstanding
61,922,990 shares................................... -- 619 619
Additional paid-in capital............................. -- (261,318) (261,318)
Retained earnings (accumulated deficit)................ -- (1,598) 273
Former parent company's investment and advances........ 384,997 -- --
Foreign currency translation adjustment................ -- (1,898) (1,994)
-------- ---------- ----------
Total stockholders' equity (deficiency)........ 384,997 (264,195) (262,420)
-------- ---------- ----------
Total liabilities, parent company's investment
and advances, and stockholders' equity
(deficiency)................................. $463,647 $ 968,271 $1,184,705
======== ========== ==========
</TABLE>

The accompanying notes to consolidated financial statements
are an integral part of these statements.

F-4
<PAGE> 84

INTERNATIONAL HOME FOODS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND
PARENT COMPANY'S INVESTMENT AND ADVANCES
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(SEE NOTES 1 AND 2)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------------- ----------------------
1994 1995 1996 1996 1997
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net sales........................... $997,321 $818,861 $942,792 $704,103 $843,933
Cost of goods sold.................. 463,137 398,122 444,879 333,880 412,950
-------- -------- ---------- -------- -----------
Gross profit...................... 534,184 420,739 497,913 370,223 430,983
Marketing expenses.................. 200,757 186,396 191,527 140,168 178,394
Selling, general and administrative
expenses.......................... 174,211 165,736 148,903 110,293 119,941
Provision for restructuring and
other charges..................... -- -- 4,308 -- --
Stock option compensation........... -- -- -- -- 51,915
-------- -------- ---------- -------- -----------
Income from operations.............. 159,216 68,607 153,175 119,762 80,733
Interest expense.................... -- -- 17,072 -- 79,235
Interest income and other, net...... -- -- 177 (18) 1,674
-------- -------- ---------- -------- -----------
Income before provision for income
taxes.......................... 159,216 68,607 136,280 119,744 3,172
Provision for income taxes.......... 63,296 29,414 53,319 45,576 1,301
-------- -------- ---------- -------- -----------
Net income........................ 95,920 39,193 82,961 74,168 1,871
Parent company's investment
and advances, beginning
of period......................... 423,551 467,139 -- 384,997 --
Advances, withdrawals and dividends,
net............................... (52,332) (121,335) -- (90,532) --
-------- -------- ---------- -------- -----------
Parent company's investment and
advances, end of period........... $467,139 $384,997 $ -- $368,633 $ --
======== ======== ========== ======== ===========
Income per common share............. $1.34 $0.03
Weighted average number of shares
outstanding....................... 61,922,990 63,301,986
========== ===========
Unaudited Pro forma historical
income per common share (Note
16)............................... $1.08 $0.02
Weighted average number of shares
outstanding (Note 16)............. 77,056,605 77,056,605
========== ===========
</TABLE>

The accompanying notes to consolidated financial statements
are an integral part of these statements.

F-5
<PAGE> 85

INTERNATIONAL HOME FOODS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS' EQUITY (DEFICIENCY)
(IN THOUSANDS, EXCEPT SHARE AMOUNT)
(SEE NOTES 1 AND 2)

<TABLE>
<CAPTION>
FOR THE FOR THE NINE
YEAR ENDED MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
1996 1997
(UNAUDITED)
<S> <C> <C>
Common Stock:
Balance at beginning of period............................ $ -- $ 619
Effect of merger transaction -- issued 61,922,990
shares................................................. 619 --
--------- ---------
Balance at end of period.................................. $ 619 $ 619
========= =========
Additional paid-in capital:
Balance at beginning of period............................ $ -- $(261,318)
Effect of merger transaction.............................. (261,318) --
--------- ---------
Balance at end of period.................................. $(261,318) $(261,318)
========= =========
Foreign currency translation adjustment:
Balance at beginning of period............................ $ -- $ (1,898)
Effect of merger transaction.............................. (1,662)
Translation adjustment for the period November 1, 1996 to
December 31, 1996 and January 1, 1997 to September 30,
1997, respectively..................................... (236) (96)
--------- ---------
Balance at end of period.................................. $ (1,898) $ (1,994)
========= =========
Former parent company's investment and advances
Balance at beginning of period............................ $ 384,997 $ --
Net income*............................................... 84,559
Other activity, net**..................................... (101,256)
Effect of merger transaction.............................. (630,661)
Transfer to common stock, additional paid-in capital, and
foreign currency translation adjustment on November 1,
1996................................................... 262,361
--------- ---------
Balance at end of period.................................. $ -- $ --
========= =========
Retained earnings (accumulated deficit):
Balance at beginning of period............................ $ -- $ (1,598)
Net loss for the period November 1, 1996 to December 31,
1996 and net income for the period January 1997 to
September 30, 1997, respectively....................... (1,598) 1,871
--------- ---------
Balance at end of period.................................. $ (1,598) $ 273
========= =========
</TABLE>

- ---------------

* For the period January 1, 1996 to October 31, 1996.

** Consists principally of advances, withdrawals, dividends, and foreign
currency translation adjustments.

The accompanying notes to consolidated financial statements
are an integral part of these statements.

F-6
<PAGE> 86

INTERNATIONAL HOME FOODS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(SEE NOTES 1 AND 2)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
---------------------------------- ----------------------
1994 1995 1996 1996 1997
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income.................................. $ 95,920 $ 39,193 $ 82,961 $ 74,168 $ 1,871
Adjustments to reconcile net income to net
cash provided from operating activities --
Depreciation and amortization............. 26,389 30,154 19,019 13,717 21,921
Deferred income taxes..................... -- -- (1,032) -- 12
Provision for restructuring and other
charges................................. -- -- 4,308 -- --
Stock option compensation................. -- -- -- -- 51,915
Changes in assets and liabilities
Accounts receivable....................... (24,711) 61,710 1,253 (10,059) (712)
Inventories............................... (13,802) 8,103 14,970 9,384 (7,289)
Other current assets...................... (1,259) 1,051 (3,133) 1,893 1,324
Accounts payable.......................... (2,728) (2,578) (352) 3,885 6,284
Accrued liabilities....................... 3,280 8,246 30,298 5,731 26,933
Other..................................... 360 (343) (2,342) 288 (15,427)
-------- --------- ----------- -------- ---------
Net cash provided from operating
activities........................... 83,449 145,536 145,950 99,007 86,832
-------- --------- ----------- -------- ---------
INVESTING ACTIVITIES:
Purchases of plant and equipment, net....... (31,117) (24,201) (11,905) (8,475) (8,609)
Purchase of business, net of cash
acquired.................................. -- -- (29,136) -- (163,058)
-------- --------- ----------- -------- ---------
Net cash used in investing activities... (31,117) (24,201) (41,041) (8,475) (171,667)
-------- --------- ----------- -------- ---------
FINANCING ACTIVITIES:
Dividends paid to American Home Products.... (93,761) (5,818) (1,539) -- --
Change in former parent company's investment
and advances, net......................... 42,134 (115,793) (99,121) (90,632) --
Increase (decrease) due to banks............ -- -- 9,278 -- (2,151)
Redemption of common stock of IHF and
distribution to American Home Products
Corporation............................... -- -- (1,209,000) -- --
Issuance of long-term bank debt............. -- -- 670,000 -- 80,000
Issuance of Senior Subordinated Notes....... -- -- 400,000 -- --
Payment of debt issuance costs.............. -- -- (30,649) -- --
Retirement of Heritage long-term debt and
accrued interest.......................... -- -- (40,763) -- --
Issuance of common stock, net of issuance
costs..................................... -- -- 242,744 -- --
Repayment of long-term debt................. -- -- -- -- (29,500)
Borrowing from revolving credit facility for
acquisitions.............................. -- -- -- -- 86,000
Repayment for borrowing from revolving
credit facility........................... -- -- -- -- (15,000)
Payment to minority stockholder............. -- -- -- -- (16,556)
-------- --------- ----------- -------- ---------
Net cash used in financing activities... (51,627) (121,611) (59,050) (90,632) 102,793
-------- --------- ----------- -------- ---------
Effect of exchange rates on cash............ (705) 276 -- 100 (97)
-------- --------- ----------- -------- ---------
Increase in cash and cash equivalents....... -- -- 45,859 -- 17,861
Cash and cash equivalents at beginning of
period.................................... -- -- -- -- 45,859
-------- --------- ----------- -------- ---------
Cash and cash equivalents at end of
period.................................... $ -- $ -- $ 45,859 $ -- $ 63,720
======== ========= =========== ======== =========
Cash paid during the period for:
Interest.................................. -- -- 5,568 -- 63,449
Income taxes.............................. 3,528 2,409 827 13,902 432
</TABLE>

The accompanying notes to consolidated financial statements
are an integral part of these statements.

F-7
<PAGE> 87

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS)
(SEE NOTES 1 AND 2)

(DATA WITH REGARD TO SEPTEMBER 30, 1996 AND 1997

AND FOR THE NINE MONTHS THEN ENDED ARE UNAUDITED)

(1) DESCRIPTION OF BUSINESS, MERGER, AND ACQUISITION

BACKGROUND AND BASIS OF PRESENTATION

On September 5, 1996, American Home Products Corporation ("American Home
Products"), AHP Subsidiary Holding Corporation and other parties entered into an
agreement ("Agreement") pursuant to which an affiliate ("Hicks Muse Holding") of
Hicks, Muse, Tate & Furst Equity Fund III, L.P. ("Hicks Muse") acquired,
effective November 1, 1996, an 80 percent interest in International Home Foods,
Inc. ("IHF" or "the Company") and its subsidiary, M. Polaner, Inc., for
approximately $1,226,000. In connection with this transaction (the "IHF
Acquisition"), American Home Products contributed all of its other food products
businesses into IHF. Effective November 1, 1996, these entities and businesses
constitute IHF. In connection with the Agreement, IHF received $264,000 of
equity financing and incurred indebtedness of $1,070,000. Approximately $962,000
of the proceeds was used to redeem shares of common stock of IHF which were
indirectly held by American Home Products and $264,000 was distributed to
American Home Products. At December 31, 1996, the Company has a liability to
American Home Products of $16,556 for the estimated unpaid redemption amount due
upon final determination of the purchase price. As a result of the redemption,
American Home Products continues to beneficially own approximately 20 percent of
the Company. The IHF Acquisition has been accounted for as a leveraged
recapitalization such that the Company's assets and liabilities remain at their
historical bases for financial reporting purposes; for income tax purposes, the
transaction has been treated as a taxable business combination such that the
consolidated financial statements reflect a "step-up" in tax basis (see Note 8).

Earnings, advances, withdrawals, dividends, foreign currency translation
adjustments, and other transactions between the Company and American Home
Products for periods prior to November 1, 1996 are reflected in former parent
company's investment and advances in the accompanying financial statements which
are presented on a combined basis prior to November 1, 1996 and on a
consolidated basis subsequent to November 1, 1996. The combined financial
statements for periods prior to November 1, 1996 reflect the financial position,
results of operations, and cash flows of the Company as if the Company was a
stand-alone entity. The Company began presenting retained earnings (accumulated
deficit) as a separate component of stockholders' equity (deficiency) effective
November 1, 1996.

The effects of the IHF Acquisition are summarized as follows:

<TABLE>
<CAPTION>
<S> <C>
Redemption and distribution to AHP Subsidiary Holding
Corporation............................................... $(1,225,556)
Issuance of common stock.................................... 264,000
Fees........................................................ (21,256)
Recognition of postretirement benefits obligation........... (16,207)
Deferred income taxes....................................... 368,358
-----------
$ (630,661)
===========
</TABLE>

Pro forma unaudited net income (loss) for the years ended December 31, 1995
and 1996, assuming the IHF Acquisition had occurred at the beginning of 1995,
would have been ($22,002) and $31,241, respectively. Decreases to reported net
income result from increased pro forma interest expense, partially offset by the
related tax effects. The unaudited pro forma amounts do not purport to be
indicative of what the Company's actual results of operations would have been
had the IHF Acquisition been consummated on January 1, 1995 or to project the
Company's results of operations for any future period.

F-8
<PAGE> 88

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles and necessarily include amounts based
on judgments and estimates made by management. Actual results could differ from
these estimates. Estimates are used when accounting for potential bad debts,
inventory obsolescence and spoilage, trade and promotion allowances, coupon
redemptions, depreciation and amortization, deferred income taxes and tax
valuation allowances, restructuring charges, and contingencies, among other
items.

ACQUISITION

Immediately after the IHF Acquisition and effective November 1, 1996, the
Company acquired Heritage Brands Holdings, Inc. and subsidiaries ("Heritage")
for approximately $70,800, including the assumption of approximately $40,800 of
debt which was repaid immediately following consummation of the acquisition, in
a transaction accounted for using the purchase method of accounting. The excess
of the purchase price of Heritage over the fair value of assets acquired and
liabilities assumed resulted in goodwill and other intangible assets of
approximately $59,100 (an increase of approximately $25,000 over the amount of
Heritage's unamortized goodwill and intangible assets prior to the acquisition)
which are being amortized over 20 years. The acquisition was not significant
and, accordingly, pro forma financial information has not been provided. The
results of operations and cash flows of Heritage have been included in the
accompanying consolidated financial statements of the Company since November 1,
1996.

BUSINESS

The Company operates in one business segment which manufactures and markets
a diversified portfolio of shelf-stable food products. The Company sells its
products primarily in the United States and Canada and is not dependent on any
single or major group of customers for its sales. The Company's canned pasta
product line accounted for approximately 40-50 percent of consolidated sales for
all periods presented.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

PRINCIPLES OF COMBINATION/CONSOLIDATION

For periods through October 31, 1996, the accompanying financial statements
included the operations of the following indirect wholly-owned subsidiaries of
American Home Products: American Home Food Products, Inc. (now, the Company) and
its subsidiary M. Polaner, Inc., American Home Foods, Inc. (now I.H.F.P, Inc.),
Luck's Incorporated, Canadian Home Products Limited, and certain related assets
owned by American Home Products (collectively, American Home Food Products) and
its subsidiaries. Effective November 1, 1996, the consolidated operations of the
Company include the aforementioned entities and Heritage (see Note 1). All
significant intercompany balances and transactions have been eliminated in the
combined and consolidated financial statements. The accompanying combined and
consolidated financial statements are referred to herein as "consolidated"
financial statements.

CASH AND CASH EQUIVALENTS

All highly liquid investments with original maturities of three months or
less are considered to be cash equivalents. The Company's cash and cash
equivalents at December 31, 1996 and September 30, 1997 consist of cash in banks
and investments in the commercial paper of several companies.

F-9
<PAGE> 89

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

INVENTORIES:

Inventories are valued at the lower of cost or market, with cost determined
on a first-in, first-out basis.

PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment are stated at cost. Normal maintenance and
repairs are expensed. Additions and improvements either to provide necessary
capacity, improve the efficiency of production, or to modernize the facilities
are capitalized. Depreciation is calculated using the straight-line method over
the estimated useful lives of the related assets; generally 40 years for
building and leasehold improvements, 15 years for machinery and equipment, and 5
to 20 years for furniture and fixtures.

INTANGIBLE AND OTHER ASSETS:

Goodwill represents the excess of cost over the fair value of net assets
acquired and is being amortized using the straight-line method over periods of
20-40 years. Deferred financing costs relate to costs incurred in connection
with the agreements for bank and other indebtedness. Such costs are being
amortized over the terms of the financings using the interest or straight-line
method, as appropriate. Amortization of deferred financing costs is included in
interest expense in the accompanying consolidated financial statements.

The Company continually reviews goodwill to evaluate whether changes have
occurred that would suggest goodwill may be impaired based on the estimated cash
flows of the entity acquired over the remaining amortization period. If this
review indicates that the remaining estimated useful life of goodwill requires
revision or that the goodwill is not recoverable, the carrying amount of the
goodwill is reduced by the estimated shortfall of cash flows on a discounted
basis.

During 1995, Statement of Financial Accounting Standards (SFAS) No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of," was issued. The effect of adopting this pronouncement in 1996
was not significant.

RESEARCH AND DEVELOPMENT:

Research and development costs are charged to expense as incurred and
amounted to $6,782, $6,447 and $3,823 for the years ended December 31, 1994,
1995 and 1996 and $7,415 and $3,343 for the nine months ended September 30, 1996
and 1997, respectively.

ADVERTISING:

Advertising costs are charged to expense as incurred and amounted to
$32,839, $42,386, and $58,551 for the years ended December 31, 1994, 1995 and
1996 and $42,974 and $45,896 for the nine months ended September 30, 1996 and
1997, respectively.

FORMER PARENT COMPANY INVESTMENT AND ADVANCES:

Former parent company's investment and advances includes the stockholder's
equity of the individual American Home Products subsidiaries described in Note
2. The equity of the individual subsidiaries represents the original investment
by American Home Products, plus accumulated net income and net advances,
withdrawals and dividends. For periods prior to November 1, 1996, cash receipts
were transferred to American Home Products by daily cash sweeps, and American
Home Products made funds available for operating expenses.

F-10
<PAGE> 90

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

INTERIM FINANCIAL INFORMATION:

The unaudited consolidated financial statements and related disclosures
presented herein have been prepared by the Company without audit and, in the
opinion of management, contain all adjustments necessary to present fairly and
on a basis consistent with the consolidated financial statements for the year
ended December 31, 1996, the Company's consolidated financial position as of
September 30, 1997, and the results of their operations and cash flows for the
nine months ended September 30, 1996 and 1997.

The results of operations for the nine months ended September 30, 1997 are
not necessarily indicative of the results to be expected for the entire year.

FOREIGN CURRENCY TRANSLATION:

The assets and liabilities of the Company's foreign subsidiary, Canadian
Home Products Limited, are translated into United States dollars at period end
exchange rates. Income, expense and cash flow amounts are translated using
monthly average exchange rates. Translation adjustments were accumulated in
former parent company investment and advances through October 31, 1996 and
effective November 1, 1996, are accumulated as a separate component of
stockholders' deficiency. Transaction gains and losses are reflected in other
income (expense) net, and have not been significant.

FINANCIAL INSTRUMENTS:

The cost of interest rate collars is amortized as interest expense over the
terms of the related agreements. Interest expense is adjusted, if required, to
reflect the interest rates included in these collar agreements.

INCOME (LOSS) PER SHARE:

Net income (loss) per share is based on the weighted average number of
shares of common stock and common stock equivalents outstanding during each
respective period. Proceeds from the exercise of the dilutive stock options are
assumed to be used to repurchase outstanding shares of the Company's common
stock at the estimated average fair market value during the period for primary
earnings per share and the higher of the estimated average or period end fair
market value for fully dilutive earnings per share. (See Note 16(b)).

INCOME TAXES:

The Company's operations were included in the consolidated income tax
returns of American Home Products through October 31, 1996. The Company was
charged by American Home Products based on the statutory tax rates adjusted for
permanent differences, but without regard for temporary differences.
Accordingly, the Company's financial statements for periods prior to the IHF
Acquisition do not reflect deferred tax assets or liabilities since those
amounts were being provided for by American Home Products. Deferred tax assets
and liabilities prior to the IHF Acquisition would have reflected temporary
differences between assets and liabilities for financial reporting purposes and
income tax purposes. Such temporary differences were primarily attributable to
depreciation, allowances for doubtful accounts, and nondeductible reserves and
were not significant through October 31, 1996. The income tax provision on a
stand-alone basis for periods prior to November 1, 1996 would not differ
materially from the income tax provision reflected in the accompanying
consolidated financial statements.

Effective November 1, 1996, the Company's operations are included in the
consolidated federal income tax returns of its parent. For periods after
November 1, 1996, the Company's income tax provision has been prepared on a
separate return basis, with deferred income taxes provided for differences in
the financial statement and tax bases of assets and liabilities. The tax effects
of the temporary differences which resulted

F-11
<PAGE> 91

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

from the "step-up" in tax basis (see Notes 1 and 8) have been reflected in
stockholders' equity (deficiency) as of November 1, 1996. The Company intends to
permanently reinvest its undistributed Canadian earnings in the Canadian
operations; accordingly, deferred income taxes, which would not be significant,
have not been provided for the repatriation of such undistributed earnings.

RECLASSIFICATIONS:

Certain 1994 and 1995 amounts have been reclassified to conform with the
1996 presentation.

(3) INVENTORIES

Inventories are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------- SEPTEMBER 30,
1995 1996 1997
(UNAUDITED)
<S> <C> <C> <C>
Raw materials.................................... $ 27,175 $ 29,932 $ 60,050
Work in progress................................. 30,117 26,790 17,642
Finished goods................................... 82,558 72,483 122,570
-------- -------- --------
Total.................................. $139,850 $129,205 $200,262
======== ======== ========
</TABLE>

(4) PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------- SEPTEMBER 30,
1995 1996 1997
(UNAUDITED)
<S> <C> <C> <C>
Land............................................. $ 4,494 $ 4,589 $ 7,679
Buildings and leasehold improvements............. 101,622 107,923 118,803
Machinery and equipment.......................... 172,093 185,867 194,325
Furniture and fixtures........................... 18,893 19,917 21,841
-------- -------- ---------
297,102 318,296 342,648
Less -- accumulated depreciation and
amortization................................... 120,347 132,294 141,719
-------- -------- ---------
Total.................................. $176,755 $186,002 $ 200,929
======== ======== =========
</TABLE>

Depreciation expense aggregated $13,380, $17,144 and $15,683 for the years
ended December 31, 1994, 1995, 1996 and $11,710 and $13,411 for the nine months
ended September 30, 1996 and 1997, respectively.

(5) INTANGIBLE AND OTHER ASSETS

Intangible assets are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------- SEPTEMBER 30,
1995 1996 1997
(UNAUDITED)
<S> <C> <C> <C>
Goodwill and tradenames......................... $110,579 $169,749 $254,956
Less -- accumulated amortization................ 13,136 15,811 20,574
-------- -------- --------
Net intangible assets...................... $ 97,443 $153,938 $234,382
======== ======== ========
</TABLE>

F-12
<PAGE> 92

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

Amortization of intangibles totaled $13,010, $13,010 and $2,675 for the
years ended December 31, 1994, 1995 and 1996 and $2,007 and $4,763 for the nine
months ended September 30, 1996 and 1997, respectively. All fully amortized
intangibles have been retired.

Other assets at December 31, 1996 and September 30, 1997 include deferred
financing fees incurred in connection with the Company's issuance of long-term
debt. Such costs aggregated $32,149; amortization expense for the period
November 1, 1996 (date of debt issuance) to December 31, 1996 and for the nine
months ended September 30, 1997 was $661 and $3,747, respectively.

(6) ALLOWANCE FOR DOUBTFUL ACCOUNTS AND SALES RETURNS AND ALLOWANCES

The allowance for doubtful accounts and sales returns and allowances and
their related activity, are as follows:

<TABLE>
<CAPTION>
WRITE-OFFS AND
BEGINNING CHARGED REDUCTIONS, NET ENDING
BALANCE TO EXPENSE OF RECOVERIES BALANCE
<S> <C> <C> <C> <C>
Year Ended December 31, 1994........ $3,126 $ 588 $240 $3,474
Year Ended December 31, 1995........ 3,474 1,103 513 4,064
Year Ended December 31, 1996........ 4,064 563 296 4,331
Nine Months Ended September 30, 1997
(unaudited)...................... 4,331 994 116 5,209
</TABLE>

(7) BUSINESS RESTRUCTURING AND OTHER CHARGES

In December 1996, a pretax charge was recorded for severance costs of
$3,240 and other charges (principally non-cash) of $1,068.

The severance charge covers both voluntary and involuntary terminations of
approximately 125 employees, including management, sales and marketing,
technical, and administrative personnel. Employee separations were substantially
completed prior to December 31, 1996.

During 1996, cash payments of $437 were charged against the business
restructuring reserve. Management believes that the remaining reserves for
business restructuring of $2,871 at December 31, 1996 are adequate to complete
its plans. As of September 30, 1997, all of the remaining cash payments were
made.

(8) INCOME TAXES

The provision for income taxes is as follows:

<TABLE>
<CAPTION>
FOR THE NINE MONTHS
DECEMBER 31, ENDED SEPTEMBER 30,
----------------------------- -------------------
1994 1995 1996 1996 1997
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Domestic......................... $54,558 $24,126 $45,334 $38,754 $1,142
Foreign.......................... 2,567 2,411 1,193 994 127
State............................ 6,171 2,877 6,792 5,828 32
------- ------- ------- ------- ------
$63,296 $29,414 $53,319 $45,576 $1,301
======= ======= ======= ======= ======
</TABLE>

F-13
<PAGE> 93

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

A reconciliation between the Company's effective tax rate and U.S.
statutory rate is as follows:

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
-------------------- --------------
1994 1995 1996 1996 1997
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
U.S. statutory rate............................ 35% 35% 35% 35% 35%
State tax, net of federal benefit.............. 3 3 4 3 5
Amortization of other intangibles and purchase
price over fair value........................ 2 5 -- -- --
Other.......................................... -- -- -- -- 1
--- --- --- --- ---
Effective tax rate............................. 40% 43% 39% 38% 41%
=== === === === ===
</TABLE>

The provision for income taxes for 1996 is as follows:

<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM
JANUARY 1, 1996 TO NOVEMBER 1, 1996 TO
OCTOBER 31, 1996 DECEMBER 31, 1996
<S> <C> <C>
Current:
Federal.......................................... $46,136 $ --
Foreign.......................................... 1,228 41
State............................................ 6,944 2
------- -------
54,308 43
------- -------
Deferred:
Federal.......................................... -- (802)
Foreign.......................................... -- (76)
State............................................ -- (154)
------- -------
-- (1,032)
------- -------
$54,308 $ (989)
======= =======
</TABLE>

For federal and state income tax purposes, the IHF Acquisition (see Note 1)
is a taxable business combination and is a qualified stock purchase. The buyer
and seller have elected jointly to treat the IHF Acquisition as an asset
acquisition under Section 338(h)(10) of the Internal Revenue Code of 1986, as
amended. A preliminary allocation of the purchase price to the tax bases of
assets and liabilities based on their respective estimated fair values at
November 1, 1996 has been made for income tax purposes and will be finalized
during 1997. In connection with the IHF Acquisition, the Company has recorded a
deferred tax asset of approximately $368,000 at November 1, 1996 related to
future tax deductions for the net excess of the tax bases of the assets and
liabilities over the financial statement carrying amounts with a corresponding
credit to additional paid-in capital. Historically, the Company has generated
operating income and realization of the deferred tax assets is dependent upon
the Company's ability to generate sufficient future taxable income which
management believes is more likely than not. The Company anticipates future
taxable income after debt service and adjusting for the effects of the IHF
Acquisition and acquisition discussed in Note 1 sufficient to realize the
deferred tax assets existing at November 1, 1996, December 31, 1996 and
September 30, 1997. Future taxable income is based on management's forecasts of
the operating results of the Company and there can be no assurance that such
results will be achieved. Management continually reviews such forecasts in
comparison with actual results and expected trends. In the event management
determines that sufficient future taxable income may not be generated to fully
realize the deferred tax assets, the Company will provide a valuation allowance
by a charge to income tax expense in the period of such determination.

F-14
<PAGE> 94

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

As discussed in Note 2, the Company's consolidated financial statements for
periods prior to November 1, 1996 do not reflect deferred income taxes as all
such taxes were provided for by American Home Products. Deferred tax assets and
liabilities established as a result of the IHF Acquisition and the purchase of
Heritage have been reflected on the accompanying consolidated balance sheets,
effective November 1, 1996, as an adjustment to the former parent company's
investment and advances account or goodwill, as appropriate.

The components of deferred tax assets at November 1, 1996, December 31,
1996, and September 30, 1997 are as follows:

<TABLE>
<CAPTION>
NOVEMBER 1, DECEMBER 31, SEPTEMBER 30,
1996 1996 1997
(UNAUDITED)
<S> <C> <C> <C>
Current deferred tax assets:
Allowance for doubtful accounts............... $ 2,196 $ 1,771 $ 2,570
Inventory reserves............................ 14,813 2,850 5,248
Other accruals................................ 2,557 6,950 6,149
-------- -------- --------
Net current deferred tax assets................. 19,566 11,571 13,967
Noncurrent deferred tax assets:
Property, plant, and equipment................ 15,668 15,607 14,506
Tradenames.................................... 189,909 187,689 175,577
Goodwill...................................... 139,874 137,813 128,593
Stock options................................. -- -- 21,285
Other......................................... 829 855 1,035
Net operating loss carryforwards.............. 727 14,070 12,630
Valuation allowance........................... (3,000) (3,000) (3,000)
-------- -------- --------
Net noncurrent deferred tax assets.............. 344,007 353,034 350,626
-------- -------- --------
Net deferred tax assets......................... $363,573 $364,605 $364,593
======== ======== ========
</TABLE>

At December 31, 1996, the Company had a net operating loss carryforward for
federal and state income tax purposes of approximately $35,500 which expires
principally in 2011. The Company has established a $3,000 valuation allowance
related to certain deferred tax assets for state purposes due to state
limitations regarding the utilization of net operation loss carryforwards.

(9) LONG-TERM DEBT

Long-term debt at December 31, 1996 and September 30, 1997 is as follows:

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
(UNAUDITED)
<S> <C> <C>
Senior secured bank facilities:
Tranche A............................................... $ 300,000 $ 351,500
Tranche B............................................... 200,000 369,000
Tranche C............................................... 170,000 --
Revolver................................................ -- 71,000
---------- ----------
670,000 791,500
Senior Subordinated Notes................................. 400,000 400,000
---------- ----------
1,070,000 1,191,500
Less: Current portion................................... 26,000 110,000
---------- ----------
Long-term debt.......................................... $1,044,000 $1,081,500
========== ==========
</TABLE>

In connection with the purchase of an 80% interest in the Company by an
affiliate of Hicks Muse from a subsidiary of American Home Products and the
acquisition of Heritage and related assumption of Heritage's debt (see Note 1),
the Company entered into a $770,000 Credit Agreement with Chase Manhattan Bank,

F-15
<PAGE> 95

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

Bankers Trust Company, and Morgan Stanley Senior Funding, Inc. (see Note 16) and
issued $400,000 of 10 3/8% Senior Subordinated Notes ("Senior Subordinated
Notes"). The Credit Agreement provides for term loans ("Term Loans") in three
tranches aggregating $670,000 and a revolving credit loan facility ("Revolver")
of $100,000. At December 31, 1996, there were no borrowings under the Revolver
nor were any letters of credit outstanding.

Tranche A of the Term Loans is a $300,000, 6 1/2-year facility; Tranche B
of the Term Loans is a $200,000, eight-year facility; and Tranche C of the Term
Loans is a $170,000, nine-year facility. Each tranche requires semi-annual
principal payments in increasing amounts, and amounts paid under the Term Loans
may be not be reborrowed. Borrowings under the Term Loans and the Revolver bear
interest based on either the London Interbank Offered Rate ("LIBOR") or an
Alternate Base Rate, as defined, plus applicable margins which range from 0.5
percent to 3.5 percent. At December 31, 1996, the rates in effect on Tranches A,
B, and C were 8.0%, 8.6%, and 9.1%, respectively. In accordance with the Credit
Agreement, in February 1997, the Company entered into interest rate protection
agreements to the extent necessary to provide that, when combined with the
Senior Subordinated Notes, at least 50% of the Company's aggregate indebtedness
is subject to either a fixed interest rate or interest rate protection through
December 1998. Included in the Term Loans are certain Eurodollar loans which
qualify as fixed interest under the terms of the Credit Agreement. In order to
comply with required interest rate protection provisions, the Company also
entered into an interest rate collar transaction that becomes effective in
September 1997 and expires in December 1998. The notional amount of the collar
is $135,000 with the cap set at 8% and the floor set at 5.25%. The agreement is
with a financial institution having a credit rating (Moody's/S&P) of Aa3/A+,
which minimizes non-performance risk.

Borrowings and letters of credit issued under the Revolver are available to
the Company until the earlier of March 31, 2003 or the date on which the Tranche
A Term Loans mature or are repaid in full. The Company pays a commitment fee of
0.5% on the unused portion of the Revolver.

The Company is required to make mandatory prepayments on the Term Loans and
credit commitments under the Revolver will be mandatorily reduced based on (a)
excess levels of cash flow, as defined; (b) all of the net proceeds from certain
asset or subsidiary dispositions; and (c) the issuance of capital stock or the
incurrence of certain indebtedness. At the Company's option, loans may be
prepaid and credit commitments under the Revolver may be permanently reduced.

Obligations under the Credit Agreement are unconditionally and irrevocably
guaranteed by each of the Company's domestic subsidiaries. In addition, such
obligations are collateralized by first priority or equivalent collateral
interests in (a) all of the capital stock of, or other equity interests in, each
domestic subsidiary of the Company and 65% of the capital stock, or other equity
interests in, each foreign subsidiary of the Company and (b) all tangible and
intangible assets of the Company and its subsidiaries, subject to certain
exceptions and qualifications.

The Credit Agreement also contains a number of significant covenants that,
among other things, restrict the ability of the Company to dispose of assets,
incur additional indebtedness, repay other indebtedness, pay dividends, make
investments or acquisitions, engage in mergers or consolidations, make capital
expenditures, or engage in certain transactions with affiliates, and otherwise
restrict corporate activities. In addition, under the Credit Agreement,
effective beginning March 31, 1997, the Company is required to comply with
specified minimum interest coverage, maximum leverage, and minimum fixed charge
coverage ratios, as defined.

The Senior Subordinated Notes are due on November 1, 2006 and require
semi-annual interest payments. The Senior Subordinated Notes may be redeemed
prior to November 1, 2000 in up to an aggregate principal amount of $160,000
with the proceeds of one or more equity offerings, as defined, by the Company
under certain conditions at a redemption price of 110.375 percent. The Senior
Subordinated Notes may also

F-16
<PAGE> 96

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

be redeemed prior to November 1, 2001 at a redemption price of 100 percent upon
the occurrence of a change in control, as defined. Except as discussed above,
the Senior Subordinated Notes are not redeemable prior to November 1, 2001. The
Senior Subordinated Notes will be redeemable, in whole or in part, at the
Company's option at redemption prices decreasing from 105.188% at November 2001
to 100 percent on November 1, 2004 and thereafter.

Each of the Company's subsidiaries (I.H.F.P., Inc., Luck's Incorporated,
Canadian Home Products Limited, M. Polaner, Inc., and Heritage) fully and
unconditionally guarantee the Senior Subordinated Notes, on a joint and several
basis.

The Senior Subordinated Notes contain certain restrictive covenants
limiting, among other things (a) the incurrence of additional indebtedness; (b)
the declaration or payment of dividends or other capital stock distributions or
redemptions; (c) the redemption of certain subordinated obligations; (d)
investments; (e) sales of assets; and (f) consolidations, mergers, and transfers
of all or substantially all of the Company's assets.

The Company filed a registration statement on Form S-4 pursuant to the
Securities Act of 1933, which became effective on February 19, 1997, to register
the Senior Subordinated Notes. The Company has issued a Prospectus to offer to
exchange the unregistered Senior Subordinated Notes for registered Senior
Subordinated Notes. The exchange offer expired on March 27, 1997 and all of the
Senior Subordinated Notes have been exchanged.

The fair value of the Company's debt at December 31, 1996 and September 30,
1997 approximates its carrying value.

Future principal payments on the Company's long-term debt at December 31,
1996 are as follows:

<TABLE>
<S> <C>
1997........................................................ $ 26,000
1998........................................................ 31,000
1999........................................................ 41,000
2000........................................................ 51,000
2001........................................................ 58,500
Thereafter.................................................. 862,500
----------
$1,070,000
==========
</TABLE>

(10) EMPLOYEE BENEFIT PLANS:

For the American Home Products defined benefit pension plans in which the
Company participated prior to the IHF Acquisition, the amounts charged to the
Company by American Home Products aggregated $2,651 and $2,762 for the years
ended December 31, 1994, 1995, $3,188 for the period January 1, 1996 to October
31, 1996, and $2,848 for the nine months ended September 30, 1996, respectively.

The postretirement health care costs relating to the Company's
participation in the American Home Products postretirement plan represented
charges for actual retiree benefit costs based on the ratio of the Company's
participants to total American Home Products participants and aggregated $3,334
and $3,494 for the years ended December 31, 1994 and 1995, $3,239 for the period
January 1, 1996 to October 31, 1996, and $2,933 for the nine months ended
September 30, 1996, respectively.

In periods prior to November 1, 1996, the Company participated in certain
defined contribution plans sponsored by American Home Products. Expense
recognized for these plans aggregated $1,082 and $1,027 for the years ended
December 31, 1994 and 1995, $955 for the period from January 1, 1996 to October
31, 1996, and $849 for the nine months ended September 30, 1996, respectively.

F-17
<PAGE> 97

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

For periods prior to the IHF Acquisition the Company has not provided
certain disclosures required by Statement of Financial Accounting Standards No.
87, "Employers' Accounting for Pensions" since, under the American Home Products
plans, the assets are not segregated or restricted by subsidiary and the benefit
obligations have not been assumed by the Company. Further, certain disclosures
prescribed by Statement of Financial Accounting Standards No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions," have not been
provided since the American Home Products plan is unfunded and the American Home
Products plan's benefit obligations will not be assumed by the Company.

In conjunction with the IHF Acquisition, and pursuant to the American Home
Products Agreement of Sale and Plan of Merger ("Sale Agreement"), the Company
adopted new pension and postretirement plans for individuals previously covered
under the American Home Products pension and postretirement plans, with
provisions and benefits substantially equivalent to those of the American Home
Products Plans.

The Company sponsors various retirement plans for substantially all of its
employees. The Company sponsors two insignificant defined benefit pension plans
for collectively-bargained employees of its Highspire and Canadian operations.
It is the Company's policy to contribute the amounts necessary to meet the
minimum funding requirements of defined benefit plans under applicable laws. The
aggregate accumulated benefit obligation, projected benefit obligation, plan
assets, and accrued pension costs of the Highspire and Canadian plans were $153,
$154, $136, and $19, respectively, at December 31, 1996. Net periodic pension
cost for the Highspire and Canadian plans was insignificant for all periods
presented. Assumptions used in accounting for these plans included a
weighted-average discount rate of 7.5 percent, an expected long-term rate of
return on plan assets of 7.5 percent, and a rate of increase in compensation
levels of 0-3.5 percent.

Effective January 1, 1997, the Company established defined benefit plans
for its salaried and collectively-bargained employees. Benefits earned under the
plan will include service from November 1, 1996 to December 31, 1996; prior
service cost for the two-month period was insignificant. Benefits under the
plans will be based primarily on compensation levels and years of service.

Pursuant to the Sale Agreement, the Company provides certain health care
and life insurance benefits for most of its retired employees. Generally,
employees become eligible for benefits after attaining specified age and service
requirements. In connection with the IHF Acquisition, at November 1, 1996, the
Company has recorded its postretirement benefits obligation with a corresponding
charge to paid-in capital. The following table sets forth the plan's funded
status reconciled with amounts reported in the Company's consolidated balance
sheet:

<TABLE>
<CAPTION>
NOVEMBER 1, 1996 DECEMBER 31, 1996
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees.................................................. $ -- $ --
Fully eligible participants............................... -- --
Other active participants................................. (16,207) (16,855)
-------- --------
Total benefits earned....................................... (16,207) (16,855)
Plan assets at fair value................................. -- --
-------- --------
Funded status............................................... (16,207) (16,855)
Unrecognized net loss....................................... -- 166
-------- --------
Accrued postretirement benefit obligation................... $(16,207) $(16,689)
======== ========
</TABLE>

F-18
<PAGE> 98

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

Net periodic postretirement benefit cost for the period from November 1,
1996 to December 31, 1996 consisted of the following components:

<TABLE>
<S> <C>
Service cost................................................ $245
Interest cost on postretirement benefit obligation.......... 237
----
Net periodic postretirement benefit cost.......... $482
====
</TABLE>

Net periodic postretirement benefit cost for the nine months ended
September 30, 1997 was $2,025.

The discount rate used to measure the accumulated postretirement benefit
obligation as of November 1, 1996, December 31, 1996 and September 30, 1997 was
7.5 percent. The assumed health care cost trend rate used to measure the
expected cost of benefits was 8.5 percent for 1996 and is assumed to trend
downward to 6.0 percent for 2010 and thereafter. The health care trend rate has
a significant effect on the amounts reported. For example, increasing the health
care cost trend rate by one percentage point in each year would increase the
accumulated postretirement benefit obligation as of December 31, 1996 by $3,686
and the service cost and interest components of the net periodic postretirement
benefit cost for the period from November 1, 1996 to December 31, 1996 by $100.

Effective November 1, 1996, the Company also sponsors a 401(k) defined
contribution plan for nonunion employees. Contributions for the period November
1, 1996 to December 31, 1996 were insignificant. Employer contributions for the
nine months ended September 30, 1997 amounted to $675.

The Company also participates in union-sponsored multiemployer pension,
life insurance and health and welfare plans which provide benefits to union
employees located at the Company's facility in Vacaville, CA. The Company's
contributions to these plans were $2,885, $3,121 and $2,993 for the years ended
December 31, 1994, 1995, and 1996, respectively, and $2,212 and $2,164 for the
nine months ended September 30, 1996 and 1997, respectively.

(11) RELATED PARTY TRANSACTIONS:

The consolidated statements of income for periods through October 31, 1996
included the costs of certain administrative and other services provided by
American Home Products. These services included treasury, tax, personnel, legal,
environmental, safety, public relations, audit, and other related costs. The
charges to the Company for corporate administration approximated $2,500 through
October 31, 1996. Charges for the nine month period ended September 30, 1996
amounted to $2,204. Such charges are representative of costs which would have
been incurred by the Company on a stand alone basis.

American Home Products also charged the Company for its share of group
insurance costs (medical, dental, basic life, etc.) based on American Home
Product's historical claims experience and current claim trends and the ratio of
the Company's employees to total American Home Products domestic employees. The
charges, which are reflected in the accompanying consolidated statements of
income, amounted to $11,733 and $11,941 for the years ended December 31, 1994
and 1995, and $9,143 for the 10 months ended October 31, 1996, respectively.
Charges for the nine months ended September 30, 1996 were $8,598.

The consolidated statements of income include rent for 35,000 square feet
of space in American Home Product's corporate headquarters. The rent expense
related to this space amounted to $965, $905, and $946 for the years ended
December 31, 1994, 1995, and 1996, respectively. The Company vacated this space
and relocated its corporate headquarters at the end of 1996.

Various self-insurance coverages were provided to the Company through
American Home Product's consolidated programs through October 31, 1996. Auto,
property, product liability, and other insurance coverages provided by American
Home Products were allocated to the Company based on past claims history,

F-19
<PAGE> 99

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

exposure, trends, and judgment. The changes, which are reflected in the
accompanying consolidated statements of income for the years ended December 31,
1994 and 1995 and for the 10 months ended October 31, 1996 amounted to $426, and
$421, and $346, respectively. Charges for the nine months ended September 30,
1996 were $321.

The Company purchased advertising through a wholly-owned subsidiary of
American Home Products through 1996. The rates at which the Company purchased
advertising reflected the rates obtained by the consolidated purchasing of
American Home Products. The charges, which are reflected in the accompanying
consolidated statements of income for the years ended December 31, 1994, 1995
and 1996, amounted to $32,839, $42,386, and $45,186, respectively. Charges for
the nine months ended September 30, 1996 and 1997 amounted to $42,974 and $727,
respectively.

Effective November 1, 1996, the Company entered into a transition services
agreement with American Home Products under which American Home Products, until
six months after November 1, 1996, provides to the Company, for a fee, certain
facilities and services. In addition, American Home Products agreed to assist
the Company for 90 days after November 1, 1996 with the administration of
welfare benefit plans for payment by the Company to American Home Products based
on past practices. Charges to date by American Home Products to the Company
under these arrangements were insignificant.

Effective November 1, 1996, the Company entered into a 10-year monitoring
and oversight agreement with an affiliate of its indirect majority stockholder,
Hicks Muse. The agreement provides for an annual fee of the greater of $1,000 or
0.1 percent of the budgeted consolidated net sales of the Company for the
current year. In addition, effective November 1, 1996, the Company entered into
a financial advisory agreement with the affiliate under which the affiliate will
be entitled to a fee of 1.5 percent of the transaction value, as defined, for
each add-on transaction, as defined. In 1996, the Company incurred financial
advisory fees of $167 and paid transaction fees of $19,320 to such affiliate
relating to the IHF Acquisition (see Note 1). Expenses under the agreement for
the nine months ended September 30, 1997 totaled $838. The Company incurred fees
in the amount of $2,445 as a result of the financial advisory agreement during
the nine months ended September 30, 1997.

Included in prepaid expenses and other current assets at December 31, 1996
is a receivable of approximately $3,600 from American Home Products for
reimbursement of payroll taxes related to option exercises by employees.

F-20
<PAGE> 100

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

Following is an analysis of the activity in the Parent Company's Investment
and Advances account for the years ended December 31, 1994, 1995, for the ten
months ended October 31, 1996 and the nine months ended September 30, 1996 and
1997:

<TABLE>
<CAPTION>
TEN MONTHS ENDED NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, OCTOBER 31, SEPTEMBER 30,
------------------------ ---------------- --------------------
1994 1995 1996 1996 1997
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Beginning balance --
Former parent company's
investment and
advances................. $423,551 $467,139 $ 384,997 $384,997 $ --
Net income.................... 95,920 39,193 84,559 74,168
Distribution of net income
through parent company's
investment and advances
account..................... (95,920) (39,193) (84,559) (74,168) --
-------- -------- --------- -------- --------
423,551 467,139 384,997 384,997 --
-------- -------- --------- -------- --------
Changes in other assets and
liabilities through the
accounts:
Depreciation and
amortization............. 26,389 30,154 15,093 13,717 --
Accounts receivable......... (24,711) 61,710 (6,585) (10,059) --
Inventories................. (13,802) 8,103 10,903 9,384 --
Prepaid expenses and other
current assets........... (1,259) 1,051 (820) 1,893 --
Other noncurrent assets..... (19) 13 34 18 --
Accounts payable............ (2,728) (2,578) 1,334 3,885 --
Accrued salaries, wages and
benefits................. (369) 197 2,248 1,309 --
Accrued advertising and
promotion................ 8,073 2,947 (168) 5,419 --
Other accrued liabilities... (4,424) 5,102 672 (997) --
Other....................... 379 (356) 1,132 270 --
Purchases of plant and
equipment,
net...................... (31,117) (24,201) (7,146) (8,475) --
-------- -------- --------- -------- --------
(43,588) 82,142 16,697 16,364 --
-------- -------- --------- -------- --------
Effect of merger
transaction................. -- -- (630,661) -- --
Transfer to common stock
Additional paid-in capital,
and foreign currency
translation adjustment on
November 1, 1996......... -- -- 262,361 -- --
-------- -------- --------- -------- --------
Ending balance --
Parent company's investment
and advances............. $467,139 $384,997 $ -- $368,633 $ --
======== ======== ========= ======== ========
</TABLE>

F-21
<PAGE> 101

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

(12) STOCK COMPENSATION PLANS

During 1995 and 1996 and in prior years, certain employees of the Company
were granted stock options under the American Home Products stock option plans.
These options had a ten-year term and generally vested one year from date of
grant. The American Home Products stock options awarded to Company employees
during 1996 or prior were exercised, canceled, or settled in cash by January 31,
1997.

Effective November 1, 1996, the Company adopted the International Home
Foods, Inc. 1996 Stock Option Plan ("the IHF Plan") which provides for the grant
of stock options at fair value on the date of grant. Generally, stock options
have a ten-year term and vest immediately or ratably over three years. Certain
options have been granted with an exercise price which increases by 8 percent
per year until the exercise date. The total number of shares of common stock
authorized for grant under the IHF Plan is 8,444,044.

The Company has adopted the disclosure-only provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation," but applies Accounting Principles
Board Opinion No. 25 and related interpretations in accounting for its plans. No
compensation expense was recognized for 1995, 1996 or for the first six months
in 1997. If the Company had elected to recognize compensation cost based on the
fair value of the options at the grant dates, consistent with the method
prescribed by SFAS No. 123, net income would have been reduced to the pro forma
amount indicated below:

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C> <C>
Net income As reported $39,193 $82,961
Pro forma $38,445 $81,735
Pro forma
income per
common
share -- $ 1.32
</TABLE>

Note: The pro forma disclosure shown above is not representative of the
effects on net income in future years.

The fair value of the American Home Products stock options used to compute
pro forma net income disclosures is the estimated present value at grant date
using the Black-Scholes option-pricing model with the following weighted-average
assumptions:

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Expected volatility....................................... 15.7% 15.0%
Expected term............................................. 4 years 4 years
Dividend yield............................................ 4.4% 4.3%
Risk-free interest rate................................... 6.1% 6.4%
</TABLE>

IHF options granted on November 1, 1996 were valued using the minimum value
method permitted under SFAS No. 123 for companies which do not have publicly
traded equity securities and the following assumptions: expected term of four
years, zero percent dividend yield, and six percent risk-free interest rate.

F-22
<PAGE> 102

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

Presented below is a summary of the status of the American Home Products'
options held by the Company's employees, and IHF stock options, for 1995 and
1996:

<TABLE>
<CAPTION>
1995 1996
---- ----
WEIGHTED WEIGHTED
SHARES AVERAGE EXERCISE SHARES AVERAGE EXERCISE
(000'S) PRICE PER SHARE (000'S) PRICE PER SHARE
<S> <C> <C> <C> <C>
American Home Products options:
Outstanding at beginning of year.......... 1,877 $30.21 1,471 $33.11
Granted................................... 510 $38.13 171 $52.99
Exercised................................. 843 $29.38 758 $32.64
Forfeited/Expired......................... 73 $36.73 12 $45.11
Settled................................... -- -- 150 *
Outstanding at end of year................ 1,471 $33.11 722 $34.20
IHF indexed options:
Granted................................... -- -- 4,832 $ 5.33
Forfeited**............................... -- -- -- --
Outstanding at December 31, 1996**........ -- -- 4,832 $ 5.38
IHF options exercisable at end of year...... -- -- 3,518 $ 5.38
IHF non-indexed options:
Granted................................... -- -- 1,751 $ 5.33
Forfeited................................. -- -- -- --
Outstanding at December 31, 1996.......... -- -- 1,751 $ 5.33
IHF options exercisable at end of year...... -- -- 39 $ 5.33
</TABLE>

- ---------------

* 150,000 options were settled for $61.19 per option which represents the
stock's fair value at November 1, 1996.

** 1,313,515 options were forfeited by an officer upon termination in February
1997.

The weighted-average fair value of American Home Products stock options
granted during 1995 and 1996 is $4.81 and $7.21 per option, respectively. The
weighted-average fair value of IHF non-indexed options granted on November 1,
1996 is $1.12 per option. The IHF indexed options, which provide for an eight
percent per annum increase in exercise price, have no value under the minimum
value method.

As of December 31, 1996, the 6,582,584 stock options outstanding under the
IHF plan including 1,313,515 options that were subsequently forfeited by a
former officer, have exercise prices ranging from $5.33 to $5.38 and a
weighted-average exercise price of $5.38. Such options have a remaining
contractual life of 10 years and 3,557,748 were exercisable at December 31,
1996.

In the third quarter of 1997, the Company recorded a non-cash stock option
compensation charge aggregating $51.9 million related to stock option
compensation including $49.7 million related to indexed stock options granted to
senior management and other employees. When granted, these indexed options had
exercise prices ranging from $5.33 to $5.76 per share that increased over time
at a rate of 8% per year. In the third quarter of 1997, the variable exercise
price of these options was fixed. The remaining $2.2 million relates to stock
options granted during the third quarter of 1997 having exercise prices below
the estimated fair market value of the Common Stock.

(13) COMMITMENTS AND CONTINGENCIES

The Company has ongoing royalty arrangements with several parties,
primarily representing licensing agreements for its wet spices business and for
the use of characters in the Company's canned pasta business. The accompanying
consolidated statements of income include royalty costs which amounted to
$2,065, $3,136

F-23
<PAGE> 103

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

and $2,113 for the years ended December 31, 1994, 1995, and 1996 and $1,632 and
$1,569 for the nine months ended September 30, 1996 and 1997, respectively.

There is also a royalty obligation related to the Company's licensing
agreement for its cereals business entered into in 1988. The agreement includes
a minimum annual royalty of $750, payable annually, as well as a $10,250 balloon
payment payable in January 1998. As of December 31, 1995 and 1996 and September
30, 1997, $9,873, $10,155 and $10,368, respectively, have been accrued towards
the annual minimum royalty for each of the periods and the appropriate shares of
the balloon obligation. There are no minimum royalty requirements after December
31, 1997; however, an ongoing royalty of ten percent of net cereal sales will
continue.

The Company leases certain facilities and equipment under operating leases.
Rental expenses, including rent related to the Company's lease with American
Home Products (see Note 11), aggregated $1,566, $1,868, and $1,884 for the years
ended December 31, 1994, 1995, and 1996, respectively. Future minimum lease
payments under noncancellable operating leases at December 31, 1996 are as
follows:

<TABLE>
<S> <C>
1997........................................................ $ 1,956
1998........................................................ 1,548
1999........................................................ 1,306
2000........................................................ 1,066
2001 and later years........................................ 6,451
-------
$12,327
=======
</TABLE>

In the ordinary course of business, the Company enters into contracts for
the purchase of certain of its raw materials and is involved in various pending
or threatened litigation and claims. The Company has responsibility for
environmental, safety, and cleanup obligations under various local, state and
federal laws, including the Comprehensive Environmental Response, Compensation
and Liability Act, commonly known as Superfund. The Company has been identified
as a potentially responsible party at two Superfund sites. Although the outcome
of any legal proceeding cannot be predicted with certainty, management believes
through its discussions with counsel and the United States Environmental
Protection Agency that its proportionate share of any liability arising from
such matters, or the resolution of any other pending or threatened litigation or
claims, in the aggregate will not have a material adverse effect on the
consolidated financial position, results of operations, or cash flows of the
Company.

(14) GUARANTOR FINANCIAL DATA:

The Company's Senior Subordinated Notes are fully and unconditionally
guaranteed by each of the Company's subsidiaries on a joint and several basis.
The Company has not presented separate financial statements and other
disclosures concerning each of the subsidiary guarantors because management has
determined that such information is not material to the holders of the Senior
Subordinated Notes.

Presented below is summarized combined financial information of the
subsidiary guarantors:

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
------------------- -------------
1995 1996 1997
(UNAUDITED)
<S> <C> <C> <C>
Current assets.............................................. $ 88,873 $ 91,835 $190,786
Noncurrent assets........................................... 156,193 254,729 357,730
Current liabilities......................................... 24,526 46,354 78,634
Noncurrent liabilities...................................... 225,280 248,052 242,615
</TABLE>

F-24
<PAGE> 104

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

<TABLE>
<CAPTION>
FOR THE YEARS ENDED FOR THE NINE FOR THE NINE
DECEMBER 31, MONTHS ENDED MONTHS ENDED
------------------------------ SEPTEMBER 30, SEPTEMBER 30,
1994 1995 1996 1996 1997
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net sales................................... $147,480 $131,950 $136,873 $ 98,437 $197,842
Gross profit................................ 69,754 65,066 58,382 44,227 72,785
Net income/(loss)........................... (7,607) (3,028) (1,054) 1,465 3,208
Net cash provided by operating activities... 3,803 32,379 11,540 25,613 22,678
Net cash used in investing activities....... (18,462) (12,467) (11,457) (6,879) (5,404)
Net cash provided by (used in) financing
activities................................ 14,659 (19,912) 1,029 (18,734) (14,464)
</TABLE>

(15) BUMBLE BEE ACQUISITION

On May 2, 1997 the Company agreed to acquire the ongoing canned seafood
business of Bumble Bee Seafoods, Inc. for approximately $163 million, including
transaction fees, in cash plus the assumption of certain liabilities estimated
to be between $30 and $40 million.

Bumble Bee is one of the world's largest distributors of canned seafood
products. Bumble Bee's principal products include canned tuna and salmon. To
expedite completion of the sale, Bumble Bee has filed for protection under
Chapter 11 of the Federal Bankruptcy Code. It is anticipated that under the
reorganization, Bumble Bee will continue to function on a business as usual
basis. Bumble Bee has obtained debtor-in-possession financing of $83.5 million,
which should allow Bumble Bee to maintain normal day to day operations,
including payment of its trade obligations.

(16) THIRD QUARTER EVENTS

(a) Effective July 1, 1997, the Company consummated the acquisition of
substantially all of the assets (the "Assets") of Bumble Bee Seafoods, Inc. and
its wholly-owned subsidiaries, Bumble Bee International, Inc., Santa Fe Springs
Holding Company and Commerce Distributing Company (CDC) (collectively, the
"Sellers"), pursuant to the terms of an Asset Purchase and Sale Agreement dated
as of May 1, 1997 (the "Agreement") by and among the Sellers, on the one hand,
and the Company and its wholly-owned subsidiary, Bumble Bee Acquisition
Corporation, on the other hand. The aggregate consideration paid for the Assets
was approximately $163 million in cash and the assumption of certain liabilities
of the Sellers, including trade payables and certain accrued liabilities. The
Assets consist primarily of inventory, accounts receivable, property, plant and
equipment and trademarks formerly used by the Sellers for the processing and
marketing of canned seafood products, principally tuna and salmon, including
processing facilities in Puerto Rico, Ecuador and California. The transaction
was approved by an order of the Federal Bankruptcy Court for the Southern
District of California on June 19, 1997, as part of the bankruptcy proceedings
of the Sellers.

Concurrent with the acquisition of the Assets, the Company amended and
restated its existing credit agreement with Chase Manhattan Bank as of July 1,
1997. The existing senior secured bank facilities were increased from $670
million (less a $13 million principal payment made in the first quarter of 1997)
to $737 million and the Company's Revolver was increased from $100 million to
$140 million. The Company financed the purchase of the Assets with the $80
million increase in the term facility, a $30 million draw on the Company's
Revolver, and the balance of the purchase price from the Company's available
cash balances as of the date of the closing.

The provisions of the new credit agreement provide that borrowings under
Tranches A and B are increased to $367.5 million, and $369.5 million
respectively and the previous Tranche C is included as part of Tranche B. The
final maturity dates of Tranche A, March 31, 2003, and the new Tranche B,
September 30, 2004, remained unchanged. Applicable margins on borrowings which
bear interest based on the LIBOR as defined, have been changed from 2.5% to 2%
on Tranche A and from 3% to 2.25% on Tranche B. The applicable margins under the
alternate base rate, as defined, have been changed from 1.5% to 1%, and 2% to

F-25
<PAGE> 105

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

1.25% on Tranche A and B, respectively. The new agreement also includes
financial covenants substantially similar related to consolidated leverage
ratio, as defined, consolidated interest coverage, as defined, consolidated
fixed charge coverage ratio, as defined, and limitations on indebtedness,
capital expenditures and payment of dividends.

Pro forma unaudited results for the nine months ended September 30, 1996
and 1997 assuming the Bumble Bee Acquisition had occurred at the beginning of
the respective periods would have been as follows:

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
------------------------
1996 1997
---------- ----------
(UNAUDITED)
<S> <C> <C>
Net sales................................................... $1,016,331 $1,022,947
Net income (loss)........................................... 75,734 (7,242)
Net income (loss) per common share.......................... 0.23 (0.02)
</TABLE>

In September 1997, the Company signed a letter of intent to acquire a
specialty canned seafood manufacturer and marketer for approximately $26.5
million in cash.

(b) In September 1997, the Company initiated the process of registering
shares of common stock under an initial public offering ("IPO"). The proceeds
from the sale of the securities would be used by the Company to pay off
borrowings under the Credit Agreement. In connection with the IPO, the Company
expects to amend its existing Credit Agreement, which is expected to result in
an extraordinary charge in the fourth quarter of 1997 of approximately $11.1,
net of related tax benefit.

Immediately prior to the IPO, the Company plans to effect a 5.3292 for one
reverse stock split of its current capital stock. In addition, the Company will
reduce the authorized shares of Common Stock to 300,000,000. All historical and
pro forma income per common share data has been adjusted to reflect the reverse
stock split.

(17) IMPACT OF RECENT ACCOUNTING STANDARDS

The American Institute of Certified Public Accountants issued Statement of
Position 96-1, "Environmental Remediation Liabilities" ("SOP 96-1") in October
1996. SOP 96-1 provides authoritative guidance on specific accounting issues in
connection with recognizing, measuring and disclosing environmental cleanup
liabilities. The Company adopted this SOP during the first quarter of 1997;
there was no impact on the Company's results of operations or financial position
upon adoption.

In June 1996, Statement of Financial Accounting Standards No. 125 (SFAS
125), "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities", was issued to provide accounting and reporting
standards for transfers and servicing of financial assets and extinguishments of
liabilities. This statement became effective for transfers and servicing of
financial assets and extinguishments of liabilities occurring after December 31,
1996. The Company does not anticipate that the adoption of this Statement will
have a material effect on the Financial Statements.

In March 1997, SFAS 128, "Earnings Per Share", was issued to establish
standards for computing and presenting earnings per share ("EPS"). The Statement
applies to entities with publicly held common stock or potential common stock
and excludes entities whose publicly traded securities include only debt. The
Statement is effective for financial statements issued for periods ending after
December 15, 1997; earlier application is not permitted. This statement will
require presentation of basic and diluted EPS. The Company anticipates that
diluted EPS in accordance with this statement would approximate EPS as reported.

F-26
<PAGE> 106

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

In June 1997, SFAS 130, "Reporting Comprehensive Income", was issued to
establish standards for reporting and displaying of comprehensive income and its
components in a full set of general-purpose financial statements. This statement
requires disclosure of the components of comprehensive income including, among
other things, foreign currency translation adjustments, minimum pension
liability items and unrealized gains and losses on certain investments in debt
and equity securities. The Company would be required to show components of
comprehensive income in a financial statement displayed as prominently as the
other required financial statements. The statement is effective for fiscal years
beginning after December 15, 1997. The Company anticipates compliance with this
Statement in 1998.

In June 1997, SFAS 131 "Disclosures About Segments of an Enterprise and
Related Information", was issued to establish standards for public business
enterprises reporting information regarding operating segments in annual and
interim financial statements issued to shareholders. It also establishes
standards for related disclosures about products and services, geographic areas
and major customers. This statement is effective for financial statements for
periods beginning after December 15, 1997. In the initial year of application,
comparative information for earlier years is to be restated. The Company
operates in one business segment which manufactures and markets a diversified
portfolio of shelf-stable food products, and accordingly, does not believe the
segment reporting aspect of this statement will impact their financial
statements.

(18) SUBSEQUENT EVENTS (UNAUDITED)

On October 1, 1997, the Company acquired Productos Del Monte from an
affiliate of Hicks Muse for 3,127,415 shares of Common Stock. The acquisition of
Productos Del Monte will be treated as a combination of entities under common
control. Accordingly, the historical accounting values of Productos Del Monte
will be carried over for financial accounting purposes.

On October 1, 1997, the Company acquired Creative Products, Inc. for
approximately $52 million in cash. The acquisition was funded through borrowings
under the Company's Senior Bank Facilities, and will be treated as a purchase
for financial accounting purposes.

F-27
<PAGE> 107

INDEPENDENT AUDITORS' REPORT

To the Board of Directors
of Bumble Bee Seafoods, Inc.:

We have audited the accompanying consolidated balance sheets of Bumble Bee
Seafoods, Inc. and subsidiaries as of December 31, 1995 and 1996, and the
related consolidated statements of operations and accumulated deficit, and cash
flows for each of the years in the three-year period ended December 31, 1996.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Bumble Bee
Seafoods, Inc. and subsidiaries as of December 31, 1995 and 1996, and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1996, in conformity with generally accepted
accounting principles.

The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in Note
6 to the consolidated financial statements, the Company's notes payable and
subordinated note payable were due and payable in May 1996; non-payment has
constituted events of default. The Company does not currently have the funds to
retire these obligations. Such conditions raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans related to
this matter are described in Note 6 to the consolidated financial statements.
The consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

KPMG PEAT MARWICK LLP

San Diego, California
April 11, 1997

F-28
<PAGE> 108

BUMBLE BEE SEAFOODS, INC.

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PAR VALUE INFORMATION)

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, JUNE 30,
1995 1996 1997
(UNAUDITED)
<S> <C> <C> <C>
ASSETS (NOTE 6)
Current Assets:
Cash...................................................... $ 2,815 $ 2,098 $ 2,443
Trade accounts receivable, less allowance for doubtful
accounts of $985 and $844 in 1995 and 1996,
respectively........................................... 36,053 32,174 29,419
Other receivables......................................... 1,148 607 --
Inventories (note 2)...................................... 82,300 82,312 61,621
Prepaid expenses.......................................... 4,775 4,758 15,679
-------- --------- ---------
Total current assets.............................. $127,091 $ 121,949 $ 109,162
Investment in SEAFMAN at cost (note 1)...................... $ 1,992 $ 1,992 $ 1,992
Property and equipment, net (note 3)........................ 21,367 20,308 18,986
Goodwill, less accumulated amortization of $30,174 and
$97,547 in 1995 and 1996, respectively.................... 140,635 73,262 71,967
Other assets................................................ 733 725 726
-------- --------- ---------
Total assets...................................... $291,818 $ 218,236 $ 202,833
======== ========= =========
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
Current liabilities:
Notes payable (note 6).................................... $100,150 $ 100,150 $ 93,500
Revolving line of credit (note 6)......................... 68,313 70,111 67,626
Accounts payable:
Trade and other (note 7)............................... 51,164 51,516 58,238
Unicord Public Company Limited (note 7)................ 7,514 7,062 6,580
Accrued liabilities.................................... 24,045 26,733 27,638
-------- --------- ---------
Total current liabilities......................... $251,186 $ 255,572 $ 253,582
Stockholder's equity (deficit) (note 6):
Common Stock, $1.00 par value; authorized, issued and
outstanding 35,000 shares.............................. 35 35 35
Additional paid-in capital................................ 121,965 121,965 121,965
Accumulated deficit....................................... (81,368) (159,336) (172,749)
-------- --------- ---------
Total stockholder's equity (deficit).............. 40,632 (37,336) (50,749)
-------- --------- ---------
Commitments, contingencies and subsequent event (notes 8
and 9)
Total liabilities and stockholder's equity
(deficit)....................................... $291,818 $ 218,236 $ 202,833
======== ========= =========
</TABLE>

See accompanying notes to consolidated financial statements.

F-29
<PAGE> 109

BUMBLE BEE SEAFOODS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
(IN THOUSANDS, EXCEPT SHARE INFORMATION)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
FOR YEARS ENDED DECEMBER 31, JUNE 30,
-------------------------------- -------------------------
1994 1995 1996 1996 1997
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Sales, net of allowances................. $410,192 $393,704 $ 395,607 $ 209,279 $ 179,014
Cost of sales (note 7)................... 285,409 273,888 275,678 142,605 127,521
-------- -------- ---------- --------- ---------
Gross profit........................... 124,783 119,816 119,929 66,674 51,493
Selling and promotional expenses......... 93,864 90,561 96,431 52,360 41,875
General and administrative expenses...... 14,592 13,419 14,459 6,738 9,882
Amortization and write-off of goodwill... 4,632 5,227 67,373 2,291 1,294
-------- -------- ---------- --------- ---------
Operating income (loss)................ 11,695 10,609 (58,334) 5,285 (1,558)
-------- -------- ---------- --------- ---------
Other expense:
Interest expense (note 6).............. 11,344 16,209 19,322 9,361 10,041
Other expense (income), net............ 502 1,620 (127) 9 1,631
-------- -------- ---------- --------- ---------
11,846 17,829 19,195 9,370 11,672
-------- -------- ---------- --------- ---------
Loss before income taxes............ (151) (7,220) (77,529) (4,085) (13,230)
Income taxes (note 4).................... 613 642 439 219 183
-------- -------- ---------- --------- ---------
Net loss............................... (764) (7,862) (77,968) (4,304) (13,413)
Accumulated deficit at beginning of
period................................. (72,742) (73,506) (81,368) (85,672) (159,336)
-------- -------- ---------- --------- ---------
Accumulated deficit at end of period..... $(73,506) $(81,368) $ (159,336) $(178,499) $(172,749)
======== ======== ========== ========= =========
</TABLE>

See accompanying notes to consolidated financial statements.

F-30
<PAGE> 110

BUMBLE BEE SEAFOODS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
FOR YEARS ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
---------------------------- -------------------------
1994 1995 1996 1996 1997
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net loss................................ $ (764) $(7,862) $(77,968) $ (4,304) $(13,413)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Depreciation and amortization........ 2,786 2,559 2,589 1,288 1,323
Amortization and write-off of
goodwill........................... 4,632 5,227 67,373 2,291 1,295
(Gain) loss on disposal of fixed
assets............................. (93) 13 -- -- --
Change in assets and liabilities:
(Increase) decrease in trade
accounts receivable and other
receivables..................... 690 (3,550) 4,420 (4,842) 2,783
Decrease (increase) in
inventories..................... (4,718) 138 (12) 25,304 20,691
Decrease (increase) in prepaid
expenses and other assets....... 1,426 (1,234) 25 401 (674)
Increase (decrease) in trade and
other payables.................. 1,745 (95) 352 (8,368) (9,961)
Decrease in Unicord Public Company
Limited payable................. (4,026) (1,174) (452) (14) (53)
Increase in accrued liabilities.... 3,900 4,508 7,188 2,905 841
------- ------- -------- -------- --------
Net cash provided by (used in)
operating activities.......... 5,578 (1,470) 3,515 14,661 2,832
------- ------- -------- -------- --------
Cash flows from investing activities:
Proceeds from sale of fixed assets...... 147 31 -- -- --
Acquisition of machinery and
equipment............................ (1,413) (1,152) (1,530) (889) (1)
------- ------- -------- -------- --------
Net cash used in investing
activities.................... (1,266) (1,121) (1,530) (889) (1)
------- ------- -------- -------- --------
Cash flows from financing activities:
Contribution of capital Unicord Public
Company Limited...................... -- 4,000 -- -- --
Principal proceeds from revolving line
of credit, net....................... 2,152 7,057 1,798 (10,480) (2,486)
Principal repayments on long-term
debt................................. (7,000) (8,000) (4,500) (4,500) --
------- ------- -------- -------- --------
Net cash provided by (used in)
financing activities.......... (4,848) 3,057 (2,702) (14,980) (2,486)
------- ------- -------- -------- --------
Net increase (decrease) in cash........... (536) 466 (717) (1,208) 345
Cash at beginning of period............... 2,885 2,349 2,815 2,815 2,098
------- ------- -------- -------- --------
Cash at end of period..................... $ 2,349 $ 2,815 $ 2,098 $ 1,607 $ 2,443
======= ======= ======== ======== ========
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest............................. $11,007 $13,369 $ 12,083 $ 6,174 $ 14,034
Income taxes......................... 681 716 387 4 128
</TABLE>

See accompanying notes to consolidated financial statements.

F-31
<PAGE> 111

BUMBLE BEE SEAFOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
DECEMBER 31, 1994, 1995 AND 1996

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND DESCRIPTION OF BUSINESS

Bumble Bee Seafoods, Inc. (the "Company" or "BBSI") was incorporated in the
state of Delaware on June 11, 1984 and commenced operations effective June 8,
1985. The Company produces, distributes and markets various canned seafoods and
seafood derivative products including tuna, salmon and pet foods. The Company
operates plants in Mayaguez, Puerto Rico and Santa Fe Springs, California.

In September 1989, in simultaneous transactions, Unicord Public Company
Limited ("Unicord"), a Thailand-based company, acquired all outstanding common
stock of Uni Group, Inc. ("UGI"), a Delaware corporation through a wholly-owned
subsidiary, Uni Group, Inc., a British Virgin Islands corporation, and UGI
acquired all outstanding stock of BBSI. The acquisition cost of $285,000 was
financed by approximately $35,000 of cash and $250,000 of notes payable.

The acquisition was accounted for as a purchase. Push-down accounting was
applied to reflect the fair market value of the assets acquired and liabilities
assumed, including liabilities incurred to finance the transaction.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the financial statements of
the Company and its wholly-owned subsidiaries, Bumble Bee International, Inc.
("BBII"), Commerce Distributing Company, and Santa Fe Springs Holding Company.
All significant intercompany balances and transactions have been eliminated in
consolidation.

The Company has a minority ownership interest in Sociedad Ecuatoriana de
Alimentos y Frigorificos Manta, C.A. ("SEAFMAN"), an Ecuador corporation. In
accordance with Ecuadorian regulations, the Company may not hold, either legally
or beneficially, a controlling interest in SEAFMAN or exercise significant
influence over its operations. The investment in SEAFMAN is accounted for at
cost, which approximates its value under the equity method of accounting.

INVENTORIES

Raw fish inventories are stated at specifically identified cost. All other
inventories are stated at weighted average cost, not in excess of market.

GOODWILL

Goodwill, which represents the excess of purchase price over fair value of
net assets acquired, is amortized on a straight-line basis over the expected
periods to be benefited, 40 years. The Company assesses the recoverability of
this intangible asset whenever events or changes in circumstances indicate that
the goodwill will not be recoverable. The amount of goodwill impairment, if any,
is measured as the amount by which the carrying amount of goodwill exceeds its
fair value.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost. Depreciation on machinery
and equipment is calculated using the straight-line method over the estimated
useful lives of the assets, generally ranging from three to ten years; buildings
are depreciated using the straight-line method over 20 years. Leasehold
improvements are amortized using the straight-line method over the shorter of
the lease term or the estimated useful life of the asset.

F-32
<PAGE> 112

BUMBLE BEE SEAFOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

INCOME TAXES

The Company accounts for income taxes under the asset and liability method.
Under this method, deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases and operating loss and tax credit carryforwards. Deferred
tax assets and liabilities are measured using enacted tax rates applied to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in operations in the period that includes the
enactment date. The Company maintains a valuation allowance against deferred tax
assets in order to reduce the amount of those deferred tax assets to an amount
that management believes will be realized. Management bases such estimates on
several factors, including the reversal of deferred tax liabilities, projected
future taxable income and tax planning strategies.

COMMITMENTS AND CONTINGENCIES

Liabilities for loss contingencies, including environmental remediation
costs, arising from claims, assessments, litigation, fines and penalties, and
other sources are recorded when it is probable that a liability has been
incurred and the amount of the assessment and/or remediation can be reasonably
estimated. Recoveries from third parties which are probable of realization are
separately recorded, and are not offset against the related liability in
accordance with Financial Accounting Standards Board Interpretation No. 39,
"Offsetting of Amounts Related to Certain Contracts."

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of all receivables, trade accounts payable and accrued
liabilities approximate fair value due to the short-term nature of such
instruments. It is not practicable to estimate the fair value of amounts due to
Unicord Public Company Limited, trade acceptances to foreign banks, and notes
payable as the payment of these obligations is dependent upon receiving proceeds
from the sale of substantially all of the assets of the Company and the approval
of the payment of certain portions of these obligations by the Federal
Bankruptcy Court (Notes 6, 7 and 9).

USE OF ESTIMATES

Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the consolidated financial
statements and the reported amounts of revenue and expenses during the reporting
period to prepare these consolidated financial statements in conformity with
generally accepted accounting principles. Actual results could differ from those
estimates.

IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF

The Company adopted the provisions of SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of
(SFAS No. 121), on January 1, 1996. This Statement requires that long-lived
assets and certain identifiable intangibles, including goodwill, be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying amount of an asset
to future net cash flows expected to be generated by the asset. If such assets
are considered to be impaired, the impairment to be recognized is measured by
the amount by which the carrying amounts of the assets exceed the fair values of
the assets. Assets to be disposed of are reported at the lower of the carrying
amount or fair value less costs to sell. In conjunction with the pending sale of
the assets of the Company (Note 9) and in applying the provisions of SFAS No.
121, the Company recorded a charge to operations of $63,000 for the year ended
December 31, 1996, representing the write-down of goodwill due to impairment.

F-33
<PAGE> 113

BUMBLE BEE SEAFOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NET LOSS PER COMMON SHARE

The computation of net loss per share is based on the weighted-average
number of outstanding common shares during each year. The weighted-average
number of common shares outstanding for the years ended December 31, 1994, 1995
and 1996 was 35,000.

INTERIM FINANCIAL INFORMATION:

The unaudited consolidated financial statements presented herein have been
prepared by the Company without audit and, in the opinion of management, contain
all adjustments necessary to present fairly and on a basis consistent with the
consolidated financial statements for the year ended December 31, 1996, the
Company's consolidated financial position as of June 30, 1997, and the results
of their operations and cash flows for the six months ended June 30, 1996 and
1997.

The results of operations for the six months ended June 30, 1997 are not
necessarily indicative of the results to be expected for the entire year.

RECLASSIFICATIONS

Certain 1994 and 1995 amounts have been reclassified to conform with the
1996 presentation.

(2) INVENTORIES

Inventories at December 31, 1995 and 1996 are comprised of the following:

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Raw fish, materials and supplies............................ $12,035 $13,615
Finished goods, primarily canned fish....................... 70,265 68,697
------- -------
$82,300 $82,312
======= =======
</TABLE>

(3) PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment at December 31, 1995 and 1996 consists of the
following:

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Land........................................................ $ 3,090 $ 3,090
Buildings................................................... 11,853 11,978
Machinery and equipment..................................... 19,616 20,892
Furniture and fixtures...................................... 1,181 1,192
Leasehold improvements...................................... 1,216 1,369
Construction in progress.................................... 254 218
-------- --------
37,210 38,739
Less accumulated depreciation and amortization.............. (15,843) (18,431)
-------- --------
$ 21,367 $ 20,308
======== ========
</TABLE>

(4) INCOME TAXES

The provision for income taxes are primarily the result of local taxes in
Puerto Rico related to the operations of BBII.

Differences between expected income taxes calculated using the federal
statutory rate of 35% in 1995 and 1996, and actual tax expense as disclosed in
the accompanying consolidated statements of operations and

F-34
<PAGE> 114

BUMBLE BEE SEAFOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

accumulated deficit are attributable primarily to Puerto Rico income tax and tax
benefits of operating losses not recognized, and the Puerto Rico and possession
tax credit.

The tax effects of temporary differences that give rise to significant
portions of deferred tax assets and liabilities are presented below:

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Deferred tax assets:
Operating loss carryforward............................... $ 53,932 $ 60,526
Accounts receivable reserves and allowances............... 597 996
Accrued liabilities -- not deductible for tax............. 1,884 1,464
Long-term debt -- OID difference.......................... 536 --
-------- --------
Total gross deferred tax assets................... 56,949 62,986
Less valuation allowance.................................... (48,079) (54,088)
Net deferred tax assets........................... 8,870 8,898
Deferred tax liabilities:
Property, plant and equipment, principally due to
differences in depreciation............................ $ 554 $ 504
Inventory allowances...................................... 327 319
Intangible assets......................................... 7,989 8,075
-------- --------
Total gross deferred tax liabilities.............. 8,870 8,898
-------- --------
Net deferred taxes................................ $ -- $ --
======== ========
</TABLE>

During the years ended December 31, 1995 and 1996, the valuation allowance
increased by $8,559 and $6,009, respectively. These changes in the valuation
allowance are primarily related to the increase in operating loss carryforward
amounts and the Company's historical levels of taxable income.

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the periods in
which those temporary differences become deductible. Management considers the
scheduled reversal of deferred tax liabilities, projected future taxable income
and tax planning strategies in making this assessment. Based on the level of
historical taxable income and projections for future taxable income over the
periods in which the deferred tax assets are deductible, management believes
that it is more likely than not that the Company will realize the benefits of
these deductible differences, net of the existing valuation allowance at
December 31, 1996. The amount of the deferred tax asset considered realizable,
however, could be reduced if estimates of future taxable income during the
carryforward period are reduced.

F-35
<PAGE> 115

BUMBLE BEE SEAFOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

As of December 31, 1996, the Company has net operating loss carryforwards
of approximately $154,811 for federal income tax reporting purposes are as
follows:

<TABLE>
<CAPTION>
YEAR OF OPERATING
EXPIRATION LOSS CARRYFORWARDS
<S> <C>
2004...................................................... $ 7,587
2005...................................................... 28,547
2006...................................................... 289
2007...................................................... 43,642
2008...................................................... 17,903
2009...................................................... 17,635
2010...................................................... 17,088
2011...................................................... 22,120
--------
$154,811
========
</TABLE>

The Company has available for state tax reporting purposes operating loss
carryforwards of approximately $90,601 as of December 31, 1996. The portion of
the state tax carryforwards related to California are subject to a California
law adopted in July 1991, which retroactively suspended utilization of
California net operating loss carryforwards for the years ended 1991 and 1992.
With respect to state net operating loss carryforwards incurred in California
and suspended in 1991 and 1992, the carryforward period is extended for two
years for losses incurred prior to 1991 and for one year for losses incurred in
1991. In 1993, California adopted a law reducing the net operating loss
carryforward period from 15 years to 5 years, retroactive to loss years
beginning with 1987.

(5) EMPLOYEE BENEFIT PLANS

The Company has a retirement savings plan under the provisions of Section
401(k) of the Internal Revenue Code as a benefit for employees. Company
contributions consist of matching contributions and discretionary contributions,
with the latter being terminated by the Board of Directors. The contributions
are placed in a trust. During the years ended December 31, 1994, 1995 and 1996,
the Company charged approximately $216, $216 and $219, respectively, to
operations for this plan.

BBII has a non-contributory defined benefit pension plan covering
substantially all of its employees. The benefits are based on the employee's
years of service and compensation prior to retirement. BBII's funding policy is
to contribute an amount neither less than the ERISA minimum funding requirement
nor more than the maximum that would be deductible for tax purposes. Assets of
the plan consist primarily of certificates of deposits and mutual funds.

Net pension costs for 1994, 1995 and 1996 include the following components:

<TABLE>
<CAPTION>
1994 1995 1996
<S> <C> <C> <C>
Service cost -- benefits earned during the period.......... $ 515 $ 551 $ 560
Interest cost on projected benefit obligation.............. 258 321 345
Actual return on plan assets............................... (208) (343) (341)
Net amortization of prior service cost and deferral of net
gain..................................................... 11 138 76
----- ----- -----
Net pension costs........................................ $ 576 $ 667 $ 640
===== ===== =====
</TABLE>

F-36
<PAGE> 116

BUMBLE BEE SEAFOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table sets forth the plans' funded status as of December 31,
1995 and 1996:

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested benefits........................................... $ 4,015 $ 4,032
Nonvested benefits........................................ 330 390
------- -------
Accumulated benefit obligation......................... $ 4,345 $ 4,422
======= =======
Projected benefit obligation................................ $(5,322) $(5,382)
Plan assets at fair market value............................ 3,285 3,696
------- -------
Projected benefit obligation in excess of plan
assets............................................... (2,037) (1,686)
Unrecognized net (gain) loss................................ 604 110
Unrecognized prior service cost............................. 17 14
Unrecognized transition obligation.......................... 50 42
Asset loss (gain)........................................... (115) (65)
------- -------
Accrued pension cost................................... $(1,481) $(1,585)
======= =======
</TABLE>

Assumptions used in accounting for the pension plan as of December 31, 1995
and 1996 were:

<TABLE>
<S> <C>
Discount rate............................................... 7.0%
Rate of increase in compensation............................ 4.0%
Expected rate of return on plan assets...................... 8.0%
</TABLE>

(6) NOTES PAYABLE

Notes payable are comprised of the following as of December 31, 1995 and
1996:

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Note payable A, prime rate plus 1.75%....................... $ 25,000 $ 20,500
Note payable B, prime rate plus 1.75%, with 0.5% increases
on November 15, 1995 and each six-month anniversary
thereafter................................................ 30,000 30,000
Subordinated note payable, including interest due at
maturity of $2,150 and $6,650, respectively............... 45,150 49,650
-------- --------
$100,150 $100,150
======== ========
</TABLE>

In May 1991, the Company negotiated amended and restated credit agreements.
Under the terms of the agreements, UGI contributed $43,000 additional capital to
BBSI. As restructured, the senior debt is secured by all assets of BBSI and by
the shares of BBSI, and the subordinated debt is secured by the shares of BBSI
and guaranteed by UGI.

Note payable A was for an original amount of $55,500 and bears interest at
the prime rate plus 1.75% (10.5% and 10.0% at December 31, 1995 and 1996,
respectively) with scheduled quarterly installments and a final payment of
$20,500 due on May 15, 1996. Note payable B was for $30,000 and bears interest
at the bank's prime rate plus 1.75% (12.0% and 11.5% at December 31, 1995 and
1996, respectively) with interest payable monthly and increasing 0.5% per annum
each six-month period beginning November 15, 1995, due on May 15, 1996.

Under terms of the amended and restated subordinated credit agreement, the
$65,000 due plus accrued interest of $7,382 at May 15, 1991 was reduced by a
cash payment of $22,000 with the remaining principal balance converted into a
note payable of $43,000. The note included no interest for four years and simple
interest at 5% in the fifth year, principal and interest due on May 16, 1996.

F-37
<PAGE> 117

BUMBLE BEE SEAFOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The terms of the amended and restated credit agreement include a revolving
loan facility with a maximum credit availability of $71,000 at the prime rate
plus 1.75% (10.5% and 10.0% at December 31, 1995 and 1996, respectively). The
amount outstanding under the revolving line of credit was $68,313 and $70,111 at
December 31, 1995 and 1996, respectively.

On May 15, 1996, the Company received notice from the lenders indicating it
was in default of the credit agreement and that all amounts due under the notes
were immediately due and payable. The notice further indicated that although the
lenders are entitled to immediately cease making advances under the revolving
line of credit, they would continue to make advances to the Company at their
discretion on a day-to-day basis for working capital purposes. The Company has
subsequently received notice from the lenders indicating that such advances will
continue up to the earlier of (a) April 25, 1997, or (b) five business days
after the termination in writing by any of the parties to the sale transaction
described in Note 9. Additionally, under the terms of the notice, the Company
continues to accrue the additional 3% penalty interest on the outstanding loans.
In February 1997, the Company paid $5,970 of the accrued penalty interest; any
additional penalty interest will be payable when the loans are paid in full.

During October 1995, the Company received from its subordinated lender
notice of acceleration, due to the senior note default, declaring the unpaid
portion of $43,000 and the accrued interest thereon immediately due and payable.
The notice also modified the interest rate so that interest accrues at 2% over
prime. On May 16, 1996, the subordinated note became due and payable in full and
as a result of non-payment, the Company is in default. The Company's
subordinated lender has orally indicated to management its intent to forbear,
for an unspecified period of time, from enforcing certain of its rights that
arise because of the default.

Management is pursuing a transaction, discussed more fully in Note 9, to
sell substantially all of the assets of the Company in order to satisfy, in
part, the debt obligations. The accompanying consolidated financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

(7) RELATED PARTY TRANSACTIONS

The Company purchases canned tuna and frozen tuna loins under agreements
with Unicord Public Company Limited. During the years ended December 31, 1994,
1995 and 1996, the Company purchased $46,850, $3,198 and $0, respectively, of
products under the above described agreements. In conjunction with these
purchases, the Company issued trade acceptances to foreign banks, which advanced
funds to Unicord Public Company Limited upon shipment of the product. Included
in trade and other accounts payable are amounts due to foreign banks under these
trade acceptance arrangements totaling approximately $27,831 as of December 31,
1995 and 1996. Net accounts payable due to Unicord Public Company Limited
related to the above purchases as of December 31, 1995 and 1996 were $7,514 and
$7,062, respectively. In addition, the Company purchases canned tuna and frozen
tuna loins from SEAFMAN. Total purchases from SEAFMAN during the years ended
December 31, 1994, 1995 and 1996 were $10,436, $11,377 and $11,832,
respectively. Net accounts payable related to the above purchases at December
31, 1995 and 1996 were $1,922 and $583, respectively.

(8) COMMITMENTS AND CONTINGENCIES

LEASE AGREEMENTS

As of December 31, 1996, the Company had noncancelable lease commitments
for certain buildings and equipment which are accounted for as operating leases
and expiring at various dates through 2005. Rent expense for the years ended
December 31, 1994, 1995 and 1996 was approximately $2,227, $2,261 and $2,201,
respectively.

The Company has also agreed to make payments under lease agreements for the
use of certain production machinery and equipment. The agreements require fixed
payments plus additional sums based on output.

F-38
<PAGE> 118

BUMBLE BEE SEAFOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Total payments made under these arrangements for the years ended December 31,
1994, 1995 and 1996 amounted to $315, $339 and $300, respectively.

The future minimum rental payments under these agreements are as follows:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
<S> <C> <C>
1997.............................................. $1,846
1998.............................................. 1,557
1999.............................................. 1,354
2000.............................................. 1,278
2001.............................................. 1,317
Thereafter........................................ 1,373
------
Total........................................... $8,725
======
</TABLE>

PURCHASE COMMITMENTS

In connection with its business, the Company and BBII routinely enter into
commitments relating to the purchase of certain finished goods and raw fish. As
of December 31, 1996, aggregate future commitments for such purchases are
estimated to be $15,716. These commitments expire on August 31, 1997. The
Company expects such purchase commitments to approximate market value and does
not anticipate any losses related to the commitments.

LEGAL MATTERS

The Company is involved in various claims and legal actions arising in the
ordinary course of business. In the opinion of management, based in part upon
advice from legal counsel, the ultimate disposition of these other matters will
not have a material adverse effect on the Company's consolidated financial
position, results of operations or liquidity.

(9) SUBSEQUENT EVENT (UNAUDITED)

On May 1, 1997 the Company entered into an Asset Purchase and Sale
Agreement (the "Agreement") by and among the Company and International Home
Foods, Inc. ("IHF") and its wholly-owned subsidiary, Bumble Bee Acquisition
Corporation. On May 2, 1997, the Company declared bankruptcy with the Federal
Bankruptcy Court for the Southern District of California. The transaction was
approved by an order of the Federal Bankruptcy Court for the Southern District
of California on June 19, 1997. On July 1, 1997, IHF consummated the acquisition
of substantially all of the assets (the "Assets") of the Company, pursuant to
the terms of the Agreement. The aggregate consideration paid for the assets was
approximately $160 million in cash and the assumption of certain liabilities of
the Company, including trade payables and certain accrued liabilities including
pension cost. The Assets consisted primarily of inventory, accounts receivable,
property, plant and equipment and trademarks formerly used by the Company for
the processing and marketing of canned seafood products, principally tuna and
salmon, including processing facilities in Puerto Rico and California.

F-39
<PAGE> 119

======================================================

NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE
BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING
STOCKHOLDER OR ANY OF THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER OF ANY SECURITIES OTHER THAN THOSE TO WHICH IT RELATES OR AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN ANY JURISDICTION
WHERE SUCH AN OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE
AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF.

------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 11
The Company........................... 16
Use of Proceeds....................... 17
Dividend Policy....................... 17
Dilution.............................. 17
Capitalization........................ 19
Selected Historical Financial and
Operating Information............... 20
Unaudited Pro Forma Financial
Statements.......................... 21
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 29
Business.............................. 37
Management............................ 50
Principal and Selling Stockholders.... 58
Certain Relationships and Related
Transactions........................ 60
Description of Capital Stock.......... 63
Description of Indebtedness........... 64
Shares Eligible for Future Sale....... 68
Certain U.S. Tax Considerations
Applicable to Non-U.S. Holders of
the Common Stock.................... 69
Underwriting.......................... 72
Legal Matters......................... 76
Experts............................... 77
Available Information................. 77
Index to Financial Statements......... F-1
</TABLE>

------------------

UNTIL , 1997 (25 DAYS AFTER THE COMMENCEMENT OF THIS OFFERING) ALL
DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES OFFERED HEREBY,
WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A
PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.

======================================================
======================================================

13,622,500 SHARES

[INTERNATIONAL HOME FOODS LOGO]

INTERNATIONAL HOME FOODS, INC.

COMMON STOCK

--------------------

PROSPECTUS
--------------------

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

BT ALEX. BROWN

CHASE SECURITIES INC.

CREDIT SUISSE FIRST BOSTON

GOLDMAN, SACHS & CO.

MORGAN STANLEY DEAN WITTER

, 1997
======================================================
<PAGE> 120

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE
WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE
SECURITIES LAWS OF ANY SUCH JURISDICTION.

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

SUBJECT TO COMPLETION, DATED OCTOBER 27, 1997

PROSPECTUS
, 1997

13,622,500 SHARES

[INTERNATIONAL HOME FOODS LOGO]

INTERNATIONAL HOME FOODS, INC.

COMMON STOCK

Of the 13,622,500 shares of common stock, $.01 par value ("Common Stock")
being offered hereby, 10,526,359 shares are being sold by International Home
Foods, Inc. ("International Home Foods," "IHF" or the "Company") and 3,096,141
shares are being sold by a subsidiary of American Home Products Corporation (the
"Selling Stockholder"). The Company will not receive any of the proceeds from
the sale of shares by the Selling Stockholder. See "Principal and Selling
Stockholders."

Of the 13,622,500 shares being offered hereby, 2,724,500 shares of Common
Stock are being offered initially outside the United States and Canada (the
"International Offering") by the International Managers (as defined herein) and
10,898,000 shares are being offered initially in the United States and Canada
(the "U.S. Offering" and, together with the International Offering, the
"Offering") by the U.S. Underwriters (as defined herein). The initial public
offering price and the underwriting discounts and commissions of the
International Offering and the U.S. Offering are identical. See "Underwriting."

Prior to the Offering, there has been no public market for the Common Stock.
It is currently estimated that the initial public offering price will be between
$18.00 and $20.00 per share. See "Underwriting" for information relating to the
factors to be considered in determining the initial public offering price.

The shares of Common Stock offered hereby have been approved for listing on
the New York Stock Exchange, subject to notice of issuance, under the symbol
"IHF."

SEE "RISK FACTORS" BEGINNING ON PAGE 11 HEREIN FOR A DISCUSSION OF CERTAIN
MATTERS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.

(2) Before deducting expenses estimated at $2,000,000, which will be paid by the
Company.

The shares offered hereby are being offered by the several International
Managers when, as and if delivered to and accepted by the International Managers
and subject to various prior conditions, including their right to reject orders
in whole or in part. It is expected that delivery of share certificates for the
shares offered hereby will be made in New York, New York on or about
, 1997.

DONALDSON, LUFKIN & JENRETTE

INTERNATIONAL

BT ALEX. BROWN INTERNATIONAL

CHASE MANHATTAN INTERNATIONAL LIMITED

CREDIT SUISSE FIRST BOSTON

GOLDMAN, SACHS INTERNATIONAL

MORGAN STANLEY DEAN WITTER

<PAGE> 121

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

- ------------------------------------------------------

NO ACTION HAS BEEN OR WILL BE TAKEN IN ANY JURISDICTION BY THE COMPANY, THE
SELLING STOCKHOLDER OR ANY UNDERWRITER THAT WOULD PERMIT A PUBLIC OFFERING OF
COMMON STOCK OR POSSESSION OR DISTRIBUTION OF THIS PROSPECTUS IN ANY
JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED, OTHER THAN IN THE UNITED
STATES. PERSONS INTO WHOSE POSSESSION THIS PROSPECTUS COMES ARE REQUIRED BY THE
COMPANY, THE SELLING STOCKHOLDER AND THE UNDERWRITERS TO INFORM THEMSELVES
ABOUT, AND TO OBSERVE ANY RESTRICTIONS AS TO, THE OFFERING AND THE DISTRIBUTION
OF THIS PROSPECTUS.

------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Prospectus Summary......................... 3
Risk Factors............................... 11
The Company................................ 16
Use of Proceeds............................ 17
Dividend Policy............................ 17
Dilution................................... 17
Capitalization............................. 19
Selected Historical Financial and Operating
Information.............................. 20
Unaudited Pro Forma Financial Statements... 21
Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................... 29
Business................................... 37
Management................................. 50
Principal and Selling Stockholders......... 58
Certain Relationships and Related
Transactions............................. 60
Description of Capital Stock............... 63
Description of Indebtedness................ 64
Shares Eligible for Future Sale............ 68
Certain U.S. Tax Considerations Applicable
to Non-U.S. Holders of the Common
Stock.................................... 69
Underwriting............................... 72
Legal Matters.............................. 76
Experts.................................... 77
Available Information...................... 77
Index to Financial Statements.............. F-1
</TABLE>

------------------

======================================================

13,622,500 SHARES

[INTERNATIONAL HOME FOODS LOGO]

INTERNATIONAL HOME FOODS, INC.

COMMON STOCK
--------------------

PROSPECTUS
--------------------

DONALDSON, LUFKIN & JENRETTE

INTERNATIONAL

BT ALEX. BROWN INTERNATIONAL

CHASE MANHATTAN INTERNATIONAL LIMITED

CREDIT SUISSE FIRST BOSTON

GOLDMAN, SACHS INTERNATIONAL

MORGAN STANLEY DEAN WITTER

, 1997

======================================================
<PAGE> 122

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The estimated expenses payable by International Home Foods, Inc. (the
"Registrant" or the "Company") in connection with the registration of the
securities offered hereby, other than underwriting discounts and commissions,
are as follows:

<TABLE>
<S> <C>
SEC Registration Fee........................................ $ 90,198
NASD Filing Fee............................................. 30,266
New York Stock Exchange Listing Fee......................... 250,000
Blue Sky Qualification Fees and Expenses.................... 5,000
Accounting Fees and Expenses................................ 750,000
Legal Fees and Expenses..................................... 150,000
Transfer Agent and Registrar Fees........................... 25,000
Printing and Engraving Expenses............................. 650,000
Miscellaneous............................................... 49,536
----------
Total............................................. $2,000,000
==========
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Article Ten of the Amended and Restated Certificate of Incorporation of the
Registrant provides that the Registrant shall indemnify its officers and
directors to the maximum extent allowed by the Delaware General Corporation Law.
Pursuant to Section 145 of the Delaware General Corporation Law, the Registrant
generally has the power to indemnify its current and former directors against
expenses and liabilities incurred by them in connection with any suit to which
they are, or are threatened to be made, a party by reason of their serving in
those positions so long as they acted in good faith and in a manner they
reasonably believed to be in, or not opposed to, the best interests of the
Registrant, and with respect to any criminal action, so long as they had no
reasonable cause to believe their conduct was unlawful. With respect to suits by
or in the right of the Registrant, however, indemnification is generally limited
to attorneys' fees and other expenses and is not available if the person is
adjudged to be liable to the Registrant, unless the court determines that
indemnification is appropriate. The statute expressly provides that the power to
indemnify authorized thereby is not exclusive of any rights granted under any
bylaw, agreement, vote of stockholders or disinterested directors, or otherwise.
The Registrant also has the power to purchase and maintain insurance for its
directors and officers and has purchased a policy providing such insurance.

The preceding discussion of the Registrant's Amended and Restated
Certificate of Incorporation and Section 145 of the Delaware General Corporation
Law is not intended to be exhaustive and is qualified in its entirety by the
Amended and Restated Certificate of Incorporation and Section 145 of the
Delaware General Corporation Law.

The Registrant has entered into indemnification agreements with the
Registrant's directors and officers. Pursuant to such agreements, the Registrant
will, to the extent permitted by applicable law, indemnify such persons against
all expenses, judgments, fines and penalties incurred in connection with the
defense or settlement of any actions brought against them by reason of the fact
that they were directors or officers of the Registrant or assumed certain
responsibilities at the direction of the Registrant.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

The following information relates to all securities issued or sold by the
Registrant in the last three years and not registered under the Securities Act.
Each of the transactions described below was conducted in reliance upon the
exemption from registration provided in Section 4(2) of the Securities Act and
the rules and

II-1
<PAGE> 123

regulations promulgated thereunder. Furthermore, each of the certificates
representing the Registrant's securities issued in connection with such
transactions contains a restrictive legend.

On November 1, 1996, the Company sold $400,000,000 of its 10 3/8% Senior
Subordinated Notes due 2006 (the "Senior Subordinated Notes"). The Senior
Subordinated Notes were sold to Chase Securities Inc. and BT Alex. Brown
Incorporated, as initial purchasers. The discount paid to the initial purchasers
equaled $12,000,000.

On November 1, 1996, the Company sold 49,538,258 shares of its common
stock, par value $0.01 per share (the "Common Stock") to a group of accredited
investors for $264,000,000.

On October 1, 1997, the Company issued 3,127,415 shares of Common Stock to
two accredited investors in exchange for all of the outstanding capital stock of
DM US Holding Corp.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits:

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
<C> <S>
1.1 -- Form of Underwriting Agreement.*
2.1.1 -- Agreement of Sale and Plan of Merger (the "Merger
Agreement") entered into among AHP Subsidiary Holding
Corporation, American Home Food Products, Inc., AHFP
Holding Corporation and AHFP Acquisition Corporation,
dated as of September 5, 1996.(1)
2.1.2 -- First Amendment to Agreement of Sale and Plan of Merger,
dated as of October 31, 1996.(1)
3.1 -- Amended and Restated Certificate of Incorporation of the
Company.*
3.2 -- Amended and Restated Bylaws of the Company.*
4.1 -- Form of Common Stock Certificate.*
4.2 -- Registration Rights Agreement made as of November 1, 1996
by and among the Company, AHP Subsidiary Holding
Corporation and AHFP Holding Corporation.(1)
4.3 -- Indenture, dated as of November 1, 1996 between the
Company and United States Trust Company of New York.(1)
5.1 -- Opinion of Vinson & Elkins L.L.P.*
10.1 -- Transitional Services Agreement dated as of November 1,
1996 between American Home Products Corporation and the
Company.(1)
10.2 -- Financial Advisory Agreement dated as of November 1, 1996
by and between the Company and Hicks, Muse & Company
Partners, L.P. ("HMCo").(1)
10.3 -- 1997 Stock Option Plan of the Company.*
10.4 -- Nonqualified Stock Option Agreement dated November 1,
1996 by and between the Company and C. Dean
Metropoulos.(1)
10.5 -- Nonqualified Stock Option Agreement dated November 1,
1996 by and between the Company and Kenneth J. Martin.(1)
10.6 -- Nonqualified Stock Option Agreement dated November 12,
1996 by and between the Company and M.L. Lowenkron.(1)
</TABLE>

II-2
<PAGE> 124

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
<C> <S>
10.7 -- Nonqualified Stock Option Agreement dated November 12,
1996 by and between the Company and Roger T. Staubach.(1)
10.8 -- Nonqualified Stock Option Agreement dated January 3,
1997, by and between the Company and L. Hollis Jones.(1)
10.9 -- Nonqualified Stock Option Agreement by and between the
Company and John H. Bess.#
10.10 -- Indemnification Agreement dated November 1, 1996 between
the Company and C. Dean Metropoulos, together with a
schedule identifying substantially identical documents
and setting forth the material details in which those
documents differ from the foregoing documents.(1)
10.11 -- Monitoring and Oversight Agreement dated as of November
1, 1996 by and between the Company and HMCo.(1)
10.12 -- Credit Agreement, dated November 1, 1996, amended and
restated July 1, 1997, by and among the Company and the
bank's signatory thereto.+
10.13 -- Agreement and Plan of Reorganization, dated October 1,
1997, between the Company and AHFP Holding Corporation.*
10.14 -- Custom Manufacturing Agreement, between Accra Pac, Inc.
and I.H.F.P., Inc.#
10.15 -- Amended and Restated Jams Manufacturing Agreement, dated
March 3, 1997, between Roseland Manufacturing, Inc. and
the Company.*
10.16 -- Asset Purchase and Sale Agreement, dated May 1, 1997, by
and among Bumble Bee Seafoods, Inc., Bumble Bee
International, Inc., Commerce Distributing Company, Santa
Fe Springs Holding Company, the Company and Bumble Bee
Acquisition Corporation.(2)
11.1 -- Statement Re: Computation Historical and Pro Forma
Historical of Per Share Earnings.*
11.2 -- Statement Re: Computation of Pro Forma Per Share Earnings
for Recapitalization.*
21.1 -- Subsidiaries of the Company.*
23.1 -- Consent of Coopers & Lybrand L.L.P., Independent
Accountants.*
23.2 -- Consent of Arthur Andersen LLP, Independent Public
Accountants.*
23.3 -- Consent of KPMG Peat Marwick LLP, Independent
Accountants.*
23.4 -- Consent of Vinson & Elkins L.L.P. (included in its
opinion filed as Exhibit 5.1 hereto).*
24.1 -- Powers of Attorney.+
27.1 -- Financial Data Schedule.*
</TABLE>

- ---------------

* Filed herewith.

# To be filed by amendment.

+ Previously filed.

(1) Incorporated by reference to the Company's Registration Statement on Form
S-4, dated February 19, 1997, File No. 333-18859.

(2) Incorporated by reference to the Company's Current Report on Form 8-K, dated
July 16, 1997, File No. 333-18859.

II-3
<PAGE> 125

ITEM 17. UNDERTAKINGS

The undersigned Registrant also hereby undertakes that:

(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

II-4
<PAGE> 126

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Company has duly caused this Amendment No. 1 to Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Parsippany, State of New Jersey, on the 27th day of October, 1997.

INTERNATIONAL HOME FOODS, INC.

By: /s/ ALAN B. MENKES

----------------------------------

Alan B. Menkes,
Director

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to Registration Statement has been signed by the following person in the
capacities and on the date indicated.

<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<C> <S> <C>

* Chairman of the Board and October 27, 1997
- ----------------------------------------------------- Chief Executive Officer
C. Dean Metropoulos (Principal Executive Officer)

* Chief Financial Officer October 27, 1997
- ----------------------------------------------------- (Principal Financial and
N. Michael Dion Accounting Officer)

* Director October 27, 1997
- -----------------------------------------------------
L. Hollis Jones

* Director October 27, 1997
- -----------------------------------------------------
Thomas O. Hicks

* Director October 27, 1997
- -----------------------------------------------------
Charles W. Tate

/s/ ALAN B. MENKES Director October 27, 1997
- -----------------------------------------------------
Alan B. Menkes

* Director October 27, 1997
- -----------------------------------------------------
Michael J. Levitt

* Director October 27, 1997
- -----------------------------------------------------
M.L. Lowenkron

* Director October 27, 1997
- -----------------------------------------------------
Roger T. Staubach

*By: /s/ ALAN B. MENKES
-----------------------------------------------
Alan B. Menkes
Attorney-in-Fact
</TABLE>

II-5
<PAGE> 127
INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
<C> <S>

1.1 -- Form of Underwriting Agreement.*
2.1.1 -- Agreement of Sale and Plan of Merger (the "Merger
Agreement") entered into among AHP Subsidiary Holding
Corporation, American Home Food Products, Inc., AHFP
Holding Corporation and AHFP Acquisition Corporation,
dated as of September 5, 1996.(1)
2.1.2 -- First Amendment to Agreement of Sale and Plan of Merger,
dated as of October 31, 1996.(1)
3.1 -- Amended and Restated Certificate of Incorporation of the
Company.*
3.2 -- Amended and Restated Bylaws of the Company.*
4.1 -- Form of Common Stock Certificate.*
4.2 -- Registration Rights Agreement made as of November 1, 1996
by and among the Company, AHP Subsidiary Holding
Corporation and AHFP Holding Corporation.(1)
4.3 -- Indenture, dated as of November 1, 1996 between the
Company and United States Trust Company of New York.(1)
5.1 -- Opinion of Vinson & Elkins L.L.P.*
10.1 -- Transitional Services Agreement dated as of November 1,
1996 between American Home Products Corporation and the
Company.(1)
10.2 -- Financial Advisory Agreement dated as of November 1, 1996
by and between the Company and Hicks, Muse & Company
Partners, L.P. ("HMCo").(1)
10.3 -- 1997 Stock Option Plan of the Company.*
10.4 -- Nonqualified Stock Option Agreement dated November 1,
1996 by and between the Company and C. Dean
Metropoulos.(1)
10.5 -- Nonqualified Stock Option Agreement dated November 1,
1996 by and between the Company and Kenneth J. Martin.(1)
10.6 -- Nonqualified Stock Option Agreement dated November 12,
1996 by and between the Company and M.L. Lowenkron.(1)
10.7 -- Nonqualified Stock Option Agreement dated November 12,
1996 by and between the Company and Roger T. Staubach.(1)
10.8 -- Nonqualified Stock Option Agreement dated January 3,
1997, by and between the Company and L. Hollis Jones.(1)
10.9 -- Nonqualified Stock Option Agreement by and between the
Company and John H. Bess.#
10.10 -- Indemnification Agreement dated November 1, 1996 between
the Company and C. Dean Metropoulos, together with a
schedule identifying substantially identical documents
and setting forth the material details in which those
documents differ from the foregoing documents.(1)
10.11 -- Monitoring and Oversight Agreement dated as of November
1, 1996 by and between the Company and HMCo.(1)
10.12 -- Credit Agreement, dated November 1, 1996, amended and
restated July 1, 1997, by and among the Company and the
bank's signatory thereto.+
10.13 -- Agreement and Plan of Reorganization, dated October 1,
1997, between the Company and AHFP Holding Corporation.*
</TABLE>

<PAGE> 128

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
<C> <S>
10.14 -- Custom Manufacturing Agreement, between Accra Pac, Inc.
and I.H.F.P., Inc.#
10.15 -- Amended and Restated Jams Manufacturing Agreement, dated
March 3, 1997, between Roseland Manufacturing, Inc. and
the Company.*
10.16 -- Asset Purchase and Sale Agreement, dated May 1, 1997, by
and among Bumble Bee Seafoods, Inc., Bumble Bee
International, Inc., Commerce Distributing Company, Santa
Fe Springs Holding Company, the Company and Bumble Bee
Acquisition Corporation.(2)
11.1 -- Statement Re: Computation Historical and Pro Forma
Historical of Per Share Earnings.*
11.2 -- Statement Re: Computation of Pro Forma Per Share Earnings
for Recapitalization.*
21.1 -- Subsidiaries of the Company.*
23.1 -- Consent of Coopers & Lybrand L.L.P., Independent
Accountants.*
23.2 -- Consent of Arthur Andersen LLP, Independent Public
Accountants.*
23.3 -- Consent of KPMG Peat Marwick LLP, Independent
Accountants.*
23.4 -- Consent of Vinson & Elkins L.L.P. (included in its
opinion filed as Exhibit 5.1 hereto).*
24.1 -- Powers of Attorney.+
27.1 -- Financial Data Schedule.*
</TABLE>

- ---------------

* Filed herewith.

# To be filed by amendment.

+ Previously filed.

(1) Incorporated by reference to the Company's Registration Statement on Form
S-4, dated February 19, 1997, File No. 333-18859.

(2) Incorporated by reference to the Company's Current Report on Form 8-K, dated
July 16, 1997, File No. 333-18859.

<PAGE> 1

13,622,500 SHARES

INTERNATIONAL HOME FOODS, INC.

COMMON STOCK

UNDERWRITING AGREEMENT
<PAGE> 2

13,622,500 Shares

INTERNATIONAL HOME FOODS, INC.

Common Stock

UNDERWRITING AGREEMENT

__________, 1997

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
BT ALEX. BROWN INCORPORATED
CHASE SECURITIES, INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
GOLDMAN, SACHS & CO.
MORGAN STANLEY & CO. INCORPORATED
As representatives of the several Underwriters
named in Schedule I hereto
c/o Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue
New York, New York 10172

DONALDSON, LUFKIN & JENRETTE
INTERNATIONAL LIMITED
BT ALEX. BROWN INTERNATIONAL PLC
CHASE MANHATTAN SECURITIES LIMITED
CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
GOLDMAN, SACHS INTERNATIONAL
MORGAN STANLEY & CO. INTERNATIONAL
As representatives of the several Underwriters
named in Schedule I hereto
c/o Donaldson, Lufkin & Jenrette International Limited
99 Bishopsgate
London, EC2M-3YM, England
<PAGE> 3
Dear Sirs:

International Home Foods, Inc., a Delaware corporation (the
"COMPANY"), proposes to issue and sell to the several Underwriters (as defined
below), 10,526,539 shares of its common stock, par value $.01 per share, and a
stockholder of the Company named in Schedule I hereto (the "SELLING
STOCKHOLDER") proposes to sell to the several Underwriters an 3,091,141 shares
of common stock of the Company (the "U.S. FIRM SHARES"). It being understood
that subject to the conditions hereinafter stated, 10,898,000 Firm Shares (the
"U.S. FIRM SHARES") will be sold to the several U.S. Underwriters named in
Schedule II hereto (the "U.S. UNDERWRITERS") in connection with the offering
and sale of such U.S. Firm Shares in the United States and Canada to United
States and Canadian Persons (as such terms are defined in the Agreement between
U.S. Underwriters and International Managers of even date herewith), and
2,724,500 Firm Shares (the "INTERNATIONAL FIRM SHARES") will be sold to the
several International Managers named in Schedule III hereto (the "INTERNATIONAL
MANAGERS") in connection with the offering and sale of such International
Shares outside the United States and Canada to persons other than the United
States and Canadian Persons. Donaldson, Lufkin & Jenrette Securities
Corporation, BT Alex. Brown Incorporated, Chase Securities Inc., Credit Suisse
First Boston Corporation, Goldman, Sachs & Co. and Morgan Stanley & Co.
Incorporated shall act as representatives (the "U.S. REPRESENTATIVES") of the
several U.S. Underwriters, and Donaldson, Lufkin & Jenrette International
Limited, BT Alex. Brown International, a Division of Bankers Trust PLC, Chase
Manhattan International Limited, Credit Suisse First Boston (Europe) Limited,
Goldman, Sachs International and Morgan Stanley & Co. International, shall act
as representatives of the several International Managers. The U.S.
Underwriters and the International Managers are hereinafter collectively
referred to as the "UNDERWRITERS". The Company and the Selling Stockholder are
hereinafter sometimes referred to collectively as the "SELLERS".

The Company also proposes to issue and sell not more than 2,043,374
shares of Common Stock and the Selling Stockholder proposes to sell not more
than 464,421 shares of common stock (or not more than 2,043,375 shares in the
aggregate) (collectively, the "ADDITIONAL SHARES"), if requested by the U.S.
Underwriters as provided in Section 2 hereof. The Firm Shares and the
Additional Shares are hereinafter referred to collectively as the "SHARES". The
shares of common stock of the Company to be outstanding after giving effect to
the sales contemplated hereby are hereinafter referred to as the "COMMON
STOCK".

SECTION 1. Registration Statement and Prospectus. The Company
has prepared and filed with the Securities and Exchange Commission (the
"COMMISSION") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "ACT"), a registration statement on Form S-1, including a
prospectus, relating to the Shares, which may be amended. The registration
statement contains two prospectuses to be used in connection with the offering
and sale of the shares: the U.S. Prospectus to be used in connection with the
offering and sale of shares in the United States and Canada to United Stated
and Canadian Persons, and the international prospectus, to be used in
connection

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with the offering and sale of Shares outside the United States and Canada to
person other than United States and Canadian Persons. The international
prospectus is identical to the U.S. prospectus except for the front and back
cover pages. The registration statement, as amended at the time it became
effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Act, is hereinafter collectively referred to as the "REGISTRATION
STATEMENT"; and the U.S. prospectus and the international prospectus in the
respective forms first used to confirm sales of Shares are hereinafter referred
to as the "PROSPECTUS". If the Company has filed or is required pursuant to
the terms hereof to file a registration statement pursuant to Rule 462(b) under
the Act registering additional shares of Common Stock (a "RULE 462(B)
REGISTRATION STATEMENT"), then, unless otherwise specified, any reference
herein to the term "Registration Statement" shall be deemed to include such
Rule 462(b) Registration Statement.

SECTION 2. Agreements to Sell and Purchase and Lock-Up
Agreements. On the basis of the representations and warranties contained in
this Agreement, and subject to its terms and conditions, (i) the Company agrees
to issue and sell 10,526,359 Firm Shares, (ii) the Selling Stockholder agrees
to sell 3,096,141 Firm Shares and (iii) each Underwriter agrees, severally and
not jointly, to purchase from each Seller at a price per Share of $______ (the
"PURCHASE PRICE") the number of Firm Shares (subject to such adjustments to
eliminate fractional shares as you may determine) set forth opposite the name
of such Underwriter in Schedules II and III hereto.

On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions , the Company agrees to
issue and sell up to 1,578,974 of the Additional Shares and the Selling
Stockholder agrees to sell up to 464,421 of the Additional Shares and the U.S.
Underwriters shall have the right to purchase, severally and not jointly, up to
2,043,375 Additional Shares from the Company and the Selling Stockholder at the
Purchase Price. Additional Shares may be purchased solely for the purpose of
covering over-allotments made in connection with the offering of the Firm
Shares. The U.S. Underwriters may exercise their right to purchase Additional
Shares in whole or in part from time to time by giving written notice thereof
to the Company and the Selling Stockholder within 30 days after the date of
this Agreement; provided, however, that in the event that the U.S. Underwriters
do no exercise their over-allotment option in full, the first 464,421
Additional Shares shall be purchased from the Selling Stockholder, with the
remainder, if any, to be purchased from the Company. The U.S. Representatives
shall give any such notice on behalf of the U.S. Underwriters and such notice
shall specify the aggregate number of Additional Shares to be purchased
pursuant to such exercise and the date for payment and delivery thereof, which
date shall be a business day (i) no earlier than one full business day after
such notice has been given (and, in any event, no earlier than the Closing Date
(as hereinafter defined)) and (ii) no later than ten business days after such
notice has been given. If any Additional Shares are to be purchased, each
U.S. Underwriter, severally and not jointly,

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<PAGE> 5
agrees to purchase from each Seller the number of Additional Shares (subject to
adjustment to eliminate fractional shares as you may determine) which bears the
same proportion to the total number of Additional Shares to be purchased from
such Seller as the number of U.S. Firm Shares set forth opposite the name of
such U.S. Underwriter in Schedule I bears to the total number of U.S. Firm
Shares.

Each Seller hereby agrees, severally and not jointly, not to (i)
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other arrangement
that transfers all or a portion of the economic consequences associated with
the ownership of any Common Stock (regardless of whether any of the
transactions described in clause (i) or (ii) is to be settled by the delivery
of Common Stock, or such other securities, in cash or otherwise), except to the
Underwriters pursuant to this Agreement, for a period of 180 days after the
date of the Prospectus without the prior written consent of Donaldson, Lufkin &
Jenrette Securities Corporation. Notwithstanding the foregoing, during such
period (i) the Company may grant stock options pursuant to the Company's
existing stock option plan consistent with past practice and (ii) the Company
may issue shares of Common Stock upon the exercise of an option or warrant or
the conversion of a security outstanding on the date hereof. The Company also
agrees not to file any registration statement with respect to any shares of
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock for a period of 180 days after the date of the Prospectus
without the prior written consent of Donaldson, Lufkin & Jenrette Securities
Corporation. In addition, the Selling Stockholder agrees that, for a period of
180 days after the date of the Prospectus without the prior written consent of
Donaldson, Lufkin & Jenrette Securities Corporation, it will not make any
demand for, or exercise any right with respect to, the registration of any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock. The Company shall, prior to or concurrently
with the execution of this Agreement, deliver an agreement executed by (i) the
Selling Stockholder, (ii) each of the directors and officers of the Company and
(iii) each stockholder listed on Annex I hereto to the effect that such person
will not, during the period commencing on the date such person signs such
agreement and ending 180 days after the date of the Prospectus, without the
prior written consent of Donaldson, Lufkin & Jenrette Securities Corporation,
(A) engage in any of the transactions described in the first sentence of this
paragraph or (B) make any demand for, or exercise any right with respect to,
the registration of any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock. In addition, each such
director, officer, and stockholder may make a bona fide gift or gifts or may
make a distribution to limited partners or shareholders provided that such
transferee or transferees similarly agree in writing for the benefit of the
Representatives to the effect set forth in (A) and (B) above for a period of
180 days after the date of the Prospectus.

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<PAGE> 6
The Company hereby confirms its engagement of Donaldson, Lufkin &
Jenrette Securities Corporation ("DLJ") as, and DLJ hereby confirms its
agreement with the Company to render services as, a "qualified independent
underwriter", within the meaning of Section (b)(15) of Rule 2720 of the
National Association of Securities Dealers, Inc. with respect to the offering
and sale of the Shares. DLJ, solely in its capacity as the qualified
independent underwriter and not otherwise, is referred to herein as the "QIU".
As compensation for the services of the QIU hereunder, the Company agrees to
pay the QIU $5,000 on the Closing Date. The price at which the Shares will be
sold to the public shall not be higher than the maximum price recommended by
the QIU.

SECTION 3. Terms of Public Offering. The Sellers are advised by
you that the Underwriters propose (i) to make a public offering of their
respective portions of the Shares as soon after the execution and delivery of
this Agreement as in your judgment is advisable and (ii) initially to offer the
Shares upon the terms set forth in the Prospectus.

SECTION 4. Delivery and Payment. Delivery to the Underwriters
of and payment for the Firm Shares shall be made at 9:00 A.M., New York City
time, on __________ , 1997 (the "CLOSING DATE") at such place as you shall
designate. The Closing Date and the location of delivery of and payment for
the Firm Shares may be varied by agreement between the U.S. Representatives and
the Company.

Delivery to the U.S. Underwriters of and payment for any Additional
Shares to be purchased by the U.S. Underwriters shall be made at such place as
the U.S. Representatives shall designate at 9:00 A.M., New York City time, on
the date specified in the applicable exercise notice given by you pursuant to
Section 2 (an "OPTION CLOSING DATE"). Any such Option Closing Date and the
location of delivery of and payment for such Additional Shares may be varied by
agreement between the U.S. Representatives and the Company.

Certificates for the Shares shall be registered in such names and
issued in such denominations as you shall request in writing not later than two
full business days prior to the Closing Date or an Option Closing Date, as the
case may be. Such certificates shall be made available to you for inspection
not later than 9:30 A.M., New York City time, on the business day prior to the
Closing Date or the applicable Option Closing Date, as the case may be.
Certificates in definitive form evidencing the Shares shall be delivered to you
on the Closing Date or the applicable Option Closing Date, as the case may be,
with any transfer taxes thereon duly paid by the respective Sellers, for the
respective accounts of the several Underwriters, against payment to the Sellers
of the Purchase Price therefor by wire transfer of Federal or other funds
immediately available in New York City.

SECTION 5. Agreements of the Company. The Company agrees with
you:

(a) To advise you promptly and, if requested by you, to confirm
such advice in writing, (i) of any request by the Commission for amendments to
the Registration Statement or amendments or supplements to the Prospectus or
for additional information,

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<PAGE> 7
(ii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the suspension of
qualification of the Shares for offering or sale in any jurisdiction, or the
initiation of any proceeding for such purposes, (iii) when any amendment to the
Registration Statement becomes effective, (iv) if the Company is required to
file a Rule 462(b) Registration Statement after the effectiveness of this
Agreement, when the Rule 462(b) Registration Statement has become effective and
(v) of the happening of any event during the period referred to in Section 5(d)
below which makes any statement of a material fact made in the Registration
Statement or the Prospectus untrue or which requires any additions to or
changes in the Registration Statement or the Prospectus in order to make the
statements therein not misleading. If at any time the Commission shall issue
any stop order suspending the effectiveness of the Registration Statement, the
Company will make every reasonable effort to obtain the withdrawal or lifting
of such order at the earliest possible time.

(b) To furnish to you three signed copies of the Registration
Statement as first filed with the Commission and of each amendment to it,
including all exhibits, and to furnish to you and each Underwriter designated
by you such number of conformed copies of the Registration Statement as so
filed and of each amendment to it, with and without exhibits, as you may
reasonably request.

(c) To prepare the Prospectus, the form and substance of which
shall be satisfactory to you, and to file the Prospectus in such form with the
Commission within the applicable period specified in Rule 424(b) under the Act;
during the period specified in Section 5(d) below, not to file any further
amendment to the Registration Statement and not to make any amendment or
supplement to the Prospectus of which you shall not previously have been
advised or to which you shall reasonably object after being so advised; and,
during such period, to prepare and file with the Commission, promptly upon your
reasonable request, any amendment to the Registration Statement or amendment or
supplement to the Prospectus which may be necessary or advisable in connection
with the distribution of the Shares by you, and to use its reasonable efforts
to cause any such amendment to the Registration Statement to become promptly
effective.

(d) Promptly after the Registration Statement becomes effective
and from time to time thereafter for such period as in the opinion of counsel
for the Underwriters a prospectus is required by law to be delivered in
connection with sales by an Underwriter or a dealer, to furnish in New York
City to each Underwriter and any dealer as many copies of the Prospectus (and
of any amendment or supplement to the Prospectus) as such Underwriter or dealer
may reasonably request.

(e) If during the period specified in Section 5(d), any event
shall occur or condition shall exist as a result of which, in the opinion of
counsel for the Underwriters, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if, in the opinion of counsel for the Underwriters, it is necessary to amend
or supplement the Prospectus to comply with applicable law,

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<PAGE> 8
forthwith to prepare and file with the Commission an appropriate amendment or
supplement to the Prospectus so that the statements in the Prospectus, as so
amended or supplemented, will not in the light of the circumstances when it is
so delivered, be misleading, or so that the Prospectus will comply with
applicable law, and to furnish to each Underwriter and to any dealer as many
copies thereof as such Underwriter or dealer may reasonably request.

(f) Prior to any public offering of the Shares, to cooperate with
you and counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters and
by dealers under the state securities or Blue Sky laws of such jurisdictions as
you may request, to continue such registration or qualification in effect so
long as required for distribution of the Shares and to file such consents to
service of process or other documents as may be necessary in order to effect
such registration or qualification; provided, however, that the Company shall
not be required in connection therewith to qualify as a foreign corporation in
any jurisdiction in which it is not now so qualified or to take any action that
would subject it to general consent to service of process or taxation other
than as to matters and transactions relating to the Prospectus, the
Registration Statement, any preliminary prospectus or the offering or sale of
the Shares, in any jurisdiction in which it is not now so subject.

(g) To mail and make generally available to its stockholders as
soon as practicable an earnings statement covering the twelve-month period
ending December 31, 1998, that shall satisfy the provisions of Section 11(a) of
the Act, and to advise you in writing when such statement has been so made
available.

(h) During the period of three years after the date of this
Agreement, to furnish to you as soon as available copies of all reports or
other communications furnished to the record holders of Common Stock or
furnished to or filed with the Commission or any national securities exchange
on which any class of securities of the Company is listed and such other
publicly available information concerning the Company and its subsidiaries as
you may reasonably request.

(i) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of the Sellers' obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel, the Company's accountants and any Selling Stockholder's
counsel (in addition to the Company's counsel) in connection with the
registration and delivery of the Shares under the Act and all other fees and
expenses in connection with the preparation, printing, filing and distribution
of the Registration Statement (including financial statements and exhibits),
any preliminary prospectus, the Prospectus and all amendments and supplements
to any of the foregoing, including the mailing and delivering of copies thereof
to the Underwriters and dealers in the quantities specified herein, (ii) all
costs and expenses related to the transfer and delivery of the Shares to the
Underwriters, including any

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<PAGE> 9
transfer or other taxes payable thereon, (iii) all costs of printing or
producing this Agreement and any other agreements or documents in connection
with the offering, purchase, sale or delivery of the Shares, (iv) all expenses
in connection with the registration or qualification of the Shares for offer
and sale under the securities or Blue Sky laws of the several states and all
costs of printing or producing any Preliminary and Supplemental Blue Sky
Memoranda in connection therewith (including the filing fees and reasonable
fees and disbursements of counsel for the Underwriters in connection with such
registration or qualification and memoranda relating thereto), (v) the filing
fees and reasonable disbursements of counsel for the Underwriters in connection
with the review and clearance of the offering of the Shares by the National
Association of Securities Dealers, Inc., (vi) all fees and expenses in
connection with the preparation and filing of the registration statement on
Form 8-A relating to the Common Stock and all costs and expenses incident to
the listing of the Shares on the New York Stock Exchange, Inc. (the "NYSE"),
(vii) the cost of printing certificates representing the Shares, (viii) the
costs and charges of any transfer agent, registrar and/or depositary, (ix) the
fees and expenses of the QIU (including the fees and disbursements of counsel
for the QIU), and (x) all other costs and expenses incident to the performance
of the obligations of the Company and the Selling Stockholder hereunder for
which provision is not otherwise made in this Section. The provisions of this
Section shall not supersede or otherwise affect any agreement that the Company
and the Selling Stockholder may otherwise have for allocation of such expenses
among themselves.

(j) To use its reasonable efforts (i) to list, subject to notice
of issuance, the Shares on the NYSE and (ii) provided that the Company is a
reporting company under Section 12(b), 12(g) or 15(d) of the Exchange Act, to
maintain the listing of the Shares on the NYSE for a period of three years
after the date of this Agreement.

(k) To use its best efforts to do and perform all things required
or necessary to be done and performed under this Agreement by the Company prior
to the Closing Date or any Option Closing Date, as the case may be, and to
satisfy all conditions precedent to the delivery of the Shares.

(l) If the Registration Statement at the time of the effectiveness
of this Agreement does not cover all of the Shares, to file a Rule 462(b)
Registration Statement with the Commission registering the Shares not so
covered in compliance with Rule 462(b) by 10:00 P.M., New York City time, on
the date of this Agreement and to pay to the Commission the filing fee for such
Rule 462(b) Registration Statement at the time of the filing thereof or to give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the Act.

SECTION 6. Representations and Warranties of the Company. The
Company represents and warrants to each Underwriter that:

(a) The Registration Statement has become effective (other than
any Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this

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<PAGE> 10
Agreement); any Rule 462(b) Registration Statement filed after the
effectiveness of this Agreement will become effective no later than 10:00 P.M.,
New York City time, on the date of this Agreement; and no stop order suspending
the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the
Commission.

(b) (i) The Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the effectiveness of
this Agreement), when it became effective, did not contain and, as amended, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement (other than
any Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement) and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the Act,
(iii) if the Company is required to file a Rule 462(b) Registration Statement
after the effectiveness of this Agreement, such Rule 462(b) Registration
Statement and any amendments thereto, when they become effective (A) will not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading and (B) will comply in all material respects with the Act and
(iv) the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in the Registration Statement or the Prospectus based
upon information relating to any Underwriter furnished to the Company in
writing by such Underwriter through you expressly for use therein.

(c) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Act, complied when so filed in all material
respects with the Act, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or omissions
in any preliminary prospectus based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use therein.

(d) Each of the Company and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to carry on its business as described in the Prospectus and to own,
lease and operate its properties, and each is duly qualified and is in good
standing as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership or leasing of
property requires such qualification, except where the failure to be so
qualified would not

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have a material adverse effect on the business, prospects, financial condition
or results of operations of the Company and its subsidiaries, taken as a whole.

(e) There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens granted or
issued by the Company or any of its subsidiaries relating to or entitling any
person to purchase or otherwise to acquire any shares of the capital stock of
the Company or any of its subsidiaries, except as disclosed in the
Registration Statement.

(f) All the outstanding shares of capital stock of the Company
(including the Shares to be sold by the Selling Stockholder) have been duly
authorized and validly issued and are fully paid, non-assessable and not
subject to any preemptive or similar rights; and the Shares to be issued and
sold by the Company have been duly authorized and, when issued and delivered to
the Underwriters against payment therefor as provided by this Agreement, will
be validly issued, fully paid and non-assessable, and the issuance of such
Shares will not be subject to any preemptive or similar rights.

(g) All of the outstanding shares of capital stock of each of the
Company's subsidiaries have been duly authorized and validly issued and are
fully paid and non-assessable, and are owned by the Company, directly or
indirectly through one or more subsidiaries, free and clear of any security
interest, claim, lien, encumbrance or adverse interest of any nature except as
disclosed in the Prospectus.

(h) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.

(i) Neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws or in default in the performance
of any obligation, agreement, covenant or condition contained in any indenture,
loan agreement, mortgage, lease or other agreement or instrument that is
material to the Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective property is bound except for such defaults
which, individually or in the aggregate, could not have a material adverse
effect on the Company and its subsidiaries, taken as a whole.

(j) The execution, delivery and performance of this Agreement by
the Company, the compliance by the Company with all the provisions hereof and
the consummation of the transactions contemplated hereby will not (i) require
any consent, approval, authorization or other order of, or qualification with,
any court or governmental body or agency (except such as may be required under
the securities or Blue Sky laws of the various states), (ii) conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
the charter or by-laws of the Company or any of its subsidiaries or any
indenture, loan agreement, mortgage, lease or other agreement or instrument
that is material to the Company and its subsidiaries, taken as a whole, to
which the Company or any

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of its subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound, (iii) violate or conflict
with any applicable law or any rule, regulation, judgment, order or decree of
any court or any governmental body or agency having jurisdiction over the
Company, any of its subsidiaries or their respective property or (iv) result in
the suspension, termination or revocation of any Authorization (as defined
below) of the Company or any of its subsidiaries or any other impairment of the
rights of the holder of any such Authorization.

(k) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is or could be a
party or to which any of their respective property is or could be subject that
are required to be described in the Registration Statement or the Prospectus
and are not so described; nor are there any statutes, regulations, contracts or
other documents that are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement that
are not so described or filed as required.

(l) Neither the Company nor any of its subsidiaries has violated
any foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS") or any
provisions of the Employee Retirement Income Security Act of 1974, as amended,
or the rules and regulations promulgated thereunder, except for such violations
which, singly or in the aggregate, would not have a material adverse effect on
the business, prospects, financial condition or results of operation of the
Company and its subsidiaries, taken as a whole.

(m) Each of the Company and its subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other approvals
(each, an "AUTHORIZATION") of, and has made all filings with and notices to,
all governmental or regulatory authorities and self-regulatory organizations
and all courts and other tribunals, including, without limitation, under any
applicable Environmental Laws and rules and regulations promulgated by the U.S.
Food and Drug Administration (the "FDA"), as are necessary to own, lease,
license and operate its respective properties and to conduct its business,
except where the failure to have any such Authorization or to make any such
filing or notice would not, singly or in the aggregate, have a material adverse
effect on the business, prospects, financial condition or results of operations
of the Company and its subsidiaries, taken as a whole. Each such Authorization
is valid and in full force and effect and each of the Company and its
subsidiaries is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred (including,
without limitation, the receipt of any notice from any authority or governing
body) which allows or, after notice or lapse of time or both, would allow,
revocation, suspension or termination of any such Authorization or results or,
after notice or lapse of time or both, would result in any other impairment of
the rights of the holder of any such Authorization; and, except as described in
the Prospectus, such Authorizations contain no restrictions that are burdensome
to the Company or any of its subsidiaries; except where such failure to be
valid and in full force and effect or to be in compliance, the occurrence

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of any such event or the presence of any such restriction would not, singly or
in the aggregate, have a material adverse effect on the business, prospects,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole.

(n) In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business, operations
and properties of the Company and its subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or any permit,
license or approval, any related constraints on operating activities and any
potential liabilities to third parties). On the basis of such review, the
Company has reasonably concluded that such associated costs and liabilities
would not singly or in the aggregate, have a material adverse effect on the
business, prospects, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole.

(o) In each case, except as described in the Prospectus, the
Company and its subsidiaries have good and marketable title in fee simple to
all real property and good and marketable title to all personal property owned
by them which is material to the business of the Company and its subsidiaries,
in each case free and clear of all liens, encumbrances and defects, or except
as such as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries; and any real property and buildings held under
lease by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exception as would not have a
material adverse effect on the business, prospects, financial condition or
results or operations of the Company and its subsidiaries, taken as a whole.

(p) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, all patents, patents rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary of confidential information, systems or procedures),
trademarks, services marks and trade names ("intellectual property") currently
employed by them in connection with the business now operated by them except
where the failure to own or possess or otherwise be able to acquire such
intellectual property would not, singly or in the aggregate, have a material
adverse effect on the business, prospects, financial condition or results of
operation of the Company and its subsidiaries, taken as a whole, and neither
the Company nor any of its subsidiaries has received any notice of infringement
of or conflict with asserted rights of others with respect to any such
intellectual property which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a material adverse effect
on the business, prospects, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole.

(q) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as

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<PAGE> 14
are prudent and customary in the businesses in which they are engaged; and
neither the Company nor any of its subsidiaries has any reason to believe that
it will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers at a cost
that would not have a material adverse effect on the business, prospects,
financial conditions or results of operations of the Company and its
subsidiaries, taken as a whole.

(r) No "nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(f)(2) under the Act has indicated
to the Company that it is considering the downgrading, suspension or withdrawal
of, or any review for a possible change that does not indicate the direction of
the possible change in, any rating assigned to the Company or any securities of
the Company.

(s) No relationship, direct or indirect, exists between or among
the Company or any of its subsidiaries on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any of its
subsidiaries on the other hand, which is required by the Act to be described in
the Registration Statement or the Prospectus which is not so described.

(t) The pro forma financial statements of the Company and its
subsidiaries and the related notes thereto set forth in the Registration
Statement and the Prospectus (and any supplement or amendment thereto) have
been prepared on a basis consistent with the historical financial statements of
the Company and its subsidiaries (except for the pro forma adjustments
specified therein), give effect to the assumptions used in the preparation
thereof on a reasonable basis and present fairly the historical and proposed
transactions contemplated by the Registration statement and the Prospectus.
Such pro forma financial statements have been prepared in accordance with the
applicable requirements of Rule 11-02 of Regulation S-X promulgated by the
Commission. The other pro forma financial and statistical information and data
set forth in the Registration Statement and the Prospectus (and any supplement
or amendment thereto) are, in all material respects, accurately presented and
prepared on a basis consistent with the pro forma financial statements.

(u) There is no (i) significant unfair labor practice complaint,
grievance or arbitration proceeding pending or to the best knowledge of the
Company threatened against the Company or any of its subsidiaries before the
National Labor Relations Board or any state or local labor relations board,
(ii) strike, labor dispute, slowdown or stoppage pending or to the best
knowledge of the Company threatened against the Company or any of its
subsidiaries or (iii) union representation question existing with respect to
the employees of the Company and its subsidiaries, except for such actions
specified in clause (i), (ii) or (iii) above, which, singly or in the
aggregate, would not have a material adverse effect on the business, prospects,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole.

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<PAGE> 15
(v) The Company and each of its subsidiaries maintains a system or
internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principle and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.

(w) All materials tax returns to be filed by the Company and each
of its subsidiaries in any jurisdiction have been filed, other than those
filings being contested in good faith, and all material taxes, including
withholding taxes, penalties and interest, assessments, fees and other charges
due pursuant to such returns or pursuant to any assessment received by the
Company or any of its subsidiaries have been paid, other than those being
contested in good faith and for which adequate reserves have been provided.

(x) This Agreement has been duly authorized, executed and
delivered by the Company.

(y) Coopers & Lybrand, L.L.P., KPMG Peat Marwick LLP and Arthur
Andersen LLP are independent public accountants with respect to the Company and
its subsidiaries as required by the Act.

(z) The consolidated financial statements included in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto), together with related schedules and notes, present fairly the
consolidated financial position, results of operations and changes in financial
position of the Company and its subsidiaries on the basis stated therein at the
respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance
with generally accepted accounting principles consistently applied throughout
the periods involved, except as disclosed therein; the supporting schedules, if
any, included in the Registration Statement present fairly in accordance with
generally accepted accounting principles the information required to be stated
therein; and the other financial and statistical information and data set forth
in the Registration Statement and the Prospectus (and any amendment or
supplement thereto) are, in all material respects, accurately presented and
prepared on the basis of the assumptions described in the Registration
Statement.

(aa) The execution, delivery and performance of each of (i) that
certain Stock Purchase agreement dated as of September 29, 1997 by and between
the AHFP Holding Corporation, the Selling Securityholders named therein and DM
U.S. Holding Corp. and that certain Agreement and Plan of Reorganization dated
as of September 30, 1997 by and between the Company and AHFP Holding
Corporation, (ii) that certain Stock Purchase Agreement by and among the
Company Creative Products, Inc. of Rossville,

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<PAGE> 16
and the individuals listed on Schedule I thereto and [(iii) that certain letter
of intent by and between the Company and Orleans Food Company (collectively,
the "Acquisition Agreements") does not and will not (A) violate, conflict with
or result in the breach of any provision of the Company's articles of
incorporation or by-laws or other organizational documents, as applicable, of
the Company which would have a material adverse effect on the ability of the
Company or any of its subsidiaries to consummate the transactions contemplated
by this Agreement, (B) conflict with or violate any law or governmental order
applicable to the Company or any of its subsidiaries which would have a
material effect on the ability of the Company to consummate the transactions
contemplated by this Agreement or (C) conflict with, or result in any breach
of, constitute a default (or event which with the giving of notice or the lapse
of time, or both, would become a default) under, require any consent under, or
give to others any right of termination, amendment, acceleration, suspension,
revocation, or cancellation of, or result in the creation of any liens,
encumbrances or defects on any of the assets or the properties of the Company
or its subsidiaries pursuant to, any note, bond, mortgage or indenture,
contract, agreement, lease, sublease, license, permit, franchise or other
instrument or arrangement to which the Company or its subsidiaries is a party
or by which any of such assets or properties are bound or affected which would
have a material adverse effect on the ability of the Company to consummate the
transactions contemplated by this Agreement.

(bb) The execution, delivery and performance of each of the
Acquisition Agreements does not and will not require any consent, approval,
authorization or other order of, action by, filing with, or notification to,
any governmental authority or any other third party, except the notification
requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder.

(cc) The Company is not and, after giving effect to the offering
and sale of the Shares and the application of the proceeds thereof as described
in the Prospectus, will not be, an "investment company" as such term is defined
in the Investment Company Act of 1940, as amended.

(dd) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right to require the Company to file a registration statement under
the Act with respect to any securities of the Company, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right to require the Company to include such securities with the
Shares registered pursuant to the Registration Statement which right has not
been waived.

(ee) Except as disclosed in the Prospectus, since the respective
dates as of which information is given in the Prospectus other than as set
forth in the Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), (i) there has not occurred any
material adverse change or any development

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<PAGE> 17
involving a prospective material adverse change in the condition, financial or
otherwise, or the earnings, business, management or operations of the Company
and its subsidiaries, taken as a whole, (ii) there has not been any material
adverse change or any development involving a prospective material adverse
change in the capital stock or in the long- term debt of the Company or any of
its subsidiaries and (iii) neither the Company nor any of its subsidiaries has
incurred any liability or obligation, direct or contingent which individually
or in the aggregate, could have a material adverse effect on the Company and
its subsidiaries, taken as a whole.

(ff) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters shall be deemed
to be a representation and warranty by the Company to the Underwriters as to
the matters covered thereby.

SECTION 7. Representations and Warranties of the Selling
Stockholders. The Selling Stockholder represents and warrants to each
Underwriter that:

(a) The Selling Stockholder is the lawful owner of the Shares to
be sold by such Selling Stockholder pursuant to this Agreement and has (except
for restrictions pursuant to that certain Agreement of Sale and Plan of Merger
by and among AHP Subsidiary Holding Corporation, American Home Products, Inc.
and AHFP Holding Corporation and AHFP Acquisition Corporation (the "AHP
Agreement"), and on the Closing Date will have, good and clear title to such
Shares, free of all restrictions on transfer, liens, encumbrances, security
interests, equities and claims whatsoever (other than restrictions on transfer
imposed by applicable law).

(b) The Shares to be sold by the Selling Stockholder have been
duly authorized and are validly issued, fully paid and non-assessable.

(c) The Selling Stockholder has, and on the Closing Date will
have, full legal right, power and authority to enter into this Agreement, the
Custody Agreement signed by the Selling Stockholder and International Home
Foods, Inc., as Custodian, relating to the deposit of the Shares to be sold by
such Selling Stockholder (the "CUSTODY AGREEMENT") and the Power of Attorney of
the Selling Stockholder appointing certain individuals as the Selling
Stockholder's attorneys-in-fact (the "ATTORNEYS") to the extent set forth
therein, relating to the transactions contemplated hereby and by the
Registration Statement and the Custody Agreement (the "POWER OF ATTORNEY") and
to sell, assign, transfer and deliver the Shares to be sold by the Selling
Stockholder in the manner provided herein and therein.

(d) This Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Stockholder.

(e) The Custody Agreement of the Selling Stockholder has been duly
authorized, executed and delivered by the Selling Stockholder and is a valid
and binding agreement of the Selling Stockholder.

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<PAGE> 18
(f) The Power of Attorney of the Selling Stockholder has been duly
authorized, executed and delivered by the Selling Stockholder and is a valid
and binding instrument of the Selling Stockholder, and, pursuant to such Power
of Attorney, the Selling Stockholder has, among other things, authorized the
Attorneys, or any one of them, to execute and deliver on the Selling
Stockholder's behalf this Agreement and any other document that they, or any
one of them, may deem necessary or desirable in connection with the
transactions contemplated hereby and thereby and to deliver the Shares to be
sold by the Selling Stockholder pursuant to this Agreement.

(g) Upon delivery of and payment for the Shares to be sold by the
Selling Stockholder pursuant to this Agreement, assuming that the Underwriters
shall have purchased the Shares to be sold by the Selling Stockholder for value
in good faith and without any adverse claim, good and clear title to such
Shares will pass to the Underwriters, free of all restrictions on transfer,
liens, encumbrances, security interests, equities and claims whatsoever.

(h) The execution, delivery and performance of this Agreement and
the Custody Agreement and Power of Attorney of the Selling Stockholder by or on
behalf of the Selling Stockholder, the compliance by the Selling Stockholder
with all the provisions hereof and thereof and the consummation of the
transactions contemplated hereby and thereby will not (i) require any consent,
approval, authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required under the
securities or Blue Sky laws of the various states), (ii) conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
the organizational documents of the Selling Stockholder, or any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is material to
the Selling Stockholder and to which to the Selling Stockholder is a party or
by which the Selling Stockholder or any property of the Selling Stockholder is
bound or (iii) violate or conflict with any applicable law or any rule,
regulation, judgment, order or decree of any court or any governmental body or
agency having jurisdiction over the Selling Stockholder or any property of the
Selling Stockholder.

(i) The information in the Registration Statement under the
caption "Principal and Selling Stockholder" which specifically relates to the
Selling Stockholder does not, and will not on the Closing Date, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.

(j) At any time during the period described in Section 5(d), if
there is any change in the information referred to in Section 7(i), the Selling
Stockholder will immediately notify you of such change.

(k) Each certificate signed by or on behalf of the Selling
Stockholder and delivered to the Underwriters or counsel for the Underwriters
shall be deemed to be a

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<PAGE> 19
representation and warranty by the Selling Stockholder to the Underwriters as
to the matters covered thereby.

SECTION 8. Indemnification of QIU. (a) The Company agrees to
indemnify and hold harmless the QIU, its directors, its officers and each
person, if any, who controls the QIU within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, from and against any and all losses,
claims, damages, liabilities and judgments (including, without limitation, any
legal or other expenses incurred in connection with investigating or defending
any matter, including any action, that could give rise to any such losses,
claims, damages, liabilities or judgments) related to, based upon or arising
out of (i) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto), the
Prospectus (or any amendment or supplement thereto) or any preliminary
prospectus, or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading or (ii) the QIU's activities as QIU under its engagement
pursuant to Section 2 hereof, except in the case of this clause (ii) insofar
as any such losses, claims, damages, liabilities or judgments are found in a
final judgment by a court of competent jurisdiction, not subject to further
appeal, to have resulted solely from the willful misconduct or gross negligence
of the QIU.

(b) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) (the "QIU
INDEMNIFIED PARTY"), the QIU Indemnified Party shall promptly notify the
Company in writing and the Company shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the QIU
Indemnified Party and the payment of all fees and expenses of such counsel, as
incurred. Any QIU Indemnified Party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the QIU Indemnified
Party unless (i) the employment of such counsel shall have been specifically
authorized in writing by the Company, (ii) the Company shall have failed to
assume the defense of such action or employ counsel reasonably satisfactory to
the QIU Indemnified Party or (iii) the named parties to any such action
(including any impleaded parties) include both the QIU Indemnified Party and
the Company, and the QIU Indemnified Party shall have been advised by such
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the Company (in which case
the Company shall not have the right to assume the defense of such action on
behalf of the QIU Indemnified Party). In any such case, the Company shall not,
in connection with any one action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) for all QIU
Indemnified Parties, which firm shall be designated by the QIU, and all such
fees and expenses shall be reimbursed as they are incurred. The Company shall
indemnify and hold harmless the QIU Indemnified Party from and against any and
all losses, claims, damages, liabilities and judgments by reason of any
settlement of any action (i) effected with its written consent or (ii) effected
without its written consent if the

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<PAGE> 20
settlement is entered into more than twenty business days after the Company
shall have received a request from the QIU Indemnified Party for reimbursement
for the fees and expenses of counsel (in any case where such fees and expenses
are at the expense of the Company) and, prior to the date of such settlement,
the Company shall have failed to comply with such reimbursement request. The
Company shall not, without the prior written consent of the QIU Indemnified
Party, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the QIU Indemnified Party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the QIU Indemnified
Party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the QIU Indemnified Party from all liability on claims
that are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the QIU Indemnified Party.

(c) To the extent the indemnification provided for in this Section 8
is unavailable to a QIU Indemnified Party or insufficient in respect of any
losses, claims, damages, liabilities or judgments referred to therein, then the
Company, in lieu of indemnifying such QIU Indemnified Party, shall contribute
to the amount paid or payable by such QIU Indemnified Party as a result of such
losses, claims, damages, liabilities and judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the QIU on the other hand from the offering of the Shares or (ii) if
the allocation provided by clause 8(c)(i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause 8(c)(i) above but also the relative fault of the
Company on the one hand and the QIU on the other hand in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the QIU on the other hand shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received
by the Company as set forth in the table on the cover page of the Prospectus,
and the fee received by the QIU pursuant to Section 2 hereof, bear to the sum
of such total net proceeds and such fee. The relative fault of the Company on
the one hand and the QIU on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the QIU and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission and whether the QIU's activities as QIU
under its engagement pursuant to Section 2 hereof involved any willful
misconduct or gross negligence on the part of the QIU.

The Company and the QIU agree that it would not be just and equitable
if contribution pursuant to this Section 8(c) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or

20
<PAGE> 21
payable by a QIU Indemnified Party as a result of the losses, claims, damages,
liabilities or judgments referred to in the immediately preceding paragraph
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses incurred by such QIU Indemnified Party in connection
with investigating or defending any matter, including any action, that could
have given rise to such losses, claims, damages, liabilities or judgments. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.

(d) The remedies provided for in this Section 8 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
QIU Indemnified Party at law or in equity.

SECTION 9. Indemnification. (a) The Company agrees to indemnify
and hold harmless each Underwriter, its directors, its officers and each
person, if any, who controls any Underwriter within the meaning of Section 15
of the Act or Section 20 of the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), from and against any and all losses, claims, damages,
liabilities and judgments (including, without limitation, any legal or other
expenses incurred in connection with investigating or defending any matter,
including any action, that could give rise to any such losses, claims, damages,
liabilities or judgments) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment thereto), the Prospectus (or any amendment or supplement thereto) or
any preliminary prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such losses,
claims, damages, liabilities or judgments are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished in writing to the Company by
such Underwriter through you expressly for use therein; provided, however, that
the foregoing indemnity agreement with respect to any preliminary prospectus
shall not inure to the benefit of any Underwriter from whom the person
asserting any such losses, claims, damages and liabilities and judgments
purchased Shares, or any person controlling such Underwriter, if a copy of the
Prospectus (as then amended or supplemented if the Company shall have furnished
any amendments or supplements thereto to the several Underwriters in the
requisite quantity and on a timely basis to permit proper delivery) was not
sent or given by or on behalf of such Underwriter to such person, if required
by law so to have been delivered, at or prior to the written confirmation of
the sale of the Shares to such person, and if the Prospectus (as so amended and
supplemented) would have cured the defect giving rise to such loss, claim,
damage, liability or judgment.

(b) The Selling Stockholder agrees to indemnify and hold harmless
each Underwriter, its directors, its officers and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"),
from and against any and all

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<PAGE> 22
losses, claims, damages, liabilities and judgments (including, without
limitation, any legal or other expenses incurred in connection with
investigating or defending any matter, including any action, that could give
rise to any such losses, claims, damages, liabilities or judgments) caused by
any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement (or any amendment thereto), the Prospectus (or
any amendment or supplement thereto) or any preliminary prospectus, or caused
by any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
judgments are caused by any such untrue statement or omission or alleged untrue
statement or omission based upon information relating to any Underwriter
furnished in writing to the Company by such Underwriter through you expressly
for use therein; provided, however, that the foregoing indemnity agreement with
respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages and
liabilities and judgments purchased Shares, or any person controlling such
Underwriter, if a copy of the Prospectus (as then amended or supplemented if
the Company shall have furnished any amendments or supplements thereto to the
several Underwriters in the requisite quantity and on a timely basis to permit
proper delivery) was not sent or given by or on behalf of such Underwriter to
such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Shares to such person, and if the
Prospectus (as so amended and supplemented) would have cured the defect giving
rise to such loss, claim, damage, liability or judgment. Notwithstanding the
foregoing, the aggregate liability of the Selling Stockholder pursuant to this
Section 9(b) shall be limited to an amount equal to the total proceeds (before
deducting expenses) received by the Selling Stockholder from the Underwriters
for the sales of the Shares sold by the Selling Stockholder hereunder.

(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, each person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
the Selling Stockholder and each person, if any, who controls the Selling
Stockholder within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Sellers to
such Underwriter but only with reference to information relating to such
Underwriter furnished in writing to the Company by such Underwriter through you
expressly for use in the Registration Statement (or any amendment thereto), the
Prospectus (or any amendment or supplement thereto) or any preliminary
prospectus.

(d) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 9(a), 9(b) or 9(c)
(the "INDEMNIFIED PARTY"), the indemnified party shall promptly notify the
person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which

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<PAGE> 23
indemnity may be sought pursuant to each of Sections 9(a), 9(b) and 9(c) the
Underwriter shall not be required to assume the defense of such action pursuant
to this Section 8(d), but may employ separate counsel and participate in the
defense thereof, but the fees and expenses of such counsel, except as provided
below, shall be at the expense of such Underwriter). Any indemnified party
shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of the indemnified party unless (i) the employment of
such counsel shall have been specifically authorized in writing by the
indemnifying party, (ii) the indemnifying party shall have failed to assume the
defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different
from or additional to those available to the indemnifying party (in which case
the indemnifying party shall not have the right to assume the defense of such
action on behalf of the indemnified party). In any such case, the indemnifying
party shall not, in connection with any one action or separate but
substantially similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for (i) the fees
and expenses of more than one separate firm of attorneys (in addition to any
local counsel) for all Underwriters, their officers and directors and all
persons, if any, who control any Underwriter within the meaning of either
Section 15 of the Act or Section 20 of the Exchange Act, (ii) the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for the Company, its directors, its officers who sign the Registration
Statement and all persons, if any, who control the Company within the meaning
of either such Section and (iii) the fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) for all Selling
Stockholders and all persons, if any, who control any Selling Stockholder
within the meaning of either such Section, and all such fees and expenses shall
be reimbursed as they are incurred. In the case of any such separate firm for
the Underwriters, their officers and directors and such control persons of any
Underwriters, such firm shall be designated in writing by Donaldson, Lufkin &
Jenrette Securities Corporation. In the case of any such separate firm for
the Company and such directors, officers and control persons of the Company,
such firm shall be designated in writing by the Company. In the case of any
such separate firm for the Selling Stockholder and such control persons of any
Selling Stockholder, such firm shall be designated in writing by the Attorneys
and the Selling Stockholder. The indemnifying party shall indemnify and hold
harmless the indemnified party from and against any and all losses, claims,
damages, liabilities and judgments by reason of any settlement of any action
(i) effected with its written consent or (ii) effected without its written
consent if the settlement is entered into more than twenty business days after
the indemnifying party shall have requested from the indemnified party for
reimbursement for the fees and expense of counsel (in any case where such fees
and expenses are at the expense of the indemnifying party) and, prior to the
date of such settlement, the indemnifying party shall have failed to comply
with reimbursement request. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement or compromise
of, or

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<PAGE> 24
consent to the entry of judgment with respect to, any pending or threatened
action in respect of which the indemnified party is or could have been a party
and indemnity or contribution may be or could have been sought hereunder by the
indemnified party, unless such settlement, compromise or judgment includes an
unconditional release of the indemnified party from all liability on claims
that are or could have been the subject matter of such action.

(e) To the extent the indemnification provided for in this Section
9 is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages, liabilities or judgments referred to therein, then
each indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Sellers on the one hand and the Underwriters on the other hand from the
offering of the Shares or (ii) if the allocation provided by clause 9(e)(i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause 9(e)(i) above
but also the relative fault of the Sellers on the one hand and the Underwriters
on the other hand in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative benefits received by the
Sellers on the one hand and the Underwriters on the other hand shall be deemed
to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Sellers, and the total underwriting
discounts and commissions received by the Underwriters, bear to the total price
to the public of the Shares, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault of the Sellers on the one
hand and the Underwriters on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Selling Stockholders on
the one hand or the Underwriters on the other hand and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.

The Sellers and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9(e) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages, liabilities or judgments referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
indemnified party in connection with investigating or defending any matter,
including any action, that could have given rise to such losses, claims,
damages, liabilities or judgments. Notwithstanding the provisions of this
Section 9, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Shares underwritten by it
and distributed to the public were offered to the public exceeds

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<PAGE> 25
the amount of any damages which such Underwriter has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 12(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 9(e) are several in
proportion to the respective number of Shares purchased by each of the
Underwriters hereunder and not joint.

(f) The remedies provided for in this Section 9 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.

SECTION 10. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Firm Shares under this
Agreement are subject to the satisfaction of each of the following conditions:

(a) All the representations and warranties of the Company
contained in this Agreement shall be true and correct on the Closing Date with
the same force and effect as if made on and as of the Closing Date.

(b) If the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, such Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., New York City
time, on the date of this Agreement; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or contemplated by the Commission.

(c) You shall have received on the Closing Date a certificate
dated the Closing Date, signed by the Chairman and Chief Executive Officer and
President of the Company, confirming the matters set forth in Sections 6(t),
10(a) and 10(b) and that the Company has complied with all of the agreements
and satisfied all of the conditions herein contained and required to be
complied with or satisfied by the Company on or prior to the Closing Date.

(d) Except as disclosed in the Prospectus, since the respective
dates as of which information is given in the Prospectus other than as set
forth in the Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), (i) there shall not have occurred
any change or any development involving a prospective change in the condition,
financial or otherwise, or the earnings, business, management or operations of
the Company and its subsidiaries, taken as a whole, (ii) there shall not have
been any change or any development involving a prospective change in the
capital stock or in the long-term debt of the Company or any of its
subsidiaries and (iii) neither the Company nor any of its subsidiaries shall
have incurred any liability or obligation, direct or contingent, the effect of
which, in any such described in clause 10(d)(i), 10(d)(ii) or 10(d)(iii), in
your judgment, has or would have a material adverse

25
<PAGE> 26
effect on the business, prospects financial condition or results of operations
of the Company and its subsidiaries taken as a whole and, in your judgment,
makes it impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.

(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of Vinson & Elkins L.L.P., counsel for the Company, to the effect that:

(i) the Company has been duly incorporated and
each of the Company, I.H.F.P., Inc., a Delaware corporation,
M. Polaner, Inc., a Delaware corporation, Heritage Brands
Holdings, Inc., a Delaware corporation, Heritage Brands, Inc.,
a Delaware corporation, Campfire, Inc., a Delaware
corporation, Bumble Bee Acquisition Corporation, a Delaware
corporation, BBII Acquisition Corporation, a Delaware
corporation, Creative Products of Rossville, Inc., a Delaware
corporation, Orleans Seafood, Inc., a Delaware corporation,
Luck's Incorporated, a Delaware corporation, and DM U.S.
Holding Corp., a Delaware corporation (collectively the
"Domestic Subsidiaries") is validly existing as a corporation
in good standing under the laws of its jurisdiction of
incorporation and has the corporate power and authority to
carry on its business as described in the Prospectus and to
own, lease and operate its properties;

(ii) each of the Company and the Domestics
Subsidiaries is duly qualified and is in good standing as a
foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification,
except where the failure to be so qualified would not have a
material adverse effect on the business, prospects, financial
condition or results of operations of the Company and the
Domestic Subsidiaries, taken as a whole;

(iii) the authorized capital stock of the Company
conforms as to legal matters to the description thereof
contained in the Prospectus;

(iv) all the outstanding shares of capital stock
of the Company (including the Shares to be sold by the Selling
Stockholder) have been duly authorized and validly issued and
are fully paid, non- assessable and not subject to any
preemptive or similar rights;

(v) the Shares to be issued and sold by the
Company hereunder have been duly authorized and, when issued
and delivered to the Underwriters against payment therefor as
provided by this Agreement, will be validly issued, fully paid
and non-assessable, and the issuance of such Shares will not
be subject to any preemptive or similar rights;

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<PAGE> 27
(vi) all of the outstanding shares of capital
stock of each of the Company's Domestic Subsidiaries have been
duly authorized and validly issued and are fully paid and
non-assessable, and (except for director's qualifying shares)
are owned by the Company, directly or indirectly through one
or more subsidiaries, and, to the best of such counsel's
knowledge, are free and clear of any security interest, claim,
lien, encumbrance or adverse interest of any nature (other
than liens and security interest created pursuant to the
Senior Bank Facilities or the Indenture (each as defined in
the Prospectus) or law);

(vii) this Agreement has been duly authorized,
executed and delivered by the Company;

(viii) the Registration Statement has become
effective under the Act, no stop order suspending its
effectiveness has been issued and no proceedings for that
purpose are, to the best of such counsel's knowledge after due
inquiry, pending before or have been threatened by the
Commission;

(ix) the statements under the captions
"Business-Certain Legal and Regulatory Matters" (other than --
"Food Safety and Labeling" and -- "Federal Trade Commission"),
"Certain Relationships and Related Transactions", "Risk
Factors-Restrictive Debt Covenants", "Risk-Factors - Shares
Eligible for Future Sale, Registration Rights Agreement", and
"Description of Capital Stock", Description of Indebtedness"
and "Underwriting" in the Prospectus and Items 14 and 15 of
Part II of the Registration Statement, insofar as such
statements constitute a summary of the legal matters,
documents or proceedings referred to therein, fairly present
the information called for with respect to such legal matters,
documents and proceedings;

(x) to the best of such counsel's knowledge after
due inquiry, neither the Company nor any of its Domestic
Subsidiaries is in violation of its respective charter or
by-laws and, to the best of such counsel's knowledge after due
inquiry, neither the Company nor any of its Domestic
Subsidiaries is in default in the performance of any
obligation, agreement, covenant or condition contained in any
indenture, loan agreement, mortgage, lease or other agreement
or other instrument to which the Company or any of its
Domestic Subsidiaries is a party or by which the Company or
any of its Domestic Subsidiaries or their respective property
is bound except for such defaults which, individually or in
aggregate could not have a material adverse effect on the
Company and its Domestic Subsidiaries taken as a whole;

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<PAGE> 28
(xi) the execution, delivery and performance of
this Agreement by the Company, the compliance by the Company
with all the provisions hereof and the consummation of the
transactions contemplated hereby will not (A) require any
consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency
(except such as may be required under the Act or other
securities or Blue Sky laws of the various states), (B)
conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the charter or by-laws of
the Company or any of its Domestic Subsidiaries or any
indenture, loan agreement, mortgage, lease or other agreement
or instrument that is material to the Company and its Domestic
Subsidiaries, taken as a whole, to which the Company or any of
its Domestic Subsidiaries is a party or by which the Company
or any of its Domestic Subsidiaries or their respective
property is bound, (C) violate or conflict with any applicable
law or any rule, regulation, judgment, order or decree of any
court or any governmental body or agency having jurisdiction
over the Company, any of its Domestic Subsidiaries or their
respective property or (D) result in the suspension,
termination or revocation of any Authorization of the Company
or any of its Domestic Subsidiaries that is material to the
Company and its Domestic Subsidiaries, taken as a whole, or
any other impairment of the rights of the holder of any such
Authorization;

(xii) after due inquiry, such counsel does not know
of any legal or governmental proceedings pending or threatened
to which the Company or any of its Domestic Subsidiaries is or
could be a party or to which any of their respective property
is or could be subject that are required to be described in
the Registration Statement or the Prospectus and are not so
described, or of any statutes, regulations, contracts or other
documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not so
described or filed as required;

(xiii) to the best of such counsel's knowledge after
due inquiry, no relationship, direct or indirect, exists
between or among the Company or any of its Domestic
Subsidiaries on the one hand, and the directors, officers or
stockholders of the Company or any of its subsidiaries on the
other hand, which is required by the Act to be described in
the Registration Statement or the Prospectus which is not so
described;

(xiv) to the best of such counsel's knowledge after
due inquiry, the execution delivery and performance by the
Company of each of the Acquisition Agreements does not and
will not (A) violate, conflict with or result in the breach of
any provision of the Company's articles of incorporation or
by-laws or other organizational documents, as applicable, of
the Company which would have a material adverse effect on the
ability

28
<PAGE> 29
of the Company or any of its Domestic Subsidiaries to
consummate the transactions contemplated by this Agreement,
(B) conflict with or violate any law or governmental order
applicable to the Company or any of its subsidiaries which
would have a material effect on the ability of the Company to
consummate the transactions contemplated by this Agreement or
(C) conflict with, or result in any breach of, constitute a
default (or event which with the giving of notice or the lapse
of time, or both, would become a default) under, require any
consent under, or give to others any right of termination,
amendment, acceleration, suspension, revocation, or
cancellation of, or result in the creation of any liens,
encumbrances or defects on any of the assets or the properties
of the Company or its Domestic Subsidiaries pursuant to, any
note, bond, mortgage or indenture, contract, agreement, lease,
sublease, license, permit, franchise or other instrument or
arrangement to which the Company or its Domestic Subsidiaries
is a party or by which any of such assets or properties are
bound or affected which would have a material adverse effect
on the ability of the Company to consummate the transactions
contemplated by this Agreement.

(xv) The execution, delivery and performance of
each of the Acquisition Agreements does not and will not
require any consent, approval, authorization or other order
of, action by, filing with, or notification to, any
governmental authority or any other third party, except the
notification requirements of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and
regulations promulgated thereunder.

(xvi) the Company is not and, after giving effect
to the offering and sale of the Shares and the application of
the proceeds thereof as described in the Prospectus, will not
be, an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended;

(xvii) except as described in the Registration
Statement, to the best of such counsel's knowledge after due
inquiry, there are no contracts, agreements or understandings
between the Company and any person granting such person the
right to require the Company to file a registration statement
under the Act with respect to any securities of the Company or
to require the Company to include such securities with the
Shares registered pursuant to the Registration Statement that
have not been waived in connection with the offering;

In addition to the matters set forth above, such opinion shall include
a statement that the Registration Statement and the Prospectus and any
supplement or amendment thereto (except for the financial statements and other
financial data and statistical information and data included therein as to
which no opinion need be expressed) comply

29
<PAGE> 30
as to form in all material respects with the Act, (B) such counsel has no
reason to believe that at the time the Registration Statement became effective
or on the date of this Agreement, the Registration Statement and the prospectus
included therein (except for the financial statements and other financial data
and statistical information and data as to which such counsel need not express
any belief) contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading and (C) such counsel has no reason to believe
that the Prospectus, as amended or supplemented, if applicable (except for the
financial statements and other financial data and statistical information and
data, as aforesaid) contains any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.

The opinion of Vinson & Elkins L.L.P. described in Section 10(e) above
shall be rendered to you at the request of the Company and shall so state
therein.

(f) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of Louis L. Hoynes, Jr., General Counsel, counsel for the Selling Stockholder,
to the effect that:

(i) the Selling Stockholder is the lawful owner
of the Shares to be sold by the Selling Stockholder pursuant
to this Agreement and has good and clear title to such Shares,
free of all restrictions on transfer, liens, encumbrances,
security interests, equities and claims whatsoever;

(ii) the Selling Stockholder has full legal right,
power and authority, and all authorization and approval
required by law, to enter into this Agreement and the Custody
Agreement and the Power of Attorney of the Selling Stockholder
and to sell, assign, transfer and deliver the Shares to be
sold by the Selling Stockholder in the manner provided herein
and therein;

(iii) the Custody Agreement of the Selling
Stockholder has been duly authorized, executed and delivered
by the Selling Stockholder and is a valid and binding
agreement of the Selling Stockholder;

(iv) the Power of Attorney of the Selling
Stockholder has been duly authorized, executed and delivered
by the Selling Stockholder and is a valid and binding
instrument of the Selling Stockholder, and, pursuant to such
Power of Attorney, the Selling Stockholder has, among other
things, authorized the Attorneys, or any one of them, to
execute and deliver on the Selling Stockholder's behalf this
Agreement and any other document they, or any one of them, may
deem necessary or desirable in connection with the
transactions contemplated hereby and thereby and to deliver
the Shares to be sold by the Selling Stockholder pursuant to
this Agreement;

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<PAGE> 31
(v) upon delivery of and payment for the Shares
to be sold by the Selling Stockholder pursuant to this
Agreement, assuming that the Underwriters shall have purchased
the Shares to be sold by the Selling Stockholder for value in
good faith and without any adverse claim, good and clear title
to such Shares will pass to the Underwriters, free of all
restrictions on transfer, liens, encumbrances, security
interests, equities and claims whatsoever; and

(vi) the execution, delivery and performance of
this Agreement and the Custody Agreement and Power of Attorney
of the Selling Stockholder by the Selling Stockholder, the
compliance by the Selling Stockholder with all the provisions
hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not (A) require any
consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency
(except such as may be required under the securities or Blue
Sky laws of the various states), (B) conflict with or
constitute a breach of any of the terms or provisions of, or a
default under, the organizational documents of the Selling
Stockholder, if the Selling Stockholder is not an individual,
or any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Selling
Stockholder to which the Selling Stockholder is a party or by
which any property of the Selling Stockholder is bound or (C)
violate or conflict with any applicable law or any rule,
regulation, judgment, order or decree of any court or any
governmental body or agency having jurisdiction over the
Selling Stockholder or any property of the Selling
Stockholder; and

(vii) This Agreement has been dully authorized,
executed and delivered by or on behalf of the Selling
Stockholder.

The opinion of Louis L. Hoynes, Jr. described immediately
above shall be rendered to you at the request of the Selling Stockholder and
shall so state therein. In giving such opinions with respect to matters
covered immediately above counsel for the Selling Stockholder may state its
opinion and belief that its opinion and belief is based upon its participation
in the preparation of the Registration Statement and Prospectus and any
amendment or supplements thereto and review and discussion of the contents
thereto, but are without check or verification except as specified.

(g) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of Kelley Maggs, Esq., General Counsel of the Company, to the effect that:

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<PAGE> 32
(i) neither the Company nor any of its
subsidiaries has violated any Environmental Law or any
provisions of the Employee Retirement Income Security Act of
1974, as amended, or the rules and regulations promulgated
thereunder, except for such violations which, singly or in the
aggregate, would not have a material adverse effect on the
business, prospects, financial condition or results of
operation of the Company and its subsidiaries, taken as a
whole;

(ii) each of the Company and its subsidiaries has
such Authorizations of, and has made all filings with and
notices to, all governmental or regulatory authorities and
self-regulatory organizations and all courts and other
tribunals, including, without limitation, under any applicable
Environmental Laws or the FDA, as are necessary to own, lease,
license and operate its respective properties and to conduct
its business, except where the failure to have any such
Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a material adverse effect on
the business, prospects, financial condition or results of
operations of the Company and its subsidiaries, taken as a
whole; each such Authorization is valid and in full force and
effect and each of the Company and its subsidiaries is in
compliance with all the terms and conditions thereof and with
the rules and regulations of the authorities and governing
bodies having jurisdiction with respect thereto; and no event
has occurred (including, without limitation, the receipt of
any notice from any authority or governing body) which allows
or, after notice or lapse of time or both, would allow,
revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or
both, would result in any other impairment of the rights of
the holder of any such Authorization; and such Authorizations
contain no restrictions that are burdensome to the Company or
any of its subsidiaries; except where such failure to be valid
and in full force and effect or to be in compliance, the
occurrence of any such event or the presence of any such
restriction would not, singly or in the aggregate, have a
material adverse effect on the business, prospects, financial
condition or results of operations of the Company and its
subsidiaries, taken as a whole;

(iii) the Company and its subsidiaries own or
possess, or can acquire on reasonable terms, all patents,
patents rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or
unpatentable proprietary of confidential information, systems
or procedures), trademarks, services marks and trade names
("intellectual property") currently employed by them in
connection with the business now operated by them except where
the failure to own or possess or otherwise be able to acquire
such intellectual property would not, singly or in the
aggregate, have a material adverse effect on the business,
prospects, financial condition or results of operation of the

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<PAGE> 33
Company and its subsidiaries, taken as a whole, and neither
the Company nor any of its subsidiaries has received any
notice of infringement of or conflict with asserted rights of
others with respect to any such intellectual property which,
singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse
effect on the business, prospects, financial condition or
results of operations of the Company and its subsidiaries,
taken as a whole;

(iv) the statements under the captions "Business -
Certain Legal and Regulatory Matters - Food Safety and
Labeling" and "Federal Trade Communication" insofar as such
statements constitute a summary of the legal matters,
documents or proceedings referred to therein, fairly present
the information called for with respect to such legal matters,
documents and proceedings.

The opinion of the General Counsel of the Company described in Section
10(g) above shall be rendered to you at the request of the Company and shall so
state therein.

(h) You shall have received on the Closing Date an opinion, dated
the Closing Date, of Akin, Gump, Strauss, Hauer & Feld, L.L.P., counsel for the
Underwriters, as to the matters referred to in Sections 10(e)(iv), 10(e)(vi)
(but only with respect to the Company), 10(e)(ix) (but only with respect to the
statements under the caption "Description of Capital Stock" and "Underwriting")
and 10(e)(xvii).

In giving such opinions with respect to the matters covered by Section
10(e)(xvii), counsel for the Underwriters may state that their opinion and
belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements thereto
and review and discussion of the contents thereof, but are without independent
check or verification except as specified.

(i) You shall have received, on each of the date hereof and the
Closing Date, a letter dated the date hereof or the Closing Date, as the case
may be, in form and substance satisfactory to you, from Coopers & Lybrand,
L.L.P., KPMG Peat Marwick LLP and Arthur Andersen LLP, independent public
accountants, with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus and
substantially in the form and substance of the letters delivered to you by such
independent public accountants on the date of this Agreement.

(j) The Company shall have delivered to you the agreements
specified in Section 2 hereof which agreements shall be in full force and
effect on the Closing Date.

(k) The Shares shall have been duly listed, subject to notice of
issuance, on the NYSE.

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<PAGE> 34
(l) The Company and the Selling Stockholder shall not have failed
on or prior to the Closing Date to perform or comply with any of the agreements
herein contained and required to be performed or complied with by the Company
or the Selling Stockholders, as the case may be, on or prior to the Closing
Date.

The several obligations of the Underwriters to purchase any Additional
Shares hereunder are subject to the delivery to you on the applicable Option
Closing Date of such documents as you may reasonably request with respect to
the good standing of the Company, the due authorization and issuance of such
Additional Shares and other matters related to the issuance of such Additional
Shares.

Furthermore, all the representations and warranties of the Selling
Stockholder contained in this Agreement shall be true and correct in all
material respects on the Option Closing Date with the same force and effect as
if made on and as of the Option Closing Date and you shall have received on the
Closing Date a certificate dated the Option Closing Date from the Selling
Stockholder to such effect and to the effect that the Selling Stockholder has
complied with in all material respects all of the agreements (and satisfied all
of the conditions herein contained) and required to be complied with or
satisfied by the Selling Stockholder on or prior to the Option Closing Date.

SECTION 11. Effectiveness of Agreement and Termination. This
Agreement shall become effective upon the execution and delivery of this
Agreement by the parties hereto.

This Agreement may be terminated at any time on or prior to the
Closing Date by you by written notice to the Sellers if any of the following
has occurred: (i) any outbreak or escalation of hostilities or other national
or international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market
the Shares on the terms and in the manner contemplated in the Prospectus, (ii)
the suspension or material limitation of trading in securities or other
instruments on the New York Stock Exchange, the American Stock Exchange, the
Chicago Board of Options Exchange, the Chicago Mercantile Exchange, the Chicago
Board of Trade or the Nasdaq National Market or limitation on prices for
securities or other instruments on any such exchange or the Nasdaq National
Market, (iii) the suspension of trading of any securities of the Company on any
exchange or in the over-the-counter market, (iv) the enactment, publication,
decree or other promulgation of any federal or state statute, regulation, rule
or order of any court or other governmental authority which in your opinion
materially and adversely affects, or will materially and adversely affect, the
business, prospects, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole, (v) the declaration of a
banking moratorium by either federal or New York State authorities or (vi) the
taking of any action by any federal, state or local government or agency in
respect of its monetary or fiscal affairs which in your opinion has a material
adverse effect on the financial markets in the United States.

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<PAGE> 35
If on the Closing Date or on an Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Firm Shares or Additional Shares, as the case may be, which it has or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not
more than one-tenth of the total number of Firm Shares or Additional Shares,
as the case may be, to be purchased on such date by all Underwriters, each
non-defaulting Underwriter shall be obligated severally, in the proportion
which the number of Firm Shares set forth opposite its name in Schedule II and
Schedule III bears to the total number of Firm Shares which all the
non-defaulting Underwriters have agreed to purchase, or in such other
proportion as you may specify, to purchase the Firm Shares or Additional
Shares, as the case may be, which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase on such date; provided that in no
event shall the number of Firm Shares or Additional Shares, as the case may be,
which any Underwriter has agreed to purchase pursuant to Section 2 hereof be
increased pursuant to this Section 11 by an amount in excess of one-ninth of
such number of Firm Shares or Additional Shares, as the case may be, without
the written consent of such Underwriter. If on the Closing Date any
Underwriter or Underwriters shall fail or refuse to purchase Firm Shares and
the aggregate number of Firm Shares with respect to which such default occurs
is more than one-tenth of the aggregate number of Firm Shares to be purchased
by all Underwriters and arrangements satisfactory to you, the Company and the
Selling Stockholders for purchase of such Firm Shares are not made within 48
hours after such default, this Agreement will terminate without liability on
the part of any non- defaulting Underwriter, the Company or the Selling
Stockholders. In any such case which does not result in termination of this
Agreement, either you or the Sellers shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. If, on an Option Closing
Date, any Underwriter or Underwriters shall fail or refuse to purchase
Additional Shares and the aggregate number of Additional Shares with respect
to which such default occurs is more than one-tenth of the aggregate number of
Additional Shares to be purchased on such date, the non-defaulting Underwriters
shall have the option to (i) terminate their obligation hereunder to purchase
such Additional Shares or (ii) purchase not less than the number of Additional
Shares that such non-defaulting Underwriters would have been obligated to
purchase on such date in the absence of such default. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of any such Underwriter under this Agreement.

SECTION 12. Agreements of the Selling Stockholder. The Selling
Stockholder agrees with you and the Company:

(a) To pay or to cause to be paid all transfer taxes payable in
connection with the transfer of the Shares to be sold by the Selling
Stockholder to the Underwriters.

35
<PAGE> 36
(b) To do and perform all things to be done and performed by the
Selling Stockholder under this Agreement prior to the Closing Date and to
satisfy all conditions precedent to the delivery of the Shares to be sold by
the Selling Stockholder pursuant to this Agreement.

SECTION 13. Miscellaneous. Notices given pursuant to any
provision of this Agreement shall be addressed as follows: (i) if to the
Company, to International Home Foods, Inc., 1663 Littleton Road, Parsippany,
New Jersey 07054, (ii) if to the Selling Stockholder, to C. Dean Metropoulos,
John H. Bess, N. Michael Dion, and Lynne Misericordia c/o International Home
Foods, Inc., 1662 Littleton Road, Parsippany, New Jersey 07054 with a copy to
Jeffrey Sherman c/o American Home Products Corporation, 5 Giralda Farma,
Madison, New Jersey 07940 and (iii) if to any Underwriter or to you, to you
c/o Donaldson, Lufkin & Jenrette Securities Corporation, 277 Park Avenue, New
York, New York 10172, Attention: Syndicate Department, or in any case to such
other address as the person to be notified may have requested in writing.

The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, the Selling Stockholder and the
several Underwriters set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will survive delivery of and
payment for the Shares, regardless of (i) any investigation, or statement as to
the results thereof, made by or on behalf of any Underwriter, the officers or
directors of any Underwriter, any person controlling any Underwriter, any QIU
Indemnified Party, the Company, the officers or directors of the Company, any
person controlling the Company, any Selling Stockholder or any person
controlling the Selling Stockholder, (ii) acceptance of the Shares and payment
for them hereunder and (iii) termination of this Agreement.

If for any reason the Shares are not delivered by or on behalf of any
Seller as provided herein (other than as a result of any termination of this
Agreement pursuant to Section 11), the Sellers agree, jointly and severally, to
reimburse the several Underwriters for all out-of-pocket expenses (including
the fees and disbursements of counsel) incurred by them. Notwithstanding any
termination of this Agreement, the Company shall be liable for all expenses
which it has agreed to pay pursuant to Section 5(i) hereof. The Sellers also
agree, jointly and severally, to reimburse the several Underwriters, their
directors and officers, any persons controlling any of the Underwriters and the
QIU Indemnified Parties for any and all fees and expenses (including, without
limitation, the fees disbursements of counsel) incurred by them in connection
with enforcing their rights hereunder (including, without limitation, pursuant
to Section 8 hereof).

Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Selling
Stockholders, the Underwriters, the Underwriters' directors and officers, any
controlling persons referred to herein, QIU Indemnified Parties the Company's
directors and the Company's officers who sign the Registration Statement and
their respective successors and assigns, all as and to the extent provided in
this Agreement, and no other person shall acquire or have

36
<PAGE> 37
any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include a purchaser of any of the Shares from any of the
several Underwriters merely because of such purchase.

This Agreement shall be governed and construed in accordance with the
laws of the State of New York.

This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.

Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Stockholders and the several Underwriters.

Very truly yours,

INTERNATIONAL HOME FOODS, INC.

By:
-------------------------------------
Title:

AHP SUBSIDIARY HOLDING CORPORATION

By:
-------------------------------------
Attorney-in-fact

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
BT ALEX. BROWN INCORPORATED
CHASE SECURITIES, INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
GOLDMAN SACHS & CO.
MORGAN STANLEY,
DEAN WITTER, DISCOVER & CO.

Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule II hereto

37
<PAGE> 38
By DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

By:
-------------------------------

DONALDSON, LUFKIN & JENRETTE
INTERNATIONAL
BT ALEX, BROWN INTERNATIONAL
CHASE MANHATTAN LIMITED
INTERNATIONAL
CREDIT SUISSE FIRST BOSTON
(EUROPE) LIMITED
GOLDMAN, SACHS INTERNATIONAL
MORGAN STANTLEY & CO. INTERNATIONAL

Acting severally on behalf of themselves
and the several Underwriters named in
Schedule II hereto

By: DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

By:
-------------------------------

38
<PAGE> 39
SCHEDULE I

Selling Stockholder

<TABLE>
<CAPTION>
Number of Firm
Name Shares Being Sold
- ---- -----------------
<S> <C>
AHP Subsidiary Holding Corporation

--------
Total
</TABLE>

39
<PAGE> 40
SCHEDULE II

<TABLE>
<CAPTION>
Number of Firm Shares
U.S. Underwriters to be Purchased
- ----------------- ---------------------
<S> <C>
Donaldson, Lufkin & Jenrette Securities
Corporation . . . . . . . . . . . . . . . . . . . . . . . . .
BT Alex. Brown Incorporated . . . . . . . . . . . . . . . . . . .
Chase Securities, Inc. . . . . . . . . . . . . . . . . . . . . .
Credit Suisse First Boston Corporation . . . . . . . . . . . . .
Goldman, Sachs & Co. . . . . . . . . . . . . . . . . . . . . . .
Morgan Stanley & Co. Incorporated . . . . . . . . . . . . . . . .

----------
Sub Total 10,898,000
</TABLE>

40
<PAGE> 41
SCHEDULE III

<TABLE>
<CAPTION>
Number of Firm Shares
International Managers to be Purchased
- ---------------------- ---------------------
<S> <C>
Donald, Lufkin & Jenrette
International Limited . . . . . . . . . . . . . . . . . . . . .
BT Alex. Brown International . . . . . . . . . . . . . . . . . .
Chase Manhattan International Limited . . . . . . . . . . . . . .
Credit Suisse First Boston (Europe) Limited . . . . . . . . . . .
Goldman, Sachs International . . . . . . . . . . . . . . . . . .
Morgan Stanley & Co. International . . . . . . . . . . . . . . .

---------
Sub Total 2,754,500
</TABLE>

41
<PAGE> 42
Annex I

[Insert names of stockholders of the Company who will be required to sign lock
ups]

<PAGE> 1
EXHIBIT 3.1

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
INTERNATIONAL HOME FOODS, INC.

(Pursuant to Sections 242 and 245 of the General Corporation
Law of the State of Delaware)

- --------------------------------------------------------------------------------

International Home Foods, Inc., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware
(the "Corporation"), does hereby certify as follows:

1. The name of the Corporation is International Home Foods, Inc and
the name under which the Corporation was originally incorporated was American
Home Food Products, Inc. The date of filing of the Corporation's original
Certificate of Incorporation was November 10, 1986.

2. This Amended and Restated Certificate of Incorporation (the
"Amended and Restated Certificate of Incorporation") restates and integrates
and further amends the Certificate of Incorporation of the Corporation.

3. This Amended and Restated Certificate of Incorporation was duly
adopted by vote of the stockholders in accordance with Sections 228, 242 and
245 of the General Corporation Law of the state of Delaware.

4. The text of the certificate of incorporation, as amended or
supplemented heretofore, is further amended hereby and restated to read in full
as set forth herein:

ARTICLE FIRST

The name of this corporation (hereinafter called the "Corporation") is
International Home Foods, Inc.

ARTICLE SECOND

The registered office of the Corporation in the State of Delaware is
located at Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of the registered agent of the
Corporation at such address is The Corporation Trust Company.

ARTICLE THIRD

The purpose for which the Corporation is organized is to engage in any
and all lawful acts and activity for which corporations may be organized under
the General Corporation Law of Delaware. The Corporation will have perpetual
existence.
<PAGE> 2
ARTICLE FOURTH

The total number of shares of all classes of stock which the Corporation
shall have authority to issue is 400,000,000 shares, consisting of (i)
100,000,000 shares of preferred stock, par value $0.01 per share (the
"Preferred Stock"); and (ii) 300,000,000 shares of common stock, par value
$0.01 per share (the "Common Stock").

Upon the filing of this Amended and Restated Certificate of
Incorporation with the Delaware Secretary of State, each share of the
Corporation's Common Stock, par value $.01 per share (the "Old Common Stock"),
issued and outstanding immediately prior to the filing hereof shall, without
any action on the part of the holder thereof, be converted and reclassified
into, and immediately represent 0.1876449 validly issued, fully paid and non-
assessable shares of Common Stock. Any fraction of a share of Common Stock
that would otherwise result pursuant to the preceding sentence shall
automatically be eliminated and, in lieu thereof, the holder thereof shall be
entitled to receive a cash adjustment in respect of such fraction of a share in
an amount based upon a value of the Common Stock equal to $19.00 per share.
Each certificate which theretofore represented shares of Old Common Stock shall
thereafter represent that number of shares of Common Stock determined in the
previous sentences; provided, however, that each person holding of record a
stock certificate or certificates which represented shares of Old Common Stock
shall receive, upon surrender of such certificate or certificates, a new
certificate or certificates evidencing and representing the number of shares of
Common Stock to which such person is entitled.

The designations and the powers, preferences, rights, qualifications,
limitations, and restrictions of the Common Stock and the Preferred Stock are
as follows:

1. Provisions Relating to the Common Stock.

(a) Subject to the prior rights and preferences, if any, applicable
to shares of Preferred Stock or any class or series thereof, each share of
Common Stock shall entitle the holder of record thereof to receive dividends
(payable in cash, stock or otherwise) out of funds legally available therefor,
when, as and if declared by the board of directors of the Corporation in
respect of Common Stock.

(b) The holders of Common Stock shall be entitled to share ratably in
the net assets of the Corporation remaining after any dissolution, liquidation
or winding up of the affairs of the Corporation, whether voluntary or
involuntary, and after payment or provision for the payment of the debts and
liabilities of the Corporation and payment of the liquidation preference, if
any, on any shares of capital stock of the Corporation having such a
preference. A dissolution, liquidation or winding-up of the Corporation, as
such terms are used in this paragraph (b), shall not be deemed to be occasioned
by, or to include, any consolidation or merger of the Corporation with or into
any other corporation or corporations or other entity or a sale, lease,
exchange or conveyance of all, or any part of, the assets of the Corporation.

(c) Each share of the Common Stock shall entitle the registered
holder thereof to one vote on all matters brought before the common
stockholders of the Corporation for a vote.

2
<PAGE> 3
2. Provisions Relating to the Preferred Stock.

(a) The Preferred Stock may be issued from time to time in one or
more classes or series, the shares of each class or series to have any
designations, powers, preferences and rights, and qualifications, limitations
and restrictions thereof, as are stated and expressed in this Article and in
the resolution or resolutions providing for the issuance of such class or
series adopted by the board of directors of the Corporation as hereafter
prescribed.

(b) Authority is hereby expressly granted to and vested in the board
of directors of the Corporation to authorize the issuance of Preferred Stock
from time to time in one or more classes or series, and with respect to each
class or series of the Preferred Stock, to state by the resolution or
resolutions from time to time adopted providing for the issuance thereof the
following:

(i) whether the class or series is to have voting rights in
addition to any voting rights required by law, special or limited, and, if so,
the terms of such voting rights, or whether such class or series is to be
without voting rights, and whether such class or series is to be entitled to
vote as a separate class either alone or together with the holders of one or
more other classes or series of stock;

(ii) the number of shares to constitute the class or series and
the designations thereof;

(iii) whether the shares of any class or series shall be
redeemable at the option of the Corporation or the holders thereof or upon the
happening of any specified event, and, if redeemable, the redemption price or
prices (which may be payable in the form of cash, notes, securities, or other
property), and the time or times at which, and the terms and conditions upon
which, such shares shall be redeemable and the manner of redemption;

(iv) whether the shares of a class or series shall be subject
to the operation of retirement or sinking funds to be applied to the purchase
or redemption of such shares for retirement, and, if such retirement or sinking
fund or funds are to be established, the periodic amount thereof, and the terms
and provisions relative to the operation thereof;

(v) the dividend rate, whether dividends are payable in cash,
stock of the Corporation, or other property, the conditions upon which, and the
times when, such dividends are payable, the relative rights of priority, if
any, of payment of dividends on shares of that series and any other class or
series of stock, whether such dividends shall be cumulative or noncumulative,
and if cumulative, the date or dates from which such dividends shall
accumulate;

(vi) the preferences, if any, and the amounts thereof which the
holders of any class or series thereof shall be entitled to receive upon the
voluntary or involuntary dissolution of, or upon any distribution of the assets
of, the Corporation, and whether or not a dissolution, liquidation or
winding-up of the Corporation, as such terms are used in this paragraph (vi),
shall be deemed to be occasioned by or to include any consolidation or merger
of the Corporation with or into any other corporation or corporations or other
entity or a sale, lease, exchange or conveyance of all, or any part of the
assets of the Corporation;

3
<PAGE> 4
(vii) whether the shares of any class or series, at the option
of the Corporation or the holder thereof or upon the happening of any specified
event, shall be convertible into or exchangeable for the shares of any other
class or classes or of any other series of the same or any other class or
classes of stock, securities, or other property of the Corporation and the
conversion price or prices or ratio or ratios or the rate or rates at which
such conversion or exchange may be made, with such adjustments, if any, as
shall be stated and expressed or provided for in such resolution or
resolutions, and any other terms and conditions of conversion or exchange;

(viii) the preferences and relative, participating, optional, or
other special rights, if any, and the qualifications, limitations, or
restrictions thereof, if any, with respect to any class or series;

(ix) any other powers, preferences and relative, participating,
optional, or other special rights, if any, and the qualifications, limitations,
or restrictions thereof, if any, with respect to any class or series.

(c) The shares of each class or series of Preferred Stock may vary
from the shares of any other class or series thereof in any or all of the
foregoing respects and in any other manner as shall be determined by the
resolutions adopted by the board of directors providing for the issuance
thereof. The board of directors of the Corporation may increase the number of
shares of the Preferred Stock designated for any existing class or series by a
resolution adding to such class or series authorized and unissued shares of the
Preferred Stock not designated for any other class or series. The board of
directors of the Corporation may decrease the number of shares of the Preferred
Stock designated for any existing class or series by a resolution subtracting
from such class or series authorized and unissued shares of the Preferred Stock
designated for such existing class or series, and the shares so subtracted
shall become authorized, unissued and undesignated shares of the Preferred
Stock.

3. General.

(a) Subject to the foregoing provisions of this Amended and Restated
Certificate of Incorporation, the Corporation may issue shares of its Preferred
Stock and Common Stock from time to time for such consideration (not less than
the par value thereof) as may be fixed by the board of directors of the
Corporation, which is expressly authorized to fix the same in its absolute
discretion subject to the foregoing conditions. Shares so issued for which the
consideration shall have been paid or delivered to the Corporation shall be
deemed fully paid stock and shall not be liable to any further call or
assessment thereon, and the holders of such shares shall not be liable for any
further payments in respect of such shares.

(b) The Corporation shall have authority to create and issue rights
and options entitling their holders to purchase shares of the Corporation's
capital stock of any class or series or other securities of the Corporation,
and such rights and options shall be evidenced by instrument(s) approved by the
board of directors of the Corporation. The board of directors of the
Corporation shall be empowered to set the exercise price, duration, times for
exercise and other terms of such rights or options; provided, however, that the
consideration to be received for any share of capital stock subject thereto
shall not be less than the par value thereof.

4
<PAGE> 5
(c) No stockholder of the Corporation shall by reason of his or her
holding shares of any class of capital stock of the Corporation have any
preemptive or preferential right to acquire or subscribe for any additional,
unissued or treasury shares (whether now or hereafter acquired) of any class of
capital stock of the Corporation now or hereafter to be authorized, or any
notes, debentures, bonds or other securities convertible into or carrying any
right, option or warrant to subscribe for or acquire shares of any class of
capital stock of the Corporation now or hereafter to be authorized, whether or
not the issuance of any such shares or such notes, debentures, bonds or other
securities would adversely affect the dividends or voting or other rights of
that stockholder.

(d) Cumulative voting shares of any capital stock having voting
rights is prohibited.

ARTICLE FIFTH

(a) The number of directors that shall constitute the whole board of
directors shall from time to time be fixed exclusively by the board of
directors by a resolution adopted by a majority of the members of the board of
directors serving at the time of that vote. In no event shall the number of
directors that constitute the whole board of directors be fewer than three or
more than twenty-one. No decrease in the number of directors shall have the
effect of shortening the term of any incumbent director. Directors of the
Corporation need not be elected by written ballot unless the bylaws of the
Corporation otherwise provide.

(b) The board of directors of the Corporation shall be divided into
three classes designated Class I, Class II, and Class III, respectively, all as
nearly equal in number as possible, with each director then in office receiving
the classification that at least a majority of the board of directors
designates. The initial term of office of directors of Class I shall expire at
the annual meeting of stockholders of the Corporation in 1998, of Class II
shall expire at the annual meeting of stockholders of the Corporation in 1999,
and of Class III shall expire at the annual meeting of stockholders of the
Corporation in 2000, and in all cases as to each director until his successor
is elected and qualified or until his earlier death, resignation or removal.
At each annual meeting of stockholders beginning with the annual meeting of
stockholders in 1998, each director elected to succeed a director whose term is
then expiring shall hold his office until the third annual meeting of
stockholders after his election and until his successor is elected and
qualified or until his earlier death, resignation or removal. If the number of
directors that constitutes the whole board of directors is changed, the
majority of the whole board of directors shall fix and determine the number of
directors comprising each class; provided, however, that any increase or
decrease in the number of directors shall be apportioned among the classes as
equally as possible.

(c) Vacancies in the board of directors resulting from death,
resignation, retirement, disqualification, removal from office or other cause
and newly-created directorships resulting from any increase in the authorized
number of directors shall be filled by a majority vote of the remaining
directors then in office, though less than a quorum, or by the sole remaining
director, and each director so chosen shall receive the classification of the
vacant directorship to which he or she has been appointed or, if it is a newly
created directorship, shall receive the classification that at least a majority
of the board of directors designates and shall hold office until the first
meeting of stockholders held after his election for the purpose of electing
directors of that classification and

5
<PAGE> 6
until his or her successor is elected and qualified or until his or her earlier
death, resignation or removal from office.

(d) No director of any class of directors of the Corporation shall be
removed before the expiration of that director's term of office except for
cause and by an affirmative vote of the holders of not less than a majority in
voting power of the outstanding shares entitled to vote thereon cast at the
annual meeting of stockholders or at any special meeting of stockholders called
for this purpose by a majority of the members of the board of directors serving
at the time of that vote.

(e) Notwithstanding the foregoing, the election, removal and the
filing of vacancies with respect to directors elected separately by any series
of Preferred Stock shall be governed by the terms of the Preferred Stock
Designation establishing such series.

(f) Notwithstanding any other provisions of this Amended and Restated
Certificate of Incorporation or any provision of law that might otherwise
permit a lesser or no vote, but in addition to any affirmative vote of the
holders of any particular class or series of the capital stock of the
Corporation required by law or by this Amended and Restated Certificate of
Incorporation, the affirmative vote of the holders of not less than two-thirds
in voting power of the shares of the Corporation then entitled to be voted in
an election of directors, voting together as a single class, shall be required
to amend or repeal or to adopt any provision inconsistent with, this Article
Fifth.

ARTICLE SIXTH

No action required to be taken or that may be taken at any meeting of
common stockholders of the Corporation may be taken without a meeting, and the
power of common stockholders to consent in writing, without a meeting, to the
taking of any action is specifically denied. Notwithstanding any other
provisions of this Amended and Restated Certificate of Incorporation or any
provision of law that might otherwise permit a lesser or no vote, but in
addition to any affirmative vote of the holders of any particular class or
series of the capital stock of the Corporation required by law or by this
Amended and Restated Certificate of Incorporation, the affirmative vote of the
holders of not less than two-thirds in voting power of the shares of the
Corporation then entitled to be voted in an election of directors, voting
together as a single class, shall be required to amend or repeal or to adopt
any provision inconsistent with, this Article Sixth.

ARTICLE SEVENTH

Special meetings of the common stockholders of the Corporation, and any
proposals to be considered at such meetings, may be called and proposed
exclusively by the board of directors, pursuant to a resolution approved by a
majority of the members of the board of directors serving at the time of that
vote, and no stockholder of the Corporation shall require the board of
directors to call a special meeting of common stockholders or to propose
business at a special meeting of common stockholders. No business proposed by
a stockholder to be considered at an annual meeting of the common stockholders
(including the nomination of any person to be elected as a director of the
Corporation) shall be considered by the common stockholders at that meeting
unless, no later than sixty days before the annual meeting of common
stockholders or (if later) ten days after the first

6
<PAGE> 7
public notice of that meeting is sent to common stockholders, the Corporation
receives from the stockholder proposing that business a written notice that
sets forth (1) the nature of the proposed business with reasonable
particularity, including the exact text of any proposal to be presented for
adoption, and the reasons for conducting that business at the annual meeting;
(2) with respect to each such stockholder, that stockholder's name and address
(as they appear on the records of the Corporation), business address and
telephone number, residence address and telephone number, and the number of
shares of each class and series of stock of the Corporation beneficially owned
by that stockholder; (3) any interest of the stockholder in the proposed
business; (4) the name or names of each person nominated by the stockholder to
be elected or reelected as a director, if any; and (5) with respect to each
nominee, that nominee's name, business address and telephone number, and
residence address and telephone number, the number of shares, if any, of each
classes and series of stock of the Corporation owned beneficially by that
nominee, and all information relating to that nominee that is required to be
disclosed in solicitations of proxies for elections of directors or is
otherwise required, pursuant to Regulation 14A under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") (or any provision of law
subsequently replacing Regulation 14A), together with a notarized letter signed
by the nominee stating his or her acceptance of the nomination by that
stockholder, stating his or her intention to serve as director if elected, and
consenting to being named as a nominee for director in any proxy statement
relating to such election. Notwithstanding the previous sentence, the
Corporation may exclude from its proxy materials any proposed business that may
be excluded by applicable law. The person presiding at the annual meeting
shall determine whether business (including the nomination of any person as a
director) has been properly brought before the meeting and, if the facts so
warrant, shall not permit any business (or voting with respect to any
particular nominee) to be transacted that has not been properly brought before
the meeting. Notwithstanding any other provisions of this Amended and
Restated Certificate of Incorporation or any provision of law that might
otherwise permit a lesser or no vote, but in addition to any affirmative vote
of the holders of any particular class or series of the capital stock of the
Corporation required by law or by this Amended and Restated Certificate of
Incorporation, the affirmative vote of the holders of not less than two-thirds
in voting power of the shares of the Corporation then entitled to be voted in
an election of directors, voting together as a single class, shall be required
to amend or repeal or to adopt any provision inconsistent with, this Article
Seventh.

ARTICLE EIGHTH

All of the power of the Corporation, insofar as it may be lawfully
vested by this Amended and Restated Certificate of Incorporation in the board
of directors, is hereby conferred upon the board of directors of the
Corporation. In furtherance of and not in limitation of that power or the
powers conferred by law, (1) a majority of whole board of directors shall have
the power to adopt, amend, and repeal the bylaws of the Corporation; (2) the
board of directors may designate and appoint from among its members one or more
committees, and may designate one or more of its members as alternate members,
who may, subject to any limitations imposed by the board of directors, replace
absent or disqualified members at any meeting of such committee; (3) the
stockholders of the Corporation shall have no power to appoint or remove
directors as members of committees of the board of directors, nor to abrogate
the power of the board of directors to establish any such committees or the
power of any such committee to exercise the powers and authority of the board
of directors; (4) the stockholders of the Corporation shall have no power to
elect or remove

7
<PAGE> 8
officers of the Corporation nor to abrogate the power of the board of directors
to elect and remove officers of the Corporation; and (5) notwithstanding any
other provision of this Amended and Restated Certificate of Incorporation or
any provision of law that might otherwise permit a lesser or no vote, but in
addition to any affirmative vote of the holders of any particular class or
series of the capital stock of the Corporation required by law or by this
Amended and Restated Certificate of Incorporation, the bylaws of the
Corporation shall not be adopted, altered, amended or repealed by the
stockholders of the Corporation except in accordance with the provisions of the
bylaws and by the vote of the holders of not less than a majority in voting
power of the outstanding shares of stock then entitled to vote upon the
election of directors, voting together as a single class or such higher vote as
is set forth in the bylaws. The bylaws of the Corporation shall not contain
any provision inconsistent with this Amended and Restated Certificate of
Incorporation. Notwithstanding any other provisions of this Amended and
Restated Certificate of Incorporation or any provision of law that might
otherwise permit a lesser or no vote, but in addition to any affirmative vote
of the holders of any particular class or series of the capital stock of the
Corporation required by law or by this Amended and Restated Certificate of
Incorporation, the affirmative vote of the holders of not less than two-thirds
in voting power of the shares of the Corporation then entitled to be voted in
an election of directors voting together as a single class, shall be required
to amend or repeal or to adopt any provision inconsistent with, this Article
Eighth.

ARTICLE NINTH

No contract or transaction between the Corporation and one or more of
its directors, officers or stockholders or between the Corporation and any
other person (as used herein "person" means a corporation, partnership,
association, firm, trust, joint venture, political subdivision or
instrumentality) or other organization in which one or more of its directors,
officers or stockholders are directors, officers or stockholders, or have a
financial interest, shall be void or voidable solely for this reason, or solely
because the director or officer is present at or participates in the meeting of
the board or committee which authorizes the contract or transaction, or solely
because his, her or their votes are counted for such purpose, if: (i) the
material facts as to his or her relationship or interest and as to the contract
or transaction are disclosed or are known to the board of directors or the
committee, and the board of directors or committee in good faith authorizes
the contract or transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested directors be less than a
quorum; or (ii) the material facts as to his or her relationship or interest
and as to the contract or transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract or transaction is
specifically approved in good faith by vote of the stockholders; or (iii) the
contract or transaction is fair as to the Corporation as of the time it is
authorized approved or ratified by the board of directors, a committee thereof,
or the stockholders. Interested directors may be counted in determining the
presence of a quorum at a meeting of the board of directors or of a committee
which authorizes the contract or transaction.

ARTICLE TENTH

(a) The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to a proceeding (as hereinafter defined) by
reason of the fact that he or she (i) is

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<PAGE> 9
or was a director or officer of the Corporation or (ii) while a director or
officer of the Corporation, is or was serving at the request of the Corporation
as a director, officer, partner, venturer, proprietor, trustee, employee,
agent, or similar functionary of another foreign or domestic corporation,
partnership, joint venture, sole proprietorship, trust, employee benefit plan,
or other enterprise, to the fullest extent permitted under the Delaware General
Corporation Law, as the same exists or may hereafter be amended. Such right
shall be a contract right and as such shall run to the benefit of any director
or officer who is elected and accepts the position of director or officer of
the Corporation or elects to continue to serve as a director or officer of the
Corporation while this Article Tenth is in effect. Any repeal or amendment of
this Article Tenth shall be prospective only and shall not limit the rights of
any such director or officer or the obligations of the Corporation with respect
to any claim arising from or related to the services of such director or
officer in any of the foregoing capacities prior to any such repeal or
amendment to this Article Tenth. Such right shall include the right to be paid
by the Corporation expenses incurred in defending any such proceeding in
advance of its final disposition to the maximum extent permitted under the
Delaware General Corporation Law, as the same exists or may hereafter be
amended. If a claim for indemnification or advancement of expenses hereunder
is not paid in full by the Corporation within sixty days after a written claim
has been received by the Corporation, the claimant may at any time thereafter
bring suit against the Corporation to recover the unpaid amount of the claim,
and if successful in whole or in part, the claimant shall also be entitled to
be paid the expenses of prosecuting such claim. It shall be a defense to any
such action that such indemnification or advancement of costs of defense are
not permitted under the Delaware General Corporation Law, but the burden of
proving such defense shall be on the Corporation. Neither the failure of the
Corporation (including its board of directors, independent legal counsel, or
stockholders) to have made its determination prior to the commencement of such
action that indemnification of, or advancement of costs of defense to, the
claimant is permissible in the circumstances nor an actual determination by the
Corporation (including its board of directors, independent legal counsel, or
stockholders) that such indemnification or advancement is not permissible shall
be a defense to the action or create a presumption that such indemnification or
advancement is not permissible. In the event of the death of any person having
a right of indemnification under the foregoing provisions, such right shall
inure to the benefit of his or her heirs, executors, administrators, and
personal representatives. The rights conferred above shall not be exclusive of
any other right which any person may have or hereafter acquire under any
statute, bylaw, resolution of stockholders or directors, agreement, or
otherwise.

(b) The Corporation may additionally indemnify any employee or agent
of the Corporation to the fullest extent permitted by law.

(c) As used herein, the term "proceeding" means any threatened,
pending, or completed action, suit, or proceeding, whether civil, criminal,
administrative, arbitrative, or investigative, any appeal in such an action,
suit, or proceeding, and any inquiry or investigation that could lead to such
an action, suit, or proceeding.

ARTICLE ELEVENTH

A director shall not be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to
the Corporation or its stockholders, (ii) for acts or omissions not in good

9
<PAGE> 10
faith or which involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the General Corporation Law of the State of
Delaware, or (iv) for any transaction from which the director derived an
improper personal benefit. If the General Corporation Law of the State of
Delaware is amended after approval of the stockholders of this Article Eleventh
to authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the General
Corporation Law of the State of Delaware, as so amended. Any repeal or
modification of this Article Eleventh by the stockholders shall be prospective
only and shall not adversely affect any right or protection of a director of
the Corporation existing at the time of such repeal or modification.
Notwithstanding any other provisions of this Amended and Restated Certificate
of Incorporation or any provision of law that might otherwise permit a lesser
or no vote, but in addition to any affirmative vote of the holders of any
particular class or series of the capital stock of the Corporation required by
law or by this Amended and Restated Certificate of Incorporation, the
affirmative vote of the holders of not less than two-thirds in voting power of
the shares of the Corporation then entitled to be voted in an election of
directors, voting together as a single class, shall be required to amend or
repeal or to adopt any provision inconsistent with, this Article Eleventh.

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<PAGE> 11
IN WITNESS WHEREOF, said International Home Foods, Inc. has caused this
Amended and Restated Certificate of Incorporation to be signed by C. Dean
Metropoulos, its Chief Executive Officer, this ____ day of October, 1997.

INTERNATIONAL HOME FOODS, INC.

By: /s/ C. DEAN METROPOULOS
---------------------------------
C. Dean Metropoulos
Chief Executive Officer

<PAGE> 1
EXHBIT 3.2

AMENDED AND RESTATED BYLAWS

INTERNATIONAL HOME FOODS, INC.

A DELAWARE CORPORATION
<PAGE> 2
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I: OFFICES
1.1 Registered Office and Agent . . . . . . . . . . . . . . . . . 1
1.2 Other Offices . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE II: MEETINGS OF STOCKHOLDERS
2.1 Annual Meeting . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 Special Meeting . . . . . . . . . . . . . . . . . . . . . . . 1
2.3 Place of Meetings . . . . . . . . . . . . . . . . . . . . . . 1
2.4 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.5 Notice of Stockholder Business at Annual Meeting . . . . . . . 2
2.6 Voting List . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.7 Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.8 Required Vote; Withdrawal of Quorum . . . . . . . . . . . . . 3
2.9 Method of Voting; Proxies . . . . . . . . . . . . . . . . . . 3
2.10 Record Date . . . . . . . . . . . . . . . . . . . . . . . . . 3

ARTICLE III: DIRECTORS
3.1 Management . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.2 Number; Qualification; Election; Eligibility; Term . . . . . . 4
3.3 Nomination of Director Candidates . . . . . . . . . . . . . . 4
3.4 Change in Number . . . . . . . . . . . . . . . . . . . . . . . 5
3.5 Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.6 Newly Created Directorships and Vacancies . . . . . . . . . . 5
3.7 Meetings of Directors . . . . . . . . . . . . . . . . . . . . 6
3.8 Election of Officers . . . . . . . . . . . . . . . . . . . . . 6
3.9 Regular Meetings . . . . . . . . . . . . . . . . . . . . . . . 6
3.10 Special Meetings . . . . . . . . . . . . . . . . . . . . . . . 6
3.11 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.12 Quorum; Majority Vote . . . . . . . . . . . . . . . . . . . . 6
3.13 Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.14 Presumption of Assent . . . . . . . . . . . . . . . . . . . . 7
3.15 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . 7

ARTICLE IV: COMMITTEES
4.1 Designation . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.2 Number; Qualification; Term . . . . . . . . . . . . . . . . . 7
4.3 Committee Changes . . . . . . . . . . . . . . . . . . . . . . 7
4.4 Alternate Members of Committees . . . . . . . . . . . . . . . 7
4.5 Regular Meetings . . . . . . . . . . . . . . . . . . . . . . . 7
4.6 Special Meetings . . . . . . . . . . . . . . . . . . . . . . . 7
4.7 Quorum; Majority Vote . . . . . . . . . . . . . . . . . . . . 7
4.8 Minutes . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.9 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.10 Responsibility . . . . . . . . . . . . . . . . . . . . . . . . 8

ARTICLE V: NOTICE
5.1 Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.2 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>

i
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE VI: OFFICERS
6.1 Number; Titles; Term of Office . . . . . . . . . . . . . . . . 8
6.2 Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.3 Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.4 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.5 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.6 Chairman of the Board . . . . . . . . . . . . . . . . . . . . 9
6.7 Chief Executive Officer . . . . . . . . . . . . . . . . . . . 9
6.8 President . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.9 Vice Presidents . . . . . . . . . . . . . . . . . . . . . . . 9
6.10 Treasurer . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.11 Assistant Treasurers . . . . . . . . . . . . . . . . . . . . . 10
6.12 Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.13 Assistant Secretaries . . . . . . . . . . . . . . . . . . . . 10

ARTICLE VII: CERTIFICATES AND STOCKHOLDERS
7.1 Certificates for Shares . . . . . . . . . . . . . . . . . . . 10
7.2 Replacement of Lost or Destroyed Certificates . . . . . . . . 10
7.3 Transfer of Shares . . . . . . . . . . . . . . . . . . . . . . 10
7.4 Registered Stockholders . . . . . . . . . . . . . . . . . . . 11
7.5 Regulations . . . . . . . . . . . . . . . . . . . . . . . . . 11
7.6 Legends . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

ARTICLE VIII: MISCELLANEOUS PROVISIONS
8.1 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8.2 Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8.3 Books and Records . . . . . . . . . . . . . . . . . . . . . . 11
8.4 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . 11
8.5 Seal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8.6 Resignations . . . . . . . . . . . . . . . . . . . . . . . . . 11
8.7 Securities of Other Corporations . . . . . . . . . . . . . . . 11
8.8 Telephone Meetings . . . . . . . . . . . . . . . . . . . . . . 12
8.9 Action Without a Meeting . . . . . . . . . . . . . . . . . . . 12
8.10 Invalid Provisions . . . . . . . . . . . . . . . . . . . . . . 12
8.11 Mortgages, etc. . . . . . . . . . . . . . . . . . . . . . . . 12
8.12 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
8.13 References . . . . . . . . . . . . . . . . . . . . . . . . . . 12
8.14 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>

ii
<PAGE> 4
AMENDED AND RESTATED BYLAWS

INTERNATIONAL HOME FOODS, INC.

A DELAWARE CORPORATION

PREAMBLE

These Bylaws are subject to, and governed by, the General Corporation
Law of the State of Delaware (the "Delaware General Corporation Law") and the
amended and restated certificate of incorporation (as the same may be amended
and restated from time to time) of International Home Foods, Inc., a Delaware
corporation (the "Corporation"). In the event of a direct conflict between the
provisions of these Bylaws and the mandatory provisions of the Delaware General
Corporation Law or the provisions of the amended and restated certificate of
incorporation of the Corporation, such provisions of the Delaware General
Corporation Law or the amended and restated certificate of incorporation of the
Corporation, as the case may be, will be controlling.

ARTICLE I OFFICES

1.1 Registered Office and Agent. The registered agent of the
Corporation shall be as designated from time to time by the appropriate filing
by the Corporation in the office of the Secretary of State of the State of
Delaware.

1.2 Other Offices. The Corporation may also have offices at such
other places, both within and without the State of Delaware, as the board of
directors may from time to time determine or as the business of the Corporation
may require.

ARTICLE II MEETINGS OF STOCKHOLDERS

2.1 Annual Meeting. An annual meeting of stockholders of the
Corporation shall be held each calendar year on such date and at such time as
shall be designated from time to time by the board of directors and stated in
the notice of the meeting or in a duly executed waiver of notice of such
meeting. At such meeting, the stockholders shall elect directors and transact
such other business as may properly be brought before the meeting.

2.2 Special Meeting. Except as otherwise required by law, special
meetings of the stockholders of the Corporation, and any proposals to be
considered at such meetings, may be called and proposed exclusively by the
board of directors, pursuant to a resolution approved by a majority of the
members of the board of directors serving at the time of that vote, and no
stockholder of the Corporation shall require the board of directors to call a
special meeting of stockholders or to propose business at a special meeting of
stockholders. A special meeting shall be held on such date and at such time as
shall be designated by the board of directors and stated in the notice of the
meeting or in a duly executed waiver of notice of such meeting. Only such
business shall be transacted at a special meeting as may be stated or indicated
in the notice of such meeting or in a duly executed waiver of notice of such
meeting.

2.3 Place of Meetings. An annual meeting of stockholders may be held
at any place within or without the State of Delaware designated by the board of
directors. A special meeting of stockholders may be held at any place within
or without the State of Delaware designated in the notice of the meeting or a
duly
<PAGE> 5
executed waive of notice of such meeting. Meetings of stockholders shall be
held at the principal office of the Corporation unless another place is
designated for meetings in the manner provided herein.

2.4 Notice. Written or printed notice stating the place, day, and
time of each meeting of the stockholders and, in case of a special meeting, the
purpose or purposes for which the meeting is called shall be delivered not less
than ten (10) nor more than sixty (60) days before the date of the meeting,
either personally or by mail, by or at the direction of the President, the
Secretary, or the officer or person(s) calling the meeting, to each stockholder
of record entitled to vote at such meeting. If such notice is to be sent by
mail, it shall be directed to each stockholder at his address as it appears on
the records of the Corporation, unless he shall have filed with the Secretary
of the Corporation a written request that notices to him be mailed to some
other address, in which case it shall be directed to him at such other address.
Notice of any meeting of stockholders shall not be required to be given to any
stockholder who shall attend such meeting in person or by proxy and shall not,
at the beginning of such meeting, object to the transaction of any business
because the meeting is not lawfully called or convened, or who shall, either
before or after the meeting, submit a signed waiver of notice, in person or by
proxy.

2.5 Notice of Stockholder Business at Annual Meeting. (a) At an
annual meeting of the stockholders, only such business shall be conducted as
shall have been brought before the meeting (i) pursuant to the Corporation's
notice of meeting, (ii) by or at the direction of a majority of the members of
the board of directors, or (iii) by any stockholder of the Corporation who is a
stockholder of record at the time of giving of notice provided for in this
bylaw, who shall be entitled to vote at such meeting, and who complies with the
notice procedures set forth in paragraph (b) of this bylaw.

(b) For business to be properly brought before an annual
meeting by a stockholder pursuant to clause (iii) of paragraph (a) of this
bylaw, the stockholder must have given timely notice thereof in writing to the
Secretary of the Corporation. To be timely, a stockholder's notice must be
delivered to or mailed and received at the principal executive offices of the
Corporation no later than sixty days before the annual meeting of stockholders
or (if later) ten days after the first public notice of that meeting is sent to
stockholders, the Corporation receives from the stockholder proposing that
business a written notice that sets forth (1) the nature of the proposed
business with reasonable particularity, including the exact text of any
proposal to be presented for adoption, and the reasons for conducting that
business at the annual meeting; (2) with respect to each such stockholder, that
stockholder's name and address (as they appear on the records of the
Corporation), business address and telephone number, residence address and
telephone number, and the number of shares of each class and series of stock of
the Corporation beneficially owned by that stockholder; (3) any interest of the
stockholder in the proposed business; (4) the name or names of each person
nominated by the stockholder to be elected or reelected as a director, if any;
and (5) with respect to each nominee and such stockholder the information and
notices required by Section 3.3 of these Bylaws.

(c) Notwithstanding anything in these bylaws to the contrary,
no business shall be conducted at an annual meeting except in accordance with
the procedures set forth in this bylaw. The person presiding at the annual
meeting shall determine whether business (including the nomination of any
person as a director) has been properly brought before the meeting and, if the
facts so warrant, shall not permit any business (or voting with respect to any
particular nominee) to be transacted that has not been properly brought before
the meeting. Nothing in this bylaw shall relieve a stockholder who proposes to
conduct business at an annual meeting from complying with all applicable
requirements, if any, of the Exchange Act, and the rules and regulations
thereunder.

2.6 Voting List. At least ten days before each meeting of
stockholders, the Secretary or other officer of the Corporation who has charge
of the Corporation's stock ledger, either directly or through another officer
appointed by him or through a transfer agent appointed by the board of
directors, shall prepare a complete list of stockholders entitled to vote
thereat, arranged in alphabetical order and showing the address of each
stockholder and number of shares registered in the name of each stockholder.
For a period of ten days

2
<PAGE> 6
prior to such meeting, such list shall be kept on file at a place within the
city where the meeting is to be held, which place shall be specified in the
notice of meeting or a duly executed waiver of notice of such meeting or, if
not so specified, at the place where the meeting is to be held and shall be
open to examination by any stockholder during ordinary business hours. Such
list shall be produced at such meeting and kept at the meeting at all times
during such meeting and may be inspected by any stockholder who is present.

2.7 Quorum. The holders of a majority of the outstanding shares
entitled to vote on a matter, present in person or by proxy, shall constitute a
quorum at any meeting of stockholders, except as otherwise provided by law, the
certificate of incorporation of the Corporation, or these bylaws. If a quorum
shall not be present, in person or by proxy, at any meeting of stockholders,
the stockholders entitled to vote thereat who are present, in person or by
proxy, or, if no stockholder entitled to vote is present, any officer of the
Corporation may adjourn the meeting from time to time, without notice other
than announcement at the meeting (unless the board of directors, after such
adjournment, fixes a new record date for the adjourned meeting), until a quorum
shall be present, in person or by proxy. At any adjourned meeting at which a
quorum shall be present, in person or by proxy, any business may be transacted
which may have been transacted at the original meeting had a quorum been
present; provided that, if the adjournment is for more than 30 days or if after
the adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder of record entitled
to vote at the adjourned meeting.

2.8 Required Vote; Withdrawal of Quorum. When a quorum is present at
any meeting, the vote of the holders of at least a majority of the outstanding
shares entitled to vote who are present, in person or by proxy, shall decide
any question brought before such meeting, unless the question is one on which,
by express provision of statute, the certificate of incorporation of the
Corporation, or these bylaws, a different vote is required, in which case such
express provision shall govern and control the decision of such question. The
stockholders present at a duly constituted meeting may continue to transact
business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum.

2.9 Method of Voting; Proxies. Except as otherwise provided in the
certificate of incorporation of the Corporation or bylaw, each outstanding
share, regardless of class, shall be entitled to one vote on each matter
submitted to a vote at a meeting of stockholders. Elections of directors need
not be by written ballot. At any meeting of stockholders, every stockholder
having the right to vote may vote either in person or by a proxy executed in
writing by the stockholder or by his duly authorized attorney-in-fact. Each
such proxy shall be filed with the Secretary of the Corporation before or at
the time of the meeting. No proxy shall be valid after three years from the
date of its execution, unless otherwise provided in the proxy. If no date is
stated in a proxy, such proxy shall be presumed to have been executed on the
date of the meeting at which it is to be voted. Each proxy shall be revocable
unless expressly provided therein to be irrevocable and coupled with an
interest sufficient in law to support an irrevocable power or unless otherwise
made irrevocable by law.

2.10 Record Date. (a) For the purpose of determining stockholders
entitled to notice of or to vote at any meeting of stockholders, or any
adjournment thereof, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion, or exchange of stock or for the purpose of
any other lawful action, the board of directors may fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted by the board of directors, for any such determination of
stockholders, such date in any case to be not more than sixty (60) days and not
less than ten (10) days prior to such meeting nor more than sixty (60) days
prior to any other action. If no record date is fixed:

(i) The record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders shall be
at the close of business on the day next preceding the date on which
notice is given or, if notice is waived, at the close of business on the
day next preceding the day on which the meeting is held.

3
<PAGE> 7
(ii) The record date for determining stockholders for
any other purpose shall be at the close of business on the day on which
the board of directors adopts the resolution relating thereto.

(iii) A determination of stockholders of record entitled
to notice of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the board of
directors may fix a new record date for the adjourned meeting.

(b) Conduct of Meeting. The Chairman of the Board, if such
office has been filled, and, if not or if the Chairman of the Board is absent
or otherwise unable to act, the President shall preside at all meetings of
stockholders. The Secretary shall keep the records of each meeting of
stockholders. In the absence or inability to act of any such officer, such
officer's duties shall be performed by the officer given the authority to act
for such absent or non-acting officer under these Bylaws or by some person
appointed by the meeting.

(c) Inspectors. The board of directors may, in advance of any
meeting of stockholders, appoint one or more inspectors to act at such meeting
or any adjournment thereof. If any of the inspectors so appointed shall fail
to appear or act, the chairman of the meeting shall, or if inspectors shall not
have been appointed, the chairman of the meeting may, appoint one or more
inspectors. Each inspector, before entering upon the discharge of his duties,
shall take and sign an oath faithfully to execute the duties of inspector at
such meeting with strict impartiality and according to the best of his ability.
The inspectors shall determine the number of shares of capital stock of the
Corporation outstanding and the voting power of each, the number of shares
represented at the meeting, the existence of a quorum, and the validity and
effect of proxies and shall receive votes, ballots, or consents, hear and
determine all challenges and questions arising in connection with the right to
vote, count and tabulate all votes, ballots, or consents, determine the
results, and do such acts as are proper to conduct the election or vote with
fairness to all stockholders. On request of the chairman of the meeting, the
inspectors shall make a report in writing of any challenge, request, or matter
determined by them and shall execute a certificate of any fact found by them.
No director or candidate for the office of director shall act as an inspector
of an election of directors. Inspectors need not be stockholders.

ARTICLE III DIRECTORS

3.1 Management. The business and property of the Corporation shall
be managed by the board of directors. Subject to the restrictions imposed by
law, the certificate of incorporation of the Corporation, or these Bylaws, the
board of directors may exercise all the powers of the Corporation.

3.2 Number; Qualification; Election; Eligibility; Term. Except as
otherwise provided in the Certificate of Incorporation, the number of directors
which shall constitute the entire board of directors shall not be fewer than
three or more than twenty-one. Within the limits above specified, the number
of directors which shall constitute the entire board of directors shall from
time to time be fixed exclusively by the board of directors by a resolution
adopted by a majority of the entire board of directors serving at the time of
that vote. Except as otherwise required by law, the certificate of
incorporation of the Corporation, or these bylaws, the directors of the
Corporation shall be elected at an annual meeting of stockholders at which a
quorum is present by a plurality of the votes of the shares present in person
or represented by proxy and entitled to vote on the election of directors or a
class of directors. None of the directors need be a stockholder of the
Corporation or a resident of the State of Delaware. Each director must have
attained the age of majority. All directors must, in order to be elected, meet
the eligibility requirements of Section 3.3.

3.3 Nomination of Director Candidates. (a) Nominations of persons
for election to the board of directors of the Corporation at a meeting of
stockholders may be made (i) by or at the direction of the board

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of directors or (ii) by any stockholder of the Corporation who is a stockholder
of record at the time of giving of notice provided for in this bylaw, who shall
be entitled to vote for the election of the director so nominated.

(b) Nominations by stockholders shall be made pursuant to
timely notice in writing to the Secretary of the Corporation. To be timely, a
stockholder's notice shall be delivered to or mailed and received at the
principal executive offices of the Corporation (i) in the case of an annual
meeting, no later than sixty days before the annual meeting of stockholders or
(if later) ten days after the first public notice of that meeting is sent to
stockholders, and (ii) in the case of a special meeting at which directors are
to be elected, not later than the close of business on the tenth day following
the earlier of the day on which notice of the date of the meeting was mailed or
public disclosure of the meeting date was made. The other provisions of these
Bylaws notwithstanding, in order to be eligible for election as a director, an
individual must have been nominated, by written notice delivered to the
Corporation at its principal place of business in Parsippany, New Jersey. Such
notice shall set forth (i) as to each nominee for election as a director that
nominee's name, business address and telephone number, and residence address
and telephone number, the number of shares, if any, of each classes and series
of stock of the Corporation owned beneficially by that nominee, and all
information relating to that nominee that is required to be disclosed in
solicitations of proxies for elections of directors or is otherwise required,
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (or any provision of law subsequently replacing
Regulation 14A), together with a notarized letter signed by the nominee stating
his or her acceptance of the nomination by that stockholder, stating his or her
intention to serve as director if elected, and consenting to being named as a
nominee for director in any proxy statement relating to such election., and
(ii) if the nomination is submitted by a stockholder of record, (A) the name
and address, as they appear on the Corporation's books, of such stockholder of
record and the name and address of the beneficial owner, if different, on whose
behalf the nomination is made and (B) the class and number of shares of the
Corporation which are beneficially owned and owned of record by such
stockholder of record and such beneficial owner.

(c) No person shall be eligible to serve as a director of the
Corporation unless nominated in accordance with the procedures set forth in
this bylaw. The election of any director in violation of this bylaw shall be
void and of no effect. The chairman of the meeting shall, if the facts
warrant, determine and declare to the meeting that a nomination was not made in
accordance with the procedures prescribed by these Bylaws, and if he should so
determine, he shall so declare to the meeting and the defective nomination
shall be disregarded. Notwithstanding the foregoing provisions of this bylaw,
a stockholder shall also comply with all applicable requirements of the
Exchange Act and the rules and regulations thereunder with respect to the
matters set forth in this bylaw.

3.4 Change in Number. If the number of directors that constitutes
the whole board of directors is changed in accordance with the certificate of
incorporation and these Bylaws, the majority of the whole board of directors
that adopts the change shall also fix and determine the number of directors
comprising each class; provided, however, that any increase or decrease in the
number of directors shall be apportioned among the classes as equally as
possible. No decrease in the number of directors constituting the entire board
of directors shall have the effect of shortening the term of any incumbent
director.

3.5 Removal. Except as otherwise provided by law, no director of any
class of directors of the Corporation shall be removed before the expiration of
that director's term of office except for cause and by an affirmative vote of
the holders of not less than a majority in voting power of the outstanding
shares entitled to vote thereon cast at the annual meeting of stockholders or
at any special meeting of stockholders called for this purpose by a majority of
the members of the board of directors serving at the time of that vote.

3.6 Newly Created Directorships and Vacancies. Vacancies in the
board of directors resulting from death, resignation, retirement,
disqualification, removal from office or other cause and newly-created
directorships resulting from any increase in the authorized number of directors
shall be filled by a majority vote of the remaining directors then in office,
though less than a quorum, or by the sole remaining director, and each

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<PAGE> 9
director so chosen shall receive the classification of the vacant directorship
to which he or she has been appointed or, if it is a newly created
directorship, shall receive the classification that at least a majority of the
board of directors designates and shall hold office until the first meeting of
stockholders held after his election for the purpose of electing directors of
that classification and until his or her successor is elected and qualified or
until his or her earlier death, resignation or removal from office. If there
are no directors in office (or where holders of any class or classes or series
thereof are entitled to elect one or more directors, there are no directors of
such class in office), an election of directors may be held in the manner
provided by statute.

3.7 Meetings of Directors. The directors may hold their meetings and
may have an office and keep the books of the Corporation, except as otherwise
provided by statute, in such place or places within or without the State of
Delaware as the board of directors may from time to time determine or as shall
be specified in the notice of such meeting or duly executed waiver of notice of
such meeting.

3.8 Election of Officers. At the first meeting of the board of
directors after each annual meeting of stockholders at which a quorum shall be
present, the board of directors shall elect the officers of the Corporation.

3.9 Regular Meetings. Regular meetings of the board of directors
shall be held at such times and places as shall be designated from time to time
by resolution of the board of directors. Notice of such regular meetings shall
not be required.

3.10 Special Meetings. Special meetings of the board of directors
shall be held whenever called by the Chairman of the Board, the President, or
any director.

3.11 Notice. The Secretary shall give written or printed notice of
each special meeting to each director no later than ten (10) days before the
meeting. Notice of any such meeting need not be given to any party entitled to
notice who shall, either before or after the meeting, submit a signed waiver of
notice or who shall attend such meeting without protesting, prior to or at its
commencement, the lack of notice to him. Such notice shall state the place,
day and time of the meeting and the purpose or purposes for which the meeting
is called.

3.12 Quorum; Majority Vote. At all meetings of the board of
directors, a majority of the directors fixed in the manner provided in these
Bylaws shall constitute a quorum for the transaction of business. If at any
meeting of the board of directors there be less than a quorum present, a
majority of those present or any director solely present may adjourn the
meeting from time to time without further notice. Unless the act of a greater
number is required by law, the certificate of incorporation of the Corporation,
or these Bylaws, the act of a majority of the directors present at a meeting at
which a quorum is in attendance shall be the act of the board of directors. At
any time that the certificate of incorporation of the Corporation provides that
directors elected by the holders of a class or series of stock shall have more
or less than one vote per director on any matter, every reference in these
Bylaws to a majority or other proportion of directors shall refer to a majority
or other proportion of the votes of such directors.

3.13 Procedure. At meetings of the board of directors, business shall
be transacted in such order as from time to time the board of directors may
determine. The Chairman of the Board, if such office has been filled, and, if
not or if the Chairman of the Board is absent or otherwise unable to act, the
President, if he is a director, shall preside at all meetings of the board of
directors. In the absence or inability to act of either such officer, a
chairman shall be chosen by the board of directors from among the directors
present. The Secretary of the Corporation shall act as the secretary of each
meeting of the board of directors unless the board of directors appoints
another person to act as secretary of the meeting. The board of directors
shall keep regular minutes of its proceedings which shall be placed in the
minute book of the Corporation.

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3.14 Presumption of Assent. A director of the Corporation who is
present at the meeting of the board of directors at which action on any
corporate matter is taken shall be presumed to have assented to the action
unless his dissent shall be entered in the minutes of the meeting or unless he
shall file his written dissent to such action with the person acting as
secretary of the meeting before the adjournment thereof or shall forward any
dissent by certified or registered mail to the Secretary of the Corporation
immediately after the adjournment of the meeting. Such right to dissent shall
not apply to a director who vote in favor of such action.

3.15 Compensation. The board of directors shall have the authority to
fix the compensation, including fees and reimbursement of expenses, paid to
directors for attendance at regular or special meetings of the board of
directors or any committee thereof; provided, that nothing contained herein
shall be construed to preclude any director from serving the Corporation in any
other capacity or receiving compensation therefor.

ARTICLE IV COMMITTEES

4.1 Designation. The board of directors may, by resolution adopted
by a majority of the entire board of directors, designate one or more
committees.

4.2 Number; Qualification; Term. Each committee shall consist of one
or more directors appointed by resolution adopted by a majority of the entire
board of directors. The number of committee members may be increased or
decreased from time to time by resolution adopted by a majority of the entire
board of directors. Each committee member shall serve as such until the
earliest of (i) the expiration of his term as director, (ii) his resignation as
a committee member or as a director, or (iii) his removal as a committee member
or as a director.

4.3 Committee Changes. The board of directors shall have the power
at any time to fill vacancies in, to change the membership of, and to discharge
any committee.

4.4 Alternate Members of Committees. The board of directors may
designate one or more directors as alternate members of any committee. Any
such alternate member may replace any absent or disqualified member at any
meeting of the committee. If no alternate committee members have been so
appointed to a committee or each such alternate committee members is absent or
disqualified, the member or members of such committee present at any meeting
and not disqualified from voting, whether or not he or they constitute a
quorum, may unanimously appoint another member of the board of directors to act
at the meeting in the place of any such absent or disqualified member.

4.5 Regular Meetings. Regular meetings of any committee may be held
without notice at such time and place as may be designated from time to time by
the committee and communicated to all members thereof.

4.6 Special Meetings. Special meetings of any committee may be held
whenever called by any committee member. The committee member calling any
special meeting shall cause notice of such special meeting, including therein
the time and place of such special meeting, to be given to each committee
member at least two days before such special meeting.

4.7 Quorum; Majority Vote. At meetings of any committee, a majority
of the number of members designated by the board of directors shall constitute
a quorum for the transaction of business. If a quorum is not present at a
meeting of any committee, a majority of the members present any adjourn the
meeting from time to time, without notice other than an announcement at the
meeting, until a quorum is present. The act of a majority of the members
present at any meeting at which a quorum is in attendance shall be the act of a

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<PAGE> 11
committee, unless the act of a greater number is required by law, the
certificate of incorporation of the Corporation, or these Bylaws.

4.8 Minutes. Each committee shall cause minutes of its proceedings
to be prepared and shall report the same to the board of directors upon the
request of the board of directors. The minutes of the proceedings of each
committee shall be delivered to the Secretary of the Corporation for placement
in the minute books of the Corporation.

4.9 Compensation. Committee members may, by resolution of the board
of directors, be allowed a fixed sum and expenses of attendance, if any, for
attending any committee meetings or a stated salary.

4.10 Responsibility. The designation of any committee and the
delegation of authority to it shall not operate to relieve the board of
directors or any director of any responsibility imposed upon it or such
director by law.

ARTICLE V NOTICE

5.1 Method. Whenever by statute, the certificate of incorporation of
the Corporation, or these Bylaws, notice is required to be given to any
committee member, director, or stockholder and no provision is made as to how
such notice shall be given, personal notice shall not be required and any such
notice may be given (a) in writing, by mail, postage prepaid, addressed to such
committee member, director or stockholder at his address as it appears on the
books or (in the case of a stockholder) the stock transfer records of the
Corporation, or (b) by any other method permitted by law (including but not
limited to overnight courier service, telegram, telex or telefax). Any notice
required or permitted to be given by mail shall be deemed to be delivered and
given at the time when the same is deposited in the United States mail as
aforesaid. Any notice required or permitted to be given by overnight courier
service shall be deemed to be delivered and given at the time delivered to such
service with all charges prepaid and addressed as aforesaid. Any notice
required or permitted to be given by telegram, telex or telefax shall be deemed
to be delivered and given at the time transmitted with all charges prepaid and
addressed as aforesaid.

5.2 Waiver. Whenever any notice is required to be given to any
stockholder, director or committee member of the Corporation by statute, the
certificate of incorporation of the Corporation, or these Bylaws, a waiver
thereof in writing signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be equivalent to the
giving of such notice. Attendance of a stockholder, director, or committee
member at a meeting shall constitute a waiver of notice of such meeting, except
where such person attends for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.

ARTICLE VI OFFICERS

6.1 Number; Titles; Term of Office. The officers of the Corporation
shall be a Chief Executive Officer, a President, a Secretary, and such other
officers as the board of directors may from time to time elect or appoint,
including a Chairman of the Board, one or more Vice Presidents (with each Vice
President to have such descriptive title, if any, as the board of directors
shall determine), and a Treasurer. Each officer shall hold office until his
successor shall have been duly elected and shall have qualified, until his
death, or until he shall resign or shall have been removed in the manner
hereinafter provided. Any two or more offices may be held by the same person.
None of the officers need be a stockholder or a director of the Corporation or
a resident of the State of Delaware.

6.2 Removal. Any officer or agent elected or appointed by the board
of directors may be removed by the board of directors whenever in its judgment
the best interest of the Corporation will be served thereby,

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<PAGE> 12
but such removal shall be without prejudice to the contract rights, if any, of
the person so removed. Election or appointment of an officer or agent shall
not of itself create contract rights.

6.3 Vacancies. Any vacancy occurring in any office of the
Corporation (by death, resignation, removal, or otherwise) may be filled by the
board of directors.

6.4 Authority. Officers shall have such authority and perform such
duties in the management of the Corporation as are provided in these Bylaws or
as may be determined by resolution of the board of directors not inconsistent
with these Bylaws.

6.5 Compensation. The compensation, if any, of officers and agents
shall be fixed from time to time by the board of directors; provided, however,
that the board of directors may delegate to a committee of the board of
directors, the Chairman of the Board or the President the power to determine
the compensation of any officer or agent (other than the officer to whom such
power is delegated).

6.6 Chairman of the Board. The Chairman of the Board, if elected by
the board of directors, shall have such powers and duties as may be prescribed
by the board of directors. Such officer shall preside at all meetings of the
stockholders and of the board of directors. Such officer may sign all
certificates for shares of stock of the Corporation.

6.7 Chief Executive Officer. The Chief Executive Officer shall,
subject to the board of directors, have general executive charge, management,
and control of the properties and operations of the Corporation in the ordinary
course of its business, with all such powers with respect to such properties
and operations as may be reasonably incident to such responsibilities. If the
board of directors has not elected a Chairman of the Board or in the absence of
inability to act of the Chairman of the Board, the Chief Executive Officer
shall exercise all of the powers and discharge all of the duties of the
Chairman of the Board. As between the Corporation and third parties, any
action taken by the Chief Executive Officer in the performance of the duties of
the Chairman of the Board shall be conclusive evidence that there is no
Chairman of the Board or that the Chairman of the Board is absent or unable to
act.

6.8 President. The President shall have such powers and duties as
may be assigned to him by the board of directors, the Chairman of the Board, or
the Chief Executive Officer, and shall exercise the powers of the Chief
Executive Officer during that officer's absence or inability to act. As
between the Corporation and third parties, any action taken by the President in
the performance of the duties of the Chief Executive Officer shall be
conclusive evidence of the absence or inability to act of the Chief Executive
Officer at the time such action was taken.

6.9 Vice Presidents. Each Vice President shall have such powers and
duties as may be assigned to him by the board of directors, the Chairman of the
Board, the Chief Executive Officer, or the President, and (in order of their
seniority as determined by the board of directors, or in the absence of such
determination, as determined by the length of time they have held the office of
Vice President) shall exercise the powers of the President during that
officer's absence or inability to act. As between the Corporation and third
parties, any action taken by a Vice President in the performance of the duties
of the President shall be conclusive evidence of the absence or inability to
act of the President at the time such action was taken.

6.10 Treasurer. The Treasurer shall have custody of the Corporation's
funds and securities, shall keep full and accurate account of receipts and
disbursements, shall deposit all monies and valuable effects in the name and to
the credit of the Corporation in such depository or depositories as may be
designated by the board of directors, and shall perform such other duties as
may be prescribed by the board of directors, the Chairman of the Board, the
Chief Executive Officer, or the President.

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6.11 Assistant Treasurers. Each Assistant Treasurer shall have such
power and duties as may be assigned to him by the board of directors, the
Chairman of the Board, the Chief Executive Officer, or the President. The
Assistant Treasurers (in the order of their seniority as determined by the
board of directors or, in the absence of such a determination, as determined by
the length of time they have held the office of Assistant Treasurer) shall
exercise the powers of the Treasurer during that officer's absence or inability
to act.

6.12 Secretary. Except as otherwise provided in these Bylaws, the
Secretary shall keep the minutes of all minutes of all meetings of the board of
directors and of the stockholders in books provided for that purpose, and he
shall attend to the giving and service of all notices. He may sign with the
Chairman of the Board, the Chief Executive Officer, or the President, in the
name of the Corporation, all contracts of the Corporation and affix the seal of
the Corporation thereto. He may sign with the Chairman of the Board, the Chief
Executive Officer, or the President all certificates for shares of stock of the
Corporation, and he shall have charge of the certificate books, transfer books,
and stock papers as the board of directors may direct, all of which shall at
all reasonable times be open to inspection by any director upon application at
the office of the Corporation during business hours. He shall in general
perform all duties incident to the office of the Secretary, subject to the
control of the board of directors, the Chairman of the Board, the Chief
Executive Officer, and the President.

6.13 Assistant Secretaries. Each Assistant Secretary shall have such
powers and duties as may be assigned to him by the board of directors, the
Chairman of the Board, the Chief Executive Officer, or the President. The
Assistant Secretaries (in the order of their seniority as determined by the
board of directors or, in the absence of such a determination, as determined by
the length of time they have held the office of Assistant Secretary) shall
exercise the powers of the Secretary during that officer's absence or inability
to act.

ARTICLE VII CERTIFICATES AND STOCKHOLDERS

7.1 Certificates for Shares. Certificates for shares of stock of the
corporation shall be in such form as shall be approved by the board of
directors. The certificates shall be signed by the Chairman of the Board, the
Chief Executive Officer, or the President or a Vice President and also by the
Secretary or an Assistant Secretary or by the Treasurer or an Assistant
Treasurer. Any and all signatures on the certificate may be a facsimile and
may be sealed with the seal of the Corporation or a facsimile thereof. If any
officer, transfer agent, or registrar who has signed, or whose facsimile
signature has been placed upon, a certificate has ceased to be such officer,
transfer agent, or registrar before such certificate is issued, such
certificate may be issued by the Corporation with the same effect as if he were
such officer, transfer agent, or registrar at the date of issue. The
certificates shall be consecutively numbered and shall be entered in the books
of the Corporation as they are issued and shall exhibit the holder's name and
the number of shares.

7.2 Replacement of Lost or Destroyed Certificates. The board of
directors may direct a new certificate or certificates to be issued in place of
a certificate or certificates theretofore issued by the Corporation and alleged
to have been lost or destroyed, upon the making of an affidavit of that fact by
the person claiming the certificate or certificates representing shares to be
lost or destroyed. When authorizing such issue of a new certificate or
certificates, the board of directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost or destroyed
certificate or certificates, or his legal representative, to advertise the same
in such manner as it shall require and/or to give the Corporation a bond with a
surety or sureties satisfactory to the Corporation in such sum as it may direct
as indemnity against any claim, or expense resulting from a claim, that may be
made against the Corporation with respect to the certificate or certificates
alleged to have been lost or destroyed.

7.3 Transfer of Shares. Shares of stock of the Corporation shall be
transferable only on the books of the Corporation by the holders thereof in
person or by their duly authorized attorneys or legal representatives. Upon
surrender to the Corporation or the transfer agent of the Corporation of a
certificate

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representing shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, the Corporation or its
transfer agent shall issue a new certificate to the person entitled thereto,
cancel the old certificate, and record the transaction upon its books.

7.4 Registered Stockholders. The Corporation shall be entitled to
treat the holder of record of any share or shares of stock as the holder in
fact thereof and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such share or shares on the part of any other
person, whether or not it shall have express or other notice thereof, except as
otherwise provided by law.

7.5 Regulations. The board of directors shall have the power and
authority to make all such rules and regulations as they may deem expedient
concerning the issue, transfer and registration or the replacement of
certificates for shares of stock of the Corporation.

7.6 Legends. The board of directors shall have the power and
authority to provide that certificates representing shares of stock bear such
legends as the board of directors deems appropriate to assure that the
Corporation does not become liable for violations of federal or state
securities laws or other applicable law.

ARTICLE VIII MISCELLANEOUS PROVISIONS

8.1 Dividends. Subject to provisions of law and the certificate of
incorporation of the Corporation, dividends may be declared by the board of
directors at any regular or special meeting and may be paid in cash, in
property, or in shares of capital stock of the Corporation. Such declaration
and payment shall be at the discretion of the board of directors.

8.2 Reserves. There may be created by the board of directors out of
funds of the Corporation legally available therefor such reserve or reserves as
the directors from time to time, in their discretion, consider proper to
provide for contingencies, to equalize dividends, or to repair or maintain any
property of the Corporation, or for such other purpose as the board of
directors shall consider beneficial to the Corporation, and the board of
directors may modify or abolish any such reserve in the manner in which it was
created.

8.3 Books and Records. The Corporation shall keep correct and
complete books and records of account, shall keep minutes of the proceedings of
its stockholders and board of directors and shall keep at its registered office
or principal place of business, or at the office of its transfer agent or
registered office or principal place of business, or at the office of its
transfer agent or registrar, a record of its stockholders, giving the names and
addresses of all stockholders and the number and class of the shares held by
each.

8.4 Fiscal Year. The fiscal year of the Corporation shall be fixed
by the board of directors; provided, that if such fiscal year is not fixed by
the board of directors and the selection of the fiscal year is not expressly
deferred by the board of directors, the fiscal year shall be the calendar year.

8.5 Seal. The seal of the Corporation shall be such as from time to
time may be approved by the board of directors.

8.6 Resignations. Any director, committee member, or officer may
resign by so stating at any meeting of the board of directors or by giving
written notice to the board of directors, the Chairman of the Board, the Chief
Executive Officer, the President, or the Secretary. Such resignation shall
take effect at the time specified therein or, if no time is specified therein,
immediately upon its receipt. Unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.

8.7 Securities of Other Corporations. With the prior approval of a
majority of the Corporation's board of directors, the Chairman of the Board,
the Chief Executive Officer, the President, or any Vice

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President, the Corporation shall have the power and authority to transfer,
endorse for transfer, vote, consent, or take any other action with respect to
any securities of another issuer which may be held or owned by the Corporation
and to make, execute, and deliver any waiver, proxy or consent with respect to
any such securities.

8.8 Telephone Meetings. Members of the board of directors and
members of a committee of the board of directors may participate in and hold a
meeting of such stockholders, board of directors or committee by means of a
conference telephone or similar communications equipment by means of which
persons participating in the meeting can hear each other and participation in a
meeting pursuant to this section shall constitute presence in person at such
meeting, except where a person participates in the meeting for the express
purpose of objecting to the transaction of any business on the ground that the
meeting is not lawfully called or convened.

8.9 Action Without a Meeting. Unless otherwise restricted by the
certificate of incorporation of the Corporation or by these Bylaws, any action
required or permitted to be taken at a meeting of the board of directors, or of
any committee of the board of directors, may be taken without a meeting if a
consent or consents in writing, setting forth the action so taken, shall be
signed by all the directors or all the committee members, as the case may be,
entitled to vote with respect to the subject matter thereof, and such consent
shall have the same force and effect as a vote of such directors or committee
members, as the case may be, and may be stated as such in any certificate or
document filed with the Secretary of State of the State of Delaware or in any
certificate delivered to any person. Such consent or consents shall be filed
with the minutes of proceedings of the board or committee, as the case may be.

8.10 Invalid Provisions. If any part of these Bylaws shall be held
invalid or inoperative for any reason, the remaining parts, so far as it is
possible and reasonable, shall remain valid and operative.

8.11 Mortgages, etc. With respect to any deed, deed of trust,
mortgage or other instrument executed by the Corporation through its duly
authorized officer or officers, the attestation to such execution by the
Secretary of the Corporation shall not be necessary to constitute such deed,
deed of trust, mortgage or other instrument a valid and binding obligation
against the Corporation unless the resolutions, if any, of the board of
directors authorizing such execution expressly state that such attestation is
necessary.

8.12 Headings. The headings used in these Bylaws have been inserted
for administrative convenience only and do not constitute matter to be
construed in interpretation.

8.13 References. Whenever herein the singular number is used, the
same shall include the plural where appropriate, and words of any gender should
include each other gender where appropriate.

8.14 Amendments. These Bylaws may be altered, amended, or repealed or
new bylaws may be adopted by the board of directors at any regular meeting of
the board of directors or at any special meeting of the board of directors if
notice of such alteration, amendment, repeal, or adoption of new bylaws be
contained in the notice of such special meeting. Notwithstanding any
provision of law that might otherwise permit a lesser or no vote, but in
addition to any affirmative vote of the holders of any particular class or
series of the capital stock of the Corporation required by law or by the
Certificate of Incorporation, these Bylaws shall not be altered, amended or
repealed by the stockholders of the Corporation except in accordance with the
provisions of these Bylaws and by the vote of the holders of not less than a
majority in voting power of the outstanding shares of stock then entitled to
vote upon the election of directors, voting together as a single class.

<PAGE> 1
EXHIBIT 4.1

COMMON COMMON

NUMBER SHARES

PAR VALUE $0.01 PAR VALUE $0.01

THIS CERTIFICATE IS TRANSFERRABLE CUSIP 459655 10 6
IN NEW YORK, NY SEE REVERSE FOR CERTAIN DEFINITIONS

INTERNATIONAL HOME FOODS, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE

THIS CERTIFIES THAT

is the owner of

FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK OF

International Home Foods, Inc. transferable on the books of the Corporation by
the holder hereof in person or by duly authorized attorney upon surrender of
this certificate properly endorsed. This certificate and the shares represented
hereby are issued under and shall be subject to all of the provisions of the
Certificate of Incorporation and Bylaws of the Corporation and any amendments
thereto, copies of which are on file with the Corporation and the Transfer
Agent, to all of which the holder, by acceptance for issuance. This certificate
is not valid until countersigned by the Transfer Agent and registered by the
Registrar. Witness the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized Officers.

Dated:

CHAIRMAN OF THE BOARD AND CHIEF COUNTERSIGNED AND REGISTERED:
EXECUTIVE OFFICER THE BANK OF NEW YORK

[SEAL]

TRANSFER AGENT AND REGISTRAR

SECRETARY BY
AUTHORIZED SIGNATURE
<PAGE> 2
INTERNATIONAL HOME FOODS, INC.

THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO
REQUESTS, THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF OF
THE CORPORATION, AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH
PREFERENCES AND/OR RIGHTS. SUCH REQUEST SHOULD BE MADE TO THE CORPORATION OR
TO THE TRANSFER AGENT.

The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
TEN ENT - as tenants by the ------ --------
entireties (Cust) (Minor)
JT TEN - as joint tenants with under Uniform Gifts to
right of survivorship Minors
and not as tenants Act
in common ------------------
(State)

Additional abbreviations may also be used though not in the above list.

For Value Received, hereby sell, assign and transfer unto
--------

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
[ ]

----------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE
OF ASSIGNEE)

----------------------------------------------------------------------------

Shares
----------------------------------------------------------------------
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
Attorney
--------------------------------------------------------------------
to transfer the said stock on the books of the within-named Corporation
with full power of substitution in the premises.

Dated,
--------------------------------

---------------------------------
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT (SIGNATURE)
MUST CORRESPOND WITH THE NAME(S) AS -->
WRITTEN UPON THE FACE OF THE ---------------------------------
CERTIFICATE IN EVERY PARTICULAR (SIGNATURE)
WITHOUT ALTERATION OR ENLARGEMENT
OR ANY CHANGE WHATEVER.

---------------------------------
THE SIGNATURE(S) SHOULD BE
GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS,
WITH MEMBERSHIP IN AN APPROVED
SIGNATURE GUARANTEE MEDALLION
PROGRAM), PURSUANT TO
S.E.C. RULE 17Ad-18.
---------------------------------
SIGNATURE(S) GUARANTEED BY:

---------------------------------

<PAGE> 1
Exhibit 5.1

Vinson & Elkins L.L.P.
3700 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201-2975
Telephone (214) 220-7700

October 27, 1997

International Home Foods, Inc.
1633 Littleton Road
Parsippany, New Jersey 07054

Ladies and Gentlemen:

We have acted as counsel for International Home Foods, Inc., a Delaware
corporation (the "Company"), in connection with the preparation of a
Registration Statement on Form S-1 (as may hereafter be amended, the
"Registration Statement"), which has been filed by the Company with the
Securities and Exchange Commission for the purpose of registering under the
Securities Act of 1933 (the "1933 Act") and the rules and regulations
thereunder the sale of up to 15,665,875 shares (the "Shares") of the Company's
Common Stock, $.01 par value per share ("Common Stock"). The Shares will be
offered and sold (the "Offering") pursuant to an underwriting agreement (the
"Underwriting Agreement") to be entered into between the Company, AHP
Subsidiary Holding Corporation, each of Donaldson, Lufkin & Jenrette Securities
Corporation, BT Alex. Brown Incorporated, Chase Securities Inc., Credit Suisse
First Boston Corporation, Goldman, Sachs & Co. and Morgan Stanley & Co.
Incorporated (the "U.S. Underwriters") and each of Donaldson, Lufkin & Jenrette
International Limited, BT Alex. Brown International, Chase Manhattan
International Limited, Credit Suisse First Boston (Europe) Limited, Goldman,
Sachs International and Morgan Stanley & Co. International Limited (the
"International Managers" and collectively with the U.S. Underwriters, the
"Underwriters").

We are rendering this opinion as of the time the Registration Statement
becomes effective in accordance with Section 8(a) of the 1933 Act.

Before rendering the opinions hereinafter set forth, we examined, among
other things, the proposed form of Underwriting Agreement, the Registration
Statement, the Company's Amended and Restated Certificate of Incorporation, the
Company's Amended and Restated Bylaws, resolutions of the Company's Board of
Directors, and originals or photostatic or certified copies of all those
corporate records of the Company and of all those agreements, communications
and other instruments, certificates of public officials, certificates of
corporate officials and such other documents as we have deemed relevant and
necessary as a basis for the opinions hereinafter set forth. As to factual
matters, information with respect to which is in the possession of the Company
relevant
<PAGE> 2
International Home Foods, Inc.
October 27, 1997
Page 2

to the opinions herein stated, we have relied without investigation, to the
extent we deem such reliance proper, upon certificates or representations made
by its duly authorized representative.

Based upon the foregoing assumptions, and subject to the qualifications
set forth hereinafter, we are of the opinion that, when (i) the Registration
Statement becomes effective under the 1933 Act, (ii) the final terms of the
Underwriting Agreement and the Offering have been approved by the Board of
Directors (or a duly constituted committee thereof), (iii) the Underwriting
Agreement has been duly executed and delivered by each of the parties thereto,
and (iv) the Shares have been issued and delivered in accordance with the terms
of the Underwriting Agreement (including the receipt by the Company of the
consideration for the Shares described therein), the Shares will be validly
issued, fully paid and non-assessable.

The opinion expressed above is subject to the following assumptions,
exceptions and qualifications:

(a) We have assumed that (i) all information contained in all
documents reviewed by us is true and correct, (ii) all signatures on all
documents reviewed by us are genuine, (iii) all documents submitted to us as
originals are true and complete, (iv) all documents submitted to us as copies
are true and complete copies of the originals thereof, (v) each natural person
signing any document reviewed by us had the legal capacity to do so, (vi) each
natural person signing in a representative capacity any document reviewed by us
had authority to sign in such capacity, and (vii) the laws of any jurisdiction
other than Texas that govern any of the documents reviewed by us (other than
the Company's certificate of incorporation and bylaws) do not modify the terms
that appear in any such document.

(b) The opinion expressed in this letter is limited to the laws of
the State of Texas, the General Corporation Law of the State of Delaware, and
the federal laws of the United States of America. We are not admitted to the
practice of law in the State of Delaware.

We hereby consent to the filing of this opinion letter as an exhibit to
the Registration Statement and the references to us under the heading "Legal
Matters" in the prospectus that forms a part of the Registration Statement. We
also consent to the incorporation by reference of this consent into any
subsequent registration statement filed pursuant to Rule 462(b) under the 1933
Act in connection with the Offering. In giving this consent, we do not hereby
admit that we are within the category of persons whose consent is required
under Section 7 of the 1933 Act and the rules and regulations of the Securities
and Exchange Commission promulgated thereunder.
<PAGE> 3
International Home Foods, Inc.
October 27, 1997
Page 3

We express no opinion as to any matter other than as expressly set forth
above, and no opinion is to or may be inferred or implied herefrom. This
opinion is given as of the date hereof, and we undertake no, and hereby
disclaim any, obligation to advise the Company or anyone else of any change in
any matter set forth herein.

Very truly yours,

/s/ VINSON & ELKINS L.L.P.

<PAGE> 1
EXHIBIT 10.3

INTERNATIONAL HOME FOODS, INC.
1997 STOCK OPTION PLAN

1. Purpose.

International Home Foods, Inc., a Delaware corporation (herein, together
with its successors, referred to as the "Company"), by means of this 1997 Stock
Option Plan (the "Plan"), desires to afford certain individuals and key
employees of the Company and any parent corporation or subsidiary corporation
thereof now existing or hereafter formed or acquired (such parent and
subsidiary corporations sometimes referred to herein as "Related Entities") who
are responsible for the continued growth of the Company an opportunity to
acquire a proprietary interest in the Company, and thus to create in such
persons an increased interest in and a greater concern for the welfare of the
Company and any Related Entities. As used in the Plan, the terms "parent
corporation" and "subsidiary corporation" shall mean, respectively, a
corporation within the definition of such terms contained in Sections 424(e)
and 424(f), respectively, of the Internal Revenue Code of 1986, as amended (the
"Code").

The stock options described in Sections 6 and 7 (the "Options"), and the
shares of Common Stock (as hereinafter defined) acquired pursuant to the
exercise of such Options are a matter of separate inducement and are not in
lieu of any salary or other compensation for services.

2. Administration.

(a) Committee. The Board of Directors of the Company (the "Board of
Directors) shall administer the Plan with respect to all Key Employees (as
hereinafter defined) or Eligible Non-Employees (as hereinafter defined) or may
delegate all or part of its duties under this Plan to any committee appointed
by the Board of Directors (the "Committee") or to any officer or committee of
officers of the Company, subject in each case to such conditions and
limitations as the Board of Directors may establish and subject to the
following sentence. Unless a majority of the members of the Board of Directors
determines otherwise: (a) the Committee shall be constituted in a manner that
satisfies the requirements of Rule 16b-3, which Committee shall administer the
Plan with respect to all Key Employees or Eligible Non-Employees who are
subject to Section 16 of the Exchange Act in a manner that satisfies the
requirements of Rule 16b-3; and (b) the Committee shall be constituted in a
manner that satisfies the requirements of Section 162(m), which Committee shall
administer the Plan with respect to "performance-based compensation" for all
Key Employees or Eligible Non-Employees who are reasonably expected to be
"covered employees" as those terms are defined in Section 162(m). The number
of persons that shall constitute the Committee shall be determined from time to
time by a majority of all the members of the Board of Directors. Except for
references in Sections 2(a), 2(b), and 2(c) and unless the context otherwise
requires, references herein to the Committee shall also refer to the Board of
Directors as administrator of the Plan for Key Employees or Eligible Non-
Employees or to the appropriate delegate of the Committee or the Board of
Directors.

(b) Duration, Removal, Etc. The members of the Committee shall serve
at the pleasure of the Board of Directors, which shall have the power, at any
time and from time to time, to remove members from or add members to the
Committee. Removal from the Committee may be with or without cause. Any
individual serving as a member of the Committee shall have the right to resign
from membership in the Committee by written notice to the Board of Directors.
The Board of Directors, and not the remaining members of the Committee, shall
have the power and authority to fill vacancies on the Committee, however
caused.

(c) Meetings and Actions of Committee. The Board of Directors shall
designate which of the Committee members shall be the chairman of the
Committee. If the Board of Directors fails to designate a Committee chairman,
the members of the Committee shall elect one of the Committee members as
chairman, who shall act as chairman until he ceases to be a member of the
Committee or until the Board of Directors elects a new chairman. The Committee
shall hold its meetings at those times and places as the chairman of
<PAGE> 2
the Committee may determine. At all meetings of the Committee, a quorum for
the transaction of business shall be required, and a quorum shall be deemed
present if at least a majority of the members of the Committee are present. At
any meeting of the Committee, each member shall have one vote. All decisions
and determinations of the Committee shall be made by the majority vote or
majority decision of all of its members present at a meeting at which a quorum
is present; provided, however, that any decision or determination reduced to
writing and signed by all of the members of the Committee shall be as fully
effective as if it had been made at a meeting that was duly called and held.
The Committee may make any rules and regulations as it may deem advisable for
the conduct of its business that are not inconsistent with the provisions of
the Plan, the certificate of incorporation of the Company, the by-laws of the
Company, Rule 16b-3 so long as it is applicable, and Section 162(m) so long as
it is applicable.

3. Shares Available.

Subject to the adjustments provided in Section 10, the maximum aggregate
number of shares of Common Stock, $.01 par value, of the Company ("Common
Stock") in respect of which Options may be granted for all purposes under the
Plan shall be 45,000,000 shares. If, for any reason, any shares as to which
Options have been granted cease to be subject to purchase thereunder, including
the expiration of such Option, the termination of such Option prior to
exercise, or the forfeiture of such Option, such shares shall thereafter be
available for grants under the Plan. Options granted under the Plan may be
fulfilled in accordance with the terms of the Plan with (i) authorized and
unissued shares of the Common Stock, (ii) issued shares of such Common Stock
held in the Company's treasury, or (iii) issued shares of Common Stock
reacquired by the Company in each situation as the Board of Directors or the
Committee may determine from time to time.

4. Eligibility and Bases of Participation.

Grants of Incentive Options (as hereinafter defined) and Non-Qualified
Options (as hereinafter defined) may be made under the Plan, subject to and in
accordance with Section 6, to Key Employees. As used herein, the term "Key
Employee" shall mean any employee of the Company or any Related Entity,
including officers and directors of the Company or any Related Entity who are
also employees of the Company or any Related Entity, who is regularly employed
on a salaried basis and who is so employed on the date of such grant, whom the
Committee identifies as having a direct and significant effect on the
performance of the Company or any Related Entity.

Grants of Non-Qualified Options may be made, subject to and in
accordance with Section 7, to any Eligible Non-Employee. As used herein, the
term "Eligible Non-Employee" shall mean any person or entity of any nature
whatsoever, specifically including an individual, a firm, a company, a
corporation, a partnership, a trust, or other entity (collectively, a
"Person"), that the Committee designates as eligible for a grant of Options
pursuant to this Plan because such Person performs bona fide consulting,
advisory, or other services for the Company or any Related Entity (other than
services in connection with the offer or sale of securities in a capital-
raising transaction) and the Board of Directors or the Committee determines
that the Person has a direct and significant effect on the financial
development of the Company or any Related Entity.

The adoption of this Plan shall not be deemed to give any Person a right
to be granted any Options.

Notwithstanding any other provision of this Plan to the contrary, with
respect to the grant of any Options to any Key Employee or Eligible Non-
Employee, the Committee shall first determine the number of shares in respect
of which Options are to be granted to such Key Employee or Eligible Non-
Employee and shall then cause to be granted to such Key Employee or Eligible
Non-Employee an Option exercisable for such shares. The exercise price per
share of Common Stock under each Option shall be fixed by the Committee

-2-
<PAGE> 3
at the time of grant of the Option and shall equal at least 100% of the Fair
Market Value of a share of Common Stock on the date of grant.

5. Authority of Committee.

Subject to the express provisions of the Plan and any applicable law
with which the Company intends the Plan to comply, the Committee shall have the
authority, in its sole and absolute discretion, (a) to adopt, amend, and
rescind administrative and interpretive rules and regulations relating to the
Plan, including without limitation to adopt and observe such procedures
concerning the counting of Options against the Plan and individual maximums as
it may deem appropriate from time to time; (b) to determine the Key Employees
or Eligible Non-Employees to whom, and the time or times at which, Options
shall be granted; (c) to determine the amount of cash and the number of shares
of Common Stock, that shall be the subject of each Option; (d) to determine the
terms and provisions of each award evidencing Options granted hereunder (which
need not be identical), including provisions defining or otherwise relating to
(i) the term and the period or periods and extent of exerciseability of the
Options, (ii) the extent to which the transferability of shares of Common Stock
issued or transferred pursuant to any Option is restricted, (iii) the effect of
termination of employment on the Option, and (iv) the effect of approved leaves
of absence (consistent with any applicable regulations of the Internal Revenue
Service); (e) to accelerate, pursuant to Section 8, the time of exerciseability
of any Option that has been granted; (f) to construe the respective awards
evidencing Options granted hereunder and the Plan; (g) to make determinations
of the Fair Market Value of the Common Stock pursuant to the Plan; (h) to
delegate its duties under the Plan to such agents as it may appoint from time
to time, subject to the second sentence of Section 2(a); and (i) to make all
other determinations, perform all other acts, and exercise all other powers and
authority necessary or advisable for administering the Plan, including the
delegation of those ministerial acts and responsibilities as the Committee
deems appropriate. The Committee may correct any defect, supply any omission
or reconcile any inconsistency in the Plan, in any Option, or in any awards
evidencing Options granted hereunder in the manner and to the extent it deems
necessary or desirable to carry the Plan into effect, and the Committee shall
be the sole and final judge of that necessity or desirability. The
determinations of the Committee on the matters referred to in this Section 5
shall be final and conclusive. The Committee shall not have the power to
appoint members of the Committee or to terminate, modify, or amend the Plan.
Those powers are vested in the Board of Directors.

From time to time, the Board of Directors and appropriate officers of
the Company shall be and are authorized to take whatever actions are necessary
to file required documents with governmental authorities, stock exchanges, and
other appropriate Persons to make shares of Common Stock available for issuance
pursuant to awards evidencing Options granted hereunder.

6. Stock Options for Key Employees.

Subject to the express provisions of this Plan, the Committee shall have
the authority to grant incentive stock options pursuant to Section 422 of the
Code ("Incentive Options"), to grant non-qualified stock options (options which
do not qualify under Section 422 of the Code) ("Non-Qualified Options"), and to
grant both types of Options to Key Employees. No Incentive Option shall be
granted pursuant to this Plan after the earlier of ten years from the date of
adoption of the Plan or ten years from the date of approval of the Plan by the
stockholders of the Company. Notwithstanding anything in this Plan to the
contrary, Incentive Options may be granted only to Key Employees. The terms
and conditions of the Options granted under this Section 6 shall be determined
from time to time by the Committee; provided, however, that the Options granted
under this Section 6 shall be subject to all terms and provisions of the Plan
(other than Section 7), including the following:

-3-
<PAGE> 4
(a) Option Exercise Price. Subject to Section 4, the Committee shall
establish the Option exercise price at the time any Option is
granted at such amount as the Committee shall determine;
provided, that, in the case of an Incentive Option, such price
shall not be less than the Fair Market Value per share of Common
Stock at the date the Option is granted; and provided, further,
that in the case of an Incentive Option granted to a person who,
at the time such Incentive Option is granted, owns shares of the
Company or any Related Entity which possess more than 10% of the
total combined voting power of all classes of shares of the
Company or of any Related Entity, the option exercise price shall
not be less than 110% of the Fair Market Value per share of
Common Stock at the date the Option is granted. The Option
exercise price shall be subject to adjustment in accordance with
the provisions of Section 10 of the Plan.

(b) Payment. The price per share of Common Stock with respect to
each Option exercise shall be payable at the time of such
exercise. Such price shall be payable in cash or by any other
means acceptable to the Committee, including delivery to the
Company of shares of Common Stock owned by the optionee or by the
delivery or withholding of shares pursuant to a procedure created
pursuant to Section 5.d. of the Plan. Shares delivered to or
withheld by the Company in payment of the Option exercise price
shall be valued at the Fair Market Value of the Common Stock on
the day preceding the date of the exercise of the Option.

(c) Continuation of Employment. Each Incentive Option shall require
the optionee to remain in the continuous employ of the Company or
any Related Entity from the date of grant of the Incentive Option
until no more than three months prior to the date of exercise of
the Incentive Option.

(d) Exerciseability of Stock Option. Subject to Section 8, each
Option shall be exercisable in one or more installments as the
Committee may determine at the time of the grant. No Option by
its terms shall be exercisable after the expiration of ten years
from the date of grant of the Option, unless, as to any Non-
Qualified Option, otherwise expressly provided in such Option;
provided, however, that no Incentive Option granted to a person
who, at the time such Option is granted, owns stock of the
Company, or any Related Entity, possessing more than 10% of the
total combined voting power of all classes of stock of the
Company, or any Related Entity, shall be exercisable after the
expiration of five years from the date such Option is granted.

(e) Death. If any optionee's employment with the Company or a
Related Entity terminates due to the death of such optionee, the
estate of such optionee, or a Person who acquired the right to
exercise such Option by bequest or inheritance or by reason of
the death of the optionee, shall have the right to exercise such
Option in accordance with its terms at any time and from time to
time within 180 days after the date of death unless a longer or
shorter period is expressly provided in such Option or
established by the Committee pursuant to Section 8 (but in no
event after the expiration date of such Option).

(f) Disability. If the employment of any optionee terminates because
of his Disability (as defined in Section 18), such optionee or
his legal representative shall have the right to exercise the
Option in accordance with its terms at any time and from time to
time within 180 days after the date of such termination unless a
longer or shorter period is expressly provided in such Option or
established by the Committee pursuant to Section 8 (but not after
the expiration date of the Option); provided, however, that in
the case of an Incentive Option, the optionee or his legal
representative shall in any event be required to exercise the
Incentive Option within one year after termination of the
optionee's employment due to his Disability.

-4-
<PAGE> 5
(g) Termination for Cause; Voluntary Termination. Unless an
optionee's Option expressly provides otherwise, such optionee
shall immediately forfeit all rights under his Option, except as
to the shares of stock already purchased thereunder, if the
employment of such optionee with the Company or a Related Entity
is terminated by the Company or any Related Entity for Good Cause
(as defined below) or if such optionee voluntarily terminates
employment without the consent of the Company or any Related
Entity. The determination that there exists Good Cause for
termination shall be made by the Option Committee (unless
otherwise agreed to in writing by the Company and the optionee).

(h) Other Termination of Employment. If the employment of an
optionee with the Company or a Related Entity terminates for any
reason other than those specified in subsections 6(e), (f) or (g)
above, such optionee shall have the right to exercise his Option
in accordance with its terms, within 30 days after the date of
such termination, unless a longer or shorter period is expressly
provided in such Option or established by the Committee pursuant
to Section 8 (but not after the expiration date of the Option);
provided, that no Incentive Option shall be exercisable more than
three months after such termination.

(i) Maximum Exercise. The aggregate Fair Market Value of stock
(determined at the time of the grant of the Option) with respect
to which Incentive Options are exercisable for the first time by
an optionee during any calendar year under all plans of the
Company and any Related Entity shall not exceed $100,000.

7. Stock Option Grants to Eligible Non-Employees.

(a) Subject to the express provisions of this Plan, the Committee
shall have the authority to grant Non-Qualified Options to
Eligible Non-Employees. The terms and conditions of the Options
granted under this Section 7 shall be determined from time to
time by the Committee; provided, however, that the Options
granted under this Section 7 shall be subject to all terms and
provisions of the Plan (other than Section 6), including the
following:

(i) Option Exercise Price. Subject to Section 4, the
Committee shall establish the Option exercise price at the
time any Non-Qualified Option is granted at such amount as
the Committee shall determine. The Option exercise price
shall be subject to adjustment in accordance with the
provisions of Section 10 of the Plan.

(ii) Payment. The price per share of Common Stock with respect
to each Option exercise shall be payable at the time of
such exercise. Such price shall be payable in cash or by
any other means acceptable to the Committee, including
delivery to the Company of shares of Common Stock owned by
the optionee or by the delivery or withholding of shares
pursuant to a procedure created pursuant to Section 5.d.
of the Plan. Shares delivered to or withheld by the
Company in payment of the Option exercise price shall be
valued at the Fair Market Value of the Common Stock on the
day preceding the date of the exercise of the Option.

(iii) Exerciseability of Stock Option. Subject to Section 8,
each Option shall be exercisable in one or more
installments as the Committee may determine at the time of
the grant. No Option shall be exercisable after the
expiration of ten years from the date of grant of the
Option, unless otherwise expressly provided in such
Option.

-5-
<PAGE> 6
(iv) Death. If the retention by the Company or any Related
Entity of the services of any Eligible Non-Employee
terminates because of his death, the estate of such
optionee, or a Person who acquired the right to exercise
such Option by bequest or inheritance or by reason of the
death of the optionee, shall have the right to exercise
such Option in accordance with its terms, at any time and
from time to time within 180 days after the date of death
unless a longer or shorter period is expressly provided in
such Option or established by the Committee pursuant to
Section 8 (but in no event after the expiration date of
such Option).

(v) Disability. If the retention by the Company or any
Related Entity of the services of any Eligible Non-
Employee terminates because of his Disability, such
optionee or his legal representative shall have the right
to exercise the Option in accordance with its terms at any
time and from time to time within 180 days after the date
of the optionee's termination unless a longer or shorter
period is expressly provided in such Option or established
by the Committee pursuant to Section 8 (but not after the
expiration of the Option).

(vi) Termination for Cause; Voluntary Termination. If the
retention by the Company or any Related Entity of the
services of any Eligible Non-Employee is terminated (i)
for Good Cause, (ii) as a result of removal of the
optionee from office as a director of the Company or of
any Related Entity for cause by action of the stockholders
of the Company or such Related Entity in accordance with
the by-laws of the Company or such Related Entity, as
applicable, and the corporate law of the Jurisdiction of
incorporation of the Company or such Related Entity, or
(iii) as a result of the voluntarily termination by
optionee of optionee's service without the consent of the
Company or any Related Entity, then such optionee shall
immediately forfeit his rights under his Option except as
to the shares of stock already purchased. The
determination that there exists Good Cause for termination
shall be made by the Option Committee (unless otherwise
agreed to in writing by the Company and the optionee).

(vii) Other Termination of Relationship. If the retention by
the Company or any Related Entity of the services of any
Eligible Non-Employee terminates for any reason other than
those specified in subsections 7(d), (e) or (f) above,
such optionee shall have the right to exercise his or its
Option in accordance with its terms within 30 days after
the date of such termination, unless a longer or shorter
period is expressly provided in such Option or established
by the Committee pursuant to Section 8 (but not after the
expiration date of the Option).

(viii) Ineligibility for Other Grants. Any Eligible Non-Employee
who receives an Option pursuant to this Section 7 shall be
ineligible to receive any Options under any other Section
of the Plan.

(b) An Eligible Non-Employee that is a non-employee director of the
Company may elect to receive Options in lieu of all or a portion
of such director's annual cash retainer fee for services as a
director of the Company. Notwithstanding subsection 7(a)(ii),
the following shall apply if a non-employee director elects to
receive all or a portion of his/her annual cash retainer in
Options:

-6-
<PAGE> 7
(i) Method of Election. Except as otherwise specified by the
Committee, a non-employee director's election shall be
made in accordance with the following provisions. Unless
the Committee provides otherwise, the election may be made
only by written notice delivered to the Committee prior to
the first day of the calendar year in which the cash
payment would otherwise be made. The election shall
specify the amount of the annual cash retainer that is to
be paid in the form of Options and shall be irrevocable
except for payments otherwise payable in the next calendar
year after the date of a written notice of revocation.

(ii) Terms of Options. The date of grant of a Option granted
pursuant to this Section 7(b) shall be the date on which
the portion of the annual cash retainer fee that the non-
employee director has elected not to receive would
otherwise have been paid. The number of shares subject to
that Option shall be determined by dividing the foregone
amount of the annual cash retainer fee otherwise due and
payable on the date of grant by the value of an Option for
one share of Common Stock on the date of grant having the
terms set forth herein, which value shall be calculated
pursuant to the Black-Scholes Model based on the
applicable assumptions used in calculating Option values
in the most recent annual meeting proxy statement of the
Company. The exercise price with respect to a share of
Common Stock subject to that Option shall be the Fair
Market Value of a share of Common Stock on the Option's
date of grant.

8. Change of Control; Sale of the Company.

If (i) a Change of Control or a Sale of the Company shall occur, (ii)
the Company shall enter into an agreement providing for a Change of Control or
a Sale of the Company, or (iii) any member of the HMC Group shall enter into an
agreement providing for a Sale of the Company, then the Committee may declare
any or all Options outstanding under the Plan to be exercisable in full at such
time or times as the Committee shall determine, notwithstanding the express
provisions of such Options. Each Option accelerated by the Committee pursuant
to the preceding sentence shall terminate, notwithstanding any express
provision thereof or any other provision of the Plan, on such date (not later
than the stated exercise date) as the Committee shall determine.

9. Purchase Option.

(a) Except as otherwise expressly provided in any particular Option,
if (i) any optionee's employment (or, in the case of any Option
granted under Section 7, the optionee's relationship) with the
Company or a Related Entity terminates for any reason at any time
or (ii) a Change of Control occurs, the Company (and/or its
designees) shall have the option (the "Purchase Option") to
purchase, and if the option is exercised, the optionee (or the
optionee's executor or the administrator of the optionee's
estate, in the event of the optionee's death, or the optionee's
legal representative in the event of the optionee's incapacity)
(hereinafter, collectively with such optionee, the "Grantor")
shall sell to the Company and/or its assignee(s), all or any
portion (at the Company's option) of the shares of Common Stock
and/or Options held by the Grantor (such shares of Common Stock
and Options collectively being referred to as the "Purchasable
Shares").

(b) The Company shall give notice in writing to the Grantor of the
exercise of the Purchase Option within one year from the date of
the termination of the optionee's employment or engagement or
such Change of Control. Such notice shall state the number of
Purchasable Shares to be purchased and the determination of the
Board of Directors of the Fair Market

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<PAGE> 8
Value per share of such Purchasable Shares. If no notice is
given within the time limit specified above, the Purchase Option
shall terminate.

(c) The purchase price to be paid for the Purchasable Shares
purchased pursuant to the Purchase Option shall be, in the case
of any Common Stock, the Fair Market Value per share as of the
date of the notice of exercise of the Purchase Option times the
number of shares being purchased, and in the case of any Option,
the Fair Market Value per share times the number of vested shares
subject to such Option which are being purchased, less the
applicable per share Option exercise price. The purchase price
shall be paid in cash. The closing of such purchase shall take
place at the Company's principal executive offices within ten
days after the purchase price has been determined. At such
closing, the Grantor shall deliver to the purchasers the
certificates or instruments evidencing the Purchasable Shares
being purchased, duly endorsed (or accompanied by duly executed
stock powers) and otherwise in good form for delivery, against
payment of the purchase price by check of the purchasers). In
the event that, notwithstanding the foregoing, the Grantor shall
have failed to obtain the release of any pledge or other
encumbrance on any Purchasable Shares by the scheduled closing
date, at the option of the purchasers) the closing shall
nevertheless occur on such scheduled closing date, with the cash
purchase price being reduced to the extent of all unpaid
indebtedness for which such Purchasable Shares are then pledged
or encumbered.

(d) To assure the enforceability of the Company's rights under this
Section 9, each certificate or instrument representing Common
Stock or an Option held by him or it shall bear a conspicuous
legend in substantially the following form:

THE SHARES (REPRESENTED BY THIS CERTIFICATE] [ISSUABLE PURSUANT
TO THIS AGREEMENT] ARE SUBJECT TO AN OPTION TO REPURCHASE
PROVIDED UNDER THE PROVISIONS OF THE COMPANY'S 1997 STOCK OPTION
PLAN AND A STOCK OPTION AGREEMENT ENTERED INTO PURSUANT THERETO.
A COPY OF SUCH OPTION PLAN AND OPTION AGREEMENT ARE AVAILABLE
UPON WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL EXECUTIVE
OFFICES.

The Company's rights under this Section 9 shall terminate upon the
consummation of a Qualifying Public Offering.

10. Adjustment of Shares.

Unless otherwise expressly provided in a particular Option, in the event
that, by reason of any merger, consolidation, combination, liquidation,
reorganization, recapitalization, stock dividend, stock split, split-up, split-
off, spin-off, combination of shares, exchange of shares or other like change
in capital structure of the Company (collectively, a "Reorganization"), the
Common Stock is substituted, combined, or changed into any cash, property, or
other securities, or the shares of Common Stock are changed into a greater or
lesser number of shares of Common Stock, the number and/or kind of shares
and/or interests subject to an Option and the per share price or value thereof
shall be appropriately adjusted by the Committee to give appropriate effect to
such Reorganization. Any fractional shares or interests resulting from such
adjustment shall be eliminated. Notwithstanding the foregoing, (i) each such
adjustment with respect to an Incentive Option shall comply with the rules of
Section 424(a) of the Code, and (ii) in no event shall any adjustment be made
which would render any Incentive Option granted hereunder other than an
"incentive stock option" for purposes of Section 422 of the Code. The maximum
aggregate number of shares of Common Stock in respect of which Options may be
granted under this Plan as provided for in Section 3 shall be subject to
adjustment as contemplated above.

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<PAGE> 9
In the event the Company is not the surviving entity of a Reorganization
and, following such Reorganization, any optionee will hold Options issued
pursuant to this Plan which have not been exercised, canceled, or terminated in
connection therewith, the Company shall cause such Options to be assumed (or
canceled and replacement Options issued) by the surviving entity or a Related
Entity.

11. Assignment or Transfer.

(a) Except as otherwise expressly provided in any Nonqualified
Option, no Option granted under the Plan or any rights or
interests therein shall be assignable or transferable by an
optionee except by will or the laws of descent and distribution,
and during the lifetime of an optionee, Options granted to him or
her hereunder shall be exercisable only by the optionee or, in
the event that a legal representative has been appointed in
connection with the Disability of an optionee, such legal
representative.

(b) At least ninety (90) days prior to selling, pledging,
hypothecating, transferring or otherwise disposing ("Transfer")
of any interest in Common Stock issued upon exercise of an
Option, the optionee proposing such Transfer shall deliver a
written notice (the "Sale Notice") to the Company. The Sale
Notice will disclose in reasonable detail the identity of the
prospective transferee(s) and the terms and conditions of the
proposed transfer. Such optionee (and such optionee's
transferees) shall not consummate any such Transfer until ninety
(90) days after the Sale Notice has been delivered to the
Company, unless the Company has notified such optionee in writing
that it will not exercise its rights under this Section 11.b.
(The date of the first to occur of such events is referred to
herein as the "Authorization Date"). The Company or its designee
may elect to purchase all (but not less than all) of the shares
of Common Stock to be Transferred upon the same terms and
conditions as those set forth in the Sale Notice ("Right of First
Refusal") by delivering a written notice of such election to such
optionee within thirty (30) days after the receipt of the Sale
Notice by the Company (the "Election Notice"). If the Company
has not elected to purchase all of the shares of Common Stock
specified in the Sale Notice, such optionee may Transfer the
shares of Common Stock to the prospective transferee(s) as
specified in the Sale Notice, at a price and on terms no more
favorable to the transferee(s) thereof than specified in the Sale
Notice, during the 90-day period immediately following the
Authorization Date. Any Option Shares not so transferred within
such 90-day period must be reoffered to the Company in accordance
with the provisions of this Section 11.b. The Right of First
Refusal will not apply with respect to Transfers of such shares
of Common Stock a) by will or pursuant to applicable laws of
descent and distribution or among the optionee's family group;
provided that the restrictions contained in this Section 11.b.
will continue to be applicable to the shares of Common Stock
after any such Transfer and provided further that the transferees
of such shares of Common Stock have agreed in writing to be bound
by the terms and provisions of this Plan and the applicable
Option Agreement as each may be amended from time to time. In
addition, upon any transfer to a member of the optionee's family
group, the optionee shall be required to give notice to the
Company and as a condition to such Transfer to a member of the
optionee's family group, the optionee will maintain all voting
control over all of the shares of Common Stock. The optionee's,
"family group" means the optionee's spouse and lineal descendants
(whether natural or adopted) and any trust solely for the benefit
of the optionee and/or the optionee's spouse and/or lineal
descendants. In addition, with the prior approval of the
Committee, notwithstanding the provisions of this Section 11.b.,
an optionee may pledge such shares of Common Stock creating a
security interest therein; provided, that the pledgee agrees in
writing to be bound, and that such shares of Common Stock remain
bound, by the terms

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<PAGE> 10
and provisions of this Plan and the applicable Option Agreement,
as each may be amended from time to time.

To assure the enforceability of the Company's rights under
this Section 11.b., each certificate or instrument representing
Common Stock or an Option held by him or it shall bear a
conspicuous legend in substantially the following form:

THE SHARES [REPRESENTED BY THIS CERTIFICATE] [ISSUABLE PURSUANT
TO THIS AGREEMENT] ARE SUBJECT TO A RIGHT OF FIRST REFUSAL
PROVIDED UNDER THE COMPANY'S ROLLOVER STOCK OPTION PLAN AND A
STOCK OPTION AGREEMENT ENTERED INTO PURSUANT THERETO. A COPY OF
SUCH OPTION PLAN AND OPTION AGREEMENT ARE AVAILABLE UPON WRITTEN
REQUEST TO THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES.

(c) The rights and obligations pursuant to Section 11(a) and 11(b)
hereof will terminate upon the consummation of a Qualified Public
Offering.

(d) From and after the consummation of a Qualified Public Offering,
notwithstanding any limitation on a Key Employee's or Eligible
Non-Employee's right to transfer an Option, the Committee may (in
its sole discretion) permit a Key Employee or Eligible Non-
Employee to transfer an Option, or may cause the Company to grant
an Option that otherwise would be granted to a Key Employee or
Eligible Non-Employee, in any of the following circumstances: (a)
pursuant to a qualified domestic relations order, (b) to a trust
established for the benefit of the Key Employee or Eligible
Non-Employee or one or more of the children, grandchildren, or
spouse of the Key Employee or Eligible Non-Employee, as
applicable; (c) to a limited partnership in which all the
interests are held by the Key Employee or Eligible Non-Employee
and that Person's children, grandchildren or spouse; or (d) to
another Person in circumstances that the Committee believes will
result in the Option continuing to provide an incentive for the
Key Employee or Eligible Non-Employee to remain in the service of
the Company or its Subsidiaries and apply his or her best efforts
for the benefit of the Company or its Subsidiaries. If the
Committee determines to allow such transfers or issuances of
Option, any Key Employee or Eligible Non-Employee desiring such
transfers or issuances shall make application therefor in the
manner and time that the Committee specifies and shall comply
with such other requirements as the Committee may require to
assure compliance with all applicable laws, including securities
laws, and to assure fulfillment of the purposes of this Plan.
The Committee shall not authorize any such transfer or issuance
if it may not be made in compliance with all applicable federal,
state and foreign securities laws. The granting of permission
for such an issuance or transfer shall not obligate the Company
to register the shares of Common Stock to be issued under the
applicable Option.

12. Compliance with Securities Laws.

The Company shall not in any event be obligated to file any registration
statement under the Securities Act or any applicable state securities law to
permit exercise of any option or to issue any Common Stock in violation of the
Securities Act or any applicable state securities law. Each optionee (or, in
the event of his death or, in the event a legal representative has been
appointed in connection with his Disability, the Person exercising the Option)
shall, as a condition to his right to exercise any Option, deliver to the
Company an agreement or certificate containing such representations, warranties
and covenants as the Company may deem

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<PAGE> 11
necessary or appropriate to ensure that the issuance of shares of Common Stock
pursuant to such exercise is not required to be registered under the Securities
Act or any applicable state securities law.

Certificates for shares of Common Stock, when issued, may have
substantially the following legend, or statements of other applicable
restrictions, endorsed thereon, and may not be immediately transferable:

THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES LAWS. THE SHARES MAY NOT BE OFFERED FOR SALE,
SOLD, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF UNTIL THE
HOLDER HEREOF PROVIDES EVIDENCE SATISFACTORY TO THE ISSUER
(WHICH, IN THE DISCRETION OF THE ISSUER, MAY INCLUDE AN OPINION
OF COUNSEL SATISFACTORY TO THE ISSUER) THAT SUCH OFFER, SALE,
PLEDGE, TRANSFER OR OTHER DISPOSITION WILL NOT VIOLATE APPLICABLE
FEDERAL OR STATE LAWS.

This legend shall not be required for shares of Common Stock issued
pursuant to an effective registration statement under the Securities Act and in
accordance with applicable state securities laws.

13. Withholding Taxes.

By acceptance of the Option, the optionee will be deemed to (i) agree to
reimburse the Company or Related Entity by which the optionee is employed for
any federal, state, or local taxes required by any government to be withheld or
otherwise deducted by such corporation in respect of the optionee's exercise of
all or a portion of the Option; (ii) authorize the Company or any Related
Entity by which the optionee is employed to withhold from any cash compensation
paid to the optionee or in the optionee's behalf, an amount sufficient to
discharge any federal, state, and local taxes imposed on the Company, or the
Related Entity by which the optionee is employed, and which otherwise has not
been reimbursed by the optionee, in respect of the optionee's exercise of all
or a portion of the Option; and (iii) agree that the Company may, in its
discretion, hold the stock certificate to which the optionee is entitled upon
exercise of the Option as security for the payment of the aforementioned
withholding tax liability, until cash sufficient to pay that liability has been
accumulated, and may, in its discretion, effect such withholding by retaining
shares issuable upon the exercise of the Option having a Fair Market Value on
the date of exercise which is equal to the amount to be withheld.

14. Costs and Expenses.

The costs and expenses of administering the Plan shall be borne by the
Company and shall not be charged against any Option nor to any employee
receiving an Option.

15. Funding of Plan.

The Plan shall be unfunded. The Company shall not be required to make
any segregation of assets to assure the payment of any Option under the Plan.

16. Other Incentive Plans.

The adoption of the Plan does not preclude the adoption by appropriate
means of any other incentive plan for employees.

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<PAGE> 12
17. Effect on Employment.

Nothing contained in the Plan or any agreement related hereto or
referred to herein shall affect, or be construed as affecting, the terms of
employment of any Key Employee except to the extent specifically provided
herein or therein. Nothing contained in the Plan or any agreement related
hereto or referred to herein shall impose, or be construed as imposing, an
obligation on (i) the Company or any Related Entity to continue the employment
of any Key Employee, and (ii) any Key Employee to remain in the employ of the
Company or any Related Entity.

18. Definitions.

In addition to the terms specifically defined elsewhere in the Plan, as
used in the Plan, the following terms shall have the respective meanings
indicated:

(a) "Affiliate" shall mean, as to any Person, a Person that directly,
or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person.

(b) "Authorization Date" shall have the meaning set forth in Section
11.b. hereof.

(d) "Change of Control" shall mean the first to occur of the
following events: (i) any sale, lease, exchange, or other
transfer (in one transaction or series of related transactions)
of all or substantially all of the assets of the Company to any
Person or group of related Persons for purposes of Section 13(d)
of the Exchange Act, other than one or more members of the HMC
Group, (ii) a majority of the Board of Directors of the Company
shall consist of Persons who are not Continuing Directors; or
(iii) the acquisition by any Person or Group (other than one or
more members of the HMC Group) of the power, directly or
indirectly, to vote or direct the voting of securities having
more than 50% of the ordinary voting power for the election of
directors of the Company.

(e) "Code" shall have the meaning set forth in Section 1 hereof.

(f) "Committee" shall have the meaning set forth in Section 2 hereof.

(g) "Common Stock" shall have the meaning set forth in Section 3
hereof.

(h) "Company" shall have the meaning set forth in Section 1 hereof.

(i) "Continuing Director" shall mean, as of the date of
determination, any Person who (i) was a member of the Board of
Directors of the Company on the date of adoption of this Plan,
(ii) was nominated for election or elected to the Board of
Directors of the Company with the affirmative vote of a majority
of the Continuing Directors who were members of such Board of
Directors at the time of such nomination or election, or (iii) is
a member of the HMC Group.

(j) "Designated Date" means the first date on which each of the
following conditions shall have been met: (i) the Company shall
have consummated a Qualifying Public Offering and (ii) the
Company shall have ceased to be an Equity Fund Company.

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<PAGE> 13
(k) "Disability" shall mean permanent disability as defined under the
appropriate provisions of the long-term disability plan
maintained for the benefit of employees of the Company or any
Related Entity who are regularly employed on a salaried basis
unless another meaning shall be agreed to in writing by the
Committee and the optionee; Provided, however, that in the case
of an Incentive Option "disability" shall have the meaning
specified in Section 22(e)(3) of the Code.

(l) "Election Notice" shall have the meaning set forth in Section
11.b. hereof.

(m) "Eligible Non-Employee" shall have the meaning set forth in
Section 4 hereof.

(n) "Equity Fund Company" means any Person in which one or more
Equity Fund Investment Vehicles own(s), directly or indirectly,
more than 10% of the fully-diluted common stock or has an
unrecovered investment of $1,000,000 or more, and each Subsidiary
thereof.

(o) "Equity Fund Investment Vehicle" means HMTF/CH Holdings, L.P.,
Hicks, Muse, Tate & Furst Equity Fund II, L.P., Hicks, Muse, Tate
& Furst Equity Fund III, L.P., or any other similar investment
entity formed by Hicks, Muse, Tate & Furst Incorporated.

(p) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

(q) "Fair Market Value", shall, as it relates to the Common Stock,
mean the average of the high and low prices of such Common Stock
as reported on the principal national securities exchange on
which the shares of Common Stock are then listed on the date
specified herein, or if there were no sales on such date, on the
next preceding day on which there were sales, or if such Common
Stock is not listed on a national securities exchange, the last
reported bid price in the over-the-counter market, or if such
shares are not traded in the over-the-counter market, the per
share cash price for which all of the outstanding Common Stock
could be sold to a willing purchaser in an arms length
transaction (without regard to minority discount, absence of
liquidity, or transfer restrictions imposed by any applicable law
or agreement) at the date of the event giving rise to a need for
a determination. Except as may be otherwise expressly provided
in a particular Option, Fair Market Value shall be determined in
good faith by the Committee.

(r) "Good Cause", with respect to any Key Employee, shall mean
(unless another definition is agreed to in writing by the Company
and the optionee) termination by action of the Board of Directors
because of: (A) the optionee's conviction of, or plea of nolo
contendere to, a felony or a crime involving moral turpitude; (B)
the optionee's personal dishonesty, incompetence, willful
misconduct, willful violation of any law, rule, or regulation
(other than minor traffic violations or similar offenses) or
breach of fiduciary duty which involves personal profit; (C) the
optionee's commission of material mismanagement in the conduct of
his duties as assigned to him by the Board of Directors or the
optionee's supervising officer or officers of the Company or any
Related Entity; (D) the optionee's willful failure to execute or
comply with the policies of the Company or any Related Entity or
his stated duties as established by the Board of Directors or the
optionee's supervising officer or officers of the Company or any
Related Entity, or the optionee's intentional failure to perform
the optionee's stated duties; (E) substance abuse or addiction on
the part of the optionee. "Good Cause", with respect to any
Eligible Non-Employee, shall mean (unless another definition is
agreed to in writing by the Company and the optionee) termination
by action of the Board of Directors because of: (A) the
optionee's conviction of, or plea of nolo contendere to, a felony
or a crime involving

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<PAGE> 14
moral turpitude; (B) the optionee's personal dishonesty,
incompetence, willful misconduct, willful violation of any law,
rule, or regulation (other than minor traffic violations or
similar offenses) or breach of fiduciary duty which involves
personal profit; (C) the optionee's commission of material
mismanagement in providing services to the Company or any Related
Entity; (D) the optionee's willful failure to comply with the
policies of the Company in providing services to the Company or
any Related Entity, or the optionee's intentional failure to
perform the services for which the optionee has been engaged; (E)
substance abuse or addiction on the part of the optionee; or (F)
the optionee's willfully making any material misrepresentation or
willfully omitting to disclose any material fact to the board of
directors of the Company or any Related Entity with respect to
the business of the Company or any Related Entity.
Notwithstanding the foregoing, in the case of each optionee
listed on Schedule A hereto, who as of the effective date of the
Plan, has an employment agreement with the Company or any Related
Entity that contains a definition of "Good Cause" (or any similar
definition), then during the term of such employment agreement
the definition contained in such employment agreement shall be
the applicable definition of "Good Cause" under the Plan as to
such optionee.

(s) "Grantor" has the meaning set forth in Section 9 hereof.

(t) "Hicks Muse Company" shall mean any Person in which the HMC Group
beneficially owns more than 25% of the fully-diluted common stock
or has an unrecovered investment of $1,000,000 or more, and each
Subsidiary thereof.

(u) "HMC Group" shall mean Hicks, Muse, Tate & Furst Incorporated,
its Affiliates and their respective employees, officers, and
directors (and members of their respective families and trusts
for the primary benefit of such family members).

(v) "Incentive Options" shall have the meaning set forth in Section 6
hereof.

(w) The term "included" when used herein shall mean "including, but
not limited to".

(x) "Key Employee" shall have the meaning set forth in Section 4
hereof.

(y) "Marketable Securities" shall mean securities (i) of a class or
series listed or traded on the New York Stock Exchange, American
Stock Exchange, or NASDAQ National Market and (ii) which, as a
matter of law, shall at the time of acquisition be (or which at
the date of acquisition are legally committed to become within
six months after the date of acquisition) freely saleable in
unlimited quantities by the HMC Group to the public, either
pursuant to an effective registration statement under the
Securities Act as amended (including a current prospectus which
is available for delivery) or without the necessity of such
registration.

(z) "Non-Qualified Options" shall have the meaning set forth in
Section 6 hereof.

(aa) "Options" shall have the meaning set forth in Section 1 hereof.

(ab) "Person" shall have the meaning set forth in Section 4 hereof,

(ac) "Plan" shall have the meaning set forth in Section 1 hereof.

(ad) "Purchasable Shares" shall have the meaning set forth in Section
9 hereof.

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<PAGE> 15
(ae) "Purchase Option" shall have the meaning set forth in Section 9
hereof.

(af) "Qualifying Public Offering" shall mean a firm commitment
underwritten public offering of Common Stock for cash where the
proceeds to the Company (prior to deducting any underwriters'
discounts and commissions) exceed $10 million and the shares of
Common Stock registered under the Securities Act are listed on a
national securities exchange.

(ag) "Related Entities" shall have the meaning set forth in Section 1
hereof.

(ah) "Reorganization" shall have the meaning set forth in Section 10
hereof.

(ai) "Right of First Refusal" shall have the meaning set forth in
Section 11.b. hereof.

(aj) "Rule 16b-3" shall mean Rule 16b-3, as amended, or other
applicable rules under Section 16(b) of the Exchange Act.

(ak) "Sale of the Company" shall mean the first to occur of (i) any
sale, lease, exchange, or other transfer (in one transaction or
series of related transactions) of all or substantially all of
the assets of the Company to any Person or group of related
Persons for purposes of Section 13(d) of the Exchange Act, other
than one or more members of the HMC Group (a "Clause 1 Event"),
(ii) the Company's ceasing to be a Hicks Muse Company in a
transaction or series of related transactions initiated or agreed
to by the HMC Group (other than the distribution by one or more
Equity Fund Investment Vehicles, following a Qualifying Public
Offering, of equity securities of the Company to the investors in
such Equity Fund Investment Vehicle(s)) (a "Clause 2 Event"), or
(iii) the consummation of a transaction or series of related
transactions initiated or agreed to by the HMC Group pursuant to
which the HMC Group receives, in respect of its shares of Common
Stock, cash and/or Marketable Securities which have an aggregate
value equal to at least 75% of the total value of all Common
Stock owned by the HMC Group immediately prior to such
transaction, as determined by the Board of Directors in good
faith (a "Clause 3 Event"); provided, however, that the
occurrence of a Clause 1 Event, a Clause 2 Event or a Clause 3
Event on any date after the Designated Date shall not constitute
a "Sale of the Company".

(al) "Sale Notice" shall have the meaning set forth in Section 11.b
hereof.

(am) "Section 162(m)" means Section 162(m) of the Code and the rules
and regulations adopted from time to time thereunder, or any
successor law or rule as it may be amended from time to time.

(an) "Securities Act" shall mean the Securities Act of 1933, as
amended.

(ao) "Subsidiary" shall mean, with respect to any Person, any other
Person of which such first Person owns or has the power to vote,
directly or indirectly, securities representing a majority of the
votes ordinarily entitled to be cast for the election of
directors or other governing Persons.

(ap) "Transfer" shall have the meaning set forth in Section 11.b.
hereof.

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19. Amendment of Plan.

The Board of Directors shall have the right to amend, modify, suspend or
terminate the Plan at any time; provided, that no amendment shall be made which
shall increase the total number of shares of the Common Stock which may be
issued and sold pursuant to Options granted under the Plan unless such
amendment is made by or with the approval of the stockholders. The Board of
Directors shall have the right to amend the Plan and the Options outstanding
thereunder, without the consent or joinder of any optionee or other Person, in
such manner as may be determined necessary or appropriate by the Board of
Directors in order to cause the Plan and the Options outstanding thereunder (i)
to qualify as "incentive stock options" within the meaning of Section 422 of
the Code, (ii) to comply with Rule 16b-3 (or any successor rule) under the
Exchange Act (or any successor law) and the regulations (including any
temporary regulations) promulgated thereunder, or (iii) to comply with Section
162(m) of the Code (or any successor section) and the regulations (including
any temporary regulations) promulgated thereunder. Except as provided above,
no amendment, modification, suspension or termination of the Plan shall alter
or impair any Options previously granted under the Plan, without the consent of
the holder thereof.

20. Individual Limitations on Awards.

No Person may be granted during any one year period, Options with
respect to more than 15,987,643 shares of Common Stock. If an Option is
canceled, the canceled Option shall continue to be counted against the maximum
number of shares of Common Stock for which Options may be granted to such
Person under the Plan. If, after grant, the exercise price of an Option is
reduced, the transaction shall be treated as a cancellation of the Option and
the grant of a new Option. In such case, both the Option that is deemed to be
canceled and the Option that is deemed to be granted reduce the maximum number
of shares for which Options may be granted to such Person under the Plan.

21. Effective Date.

The Plan shall become effective on the date on which it is approved by
the Board of Directors and the stockholders of the Company.

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SCHEDULE "A'

NONE

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EXHIBIT 10.13

AGREEMENT

AND

PLAN OF REORGANIZATION

BY AND AMONG

AHFP HOLDING CORPORATION,

AND

INTERNATIONAL HOME FOODS, INC.

DATED AS OF

OCTOBER 1, 1997
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AGREEMENT
AND
PLAN OF REORGANIZATION

THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made and
entered into as of October 1, 1997, by and among AHFP Holding Corporation, a
Delaware corporation ("AHFP") and International Home Foods, Inc., a Delaware
corporation (the "Company").

R E C I T A L S

A. AHFP is the owner of 264,000,000 shares (the "Old Shares") of the
Company's common stock, no par value ("Common Stock");

B. AHFP is the owner of 40,000,000 shares (the "DM Shares") of the
common stock, $.01 par value ("DM Common Stock"), of DM US Holding Corp., a
Delaware corporation ("DM");

C. The Company has filed a registration statement with the
Securities and Exchange Commission in contemplation of an initial public
offering, and in order to diversify the voting power with respect to the
Company's Common Stock and provide additional liquidity for the Company's
shareholders, the Company intends to acquire DM and AHFP intends to reorganize
pursuant to the transactions described herein;

D. At the Initial Closing (hereinafter defined), the Company and
AHFP desire to effect an exchange of the DM Shares for additional shares of
Common Stock (collectively, the "DM Exchange");

E. In connection with the Second Closing (hereinafter defined), the
Company intends to amend its Certificate of Incorporation so as to provide (i)
that the par value of its Common Stock shall be increased to $.01 and (ii) for
a reverse stock split of the issued and outstanding shares of Common Stock (the
"New Common Stock") resulting in an exchange (the "Old Shares Exchange") of the
Old Shares and the shares of Common Stock received by AHFP as a result of the
DM Exchange (collectively, the "Aggregate Old Shares") for shares of New Common
Stock;

F. After the Second Closing AHFP will distribute to its shareholders
its assets, including (x) all of the shares of New Common Stock received by
AHFP pursuant to the Old Shares Exchange, (y) its contractual rights arising
under the Registration Agreement (hereinafter defined) and (z) its rights and
obligations arising under Sections 7.14 and 7.15 of the Merger Agreement
(hereafter defined), as necessary for the transactions contemplated herein to
qualify as a reorganization as described in Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code").

G. For federal income tax purposes, it is intented that the
transactions contemplated herein qualify as a reorganization as described in
Section 368(a) of the Code.
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A G R E E M E N T S

NOW, THEREFORE, in consideration of the respective representations,
warranties, covenants and agreements hereinafter set forth, and other good and
valuable consideration, the receipt of which is hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:

ARTICLE I

THE EXCHANGES

1.1. DM Exchange.

(a) Upon the terms set forth herein, at the Initial Closing
AHFP shall assign, transfer and convey to the Company the DM Shares. AHFP, at
the Initial Closing, shall deliver to the Company one or more share
certificates representing the DM Shares, properly endorsed for transfer
(together with all necessary stock powers and other documentation of transfer
reasonably acceptable to the Company).

(b) Subject to adjustment as provided in Section 1.3, at the
Initial Closing, the Company shall in respect of the DM Shares, issue to AHFP
16,666,667 shares of Common Stock.

1.2. Old Shares Exchange.

(a) Upon the terms set forth herein, at the Second Closing
AHFP shall surrender to the Company the Aggregate Old Shares. AHFP, at the
Second Closing, shall deliver to the Company one or more share certificates
representing the Aggregate Old Shares, properly endorsed for transfer (together
with all necessary stock powers and other documentation of transfer reasonably
acceptable to the Company).

(b) Subject to adjustment as provided in Section 1.3, at the
Second Closing, the Company shall in respect of the Aggregate Old Shares, issue
to AHFP 280,666,667 shares of New Common Stock.

1.3. Adjustment. Notwithstanding the foregoing, if between the date
of this Agreement and the Closing the outstanding shares of Common Stock shall
have been changed into a different number of shares or a different class by
reason of any stock dividend, subdivision, reclassification, recapitalization,
split, combination or exchange of shares (including the increase in par value
and the reverse stock split contemplated herein), then the number of shares of
Common Stock and New Common Stock to be issued by the Company pursuant to this
Article I shall be correspondingly adjusted to reflect such stock dividend,
subdivision, reclassification, recapitalization, split, combination or exchange
of shares.

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ARTICLE II

REPRESENTATIONS AND WARRANTIES

2.1. Representations and Warranties of AHFP. AHFP represents and
warrants to the Company as follows:

(a) Ownership of Shares. As of the date hereof, AHFP is the
holder of record and beneficially owns 264,000,000 shares of Common Stock and
at the Second Closing, AHFP will surrender for exchange to the Company good and
valid title to the Aggregate Old Shares, free and clear of all liens. As of
the date hereof, AHFP is the holder of record and beneficially owns 40,000,000
shares of the common stock, $.01 par value, of DM, and at the Initial Closing
will transfer to the Company good and valid title to the DM Shares.

(b) Authority. (i) AHFP has been duly created and is validly
existing under the laws of the jurisdiction of its creation; AHFP has all
requisite power and authority to execute and deliver this Agreement and to
perform its obligations hereunder, and the execution, delivery and performance
by AHFP of this Agreement and the consummation by AHFP of the transactions
contemplated hereby have been duly authorized by all necessary action on the
part of AHFP.

(ii) AHFP has full legal capacity to execute and deliver
this Agreement and to perform the obligations of AHFP hereunder. This
Agreement has been duly and validly executed and delivered by AHFP and,
assuming this Agreement constitutes a valid and binding obligation of the
Company, constitutes a valid and binding obligation of AHFP, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity). Each consent,
authorization, order or approval of, or filing or registration with, any
governmental entity required by applicable law on or before the Initial Closing
or Second Closing, as applicable, for or in connection with the execution and
delivery by such AHFP of this Agreement, or the performance by AHFP of its
obligations hereunder will have been obtained or made on or before the Initial
Closing or Second Closing, as applicable, except where the failure to obtain
any such consent, authorization, order, approval, filing or registration would
not affect AHFP's ability to perform its obligations under this Agreement in
any material respect.

(c) No Conflicts. The execution, delivery, and performance by
AHFP of this Agreement does not (i) violate or breach any provision of any law
or statute applicable to AHFP and any provision of its organizational or
constituent documents, except where such violation or breach would not affect
AHFP's ability to perform its obligations under this Agreement, or (ii)
violate, breach, cause a default under, or result in the creation of a lien
pursuant to, any agreement or instrument to AHFP is a party or to which it or
any of its properties may be subject, except where the violation, breach,
default or creation of a lien would not affect such AHFP's ability to perform
its obligations under this Agreement.

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(d) Private Placement.

(i) AHFP understands and acknowledges with the Company
that:

(A) the offering and sale of the Common Stock
and New Common Stock is intended to be exempt from registration under
the Securities Act of 1933 (the "Securities Act"), by virtue of the
provisions of either Section 4(2) of the Securities Act or Rule 506 of
Regulation D ("Regulation D") promulgated under the Securities Act by
the Securities and Exchange Commission (the "SEC");

(B) the offering itself will be reported by AHFP
to the SEC to the extent required by Regulation D and to various state
securities or blue sky commissioners to the extent required by
applicable state law; and

(C) there is no existing public or other market
for either the Common Stock or the New Common Stock and there can be no
assurance that AHFP will be able to sell or dispose of either the Common
Stock, or the New Common Stock.

(ii) AHFP represents and warrants to the Company that:

(A) except as contemplated by the Reorganization
Distribution, the Common Stock and the New Common Stock to be acquired
by it pursuant to this Agreement is being acquired for its own account,
not as a nominee or agent for any other person and without a view to the
distribution of the Common Stock or the New Common Stock or any interest
therein in violation of the Securities Act; and

(B) AHFP is an "accredited investor" within the
meaning of Rule 501(a) under Regulation D, and has such knowledge and
experience in financial and business matters so as to be capable of
evaluating the merits and risks of its investment in the Common Stock
and the New Common Stock.

(iii) AHFP acknowledges that the shares of the Common
Stock and the New Common Stock have not been registered under the Securities
Act and understands that the shares of the Common Stock and the New Common
Stock must be held indefinitely unless they are subsequently registered under
the Securities Act or such sale is permitted pursuant to an available exemption
from such registration requirement.

(e) Organization and Qualification. (i) AHFP is a corporation
duly organized, validly existing and in good standing under the laws of
the State of Delaware, has all requisite corporate power and authority
to own, lease and operate its properties and to carry on its business as
it is now conducted, and is duly qualified to do business and is in good
standing as a foreign corporation or other entity in each jurisdiction
in which the character of its properties or the nature of its business
makes such qualification necessary, except where the failure to be so
qualified or in good standing could not reasonably be expected to have a
material effect on the AHFP.

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(ii) HM&F Holdings, S.A. de C.V., a Mexican corporation
("Mexico Holdings") is duly organized, validly existing and in good
standing under the laws of Mexico, has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its
business as it is now conducted, and is duly qualified to do business
and is in good standing as a foreign corporation or other entity in each
jurisdiction in which the character of its properties or the nature of
its business makes such qualification necessary, except where the
failure to be so qualified or in good standing could not reasonably be
expected to have a material effect on Mexico Holdings.

(iii) Productos Del Monte, S.A. de C.V., a Mexican
corporation ("Del Monte"), is duly organized, validly existing and in
good standing under the laws of Mexico, has all requisite corporate
power and authority to own, lease and operate its properties and to
carry on its business as it is now conducted, and is duly qualified to
do business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the character of its properties or
the nature of its business makes such qualification necessary, except
where the failure to be so qualified or in good standing could not
reasonably be expected to have a material effect on Del Monte.

(iv) Frutas y Verduras Selectas, S. de R.L. de C.V., a
Mexican partnership ("Frutas"), is duly organized, validly existing and
in good standing under the laws of Mexico, has all requisite power and
authority to own, lease and operate its properties and to carry on its
business as it is now conducted, and is duly qualified to do business
and is in good standing as a foreign entity in each jurisdiction in
which the character of its properties or the nature of its business
makes such qualification necessary, except where the failure to be so
qualified or in good standing could not reasonably be expected to have a
material effect on Frutas.

(f) Capitalization.

(i) (A) The authorized capital stock of DM consists
solely of 50,000,000 shares of DM Common Stock, of which 40,000,000
shares are issued and outstanding and owned beneficially and of record
by AHFP, free and clear of all liens. No other shares of capital stock
of DM are issued or outstanding. Each of the DM Shares has been validly
issued and is fully paid and nonassessable. None of the DM Shares have
been issued in violation of any preemptive or similar rights of any
stockholder of DM. None of the shares of capital stock of DM or any
other class of securities of DM has been or is registered under the
Securities Act or the Exchange Act.

(B) (1) No shares of DM Common Stock are
reserved for issuance, and (2) except for this Agreement, there are no
contracts, agreements, commitments or arrangements obligating AHFP or DM
(x) to offer, sell, issue or grant any shares of, or any options,
warrants or rights of any kind to acquire any shares of, or any
securities that are convertible into or exchangeable for any shares of,
capital stock of DM, (y) to redeem, purchase or acquire, or offer to
purchase or acquire, any outstanding shares of, or any outstanding
options, warrants or rights of any kind to acquire any shares of, or any

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outstanding securities that are convertible into or exchangeable for any
shares of, capital stock of DM or (z) to grant any lien on any shares of
capital stock of DM.

(ii) (A) The authorized capital stock of Mexico
Holdings consists solely of 5,000 shares of common stock, par value $10
Mexican Pesos per share (the "Mexico Common Stock"), of which 5,000
shares are issued and outstanding. The Company owns 4,999 shares of
Mexico Common Stock of record, free and clear of all liens. Lawrence D.
Stuart, Jr. owns 1 share of Mexico Common Stock of record, free and
clear of all liens. No other shares of capital stock of Mexico Holdings
are issued or outstanding. Each share of Mexico Common Stock has been
validly issued and is fully paid and nonassessable. No shares of Mexico
Common Stock have been issued in violation of any preemptive or similar
rights of any stockholder of Mexico Holdings. None of the shares of
capital stock of Mexico Holdings or any other class of securities of
Mexico Holdings has been or is registered under the Securities Act or
the Exchange Act.

(B) (1) No shares of Mexico Common Stock are
reserved for issuance, and (2) there are no contracts, agreements,
commitments or arrangements obligating Mexico Holdings (x) to offer,
sell, issue or grant any shares of, or any options, warrants or rights
of any kind to acquire any shares of, or any securities that are
convertible into or exchangeable for any shares of, capital stock of
Mexico Holdings, (y) to redeem, purchase or acquire, or offer to
purchase or acquire, any outstanding shares of, or any outstanding
options, warrants or rights of any kind to acquire any shares of, or any
outstanding securities that are convertible into or exchangeable for any
shares of, capital stock of Mexico Holdings or (z) to grant any lien on
any shares of capital stock of Mexico Holdings.

(iii) (A) The authorized capital stock of Del Monte
consists solely of 2,500 shares of fixed capital series A stock, par
value $1.00 Mexican Pesos per share (the "Del Monte Fixed Common Stock")
and 186,513,464 shares of variable capital series B, par value $1.00
Mexican Pesos per share (the "Del Monte Variable Common Stock" and
collectively with the Del Monte Fixed Common Stock, the "Del Monte
Common Stock"). Mexico Holdings owns 2,499 shares of Del Monte Fixed
Common Stock of record, free and clear of all liens. Lawrence D.
Stuart, Jr. owns 1 share of Del Monte Fixed Common Stock of record, free
and clear of all liens. Mexico Holdings owns 186,513,464 shares of Del
Monte Variable Common Stock of record, free and clear of all liens. No
other shares of capital stock of Del Monte are issued or outstanding.
Each share of Del Monte Common Stock has been validly issued and is
fully paid and nonassessable. No shares of Del Monte Common Stock have
been issued in violation of any preemptive or similar rights of any
stockholder of Del Monte. None of the shares of capital stock of Del
Monte or any other class of securities of Del Monte has been or is
registered under the Securities Act or the Exchange Act.

(B) (1) No shares of Del Monte Common Stock
are reserved for issuance, and (2) there are no contracts, agreements,
commitments or arrangements obligating Del Monte (x) to offer, sell,
issue or grant any shares of, or any options, warrants or rights of any
kind to acquire any shares of, or any securities that are convertible
into or

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exchangeable for any shares of, capital stock of Del Monte, (y) to
redeem, purchase or acquire, or offer to purchase or acquire, any
outstanding shares of, or any outstanding options, warrants or rights of
any kind to acquire any shares of, or any outstanding securities that
are convertible into or exchangeable for any shares of, capital stock of
Del Monte or (z) to grant any lien on any shares of capital stock of Del
Monte.

(iv) (A) The interests of Frutas consist solely of
two paid-in social parts (the "Frutas Interests"). Del Monte owns one
Frutas Interest of record, free and clear of all liens. Lawrence D.
Stuart, Jr. owns one Frutas Interest of record, free and clear of all
liens. No other interests of Frutas are issued or outstanding. Each
Frutas Interests has been validly issued. No Frutas Interests has been
issued in violation of any preemptive or similar rights of any partner
of Frutas. None of the partnership interest of Frutas has been or is
registered under the Securities Act or the Exchange Act.

(B) (1) No Frutas Interests are reserved for
issuance, and (2) there are no contracts, agreements, commitments or
arrangements obligating Frutas (x) to offer, sell, issue or grant any
interests in, or any options, warrants or rights of any kind to acquire
any interests in, or any securities that are convertible into or
exchangeable for any interest in, Frutas, (y) to redeem, purchase or
acquire, or offer to purchase or acquire, any outstanding interest in,
or any outstanding options, warrants or rights of any kind to acquire
any interest in, or any outstanding securities that are convertible into
or exchangeable for any interest in, Frutas or (z) to grant any lien on
any interest in Frutas..

2.2. Representations and Warranties of the Company. The Company
represents and warrants to AHFP as follows:

(a) Organization and Qualification. The Company is a
corporation duly organized, validly exiting and in good standing under
the laws of the State of Delaware, has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its
business as it is now conducted, and is duly qualified to do business
and is in good standing as a foreign corporation or other entity in each
jurisdiction in which the character of its properties or the nature of
its business make such qualification necessary , except where the
failure to be so qualified or in good standing could not reasonable be
expected to have material effect on the Company.

(b) Capitalization. As of the date of this Agreement, the
authorized capital stock of the Company consists solely of 1,900,000,000
shares of Common Stock, of which 330,000,000 shares are issued and
outstanding. No other shares of capital stock of the Company are issued
or outstanding. Each share of Common Stock has been validly issued and
is fully paid and nonassessable. Each share of the Common Stock and the
New Common Stock to be issued to AHFP hereunder will be validly issued,
fully paid and nonassessable.

(c) Authority. (i) The Company has all requisite power and
authority to execute and deliver this Agreement and to perform its
obligations hereunder, and the execution, delivery and performance by
the Company of this Agreement and the consummation by the

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Company of the transactions contemplated hereby have been duly
authorized by all necessary action on the part of the Company.

(ii) The Company has full legal capacity to execute and
deliver this Agreement and to perform the obligations of the Company
hereunder. This Agreement has been duly and validly executed and
delivered by the Company and, assuming this Agreement constitutes a
valid and binding obligation of the Company, constitutes a valid and
binding obligation of the Company, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or in equity).
Each consent, authorization, order or approval of, or filing or
registration with, any governmental entity required by applicable law on
or before the Initial Closing or Second Closing, as applicable, for or
in connection with the execution and delivery by the Company of this
Agreement, or the performance by the Company of its obligations
hereunder will have been obtained or made on or before the Initial
Closing or Second Closing, as applicable, except where the failure to
obtain any such consent, authorization, order, approval, filing or
registration would not affect the Company's ability to perform its
obligations under this Agreement in any material respect.

(d) No Conflicts. The execution, delivery, and performance by
the Company of this Agreement does not (i) violate or breach any
provision of any law or statute applicable to the Company or any
provision of its organizational or constituent documents, except where
such violation or breach would not affect the Company's ability to
perform its obligations under this Agreement, or (ii) violate, breach,
cause a default under, or result in the creation of a lien pursuant to,
any agreement or instrument to which such the Company is a party or to
which it or any of its properties may be subject, except where the
violation, breach, default or creation of a lien would not affect the
Company's ability to perform its obligations under this Agreement.

ARTICLE III

COVENANTS

3.1. New Common Stock. Prior to the Second Closing, the Company shall
cause the New Common Stock to be created.

3.2. Registration Rights Agreement. The Company and AHFP hereby agree
as follows:

(a) that the shares of New Common Stock are subject to that
certain Registration Rights Agreement entered into as of November 1, 1996 by
and among the Company, AHFP and AHP Subsidiary Holding Corporation ("AHP Sub")
(the "Registration Agreement") and that such are Registrable Shares (as such
term is defined in the Registration Agreement) thereunder.

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(b) From and after the consummation of the Reorganization
Distribution, the Company agrees and acknowledges that each of the shareholders
of AHFP (collectively, the "AHFP Shareholders"), as transferees of AHFP, shall
be members of the Buyer Group Demand Holders and Buyer Group Piggyback Holders
(as such terms are defined in the Registration Agreement) and shall be a
Holder, Demand Holder and Piggyback Holder (as such terms are defined in the
Registration Agreement) under the Registration Agreement; provided that their
rights under the Registration Agreement in such capacity shall be subject to
the provisions of this Section 3.2.

(c) From and after the Reorganization Distribution, the right
of any Demand Holder, who is a member of the Buyer Group Demand Holders, to
make a Demand Request (as such term is defined in the Registration Agreement)
shall be limited as follows: no Demand Request may be made by any Demand
Holder, who is a member of the Buyer Group Demand Holders, unless (i) with
respect to two Demand Registrations (as such term is defined in the
Registration Agreement) only, the Registrable Shares proposed to be sold by
such Demand Holder represent, in the aggregate more than 35% of the total
number of Registrable Shares held by all Buyer Group Demand Holders or (ii)
with respect to one Demand Registration only, (A) either (x) the Registrable
Shares proposed to be sold by such Demand Holder represent 51% or more of the
total number of Registrable Shares held by all Buyer Group Demand Holders other
than the members of the HMC Group or (y) it is made by at least two such Buyer
Group Demand Holders, who are not members of the HMC Group, (B) the Registrable
Shares proposed to be sold by such Demand Holders have a fair market value
(determined in good faith by the Company's Board of Directors), at the time of
the Company's receipt of the Demand Request, of $25 million or more than and
(C) the offering to be consummated pursuant to such Demand Request will not, in
the reasonable opinion of an investment banking firm selected by the Company,
have a material adverse effect on the market price of the Common Stock.
Notwithstanding the foregoing, in no event may a Demand Request be made at any
time within 180 days after the consummation of a Qualified IPO (as such term is
defined in the Registration Agreement"). As used in the paragraph this term
"HMC Group" means Hicks, Muse, Tate & Furst Incorporated ("HMTF") and its
Affiliates (as such term is defined in the Registration Agreement) and its and
their respective officers, directors, and employees (and members of their
respective families and trusts for the primary benefit of such family members).

(d) From and after the Reorganization Distribution, the right
of any Piggyback Holder, who is a member of the Buyer Group Piggyback Holders,
to make a Piggyback Request (as such term is defined in the Registration
Agreement) in respect of a proposed Qualified IPO (as such term is defined in
the Registration Agreement) shall be subject to the prior consent of the
Company.

3.3. The Reorganization Distribution. After the Second Closing (and
in any event prior to the effectiveness of the Registration Statement for a
Qualified IPO), AHFP shall distribute to the AHFP Shareholders AHFP's assets,
including all of the shares of New Common Stock received by AHFP pursuant to
the Old Shares Exchange, subject to Section 3.2, the rights and obligations
under the Registration Agreement and the rights and obligations arising under
Sections 7.14 and 7.15 of the Merger Agreement, as necessary for the
transactions contemplated herein to qualify as a reorganization as described in
Section 368(a) of the Code (the "Reorganization Distribution"). In connection
with such distribution AHFP shall use reasonable efforts to obtain each AHFP
Shareholder's execution of and deliver to the Company a counterpart of an
Acknowledgment and Appointment of Agent in substantially the form of Exhibit
"A" hereto.

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3.4. Additional Agreements. Subject to the terms and conditions of
this Agreement, each of the parties hereto will use its commercially reasonable
efforts to take, or cause to be taken all action and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws to
consummate and make effective the transactions contemplated by this Agreement.
If at any time after either the Initial Closing or the Second Closing, as
applicable, any further action is necessary to carry out the purposes of this
Agreement, the parties to this Agreement and their duly authorized
representatives shall take all such actions.

ARTICLE IV

CLOSING

4.1. Initial Closing. The closing of the transactions contemplated by
the DM Exchange (the "Initial Closing") will take place at the offices of
Vinson & Elkins L.L.P., Dallas, Texas, at 5:00 p.m., local time, on September
30, 1997 or at such other place and time as AHFP and the Company may agree.

4.2. Second Closing. The closing of the transactions contemplated by
the Old Shares Exchange (the "Second Closing") will take place at the offices
of Vinson & Elkins L.L.P., Dallas, Texas, at 10:00 a.m. local time, immediately
prior to the effectiveness of the Registration Statement for a Qualified IPO or
at such other place and time as AHFP and the Company may agree.

4.3. Actions to Occur at the Initial Closing. At the Initial Closing:

(a) The Company shall deliver to AHFP the number of shares of
Common Stock due to AHFP as provided in Article I hereof; and

(b) AHFP shall deliver to the Company one or more stock
certificates respectively representing the DM Shares, properly endorsed for
transfer (together with all necessary stock powers and other appropriate
documentation).

4.4. Actions to Occur at Second Closing. At the Second Closing:

(a) The Company shall deliver to AHFP the number of shares of
New Common Stock due to AHFP as provided in Article I hereof; and

(b) AHFP shall deliver to the Company one or more stock
certificates respectively representing the Aggregate Old Shares, properly
endorsed for transfer (together with all necessary stock powers and other
appropriate documentation).

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ARTICLE V

GENERAL PROVISIONS

5.1. Survival of Representations, Warranties and Covenants.
Regardless of any investigation at any time made by or on behalf of any party
hereto or of any information any party may have in respect thereof, each of the
representations and warranties and covenants made hereunder or pursuant hereto
or in connection with the transactions contemplated hereby shall survive the
Closing.

5.2. Transaction Fees. Each party to this Agreement shall pay and
discharge all of its fees associated with the transactions contemplated by this
Agreement.

5.3. Amendment and Modification. This Agreement may not be amended
except by an instrument in writing signed by the parties hereto.

5.4. Waiver of Compliance. Any failure of AHFP on the one hand, or
the Company, on the other hand, to comply with any obligation, covenant,
agreement, or condition contained herein may be waived only if set forth in an
instrument in writing signed by the party or parties to be bound thereby, but
such waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any other failure.

5.5. Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of applicable
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated herein is not affected in any
manner materially adverse to any party. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated hereby be
consummated as originally contemplated to the fullest extent possible.

5.6. Parties in Interest. This Agreement shall be binding upon and,
except as provided below, inure solely to the benefit of each party hereto and
their successors and assigns, and nothing in this Agreement, except as set
forth below, express or implied, is intended to confer upon any other person
any rights or remedies of any nature whatsoever under or by reason of this
Agreement.

5.7. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally or mailed by
registered or certified mail (return receipt requested) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):

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(a) If to AHFP, to

AHFP Holding Corporation
200 Crescent Court, Suite 1600
Dallas, Texas 75201
Attn: Lawrence D. Stuart, Jr.
Facsimile: (214) 740-7313

with a copy to

Vinson & Elkins L.L.P.
3700 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201
Attn: A. Winston Oxley
Facsimile: (214) 220-7716

(b) If to the Company, to

1633 Littleton Road
Parsippany, New Jersey 07054
Attn: Kelley Maggs
Facsimile: (973) 254-5460

5.8. Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when
one or more counterparts have been signed by each of the parties and delivered
to the other parties, it being understood that all parties need not sign the
same counterpart.

5.9. Entire Agreement. This Agreement (which terms shall be deemed to
include the schedules hereto) constitutes the entire agreement of the parties
hereto and supersedes all prior agreements and understandings, both written and
oral, among the parties with respect to the subject matter hereof. There are
no representations or warranties, agreements or covenants other than those
expressly set forth in this Agreement.

5.10. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE. ANY SUIT OR PROCEEDING
BROUGHT HEREUNDER SHALL BE SUBJECT TO THE EXCLUSIVE JURISDICTION OF THE COURTS
LOCATED IN DELAWARE.

5.11. Director and Officer Liability. The directors, officers and
stockholders of either AHFP or the Company and their respective affiliates
shall not have any personal liability or obligation arising under this
Agreement.

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<PAGE> 14
5.12. Certain Definitions. For purposes of this Agreement, the
term:

(a) "affiliate" of a specified person means a person who,
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such specified person;

(b) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.

(c) "Material Adverse Effect" shall mean any change or effect
that would be materially adverse to the consolidated business, condition
(financial or otherwise), operations, performance or properties of a specified
person and its subsidiaries, if any, taken as a whole.

(d) "Merger Agreement" shall mean that certain Agreement of
Sale and Plan of Merger, dated as of September 5, 1996, by and among AHP Sub,
et al. and AHFP, et al.

(e) "person" means an individual, corporation, limited
liability company, partnership, limited partnership, syndicate, person
(including, without limitation, a "person" as defined in Section 13(d)(3) of
the Exchange Act), trust, association or other legal entity or government,
political subdivision, agency or instrumentality of a government;

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<PAGE> 15
IN WITNESS WHEREOF, AHFP and the Company have each caused this Agreement
to be signed as of the date first written above.

AHFP:

AHFP HOLDING CORPORATION

By: /s/ ANDREW S. ROSEN
------------------------------------------
Andrew S. Rosen
Vice President and Assistant
Secretary

COMPANY:

INTERNATIONAL HOME FOODS, INC.

By: /s/ N. MICHAEL DION
------------------------------------------
N. Michael Dion
Senior Vice President and Chief
Financial Officer

S-1
<PAGE> 16
EXHIBIT A

ACKNOWLEDGMENT AND APPOINTMENT OF AGENT

KNOW ALL MEN BY THESE PRESENTS, that the undersigned, hereby:

1. Appoints Hick, Muse, Tate & Furst Incorporated, a Texas
corporation ("HMTF") as his/her lawful agent and attorney-in-fact
to represent the undersigned in connection with Sections 7.14
(Sales of Old AHFP Shares and Tag Along) and 7.15 (Certain Rights
of Sellers) of the Merger Agreement, to execute and deliver all
documents necessary to effectuate Sections 7.14 and 7.15 of the
Merger Agreement, and to do anything else, including without
limitation, signing and delivering all certificates, receipts,
contracts, statements, notice, orders, instructions, and any
other document that HMTF, in it sole discretion, belives
advisable to carry out the provisions in Section 7.14 and 7.15 of
the Merger Agreement;

2. Appoints HMTF as his/her true and lawful proxy, agent and
attorney-in-fact to vote pursuant to Section 7.15 of the Merger
Agreement any and all shares of any class of series of capital
stock of International Home Foods, Inc. (the "Company") or any
subsidiary of the Company held by the undersigned. The
undersigned acknowledges that the proxy granted hereby is
irrevocable, being coupled with an interest, and that such proxy
will continue until the termination of the undersigned's
obligation to vote any shares in accordance with Section 7.15 of
the Merger Agreement; and

3. Acknowledges and agrees to fulfill the covenants under Sections
7.14 and 7.15 of the Merger Agreement.

All terms not defined herein shall have the same meaning of such term in
that certain Agreement and Plan of Reorganization, dated September 30, 1997,
between AHFP Holding Corporation and International Home Foods, Inc.

IN WITNESS HEREOF, I have set my hand this ___ day of ________ 1997.

[SHAREHOLDER]

By:
----------------------------------
Name:
--------------------------------
Its:
---------------------------------

A-1

<PAGE> 1
EXHIBIT 10.15

AMENDED AND RESTATED JAMS MANUFACTURING AGREEMENT

THIS AGREEMENT is made and entered into as of March 3, 1997 by and
between Roseland Manufacturing, Inc., a Delaware corporation (hereinafter
referred to as "Seller"), and International Home Foods, Inc., a Delaware
corporation (hereinafter referred to as "Purchaser").

WITNESSETH:

WHEREAS, American Home Food Products, Inc., a Delaware corporation and
Seller entered into a Jams Manufacturing Agreement as of January 21, 1994 and
said Agreement was assigned by American Home Food Products, Inc. to Purchaser
on November 1, 1996; and

WHEREAS, Purchaser and Seller wish to further amend such Agreement and
to execute this Amended and Restated Jams Manufacturing Agreement in order that
Purchaser may continue to purchase Product from Seller, and Seller may continue
to sell Product to Purchaser, in each case upon the terms and conditions set
forth herein;

NOW THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

1. DEFINITIONS

As used herein, the following terms shall have the following meanings:

"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person.

A "Case" of any finished Product means the stockkeeping-unit (sku) of
such finished Product, provided, however that shippers, multi-packs and other
multiple case units, notwithstanding their identification as SKUs, comprise
multiple quantities of equivalent cases of base SKUs.

"CD Limit" means the aggregate amount equal to (i) 2% multiplied by
(ii) the Overall Cost per Case for each Case of Product purchased by Purchaser
hereunder during the twelve months preceding the date of the occurrence to
which the CD Limit is applied.

"Consequential Damages" means any indirect or consequential damages
arising from, relating to or in connection with this Agreement, whether arising
from or relating to breach of warranty, agreement or covenant, negligence,
strict liability in tort or other causes.

"Direct Labor Cost" means the Standard Cost of direct labor utilized
in the production of Product, including the cost of fringe benefits, allocated
to Product in a manner consistent

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<PAGE> 2
with current practices in effect for allocation of such labor cost to all
products manufactured by Seller, as set forth in Schedule 1 to Exhibit B
hereto.

"Force Majeure" shall have the meaning ascribed to such term in
Section 10.

"Intellectual Property Right" means any trademark, service mark, trade
name, invention, patent, trade secret, copyright, know-how (including any
registrations or applications for registration of any of the foregoing), trade
dress, logos, labels, labeling and other indicia of ownership, or any other
similar type of proprietary intellectual property right.

"Manufacturing Facility" means Seller's manufacturing facility located
at 426 Eagle Rock Avenue, Roseland, New Jersey.

"Materials" means all materials and ingredients necessary for the
manufacture, labeling, packing and storage of Product which Purchaser has
purchased from Seller pursuant to Exhibit B hereto.

"Materials Cost" means the cost of Materials purchased by Seller to be
utilized in the production of Product.

"Overall Cost" means, per Case of any Product at any time, the sum of
(i) the Standard Cost of Materials utilized plus (ii) Direct Labor Cost plus
(iii) Overhead Cost, in each case per Case of such Product in effect at such
time.

"Overhead Cost" means the Standard Cost of overhead incurred at the
manufacturing plant of Seller where Product is manufactured, allocated to
Product in a manner consistent with Seller's current practices in effect for
allocation of overhead cost to all products manufactured by Seller, as modified
by Section 5, as set forth in Schedule 1 to Exhibit B hereto.

"Person" means an individual, corporation, partnership, association,
trust or other entity or organization.

"Product" means any and all jam, jelly and preserve products
manufactured for and marketed by Purchaser including, but not limited to, the
products listed in Exhibit A hereto.

"Product Defect" means any defect in any Product including, without
limitation, in the workmanship, in the manufacture of, in the ingredients or
raw materials comprising or in the labeling or packaging of any Product.

"Standard Cost" with respect to Materials Cost, Direct Labor Cost or
Overhead Cost, as the case may be, means the cost thereof that is based on
expected yields and utilizations consistent with current budgeting practices,
as modified by Section 5, as set forth in Schedule 1 to Exhibit B hereto.

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<PAGE> 3
"Term" means the term of this Agreement as described pursuant to
Section 6.

2. PRODUCTION; PRODUCT SPECIFICATIONS

(a) During the Term hereof, Seller agrees to manufacture, package
and sell to Purchaser, and Purchaser agrees to purchase from Seller,
Purchaser's total requirements of Product, subject to Section 2(d).

(b) Purchaser agrees to purchase Product from Seller and Seller
agrees to sell Product to Purchaser pursuant to the purchase order procedures
described in section 3.

(c) Product delivered hereunder shall be manufactured in
accordance with current production standards and practices at the Manufacturing
Facility. Either party may, from time to time, during the Term, request the
approval of the other party to a change in such standards or practices, which
approval shall not be unreasonably withheld; provided that if any such
requested change is not agreed to, the standards and practices in effect
immediately prior to the time of such request shall remain valid and in effect.
Any and all changes to such practices and standards shall be made only pursuant
to written agreement of the parties as aforesaid; provided that Seller shall be
entitled to increase its Standard Costs of production to the extent of any
increase in production costs resulting from any change in production standards
or practices pursuant to this Section 2 (c) from those in effect on the date
hereof; and provided further that if Seller notifies Purchaser of any such
increases in its Standard Costs of production, Seller shall furnish Purchaser
with documentation reasonably satisfactory to Purchaser evidencing the increase
in the Standard Costs of production.

In the event that the production standards and practices are changed by mutual
agreement pursuant to this Section 2 (c), Seller shall manufacture Product
hereunder in compliance with such changed production practices and standards.

(d) Purchaser has the right, exercisable at its option, to
transfer some or all production of Product to other manufacturing facilities
prior to the expiration of the Term of this Agreement, provided, however,
Purchaser gives Seller 180 days' prior written notice and reimburses Seller for
the lower of either (i) fixed costs of contract termination, or (ii) fixed
labor and overhead costs remaining in the Term of this Agreement (e.g. lease
and labor contract termination costs). Purchaser will be provided access to
Sellers facilities to remove equipment and make general repairs as necessary
following written notification.

3. PURCHASE ORDERS

(a) By December 1 of each year during the term hereof, Purchaser
shall provide Seller with an annual forecast for the following calendar year of
requirements of Product, by SKU, which shall be updated monthly and shall
include notice of any promotional activity and significant changes in case
volume activity.

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<PAGE> 4
(b) On a regular and frequent basis, which may be daily, Purchaser
and Seller (i) shall review the inventory of Product and anticipated sales of
the Product; and (ii) agree upon a production schedule which will provide
Purchaser with sufficient amounts of Product to maintain appropriate customer
service levels. Seller shall be responsible for scheduling shipment of the
Product to Purchaser's designated locations based on deployment schedule
provided by Purchaser.

(c) In the event Seller, within five (5) business days after
receipt of an annual forecast (or monthly update), notifies Purchaser of its
inability to meet such forecast (or monthly update), including the specified
delivery dates, the parties shall attempt to arrange a substituted delivery
schedule by mutual agreement. Such notice shall include a statement of the
reasons for such inability and the amount of Product affected.

(d) Except in the case of Force Majeure (in which case the
provisions of Section 10 shall apply), in the event the parties are unable to
agree on a substituted delivery schedule, Purchaser shall have the right to
have Product manufactured by parties other than Seller or to undertake
manufacture itself, but only if Product can be obtained more expeditiously from
an alternative source and only in such amounts and for such periods necessary
to make up the difference between the amounts required by Purchaser hereunder
and only for such periods Seller is unable to timely supply Product to
Purchaser. In that event, Seller agrees to provide Purchaser or its nominee
with all technical assistance necessary for the manufacture of Product.

(e) In accordance with Purchaser's policy, Seller must obtain
written approval to purchase more than 50% of the annual requirement for any
component item.

4. PRICING: MATERIALS

(a) The price for Product ("Price") supplied pursuant to this
Agreement shall be determined as set forth in Exhibit B.

(b) The provisions relating to responsibility and payments
regarding purchase and sale of Materials shall be as set forth in Exhibit B.

(c) Seller represents and warrants that it has entered into
written commercially satisfactory arrangements pertaining to the Materials and
Purchaser, when it acquires title to and ownership of such Materials in
accordance with Section 7 of this Agreement, shall have all the rights and
benefits of Seller pursuant to such agreements as if it were Seller. Seller
agrees to provide Purchaser with copies of such bailment agreements.

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<PAGE> 5
5. ADMINISTRATIVE SERVICES: EQUIPMENT RENTAL

(a) Seller will lease from Purchaser all of Purchaser's
manufacturing equipment that is, as of the date hereof, located at the
Manufacturing Facility (the "Equipment") in order for Seller to perform its
obligations hereunder, for $1 per month.

(b) Seller and Purchaser agree that the Equipment shall be located
in and remain in the Manufacturing Facility at all times, at no cost to
Purchaser therefor. Seller will not utilize the Equipment for any purpose other
than to manufacture Product or for any other use that the parties shall agree
to in writing. The Equipment may not be moved or relocated outside of the
Manufacturing Facility by Seller without Purchaser's prior written consent.
Seller agrees that it shall not impair the right, title or interest of
Purchaser in and to the Equipment, nor shall allow any lien or other
encumbrances to be levied thereon,

(c) Seller will operate and maintain the Equipment in accordance
with past practices. Seller agrees to provide routine daily maintenance to the
Equipment. Any capital expenditures required in connection with production of
Product hereunder shall be subject to Purchaser's approval, which shall not be
unreasonably withheld and Purchaser shall be liable for all such capital
expenditures.

(d) Upon exercise of Purchaser's rights under Section 2 (d),
Purchaser may remove Equipment from the Manufacturing Facility from time to
time upon reasonable notice to Seller, all costs of removal and transporting of
Equipment to be borne by Purchaser; provided that after any such removal
sufficient Equipment remains at the Manufacturing Facility to enable Seller to
perform its production obligations hereunder; provided further that in the
event of any such removal, the Direct Labor Cost and Overhead Cost per Case of
Product shall be increased to the extent necessary to reflect Seller's
increased costs arising from any such removal during the period from
commencement of any such removal to expiration or termination of this Agreement
pursuant to Section 6 or Section 17.

(e) Upon termination of this Agreement, the lease provided for in
Section 5(a) shall terminate and Purchaser shall, as soon as practicable
thereafter but in no event later than 30 days after termination of this
Agreement, remove the Equipment from the Manufacturing Facility. In the event
such Equipment has not been removed within such 30 day period, beginning on the
next day, Purchaser shall pay rent to Seller for the use of Manufacturing
Facility at the rate of $27,000 per month.

(f) In the event of the removal of Equipment pursuant to Section
5(d) or 5(e), Purchaser shall pay all costs of removal and transporting of the
Equipment and all costs to repair any damage to the Manufacturing Facility
caused by removal of the Equipment, which repairs shall include the patching
and filling of holes and repair of any structural damage. All repairs shall be
completed within 30 days following completion of equipment removal. In the
event repairs are not completed within such 30 day period, beginning on the
31st day, Purchaser shall pay rent to Seller at the rate of $27,000 per month
until said repairs are completed.

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<PAGE> 6
6. TERM OF AGREEMENT

The term of the Agreement shall be twenty-four (24) months, commencing
on April 1, 1997 and expiring on March 31, 1999 (the "Initial Term"). Purchaser
will be provided the opportunity to discuss with Seller its labor contract
strategy and shall be allowed to review and approve contract strategy and
contract proposals prior to renewal. Seller will use its best efforts to
complete the renewal of its union contract and building lease by September 15,
1998. Purchaser shall have the right, exercisable at its option, to extend the
term of this Agreement for an additional period of twenty-four (24) months upon
180 days prior written notice to Seller (the "Option"), to be given no later
than September 30, 1998.

7. DELIVERIES: TITLE AND RISK

(a) Title to, ownership of and risk of loss with respect to all
Materials purchased by Seller shall remain with Seller until purchased by
Purchaser as described in Exhibit B hereto, and upon such purchase, title to
and ownership of all such Materials shall pass to Purchaser; provided, however,
that, except as expressly provided herein, risk of loss shall at all times
remain with Seller and Seller shall be liable for any loss of or damage to the
Materials including, but not limited to, any shortages in the Materials while
in the possession of Seller or Seller's bailees' possessions, subject to the
provisions of Section 7 of Exhibit B.

(b) The parties agree that Purchaser is hereby authorized to file
one or more financing statements, continuation statements or other documents
for the purpose of perfecting, confirming, continuing, enforcing or protecting
Purchaser's ownership interest in the Materials with or without the signature
of Seller.

(c) Shipments shall be made on the approximate date or dates
reasonably specified by Purchaser provided orders are received (and a delivery
schedule approved) by Seller at least thirty (30) days before such specified
date(s).

(d) All deliveries of Product purchased and sold hereunder shall
be F.O.B. the Manufacturing Facility.

(e) Risk of loss with respect to all Product purchased and sold
hereunder shall remain with Seller until delivery to a carrier at the
Manufacturing Facility as provided in Section 7 (d). Title to and ownership of
all Product (other than the Materials) and risk of loss with respect to such
Product purchased hereunder will pass to Purchaser upon delivery to the carrier
at the Manufacturing Facility.

8. PAYMENT TERMS

Payment of the Price of Product produced hereunder shall be made by
Purchaser within twenty (20) days from date of invoice. Seller shall invoice
Purchaser weekly based on actual production of Product in the week preceding
the date of such invoice. Invoices shall be

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<PAGE> 7
submitted to Purchaser by facsimile transmission on the first business day of
each week, and no confirming copy of the invoice shall be required to be mailed
to Purchaser.

9. MATERIALS AND PRODUCT AT TERMINATION

(A) At the time of expiration or termination of this Agreement
pursuant to Section 2(d), 6 or 17:

(a) Purchaser shall purchase from Seller, at actual cost, all
Materials (i) in Seller's possession at such time or (ii) that are subsequently
delivered to Seller by the supplier thereof, in each case that Seller has
purchased pursuant to Section 1 of Exhibit B that Purchaser has not previously
purchased pursuant to the terms of Exhibit B;

(b) Purchaser shall purchase from Seller (i) all inventories of
finished Product manufactured hereunder that have not theretofore been
delivered or invoiced to Purchaser and (ii) all Product for which Seller has
outstanding orders at such time from Purchaser;

(c) Purchaser shall pay to Seller all amounts due hereunder less
the aggregate amount paid by Purchaser for Materials pursuant to Exhibit B
hereto; and

(d) Purchaser shall assume all obligations of Seller under or in
respect of any outstanding orders or agreements made by Seller pursuant to
Section 1 of Exhibit B for the purchase of Materials hereunder; provided that,
in the case of clauses (a) and (b) of this Section 9, such Materials and
inventories of finished Product are usable and in good order and salable
condition and can be used by Purchaser in future production of its products.

(B) Inventories of finished Product and Materials and work in
progress shall be within normal customary levels at the expiration of this
Agreement. The parties shall consult with each other from time to time prior to
expiration of this Agreement in order to minimize such inventory and work in
progress.

10. FORCE MAJEURE

Neither party shall be liable to the other party for any delay or
default in performance where occasioned by any cause of any kind or extent
beyond its reasonable control including, by way of example, but not limitation,
any act of God, any act, regulation or law of any government, war, civil
commotion, destruction of production facilities or materials by fire,
earthquake or storm, labor disturbance, epidemic, equipment breakdown or
failure, or failure of suppliers, public utilities or common carriers ("Force
Majeure"). The party claiming relief hereunder shall notify the other party in
writing of the Force Majeure causing delay or default in performance. Each
party shall take reasonable action within its control to alleviate the Force
Majeure causing delay or default in performance. During any period in which any
Force Majeure prevents Seller from producing or delivering Product in
accordance with the terms of this Agreement, Purchaser shall be entitled to
purchase Product from any other Person but only for the duration of such
period, provided that as soon as Seller notifies

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<PAGE> 8
Purchaser that Seller is able to resume performing its obligations pursuant to
this Agreement, (i) Seller's rights under Section 2 shall be deemed thereupon
immediately reinstated in full and (ii) Purchaser shall forthwith resume
purchasing Product from Seller and shall otherwise perform its obligations in
accordance with the terms of this Agreement and Purchaser shall forthwith cease
to purchase Product from any other Person.

11. TRADEMARKS

(a) Purchaser and Seller agree that Purchaser is, and shall be,
the owner of all Intellectual Property Rights relating to Product. Seller shall
not make any claim of ownership in or to the foregoing. Title to any other
trademarks, or applications filed thereon, relating to Purchaser's sale of
Product shall reside in Purchaser. Nothing in this agreement shall constitute
Seller in any way as owner, part owner or licensee of the trademarks except to
the extent necessary to perform Seller's obligations hereunder. Seller shall
make only that limited use of the Intellectual Property Rights in
manufacturing, packaging and sale of Product, as provided for herein, or as
Purchaser in the future may direct in writing. Seller agrees that it will
neither take nor direct any action other than as provided herein, or as
Purchaser may from time to time request in writing, which would impair, the
rights and interests of Purchaser in Purchaser's Intellectual Property Rights
in and to Product. Except as may be otherwise provided herein, upon termination
or cancellation of the Agreement, Seller shall discontinue and make no further
use of the Intellectual Property Rights with respect to Product. Seller shall
not adopt, use, apply for registrations, register or own any such trademarks or
any marks confusingly similar thereto with respect to Product, in any country
of the world.

(b) Purchaser represents and warrants as of the date hereof, and
shall be deemed to represent and warrant as of each date that Product is
delivered hereunder, that it has, as of and since the date hereof, not granted,
conveyed, sold, assigned, transferred or otherwise disposed of to any Person,
any Intellectual Property Rights in and to any Product.

12. COMPLIANCE WITH LAWS

(a) Seller shall manufacture, package, label, store and load for
shipment Product, maintain the Manufacturing Facility and dispose of waste and
other by-products of manufacture and packaging in conformity with all federal,
state and local laws, rules and regulations applicable thereto, including, but
not limited to, the federal Food Drug and Cosmetic Act, as amended, the
Consumer Product Safety Act, as amended, and the Fair Labor Standards Act of
1938, as amended (collectively "Laws"), except that Purchaser shall be
responsible for designing and maintaining labels that comply with such Laws.
Seller warrants that Product is not adulterated within the meaning of the
Federal Food, Drug and Cosmetic Act, and are articles which, under said Act,
may be introduced into interstate commerce.

(b) Seller shall, within twenty four (24) hours, notify Purchaser
of any inspection of the Manufacturing Facility where Product is manufactured
by the United States Food and Drug Administration or any other federal, state
or local government agency and shall furnish Purchaser with copies of all
reports and analyses relating to such inspections where the

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<PAGE> 9
inspections involve Product, its ingredients or the Manufacturing Facility used
to manufacture Product; provided that any failure so to notify or furnish shall
not constitute a breach of this Agreement. If such inspections are scheduled or
conducted with advance notice, Seller shall advise Purchaser and Purchaser
shall have the option to attend at the time of such inspection. Duplicate
samples of Product given to government agents will be provided to Purchaser, as
will duplicates of photographs, if any, taken during the inspection.

(c) Seller shall be responsible for all licenses and permits, and
fees and charges with respect thereto (which fees and charges will be reflected
in Overhead Cost set forth in Schedule 1 to Exhibit B), required by applicable
Federal, state and local law.

13. PRODUCT RECALLS

(a) In the event of a recall of Product required by a governmental
agency or authority of competent jurisdiction or if recall of Product is
mutually deemed advisable by Purchaser and Seller, such recall shall be
promptly implemented and administered by Purchaser in a manner which is
appropriate and reasonable under the circumstances and in conformity with
accepted trade practices. In the event a recall is required because Product
fails to conform with the production standards and practices mutually agreed
upon or the warranties of Seller set forth in this Agreement, or at the express
request of Seller, Seller shall, subject to Section 15(c), reimburse Purchaser
for its reasonable cost and expenses in administering the recall, and the cost
of Product and reasonable freight for all amounts of Product recalled. In the
event that a recall is required as a result of Purchaser's breach of its
obligations hereunder or due to Purchaser's negligence or fault, all reasonable
costs and expenses incurred by Seller in connection therewith shall be borne by
Purchaser.

(b) Seller shall, if requested by Purchaser, obtain (to the extent
obtainable) product recall insurance with respect to Product produced hereunder
in an amount (per occurrence and in the aggregate) (the "Product Recall
Insurance Coverage") agreed upon by the parties with an insurer of recognized
financial responsibility, and shall cause Purchaser to be included as a
co-insured under such insurance; provided that if no such insurance is
obtained, the amount of the Product Recall Insurance Coverage shall be deemed
to be zero. Purchaser shall pay the insurance premium expense for such
insurance and any deductible with respect to any claim under such insurance.

14. WARRANTY: INSURANCE

(a) Subject to Section 15(c), Seller warrants that Product sold
hereunder (i) shall be in accordance with the production standards and
practices mutually agreed upon and (ii) is merchantable, free from defects in
material and workmanship and fit for the purposes for which it is intended.

(b) Purchaser shall inspect each shipment of Product to determine
whether Product is as warranted herein. Purchaser shall send Seller a written
notice of objections to any shipment ("Rejected Shipment") that fails to meet
such warranties within fifteen (15) days of

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receipt of such shipment from the carrier. Such notice shall specify the
particulars of Purchaser's finding. In the absence of any such notice within
said time, the shipment shall be deemed to comply with such warranties.
Purchaser shall follow Seller's instructions as to the return of the Rejected
Shipment to Seller, return to be at Seller's expense if the Rejected Shipment
is determined to have been validly rejected Seller shall promptly provide
Purchaser with replacement Product that conforms to such warranties, which
replacement Product (and shipping expenses with respect thereto) shall be at
Seller's expense if the Rejected Shipment is determined to have been validly
rejected and shall be at Purchaser's expense if invalidly rejected. Seller
shall assume all liability for all validly rejected Product and validly
rejected Product shall be destroyed, reworked or salvaged (with Purchaser's
written consent) by Seller at its sole cost and expense and Seller shall
furnish Purchaser with a certificate affirming that same has been done. Any
such destruction shall conform to all applicable federal, state and local laws
and rules and regulations thereunder. Purchaser's right to inspect and right
to replacement of Product not conforming to such warranties shall not preclude
Purchaser from exercising or enforcing any other rights or remedies it may have
to redress any loss or damage resulting from Seller's failure to supply Product
conforming to such warranties. If Seller shall disagree with the finding by
Purchaser that such shipment fails to meet such warranties, such dispute shall
be resolved by an independent laboratory selected jointly by the parties. All
fees and disbursements incurred in connection with such determination shall be
borne by the party ultimately determined to have incorrectly judged whether
such shipment shall have met such warranties.

(c) Seller agrees to keep in force All Risk Property Insurance
with respect to the Materials owned by Purchaser while such Materials are in
Seller's custody, care and control with an insurer of recognized financial
responsibility and shall furnish Purchaser with a certificate attesting to such
insurance. The insurance premium with respect thereto will be reflected in
Overhead Cost set forth in Schedule 1 to Exhibit B and Purchaser shall pay any
deductible with respect to any claim under such insurance.

(d) Seller agrees to obtain and keep in force Products Liability
Insurance with respect to Product in an amount not less than $10,000,000 (per
occurrence and in the aggregate) with an insurer of recognized financial
responsibility, and shall cause Purchaser to be included as an additional
insured under such insurance. The insurance premium with respect thereto will
be reflected in Overhead Cost set forth in Schedule 1 to Exhibit B, and
Purchaser shall pay any deductible with respect to any claim under such
insurance.

15. INDEMNIFICATION: INFRINGEMENT

(a) Subject to Section 15(c), Seller shall indemnify and hold
Purchaser, its directors, officers, employees and agents harmless from and
against all liabilities, damages, losses or expenses (including reasonable
attorneys' fees and expenses) ("Damages") incurred or suffered by Purchaser
arising out of or in connection with (i) any injury, claim or damage resulting
from or caused by the manufacture of Product, operation of the Manufacturing
Facility or any Product Defect with respect to any Product, including injuries
to persons and property arising from such Product Defect or (ii) any breach by
Seller of its warranties,

10
<PAGE> 11
covenants or agreements hereunder, except to the extent such Damages are caused
by the gross negligence or willful misconduct of Purchaser or any breach by
Purchaser of its warranties, covenants or agreements hereunder; and provided
that Seller shall have no such indemnification obligation with respect to
Damages incurred or suffered by Purchaser arising out of or as a result of any
Force Majeure.

(b) Subject to Section 15 (c), Purchaser shall indemnify and hold
Seller, its directors, officers, employees and agents harmless from and against
all Damages incurred or suffered by Seller arising out of or in connection with
(i) any breach by Purchaser of its representations, warranties, covenants or
agreements hereunder or (ii) infringement of any Intellectual Property Right
arising from the manufacture by Seller or sale by Seller to Purchaser of any
Product hereunder, except to the extent such Damages are caused by the gross
negligence or willful misconduct of Seller or any breach by Seller of its
warranties, covenants or agreements hereunder; and provided that Purchaser
shall have no such indemnification obligation with respect to Damages incurred
or suffered by Seller arising out of or as a result of any Force Majeure.

(c) Notwithstanding any provision in this Agreement to the
contrary, (i) the maximum aggregate liability of either party hereto to the
other party hereto for any Consequential Damages shall not exceed the CD Limit,
(ii) the maximum aggregate liability of Seller arising from, relating to or in
connection with any recall of Product shall be limited to the amount of the
insurance proceeds actually received by Seller under the policy referred to in
Section 13 (b) and (iii) the maximum aggregate liability of Seller arising
from, relating to or in connection with any injury, claim or damage resulting
from or caused by any Product Defect with respect to any Product, including
injuries to persons and property arising from such Product Defect, shall be
limited to the amount of the insurance proceeds actually received by Seller
under the policy referred to in Section 14 (c).

(d) In the event that a party hereto (the "Indemnifying Party")
makes any payment pursuant to its indemnification obligations under this
Agreement, it shall be subrogated to all rights of the party indemnified
hereunder (the "Indemnified Party") to pursue any claim to receive payment or
other consideration from any other third party which may be liable with respect
to any claim, suit, action or proceeding for which indemnification was
provided. The Indemnified Party shall execute and deliver such instruments and
agreements and take such other action as may be required to subrogate the
Indemnifying Party to such Indemnified Party's rights to receive such payment
or consideration.

16. ASSIGNMENT

Neither Seller nor Purchaser may assign its rights or delegate its
performance hereunder without the prior written consent of the other party, and
any attempted assignment or delegation without such consent shall be void;
provided that this Agreement may be assigned or otherwise transferred (a) by
Seller to DSD, Inc. ("DSD") provided that DSD expressly assumes in Writing all
of Seller's obligations hereunder, (b) by Purchaser to an affiliate of
Purchaser, provided that such affiliate expressly assumes in writing all of

11
<PAGE> 12
Purchaser's obligations hereunder, which, however, shall not relieve Purchaser
from any obligations hereunder, and (c) by either party to (i) any purchaser or
successor to all or substantially all of the business of Seller or Purchaser
that is responsible for purchasing or selling Product, as the case may be,
hereunder or any successor corporation into which it may merge or with which it
may be consolidated or to which it may transfer all or substantially-all of its
assets, provided in each case that such purchaser or successor corporation
expressly assumes in writing all of the obligations hereunder of the assignor
or transferor, which, however, shall not relieve either party hereto of any
obligations hereunder.

17. DEFAULT

If either party shall be in default of any material obligation
hereunder, the other party may terminate this Agreement by giving thirty (30)
days' written notice to the party in default, specifying the basis for
termination, provided that if within thirty (30) days after receipt of such
notice the party in default shall remedy the conditions forming the basis for
termination, such notice shall cease to be operational and this Agreement shall
continue in full force. The right of either party to terminate this Agreement,
as herein above provided, shall not be affected in any way by its waiver of, or
failure to take action with respect to, any previous defaults.

Notwithstanding the foregoing, the occurrence of any of the following
events with respect to a party hereto shall be deemed to constitute a default
which shall give rise to an immediate right of the other party to terminate
this Agreement without notice:

(a) insolvency, the making of a general assignment for the benefit
of creditors, the suspension of business (except due to Force Majeure)
or the commission of any act amounting to a business failure, any
change in, or termination of, a party's corporate existence (except a
merger, consolidation or reorganization in which the obligations of
such party hereunder are expressly assumed in writing by the surviving
corporation);

(b) the institution of bankruptcy, reorganization, liquidation or
receivership proceedings by or against a party hereto and, if
instituted against such party, its consent thereto or the failure
to cause such proceedings to be discharged within thirty (30) days
thereafter.

18. RIGHTS UPON TERMINATION

Upon termination of this Agreement, Seller shall (i) not produce,
distribute or market any Product under any Intellectual Property Right owned by
Purchaser or make any further use of such Intellectual Property Right and (ii)
deliver to Purchaser all copies of Product's production standards and
practices, all technical data and any other know-how, documentation or
information used in connection with the manufacture and packaging of Product
hereunder ("Information") and shall, without the requirement of additional
consideration, cooperate with

12
<PAGE> 13
and assist Purchaser with respect to the execution of such documents as
Purchaser shall reasonably request to confirm Purchaser's ownership of and
rights in such Information.

19. ACCESS

(a) Seller shall inspect, according to mutually agreed upon
specifications, the Materials received from third parties on receipt thereof,
or within five (5) business days after receipt, but, in any event, prior to use
by Seller, to ensure that there has been no substitution, adulteration or
deterioration of such Materials while en route to Seller. Seller shall
immediately notify Purchaser of any such defects discovered in any shipment of
Materials received by Seller and shall not use any such defective Materials in
the manufacture and packaging of Product.

(b) Seller shall permit Purchaser, its auditors and other agents
to visit and inspect the Manufacturing Facility upon reasonable notice to
verify that Product is produced in accordance with agreed upon production
standards and practices and that Seller is otherwise in compliance with the
provisions of this Agreement.

(c) The parties agree that in case of an emergency affecting the
quality of Product hereunder, a representative of Purchaser shall have
reasonable access, upon notice to Seller, to those areas of Seller's premises
concerned with or affecting Product, and Seller shall consult with Purchaser in
dealing with such emergency.

(d) Seller shall prepare and maintain at all times books of
account and records (specifically including the originals or copies of
documents supporting entries in such books of account) relating to the
manufacture, packaging and inventories of Product in accordance with generally
accepted accounting principles. Upon reasonable notice to Seller, Purchaser,
through its duly authorized representatives, shall have the right, during
normal business hours, to inspect at the Manufacturing Facility all such books,
records and supporting documentation and to verify that the price of Product is
in accordance with the terms and conditions of this Agreement and may make
copies thereof and take extracts therefrom.

13
<PAGE> 14
20. MISCELLANEOUS

(a) Notices. All notices, statements or other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered by (i) overnight courier or mail or (ii) telecopier with confirming
copy mailed, first class postage prepaid, to each of the parties hereto at the
following addresses or at such other address as may be designated by such party
by notice in writing sent in like manner.

For Purchaser:

International Home Foods, Inc.
1633 Littleton Road
Parsippany, New Jersey 07054
ATTN: Scott Foos, Sr. V.P. Operations
Telecopier:(201) 254-5460

For Seller:

Roseland Manufacturing, Inc.
426 Eagle Rock Avenue
Roseland, New Jersey 07068
ATTN: David Wenner
Telecopier: (201) 228-7461

(b) Entire Agreement; Inconsistency. This Agreement and the
exhibits and schedules hereto contain all of the terms and conditions of sale
and purchase of Product and constitute the complete understanding of the
parties. No modification or extension of or release from any provision hereof
shall be effected by mutual agreement, acknowledgment, Purchaser's purchase
order forms, or otherwise, unless the same shall be in writing, signed by both
parties hereto and specifically described as an amendment or extension of this
Agreement. If there is any inconsistency between the provisions of this
Agreement and any invoice, purchase order or other document delivered hereunder
or in connection herewith, the provisions of this Agreement shall control.

(c) Choice of Law; Paragraph Headings. This Agreement and
performance hereunder shall be construed and interpreted according to the laws
of the State of New Jersey (without regard to its conflict of laws provisions).
The paragraph headings used herein have been inserted for convenience only and
shall not be used in any way to construe or interpret this Agreement or
performance hereunder.

(d) Independent Contractors. The parties hereto are independent
contractors. Nothing in this Agreement is intended or shall be deemed to
constitute a partnership, agency, franchise or joint venture relationship
between the parties. Neither party shall incur any debts or make any
commitments for the other, except to the extent, if at all, specifically
provided herein.

14
<PAGE> 15
(e) No waiver. Either party's failure to insist upon strict
performance of any provision of this Agreement shall not be deemed to be a
waiver thereof. No waiver shall be effective unless specifically made in
writing and signed by a duly authorized representative of Seller or Purchaser,
whichever party is granting such waiver.

(f) Severability. If any provision of this Agreement shall be
illegal or unenforceable, the remainder of this Agreement shall remain in force
and not be affected thereby.

(g) Counterparts: Effectiveness. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have
received a counterpart hereof signed by the other party hereto.

IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first above written.

ROSELAND MANUFACTURING, INC.

By: /s/ DAVID WENNER
-------------------------------------
Name: David Wenner
Title: President

INTERNATIONAL HOME FOODS, INC.

By: /s/ SCOTT FOOS
-------------------------------------
Name: Scott Foos
Title: Sr. Vice President Operations

The undersigned hereby unconditionally and irrevocably guarantees to
International Home Food Products, Inc. the performance and observance by
Roseland Manufacturing, Inc. of every warranty, covenant and agreement of
Roseland Manufacturing, Inc. to be performed and observed by Roseland
Manufacturing, Inc. contained in this Agreement.

B&G FOOD HOLDINGS, INC.

By: /s/ DAVID WENNER
-------------------------------------

Name: David Wenner
-----------------------------------

Title: President
----------------------------------

15
<PAGE> 16
Exhibit B to Jams Manufacturing Agreement
Materials: Pricing

1. Purchasing of Materials. Subject to Purchaser's authorization, which
shall be timely given, Seller shall order and purchase all Materials, arrange
delivery of all Materials and make payment of all costs of Materials directly
to Seller's suppliers. Any purchaser contract which is greater than 50% of the
annual requirement must be approved by Purchaser in writing.

Seller and Purchaser agree that on a monthly basis Purchaser shall
purchase the Materials from Seller. Seller shall pay to Purchaser or Purchaser
shall pay to Seller, as the case may be, for Materials used during each month
by Seller to manufacture and package the Product and/or Materials purchased by
Seller during each such month (or at such other times as the parties may
mutually agree).

2. Materials Inventory. Seller will perform a physical inventory of
Materials each April and October during each year of the Term and upon
termination of this Agreement in order to reconcile (i) the actual cost of
Materials utilized in the production of Product delivered to Purchaser during
the period (the "Inventoried Period") since the last such inventory (or since
the start of the Term if no such prior inventory has been performed) and (ii)
the amount paid by Purchaser there for.

3. Price of Product. The Price of Product per Case at any time shall be
an amount equal to the sum of (i) the Purchaser approved Overall Cost of such
Product at such time plus (ii) $0.2025 (the "Markup") of the Overall Cost of
such product excluding industrial and bulk products for which a separate
"Markup" schedule has been defined in Schedule 1 to Exhibit B.

4. Change in Standard Costs. At the beginning of each calendar year, the
Standard Cost of Materials, Direct Labor Cost and overhead Cost set forth in
Schedule 1 to this Exhibit B will be changed by Seller prospectively to reflect
expected actual costs on a going forward basis. Any change in any of the above
costs will first be reviewed and approved by Purchaser, in writing, which
approval shall not be unreasonably withheld.

5. Materials Price Adjustment. At the end of each monthly accounting
period, Seller shall calculate the amount (the "Materials Price Adjustment")
equal to the aggregate of the actual price paid for Materials (excluding for
purposes of this calculation the Markup with respect to such Materials) during
such month minus the aggregate standard cost of such Materials. If the
Materials Price Adjustment is greater than zero, Purchaser shall pay to Seller
the amount of the Materials Price Adjustment. If the Materials Price Adjustment
is less than zero, Seller shall pay to Purchaser the absolute value of the
amount of the Materials Price Adjustment.

6. Materials Efficiency Adjustment. At the time of each inventory
performed pursuant to Section 3 of this Exhibit B, Seller shall calculate the
amount (the "Materials Efficiency adjustment") equal to (A) (i) the actual
aggregate quantity of Materials utilized in producing Product during the
Inventoried Period minus (ii) the aggregate quantity of Materials budgeted to
be utilized (based on the number of Cases actually produced) during such
period, multiplied by (B) the Standard Cost of Materials during such period.
If the Materials Efficiency

16
<PAGE> 17
Adjustment is greater than zero, Purchaser shall pay to Seller one-half of the
amount of the Materials Efficiency Adjustment. If the Materials Efficiency
Adjustment is less than zero, Seller shall pay to Purchaser one-half of the
absolute value of the amount of the Materials Efficiency Adjustment.

7. Production Volume Adjustment. (a) Following the end of each monthly
accounting period (each a "Period End") in the Term, Seller shall calculate the
amount (the "Labor and Overhead Absorption Variance") equal to the difference
between (i) the aggregate cumulative Direct Labor Cost plus Overhead Cost
billed to Purchaser with respect to Product produced during the period (the
"Relevant Period") minus (ii) the aggregate cumulative Direct Labor Cost and
Overhead Cost budgeted to be billed to Purchaser during the Relevant Period. If
the Labor and Overhead Absorption Variance is less than zero, Purchaser shall
pay to Seller the absolute value of the amount of the Labor and Overhead
Absorption Variance.

(b) At the time of each inventory performed pursuant to Section 3 of this
Exhibit B, Seller shall calculate the amount (the "Cumulative Labor and
Overhead Absorption Variance") equal to the aggregate of the amounts of the
Labor and Overhead Absorption Variance calculated for each monthly accounting
period (pursuant to Section 7 (a) of this Exhibit (B) since the last such
inventory (or since the start of the Term if no such prior inventory has been
performed). Based on such calculation:

(I) If the Cumulative Labor and Overhead Absorption Variance is less than
zero, Seller shall calculate the amount (the "Under Budgeted Sales Adjustment")
equal to (T) direct labor and overhead incurred in producing Product hereunder
during the Inventoried Period minus (B) the aggregate Direct Labor Cost and
Overhead Cost budgeted to be incurred during such period. If the amount of the
Under Budgeted Sales Adjustment is greater than zero, Purchaser shall pay to
Seller the amount of the Under Budget Sales Adjustment. If the amount of the
Under Budgeted Sales Adjustment is less than zero, Seller shall pay to
Purchaser the absolute value of the amount of the Under Budgeted Sales
Adjustment.

(II) If the Cumulative Labor and Overhead Absorption Variance is greater
than zero, Seller shall calculate the amount (the "Over Budgeted Sales
Adjustment") equal to (A) the aggregate actual cost of direct labor and
overhead incurred in producing Product hereunder during the Inventoried Period
minus (B) the aggregate Direct Labor Cost and Overhead Cost billed to Purchaser
with respect to Product produced hereunder during such period. If the amount of
the Overbudgeted Sales Adjustment is greater than zero, Purchaser shall pay to
Seller the amount of the Over Budgeted Sales Adjustment. If the amount of the
Over Budgeted Sales Adjustment is less than zero, Seller shall pay to Purchaser
the absolute value of the amount of the Over Budgeted Sales Adjustment.

<PAGE> 1
Exhibit 11.1

INTERNATIONAL HOME FOODS, INC.
STATEMENT RE COMPUTATION HISTORICAL AND
PRO FORMA HISTORICAL OF PER SHARE EARNINGS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
Nine Months
Year Ended Ended
December 31, September 30,
1996 1997
------------ -----------------
<S> <C> <C>
Computation for statement of earnings:
Net income............................ $ 83.0 $ 1.9
============ ============

Computation for weighted average
common shares outstanding(1):
Weighted average common shares
outstanding......................... 61,922,990 61,922,990

Incremental common shares applicable
to common stock options and warrants
based on the estimated fair value
of the stock........................ -- 1,378,996

Weighted average common shares........ 61,922,990 63,301,986
============ ============
Primary and fully diluted income per
common share........................ $ 1.34 $ 0.03
============ ============
Unaudited pro forma historical
earnings per common share:

Weighted Average common shares
outstanding....................... 61,922,990 61,922,990

Incremental common shares applicable
to common stock options and
warrants based on the estimated
fair value of the stock........... 4,607,256 4,607,256

Incremental common shares applicable
to shares issued in connection
with the Offering................. 10,526,359 10,526,359
------------ ------------
Pro forma historical weighted
average common shares............. 77,056,605 77,056,605
============ ============
Pro forma primary and fully diluted
income per common share............. $ 1.08 $ 0.02
============ ============
</TABLE>

- ---------------
(1) Earnings per common share is based on the weighted average number of shares
of common stock and common stock equivalents outstanding during the period
as adjusted for the 5.3292 for one reverse stock split.

<PAGE> 1
EXHIBIT 11.2

INTERNATIONAL HOME FOODS, INC.
STATEMENT RE COMPUTATION OF PRO FORMA PER SHARE EARNINGS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

Nine Months
Year Ended Ended
December 31, September 30,
1996 1997
------------ -------------
<S> <S> <S>
Computation for statement of earnings:
Pro forma income (loss)............. $ 38.2 $ (1.0)
========== ==========

Computation for pro forma weighted
average common shares outstanding(1):
Weighted average common shares
outstanding......................... 61,922,990 61,922,990
Incremental common shares applicable
to common stock options and warrants
based on the estimated fair value
of the stock........................ 4,607,256 4,607,256
Incremental common shares applicable
to shares issued in connection with
the Offering........................ 10,526,359 10,526,359
---------- ----------
Pro forma weighted average common
shares.............................. 77,056,605 77,056,605
========== ==========
Pro forma primary and fully diluted
income (loss) per common share...... $ 0.50 $ (0.01)
========= ==========
</TABLE>

- ------------

(1) Pro forma earnings per share of Common Stock is based on the weighted
average number of shares of common stock equivalents outstanding during the
period as adjusted for the 5.3292 for one reverse stock split.

<PAGE> 1
EXHIBIT 21.1
SUBSIDIARIES OF THE COMPANY

<TABLE>
<CAPTION>
Jurisdiction of
Subsidiary Incorporation or Organization
- ---------- -----------------------------
<S> <C>
I.H.F.P., Inc. Delaware
Luck's, Incorporated Delaware
M. Polaner, Inc. Delaware
Canadian Home Products Limited Canada
Heritage Brands Holdings, Inc. Delaware
Heritage Brands, Inc. Delaware
Campfire, Inc. Delaware
Bumble Bee Acquisition Corporation Delaware
Sociedad Ecuatoriama de Alimentos
Frigorificos Manta C.A. Ecuador
Commerce Acquisition Corporation Delaware
SFSHC Acquisition Corporation Delaware
BBII Acquisition Corporation Delaware
Pesquena Manteuse de Alun
Mantatun, S.A. Ecuador
DM US Holding Corp. Delaware
HMTF Mexico Holdings, S.A. de C.V. Mexico
Productos Del Monte, S.A. de C.V. Mexico
Frutas y Verduras Selectas, S. de R.L.
de C.V. Mexico
Creative Products, Inc. Delaware
</TABLE>

<PAGE> 1

EXHIBIT 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the inclusion in this Amendment No. 1 to registration
statement on Form S-1 (Registration No. 333-36249) of our report dated April 18,
1997 except as to Note 15, for which the date is May 2, 1997, and Note 16(b) for
which the date is November , 1997, on our audit of the consolidated financial
statements of International Home Foods, Inc. as of December 31, 1996 and for the
year ended December 31, 1996. We also consent to the reference to our Firm under
the caption "Experts."

Parsippany, New Jersey

October 27, 1997

The consolidated financial statements of International Home Foods, Inc.
have been prepared to give effect to the reverse stock split described in Note
16(b) of the Notes to the Consolidated Financial Statements included in the
Prospectus. When the reverse stock split has occurred we will issue the above
consent.

Coopers & Lybrand L.L.P.

Parsippany, New Jersey

October 27, 1997

<PAGE> 1

EXHIBIT 23.2

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

We hereby consent to the use of our report and to all references to our
Firm included in or made a part of this registration statement.

Arthur Andersen LLP

New York, NY

October 27, 1997

<PAGE> 1

EXHIBIT 23.3

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the use of our report included herein and to the reference to
our firm under the heading "Experts" in the prospectus.

Our report dated April 11, 1997, contains an explanatory paragraph that
states that the Company's notes payable and subordinated note payable were due
and payable in May 1996 and nonpayment has constituted events of default. The
Company does not currently have funds to retire these obligations. Such
conditions raise substantial doubt about the Company's ability to continue as a
going concern. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

KPMG Peat Marwick LLP

San Diego, California

October 27, 1997

<ARTICLE> 5
<MULTIPLIER> 1,000,000

<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 64
<SECURITIES> 0
<RECEIVABLES> 79
<ALLOWANCES> 5
<INVENTORY> 200
<CURRENT-ASSETS> 365
<PP&E> 201
<DEPRECIATION> 142
<TOTAL-ASSETS> 1,185
<CURRENT-LIABILITIES> 294
<BONDS> 400
0
0
<COMMON> 0
<OTHER-SE> (262)
<TOTAL-LIABILITY-AND-EQUITY> 1,185
<SALES> 844
<TOTAL-REVENUES> 844
<CGS> 413
<TOTAL-COSTS> 413
<OTHER-EXPENSES> 350
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 79
<INCOME-PRETAX> 3
<INCOME-TAX> 1
<INCOME-CONTINUING> 2
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2
<EPS-PRIMARY> .03
<EPS-DILUTED> 0

</TABLE>