GEO. A. HORMEL & COMPANY
dba HORMEL FOODS CORPORATION
AUSTIN, MINNESOTA
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To The Stockholders:
Notice is hereby given that the Annual Meeting of Stockholders of
Geo. A. Hormel & Company, dba Hormel Foods Corporation, a Delaware
corporation, will be held in the main auditorium of the Austin High
School, Austin, Minnesota, on Tuesday, January 31, 1995, at 8:00 p.m.
for the following purposes:
1. To elect a board of 15 directors for the ensuing year.
2. To vote on a proposal to amend the Company's Certificate of
Incorporation to change the Company's name from Geo. A. Hormel &
Company to Hormel Foods Corporation.
3. To vote upon ratification of appointment, by the Board of
Directors, of Ernst & Young as independent auditors
for the fiscal year which will end October 28, 1995.
4. To transact such other business as may properly come before the
meeting.
The Board of Directors has fixed December 5, 1994, at the close of
business, as the record date for the determination of stockholders
entitled to notice of, and to vote at, the Annual Meeting.
By order of the Board of Directors
T. J. LEAKE
Secretary
December 30, 1994
GEO. A. HORMEL & COMPANY
dba HORMEL FOODS CORPORATION
1 HORMEL PLACE
AUSTIN, MINNESOTA 55912
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of the
Company for use at the Annual Meeting of Stockholders to be held on
January 31, 1995. The shares represented by the enclosed proxy will be
voted in accordance with the stockholder's directions if the proxy is
duly executed and returned prior to the meeting. If no directions are
specified, the shares will be voted for the election of directors
recommended by the Board of Directors, for the amendment to the
Company's Certificate of Incorporation changing the Company's name to
Hormel Foods Corporation and for the appointment of Ernst & Young as
independent auditors for the next fiscal year. Any person giving a
proxy may revoke it at any time before it is exercised by contacting
the Secretary of the Company.
The expenses of soliciting proxies will be paid by the Company. If
it appears necessary or advisable, proxies may be solicited at Company
expense personally, or by telephone or telegraph, by directors,
officers and other employees who will not receive additional
compensation. The Company will also reimburse brokerage firms, and
other custodians, nominees and fiduciaries, for their reasonable out-
of-pocket expenses in sending proxy materials to beneficial owners.
Your cooperation in promptly signing and returning the enclosed proxy
will help to avoid additional expense.
The Company had 76,704,288 shares of Common Stock outstanding as of
December 5, 1994. Each share of stock is entitled to one vote. The
Company has no other class of shares outstanding. Only common
stockholders of record at the close of business as of December 5,
1994, are entitled to notice of, and to vote at, the Annual Meeting of
Stockholders. A majority of the outstanding shares will constitute a
quorum at the meeting. Abstentions and broker non-votes are counted
for purposes of determining the presence or absence of a quorum for
the transaction of business. Shares represented by abstentions are
counted in the same manner as shares submitted with a "withheld" or
"no" vote in tabulations of the votes cast on proposals presented to
stockholders, whereas shares represented by broker non-votes are
deemed not present, and therefore, not counted for purposes of
determining whether a proposal has been approved. This proxy statement
and form of proxy are being mailed to stockholders on or about
December 30, 1994.
STOCKHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
Any stockholder intending to present a proposal at the Annual
Meeting of Stockholders to be held in 1996 must arrange to have the
proposal delivered to the Company not later than September 1, 1995, in
order to have the proposal considered for inclusion in the proxy
statement and the form of proxy for that meeting.
ELECTION OF DIRECTORS
It is intended that the persons named as proxies in the enclosed
proxy will vote for the election of the 15 nominees named below to
hold office as directors until the next Annual Meeting of Stockholders
and until their successors are elected and qualify. In the event any
of such nominees should become unavailable for any reason, which the
Board of Directors does not anticipate, it is intended that the
proxies will vote for the election of such substitute persons, if any,
as shall be designated by the Board of Directors. Directors are
elected by a plurality of the votes cast. The fifteen candidates
receiving the highest number of votes will be elected.
NOMINEES FOR DIRECTORS
<TABLE>
<CAPTION>
Principal Year
Occupation First
and Five Year Became a
Name Age Business Experience Director
<S> <C> <C> <S> <C>
JOHN W. ALLEN 64 Professor in the Food Industry Management Program 1989
at Michigan State University
JAMES W. COLE* 60 Group Vice President, Foodservice Group 1990
WILLIAM S. DAVILA 63 President and Chief Operating Officer of The Vons 1993
Companies, Inc., 1984 to 1992; President Emeritus of
The Vons Companies, Inc. since 1992
DAVID N. DICKSON* 51 Group Vice President, International and Corporate 1990
Development
LUELLA G. GOLDBERG 57 Chair, Board of Trustees, Wellesley College, 1985 to 1993; 1993
Acting President, Wellesley College, July 1, 1993 to
October 1, 1993; Trustee, Wellesley College;
Director, Minnesota Orchestral Association;
Trustee and Member of Executive Committee,
University of Minnesota Foundation; Member,
Board of Overseers, University of Minnesota
School of Management
DON J. HODAPP* 56 Group Vice President, Administration, 1986 to 1992; 1986
Executive Vice President and Chief Financial Officer
since 1992
JOEL W. JOHNSON* 51 Senior Vice President of Sales and Marketing, Oscar 1991
Mayer Foods, Inc., 1987 to 1991; Executive Vice
President and General Manager of Oscar Mayer Foods,
Inc., 1991; Executive Vice President of Marketing
and Sales of the Company, 1991 to 1992; President, 1992
to January 25, 1993; President and Chief Operating Officer,
January 26, 1993 to October 1, 1993; President and Chief
Executive Officer since October 1, 1993
GERALDINE M. JOSEPH 71 Senior Fellow, Hubert H. Humphrey Institute 1974-1978
of Public Affairs 1984 to 1993; Director, German 1981
Marshall Fund of the U.S.; Director, National
Democratic Institute for International Affairs;
Advisory Committee Member, Humphrey Policy Forum
STANLEY E. KERBER* 57 Group Vice President, Meat Products Group 1990
RICHARD L. KNOWLTON 62 Chairman of the Board, President and Chief Executive 1974
Officer, 1984 to 1992; Chairman of the Board
and Chief Executive Officer, 1992 to October 1, 1993;
member, Board of Trustees, Mayo Foundation since 1988;
nonemployee Board Chairman since October 1, 1993
EARL B. OLSON 79 Chairman of the Board, Jennie-O Foods, Inc. 1987
(a wholly owned subsidiary of Hormel Foods
Corporation since 1986)
ROBERT F. PATTERSON* 55 Group Vice President, Prepared Foods Group 1990
GARY J. RAY* 48 Group Vice President, Operations Group, 1990 to 1992; 1990
Executive Vice President of Operations since 1992
RAY V. ROSE 71 Food Industry Consultant 1981
ROBERT R. WALLER, M.D. 57 Professor of Ophthalmology, Mayo Medical School; 1993
President and Chief Executive Officer, Mayo Foundation;
Executive Committee Chair, Board of Trustees,
Mayo Foundation; Chair, Mayo Foundation
for Medical Education and Research
</TABLE>
*Messrs. Cole, Dickson, Hodapp, Johnson, Kerber, Patterson, and Ray
are members of the Executive Committee of the Board of Directors.
Mr. Allen is a member of the Board of Directors of Alliance
Associates, Inc., Coldwater, Michigan, and Brooks Beverage Management,
Inc., Holland, Michigan.
Mr. Davila is a member of the Board of Directors of The Vons
Companies, Inc., Los Angeles, California, Wells Fargo Bank, San
Francisco, California, and Pacific Gas and Electric, San Francisco,
California.
Mrs. Goldberg is a member of the Board of Directors of NWNL
Companies, Inc., TCF Financial Corporation, and Piper Jaffray
Investment Trust, Inc., all of Minneapolis, Minnesota.
Mr. Johnson is a member of the Board of Directors of Meredith
Corporation, Des Moines, Iowa.
Mr. Knowlton is a member of the Board of Directors of NWNL
Companies, Inc., Super Valu Stores, Inc., and First Bank System, Inc.,
all of Minneapolis, Minnesota.
Mr. Rose is a member of the Board of Directors of Smith's Food and
Drug, Inc., Salt Lake City, Utah.
Dr. Waller is a member of the Board of Directors of Principal
Financial Group, Des Moines, Iowa.
No family relationship exists between any of the nominees for
director of the Company.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company receive a retainer of
$23,000 and $1,200 for attendance at each Board Meeting. In addition,
a fee of $500 or $1,000, depending upon location and duration of
meeting, is paid for attendance at committee meetings. The
Chairpersons of the Audit, Compensation, and Nominating Committees and
the Board Chairman each receive an additional $2,000 per year.
Additionally, each February 1, each nonemployee director receives a
grant of 1,000 options at fair market value, and an award of $5,000
worth of Restricted Shares. Directors who are employees of the Company
receive $100 for each Board Meeting they attend, which has remained
unchanged since 1934.
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETINGS
The Board of Directors met eight times during the last fiscal year.
All of these meetings were regular, scheduled meetings.
The Company has Audit, Personnel, Compensation, and Nominating
Committees of the Board of Directors.
The Audit Committee members are Mrs. Joseph, Chairperson, Mr. Allen,
Mr. Davila, and Mrs. Goldberg. The Committee met twice during the last
fiscal year. The Audit Committee reviews the arrangement and scope of
the audit, reviews the activities and recommendations of the Company's
internal auditors, considers comments by the independent accountants
with respect to the adequacy of internal control procedures and the
consideration given or the corrective action taken by management,
reviews internal accounting procedures and controls with the Company's
financial and accounting staff and reviews nonaudit services provided
by the Company's independent accountants.
The Company has a Personnel Committee consisting of Mr. Johnson,
Chairperson, Mr. Knowlton, Mr. Rose, and Dr. Waller. This Committee
deals, among other things, with matters of management positions and
the succession of management. The Committee met once during the last
fiscal year.
The Company has a Compensation Committee consisting of Mr. Rose,
Chairperson, Mr. Davila and Mr. Knowlton. The primary function of this
Committee is to establish compensation arrangements for all officers
of the Company and other senior management personnel. The Committee
met five times during the last fiscal year.
The Company has a Nominating Committee, consisting of Dr. Waller,
Chairperson, Mr. Johnson, Mrs. Joseph, and Mr. Rose. Board of
Directors nominees are proposed by the Nominating Committee, which
will consider nominees recommended by stockholders. Stockholder
recommendations should be sent to the Secretary of the Company for
forwarding to the Nominating Committee. The Committee met once during
the last fiscal year.
Since October 1, 1993, the date of his retirement from all executive
positions with the Company, Mr. Knowlton has served in the newly
created position of nonemployee Board Chairman. Mr. Knowlton serves in
such position at the pleasure of the Board.
PRINCIPAL SHAREHOLDERS
Information as to the persons or groups known by the Company to be
beneficial owners of more than five percent of the Company's voting
securities, as of October 29, 1994, is shown below:
<TABLE>
<CAPTION>
Name and Address Amount Percent
Title of Class of Beneficial Owner Beneficially Owned of Class
<S> <C> <C> <C>
Common Stock The Hormel Foundation (1) 32,029,080 41.76%
501 16th Avenue NE
Austin, MN 55912
Common Stock The Geo. A. Hormel & Company (2) 4,323,645 5.64%
Joint Earnings Profit
Sharing Trust
1 Hormel Place
Austin, MN 55912
</TABLE>
(1) The Hormel Foundation holds 2,539,050 of such shares as
individual owner and 29,490,030 of such shares as trustee of
various trusts. The Hormel Foundation, as trustee, votes the
shares held in trust. The Hormel Foundation has a remainder
interest in all of the shares held in trust. The remainder
interest consists of corpus and accumulated income in various
trusts which are to be distributed when the trusts terminate upon
the death of designated beneficiaries, or upon the expiration of
twenty-one years after the death of such designated beneficiaries.
The Hormel Foundation was converted from a private to a public
foundation on December 1, 1980. The Certificate of Incorporation
and Bylaws of the Foundation provide for a Board of Directors, a
majority of whom represent non-profit agencies to be given support
by the Foundation. Each member of the Hormel Foundation has equal
voting rights.
Members of The Hormel Foundation are: I. J. Holton, retired
Chairman of the Board of Hormel Foods; Richard L. Knowlton,
retired Chief Executive Officer of Hormel Foods; Charles D.
Nyberg, retired Senior Vice President and General Counsel of
Hormel Foods; William R. Hunter, retired Executive Vice President
of Hormel Foods; Joel W. Johnson, President and Chief Executive
Officer of Hormel Foods; Jerry A. Anfinson, Certified Public
Accountant, Austin; Raymond B. Ondov, Attorney, Austin; James G.
Huntting, Jr., retired President of Huntting Elevator Company of Austin;
Kermit F. Hoversten, Attorney, representing the City of Austin;
John H. Dibble, Executive Director, United Way of Austin, Inc.;
James A. Birney, Officer in Charge, The Salvation Army of Austin;
Donald R. Brezicka, St. Olaf Hospital Administrator, representing
the St. Olaf Hospital Association, Austin; Neil A. Perry,
Executive Director, Young Men's Christian Association, Austin;
James R. Mueller, Executive Director, Cedar Valley Rehabilitation
Workshop, Inc., Austin; H. O. Schmid, Director, Hormel Institute,
Austin, representing the University of Minnesota; Peter A.
Tangren, representing the Austin Public Education Foundation Inc.;
and Philip Richardson, Attorney, Austin, representing the Austin
Community Scholarship Committee.
(2) The Trustee of the Company's Joint Earnings Profit
Sharing Trust is required to obtain and follow voting direction
from Trust participants when voting the Common Stock held in the
Trust.
SECURITY OWNERSHIP OF MANAGEMENT
Information as to beneficial ownership of the Company's equity
securities by directors, nominees, and executive officers of the
Company as of October 29, 1994, is shown below:
<TABLE>
<CAPTION>
Name of Amount Percent
Title of Class Beneficial Owner Beneficially Owned (1) of Class
<S> <C> <C> <C> <C>
Common Stock John W. Allen (2) 5,298 *
Common Stock James W. Cole (2) (5) 117,797 *
Common Stock William S. Davila (2) 4,990 *
Common Stock David N. Dickson (2) (5) 63,289 *
Common Stock Luella G. Goldberg (2) 4,668 *
Common Stock Don J. Hodapp (2) (3) (5) 204,048 *
Common Stock Joel W. Johnson (2) (4) (5) 182,019 *
Common Stock Geraldine M. Joseph (2) (3) 6,798 *
Common Stock Stanley E. Kerber (2) (3) (5) 119,002 *
Common Stock Richard L. Knowlton (2) (4) 538,346 *
Common Stock Earl B. Olson (2) 328,683 *
Common Stock Robert F. Patterson (2) (3) (5) 153,042 *
Common Stock Gary J. Ray (2) (3) (5) 158,163 *
Common Stock Ray V. Rose (2) 5,483 *
Common Stock Robert R. Waller, M.D. (2) 2,449 *
Common Stock All Directors and Executive (6) 2,960,539 3.79%
Officers as a Group
</TABLE>
(1) Except as otherwise indicated and subject to applicable
community property and similar statutes, the persons listed as
beneficial owners of the shares of the Company's Common Stock have
sole voting and investment power with respect to said shares.
Holdings are rounded to the nearest full share.
(2) The total number of shares of the Company's Common
Stock beneficially owned by the following persons includes the
following number of shares subject to immediately exercisable
options: Mr. Allen - 3,000; Mr. Cole - 105,000; Mr. Davila -
2,000; Mr. Dickson - 50,000; Mrs. Goldberg - 1,000; Mr. Hodapp -
112,000; Mr. Johnson - 170,000; Mrs. Joseph - 3,000; Mr. Kerber -
55,000; Mr. Knowlton - 251,000; Mr. Olson - 3,000; Mr. Patterson -
80,000; Mr. Ray - 112,000; Mr. Rose - 3,000; and Dr. Waller -
2,000.
(3) The total number of shares of the Company's Common
Stock beneficially owned by the following nominees for election as
directors includes the following number of shares of the Company's
Common Stock beneficially owned by members of their respective
households: Mr. Hodapp - 19,769; Mrs. Joseph - 1,000; Mr. Kerber -
30,000; Mr. Ray - 56; and Mr. Patterson - 25,000.
(4) Does not include any shares owned by The Hormel
Foundation, of which Mr. Johnson and Mr. Knowlton are members.
(5) Shares listed as beneficially owned include, where
applicable, shares allocated to participants' accounts under the
Hormel Tax Deferred Investment Plan 401(k)A and the Company's
Founders' Fund Plan, and a pro-rata share of unallocated shares
held in the Company's Joint Earnings Profit Sharing Trust for the
benefit of participants.
(6) As of October 29, 1994, all directors and executive
officers as a group owned beneficially 1,552,000 shares subject to
immediately exercisable options. Shares listed as beneficially
owned include, where applicable, shares allocated to participants'
accounts under the Hormel Tax Deferred Investment Plan 401(k)A and
the Company's Founders' Fund Plan and a pro-rata share of
unallocated shares held in the Company's Joint Earnings Profit
Sharing Trust for the benefit of participants.
* Less than one percent.
EXECUTIVE COMPENSATION
Compensation Committee Report on Executive Compensation
The Compensation Committee (the "Committee") consists exclusively of
nonemployee directors, and is responsible for setting and
administering the policies that govern the compensation of executive
officers of the Company, including the five executive officers named
in this proxy statement. The Committee also administers the Company's
stock option plans.
Philosophy/Objectives
The Committee's objective is to attract and retain the most highly
qualified executive officers in a manner which provides incentives to
create stockholder value. This objective is accomplished by
establishing compensation which is calculated to attract and retain
the best management talent available while at the same time providing
both significant risk and opportunity for reward based on Company
performance.
Executive officer Annual Compensation as related in the Summary
Compensation Table on page 10 consists of salary, formula bonus
determined by Company earnings under the Company's Operator Share
Incentive Compensation Plan and discretionary bonus approved by the
Committee. Long Term Compensation is provided by stock options and
restricted shares which provide longer term compensation opportunities
based on increases in the value of the Company's stock. In its
considerations, except as noted below, the Committee does not assign
quantitative relative weights to different factors or follow
mathematical formulae. Rather, the Committee exercises its discretion
and makes a judgment after considering the factors it deems relevant.
The Committee believes that it has set compensation at appropriate
levels which reflect each executive's contribution to achieving the
Company's goals and in a manner that ties the executive's earning
opportunity to the welfare of the Company's stockholders.
In the Committee's view, it is in the Company's best interest to
offer compensation opportunities which enable the Company to compete
with other American industrial companies for the most effective talent
available. However, it is also the Committee's view that such
opportunities should involve compensation which is significantly "at
risk" to the fortunes of the Company. For that reason, while total
Annual Compensation is targeted to place an executive's total
compensation at the 75th percentile of the compensation reported by a
consultant retained by the Company as described below, the proportion
of formula bonus in the compensation mix will generally increase as
the executive officer's responsibilities and compensation increase. In
the case of the five executive officers named in the Summary
Compensation Table, the "at risk" formula bonus exceeds salary for
each of the reported years.
Executive Officer Annual Compensation
Salary is the weekly cash payment which is assured to the executive
officer as part of the employment relationship. The formula bonus
determined by Company earnings under the Company's Operator Share
Incentive Compensation Plan is the after tax earnings per share
reported by the Company at fiscal year end on a designated number of
shares of the Company's Common Stock ("Operators' Shares"). Operators'
Shares do not constitute any form of equity ownership in the Company,
and are limited to a method for calculating compensation. The level of
salary and number of Operators' Shares is determined annually in the
following manner in the case of each executive officer.
Each executive officer position has been rated based on evaluation
criteria provided by an independent nationally recognized management
compensation firm ("Consultant"). The Consultant has rated the Chief
Executive Officer ("CEO") position and, with input from the CEO, has
rated the major officer positions reporting directly to the CEO,
including all executive officers named in the Summary Compensation
Table. Other executive positions within the Company are rated by a job
evaluation committee currently comprising the CEO, the Company's two
Executive Vice Presidents, and the Company's Vice President of Human
Resources, utilizing the Consultant as a resource.
The ratings of each executive officer position are a measurement of
job content expressed in numerical points, measuring qualitative
attributes of the position using a methodology developed by the
Consultant. The Consultant annually assigns a range of compensation
values to those numerical ratings using Consultant's data base drawn
from surveys of several hundred American companies in a variety of
industries. The Committee has determined that it is appropriate and in
the Company's best interest to set the policy guideline for Company
compensation at the 75th percentile of the range of compensation
provided by the Consultant for a given numerical rating. Once the
level of compensation is established, the appropriate amount is
provided through a combination of salary and Operators' Shares. A
significant percentage of that compensation for all executive officers
is provided by awarding Operators' Shares. For purposes of determining
the number of Operators' Shares to be awarded, Operators' Shares are
valued based on a three year average of Company earnings. The basic
concept underlying Operators' Shares has been used by the Company
since 1932 as a significant component of executive compensation.
Compensation from Operators' Shares exceeded salary for each executive
officer named in the Summary Compensation Table in each of the past
three fiscal years.
In addition to the salary and Operators' Shares described above,
Annual Compensation may include a discretionary cash bonus proposed by
the CEO for a small group of executive officers which the Committee
has the authority to accept or reject, and a bonus provided by the
Committee for the CEO. In the case of selected executive officers
below the CEO responsible for sales and marketing groups, the receipt
of the bonus depends on achieving the pre-determined pre-tax profit
goal for the group reporting to the executive officer. In the case of
other executive officers below the CEO, receipt of the bonus depends
upon the Committee's acceptance of the CEO's recommendation based on
the CEO's assessment of the executive officer's performance. The
Committee has accepted the CEO's recommendation in each of the last
three fiscal years.
Executive Officer Long Term Compensation/Stock Option Program
Acting as the Committee administering the Company's 1991 Key
Employee Stock Option and Award Plan, the Committee reviews
recommendations from the CEO for the grant of options or Restricted
Shares to executive officers (other than the CEO) and other eligible
recommended employees. The Committee's determination of option grants
reflected in the Summary Compensation Table took into consideration
the executive officer's past grants, compensation level, contributions
to the Company during the last completed fiscal year, and potential
for contributions in the future. (No Restricted Shares were awarded
during fiscal year 1994.)
Options are granted at the market price of the Company stock at date
of grant, and provide compensation to the optionee only to the extent
the market price of the stock increases between the date of grant and
the date the option is exercised. Options are intended to provide long
term compensation tied specifically to increases in the price of the
Company's stock.
The total number of options granted in each year, which may vary
from year to year, bears a general relationship to the total number of
options authorized by the Company's stockholders divided by the number
of years in the term of the plan under which the options are awarded.
While options are generally awarded based on the influence an
executive position is considered by the Committee to have on
stockholder value, the number of options awarded may vary up or down
from prior year awards based on the level of an individual executive
officer's contribution to the Company in a particular year, based on
the recommendation of the CEO.
Chief Executive Officer Compensation
The cash compensation of the chief executive officer is established
by the Committee in generally the same way as cash compensation is
determined for other executive officers, and the Committee employs
generally the same criteria for option grants and Restricted Share
awards as apply to other executive officers, taking into consideration
the chief executive officer's responsibility for the total enterprise.
In addition to salary and formula bonus under the Operator Share
Incentive Compensation Plan, as described above, the Committee awarded
Mr. Johnson as CEO a discretionary bonus of $200,000 for 1994. The
bonus was paid because the Company as a whole, and virtually every
operating unit within the Company, exceeded its pre-tax earnings goal
for fiscal year 1994. The amount of the bonus was determined by the
Committee in its sole discretion, taking into consideration the
payment to Mr. Johnson of a $150,000 bonus last year on account of
fiscal year 1993 results.
Deductibility of Compensation Under Internal Revenue Code Section 162
(m)
Section 162(m) of the Internal Revenue Code, adopted in 1993,
imposes a $1 million cap, subject to certain exceptions, on the
deductibility to a company of compensation paid to the five executive
officers named in such company's proxy statement. The Committee has
reviewed the Company's 1991 Key Employee Stock Option and Award Plan
and has concluded that the Plan complies with the transitional rules
under Section 162(m), so that any compensation realized from the
exercise of stock options would not be affected by Section 162(m).
Additionally, cash compensation voluntarily deferred by the executive
officers named in this proxy statement under the Company's Deferred
Compensation Plans is not subject to the Section 162(m) cap until the
year paid. Thus, compensation paid this fiscal year subject to the
Section 162(m) cap is not expected to exceed $1 million for any named
executive officer. Therefore the Company believes it will not be
subject to any Section 162(m) limitations on the deductibility of
compensation paid to the Company's named executive officers for fiscal
year 1994.
The Committee presently intends to take necessary steps within the
time permitted to maintain the qualification of the Company's 1991 Key
Employee Stock Option and Award Plan under Section 162(m), which may
include a future request for stockholder approval for a limitation on
the number of shares for which options may be granted to any one
participant. Additionally, the Committee continues to consider other
steps which might be in the Company's best interest to comply with
Section 162(m), while reserving the right to award future compensation
which would not comply with the Section 162(m) requirements for
nondeductibility if the Committee concluded that this was in the
Company's best interests.
THE COMPENSATION COMMITTEE
Ray V. Rose, Chairman
William S. Davila
Richard L. Knowlton
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and noncash compensation for
each of the last three fiscal years earned by or awarded to the Chief
Executive Officer and the four other most highly compensated executive
officers of the Company:
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation AwardsPayouts
Other
Annual Restricted Securities
Compen- Stock Underlying LTIP All Other
Salary Bonus sation Award(s) Options/ Payouts Compensa-
Name and Principal Position Year ($)(1) ($)(2) ($)(3) ($) SARs (#)(4) ($) tion
($)(5)(6)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Joel W. Johnson 1994 323,100 662,000 - 0 40,000 0 16,474
President and 1993 273,300 558,000 - 0 50,000 0 15,464
Chief Executive Officer 1992 228,700 422,400 - 0 30,000 0 13,050
Don J. Hodapp 1994 227,700 429,200 - 0 22,000 0 11,938
Executive Vice President, and 1993 217,300 356,000 - 0 30,000 0 11,174
Chief Financial Officer 1992 202,900 322,800 - 0 30,000 0 10,600
Gary J. Ray 1994 186,100 383,000 - 0 22,000 0 10,207
Executive Vice President 1993 175,700 315,200 - 0 30,000 0 9,496
1992 150,900 285,600 - 0 30,000 0 8,951
Robert F. Patterson 1994 165,300 352,200 - 0 15,000 0 9,154
Group Vice President 1993 154,900 281,200 - 0 25,000 0 8,471
1992 148,200 248,400 - 0 20,000 0 7,950
Stanley E. Kerber 1994 171,400 319,500 - 0 15,000 0 9,166
Group Vice President 1993 165,300 231,200 - 0 20,000 0 8,704
1992 159,700 248,400 - 0 20,000 0 8,150
</TABLE>
(1) Includes director fee payments of $100 per meeting attended for
each officer named in the table.
(2) Includes payments under the Company's Operator Share Incentive
Compensation Plan as well as annual discretionary bonuses. The
amounts shown in the Table include those amounts voluntarily
deferred by the named individuals under the Company's Deferred
Compensation Plans, which permit participants to voluntarily defer
receipt of all or part of the payments currently due to the
participant under the Operator Share Incentive Compensation Plan.
(3) There was no Other Annual Compensation exceeding the lesser of
$50,000 or 10% of total Annual Compensation in each of the years
shown.
(4) No SARs were awarded in 1992, 1993, or 1994.
(5) The amount shown includes Company Joint Earnings Profit Sharing
contributions which may be authorized by the Board of Directors in
its discretion based on Company profits. The total amount of
Company contributions declared available to all participants by
the Board is allocated in the same proportion as each person's
base weekly wage bears to the total base wage for all eligible
persons. Payments to the executive officers named in the Table are
calculated using the same proportional formula as is used for all
eligible employees. Joint Earnings Profit Sharing contributions
were for Mr. Johnson $15,624 in 1994, $15,314 in 1993, and $12,250
in 1992; for Mr. Hodapp $11,088 in 1994, $10,374 in 1993, and
$9,800 in 1992; for Mr. Ray $9,072 in 1994, $8,398 in 1993, and
$7,840 in 1992; for Mr. Patterson $8,064 in 1994, $7,410 in 1993,
and $6,860 in 1992; and for Mr. Kerber $8,316 in 1994, $7,904 in
1993, and $7,350 in 1992. "All Other Compensation" also includes
Company matching payments of up to $200.00 under the Company's
Founders' Fund Plan and up to $650.00 under the Hormel Tax
Deferred Investment Plan A. Both of these matching payments, in
the same amount, are available to all other eligible employees.
Company matching payments were for Mr. Johnson $200 and $650 in
1994, $150 and $0 in 1993, and $150 and $650 in 1992; for Mr.
Hodapp $200 and $650 in 1994, $150 and $650 in 1993, and $150 and
$650 in 1992; for Mr. Ray $200 and $650 in 1994, $150 and $650 in
1993, and $150 and $650 in 1992; for Mr. Patterson $200 and $650
in 1994, $150 and $650 in 1993, and $150 and $650 in 1992; and for
Mr. Kerber $200 and $650 in 1994, $150 and $650 in 1993, and $150
and $650 in 1992. For Mr. Ray and Mr. Patterson "All Other
Compensation" includes Company contributions to a disability
insurance program which is available to all other eligible
employees with benefits proportional to Annual Compensation. Mr.
Ray received contributions of $285 in 1994, $298 in 1993, and $311
in 1992, and Mr. Patterson received $240 in 1994, $261 in 1993,
and $290 in 1992.
(6) None of the named executive officers held any restricted stock at
year end.
STOCK OPTIONS TABLE
The following tables summarize option grants and exercises during
1994 to or by the Chief Executive Officer or the executive officers
named in the Summary Compensation Table above, and the values of
options granted during 1994 and held by such persons at the end of
1994.
<TABLE>
<CAPTION>
Option/SAR Grants in Last Fiscal Year
Potential Realizable Value
at Assumed Annual
Individual Grants Rates of Stock Price Prior
Appreciation for Columns
Option Term Annualized (4)
Number % of Total
of Options/SARs
Securities Granted to
Underlying Employees Exercise
Options/SARs in or Base
Granted Fiscal Price Expiration
Name (#)(1) Year ($/Sh) Date 0% ($)(2) 5% ($)(3) 10% ($)(3) 0% ($) 5% ($) 10%($)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Joel W. Johnson 40,000 10.93% $20.50 1/25/04 $0 $515,694 $1,306,869 $0 $51,569 $130,687
Don J. Hodapp 22,000 6.01% $20.50 1/25/04 $0 $283,631 $718,778 $0 $28,363 $71,878
Gary J. Ray 22,000 6.01% $20.50 1/25/04 $0 $283,631 $718,778 $0 $28,363 $71,878
Robert F. Patterson 15,000 4.10% $20.50 1/25/04 $0 $193,385 $490,076 $0 $19,339 $49,008
Stanley E. Kerber 15,000 4.10% $20.50 1/25/04 $0 $193,385 $490,076 $0 $19,339 $49,008
</TABLE>
Total potential realizable value for the five officers who received
stock option grants is $1,469,726 and $3,724,577 respectively, under
the 5% and 10% stock price growth assumptions. Assuming 5% and 10%
stock price growth over a period of 10 years commencing January 25,
1994, the increase in total stockholder value from stock price
appreciation alone for the average number of shares outstanding during
fiscal year 1994 would be $988,206,113 and $2,504,308,314
respectively.
(1) All options granted during the period were granted at the market
value on the date of grant. No SARs were granted during the fiscal
year ended October 29, 1994.
(2) The SEC requires the columns which show 5% and 10% annual stock
price appreciation over the option terms. The column which shows
0% appreciation is not required by the SEC.
(3) These amounts represent certain assumed rates of appreciation
only. Actual gains, if any, on stock option exercises are
dependent on the future performance of the Company and overall
market conditions. There can be no assurance that the amounts
reflected in this table will be achieved.
(4) Computed by dividing potential realizable value at the assumed
annual rates of stock price appreciation by the term of the
option. This column is not required by the SEC.
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARs at Options at Fiscal
Fiscal Year End (#)(5) Year End ($)(3)(4)(5)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized ($)(2)(4)) Unexercisable
Unexercisable
<S> <C> <C> <C> <C> <C>
Joel W. Johnson 0 0 170,000/0 $538,750/0
Don J. Hodapp 30,000 $218,125 112,000/0 $411,500/0
Gary J. Ray 30,000 $238,125 112,000/0 $411,500/0
Robert F. Patterson 30,000 $189,375 80,000/0 $280,000/0
Stanley E. Kerber 0 $0 55,000/0 $148,125/0
</TABLE>
(1) There are no outstanding SARs.
(2) Value realized represents the aggregate difference between the
market value on the date of exercise and the applicable exercise
price.
(3) Unrealized value of in-the-money options at year end represents
the aggregate difference between the market value at October 29,
1994 and the applicable exercise price.
(4) The differences between market value and exercise price in the
case of both value realized and unrealized value accumulate over
what may be, in many cases, several years.
(5) There are no unexercisable options.
PENSION PLAN
The Company maintains noncontributory defined benefit pension plans
covering substantially all employees. Pension benefits for salaried
employees are based upon the employee's highest five consecutive years
of compensation (as described below) of the last 10 years of service
and the employee's length of service. The Company also maintains a
supplemental executive retirement plan that provides pension benefits
calculated under the qualified defined benefit pension plan formula
that exceed the annual benefit limitation for defined benefit plans
qualifying under the Internal Revenue Code. The following tabulation
shows the estimated aggregate annual pension payable to an employee
under the qualified defined pension plan and the supplemental
executive retirement plan upon normal retirement at the end of fiscal
year 1994 at age 65 under various assumptions as to final average
annual compensation and years of service, and on the assumptions that
the retirement plans will continue in effect during such time without
change and that the employee will select a single life annuity option.
The pension benefits shown below reflect an integration with Social
Security benefits.
<TABLE>
<CAPTION>
Average Annual
Compensation Years of Service
15 20 25 30 35 40 45
<C> <C> <C> <C> <C> <C> <C> <C>
$ 250,000 $ 57,638 $ 76,850 $ 96,063 $ 115,276 $ 134,488 $ 153,701 $ 172,913
$ 500,000 $ 117,638 $ 156,850 $ 196,063 $ 235,276 $ 274,488 $ 313,701 $ 352,913
$ 750,000 $ 177,638 $ 236,850 $ 296,063 $ 355,276 $ 414,488 $ 473,701 $ 532,913
$ 1,000,000 $ 237,638 $ 316,850 $ 396,063 $ 475,276 $ 554,488 $ 633,701 $ 712,913
$ 1,250,000 $ 297,638 $ 396,850 $ 496,063 $ 595,276 $ 694,488 $ 793,701 $ 892,913
$ 1,500,000 $ 357,638 $ 476,850 $ 596,063 $ 715,276 $ 834,488 $ 953,701 $ 1,072,913
$ 1,750,000 $ 417,638 $ 556,850 $ 696,063 $ 835,276 $ 974,488 $ 1,113,701 $ 1,252,913
$ 2,000,000 $ 477,638 $ 636,850 $ 796,063 $ 955,276 $ 1,114,488 $ 1,273,701 $ 1,432,913
</TABLE>
The compensation for the purpose of determining the pension benefits
consists of Annual Compensation and Restricted Stock Awards. The years
of credited service for individuals listed in the Summary Compensation
Table are: 3 years for Mr. Johnson; 28 years for Mr. Hodapp; 26 years
for Mr. Ray; 39 years for Mr. Kerber; and 30 years for Mr. Patterson.
COMPARATIVE STOCK PERFORMANCE
The following graph compares the cumulative total shareholder return
on the Company's Common Stock during the five fiscal years preceding
October 29, 1994, with the Standard & Poor's 500 Stock Index and the
Standard & Poor's Food Group Index (assuming the investment of $100 in
each vehicle on October 28, 1989, and the reinvestment of all
dividends during such period).
Comparison of Five Year Cumulative Total Return
Among Hormel Foods Corporation, S & P 500 Index, and S & P Food Group
Index
OTHER INFORMATION RELATING TO DIRECTORS, NOMINEES,
AND EXECUTIVE OFFICERS
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Persons serving as members of the Compensation Committee during
fiscal year 1994 were William S. Davila, Ray V. Rose, and R. L.
Knowlton. Mr. Knowlton was an officer of the Company during the fiscal
year prior to his election to the Committee. Dubuque Foods, Inc., a
wholly-owned subsidiary of the Company, paid $563,231 in usual and
ordinary brokerage commissions during the Company's fiscal year 1994
to Firebird Foods, Phoenix, Arizona, in which Mr. Robert Knowlton,
brother of Mr. R. L. Knowlton, holds majority ownership.
SECTION 16 COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, certain officers, and any persons holding more
than 10% of the Company's Common Stock to report their initial
ownership of the Company's Common Stock and any subsequent changes in
that ownership to the Securities and Exchange Commission and the New
York Stock Exchange. Specific due dates for these reports have been
established, and the Company is required to disclose in this proxy
statement any failure to file by those dates during 1994. To the best
of the Company's knowledge, all of these filing requirements were
satisfied. In making these disclosures, the Company has relied on the
representations of its directors and officers and copies of the
reports that they have filed with the Commission.
PROPOSED AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION TO
CHANGE THE COMPANY'S NAME TO
HORMEL FOODS CORPORATION
The Board has unanimously approved, and recommends that the
stockholders vote to approve and adopt, the following resolution
amending the Company's Certificate of Incorporation to change the
corporate name to Hormel Foods Corporation:
"RESOLVED, that Article First of the Certificate of
Incorporation, as amended, of Geo. A. Hormel & Company shall
be amended in its entirety to read as follows:
ARTICLE FIRST. The name of this Corporation is HORMEL
FOODS CORPORATION."
If approved by stockholders, the appropriate officers of the Company
will make the necessary filings in the State of Delaware to accomplish
the amendment. The name change will not affect in any way the validity
of currently outstanding stock certificates, the capital structure of
the Company or the listing of any of its securities on any national
security exchange. Stockholders will not be required to surrender or
exchange any share certificates currently held by them.
George A. Hormel, the Company's founder, began the business more
than a century ago in Austin, Minnesota, with a small packing plant
and adjoining retail provisions market doing business under the name
"Geo. A. Hormel & Co.". In 1901, the business was incorporated under
the laws of Minnesota under that name. The business was reincorporated
in Delaware as Geo. A. Hormel & Company in 1928.
In 1992, Company management undertook a study of how the Company,
its name, and its brand logo, are perceived by the consumers of its
products. Based on the findings of that study, since early in 1993 the
Company has done business as Hormel Foods Corporation. That trade name
has been used on the Company's products, in advertising, and in the
Company's Annual Report for fiscal year 1993. However, the name
appearing on the Company's Certificate of Incorporation continued to
be Geo. A. Hormel & Company, which is the name appearing on the
Company's proxy statement and other SEC filings, on the Company's New
York Stock Exchange registration, and on the Company's stock
certificates.
In view of the public acceptance of the trade name Hormel Foods
Corporation, the Board of Directors believes that it is in the best
interests of the Company to amend its Certificate of Incorporation to
adopt Hormel Foods Corporation as the Company's official name. Hormel
Foods Corporation retains the proud tradition of the name of the
Company's founder, while presenting to the consumer the image of the
modern food company which the Company has evolved into over the last
century.
The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock entitled to vote there- on is required for
approval of the amendment to the Company's Certificate of
Incorporation recited above. The Board of Directors recommends a vote
FOR such approval as being in the best interests of the Company and
its stockholders.
APPROVAL OF APPOINTMENT OF AUDITORS
Subject to ratification by the stockholders, the Board of Directors
has appointed Ernst & Young, independent public accountants, to audit
the financial statements of the Company and its consolidated
subsidiaries for the fiscal year which will end October 28, 1995.
Ernst & Young are the present public auditors and have served as
public auditors for the Company since 1931. Representatives of the
firm are expected to be present at the meeting and will be afforded an
opportunity to make a statement, if they desire to do so and be
available to respond to appropriate questions. Management is not aware
of any direct or indirect financial interest or any other connections
Ernst & Young may have with the Company or its subsidiaries except the
usual professional status of an independent auditor.
Audit services rendered by Ernst & Young for the fiscal year ended
October 29, 1994, included the examination of the financial statements
of the Company and its subsidiaries, review of certain documents filed
by the Company with the Securities and Exchange Commission, and
examination of the financial statements of various employee benefit
plans.
The affirmative vote of the majority of the shares of Common Stock
represented at the meeting shall constitute ratification. The Board of
Directors recommends a vote FOR the proposal to approve the
appointment of Ernst & Young.
OTHER MATTERS
The management of your Company does not know of any matters to be
presented at the meeting other than those mentioned above. However, if
any other matters come before the meeting, it is intended that the
holders of the proxies will vote thereon in their discretion.
By order of the Board of Directors
T. J. LEAKE
Secretary
December 30, 1994
GEO. A. HORMEL & COMPANY
1 Hormel Place
Austin, MN 55912
This proxy is solicited on behalf of the Board of Directors.
The undersigned hereby appoints J. W. Johnson, D. J. Hodapp,
G. J. Ray or a majority thereof present, or if only
one be present, then that one, with full power of substitution, and
hereby authorizes them to represent and to vote as designated below
all the shares of Common Stock of Geo. A. Hormel & Company held of
record by the undersigned on December 5, 1994, at the Annual Meeting
of Stockholders to be held on January 31, 1995, or any adjournment
thereof.
1. ELECTION OF DIRECTORS
FOR all nominees listed below
(except as marked to the contrary below)
WITHHOLD AUTHORITY
(to vote for all nominees)
John W. Allen, J. W. Cole, William S. Davila, D. N. Dickson, Luella G.
Goldberg, D. J. Hodapp, J. W. Johnson, Geraldine M. Joseph, S. E.
Kerber,
R. L. Knowlton, Earl B. Olson, R. F. Patterson, G. J. Ray, Ray V.
Rose, Robert R. Waller, M.D.
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name on the space provided below.)
2. PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION TO
CHANGE THE COMPANY'S NAME FROM
GEO. A. HORMEL & COMPANY TO HORMEL FOODS CORPORATION.
FOR AGAINST ABSTAIN
3. PROPOSAL TO APPROVE THE APPOINTMENT OF ERNST & YOUNG AS THE
INDEPENDENT AUDITORS OF THE CORPORATION.
FOR AGAINST ABSTAIN
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH
OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING.
YES NO
SHARES____________________
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, the
proxy will be voted FOR Proposals 1, 2 and 3.
Please sign exactly as name appears below. When shares are held by
joint tenants, both should sign. When signing as attorney,
executor, administrator,
trustee or guardian,
please give full title as
such. If a corpora-
tion, please sign in full
corporate name by
President or other
authorized officer. If a
partnership, please sign in
partnership
name by authorized person.
Dated January________, 1995
________________________________
Signature
________________________________
Signature if held jointly
