<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
H. J. Heinz Company
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
LOGO
H. J. Heinz Company
World Headquarters
600 Grant Street
Pittsburgh, Pennsylvania 15219
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of H.J.
Heinz Company to be held at 2 P.M. on Tuesday, September 8, 1998, at Heinz
Hall for the Performing Arts, 600 Penn Avenue, Pittsburgh, Pennsylvania.
Information about the business of the meeting and the nominees for election to
the Board of Directors is set forth in the formal meeting notice and the Proxy
Statement on the following pages.
It is important that your shares be represented at the meeting. Whether or not
you plan to attend the session in person, we hope that you will vote on the
matters to be considered and sign, date and return your proxy in the enclosed
envelope as promptly as possible.
In accordance with our regular practice, a report of annual meeting
proceedings, including an account of actions taken, will be sent to you
following the meeting.
Respectfully yours,
/s/ Anthony J. F. O'Reilly
Anthony J. F. O'Reilly
Chairman of the Board
August 3, 1998
<PAGE>
Notice of
Annual Meeting of Shareholders
The Annual Meeting of Shareholders of H. J. Heinz Company will be held at
Heinz Hall for the Performing Arts, 600 Penn Avenue, Pittsburgh, Pennsylvania,
on Tuesday, September 8, 1998, at 2 P.M. Eastern Daylight Time, for the
following purposes:
(1) To elect 21 directors for a term of one year;
(2) To elect auditors to audit the financial statements of the Company and
certain of its subsidiaries for the fiscal year ending April 28,1999;
and
(3) To consider and act upon such other business as may properly come
before the meeting.
Your attention is directed to the accompanying Proxy Statement for a
description of matters to be considered at the meeting.
Holders of record as of the close of business on July 17, 1998 of the
Company's Common Stock and Third Cumulative Preferred Stock, $1.70 First
Series, are entitled to notice of and to vote at the meeting. A list of the
shareholders entitled to vote at the meeting will be available for inspection
at the meeting for purposes relating to the meeting.
Please sign, date and return the enclosed proxy promptly in the envelope
provided, which requires no United States postage. Your compliance with this
request will be appreciated and will assist in obtaining a quorum. Such action
will not limit your right to vote in person or to attend the meeting.
/s/ Lawrence J. McCabe
Secretary
August 3, 1998
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
PAGE
<S> <C>
General.................................................................... 1
Security Ownership of Management........................................... 2
Board of Directors and Committees of the Board............................. 3
Matters to Be Acted Upon
1. Election of Directors.................................................. 6
2. Election of Auditors................................................... 9
3. Other Business......................................................... 9
Executive Compensation..................................................... 10
Report of the Management Development and Compensation Committee
on Executive Compensation................................................. 13
Performance Graph--Five Fiscal Years (1993-1998)........................... 15
Performance Graph--18 Fiscal Years (1980-1998)............................. 16
Additional Information..................................................... 16
Appendix A--Corporate Governance Guidelines................................ A-1
</TABLE>
<PAGE>
PROXY STATEMENT
GENERAL
This Proxy Statement and the enclosed proxy card are being mailed to you by
your Board of Directors starting on or about August 3, 1998. The Company's
Board of Directors requests that your shares be represented at the Annual
Meeting by the proxies named in the proxy card.
WHO CAN VOTE
You are entitled to vote at the Annual Meeting if the Company's shareholder
records on July 17, 1998 showed that you owned the Company's Common Stock or
Third Cumulative Preferred Stock, $1.70 First Series (the "Preferred Stock").
As of July 17, 1998, there were 362,430,208 shares of Common Stock and 18,364
shares of Preferred Stock outstanding. Each share of Common Stock has one vote
and each share of Preferred Stock has one-half vote. The enclosed proxy card
shows the number of shares which you are entitled to vote.
HOW TO VOTE
You may vote in person at the Annual Meeting or by using the enclosed proxy
card. The Board of Directors recommends that you vote by proxy even if you
plan to attend the meeting.
HOW PROXIES WORK
The Board of Directors is asking for your proxy. Giving us your proxy means
that you authorize us to vote your shares at the meeting in the manner you
direct. You may vote for all, some, or none of our director candidates. You
may also vote for or against the other proposal[s] or abstain from voting.
If you sign and return the enclosed proxy card but do not specify how to vote,
we will vote your shares in favor of our director nominees and the election of
auditors.
REVOKING A PROXY
You may revoke your proxy before it is voted by submitting a new proxy with a
later date, by voting in person at the meeting, or by notifying the Company's
Secretary in writing.
QUORUM
In order to carry on the business of the meeting, there must be a quorum. This
means at least a majority of the outstanding shares eligible to vote (with
each share of Preferred Stock counting as one-half of a share for purposes of
the quorum) must be represented at the meeting, either by proxy or in person.
VOTES NEEDED
The director nominees receiving the highest number of votes will be elected to
fill the seats on the Board. Approval of the other proposal[s] requires the
favorable vote of a majority of the votes cast. Only votes for or against a
proposal count. Abstentions and broker non-votes count for quorum purposes but
not for voting purposes and are not considered to be votes cast. Broker non-
votes occur when a broker returns a proxy but does not have authority to vote
on a particular proposal.
ATTENDING THE ANNUAL MEETING
All shareholders on July 17, 1998 can attend. If the shares are in your name,
check the box on your proxy card and an admission ticket will be mailed to you
provided your proxy card is received by September 1, 1998. Otherwise, an
admission ticket will be available at the registration desk at the Annual
Meeting. If your shares are held through a broker, contact your broker and
request that they provide you with evidence of your stock ownership. This
documentation, when presented at the registration desk, will allow you to
attend the meeting. One admission ticket will permit two persons to attend.
1
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth all equity securities of the Company
beneficially owned as of June 30, 1998 by each director, director nominee and
by all directors, director nominees and executive officers as a group, being
26 in number.
<TABLE>
<CAPTION>
SHARES OF TOTAL SHARES OF
COMMON STOCK COMMON STOCK
OWNED, EXCLUDING BENEFICIALLY OWNED
SHARES SUBJECT TO (INCLUDING THE
OPTIONS AND SHARES HELD SHARES LISTED IN PERCENT
SHARES HELD IN A OPTIONS IN A FIDUCIARY THE ADJACENT OF
Name FIDUCIARY CAPACITY (1) EXERCISABLE (2) CAPACITY (3) COLUMNS) (4) CLASS (5)
- ------------------------ ---------------------- --------------- -------------- ------------------ ---------
<S> <C> <C> <C> <C> <C>
Anthony J. F. O'Reilly.. 6,202,516 -0- -0- 6,202,516(6)(7) 1.71%
William R. Johnson...... 231,513 812,500 -0- 1,044,013(7)(14) .29%
William P. Snyder III... 57,615 -0- 4,074,366 4,131,981(8) 1.14%
Joseph J. Bogdanovich... 3,812,501 -0- -0- 3,812,501(9) 1.05%
Herman J. Schmidt....... 4,800 -0- -0- 4,800 --
Eleanor B. Sheldon...... 11,700 -0- -0- 11,700 --
Richard M. Cyert........ 2,900 -0- -0- 2,900(10) --
Samuel C. Johnson....... 50,700 -0- 10,500 61,200(11) --
Donald R. Keough........ 3,164 -0- -0- 3,164 --
S. Donald Wiley......... 148,742 -0- 3,196,541 3,345,283(12) .92%
Lawrence J. McCabe...... 61,311 300,000 -0- 361,311 --
David R. Williams....... 164,812 625,000 -0- 789,812(14) .22%
Nicholas F. Brady....... 4,200 -0- -0- 4,200(13) --
William C. Springer..... 125,147 1,200,000 -0- 1,325,147 .36%
Edith E. Holiday........ 1,500 -0- -0- 1,500 --
Paul F. Renne........... 40,589 115,000 -0- 155,589(7) --
Candace K. Bryan........ -0- -0- -0- -0- --
Mary C. Choksi.......... -0- -0- -0- -0- --
James M. Zimmerman...... 1,000 -0- -0- 1,000(14) --
Leonard S. Coleman...... -0- -0- -0- -0- --
Daniel J. O'Neill....... 1,345 -0- -0- 1,345 --
Malcolm Ritchie......... -0- 75,000 -0- 75,000 --
All directors, director
nominees and executive
officers as a group.... 11,074,157 3,497,500 7,281,407 21,853,064 5.98%
</TABLE>
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(1) Shares listed in this column include all shares in which the named
individuals and all directors, director nominees and executive officers
as a group (other than shares subject to stock options exercisable within
60 days of June 30, 1998 and shares held in a fiduciary capacity as
trustee of a trust) have a present beneficial economic interest and also
include all shares allocated to the accounts of the named individuals and
all directors, director nominees and executive officers as a group under
the Company's Employees Retirement and Savings Plan (W. R. Johnson,
7,344; L. J. McCabe, 34,941; D. R. Williams, 14,312; W. C. Springer,
21,352; P. F. Renne, 30,589; D. J. O'Neill, 1,271; and all directors,
director nominees and executive officers as a group, 144,823).
(2) Represents shares subject to stock options granted under the Company's
stock option plans exercisable within 60 days following June 30, 1998.
(3) Represents shares beneficially owned by the named individual in a
fiduciary capacity as a trustee of a trust.
(4) Shares listed in this column include all shares listed in the adjacent
columns. Each person has both sole voting and sole investment power with
respect to the shares listed, unless otherwise indicated.
2
<PAGE>
(5) The percentages represent the total of shares listed in the adjacent
column divided by the issued and outstanding shares of Common Stock as of
June 30, 1998, plus, where applicable, all stock options granted to the
individual or group, as appropriate, under the Company's stock option
plans exercisable within 60 days following June 30, 1998. Percentages of
less than .1 percent are omitted.
(6) Includes 148,500 shares held by a corporation which is beneficially owned
by Dr. O'Reilly and members of his family and 5,593,416 shares held by
another corporation which is beneficially owned by Dr. O'Reilly.
(7) The shares indicated do not include unallocated shares held by the
Company's employee stock ownership plan (the "ESOP"). Such shares are
voted or tendered by the trustee in accordance with instructions received
from the Investment Committee of the Board of Directors of the Company,
unless the Investment Committee delegates this authority to plan
participants. Dr. O'Reilly and Messrs. W.R. Johnson and Renne currently
serve as members of the Investment Committee. As of June 30, 1998,
609,485 shares of Common Stock were held in the ESOP but not allocated to
participants' accounts. Each member of the Investment Committee disclaims
having a beneficial economic interest in such shares.
(8) Mr. Snyder has shared voting power and shared investment power with
respect to 4,074,366 shares held by three trusts of which he is co-
trustee.
(9) Includes 3,758,728 shares held by a corporation of which a trust (Mr.
Bogdanovich is the sole beneficiary of such trust) owns a securing
interest and 8,832 shares held by another trust. Mr. Bogdanovich is the
sole beneficiary of such shares, but shares voting power and investment
power with respect to these shares.
(10) Includes 2,200 shares of Common Stock owned jointly by Dr. Cyert and his
wife.
(11) Includes 10,500 shares of Common Stock held by Mr. Johnson as trustee of
the Samuel C. Johnson 1988 Revocable Trust.
(12) Mr. Wiley has shared investment power with respect to the 1,067,951
shares held by the Vira I. Heinz Endowment. Mr. Wiley has shared
investment power with respect to 2,128,590 shares held by two trusts, one
of which holds 657,000 shares which are included in the 4,074,366 shares
referred to in Note (8) above. Mr. Wiley disclaims having a beneficial
economic interest in the shares referred to in this note.
(13) Includes 3,000 shares of Common Stock held by a trust of which Mr. Brady
is the sole beneficiary.
(14) Represents beneficial ownership as of July 22, 1998.
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
During Fiscal Year 1998, the Board of Directors had seven meetings. Each
incumbent director of the Company attended at least 80% of the aggregate
number of meetings of the Board and committees on which the director served.
The Board has an Executive Committee, which may exercise all of the powers of
the Board except as may be limited by resolutions of the Board or by law. The
Executive Committee had ten meetings in Fiscal Year 1998. The current members
of the Executive Committee are William R. Johnson (Chairman), William C.
Springer, David R. Williams, Paul F. Renne and Lawrence J. McCabe. In addition
to the Executive Committee, the Board has five other committees.
3
<PAGE>
A description of the principal functions of the committees, the current
membership of the committees and the number of meetings held during Fiscal
Year 1998 are set forth below:
AUDIT COMMITTEE
Members: William P. Snyder III (Chairman)
Herman J. Schmidt
Eleanor B. Sheldon
Richard M. Cyert
Samuel C. Johnson
Nicholas F. Brady
Edith E. Holiday
(all non-employee directors)
Meetings: Three
Functions: . Recommend the firm that the Company should retain as
independent accountants.
. Review the audit and non-audit activities of the Company's
independent accountants and internal auditors.
. Review the Company's internal control systems, accounting
policies and financial reporting requirements and practices.
MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE
Members: Herman J. Schmidt (Chairman)
William P. Snyder III
Eleanor B. Sheldon
Richard M. Cyert
Samuel C. Johnson
Donald R. Keough
(all non-employee directors)
Meetings: Seven
Functions: . Recommend to the Board the selection of the Chief Executive
Officer.
. Review and approve the appointment of corporate officers who
report directly to the Chief Executive Officer.
. Review and approve the compensation of the Chief Executive
Officer and the managers reporting to the Chief Executive
Officer.
. Determine the corporate goals and the awards granted under
the Company's incentive compensation plan.
. Administer the Company's stock option plans.
. Review and recommend to the Board the organization structure
of the Company.
NOMINATING COMMITTEE
Members: Donald R. Keough (Chairman)
Herman J. Schmidt
William P. Snyder III
Richard M. Cyert
Nicholas F. Brady
Edith E. Holiday
Anthony J. F. O'Reilly
William R. Johnson
Meetings:
Two
Functions:
. Establish qualifications for potential directors.
. Consider and recommend prospective candidates for membership
on the Board, including any recommendations which are
submitted by a shareholder in writing to the attention of
the Company's Secretary in accordance with the Company's By-
Laws.
4
<PAGE>
INVESTMENT COMMITTEE
Members: Anthony J. F. O'Reilly (Chairman)
William R. Johnson
Paul F. Renne
Meetings: One
Functions: . Monitor the policies and operations of the Company's
Employee Benefits Administration Board.
. Review and monitor the investments of the Company's
retirement plans and certain other benefit plans.
PUBLIC ISSUES AND SOCIAL RESPONSIBILITY COMMITTEE
Members: Eleanor B. Sheldon (Chairman)
Anthony J. F. O'Reilly
Herman J. Schmidt
Richard M. Cyert
Joseph J. Bogdanovich
S. Donald Wiley
Edith E. Holiday
Meetings: One
Functions: . Review and monitor the policies and actions of the Company
relating to major issues of public concern, including:
-- equal employment opportunity
-- environmental
-- occupational health and safety
-- public health and nutrition
-- charitable and political contributions
. Consider the significant social impact of corporate
activities.
. Bring to the attention of management major issues of public
concern that may require special attention or action.
DIRECTOR COMPENSATION
Non-employee directors receive:
.$30,000 in cash and 300 shares of common stock annually;
.$1,500 for each Board and committee meeting attended; and
.an additional $3,000 or $5,000 annually if they are the chairman of a
committee.
Employee directors receive no additional compensation for serving on the Board
or any committee.
Non-employee directors may defer some or all of their cash compensation and
receive the amount deferred together with interest (calculated periodically at
the prime rate) at a later date.
As part of the Company's overall program to promote charitable giving, the
Company has maintained a charitable award program funded by insurance policies
on the lives of the Company's directors who were not full-time employees and
who were members of the Board of Directors prior to 1995. Under the program,
following the death of a director, the Company will donate $1,000,000 to
qualifying charitable organizations recommended by the director and approved
by the Company. In addition, the Company has had a similar program for
directors who were executive officers and certain other key employees of the
Company as of November 1, 1989. The Company will be reimbursed from the
proceeds of the life insurance policies. Participants derive no financial
benefit from these programs.
A director who has served as such for five or more years while not a full-time
employee of the Company will be paid, upon retirement on or after age 70, a
pension benefit for life equivalent to the annual retainer in effect at the
time of the director's retirement.
5
<PAGE>
MATTERS TO BE ACTED UPON
1. ELECTION OF DIRECTORS
(Item 1 on proxy card)
The Board of Directors has nominated the following 21 nominees for election as
directors at the Annual Meeting of Shareholders. Each director to be elected
will serve until the next Annual Meeting of Shareholders or until a successor
is elected and shall qualify. In the event that any of the nominees should
become unable or unwilling to serve as a director, it is intended that the
proxies will be voted for the election of such other person, if any, as shall
be designated by the Board of Directors. It is not anticipated that any of the
nominees will be unable or unwilling to serve as a director.
INFORMATION REGARDING NOMINEES FOR ELECTION OF DIRECTORS
A brief statement of the business experience and positions with the Company
for the past five years, a listing of certain other directorships for each
person nominated to become a director of the Company and their ages (as of
September 8, 1998) are set forth on the following pages.
<TABLE>
<CAPTION>
NAME BUSINESS EXPERIENCE AND AGE
---- ---------------------------
<C> <S>
Anthony J. F. O'Reilly Chairman of the Board of H. J. Heinz Company since March
11, 1987; Chairman, President and Chief Executive Officer
from March 11, 1987 until April 30, 1998; President and
Chief Executive Officer from July 1, 1979 until March 10,
1987; director of the Company since 1971; 62.
William R. Johnson President and Chief Executive Officer of H. J. Heinz
Company since April 30, 1998; President and Chief
Operating Officer from June 12, 1996 until April 29, 1998;
Senior Vice President from September 8, 1993 until June
12, 1996; President and Chief Executive Officer of Star-
Kist Foods, Inc. from September 8, 1993 until June 12,
1996; director of the Company since 1993; director of
Cincinnati Financial Corporation, Amerada Hess Corporation
and PNC Bank Corp.; 49.
William P. Snyder III President of The Wilpen Group, Inc. since 1986; director
of the Company since 1961; 80.
Herman J. Schmidt Independent businessman; director of the Company since
1977; 81.
Eleanor B. Sheldon Social Scientist; director of the Company since 1979; 78.
Richard M. Cyert Professor of Economics and Management, Carnegie Mellon
University since 1990 and President Emeritus of Carnegie
Mellon University since 1990; director of the Company
since 1984; 77.
Samuel C. Johnson Nonexecutive Chairman of the Board of S. C. Johnson & Son,
Inc. since January 1994; Chairman of S. C. Johnson & Son,
Inc. from 1988 to January 1994; director of the Company
since 1988; director and chairman of Johnson Worldwide
Associates, Inc., director of Deere & Company and Mobil
Corporation; 70.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
NAME BUSINESS EXPERIENCE AND AGE
---- ---------------------------
<C> <S>
Donald R. Keough Chairman of the Board of Allen & Company Incorporated since
April 1993; Chairman of the Board of Excalibur Technologies
Corporation since June 1996; Adviser to the Board of
Directors of The Coca-Cola Company from April 1993 until
April 1998; President, Chief Operating Officer and a director
The Coca-Cola Company from 1981 until April 1993; director of
the Company since 1990; director of The Home Depot, Inc., The
Washington Post Company and McDonald's Corporation; 72.
S. Donald Wiley Vice Chairman of the H. J. Heinz Company Foundation since
October 1990; Trustee of the Vira I. Heinz Endowment;
director of the Company from 1972 until September 30, 1990
and since his reelection in 1991; 71.
Lawrence J. McCabe Senior Vice President, General Counsel and Secretary of H. J.
Heinz Company since November 1, 1997; Senior Vice President--
General Counsel from June 12, 1991 to October 30, 1997;
director of the Company since 1991; 63.
David R. Williams Executive Vice President of H. J. Heinz Company since June
12, 1996 and in charge of Heinz operations in Latin America,
India, Pakistan, southern Africa and the Pacific Rim;
Executive Vice President--Finance and Chief Financial Officer
from June 12, 1996 to September 13, 1996; Senior Vice
President--Finance and Chief Financial Officer from August 1,
1992 until June 12, 1996; director of the Company since 1992;
55.
Nicholas F. Brady Chairman of the Board and President of Darby Advisors, Inc.
since February 1993, Chairman of Darby Overseas Investments,
Ltd. since February 1994, Chairman of Darby Emerging Markets
Investments LDC since November 1994, Chairman of Darby Chile
Fund, LLC and Darby Chile Holdings, Ltd. since February 1996;
Secretary of the United States Department of Treasury from
September 1988 until January 1993; director of the Company
since 1993 (formerly a director of the Company from June 1987
until September 1988); director of Christiana Companies,
Inc., Amerada Hess Corporation and various Templeton Mutual
Funds; 68.
William C. Springer Executive Vice President of H. J. Heinz Company since June
12, 1996 and in charge of Heinz U.S.A., Heinz Canada, Weight
Watchers International and Heinz Bakery Products; Senior Vice
President from September 8, 1993 until June 12, 1996;
President--Heinz North America from June 1992 until September
1993; director of the Company since 1993; director of Everen
Capital Corporation; 58.
Edith E. Holiday Attorney; Assistant to the President of the United States and
Secretary of the Cabinet from June 1990 to January 1993;
General Counsel United States Department of the Treasury from
1989 to June 1990; director of the Company since 1994;
director of Hercules Incorporated, Amerada Hess Corporation,
Beverly Enterprises, Inc. and director or trustee of various
investment companies in the Franklin Templeton group of
mutual funds; 46.
Paul F. Renne Executive Vice President and Chief Financial Officer of H. J.
Heinz Company since June 11, 1997; Senior Vice President--
Finance and Chief Financial Officer from September 13, 1996
to June 11, 1997; Vice President--Treasurer from October 1,
1986 to September 13, 1996; director of the Company since
1997; 55.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
NAME BUSINESS EXPERIENCE AND AGE
---- ---------------------------
<C> <S>
Candace K. Bryan Chairman of the Board and Chief Executive Officer of
Kendle International Inc. since 1981; director of the
Company since April 1998; 51.
Mary C. Choksi Managing Director of Strategic Investment Partners, Inc.
and Emerging Markets Investors Corporation since 1987;
director of the Company since July 1998; 47.
James M. Zimmerman Chairman of the Board and Chief Executive Officer of
Federated Department Stores, Inc. since May 1997;
President and Chief Operating Officer of Federated
Department Stores, Inc. from 1988 until May 1997;
director of the Company since July 1998; director of
Federated Department Stores, Inc. and The Chubb Insurance
Corporation; 54.
Leonard S. Coleman, Jr. President of The National League of Professional Baseball
Clubs since March 1994; Executive Director, Market
Development of Major League Baseball from 1992 until
March 1994; director of Beneficial Corporation, Omnicom
Group Inc., New Jersey Resources Corp., Avis Rent A Car,
Inc., Cendant Corporation and Owens-Corning; 49.
Daniel J. O'Neill Executive Vice President of H.J. Heinz Company and
President and Chief Executive Officer of Star-Kist Foods,
Inc. from January 6, 1997; Vice President of Campbell
Soup Company from January 1994 to January 5, 1997; Group
Vice President of S. C. Johnson & Son, Inc. from January
1990 to January 1994; 46.
Malcolm Ritchie Executive Vice President and President--Europe of H.J.
Heinz Company since May 1, 1998; Vice President European
Grocery and Foodservice of H.J. Heinz Company, Ltd. from
May 1, 1997 to May 1, 1998; Managing Director of H.J.
Heinz Company Ltd. from August 15, 1994 to May 1, 1997;
Chief Executive of Hillsdown European Ambient Foods
Group--Hillsdown Holdings plc from March 1993 to July
1994; 44.
</TABLE>
CERTAIN BUSINESS RELATIONSHIPS AND AGREEMENTS
Dr. O'Reilly is Chairman of the Dublin, Ireland law firm of Matheson Ormsby
Prentice. Matheson Ormsby Prentice provided legal services to the Company
during fiscal year 1998 and it is anticipated that it will continue to provide
legal services to the Company in the future.
On December 2, 1997, the Company and Dr. O'Reilly entered into an agreement
(the "Agreement") providing for Dr. O'Reilly's continued service as Chairman
of the Board of Directors of the Company until the date of the Company's
annual meeting of shareholders in September 2000. In addition to serving as
Chairman, Dr. O'Reilly will consult with Company executives and other
directors and provide such other services as he and the Company may mutually
agree, provided such services shall not include responsibility for the day to
day operations of the Company, which shall be the responsibility of the
President and Chief Executive Officer of the Company.
After his retirement as an employee of the Company on April 30, 1998, the
Company will pay Dr. O'Reilly an annual fee of not less than $500,000. In
addition, during the term of the Agreement, Dr. O'Reilly will be eligible to
receive an annual bonus in such amounts as may be determined by the Management
Development and Compensation Committee in its sole discretion. The Agreement
also provides that Dr. O'Reilly's options to purchase 750,000 shares of the
Company's Common Stock will continue to vest and be exercisable pursuant to
the terms as originally granted, except that, if during the term of the
Agreement, Dr. O'Reilly
8
<PAGE>
should cease to be Chairman of the Board for any reason, any unvested options
will become fully vested. Dr. O'Reilly will continue to participate in all
benefit plans and programs of the Company (other than the Company's retirement
plans) on a basis consistent with the plans. Also, Dr. O'Reilly will have
access to the Company's aircraft for travel in connection with the performance
of his duties as Chairman of the Board and will be provided office facilities
and secretarial and staff services.
If the Agreement is terminated by the Company without "cause" or by Dr.
O'Reilly for "Good Reason," Dr. O'Reilly will be entitled to receive the
benefits described above and a lump-sum payment in cash equal to the aggregate
annual fee and bonus (defined as an amount equal to the highest bonus paid to
Dr. O'Reilly by the Company in any of the last three full fiscal years
preceding the date of termination) that Dr. O'Reilly would have received for
the remaining term of the Agreement or one year, whichever is greater.
Effective April 28, 1998, Joseph Bogdanovich retired from his executive
position as Vice Chairman of the Company. Mr. Bogdanovich, a director of the
Company since 1963, has not been nominated for election at the Annual Meeting,
but will continue to serve the Company as Vice Chairman Emeritus. For his
services, the Company will pay Mr. Bogdanovich an annual $100,000 consultancy
fee and provide him with office space, secretarial and staff services, the use
of automobiles and reimbursement of travel and other expenses.
On November 20, 1995, the H. J. Heinz Company Consolidated Retirement and
Pension Plan Fund ("Heinz Plan") committed to invest, on a call basis, up to
U.S. $5 million in limited partner interests of Darby Emerging Markets Fund,
L.P. ("Darby Fund"), a Cayman Islands limited partnership. Darby Overseas
Partners, L.P. ("Darby Overseas"), a Delaware limited partnership in which Mr.
Brady is a limited partner, is also a limited partner of Darby Fund. In
addition, Mr. Brady is Chairman and a shareholder of Darby Overseas
Investments, Ltd. ("General Partner"), a Delaware corporation that serves as
general partner of Darby Overseas. Mr. Brady also serves as Chairman of Darby
Emerging Markets Investments LDC ("Darby Emerging Markets"), a Cayman Islands
limited duration company that serves as general partner of Darby Fund. Darby
Overseas and the General Partner own 99% and 1%, respectively, of the capital
stock of Darby Emerging Markets. Through its ownership of Darby Emerging
Markets, Darby Overseas may receive performance-based distributions from Darby
Fund in the future. Darby Overseas serves as advisor to Darby Fund. The Heinz
Plan, through Darby Emerging Markets, pays Darby Overseas annual compensation
for such advisory services equal to 2% of the Heinz Plan's U.S. $5 million
capital commitment to Darby Fund.
2. ELECTION OF AUDITORS
(Item 2 on proxy card)
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
ELECTION OF THE FIRM OF PRICEWATERHOUSECOOPERS LLP AS THE AUDITORS TO AUDIT
THE FINANCIAL STATEMENTS OF THE COMPANY AND CERTAIN OF ITS SUBSIDIARIES FOR
THE FISCAL YEAR ENDING APRIL 28, 1999.
Representatives of PricewaterhouseCoopers LLP are expected to be present at
the Annual Meeting of Shareholders. They will have the opportunity to make
statements if they desire to do so and will be available to respond to
appropriate questions.
3. OTHER BUSINESS
The Board of Directors does not intend to present any business at the Annual
Meeting not described in this Proxy Statement. The enclosed proxy form confers
upon the persons designated to vote the shares represented thereby
discretionary authority to vote such shares in accordance with their best
judgment with respect to all matters that may come before the Annual Meeting
in addition to the scheduled items of business, including any shareholder
proposal omitted from the Proxy Statement and form of proxy pursuant to the
rules of the Securities and Exchange Commission and matters incident to the
conduct of the Annual Meeting. As of June 20, 1998, the Board of Directors was
not aware of any other matter that may properly be presented for action at the
Annual Meeting, but the enclosed proxy confers the same discretionary
authority with respect to any such other matter.
9
<PAGE>
EXECUTIVE COMPENSATION
The following tables and accompanying text present the compensation of the
Company's five most highly compensated executive officers in the fiscal year
ended April 29, 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
-------------------------------- ------------------------------------
AWARDS (2) PAYOUTS
------------- ---------
LONG
OTHER SECURITIES TERM
ANNUAL UNDERLYING INCENTIVE ALL OTHER
NAME AND SALARY BONUS COMPENSATION OPTIONS PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($)(1) (NO. AWARDED) ($) ($)(3)
- ------------------------ ---- -------- ---------- ------------ ------------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
A. J. F. O'Reilly 1998 $806,370 $2,222,635 $226,480 -0- $ -0- $233,256
Chairman and CEO(4) 1997 777,941 1,399,676 227,837 750,000 -0- 511,008
1996 741,511 1,823,689 170,988 -0- -0- 364,355
W. R. Johnson 1998 541,667 1,598,153 140,863 1,000,000 -0- 153,968
President and COO(4) 1997 480,919 977,104 -- 500,000 -0- 98,517
1996 368,684 829,225 -- -0- -0- 86,459
L. Ribolla 1998 469,340 708,714 -- -0- -0- -0-
Executive Vice President 1997 440,419 638,653 -- 350,000 -0- -0-
and President-Heinz 1996 368,684 829,225 -- -0- -0- -0-
Europe(4)
W. C. Springer 1998 465,000 769,407 -- -0- -0- 29,552
Executive Vice President 1997 439,252 672,006 59,254 350,000 -0- 164,516
1996 368,684 829,225 -- -0- -0- 111,112
D. R. Williams 1998 406,457 694,581 79,083 -0- -0- 128,936
Executive Vice President 1997 380,651 611,900 -- 350,000 -0- 135,549
1996 322,080 724,734 -- -0- -0- 90,206
</TABLE>
- ---------
(1) Includes $150,000 for personal financial counseling for Dr. O'Reilly and
$56,277 and $33,842 for club membership and dues used by Messrs. Johnson
and Williams, respectively, in connection with business entertainment and
customer relations.
(2) No awards of restricted stock were made to the named executive officers
during the period covered by the Summary Compensation Table.
(3) Includes for Dr. O'Reilly and Messrs. Johnson, Springer and Williams,
respectively, the following: (i) amounts contributed by the Company under
the Employees Retirement and Savings Plan, $23,952, $141,489, $21,660 and
$118,061; (ii) amounts attributable to "split dollar" life insurance
provided by the Company, $122,912, $6,850, $5,274 and $5,246; and (iii)
the portion of interest accrued (but not currently paid or payable) on
deferred compensation above 120% of the applicable federal long-term rate,
$86,392, $5,629, $2,618 and $5,629.
(4) Effective April 30, 1998, Dr. O'Reilly became the non-executive Chairman
of the Board of the Company and Mr. Johnson became President and Chief
Executive Officer. Also, Mr. Ribolla retired from his positions as an
executive officer and board member, effective April 30, 1998.
10
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
GRANT DATE
INDIVIDUAL GRANTS VALUE
- ------------------------------------------------------------------------ ----------
PERCENT OF
NUMBER OF TOTAL OPTIONS GRANT DATE
SHARES UNDERLYING GRANTED TO EXERCISE PRESENT
OPTIONS GRANTED EMPLOYEES PRICE EXPIRATION VALUE
NAME (#)(1) IN FISCAL YEAR ($/SHARE) DATE ($)(6)
- ----------------- ----------------- -------------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
A. J. F. O'Reilly -0- N/A N/A N/A N/A
W. R. Johnson 400,000(2) 13.4% $58.5625 4/7/08 $6,333,403
200,000(3) 6.7% $58.5625 4/7/08 $2,615,788
200,000(4) 6.7% $58.5625 4/7/08 $2,113,075
200,000(5) 6.7% $58.5625 4/7/08 $1,764,552
L. Ribolla -0- N/A N/A N/A N/A
W. C. Springer -0- N/A N/A N/A N/A
D. R. Williams -0- N/A N/A N/A N/A
</TABLE>
- ---------
(1) All options were granted on April 8, 1998 pursuant to the terms of the
Company's 1996 Stock Option Plan and have identical terms other than with
respect to vesting.
(2) Options will vest on April 8, 1999.
(3) Options will vest on the earliest to occur of: (i) the date the closing
price of the Company's Common Stock has equaled or exceeded for the tenth
consecutive trading day $70 per share, provided the first day of such ten-
day period is on or before April 8, 2001; (ii) the date the closing price
of the Company's Common Stock has equaled or exceeded for the tenth
consecutive trading day $85 per share, provided the first day of such ten-
day period is on or before April 8, 2002; (iii) the date the closing price
of the Company's Common Stock has equaled or exceeded for the tenth
consecutive trading day $100 per share, provided the first day of such
ten-day period is on or before April 8, 2003; or (iv) April 8, 2006;
provided that if such date specified in (i), (ii) or (iii) is prior to
April 8, 1999, then such options will not vest until April 8, 1999.
(4) Options will vest on the earliest to occur of: (i) the date the closing
price of the Company's Common Stock has equaled or exceeded for the tenth
consecutive trading day $85 per share, provided the first day of such ten-
day period is on or before April 8, 2002; (ii) on the date the closing
price of the Company's Common Stock has equaled or exceeded for the tenth
consecutive trading day $100 per share, provided the first day of such
ten-day period is on or before April 8, 2003; or (iii) April 8, 2006;
provided that if such date specified in (i) or (ii) is prior to April 8,
1999, then such options will not vest until April 8, 1999.
(5) Options will vest on the earliest to occur of: (i) the date the closing
price of the Company's Common Stock has equaled or exceeded for the tenth
consecutive trading day $100 per share, provided the first day of such
ten-day period is on or before April 8, 2003; or (ii) April 8, 2006;
provided that if such date specified in (i) is prior to April 8, 1999,
then such options will not vest until April 8, 1999.
(6) The estimated grant date present value reflected in the above table is
determined using the Black-Scholes model. The material assumptions and
adjustments incorporated in the Black-Scholes model in estimating the
value of the option grants reflected in the above table include the
following: (i) exercise price on the options ($58.5625) equal to the fair
market value of the underlying stock on the date of grant; (ii) expected
option term of ten years; (iii) dividend yield of 2.15%; (iv) a risk-free
interest rate of 5.6%; and (v) volatility of 22.6%.
The ultimate values of the options will depend on the future market price
of the Company's Common Stock, which cannot be forecast with reasonable
accuracy. The actual value, if any, an optionee will realize upon exercise
of an option will depend on the excess of the market value of the Company's
Common Stock over the exercise price on the date the option is exercised.
11
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN 1998 FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUE
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS IN-THE-MONEY OPTIONS/SARS
AT FISCAL YEAR-END AT FISCAL YEAR-END ($)(2)
------------------------- -------------------------
ACQUIRED ON VALUE
NAME EXERCISE (#) REALIZED ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------- ------------ --------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
A. J. F. O'Reilly 1,125,000 $34,781,288 -0- 750,000 $ -0- $16,078,125
W. R. Johnson 323,000 7,345,709 862,500 1,500,000 26,216,423 10,718,750
L. Ribolla 720,000 22,532,514 350,000 -0- 7,503,125 -0-
W. C. Springer 225,000 7,943,758 1,200,000 350,000 36,112,515 7,503,125
D. R. Williams 300,000 9,196,560 675,000 350,000 21,079,710 7,503,125
</TABLE>
- ---------
(1) The "Value Realized" is equal to the fair market value on the date of
exercise, less the exercise price, times the number of shares acquired. No
SARs were exercised during the last fiscal year.
(2) The "Value of Unexercised In-the-Money Options at Fiscal Year-End" is
equal to $53.3125, the fair market value of each share underlying the
options at April 29, 1998, less the exercise price, times the number of
options.
RETIREMENT BENEFITS
Most full-time salaried employees in the United States who were hired before
January 1, 1993 are entitled to retirement benefits from Plan A of the H. J.
Heinz Company Employees' Retirement System ("Plan A"). Benefits are based on
credited service and five-year average eligible compensation through December
31, 1992, the date on which Plan A was frozen.
The Company has a Supplemental Executive Retirement Plan (the "SERP") which
provides additional retirement benefits for eligible executives, including the
executive officers named in the Summary Compensation Table. The SERP was
adopted in order to attract and retain executives, and to compensate them for
reductions in benefits due to limitations imposed by the Internal Revenue
Code. The SERP benefit is a lump sum equal to a multiple of the employee's
final average eligible compensation during any five of the last ten years
prior to retirement. It is reduced by (i) the lump sum value of the Plan A
benefit (if any), and (ii) the value of the employee's Age-Related Company
Contribution Account under the Employees Retirement and Savings Plan and the
Employees Retirement and Savings Excess Plan.
Compensation for the fiscal year ended April 29, 1998 included in the earnings
base under the SERP for each of the executive officers named in the Summary
Compensation Table is as follows: A. J. F. O'Reilly $3,029,005, W. R. Johnson
$2,139,820, L. Ribolla $1,178,054, W. C. Springer $1,234,407 and D. R.
Williams $1,101,038. The following table shows the annual pension equivalent
of the estimated maximum retirement benefits payable to the above named
executive officers under the Company's qualified retirement plans and the SERP
at age 65, with the indicated number of credited years of service and amount
of eligible compensation. The amounts in the table are not subject to
reduction for Social Security.
12
<PAGE>
<TABLE>
<CAPTION>
YEARS OF SERVICE
----------------------------------------------------
AVERAGE EARNINGS
HIGH FIVE OF
LAST TEN YEARS
PRIOR TO RETIREMENT 15 20 25 30 35
- ------------------- --------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$1,000,000 $ 288,434 $ 336,506 $ 384,578 $ 432,651 $ 480,723
1,100,000 317,277 370,157 423,036 475,916 528,795
1,300,000 374,964 437,458 499,952 562,446 624,940
1,500,000 432,651 504,759 576,868 648,976 721,085
2,100,000 605,711 706,663 807,615 908,566 1,009,518
2,300,000 663,398 773,964 884,530 995,097 1,105,663
2,500,000 721,085 841,265 961,446 1,081,627 1,201,808
2,700,000 778,771 908,566 1,038,362 1,168,157 1,297,952
3,000,000 865,301 1,009,518 1,153,735 1,297,952 1,442,169
3,300,000 951,832 1,110,470 1,269,109 1,427,747 1,586,386
3,600,000 1,038,362 1,211,422 1,384,482 1,557,543 1,730,603
</TABLE>
As of April 29, 1998, the years of service for Dr. O'Reilly and Messrs.
Johnson, Ribolla, Springer and Williams were, as rounded to the nearest full
year, 29, 16, 31, 24, and 30, respectively.
REPORT OF THE MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE ON EXECUTIVE
COMPENSATION
The Management Development and Compensation Committee (the "Committee"), which
is made up of six non-employee directors, oversees the administration of total
compensation for senior Company executives. The Company's executive
compensation programs are designed to provide payment for performance of
assigned accountabilities and reward for the achievement of predetermined
goals which contribute to corporate earnings, with the objective of enhancing
shareholder value. Performance goals for the executive officers are
established by the Committee.
COMPONENTS OF COMPENSATION
The Company's executive compensation program has three components: base
salary, annual incentive award and stock options.
The Committee periodically compares total compensation levels for the
Company's senior executives to the compensation paid to executives of a peer
group of companies (the "Peer Group"). The Peer Group is comprised of 21
leading international consumer products companies which are, on average,
similar to the Company in terms of sales, assets, and total stock market
capitalization. The chosen "Peer Group" includes 10 of the 12 other companies
which comprise the Standard & Poor's Foods Group Index in the Performance
Graphs on pages 15 and 16. The Committee believes that the Peer Group
represents the Company's most direct competitors for executive talent.
The Committee also calls upon Hewitt Associates, an independent compensation
consultant, for consultation and survey information related to executive
compensation.
BASE SALARY
The Company's policy is to provide a base salary at a median level when
compared with base salaries of the Peer Group. In many cases, base salaries of
the Company's executive officers have been below the median for base salaries
of executive officers of the Peer Group. The Company did not adjust Dr.
O'Reilly's base salary during the fiscal year. However, during the year salary
action was taken for several executive officers. The average rate of increase
for those officers was 5.7%. The Committee intends to continue to target base
salaries at the competitive median.
13
<PAGE>
ANNUAL INCENTIVE
Annual incentives were paid to the executive officers, senior management and
large groups of salaried employees around the world under the Incentive
Compensation Plan approved by shareholders in September 1994. That plan
focuses the Company's management on clear performance measures aligned with
the creation of shareholder value. The performance measures used in Fiscal
Year 1998 were earnings per share ("EPS") for the Company and operating income
for the business units.
Annual incentive awards under the Incentive Compensation Plan are intended to
reward key executives for achieving targeted levels of performance by
providing annual awards at target performance which, when added to base
salary, produce total cash compensation around the 75th percentile of total
cash compensation of the Peer Group. When performance results exceed targeted
levels of performance, the Incentive Compensation Plan is intended to provide
awards which, when added to base salary, produce total cash compensation above
the 75th percentile of the Peer Group and, in the case of outstanding
performance, near the 90th percentile of the Peer Group.
Awards to Dr. O'Reilly and Mr. Johnson were based on the Company having
exceeded the earnings per share target approved by the Committee at the
beginning of the fiscal year. The other executive officers awards were
predicated on a 50:50 weighting between the corporate EPS goal and the
operating income performance of their respective business units.
The total of Dr. O'Reilly's base salary payments ($806,370) in Fiscal Year
1998 plus the fiscal year 1998 incentive ($2,222,635) on a size adjusted basis
lies in the upper quartile of chief executives of the Peer Group.
STOCK OPTIONS
The Committee reaffirms its belief that stock options should continue to be a
major part of the Company's executive compensation program. Stock options
emphasize the objective of increasing shareholder value and encouraging share
ownership for management in accordance with established guidelines. In April
of 1998 a grant of 1,000,000 options was made to William R. Johnson in
recognition of his moving into the role of Chief Executive Officer. Sixty
percent of the options for Mr. Johnson will vest in eight years; however,
these options will vest sooner based on Heinz stock achieving specific price
targets. (See page 11 for further information on these options.) Dr. O'Reilly
received no stock options during the 1998 fiscal year. There is no established
grant cycle for executive officers; rather grants are made on an intermittent
basis reflecting a discretionary assessment of future contributions to the
longer term growth of the Company and the need to provide a competitive
retention incentive.
TAX DEDUCTIBILITY OF EXECUTIVE OFFICER COMPENSATION
Section 162(m) of the Internal Revenue Code ("Section 162(m)") generally
limits the corporate tax deduction for compensation paid to the executive
officers named in the Summary Compensation Table on page 10 to $1,000,000
each, unless certain requirements are met. The Committee has carefully
considered the impact of this tax code provision and its normal practice is to
take such action as is necessary to preserve the Company's tax deduction to
the extent consistent with the Company's compensation policies.
The Company stock option plans and the Incentive Compensation Plan all comply
with the requirements of Section 162(m). Accordingly, all payments made to the
covered executive officers qualify for the corporate tax deduction.
The Committee believes these executive compensation policies and programs
effectively serve the interests of shareholders and the Company and are
appropriately balanced to provide increased motivation for executives to
contribute to the Company's future success.
HERMAN J. SCHMIDT, Chairman RICHARD M. CYERT
WILLIAM P. SNYDER III SAMUEL C. JOHNSON
ELEANOR B. SHELDON DONALD R. KEOUGH
14
<PAGE>
<TABLE>
PERFORMANCE GRAPH--FIVE FISCAL YEARS (1993-1998)
The following graph compares the cumulative total shareholder return on the
Company's Common Stock over the five preceding fiscal years with the
cumulative total shareholder return on the Standard & Poor's 500 Stock Index
and the return on the Standard & Poor's Foods Group Index, assuming an
investment of $100 in each at their closing prices on April 28, 1993 and
reinvestment of dividends.
PERFORMANCE GRAPH APPEARS HERE
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG H.J. HEINZ, S&P 500 INDEX AND S&P FOODS INDEX
<CAPTION>
Measurement period
(Fiscal year Covered) HEINZ S&P 500 S&P FOODS
- --------------------- -------- ------- ---------
<S> <C> <C> <C>
Measurement PT -
4/28/1993 $100 $100 $100
FYE 4/28/1994 $ 96 $100 $ 99
FYE 4/28/1995 $127 $126 $125
FYE 4/28/1996 $156 $162 $146
FYE 4/28/1997 $198 $202 $193
FYE 4/28/1998 $261 $281 $257
</TABLE>
15
<PAGE>
PERFORMANCE GRAPH--18 FISCAL YEARS (1980-1998)
The following graph compares the cumulative shareholder return on the
Company's Common Stock over the 18 preceding fiscal years with the cumulative
total shareholder return on the Standard & Poor's 500 Stock Index and the
return on the Standard & Poor's Foods Group Index, assuming an investment of
$100 in each at their closing prices on April 30, 1980 and reinvestment of
dividends. Dr. O'Reilly served as Chief Executive Officer of the Company from
July 1, 1979 until April 30, 1998.
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG H.J. HEINZ, S&P 500 INDEX AND S&P FOODS INDEX
<CAPTION>
Measurement period
(Fiscal year Covered) H.J. Heinz S&P 500 S&P Foods
- --------------------- ---------- ------- ---------
<S> <C> <C> <C>
FYE 4/28/1981 $ 150 $ 132 $ 133
FYE 4/28/1982 $ 190 $ 123 $ 155
FYE 4/28/1983 $ 263 $ 178 $ 212
FYE 4/28/1984 $ 318 $ 187 $ 246
FYE 4/28/1985 $ 445 $ 215 $ 325
FYE 4/28/1986 $ 806 $ 295 $ 583
FYE 4/28/1987 $ 847 $ 367 $ 724
FYE 4/28/1988 $ 856 $ 352 $ 745
FYE 4/28/1989 $1,071 $ 425 $1,056
FYE 4/28/1990 $1,377 $ 478 $1,201
FYE 4/28/1991 $1,706 $ 562 $1,616
FYE 4/28/1992 $1,677 $ 629 $1,702
FYE 4/28/1993 $1,709 $ 689 $1,790
FYE 4/28/1994 $1,636 $ 731 $1,767
FYE 4/28/1995 $2,163 $ 865 $2,241
FYE 4/28/1996 $2,667 $1,114 $2,614
FYE 4/28/1997 $3,385 $1,392 $3,463
FYE 4/28/1998 $4,453 $1,933 $4,442
</TABLE>
ADDITIONAL INFORMATION
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's directors and executive officers to file with the
Securities and Exchange Commission reports of ownership and changes in
ownership of any securities of the Company.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended April 29, 1998, all
required filings were made on a timely basis, except for one report that was
inadvertently filed late by John Crawshaw, Area Vice President--Pacific Rim,
who is based in New Zealand.
16
<PAGE>
RESPONSIBILITIES OF THE BOARD OF DIRECTORS
Included in Appendix A are the Corporate Governance Guidelines adopted by the
Board of Directors.
SHAREHOLDER PROPOSALS
Section 14a-8 of the Exchange Act contains the rules for including a
shareholder proposal in the Company's proxy statement and on the related form
of proxy. The deadline for submitting a shareholder proposal pursuant to Rule
14a-8 for the Company's 1999 Annual Meeting is April 5, 1999. Shareholder
proposals outside the process provided in Rule 14a-8 are not required to be
included in the Company's proxy statement and form of proxy, but may be
presented at the Annual Meeting scheduled for September 8, 1999 if the
proposal is received by the Company no later than June 19, 1999. All
shareholder proposals should be sent to the attention of the Company's
Secretary.
PROXY SOLICITATION
In addition to this mailing, the Company's employees or agents may solicit
proxies personally, by mail, electronically or by telephone. The Company pays
the costs of soliciting this proxy, including the fees of D.F. King & Co.,
estimated to be $18,000 plus expenses, for their assistance in the
solicitation of proxies. The Company also reimburses brokers and other
nominees for their expenses in forwarding the proxy statements and other
materials to shareholders.
ANNUAL REPORT
The Annual Report to Shareholders covering the Company's fiscal year ended
April 29, 1998 has been mailed together with the proxy solicitation material.
The Annual Report does not form any part of the material for the solicitation
of proxies.
Lawrence J. McCabe
Senior Vice President,
General Counsel and Secretary
Dated: August 3, 1998
17
<PAGE>
APPENDIX A
CORPORATE GOVERNANCE GUIDELINES
RESPONSIBILITIES OF THE BOARD OF DIRECTORS OF H. J. HEINZ COMPANY
The H. J. Heinz Company (the "Company") is primarily an economic institution
offering quality products and services for the public at reasonable cost. It
must be skillfully managed to provide: (1) a return to shareholders on their
investment, (2) employment opportunities, career advancement and work
satisfaction for employees, and (3) capital expansion and development of
market opportunities.
Directors are elected by the shareholders and represent the shareholders as
owners of the Company. Directors have a prime responsibility to assure the
success and continuity of the business and the conduct of its activities in a
responsible and ethical manner.
The Directors shall maintain relationships with management that are
supportive, objectively analytical and critical of performance. In their
capacity as Directors they monitor but do not participate in the day-to-day
management of the business. The Directors will endeavor to assure that the
Company is sensitive and responsible to issues of public interest and
encourage management to give proper regard to such issues in policy
formulation and decision making. Further, the Directors recognize that the
Company shares the common interests of the communities it serves and supports
efforts contributing to the improvement of the quality of life.
More detailed descriptions of these responsibilities and sources of
recommendation are described below:
1. Select and elect the Chief Executive Officer and delegate to him the
authority and responsibility to manage the Company (Recommendation from
the Management Development and Compensation Committee, which shall be
composed entirely of outside directors.)
2. Elect all corporate officers and approve the appointment of others who
may report directly to the Chief Executive Officer. Determine that a
satisfactory system is in effect for training, development, and orderly
succession of top managers throughout the Company.
3. Through its Management Development and Compensation Committee, review
and approve the management compensation structure and incentive
compensation systems of the Company. Review and approve base salaries,
incentive payments, stock options, and fringe benefits for the Chief
Executive Officer and those eligible managers reporting to the Chief
Executive Officer.
4. Review and approve the specific annual and long-term financial goals of
the Company and monitor financial performance against goals.
5. Receive and review reports on the trading results of the Company, its
profitability, and its financial condition.
6. Assure that a sound financial structure is in place to finance current
and future operations.
7. Review and approve the plan of organization structure of the Company and
World Headquarters offices.
A-1
<PAGE>
8. Review and approve corporate objectives and strategies including:
. Entering a significant new line of business.
. Abandoning a significant present line of business.
. Acquisition of or merger with another corporation or other entity.
. Capital appropriations of over $10,000,000 and real property
dispositions over $10,000,000.
. Overall capital structure of the consolidated corporation (equity
and long-term debt) and debt guarantee policies. (Recommendation
from the Chief Executive Officer and the Chief Financial Officer.)
9. Review recommendations for dividend payments and declare dividends.
(Recommendation from the Chief Financial Officer and Chief Executive
Officer.)
10. Monitor Company performance using a management information system
provided by the Chief Executive Officer and approved by the Board in
the following areas:
. Financial performance of the Company.
. Compliance with all major national, foreign, state, and local laws
affecting the enterprise.
The Board will consider causes of significant deficiencies in financial
performance and review and act upon recommendations from the Company's
public accountants and the Audit Committee.
11. Appoint appropriate committees to administer employee benefit plans and
related investment funds in the United States (such as pension, savings
plan, long-term disability, etc.) and to monitor committee reports and
recommendations regarding both U.S. and foreign affiliate employee
benefit plans and funds.
12. Administer the Board organization in the following areas:
. Determine the size and constituency of the Board. (Recommendations
from the Nominating Committee.)
. Fix the age limit for Board membership.
. Fill vacancies on the Board as authorized by the By-laws.
(Recommendation from the Nominating Committee.)
. Remove Board members for cause. (Recommendation from the Nominating
Committee.)
. Appoint and abolish Board committees.
. Appoint the Chairman of the Board and Committee Chairmen.
(Recommendation from the Chief Executive Officer.)
. Define responsibilities of Board committees. (Recommendation from
the Chief Executive Officer.)
. Recommend public accountants for approval by shareholders.
(Recommendation from the Audit Committee.)
A-2
<PAGE>
. Determine times and location of Board meetings.
. Determine locations and arrangements for shareholders' meetings.
. Establish compensation for Board and Committee service.
(Recommendation by the Chief Executive Officer.)
. Approve directorships in companies other than Heinz of all Heinz
management employees.
. Determine amount and type of liability insurance for Board members
and officers and other key management employees. (Recommendations
from the Chief Financial Officer and Chief Executive Officer.)
13. Review this document of Board responsibilities biannually at a meeting
following the Annual Meeting of Shareholders and make changes to meet
the current requirements of the Company.
QUALIFICATIONS FOR NOMINEE DIRECTORS (AS ADOPTED BY THE NOMINATING COMMITTEE
ON JUNE 10, 1992)
Nominees should be selected on the basis of their business and professional
experience and qualifications without discriminating on the basis of race,
sex, creed, physical handicap or nationality. Candidates should be persons of
substantial accomplishment who have demonstrated leadership in multinational
companies or in government, finance, or higher education or who are able to
provide company expertise, industry knowledge, or marketing acumen. Nominees
should also represent all shareholders rather than special interest groups or
any group of shareholders.
A-3
<PAGE>
LOGO
<PAGE>
H.J. HEINZ COMPANY
This Proxy is Solicited on Behalf of the Board of Directors
ANTHONY J.F. O'REILLY, WILLIAM R. JOHNSON and LAWRENCE J. McCABE are, and
each of them is, appointed and authorized to represent the undersigned at the
Annual Meeting of Shareholders of H.J. Heinz Company to be held at Heinz Hall
for the Performing Arts, located at 600 Penn Avenue, Pittsburgh, Pennsylvania on
Tuesday, September 8, 1998, at 2:00 P.M., and at any adjournments thereof, and
to vote the number of shares of Common Stock that the undersigned would be
entitled to vote if personally present on all proposals coming before the
meeting in the manner specified and on any other business that may properly come
before the meeting.
Please Sign and Date on Reverse Side and Return the Proxy Card Promptly Using
the Enclosed Envelope.
This Proxy when properly executed will be voted in the manner directed by the
Shareholder. If no direction is given, this Proxy will be voted "FOR" the
election of all nominees for election as directors and the election of auditors.
+ FOLD AND DETACH HERE +
<PAGE>
Please mark
your vote as [X]
indicated on
this example
The Board of Directors recommends a vote FOR all nominees for Election as
Directors.
1. Election of Directors
Nominees: A.J.F. O'Reilly, W.R. Johnson, W.P. Snyder III,
H.J. Schmidt, E.B. Sheldon, R.M. Cyert, S.C. Johnson,
D.R. Keough, S.D. Wiley, L.J. McCabe, D.R. Williams,
N.F. Brady, W.C. Springer, E.E. Holiday, P.F. Renne,
C.K. Bryan, J.M. Zimmerman, M.C. Choksi, L.S. Coleman, Jr.,
D.J. O'Neill and M. Ritchie.
INSTRUCTIONS: To withhold authority for any individual nominee, write
that nominee's name in the space provided below:
- ----------------------------------------------------------------------
FOR all twenty one WITHHOLD
nominees unless AUTHORITY
otherwise to vote for all
indicated. nominees.
[_] [_]
The Board of Directors recommends a vote FOR Item 2.
2. Election of Auditors.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. In their discretion, upon such other matters as may properly come before
the meeting.
[_] Please check here to request an admission ticket to the Meeting.
PLEASE SIGN AND DATE IN BOX BELOW
Please sign exactly as your name appears on this Proxy. If joint owners, EITHER
may sign the Proxy. When signing as attorney, executor, administrator, trustee,
guardian or corporate officer, please give your full name and title.
- ----------------------------------------- ------------------------
Signature(s) and, if applicable, Title(s) Date
+ FOLD AND DETACH HERE +
<PAGE>
H.J. HEINZ COMPANY
This Proxy is Solicited on Behalf of the Board of Directors
ANTHONY J.F. O'REILLY, WILLIAM R. JOHNSON and LAWRENCE J. McCABE are, and
each of them is, appointed and authorized to represent the undersigned at the
Annual Meeting of Shareholders of H.J. Heinz Company to be held at Heinz Hall
for the Performing Arts, located at 600 Penn Avenue, Pittsburgh, Pennsylvania on
Tuesday, September 8, 1998, at 2:00 P.M., and at any adjournments thereof, and
to vote the number of shares of Third Cumulative Preferred Stock, $1.70 First
Series, that the undersigned would be entitled to vote if personally present on
all proposals coming before the meeting in the manner specified and on any other
business that may properly come before the meeting.
Please Sign and Date on Reverse Side and Return the Proxy Card Promptly Using
the Enclosed Envelope.
This Proxy when properly executed will be voted in the manner directed by the
Shareholder. If no direction is given, this Proxy will be voted "FOR" the
election of all nominees for election as directors and the election of auditors.
+ FOLD AND DETACH HERE +
<PAGE>
Please mark
your vote as [X]
indicated on
this example
The Board of Directors recommends a vote FOR all nominees for Election as
Directors.
1. Election of Directors
Nominees: A.J.F. O'Reilly, W.R. Johnson, W.P. Snyder III,
H.J. Schmidt, E.B. Sheldon, R.M. Cyert, S.C. Johnson,
D.R. Keough, S.D. Wiley, L.J. McCabe, D.R. Williams,
N.F. Brady, W.C. Springer, E.E. Holiday, P.F. Renne,
C.K. Bryan, J.M. Zimmerman, M.C. Choksi, L.S. Coleman, Jr.,
D.J. O'Neill and M. Ritchie.
INSTRUCTIONS: To withhold authority for any individual nominee, write
that nominee's name in the space provided below:
- ----------------------------------------------------------------------
FOR all twenty one WITHHOLD
nominees unless AUTHORITY
otherwise to vote for all
indicated. nominees.
[_] [_]
The Board of Directors recommends a vote FOR Item 2.
2. Election of Auditors.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. In their discretion, upon such other matters as may properly come before
the meeting.
[_] Please check here to request an admission ticket to the Meeting.
PLEASE SIGN AND DATE IN BOX BELOW
Please sign exactly as your name appears on this Proxy. If joint owners, EITHER
may sign the Proxy. When signing as attorney, executor, administrator, trustee,
guardian or corporate officer, please give your full name and title.
- ----------------------------------------- ------------------------
Signature(s) and, if applicable, Title(s) Date
+ FOLD AND DETACH HERE +
