DOSKOCIL COMPANIES INC, 10-K/A, 1994-07-22

DOSKOCIL COMPANIES INC
10-K/A, 1994-07-22
SAUSAGES & OTHER PREPARED MEAT PRODUCTS

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K/A
Amendment No. 2

__X__ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended January 1, 1994.
_____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to __________
Commission file number 0-7803

D O S K O C I L C O M P A N I E S I N C O R P O R A T E D
(Exact name of registrant as specified in its charter)

_________Delaware_____________ ____13-2535513_____
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

2601 Northwest Expressway, Oklahoma City, Oklahoma __73112__
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (405)879-5500

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: None

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

Name of Each Exchange
Title of Each Class on Which Registered
____________________________ _____________________
Common Stock, par value $.01 NASDAQ/NMS
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES__X__ NO_____

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (Section 229.405 of this
chapter) is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. [X]

As of March 28, 1994, the aggregate market value of the
voting stock held by non-affiliates of the registrant was
$61,691,247.

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check
mark whether the registrant has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court.
YES__X__ NO_____

On March 28, 1994, the number of shares outstanding of the
registrant's common stock, $.01 par value, was 7,940,165 shares.

DOCUMENTS INCORPORATED BY REFERENCE: None.
PAGE
<PAGE>

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

General

The financial results of the Company's operations in
recent years have been significantly affected by certain events
and accounting changes. The following is a general discussion of
the impact of these factors on the Company's financial
statements.

Retiree Medical Benefit Expenses. The Company adopted
Statement of Financial Accounting Standards No. 106 ("FAS 106"),
"Employers' Accounting for Postemployment Benefits Other Than
Pensions," as of January 3, 1993. This statement requires the
accrual of the cost of providing postemployment benefits other
than pensions in the period in which the employee renders the
service necessary to qualify for those benefits. The Company
elected to immediately recognize the accumulated liability,
measured as of January 3, 1993, and recorded a one-time, noncash
charge of $34.4 million, a deferred tax benefit of $31.0 million
and a liability of $65.4 million for Postemployment Medical
Benefits. The obligation as of January 3, 1993 represents the
discounted present value of accumulated retiree benefits, other
than pensions, attributed to employees' service rendered prior to
that date. The noncash charges associated with the accrual
required by FAS 106 for fiscal 1993 were approximately $1.1
million more than the cost that would have been recognized under
the method of accounting previously used, pay-as-you-go.
Expenses for fiscal 1992 and the three months ended December 28,
1991 recorded on the pay-as-you-go basis were $4.4 million and
$1.0 million, respectively.

Sales of Slaughtering Operations. The sale of the
Company's last remaining slaughtering and fresh pork operation in
Logansport, Indiana in December 1993 was the final step in the
Company's plan to improve operating results by withdrawing from
that low-margin and volatile business. The Company is now
concentrating on higher margin processed meat operations.

The Company announced the Logansport closing in late
1992 and recorded a charge to operations of $32 million to cover
the operating losses, severance and benefits and other noncash
charges until the plant was closed. Net cash costs of operating
this facility in 1993 were $15.8 million, which were charged
against this reserve.

The Company sold the Marshall, Missouri slaughtering
facility in 1992. Slaughtering operations had been suspended
since 1988 at that location.

The selected financial data for fiscal 1992, the three
months ended December 28, 1991 and the nine months ended
September 28, 1991 includes in continuing operations the sales
and operating income (loss) of slaughtering and fresh pork
operations as follows (no such amounts were included in fiscal
1993 operations)(in millions):

Fiscal Year Three Months Nine Months
Ended Ended Ended
January 2, December 28, September 28,
1993 1991 1991
___________ ____________ _____________

Sales . . . . . . . . . . $138.8 $37.8 $118.4
Operating income (loss) . (3.7) 0.2 (5.2)

Rationalization of Meat Processing Operations. The
Company's ongoing program to improve the efficiency of its meat
processing operations has involved two specific initiatives: (i)
the consolidation of ham processing operations and (ii) the
closing of inefficient and/or under-utilized facilities.
Beginning in 1989, the Company took a series of steps to lower
ham processing costs and gain greater control over its ham
production. These steps included: (i) terminating an unfavorable
co-pack agreement in 1990, (ii) acquiring a ham production
facility in Concordia, Missouri and (iii) consolidating ham
production in this more cost-effective facility in 1991. The
acquisition of this facility, in combination with the termination
of the co-pack arrangements, has resulted in substantial cost
savings to the Company notwithstanding significant start-up costs
incurred in 1991.

The Company also has taken significant steps to improve
operating efficiencies by closing inefficient and redundant
facilities. In April of 1990 and May of 1991, respectively, the
Company closed its pizza toppings facility in Sedalia, Missouri
and its dry sausage facility in Clarinda, Iowa and moved their
production to more efficient Doskocil facilities. In 1991, the
Company incurred five months of fixed operating expenses and
closing expenses related to these facilities totalling
approximately $500,000, which were charged against operating
income.

In September of 1992, the Company closed its sausage
production facility located in Oklahoma City, Oklahoma.
Management believes this production capacity has been replaced by
a combination of lower costing internal and external sources.

A newly constructed frank facility in Forrest City,
Arkansas began production in late 1993. This lower operating
cost facility was built to replace production from other
facilities, provide the capability to add new products and to
allow for increased manufacturing capacity.

As a result of these and other measures, management
believes that the Company has increased the capacity utilization
of its meat processing facilities and that this increase in
capacity utilization and the decrease in fixed expenses has had,
and will continue to have, a substantial positive impact on the
Company's profitability and competitiveness.

Sale of Certain Other Businesses. In December 1993,
the Company contracted for the sale of its processed food
equipment manufacturing division and provided a reserve for
losses of $0.5 million. The business was sold in January 1994.
The Company's edible fats and oil refinery was accounted for as
Assets Held for Sale until it was sold in June 1992. The
Company's metal fabrication subsidiary was reported as a
discontinued operation until its sale in December 1992. The
results from operations for the businesses sold in 1992 were
excluded from sales and operating income during all periods
presented.

Income Taxes. After considering utilization
restrictions, the Company believes it has approximately $133.0
million of net operating loss carryforwards ("NOLs") which will
be available as follows: $77.9 million in 1994, $13.3 million in
years 1995 through 1998, and $1.9 million in 1999. NOLs not
utilized in the first year that they are available may be carried
over and utilized in subsequent years, subject to their
expiration provisions. As a result, management anticipates that
the Company's cash income tax liability for the next four to five
years will not be material.

The amount of the Company's NOLs and the limitation of
their availability are subject to significant uncertainties. In
addition, a future change in stock ownership could result in the
Company's NOLs being substantially reduced or eliminated. The
Company is not aware of any proposed legislation for changes in
the tax laws which could impact the ability of the Company to
utilize the NOLs as described above. However, there can be no
assurance that legislation will not be adopted which would limit
the Company's ability to utilize its NOLs in future periods.

In accordance with Fresh Start Reporting, the Company
will not reflect the realized income tax benefit of these NOLs in
its statement of operations. Instead, such benefit is reflected
as a reduction in the "Reorganization Value in Excess of Amounts
Allocable to Identifiable Assets" ("Excess Value"), thus reducing
future intangible amortization expense. Due to the nondeductible
amortization expenses the Company will, in future years, have an
income tax rate for book purposes that is above statutory levels.

In 1993, the Company adopted the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes". This new standard is based on a liability
approach rather than an income statement approach and requires
deferred tax liabilities and assets to be recognized based on the
difference between the tax basis of assets and liabilities and
their financial reporting amounts measured by using presently
enacted income tax laws and rates. Implementing the new standard
resulted in the Company recording a deferred tax benefit of
approximately $31.0 million for deductible temporary differences
consisting primarily of future retiree medical benefit
obligations and pension obligations. The Company provided a
valuation allowance of approximately $51.7 million for the
remaining deductible temporary differences and NOLs. In
determining the valuation allowance, the Company considered prior
years' taxable income before utilization of NOLs and projected
taxable income during the next four years. A similar
determination of the valuation allowance was performed at the end
of the year.

The projected taxable income before NOL's is expected
to be significantly higher than the financial pre-tax income due
to the non-deductible amortization of the intangible assets and
the fact that the tax basis of the assets was not adjusted as a
result of the reorganization. Accordingly, the Company expects to
realize the net deferred tax asset from future operations, which
contemplates annual increases in sales consistent with industry
projections, and historical operating margins (after adjusting
historical results of operations for the sale of the Company's
slaughtering operations in 1993) but does not anticipate any
material asset sales or other unusual transactions. As previously
indicated, due to the non-deductible amortization of intangible
assets, the annual effective tax rate in future years is expected
to be significantly in excess of the statutory income tax rate.

Reorganization and Fresh Start Reporting. In
connection with the Reorganization, the Company adopted Fresh
Start Reporting at the end of the third fiscal quarter of 1991.
As a result of this and other accounting policies adopted after
confirmation of the Plan of Reorganization, historical financial
data for periods ending after September 28, 1991 are of a
different reporting entity and are not prepared on a basis
consistent with prior periods. See Note 6 of the Notes to the
Consolidated Financial Statements.

Depreciation and Amortization Expense. Under Fresh
Start Reporting, a "Reorganization Value," which is designed to
approximate the fair value of the Company as an ongoing business,
is determined and allocated to specific identifiable assets based
on their estimated fair values. Any excess is identified as
Excess Value, which is an intangible asset, the amortization of
which is a noncash expense. The Reorganization Value was
determined by management and its advisors to be $321.2 million at
September 28, 1991 after considering several factors and by
reliance upon various valuation methods, including discounted
cash flows, price/earnings ratios and other applicable ratios.
By employing this method, the Company's property, plant and
equipment was determined to have a "fair value" of approximately
$87.2 million, or approximately $26.1 million less than the
historical carrying value.

Following the allocation of Reorganization Value to the
Company's tangible assets, approximately $124.6 million remained
to be allocated to intangible assets. Of this amount,
approximately $25.0 million was allocated to trademarks and trade
names leaving Excess Value in the amount of approximately $99.6
million. These intangible assets are being amortized on a
straight-line basis over a period of 20 years. As discussed
above, future amortization expense is expected to decline as a
result of the anticipated realization of benefits from NOLs.

Results of Operations

Comparability of Periods. Because application of Fresh
Start Reporting establishes a new basis of accounting, the
following discussions, when making comparisons to results of
operations, are based on the approach of combining amounts for
the three months ended December 28, 1991 (post-confirmation) and
the nine months ended September 28, 1991 (pre-confirmation) into
combined 1991 results (the "1991 Combined Period"). Management
believes that such approach will provide useful information and
facilitate discussions of annual increases and decreases in
amounts. However, comparisons of annual operating results for
the fiscal year ended January 2, 1993 with those for the 1991
Combined Period should only be made with the understanding that
the 1991 Combined Period operating results include both the three
month (post-confirmation) and the nine month (pre-confirmation)
amounts.

The following summary of selected financial data has
been prepared based on the historical financial statements of the
Company.
<TABLE>
<CAPTION>
1991 Combined Period
______________________________________________
Fiscal Year Fiscal Year 1991 Combined Three Months Nine Months
Ended Ended Period Ended Ended Ended
January 1, January 2, December 28, December 28, September 28,
1994 <F1> 1993 <F1> 1991 1991 <F1> 1991 <F2>
___________ ___________ _____________ _____________ _____________

<S> <C> <C> <C> <C> <C>
__________________________________________________
Income Statement Data (in thousands): | |
Net sales $648,207 $770,687 | $820,220 $208,691 $611,529 |
======== ======== | ======== ======== ======== |
Gross profit $110,677 $109,338 | $110,730 $ 32,744 $ 77,986 |
Selling, general | |
and administrative 87,497 86,135 | 87,418 22,455 64,963 |
Amortization of intangible assets 6,183 6,307 | 5,399 1,436 3,963 |
Provision for plant closings 500 32,000 | - - - |
________ ________ | ________ ________ ________ |
| |
Operating income (loss) $ 16,497 $(15,104) | $ 17,913 $ 8,853 $ 9,060 |
======== ======== | ======== ======== ======== |
| |
Interest and financing costs $(13,849) $(11,485) | $(20,389) $ (3,795) $(16,594) |
Reorganization items - - | (40,952) - (40,952) |
Provision for income taxes (419) (357) | (1,075) (1,075) - |
Income (loss) before extraordinary | |
item and cumulative effect of | |
accounting change 2,407 (26,834) | (44,481) 3,943 (48,424) |
Extraordinary gain- | |
forgiveness of debt - - | 113,794 - 113,794 |
Cumulative effect on prior years | |
of change in accounting for | |
postretirement benefits other | |
than pensions (34,426) - | - - - |
Net income (loss) (32,019) (26,834) | 69,313 3,943 65,370 |
| |
Cash Flows and Capital Expenditures Data: | |
Depreciation $ 9,166 $ 11,479 | $ 13,551 $ 3,047 $ 10,504 |
Amortization of intangible | |
assets <F3> 6,183 6,307 | 5,399 1,436 3,963 |
EBITDA <F4> 32,024 2,794 | 36,885 13,296 23,589 |
Capital expenditures 19,690 6,604 | 7,009 1,193 5,816 |
Net cash provided (used) by | |
operating activities 18,138 1,088 | 14,596 14,599 (3) |
|_________________________________________________|
_____________________
<FN>
<F1> Post-Confirmation
<F2> Pre-Confirmation
<F3> See footnote (6) to the table under Item 6
<F4> See footnote (7) to the table under Item 6
</TABLE>

The Fiscal Year Ended January 1, 1994 ("Fiscal 1993")
Compared to The Fiscal Year Ended January 2, 1993 ("Fiscal
1992"). Net sales of processed product for Fiscal 1993 totaled
$648.2 million compared to $631.9 million for Fiscal 1992, an
increase of $16.3 million, or 2.6%. This increase is due
primarily to increased volumes partially offset by a temporary
decrease in sales price per pound in certain product lines.
Total sales for Fiscal 1992 of $770.7 million included $138.8
million of sales from fresh pork operations.

Gross profit for Fiscal 1993 was $110.7 million, an
increase of $1.4 million, or 1.3%, from gross profit of $109.3
million for Fiscal 1992. This increase resulted primarily from
cost savings programs and improvements in product mix partially
offset by decreases in margin per pound due to competitive
pricing pressure in certain product lines and increased noncash
expense resulting from the previously described adoption of the
accounting standard relating to Postemployment Medical Benefits.

Selling, general and administrative expense for Fiscal
1993 of $87.5 million was greater than Fiscal 1992 of $86.1
million by $1.4 million, or 1.6%. Selling expense increased
approximately $2.0 million as a result of additional promotion
expense and hiring and training cost incurred for additional
staff to support growth in the Company's foodservice and deli
divisions. The increase in selling expense was partially offset
by a $0.6 million net decrease in general and administrative
expense. A $2.0 million decrease in general and administrative
expense, which resulted from cost reduction programs and
decreased incentive cost, was partially offset by approximately
$1.5 million of additional cost for the settlement of certain
employment agreements.

In December 1993 the Company entered into a contract
for the sale of its processed food equipment manufacturing
division and recorded a provision for closing of $0.5 million.
Fiscal 1992 included a charge to operations of $32.0 million for
the closing of the Logansport facility as previously described.

Interest and financing costs for Fiscal 1993 increased
$2.4 million, or 20.6%, over Fiscal 1992 even though the average
debt outstanding decreased. Fixed interest rates on the
Company's new long term financing are higher than the variable
rates paid in Fiscal 1992. The financing, however, is less
restrictive and better supports the Company's growth objectives.

Fiscal 1992 Compared to the 1991 Combined Period.
Fiscal 1992 net sales totaled $770.7 million, a decrease of $49.5
million, or 6.0%, compared to net sales of $820.2 million for the
1991 Combined Period. The decrease is attributable to: (i)
pricing pressures in the fresh pork market, which was highly
competitive in the fourth quarter of 1992 and (ii) a continued
decrease in raw material costs and the resulting decrease in
selling prices during the first nine months of 1992. Although
these factors resulted in a decrease in net sales dollars, the
Company experienced an increase during Fiscal 1992 of 4.6% and
2.3% in processed meat sales volume and total sales volume,
respectively.

Gross profit for Fiscal 1992 was $109.3 million, a
decrease of $1.4 million, or 1.3%, from gross profit of $110.7
million for the 1991 Combined Period. This decrease resulted
from the following items, which are more fully described below:
(i) increased operating expense resulting from the application of
Fresh Start Reporting of $1.3 million, (ii) expense of unusual
events which management has estimated to be between $3.3 million
and $4.3 million, partially offset by (iii) improved product
profit realization.

Fresh Start Reporting - Fiscal 1992 gross profit was
negatively impacted by approximately $4.4 million for retiree
medical programs, which were included in cost of sales, when
compared to the 1991 Combined Period, which included only $1.0
million of such expense. Partially offsetting this $3.4 million
negative impact was a $2.1 million reduction of depreciation
expense resulting from a decrease in the carrying value of the
Company's property, plant and equipment described in the General
section above.

Unusual Events - Gross profit for Fiscal 1992 was
adversely impacted by a labor strike during May of 1992 at four
of the Company's meat processing facilities. Management believes
that the strike adversely impacted gross profit by $5.0 million
to $6.0 million and operating income by $4.0 million to $5.0
million. Management does not believe the strike resulted in a
permanent loss of customer base or that the strike had a material
adverse impact on the Company's liquidity or capital resources.

Partially offsetting the negative impact of the labor
strike was an increase in gross profit of $1.7 million for the
receipt of proceeds from insurance settlements in excess of the
value of damaged inventory and related expenses, representing the
gross profit that otherwise would have been realized on such
inventory. These proceeds were received as a consequence of
fires that caused temporary business interruptions at two of the
Company's facilities during the first quarter of Fiscal 1992.

Improved Product Profit Realization - Gross profit was
negatively impacted during the fourth quarter of 1992 by
approximately $1.1 million when compared to the fourth quarter of
1991 for fresh pork products as a result of highly competitive
pricing in the fresh pork market. Partially offsetting this and
the decreases associated with Fresh Start Reporting and the
unusual events was an improvement in gross profit of processed
products. This improvement resulted primarily from: (i)
decreases in production costs associated with the replacement in
September of 1992 of the inefficient and high-cost production
facility in Oklahoma City, Oklahoma with lower-cost internal and
external production capacity and (ii) an improved ability during
Fiscal 1992 to match changes in raw material costs with changes
in product sales prices.

For Fiscal 1992, selling, general and administrative
expenses totaled $86.1 million, a decrease of $1.3 million, or
1.5%, from $87.4 million for the 1991 Combined Period. This
decrease was primarily attributable to a temporary decrease in
selling and marketing expenses during the labor strike in May of
1992 and decreases in brokerage and marketing expenses resulting
from changes in product mix and improvements in the cost
effectiveness of marketing programs partially offset by increased
administrative costs.

During the fourth quarter of Fiscal 1992, the Company
recorded a provision for plant closing in the amount of $32.0
million in connection with the elimination in 1993 of the
Company's last remaining slaughtering operation, located in
Logansport, Indiana, and the restructuring of the adjoining
processing operations. The closing of the Logansport fresh pork
operation was the final step in the Company's plan to improve
operating results by withdrawing from the low margin slaughtering
and fresh pork business and concentrating on higher margin
processed meat operations. There was no comparable item recorded
during the 1991 Combined Period.

Interest expense for Fiscal 1992 was $11.5 million, a
decrease of $8.9 million, or 43.6%, compared to interest expense
of $20.4 million for the 1991 Combined Period. The decrease in
interest expense resulted primarily from a decline in interest
rates in Fiscal 1992. Average borrowing levels also declined
during Fiscal 1992 compared to the 1991 Combined Period.
Additionally, interest expense declined as a result of
amortization of the discount amount relating to the previously
discussed Retiree Medical Benefits. The "pay-as-you-go" Retiree
Medical Benefits expense was recorded as cost of sales and
general and administrative expense during Fiscal 1992 and the
fourth quarter of 1991 (the post-confirmation periods) and did
not impact interest expense. However, in the pre-confirmation
period of the 1991 Combined Period, the imputed interest
attributable to the Retiree Medical Benefits obligation totaled
approximately $3.3 million.

As a result of the Chapter 11 filing, the Company, on
March 5, 1990, discontinued accruing interest expense on
uncollateralized pre-petition debt obligations. Although such
discontinuance does not impact comparability of results between
Fiscal 1992 and the 1991 Combined Period, consolidated
contractual interest and financing costs, as a consequence,
exceeded reported interest expense by $13.0 million for the 1991
Combined Period. Pursuant to the Plan of Reorganization, the
obligations relating to these uncollateralized debts were
extinguished, and no associated principal or interest expense was
payable after October 31, 1991.

In the 1991 Combined Period, the Company recorded pre-
confirmation items which included: (i) reorganization charges of
$41.0 million, including $30.3 million in charges to realign
facilities and to effect the provisions of the Plan of
Reorganization, and (ii) an extraordinary gain on forgiveness of
debt of $113.8 million pursuant to the confirmation of the Plan
of Reorganization on September 26, 1991. Because of the impact
of such reorganization and the adoption of Fresh Start Reporting,
the financial statements for Fiscal 1992 are not comparable to
those for the 1991 Combined Period.

The provision for income taxes for Fiscal 1992 totaled
$0.4 million, a decrease of $0.7 million, or 63.6%, from the
income tax provision of $1.1 million for the 1991 Combined
Period. For Fiscal 1992, although the Company reflected a net
loss, the Company incurred a federal income tax obligation
resulting from the alternative minimum tax whereas for the prior
year, when the Company reflected net income, the provision was a
result of taxes on income during the period, which were in excess
of the alternative minimum tax. For the 1991 Combined Period, no
cash liability for federal income taxes was due because, for
income tax purposes, the taxable income generated in the fourth
quarter of 1991 was offset by operating losses incurred in the
first three quarters of the 1991 Combined Period while the
Company was still in Chapter 11. For financial reporting
purposes, the 1991 Combined Period income tax provision of $1.1
million was recorded as a reduction of Excess Value rather than
as an extraordinary benefit. State income taxes for both periods
were comparable in amount.

Cash Flows and Capital Expenditures

Fiscal 1993. Operating activities provided net cash of
$18.1 million in Fiscal 1993 compared to $1.1 million in Fiscal
1992. Investments in property, plant and equipment totaled $19.7
million during Fiscal 1993 compared to $6.6 million for fiscal
1992. These expenditures included construction of the new
facility at Forrest City, Arkansas, construction of additional
drying room at the Company's South Hutchinson, Kansas production
facility to support growth in the foodservice division and $7.0
million of modifications and replacements at existing facilities.
The Company sold certain assets which had been classified as
Assets Held for Sale resulting in net proceeds of $14.9 million
offset by $16.9 million of net cash used by Assets Held for Sale.

The Company reduced its net borrowings by $26.8 million
during Fiscal 1993. The Company issued $110.0 million in 9 3/4%
Senior Subordinated Redeemable Notes due in the year 2000 (the
"Senior Subordinated Notes") and entered into a new revolving
working capital facility (the "1993 Credit Agreement"). Proceeds
were used to retire the previous bank credit agreement.

On March 22, 1993, Joseph Littlejohn & Levy Fund, L.P.
("JLL") purchased from the Company two million newly-issued
shares of Common Stock at $15.00 per share pursuant to a stock
purchase agreement. The Company used the net proceeds from the
sale, $26.7 million, to repay indebtedness. As a result of this
purchase, JLL owned approximately 25% of the Common Stock.
Pursuant to the JLL stock purchase agreement, JLL may increase
its holdings to 33% by purchasing additional shares in
open-market or privately negotiated transactions or from the
Company from time to time. As a result of subsequent open market
purchases, at January 1, 1994, JLL owned approximately 27.4% of
the Common Stock. JLL holds the Common Stock subject to certain
restrictions including, among other things, the ability of JLL to
resell or otherwise transfer securities of the Company or to
purchase additional securities of the Company. This agreement
also grants certain demand and piggyback registration rights to
JLL.

Fiscal 1992. Operating activities provided net cash of
approximately $1.1 million in Fiscal 1992 compared to net cash
provided of approximately $14.6 million for the 1991 Combined
Period. Significant uses of cash in Fiscal 1992 resulted from
decreases in accounts payable and accrued liabilities of
approximately $20.0 million primarily as a result of payments of
Chapter 11 related obligations, which were established upon
confirmation of the Plan of Reorganization during the fourth
quarter of 1991. These uses of cash were offset by noncash items
of $17.8 million resulting from depreciation and amortization and
$32.0 million resulting from the provision for plant closing
discussed above.

Investments in property, plant and equipment totaled
approximately $6.6 million during Fiscal 1992 compared to
approximately $7.0 million during the 1991 Combined Period.
These purchases were primarily for modifications to existing
facilities and replacement of existing equipment. During Fiscal
1992, the Company sold certain assets which had been classified
as Assets Held for Sale upon confirmation of the Plan of
Reorganization. Such sales resulted in net proceeds of $10.3
million.

Net borrowings during Fiscal 1992 under the Company's
various credit facilities decreased approximately $4.5 million.
Payments under the Amended and Restated Credit and Security
Agreement entered into in 1991 (the "1991 Credit Agreement")
reduced the balance outstanding under the 1991 Credit Agreement
term loan facility to $73.1 million at January 2, 1993 compared
to $79.6 million at December 28, 1991, while net borrowings
increased the balance of the 1991 Credit Agreement revolving
credit facility to $64.0 million at January 2, 1993 from $55.0
million at December 28, 1991. Payments on other mortgage debt
and capitalized lease obligations totaled approximately $7.0
million during Fiscal 1992.

1991 Combined Period. Operating activities provided
net cash of approximately $14.6 million for the 1991 Combined
Period. In addition to results of operations, sources of cash
provided during the 1991 Combined Period primarily resulted from
decreases in accounts receivable and inventory levels. Payments
on pre-petition liabilities, such as employee benefits and
certain accounts payable and accrued liabilities, during the 1991
Combined Period resulted in a use of cash of approximately $9.9
million.

During the 1991 Combined Period, investments in
property, plant and equipment totaled approximately $7.0 million,
primarily for modifications to existing facilities and
replacement of existing equipment. Dispositions of property,
plant and equipment were approximately $2.5 million. Net
borrowings under the Company's various credit facilities during
the 1991 Combined Period decreased by approximately $6.9 million.

Financial Condition and Liquidity

In April 1993 the Company completed the issuance of
$110.0 million of Senior Subordinated Notes. Additionally, and
concurrently the Company consummated the 1993 Credit Agreement.
The proceeds of the Senior Subordinated Notes, the 1993 Credit
Agreement and the issuance of shares of Common Stock to JLL were
used to repay the previously outstanding credit agreement.
Repayment of this debt eliminated the numerous restrictions under
that agreement. The amount available for borrowing under the
1993 Credit Agreement is based on the borrowing base set out in
the facility. The balance borrowed at January 1, 1994 was $8.0
million and $32.0 million was available for borrowing at that
date.

Management believes that cash flow from operations
combined with the borrowing capacity available under the 1993
Credit Agreement will be sufficient to meet the Company's
operating and debt service cash requirements for the foreseeable
future. Management anticipates that the purchase price for and
operating capital needs of any acquisitions that may be
consummated in the future, including the Frozen Specialty Foods
acquisition, could be financed through borrowings under the 1993
Credit Agreement, the issuance of additional secured or unsecured
debt, equity investment and from the Company's cash flow from
operations.

Historically, the Company's business has been seasonal.
Such seasonality results in significantly different operating
capital needs during the year to finance varying levels of inventory
and accounts receivable. Such requirements are largest when sales
are highest which usually occurs around a holiday period.
Additional requirements also occur prior to such seasonal sales
peaks to finance a build up of inventory and for inventory hedging
programs more fully described below.

The Company's primary raw materials are fresh and frozen
pork, poultry and beef. Severe price swings in such raw materials,
and the resultant impact on the prices the Company charges for its
products, at times had, and may in the future have, material
adverse effects on the demand for the Company's products and its
profits. The Company utilizes several techniques for reducing the
risk of future raw materials price increases. These techniques
include purchasing and freezing raw materials during seasonally low
periods of the year and periodically entering into futures contracts.
Such techniques are generally employed prior to an expected
seasonal price increase to hedge the cost of raw materials for both
firm and forecasted sales commitments that will occur during a
seasonal sales peak. Historically, such techniques have been used
to offset firm sales commitments and a portion of anticipated
sales commitments during a seasonal sales peak.

Such futures contracts described above are accounted for
as hedges. Accordingly, resulting gains or losses are deferred and
recognized as part of the product cost. The Company's fiscal year
end is typically a seasonal low point in hedging activities and
deferred losses for Fiscal 1993, Fiscal 1992 and the 1991 Combined
Period were each less than $0.1 million.

On March 17, 1994 the Company entered into a stock
purchase agreement with IMC regarding the IMFC Acquisition
pursuant to which the Company agreed to purchase all of the
issued and outstanding capital stock of IMFC for approximately
$135 million, subject to certain conditions and customary
purchase price adjustments. The Company has received a
commitment from Chemical Bank, subject to completion of
documentation and other requirements, to provide a $186 million
senior secured credit facility for this transaction and to
refinance the existing credit facility. Frozen Specialty Foods,
with estimated revenues for the fiscal year ended February 26,
1994 of approximately $185 million, is a processor and marketer
of prepared frozen food products primarily for the foodservice
and consumer markets. Completion of the transaction is expected
in the second quarter of fiscal 1994.

Impact of Inflation

The impact of inflation on the Company's operations is
primarily a function of beef and pork commodity prices. These
prices are subject to many forces including those of the
marketplace and inflation. The Company does not believe that
inflation played a major role in either the cost of raw materials
or labor, or the selling price of its products during Fiscal
1993, Fiscal 1992 or the 1991 Combined Period. Like many food
processors, the Company periodically adjusts selling prices of
its products, subject to competitive constraints and costs of raw
materials.

Part IV

Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K

(a) List of Documents filed as part of this Report:

1. Financial Statements:
Page
Consolidated Balance Sheet at
January 1, 1994 and January 2, 1993 . . . . F-1

Consolidated Statement of Operations
For the Years Ended January 1, 1994,
January 2, 1993, the Three Months Ended
December 28, 1991 (all Post-Confirmation)
and the Nine Months Ended September 28,
1991 (Pre-Confirmation) . . . . . . . . . . F-2

Consolidated Statement of Stockholders' Equity
For the Years Ended January 1, 1994,
January 2, 1993, the Three Months
Ended December 28, 1991 (all Post-
Confirmation) and the Nine Months Ended
September 28, 1991 (Pre-Confirmation) . . . F-4

Consolidated Statement of Cash Flows
For the Years Ended January 1, 1994,
January 2, 1993, the Three Months
Ended December 28, 1991 (all Post-
Confirmation) and the Nine Months Ended
September 28, 1991(Pre-Confirmation). . . . F-5

Notes to Consolidated Financial Statements . . . F-7

Report of Independent Accountants. . . . . . . .F-25

Quarterly Results of Operations (Unaudited). . .F-26

2. Financial Statement Schedules:

Schedule V - Property, Plant and Equipment . .F-27

Schedule VI - Accumulated Depreciation,
Depletion and Amortization of
Property, Plant and Equipment . .F-28

Schedule IX - Short-Term Borrowings . . . . . .F-29

Schedule X - Supplementary Income Statement
Information . . . . . . . . . . .F-30

Schedules other than those listed above are omitted
for the reason that they are not required or are not
applicable, or the required information is shown in
the financial statements or notes thereto.

3. Exhibits (numbered in accordance with Item
601 of Regulation S-K):

Exhibit Number Description

3.1 Amended and Restated Certificate of
Incorporation of Doskocil Companies
Incorporated ("Doskocil")

3.2 Amended and Restated Bylaws of Doskocil

4.1 Specimen certificate for Doskocil Common
Stock, par value $.01 per share

4.2 Credit Agreement among Doskocil, the Several
Lenders from Time to Time Parties Thereto
and Chemical Bank, as Agent dated as of
April 28, 1993

4.3 Form of Doskocil 9 3/4 % Senior
Subordinated Redeemable Notes due 2000

4.4 Indenture between Doskocil and First
Fidelity Bank, National Association, New
York, as Trustee

4.5 Warrant Agreement dated as of October 31,
1991, between Doskocil and the signatory
banks thereto

4.6 Amended and Restated Certificate of
Incorporation of Doskocil (see Exhibit 3.1
above)

4.7 Amended and Restated Bylaws of Doskocil (see
Exhibit 3.2 above)

4.8 Doskocil Companies Incorporated Retirement
and Profit Sharing Plan

4.9* Doskocil Companies Incorporated 1992 Stock
Incentive Plan, as amended

4.10 Lease by and between the City of South
Hutchinson, Kansas and Doskocil dated
August 1, 1985

4.11 Guaranty Agreement between Doskocil and The
Fourth National Bank and Trust Company,
Wichita, dated August 1, 1985

4.12 Agreement for Waste Water Treatment Service
between Stoppenbach, Inc. and The City of
Jefferson, Wisconsin dated November 1985

4.13 Agreement (for waste water treatment)
between the City of Logansport, Indiana, and
Wilson & Co., Inc., dated June 26, 1967

10.1 Credit Agreement among Doskocil, the Several
Lenders from Time to Time Parties Thereto
and Chemical Bank, as Agent dated as of
April 28, 1993 (see Exhibit 4.2 above)

10.2 Form of Doskocil 9 3/4% Senior Subordinated
Redeemable Notes due 2000 (see Exhibit 4.3
above)

10.3 Indenture between Doskocil and First
Fidelity Bank, National Association, New
York, as Trustee (see Exhibit 4.4 above)

10.4 Amended and Restated Credit and Security
Agreement dated as of October 31, 1991,
among Doskocil and its subsidiaries,
Chemical Bank and the signatory banks
thereto

10.5 First Amendment to the Amended and Restated
Credit Agreement dated as of October 31,
1991

10.6 Second Amendment to Amended and Restated
Credit and Security Agreement dated on or
about February 12, 1992

10.7 Third Amendment to Amended and Restated
Credit and Security Agreement dated June 11,
1992

10.8 Fourth Amendment to Amended and Restated
Credit and Security Agreement dated
September 25, 1992

10.9 Fifth Amendment to Amended and Restated
Credit and Security Agreement dated
January 22, 1993

10.10 Sixth Amendment, Waiver and Consent to
Amended and Restated Credit and Security
Agreement dated March 5, 1993

10.11 Warrant Agreement dated as of October 31,
1991, between Doskocil and the signatory
banks thereto (see Exhibit 4.5 above)

10.12 Waiver Agreement dated March 5, 1993, by and
among Doskocil, Chemical Bank and the banks
signatory to the Warrant Agreement

10.13 Doskocil Companies Incorporated Retirement
and Profit Sharing Plan (see Exhibit 4.8
above)

10.14* Doskocil Companies Incorporated Annual
Incentive Plan

10.15* Doskocil Companies Incorporated 1992 Stock
Incentive Plan, as amended (see Exhibit 4.9
above)

10.16 Wilson Foods Corporation Retirement and
Profit Sharing Plan for Salaried Employees
of Wilson Foods Corporation effective
January 1, 1985, restated December 31, 1987

10.17* Employment Agreement dated November 1, 1991,
between Doskocil and John Hanes

10.18* Separation Agreement and Release dated
December 31, 1993 between Doskocil and John
Hanes

10.19* Employment Agreement dated November 1, 1991,
between Doskocil and Theodore A. Myers

10.20* Settlement Agreement dated July 6, 1993
between Doskocil and Theodore A. Myers

10.22 Lease by and between the City of South
Hutchinson, Kansas and Doskocil dated
August 1, 1985 (see Exhibit 4.10 above)

10.23 Lease dated November 4, 1991, between
Doskocil and American General Life and
Accident Insurance Company

10.24 Lease Agreement dated April 4, 1992, between
Doskocil and Millard Refrigerated Services-
Atlanta, as amended

10.25 Agreement between Wilson Foods Corporation
and the City of Cherokee, Iowa, dated
February 28, 1964, and First Amendment
thereto dated October 24, 1978; Second
Amendment thereto dated February 24, 1981;
and Third Amendment thereto dated August 18,
1983, covering water and sewage services

10.26 Agreement dated December 26, 1989, by and
between the City of Cherokee, Iowa and
Wilson Foods Corporation, covering water
rates

10.28 Stock Purchase Agreement by and between
Doskocil and JLL dated February 16, 1993

10.29 Waiver Agreement by and between Doskocil and
Chemical Bank dated March 5, 1993

10.30 Form of Indemnification Agreement between
Doskocil and its non-employee Directors

10.31 Agreement dated as of March 22, 1993, by and
between Joseph Littlejohn and Levy Fund,
L.P., The Airlie Group, L.P. and Doskocil

10.32 Stockholders Agreement dated as of March 22,
1993, by and between the Airlie Group, L.P.
and Doskocil

10.33* Separation Pay Plan, dated March 31, 1993

10.34 Consulting Agreement between Doskocil
Companies Incorporated and Richard N. Bauch,
dated January 18, 1993

10.35 Master Equipment Lease between Doskocil and
Cargill Leasing Corporation dated September
1, 1993

10.36 Stock Purchase Agreement between
International Multifoods Corporation and
Doskocil Companies Incorporated dated as of
March 17, 1994

11.1 Calculation of Earnings Per Share

20.1** Annual Report on Form 11-K with Respect to
Doskocil Employee Investment Plan

21.1 Subsidiaries of Doskocil

22.1** Proxy Statement for Annual Meeting of
Stockholders Scheduled to be Held June 2,
1994

23.1 Consent of Independent Accountants

_______________________
* Management contracts and compensatory plans or arrangements
** To be filed by amendment.

(b) Reports on Form 8-K.

None
<PAGE>
<TABLE>
DOSKOCIL COMPANIES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Dollar amounts in thousands, except par value)

<CAPTION>
January 1, January 2,
1994 1993
__________ __________
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents (Note 10) $ 6,203 $ 9,312
Receivables 36,283 34,763
Inventories (Note 2) 39,984 38,930
Other current assets 2,101 3,726
________ ________
Total current assets 84,571 86,731
Property, plant and equipment - net of
accumulated depreciation and amortization
of $20,046 in 1993 and $10,381 in 1992
(Note 3) 77,678 81,294
Trademarks and tradenames, net of accumulated
amortization of $2,837 in 1993 and
$1,587 in 1992 22,163 23,413
Deferred charges and other assets (Note 7) 44,907 7,045
Reorganization value in excess of amounts
allocable to identifiable assets, net
of accumulated amortization of $11,090 in
1993 and $6,157 in 1992 (Note 1) 87,562 92,495
________ ________

$316,881 $290,978
======== ========
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Current maturities of long-term debt $ 2,330 $ 10,170
Accounts payable 10,357 7,657
Accrued liabilities (Note 4) 40,732 54,476
________ ________
Total current liabilities 53,419 72,303

Long-term debt (Note 5) 127,906 137,305
Other long-term liabilities (Note 8) 79,987 19,731
Commitments and contingencies (Note 9)
Stockholders' equity (Note 6):
Common stock, $.01 par value, 20,000,000
shares authorized, 7,918,343 and
5,887,500 shares issued and
outstanding, respectively 79 59
Capital in excess of par value 112,315 85,267
Retained earnings (deficit) (54,910) (22,891)
Minimum pension liability adjustment (1,575) -
________ ________
55,909 62,435
Unearned compensation (340) (796)
________ ________
Total stockholders' equity 55,569 61,639
________ ________
$316,881 $290,978
======== ========
<FN>
The accompanying notes are an integral part of the consolidated
financial statements.
</TABLE>
<PAGE>
<TABLE>
DOSKOCIL COMPANIES INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data)

<TABLE>
DOSKOCIL COMPANIES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data)

The accompanying notes are an integral part of the consolidated
financial statements.
</TABLE>
<PAGE>
<TABLE>
DOSKOCIL COMPANIES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(In thousands)

<CAPTION>
Minimum
Capital in Retained Pension Unearned
__Common Stock__ Excess of Earnings Treasury Liability Compen-
Shares Amount Par Value (Deficit) Stock Adjustment sation
______ _______ __________ _________ ________ __________ ________
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 29, 1990 6,092 $ 2,437 $100,763 $(63,575) $(8,591) $ - $ -
Net income for period through
September 28, 1991 (pre-
confirmation) - - - 65,370 - - -
Effects of reorganization
(Note 6):
"Fresh Start" adjustments - - (91,852) - - - -
Elimination of accumulated
deficit - - 1,795 (1,795) - - -
Cancellation of predecessor
shares (6,092) (2,437) (6,154) - 8,591 - -
Issuance of new shares 5,790 58 79,522 - - - -
______ _______ ________ ________ _______ _______ _______
Balance, September 28, 1991 5,790 58 84,074 - - - -
Net income for period from
September 29, 1991 (post-
confirmation) - - - 3,943 - - -
______ _______ ________ ________ _______ _______ _______
Balance, December 28, 1991 5,790 58 84,074 3,943 - - -
Net Loss - - - (26,834) - - -
Issuance of shares under
Stock Incentive Plan (Note 6) 98 1 1,193 - - - (1,193)
Amortization - - - - - - 397
______ _______ ________ ________ _______ _______ _______
Balance, January 2, 1993 5,888 59 85,267 (22,891) - - (796)
Net Loss - - - (32,019) - - -
Issuance of new shares (Note 6) 2,000 20 26,702 - - - -
Issuance of shares under
Stock Incentive Plan (Note 6) 30 - 346 - - - -
Minimum pension liability
adjustment - - - - - (1,575) -
Amortization - - - - - - 456
______ _______ ________ ________ _______ _______ _______
Balance, January 1, 1994 7,918 $ 79 $112,315 $(54,910) $ - $(1,575) $ (340)
====== ======= ======== ======== ======= ======= =======
<FN>
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
Doskocil Companies Incorporated and Subsidiaries
Consolidated Statement of Cash Flows
Increase (Decrease) in Cash and Cash Equivalents
(Dollar amounts in thousands)

(Continued)
</TABLE>
<PAGE>
<TABLE>
Doskocil Companies Incorporated and Subsidiaries
Consolidated Statement of Cash Flows
Increase (Decrease) in Cash and Cash Equivalents
(Dollar amounts in thousands)

Pre-
Post-Confirmation Confirmation
______________________________________ ____________
Fiscal Year Fiscal Year Three Months Nine Months
Ended Ended Ended Ended
Jan. 1, Jan. 2, Dec. 28, Sept. 28,
1994 1993 1991 1991
___________ ___________ ____________ ____________
<S> <C> <C> <C> <C>
Cash flows from investing |
activities: |
Purchase of property, plant |
and equipment (19,690) (6,604) (1,193) | (5,816)
Proceeds from sale of |
property, plant and equipment 14,900 10,271 179 | 2,453
Decrease in deferred |
charges and other assets 517 - - | -
Net cash used by Assets Held |
for Sale (16,914) (1,554) - | -
________ _______ _______ | _______
Net cash provided (used) by |
investing activities (21,187) 2,113 (1,014) | (3,363)
________ _______ _______ | _______
Cash flows from financing |
activities: |
Proceeds from debt obligations 214,220 94,282 31,000 | 80,800
Payments on capital lease and |
debt obligations (235,270) (98,816) (38,384) | (80,348)
Payment of debt issue costs (5,732) - - | -
Issuance of common stock 26,722 - - | -
Pre-petition debt obligations - - - | (4,986)
________ _______ _______ | _______
Net cash provided (used) by |
financing activities (60) (4,534) (7,384) | (4,534)
________ _______ _______ | _______
Increase (decrease) in cash |
and cash equivalents (3,109) (1,333) 6,201 | (7,900)
Cash and cash equivalents, |
beginning of period 9,312 10,645 4,444 | 12,344
________ _______ _______ | _______
Cash and cash equivalents, |
end of period $ 6,203 $ 9,312 $10,645 | $ 4,444
======== ======= ======= =======
<FN>
The accompanying notes are an integral part of the consolidated
financial statements.
</TABLE>
<PAGE>
DOSKOCIL COMPANIES INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 Description of Business and Summary of Significant
Accounting Policies

a. Description of Business:
The Company specializes in formulating, processing,
marketing and distributing specialty precooked
value-added meat, meat toppings, pepperoni, dry
sausage, cooked and value-added smoked boneless
hams, bacon, various delicatessen specialty meats
and other food products to the foodservice,
delicatessen and retail markets. In addition,
management of the Company believes that the Company
is a leading supplier of beef and pork toppings and
pepperoni to the pizza foodservice market. The
Company supplies its products to grocery and
independent delicatessens, and numerous restaurant,
food processor and institutional customers.

The Company's annual reporting period ends on the
Saturday nearest December 31. Accordingly, the
annual reporting period ended January 1, 1994
contained 52 weeks, the annual reporting period
ended January 2, 1993 contained 53 weeks, the
reporting period for the three months ended
December 28, 1991 contained 13 weeks and the
reporting period for the nine months ended
September 28, 1991 contained 39 weeks.

b. Principles of Consolidation:
The consolidated financial statements include the
accounts of Doskocil Companies Incorporated
("Doskocil") and all of its subsidiaries. All
significant intercompany accounts and transactions
have been eliminated.

c. Inventories:
Inventories are valued at the lower of cost
(first-in, first-out) or market. The Company
periodically enters into livestock futures
contracts as deemed appropriate to reduce the risk
of future price increases. These futures contracts
are accounted for as hedges. Accordingly,
resulting gains or losses are deferred and
recognized as part of the product cost and included
in cash flows from operating activities in the
Consolidated Statement of Cash Flows.

d. Property, Plant and Equipment:
Property, plant and equipment are stated at cost if
acquired after September 28, 1991 (See Note 6).

Depreciation and amortization are provided using
the straight-line method over either the estimated
useful lives of the related assets (3 to 40 years)
or, for capital leases, the terms of the related
leases. Betterments, renewals and extraordinary
repairs that extend the life of the asset are
capitalized; other repairs and maintenance are
expensed. Upon sale, retirement or other
disposition, the cost and related accumulated
depreciation are removed from the respective
accounts, and any resulting gain or loss is
recognized in income.

Interest incurred to finance significant
construction projects is capitalized as part of the
cost of such projects. During fiscal 1993,
interest of approximately $273,000 was capitalized.
During fiscal 1992 and fiscal 1991, no interest was
capitalized.

e. Intangible Assets:
Trademarks and tradenames are amortized on the
straight-line method over 20 years.

f. Deferred Charges:
Deferred loan costs associated with various debt
instruments issued in 1993 are being amortized over
the terms of the related debt using the straight
line or interest method as appropriate. At January
1, 1994, $5.1 million remained to be amortized over
future periods. Amortized expense for these loans
included in interest expense for fiscal 1993 was
approximately $627,000.

g. Reorganization Value in Excess of Amounts Allocable to
Identifiable Assets:
Based on the allocation of reorganization value in
conformity with the procedures specified by SOP
90-7, the portion of the reorganization value which
cannot be attributed to specific tangible or
identifiable intangible assets of the reorganized
Company has been reported as "Reorganization Value
in Excess of Amounts Allocable to Identifiable
Assets" ("Reorganization Value") and is amortized
using the straight-line method over 20 years.

The Company continually reevaluates the propriety
of the carrying amount of the Reorganization Value
and other intangibles as well as the amortization
period to determine whether current events and
circumstances warrant adjustments to the carrying
value and/or revised estimates of useful lives.
At this time, the Company believes that no
significant impairment of the Reorganization Value
and other intangibles has occurred and that no
reduction of the estimated useful lives is warranted.

h. Earnings (Loss) Per Common Share:
Primary and fully diluted earnings (loss) per share
are computed by dividing net income (loss) by the
weighted average number of common and common
equivalent shares outstanding during each period.
Options, warrants and convertible subordinated
debentures which have a dilutive effect are
considered in the per share computations.
Management believes that, because of the effects of
the reorganization described in Note 6, the
earnings (loss) per common share amounts do not
provide meaningful comparisons for periods prior to
the date of reorganization.

i. Presentation:
The statements of operations, stockholders' equity
and cash flows for the fiscal years ended January
1, 1994 and January 2, 1993 and the three months
ended December 28, 1991 are those of a new
reporting entity and have been prepared on a basis
not comparable to prior periods (See Note 6).

j. Reclassifications:
Certain prior year balances have been reclassified
to conform to the current year's presentation.

Note 2 Inventories

Inventories at January 1, 1994 and January 2, 1993 are
summarized as follows (in thousands):

__1993_ __1992_

Raw materials and supplies $ 8,176 $ 7,586
Work in process 6,254 6,796
Finished goods 25,554 24,548
_______ _______
$39,984 $38,930
======= =======

Note 3 Property, Plant and Equipment

Property, plant and equipment at January 1, 1994 and January
2, 1993 is summarized as follows (in thousands):
__1993__ _1992__

Land $ 630 $ 690
Buildings and improvements 33,172 30,702
Machinery and equipment 49,134 41,301
Construction in progress 11,924 1,118
________ _______
94,860 73,811
Less accumulated depreciation and
amortization 20,046 10,381
________ _______
74,814 63,430
Assets held for sale, net 2,864 17,864
________ _______
$ 77,678 $81,294
======== =======

Assets held for sale represents facilities that have been
determined to be excess property and have been closed. In
December 1993 the Company sold its Logansport, Indiana facility.
In December 1992, the Company announced the closing of this
facility and recorded a $32.0 million provision as its estimate
of the related loss on sale of assets, costs of employee
severance compensation and benefits and results of operations
during the holding period. No gain or loss resulted in
connection with this sale.

In January 1994, the Company sold all the assets of its
processed food equipment manufacturing division at South
Hutchinson, Kansas. A provision for loss was made in 1993 for
$500,000 in connection with the decision to sell the unit.

Note 4 Accrued Liabilities

Accrued liabilities at January 1, 1994 and January 2, 1993
are summarized as follows (in thousands):
__1993_ __1992_

Interest $ 5,634 $ 126
Salaries, wages and payroll taxes 5,549 7,241
Employee medical benefits 7,299 3,423
Workers' compensation benefits 4,249 8,043
Post employment benefits 2,209 2,169
Marketing expenses 2,588 2,476
Provision for facility restructuring and
holding costs 6,552 18,016
Reorganization expenses 1,852 7,244
Other 4,800 5,738
_______ _______
$40,732 $54,476
======= =======

Note 5 Long-term Debt

Long-term debt, more fully described below, at January 1,
1994 and January 2, 1993 consisted of the following (in
thousands):

__1993__ __1992__

Notes payable to banks $ 8,000 $137,133
Industrial revenue bonds and mortgage notes 6,077 4,010
9 3/4% Senior Subordinated Redeemable Notes
due 2000, net of discount 109,627 -
Capital lease obligations 6,532 6,332
________ ________
130,236 147,475
Less current maturities 2,330 10,170
________ ________
$127,906 $137,305
======== ========

Based on the borrowing rates currently available to the
Company for bank borrowings, industrial revenue bonds and
mortgage notes, with similar terms and average maturities, the
Company believes that the carrying amount of these long term
debts approximates face value. The fair value of the 9 3/4%
Senior Subordinated Redeemable Notes due 2000 (the "Senior
Subordinated Notes") based on the quoted market price
approximates the carrying amount of $109.6 million.

The aggregate amounts of all long-term obligations which
become due during each of the next five fiscal years, excluding
obligations under capitalized leases, are as follows (in
millions): $0.8 in 1994, $1.1 in 1995, $0.8 in 1996, $0.9 in 1997
and $8.9 in 1998.

On April 28, 1993, the Company consummated a new $40.0
million secured revolving working capital facility (the "1993
Credit Agreement") provided by Chemical Bank as managing agent.
See "Notes Payable to Banks" below. Additionally and
concurrently, the Company completed the issuance of $110.0
million of the Senior Subordinated Notes. See "Senior
Subordinated Notes" below. The proceeds from these transactions
were used to repay all amounts then outstanding under the Amended
and Restated Credit and Security Agreement with Chemical Bank
entered into in 1991 (the "1991 Credit Agreement"). Retirement
of the 1991 Credit Agreement eliminated all of the Company's
restrictions under that secured credit facility.

Notes Payable to Banks

The 1993 Credit Agreement makes available a revolving credit
loan facility in the aggregate principal amount of up to $40.0
million and ranks senior in right of payment to the Senior
Subordinated Notes. The 1993 Credit Agreement includes a $5.0
million subfacility for standby and trade letters of credit. The
1993 Credit Agreement is collateralized by a first priority
security interest in all of the accounts receivable and inventory
of the Company. Borrowings under the 1993 Credit Agreement bear
interest at an annual rate equal to, at the Company's option,
either (i) Chemical Bank's Base Rate (as defined in the 1993
Credit Agreement) plus 1 1/2% or (ii) the Eurodollar Rate (as
defined in the 1993 Credit Agreement) plus 2 1/2%. Interest on
the borrowings under the 1993 Credit Agreement is payable
periodically in arrears, and the 1993 Credit Agreement is due and
payable in full no later than April 28, 1998. Borrowings under
this agreement total $8.0 million at January 1, 1994 at an
interest rate of 7.5%.

In 1991, concurrent with consummation of the 1991 Credit
Agreement, the Company entered into an interest rate swap
agreement with a notional amount of $35 million at January 1,
1994 ($40 million at January 2, 1993) to reduce the impact of
changes in interest rates on its floating rate notes payable to
banks. The termination date for this agreement is April 1, 1997.
This agreement, which effectively caps interest rates at 7.85%,
involves the exchange of floating rate for fixed rate interest
payment obligations. The net effect of this transaction is
included in interest expense.

The 1993 Credit Agreement and the Senior Subordinated Notes
contain certain restrictive covenants and conditions among which
are limitations on further indebtedness, restrictions on
dispositions and acquisitions of assets, limitations on dividends
and compliance with certain financial covenants, including but
not limited to minimum net worth and interest expense coverage.

Senior Subordinated Notes

The Senior Subordinated Notes mature on July 15, 2000, and
interest is payable on January 15 and July 15 of each year. The
Senior Subordinated Notes are redeemable at the option of the
Company, in whole or in part, at any time on or after July 15,
1998. If the Senior Subordinated Notes are redeemed during the
12-month period beginning July 15, 1998, the redemption price
(expressed as a percentage of principal amount) will be 103.0%,
and if they are redeemed during the 12-month period beginning
July 15, 1999, the redemption price will be 101.5%. The Senior
Subordinated Notes are unsecured and subordinated to all existing
and future senior indebtedness of the Company, including
borrowings under the 1993 Credit Agreement. The balance at
January 1, 1994, is net of unamortized bond discount of $0.4
million.

Industrial Revenue Bonds and Mortgage Notes

In July 1993, the Company entered into an agreement with the
Arkansas Development Finance Authority to borrow $4.0 million
using industrial revenue bonds. The interest rate is 6%.
Payments of approximately $58,000, principal and interest, are
due monthly starting August 1993 through July 2000. In addition,
the Company entered into a note payable of approximately $1.8
million collateralized by a mortgage with the City of Forrest
City, Arkansas. The interest rate on the note is 7%. Interest
only for the first year is due in July 1994 and quarterly
payments of principal and interest beginning in September 1994
are due through September 2000.

At January 1, 1994, a total of $2.2 million of the
outstanding debt remained in an escrow account from the Arkansas
Development Finance Authority and the City of Forrest City in
connection with construction of the production facility at that
site. This is included in "Deferred Charges and Other Assets" on
the balance sheet.

Other industrial revenue bonds require annual principal
payments of approximately $0.3 million on August 1, 1994 and
1995. Interest at the rate of 7.31% is due semi-annually on
February 1 and August 1.

All mortgage notes outstanding at January 2, 1993, were paid
in 1993 in connection with the sale of the Logansport facility
(See Note 3).

Leases

The Company leases certain facilities, equipment and
vehicles under agreements which are classified as capital leases.
The building leases have original terms ranging from 20 to 25
years and have renewal options for varying periods ranging from
three years to 60 years. Leased capital assets included in
property, plant and equipment at January 1, 1994 and January 2,
1993 are as follows (in thousands):

__1993_ _1992_

Buildings $ 2,666 $2,666
Machinery and equipment 6,669 5,374
_______ ______
9,335 8,040
Accumulated amortization 2,385 1,022
_______ ______
$ 6,950 $7,018
======= ======

Future minimum payments, by year and in the aggregate, under
noncancellable capital leases and operating leases with initial
or remaining terms of one year or more consist of the following
at January 1, 1994 (in thousands):

Capital Operating
Leases Leases
_______ _________

1994 $1,990 $ 2,573
1995 1,930 2,227
1996 1,816 2,149
1997 988 2,156
1998 293 2,154
Future years 921 4,501
______ _______
Total minimum lease payments 7,938 $15,760
Amounts representing interest 1,406 =======
______
Present value of net minimum
payments 6,532
Current portion 1,485
______
$5,047
======

Noncash investing and financing activities which are not
reflected in the statement of cash flows include capital lease
transactions totaling $1.6 million, $2.9 million, none, and $.5
million for the years ended January 1, 1994 and January 2, 1993,
the three months ended December 28, 1991 and the nine months
ended September 28, 1991, respectively.

The Company's rental expense for operating leases was (in
millions) $4.0, $3.0, $1.0 and $3.0 for the fiscal years ended
January 1, 1994 and January 2, 1993, the three months ended
December 28, 1991 and the nine months ended September 28, 1991.

Note 6 Common Stock

On March 22, 1993, the investment firm of Joseph Littlejohn
& Levy Fund, L.P. ("JLL") purchased from the Company two million
newly-issued shares of common stock at $15.00 per share. The
Company used the net proceeds from the sale to repay indebtedness
under the 1991 Credit Agreement. As a result of this purchase,
JLL owned approximately 25% of the Company's outstanding common
stock. Pursuant to the JLL stock purchase agreement, JLL may
increase its holdings to 33% by purchasing additional shares in
open-market or privately negotiated transactions or from the
Company from time to time. As a result of subsequent open market
purchases, at January 1, 1994, JLL owned approximately 27.4% of
the Common Stock. JLL holds the Company's common stock subject
to certain restrictions. The pro forma loss per share for the
year ended January 1, 1994, assuming the JLL agreement was signed
as of the beginning of fiscal 1993, is $4.08.

At the Company's annual meeting of shareholders held on June
10, 1993, the Company's shareholders approved a proposal to amend
the Company's Amended and Restated Certificate of Incorporation
to authorize four million shares of preferred stock. At the same
meeting, the Company's shareholders approved a proposal to
increase the aggregate number of shares of common stock available
under the Company's 1992 Stock Incentive Plan from 510,000 to
810,000. On February 5, 1993, the Company filed an amendment to
the Certificate of Incorporation increasing its number of
authorized shares of common stock to 20,000,000.

Plan of Reorganization

On September 26, 1991, the Bankruptcy Court confirmed the
Third Amended Joint Plan of Reorganization for Doskocil Companies
Incorporated and Chapter 11 Affiliates, as Modified (the "Plan of
Reorganization"), and the Company emerged from Chapter 11 on
October 31, 1991 (the "Effective Date"). For accounting
purposes, the Plan of Reorganization was deemed to be effective
as of September 28, 1991, the end of the Company's third quarter.

In conjunction with the emergence from Chapter 11 bankruptcy
proceedings, Doskocil and its direct and indirect subsidiaries
(collectively, the "Company") implemented Fresh Start Reporting
as set forth in Statement of Position 90-7, "Financial Reporting
by Entities in Reorganization Under the Bankruptcy Code" ("SOP
90-7"), issued by the American Institute of Certified Public
Accountants. Accordingly, all assets and liabilities were
restated to reflect their reorganization value, which
approximated fair value.

Pursuant to the Plan of Reorganization, Doskocil's shares of
common stock that were outstanding prior to the effective date
(the "Canceled Common Stock" or "Predecessor Common Stock") were
canceled. Also pursuant to the Plan of Reorganization, Doskocil
was to issue 6,000,000 shares of its new common stock, par value
$.01 (the "Common Stock") to holders of unsecured claims, to
holders of Canceled Common Stock and pursuant to employee
incentive plans. Of these shares of Common Stock, 92%, or
5,520,000 shares, were issued to the unsecured creditors of
Doskocil or its subsidiaries on January 14, 1992. In
connection with the reorganization the Company recognized
forgiveness of debt of $113.8 million and expensed $41.0 million
in reorganization items.

The holders of shares of the Canceled Common Stock have
received 4.5%, or 270,000 shares, of Common Stock. The remaining
3.5%, or 210,000 shares, of Common Stock were reserved for
issuance in connection with employee incentive programs, of which
128,340 shares were issued as of January 1, 1994.

Pursuant to the Plan of Reorganization, Doskocil entered
into a warrant agreement dated as of October 31, 1991 with the
1991 Credit Agreement Bank Group (the "Bank Group") (the "Current
Warrant Agreement") wherein Doskocil agreed to issue warrants to
the Bank Group to purchase up to 3% of the shares of Common Stock
at $17.53 per share, subject to certain anti-dilution provisions.
The warrants may be exercised through December 31, 1998. At
January 1, 1994, the Bank Group held warrants to purchase 193,454
shares. The Current Warrant Agreement also provides the holders
of the warrants an irrevocable put option, which obligates
Doskocil to repurchase the warrants at a price per warrant equal
to the difference between (i) the then-current market price per
share of Common Stock, and (ii) $17.53, which may be exercised by
each of the holders of the warrants only upon a Change of
Control, as defined in the Current Warrant Agreement.

Note 7 Income Taxes

Beginning with the first quarter of 1993, the Company was
required to adopt the provisions of Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" ("FAS
109"). This new standard is based on a liability approach rather
than an income statement approach and requires deferred tax
assets and liabilities to be recognized based on the difference
between the tax basis of assets and liabilities and their
financial reporting amounts measured by using presently enacted
tax laws and rates. Deferred tax assets primarily result from
operating loss carryforwards and certain accrued liabilities, and
deferred tax liabilities result from the recognition of
depreciation in different periods for financial reporting and
income tax purposes. Valuation allowances are established where
necessary to reduce deferred tax assets to the amount expected to
be realized. Income tax expense results from the income tax
payable for the year and the change during the year in deferred
tax assets and liabilities. Implementing the new standard
resulted in the Company recording a deferred tax benefit of
approximately $31.0 million for deductible temporary differences
consisting primarily of future retiree medical benefit
obligations and pension obligations. The Company provided a
valuation allowance of approximately $51.7 million for the
remaining deductible temporary differences and NOLs. In
determining the valuation allowance, the Company considered prior
years' taxable income before utilization of NOLs and projected
taxable income during the next four years. A similar
determination of the valuation allowance was performed at the end
of the year. The $31.0 million is included in Deferred Charges
and Other Assets on the balance sheet.

The provision for income taxes on continuing operations
consists of the following components (in thousands):
<TABLE>
<CAPTION>
Pre-
Post-Confirmation Confirmation
________________________________________ ____________
Fiscal Year Fiscal Year Three Months Nine Months
Ended Ended Ended Ended
Jan. 1, Jan. 2, Dec.28, Sept. 28,
1994 1993 1991 1991
___________ ___________ ____________ ____________
(Liability
Method) (Deferred Method)
___________ _________________________________________
<S> <C> <C> <C> <C>
Current:
Federal $ 44 $ 118 $ - | $ -
State 375 239 139 | -
______ ______ ______ | ______
$ 419 $ 357 $ 139 | $ -
====== ====== ====== | ======
|
Deferred: |
Federal $ - $ - $ 936 | $ -
State - - - | -
______ ______ ______ | ______
$ - $ - $ 936 | $ -
====== ====== ====== ======
</TABLE>
The effective tax rate on income from continuing operations
before extraordinary item and cumulative effect of a change in
accounting principle differs from the statutory rate as follows:
<TABLE>
<CAPTION>
Pre-
Post-Confirmation Confirmation
________________________________ ____________
Fiscal Fiscal Three Nine
Year Year Months Months
Ended Ended Ended Ended
Jan. 1, Jan. 2, Dec. 28, Sept. 28,
1994 1993 1991 1991
_______ _______ ________ _________
(Liability
Method) (Deferred Method)
__________ _________________________________
<S> <C> <C> <C> <C>
Statutory rate 34.0% (34.0)% 34.0% | 34.0%
Tax effect of: |
Items relating to: |
Business acquisitions - - - | 1.1
Fresh Start Reporting - (15.7) (25.1) | -
Amortization of |
intangible assets 74.4 8.1 9.7 | 1.8
State taxes, net of |
federal benefit 8.7 .9 1.8 | -
Nontaxable forgiveness |
of debt - - - | (57.2)
Alternative minimum tax 1.6 .4 - | -
Limitation on recog- |
nition of tax benefit - 41.6 - | 20.3
Benefit of deductible |
temporary differences (103.9) - - | -
Other - - 1.0 | -
_____ ____ ____ | ____
14.8% 1.3% 21.4% | - %
===== ==== ==== ====
</TABLE>

At January 1, 1994 the deferred tax assets and deferred tax
liabilities were as follows (in thousands):

Deferred tax assets:
Retiree medical benefit plan accruals $26,521
Pension plan accruals 6,524
Plant closing accruals 2,621
Employee compensation and benefits accruals 3,552
Other accrued expenses 5,286
Net operating loss carryforwards 54,880
_______
Total deferred tax assets 99,384
_______
Deferred tax liabilities:
Capitalized leases (167)
Accumulated depreciation (7,613)
Intangible assets (8,865)
Other (78)
_______
Total deferred tax liabilities (16,723)
_______
Net deferred tax assets 82,661
Valuation allowance (51,723)
_______
Net deferred tax assets $30,938
=======

Prior to the adoption of FAS 109, items relating to business
acquisitions and Fresh Start Reporting include amortization of
intangibles, payments currently deductible for tax purposes
previously charged to expense for financial reporting purposes,
and depreciation on the excess of fair value of assets and
liabilities acquired over the underlying tax basis of such
assets.

At January 1, 1994, after considering utilization
restrictions, the Company's tax loss carryforwards approximated
$133.0 million. In accordance with the provisions of SOP 90-7,
benefits realized from preconfirmation net operating loss
carryforwards are being used to reduce Reorganization Value in
Excess of Amounts Allocable to Identifiable Assets until such net
operating loss carryforwards are exhausted. The net operating
loss carryforwards are subject to utilization limitations due to
ownership changes. The net operating loss carryforwards may be
utilized to offset future taxable income as follows: $77.9
million in 1994, $13.3 million in each of years 1995 through
1998, and $1.9 million in 1999. Loss carryforwards not utilized
in the first year that they are available may be carried over
and utilized in subsequent years, subject to their expiration
provisions. These carryforwards expire as follows: $43.6 million
in 1996, $17.5 million in 1998, $6.0 million in 1999, $.8 million
in 2000 and $65.1 million during the years 2001 through 2008.

Note 8 Employee Benefit Plans

The Company and certain subsidiaries maintain employee
benefit plans covering most employees. Effective July 1, 1993,
the Company merged the Retirement and Profit Sharing Plan for
Salaried Employees of Wilson Foods Corporation and the 401K plan
of Wilson Foods into the Doskocil Employee Investment Plan, made
amendments and renamed the combined plan the Doskocil Retirement
and Profit Sharing Plan (the "401(k) Plan"). All eligible
employees under the predecessor plans were grandfathered into the
401(k) Plan. All full-time employees of Doskocil and its
subsidiaries who have obtained the age of 21, have completed one
year of employment and are not subject to a collective bargaining
agreement are permitted to contribute up to 15% of their salary
to the 401(k) Plan. The Company makes contributions on behalf
of each participant of a matching amount up to an employee
contribution of 3% of such employee's salary. Employees are
fully vested at all times with respect to their contributions and
become 100% vested as to the Company's contributions on their
behalf at the end of three years participation in the 401(k)
Plan. Upon severance from service with the Company, participants
are entitled to a single lump sum distribution of their vested
interest in the 401(k) Plan.

Substantially all of the hourly employees at both Wilson
Foods Corporation ("Wilson Foods") and Stoppenbach, Inc.
("Stoppenbach"), subsidiaries of Doskocil, participate in either
defined benefit pension plans or a multiemployer plan.
Information presented below includes benefits and Company
obligations associated with participants of closed and sold
operations. The funded status of the defined benefit plans at
January 1, 1994 and January 2, 1993 is as follows (in thousands):
1993 1992
_______ _______
Actuarial present value of benefit
obligations:
Vested benefit obligation $66,137 $62,522
======= =======
Accumulated benefit obligation $67,760 $64,457
======= =======
Projected benefit obligation $67,838 $64,457
Plan assets at fair value 51,910 49,624
_______ _______
Projected benefit obligation
in excess of plan assets 15,928 14,833
Unrecognized net actuarial loss -
difference in assumptions and actual
experience (1,653) (337)
Adjustment required to recognize
additional minimum liability 1,575 -
_______ _______
Accrued pension cost $15,850 $14,496
======= =======

For the plan covering hourly employees of Stoppenbach, plan
assets consist of pooled separate accounts managed by an
insurance company. The pooled separate accounts are real estate,
long-term growth stock, public bonds and intermediate term bonds.
For the defined benefit pension plans covering hourly employees
of Wilson Foods, plan assets are comprised of cash and cash
equivalents and mutual funds investing primarily in interest
bearing and equity securities. The funding policy for the Wilson
Foods plan is to contribute amounts sufficient to meet the
minimum funding requirements of the Employee Retirement Income
Security Act of 1974 (ERISA), and the Stoppenbach plan is funded
based upon a recommendation from the Company's actuary. Such
contributions have, in prior years, exceeded the minimum funding
requirements.

Certain of the Company's employees, substantially all of
whom were employed at the Logansport, Indiana facility prior to
its closing and sale, were covered by a union-sponsored,
collectively-bargained multiemployer pension plan. Contributions
to the multiemployer plan were based upon collectively-bargained
agreements and were approximately $30,000, $43,000, $17,000 and
$56,000 for fiscal years 1993 and 1992, the three months ended
December 28, 1991 and the nine months ended September 28, 1991,
respectively.

Pension costs of the defined benefit plans for fiscal 1993,
1992 and 1991 are composed of the following components, based on
expected long-term rates of return of 9.0%, 9.0% and 9.0% and
discount rates of 7.5%, 6.5% and 8.0% for the Stoppenbach plan
and expected long-term rates of return of 8.5%, 8.5% and 8.5% and
discount rates of 7.5%, 8.5% and 8.5% for the Wilson Foods plan
(in thousands):
<TABLE>
<CAPTION>
January 1, January 2, December 28,
___1994___ ___1993___ ____1991____
<S> <C> <C> <C>
Service cost for benefits
earned during the year $ 304 $ 620 $ 618
Interest cost on projected
benefit obligation 5,104 4,796 4,792
Return on plan assets (3,667) (3,476) (3,301)
Amortization of transition
obligation and unrecognized
prior service cost 41 52 245
______ ______ ______
Total pension cost $1,782 $1,992 $2,354
====== ====== ======
</TABLE>

Expenses for all of the Company's pension benefit plans for
fiscal years 1993 and 1992, the three months ended December 28,
1991 and the nine months ended September 28, 1991, were (in
millions) $3.0, $3.4, $1.3, and $2.3, respectively.

In 1981, Wilson Foods received approval to fund its 1980
plan year minimum funding standard for its hourly defined benefit
plan in 15 equal annual amounts, with interest. The terms of the
plan provide that if any increase in plan benefits is adopted,
any remaining amount due must then be paid. At January 1, 1994
and January 2, 1993, $0.8 million and $1.1 million, respectively,
remained to be paid under the terms of the agreement.

Wilson Foods provides life insurance and medical benefits
("Postretirement Medical Benefits") for substantially all retired
hourly and salaried employees under various defined benefit
plans, which prior to fiscal 1993 had been accounted for on the
pay-as-you-go method since the beginning of the fourth quarter of
1991. Contributions are made by certain retired participants
toward their Postretirement Medical Benefits.

During the first quarter of 1993, the Company adopted a new
accounting standard, Statement of Financial Accounting Standards
No. 106, "Employers' Accounting for Postretirement Benefits Other
Than Pensions" ("FAS 106"). FAS 106 requires employers to
account for postretirement retiree medical benefits under the
accrual, rather than the pay-as-you-go, method of accounting,
such that the expected benefits to be paid in future years are
recorded during the period in which the employee renders the
service necessary to qualify for those benefits. FAS 106 also
requires an employer to amortize over a period of years the
benefits earned in prior years or, alternatively, to record the
total prior service obligation on the date FAS 106 is adopted as
a one-time charge to earnings.

Upon adoption of the new accounting standard and in
accordance with the standard's provisions, the Company recorded,
in the first quarter of 1993, a one-time, noncash charge for the
cumulative effect of the change in accounting principle of $34.4
million, a deferred tax benefit of approximately $31.0 million
and a liability of $65.4 million for Postretirement Medical
Benefits. The obligation as of the beginning of fiscal 1993
represents the discounted present value of accumulated retiree
benefits, other than pensions, attributed to employees' service
rendered prior to that date. The net increase in the
Reorganization Value in Excess of Amounts Allocable to
Identifiable Assets represents the Postretirement Medical
Benefits considered in the determination of the Reorganization
Value. The effect of adopting FAS 106 for the year ended January
1, 1994 was to increase net periodic postretirement benefit cost
and decrease earnings before cumulative effect of accounting
change by $1.1 million ($0.15 per share) and increase net loss by
$35.5 million ($4.79 per share). Postretirement benefit cost was
$4.4 million for the year ended January 2, 1993 and $1.0 million
for the three months ended December 28, 1991 which were recorded
on the pay-as-you-go basis.

The components of net periodic postretirement benefit cost
for the year ended January 1, 1994 were as follows (in
thousands):
Year
Ended
Jan. 1,
1994
_______

Service cost $ 343
Interest on accumulated benefit obligation 5,719
______
Net periodic postretirement benefit cost $6,062
======

The actuarial and recorded liabilities for these
Postretirement Medical Benefits at January 1, 1994 were as
follows (in thousands):

Accumulated postretirement benefit obligation:
Retirees $61,005
Active plan participants 12,829
_______
73,834
Assets (307)
_______
Accumulated postretirement benefit obligation
in excess of plan assets 73,527
Unrecognized net loss (7,477)
Unrecognized prior service cost 403
_______
Liability recognized on the balance sheet 66,453
Less current portion 4,759
_______
Noncurrent liability for postretirement
medical benefits $61,694
=======

For measuring the accumulated postretirement medical benefit
obligation, an 11.0% annual rate of increase in the per capita
claims cost was assumed for 1994. This rate was assumed to
decrease gradually to 10.5% for 1995, to 8.9% for 2000, to 7.7%
for 2005, and to 6.5% for 2010 and remain at that level
thereafter. The weighted average discount rate used in
determining the accumulated obligation was 7.5%. The expected
long-term rate of return on plan assets was 8.5%.

If the health care cost trend rate were increased 1.0%, the
accumulated benefit obligation as of January 1, 1994 would have
increased by $2.1 million. The effect of this change on the
aggregate of service and interest cost for the year ended January
1, 1994 would be an increase of $0.2 million.

In February 1992, the board of directors adopted the 1992
Stock Incentive Plan (the "Plan"), which authorizes the
compensation committee to grant stock options and/or Common Stock
aggregating 510,000 shares to directors, officers and other key
employees. In June 1993 the Plan was amended to increase the
aggregate number of shares to 810,000.

The compensation committee granted 105,000 restricted shares
(7,500 shares were subsequently canceled), one-third of which
vest annually, beginning January 1, 1993, and 105,000 performance
shares (7,500 shares were subsequently canceled) which vest
annually over three years based upon the attainment of targeted
earnings. In February 1993 the compensation committee approved
the vesting of 16,250 performance shares. The compensation
committee also granted 262,500 Common Stock options (22,500 of
which were subsequently canceled) at option prices ranging from
$13.00 to $14.38 per share. The options started to become
exercisable, one-third annually, beginning in February 1993.

Statement of Financial Accounting Standards No. 112
"Employer's Accounting for Postemployment Benefits" is effective
for fiscal years beginning after December 15, 1993. The Company
generally does not provide postemployment benefits, other than
workers compensation payments, the costs of which are estimated
and accrued as the events occur, accordingly, implementation of
this statement is not expected to have a material effect on the
Company's financial condition or results of operations.

Note 9 Commitments and Contingencies

The Company's subsidiary, Wilson Foods, is committed, or
contingently liable, to make payments for a fixed number of years
to various municipalities in connection with obtaining financing
for construction costs incurred in providing facilities adequate
to meet water and sewage needs at several plants. Required
payments for these services are $186,693 and $171,105 for years
1994 and 1995, respectively, for a total commitment of $357,798
at January 1, 1994, of which $35,274 represents interest.

In September 1992, United Refrigerated Services, Inc.
("URS") filed a suit captioned United Refrigerated Services, Inc.
v. Wilson Foods Corp., et al., in the Circuit Court of Saline
County, Missouri, against Wilson Foods and unaffiliated parties
Normac Foods, Inc. ("Normac") and Thompson Builders of Marshall,
Inc. ("Thompson"). The suit arose from claimed damages that
resulted from a fire in the URS warehouse in Marshall, Missouri.
In the suit URS claims damages of approximately $6.3 million for
loss of real property, $1.4 million for loss of personal
property, $1.5 million for lost profits from business
interruption and $0.5 million for other damages and seeks up to a
treble of $6.3 million, for waste to the real property in
addition to the other losses. Wilson Foods' answer counterclaims
against URS and has cross claimed against codefendants for
indemnity and/or contribution. The fire occurred in a part of
the URS warehouse being leased by Wilson Foods in which Wilson
Foods had produced sausage patties under contract for codefendant
Normac until termination of that contract in September 1991.
Normac's contractor, Thompson, was removing Normac's equipment
with a torch when fire broke out and destroyed a large section of
the URS warehouse and its contents.

In addition, in 1993, the following separately filed suits
arising out of the same facts were brought in the same court, all
of which were consolidated in November 1993: (1) Doskocil (as
Wilson Foods' parent corporation) and Sara Lee Corporation vs.
URS, Normac, Thompson and Chemidyne Corporation (that is in the
cleaning service business); (2) ConAgra, Inc. vs. Wilson Foods,
Doskocil, Normac and Thompson; and (3) Midland Foods
Distribution, Inc. vs. URS, Wilson Foods, Normac and Thompson,
claiming property damage (however Midland moved for voluntary
dismissal without prejudice in February 1994).

In a separate action, Normac has brought a declaratory
judgment action against Wilson Foods' liability insurance
carriers in the United States District Court for the Southern
District of Oklahoma seeking to have such carriers cover Normac
for any liability arising out of the fire described above.

Wilson Foods has substantial defenses to these pending and
threatened claims and the Company believes it is not likely that
Wilson Foods will ultimately incur a loss in excess of its
insurance coverage.

In the opinion of management, other than the matters
discussed above and other matters that may arise as a result of
the Chapter 11 filings, the Company's liability, if any, under
various claims and legal actions arising in the normal course of
business, that are not covered by insurance, will be immaterial.

Note 10 Cash Equivalents and Supplemental Cash Flow Information

The Company considers cash equivalents to include all
investments with a maturity at date of purchase of 90 days or
less. Cash equivalents of $6.0 million at January 1, 1994 and
January 2, 1993 represent investments primarily in U.S.
Government Securities, carried at cost, which approximates
market.

Cash payments for 1993 included interest, net of capitalized
interest, of $8.4 million, taxes of $0.8 million and Chapter 11
reorganization professional services and financing fees of $0.3
million. Cash payments for 1992 included interest of $13.8
million, taxes of $175,000 and Chapter 11 reorganization
professional services and financing fees of $6.2 million. Cash
payments during the three months ended December 28, 1991
(post-confirmation), included interest of $3.9 million and
Chapter 11 reorganization professional services and financing
fees of $3.5 million. No income taxes were paid. Cash
payments during the nine months ended September 28, 1991 (pre-
confirmation), included interest of $14.7 million, taxes of
$32,000 and Chapter 11 reorganization professional services and
financing fees of $10.1 million. Additionally, reorganization
items for the nine months ended September 28, 1991, included
charges of $30.3 million for facility realignment and to effect
the provisions of the Plan of Reorganization. The Plan of
Reorganization provisions related primarily to the settlement of
certain claims for pre-petition pension benefits and pre-petition
litigation and to expenses related to the administration of the
settlements and cash payouts provided for in the Plan of
Reorganization.

Note 11 Concentrations of Credit Risk

The concentrations of credit risk with respect to trade
receivables are, in management's opinion, considered minimal due
to the Company's diverse customer base. The Company sells to
customers located throughout the United States and in Japan and
Canada. Credit evaluations of its customers' financial
conditions are performed periodically, and the Company generally
does not require collateral from its customers. As of January 1,
1994, the Company had concentrations of cash in bank balances
totaling approximately $4.7 million located at eight banks which
exposes the Company to concentrations of credit risk.

Note 12 Subsequent Event (unaudited)

On March 17, 1994 the Company entered into a stock purchase
agreement with International Multifoods Corporation ("IMC") with
respect to the Frozen Specialty Foods division ("Frozen Specialty
Foods") of IMC. Pursuant to the stock purchase agreement, the
Company will purchase all of the issued and outstanding capital
stock of International Multifoods Foodservice Corp. ("IMFC") from
IMC for approximately $135 million, subject to certain conditions
and customary purchase price adjustments (the "IMFC
Acquisition"). The Company has received a commitment from
Chemical Bank, subject to completion of documentation and other
requirements, to provide a $186 million senior secured credit
facility for this transaction and to refinance the existing
credit facility. Frozen Specialty Foods, with estimated revenues
for the fiscal year ended February 26, 1994 of approximately $185
million, is a processor and marketer of prepared frozen food
products primarily for the foodservice and consumer markets.
Completion of the transaction
is expected in the second quarter of fiscal 1994.

<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
Doskocil Companies Incorporated

We have audited the consolidated financial statements and the
financial statement schedules of Doskocil Companies Incorporated
and subsidiaries as listed in Item 14(a) of this Form 10-K.
These financial statements and financial statement schedules are
the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements and financial statement schedules based on our audits.

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

In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Doskocil Companies Incorporated and
subsidiaries as of January 1, 1994 and January 2, 1993, and the
consolidated results of their operations and their cash flows for
the years ended January 1, 1994 and January 2, 1993, the three
months ended December 28, 1991 and the nine months ended
September 28, 1991 in conformity with generally accepted
accounting principles. In addition, in our opinion, the
financial statement schedules referred to above, when considered
in relation to the basic financial statements taken as a whole,
present fairly, in all material respects, the information
required to be included therein.

As discussed in Notes 7 and 8 to the consolidated financial
statements, effective January 3, 1993, the Company changed its
method of accounting for income taxes and its method of
accounting for postretirement benefits other than pensions.

(COOPERS & LYBRAND)

COOPERS & LYBRAND

Tulsa, Oklahoma
March 1, 1994

<PAGE>
<TABLE>
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED):

The following is a summary of the unaudited quarterly
results of operations for the years ended January 1, 1994 and
January 2, 1993.
(Amounts are in thousands except per share data.)

<CAPTION>
Quarter
________________________________________
Year ended January 1, 1994 First<F1> Second Third Fourth <F2>
________ ________ ________ ________
<S> <C> <C> <C> <C>
Net sales $144,555 $158,066 $168,701 $176,885
Gross profit 24,083 25,852 28,060 32,682
Net income (loss) (35,956) 1,047 813 2,077
Earnings (loss) per share,
primary and fully diluted $(5.88) $0.13 $0.10 $0.26
</TABLE>
<TABLE>
<CAPTION>
Quarter
________________________________________
Year ended January 2, 1993 First Second Third Fourth <F3>
________ ________ ________ ________
<S> <C> <C> <C> <C>
Net sales $176,222 $184,076 $192,258 $218,131
Gross profit 26,124 23,743 28,122 31,349
Net income (loss) 379 (1,373) 2,744 (28,584)
Earnings (loss) per share,
primary and fully diluted $0.07 $(0.23) $0.47 $(4.94)

__________
<FN>
<F1> The first quarter of the year ended January 1, 1994 included
a noncash charge of $34.4 million for the cumulative effect on
prior years of change in accounting for postretirement
benefits other than pensions. See Note 8 of Notes to
Consolidated Financial Statements.

<F2> The fourth quarter of the year ended January 1, 1994
included a charge of $1.0 million under an employment agreement
and a $0.5 million provision for plant closing.

<F3> The fourth quarter of the year ended January 2, 1993
includes a provision for plant closing in the amount of $32.0
million. See note 3 of Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>

Schedule V
DOSKOCIL COMPANIES INCORPORATED AND SUBSIDIARIES

SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
(Dollar amounts in thousands)
<CAPTION>
Other
Balance at Changes- Balance
Beginning Additions Add Fresh Start at End
Classification of Year at Cost Retirements (Deduct) Adjustments of Year
______________ __________ _________ ___________ ________ ___________ _______
<S> <C> <C> <C> <C> <C> <C>
Year ended January 1, 1994:
Land $ 690 $ - $ - $ (60) $ - $ 630
Buildings and improvements 30,702 2,967 40 (457) - 33,172
Machinery and equipment 41,301 7,247 310 896 - 49,134
Construction in progress 1,118 10,806 - - - 11,924
________ _______ _______ ________ _______ ________
$ 73,811 $21,020 $ 350 $ 379 $ - $ 94,860
======== ======= ======= ======== ======= ========
Year ended January 2, 1993:
Land $ 871 $ - $ - $ (181) $ - $ 690
Buildings and improvements 42,119 2,368 22 (13,763) - 30,702
Machinery and equipment 44,742 8,376 2,497 (9,320) - 41,301
Construction in progress 535 757 - (174) - 1,118
________ _______ _______ ________ _______ ________
$ 88,267 $11,501 $ 2,519 $(23,438)<F1> $ - $ 73,811
======== ======= ======= ======== ======= ========
Period from September 29, 1991 to
December 28, 1991:
Land $ 871 $ - $ - $ - $ - $ 871
Buildings and improvements 41,728 391 - - - 42,119
Machinery and equipment 42,802 2,023 139 56 - 44,742
Construction in progress 1,756 (1,221) - - - 535
________ _______ _______ ________ _______ ________
$ 87,157 $ 1,193 $ 139 $ 56 $ - $ 88,267
======== ======= ======= ======== ======= ========
Period from December 30, 1990 to
September 28, 1991:
Land $ 2,556 $ - $ 77 $ (303) $(1,305) $ 871
Buildings and improvements 74,175 679 65 (6,532) (26,529) 41,728
Machinery and equipment 90,440 4,197 194 (3,063) (48,578) 42,802
Construction in progress 947 995 - - (186) 1,756
________ _______ _______ _______ ________ ________
$168,118 $ 5,871 $ 336 $(9,898) $(76,598) $ 87,157
======== ======= ======= ======= ======== ========
______________________
<FN>
<F1> Refer to Note 3 of the Notes to Consolidated Financial Statements. Effective January 2, 1993
this schedule no longer reflects activity for assets held for sale.

Depreciation is provided using the following methods and estimated useful lives:

___Life___ ____Method___
Buildings and improvements 5-40 years Straight-line
Machinery and equipment 3-10 years Straight-line
Capitalized leases Lease term Straight-line
</TABLE>
<PAGE>
<TABLE>

Schedule VI

DOSKOCIL COMPANIES INCORPORATED AND SUBSIDIARIES

SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
(Dollar amounts in thousands)

<CAPTION>
Additions Other
Balance at Charged to Changes- Balance
Beginning Costs and Add Fresh Start at End
Classification of Year Expenses Retirements (Deduct) Adjustments of Year
______________ __________ __________ ___________ ________ ___________ _______
<S> <C> <C> <C> <C> <C> <C>
Year ended January 1, 1994:
Buildings and improvements $ 2,003 $ 1,826 $ 5 $ (30) $ - $ 3,794
Machinery and equipment 8,378 7,340 252 786 - 16,252
_______ _______ _____ _______ _______ _______
$10,381 $ 9,166 $ 257 $ 756 $ - $20,046
======= ======= ===== ======= ======= =======
Year ended January 2, 1993:
Buildings and improvements $ 672 $ 2,595 $ 8 $(1,256) $ - $ 2,003
Machinery and equipment 2,287 8,884 419 (2,374) - 8,378
_______ _______ _____ _______ _______ _______
$ 2,959 $11,479 $ 427 $(3,630) $ - $10,381
======= ======= ===== ======= ======= =======

Period from September 29, 1991
to December 28, 1991:
Buildings and improvements $ - $ 672 $ - $ - $ - $ 672
Machinery and equipment - 2,375 88 - - 2,287
_______ _______ _____ _______ _______ _______
$ - $ 3,047 $ 88 $ - $ - $ 2,959
======= ======= ===== ======= ======= =======
Period from December 30, 1990
to September 28, 1991:
Buildings and improvements $ 9,413 $ 3,064 $ 8 $ - $(12,469) $ -
Machinery and equipment 30,627 7,440 49 - (38,018) -
_______ _______ _____ _______ ________ _______
$40,040 $10,504 $ 57 $ - $(50,487) $ -
======= ======= ===== ======= ======== =======
</TABLE>
<PAGE>
<TABLE>

Schedule IX

DOSKOCIL COMPANIES INCORPORATED AND SUBSIDIARIES

SCHEDULE IX - SHORT-TERM BORROWINGS
(Dollar amounts in thousands)
<CAPTION>
Maximum Average Weighted
Category of Amount Amount Average
Aggregate Balance Weighted Outstanding Outstanding Interest Rate
Short-Term at End of Average During the During the During the
Borrowings Period Interest Rate Period Period<F1> Period<F2>
___________ _________ _____________ ___________ ___________ _____________
<S> <C> <C> <C> <C> <C>
Year Ended January 1, 1994
Lines of Credit <F3> $ - - % $ - $ - - %

Year Ended January 2, 1993
Lines of Credit <F3> $ - - % $ - $ - - %

Period from September 29, 1991
to December 28, 1991
Lines of Credit <F3> $ - - % $ - $ - - %

Period from December 30, 1990
to September 28, 1991
Lines of Credit $61,000 11.3% $68,000 $61,896 11.6%

<FN>
<F1> Computed by using the monthly weighted average amount outstanding.

<F2> Computed by dividing interest expense by the average debt outstanding.

<F3> All borrowings under the Company's credit agreements were long-term during the period.
</TABLE>
<PAGE>
<TABLE>
Schedule X

DOSKOCIL COMPANIES INCORPORATED AND SUBSIDIARIES

SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION

(Dollar amounts in thousands)

__________________________
<FN>
<F1> "Retiree Medical" represents the discounted amount of the
estimated retiree medical benefits obligation and was amortized over
the expected payment period using the "interest method." It was
reported as additional interest expense in the statement of
operations.
</TABLE>
<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, the registrant has
duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.

DOSKOCIL COMPANIES INCORPORATED

By: (Bryant P. Bynum)
Bryant P. Bynum
Vice President, Finance,
Corporate Planning and
Treasurer

Dated: July 22, 1994

INDEX TO EXHIBITS

Exhibit
Number Description
_______ ___________

3.1 Amended and Restated Certificate of
Incorporation of Doskocil Companies
Incorporated ("Doskocil")

3.2 Amended and Restated Bylaws of Doskocil

4.1 Specimen certificate for Doskocil Common
Stock, par value $.01 per share (incorporated
herein by reference to Exhibit 4.2 to
Registration Statement on Form S-8, dated
March 3, 1992, and filed on March 4, 1992)

4.2 Credit Agreement among Doskocil, the Several
Lenders from Time to Time Parties Thereto and
Chemical Bank, as Agent dated as of April 28,
1993 (incorporated herein by reference to
Exhibit 2 to Current Report on Form 8-K, dated
April 28, 1993, and filed April 30, 1993)

4.3 Form of Doskocil 9 3/4% Senior Subordinated
Redeemable Notes due 2000 (incorporated herein
by reference to Exhibit 4.22 to Amendment No.
2 to Registration Statement on Form S-1 filed
April 13, 1993)

4.4 Indenture between Doskocil and First Fidelity
Bank, National Association, New York, as
Trustee (incorporated herein by reference to
Exhibit 3 to Current Report on Form 8-K, dated
April 28, 1993, and filed April 30, 1993)

4.5 Warrant Agreement dated as of October 31,
1991, between Doskocil and the signatory banks
thereto (incorporated herein by reference to
Exhibit 4.2 to Annual Report on Form 10-K,
dated March 12, 1992, and filed on March 13,
1992)

4.6 Amended and Restated Certificate of
Incorporation of Doskocil (see Exhibit 3.1
above)

4.7 Amended and Restated Bylaws of Doskocil (see
Exhibit 3.2 above)

4.8 Doskocil Companies Incorporated Retirement and
Profit Sharing Plan

4.9* Doskocil Companies Incorporated 1992 Stock
Incentive Plan, as amended

4.10 Lease by and between the City of South
Hutchinson, Kansas and Doskocil dated August
1, 1985 (incorporated herein by reference to
Exhibit 10.14 to Annual Report on Form 10-K,
dated April 12, 1991, and filed on April 15,
1991)

4.11 Guaranty Agreement between Doskocil and The
Fourth National Bank and Trust Company,
Wichita, dated August 1, 1985 (incorporated
herein by reference to Exhibit 4.12 to Annual
Report on Form 10-K, dated March 12, 1992, and
filed on March 13, 1992)

4.12 Agreement for Waste Water Treatment Service
between Stoppenbach, Inc. and the City of
Jefferson, Wisconsin, dated November 1985
(incorporated herein by reference to
Exhibit 4.13 to Annual Report on Form 10-K,
dated March 12, 1992, and filed on March 13,
1992)

4.13 Agreement (for waste water treatment) between
the City of Logansport, Indiana and Wilson &
Co., Inc., dated June 26, 1967 (incorporated
herein by reference to Exhibit 4.26 to Annual
Report on Form 10-K, dated March 12, 1992, and
filed on March 13, 1992)

10.1 Credit Agreement among Doskocil, the Several
Lenders from Time to Time Parties Thereto and
Chemical Bank, as Agent dated as of April 28,
1993 (see Exhibit 4.2 above)

10.2 Form of Doskocil 9 3/4% Senior Subordinated
Redeemable Notes due 2000 (see Exhibit 4.3
above)

10.3 Indenture between Doskocil and First Fidelity
Bank, National Association, New York, as
Trustee (see Exhibit 4.4 above)

10.4 Amended and Restated Credit and Security
Agreement dated as of October 31, 1991, among
Doskocil and its subsidiaries, Chemical Bank
and the signatory banks thereto (incorporated
herein by reference to Exhibit 2 to Current
Report on Form 8-K, dated November 14, 1991,
and filed on November 15, 1991)

10.5 First Amendment to the Amended and Restated
Credit Agreement dated as of October 31, 1991
(incorporated herein by reference to Exhibit 6
to Current Report on Form 8-K, dated November
14, 1991, and filed on November 15, 1991)

10.6 Second Amendment to Amended and Restated
Credit and Security Agreement, dated on or
about February 12, 1992 (incorporated herein
by reference to Exhibit 4.3 to Registration
Statement on Form S-1 dated March 12, 1993)

10.7 Third Amendment to Amended and Restated Credit
and Security Agreement, dated June 11, 1992
(incorporated herein by reference to Exhibit
4.4 to Registration Statement on Form S-1
dated March 12, 1993)

10.8 Fourth Amendment to Amended and Restated
Credit and Security Agreement, dated September
25, 1992 (incorporated herein by reference to
Exhibit 4.5 to Registration Statement on
Form S-1 dated March 12, 1993)

10.9 Fifth Amendment to Amended and Restated Credit
and Security Agreement, dated January 22, 1993
(incorporated herein by reference to Exhibit
4.6 to Registration Statement on Form S-1
dated March 12, 1993)

10.10 Sixth Amendment, Waiver and Consent to Amended
and Restated Credit and Security Agreement
dated March 5, 1993 (incorporated herein by
reference to Exhibit 4.7 to Registration
Statement on Form S-1 dated March 12, 1993)

10.11 Warrant Agreement dated as of October 31,
1991, between Doskocil and the signatory banks
thereto (see Exhibit 4.5 above)

10.12 Waiver Agreement dated March 5, 1993, by and
among Doskocil, Chemical Bank and the banks
signatory to the Warrant Agreement
(incorporated herein by reference to Exhibit
10.40 to Registration Statement on Form S-1
filed March 12, 1993)

10.13 Doskocil Companies Incorporated Retirement and
Profit Sharing Plan (see Exhibit 4.8 above)

10.14* Doskocil Companies Incorporated Annual
Incentive Plan (incorporated herein by
reference to Exhibit 10.4 to Annual Report on
Form 10-K, dated March 12, 1992 and filed
March 13, 1992)

10.15* Doskocil Companies Incorporated 1992 Stock
Incentive Plan, as amended (see Exhibit 4.9
above)

10.16 Wilson Foods Corporation Retirement and Profit
Sharing Plan for Salaried Employees of Wilson
Foods Corporation effective January 1, 1985,
restated December 31, 1987 (incorporated
herein by reference to Exhibit 10.15 to Annual
Report on Form 10-K, dated March 12, 1992, and
filed on March 13, 1992)

10.17* Employment Agreement dated November 1, 1991,
between Doskocil and John Hanes (incorporated
herein by reference to Exhibit 9 to Current
Report on Form 8-K, dated November 14, 1991,
and filed on November 15, 1991)

10.18* Separation Agreement and Release dated
December 31, 1993 between Doskocil and John
Hanes

10.19* Employment Agreement dated November 1, 1991,
between Doskocil and Theodore A. Myers
(incorporated herein by reference to Exhibit
10 to Current Report on Form 8-K, dated
November 14, 1991, and filed on November 15,
1991)

10.20* Settlement Agreement dated July 6, 1993
between Doskocil and Theodore A. Myers

10.21* Form of Transition Employment Agreement dated
on or about December 17, 1991, between
Doskocil and Ronald W. Marsh, Thomas G.
McCarley, William L. Brady, David J. Clapp,
Raymond J. Haefele, Neil R. Johnson,
Charles I. Merrick, Darian B. Andersen,
Bryant P. Bynum, Joseph P. Baker, Lee C.
Harrison, William Kelly, James J. Krause, T.D.
Traver and Charles Sweeney (incorporated
herein by reference to Exhibit 10.18 to
Amendment No. 3 to Registration Statement on
Form S-1, Registration Statement No. 33-59484,
filed on April 20, 1993)

10.22 Lease by and between the City of South
Hutchinson, Kansas and Doskocil dated August
1, 1985 (see Exhibit 4.10 above)

10.23 Lease dated November 4, 1991, between Doskocil
and American General Life and Accident
Insurance Company (incorporated herein by
reference to Exhibit 10.35 to Annual Report on
Form 10-K, dated March 12, 1992 and filed on
March 13, 1992)

10.24 Lease Agreement dated April 4, 1992, between
Doskocil and Millard Refrigerated Services-
Atlanta, as amended (incorporated herein by
reference to Exhibit 10.27 to Registration
Statement on Form S-1 dated August 28, 1992)

10.25 Agreement between Wilson Foods Corporation and
the City of Cherokee, Iowa, dated February 28,
1964, and First Amendment thereto dated
October 24, 1978; Second Amendment thereto
dated February 24, 1981; and Third Amendment
thereto dated August 18, 1983, covering water
and sewage services (incorporated herein by
reference to Exhibit 10.34 to Registration
Statement on Form S-1 dated March 12, 1993)

10.26 Agreement dated December 26, 1989, by and
between the City of Cherokee, Iowa and Wilson
Foods Corporation, covering water rates
(incorporated herein by reference to Exhibit
10.35 to Registration Statement on Form S-1
dated March 12, 1993)

10.27 Equipment Lease Agreement between Wilson Foods
and MDFC Equipment Leasing Corporation, dated
May 20, 1992, and related unconditional
Guaranty executed by Doskocil dated June 11,
1992, and Equipment Lease Addendum to date
(incorporated herein by reference to Exhibit
10.38 to Amendment No. 1 to Registration
Statement on Form S-1 dated March 24, 1993)

10.28 Stock Purchase Agreement by and between
Doskocil and JLL dated February 16, 1993
(incorporated herein by reference to Exhibit 1
to Current Report on Form 8-K dated February
18, 1993 and Filed on February 19, 1993)

10.29 Waiver Agreement by and between Doskocil and
Chemical Bank dated March 5, 1993
(incorporated herein by reference to Exhibit
10.40 to Registration Statement on Form S-1
dated March 12, 1993)

10.30 Form of Indemnification Agreement between
Doskocil and its non-employee Directors
(incorporated herein by reference to Exhibit
10.42 to Amendment No. 1 to Registration
Statement on Form S-1 dated March 24, 1993)

10.31 Agreement dated as of March 22, 1993, by and
between Joseph Littlejohn and Levy Fund, L.P.,
The Airlie Group, L.P. and Doskocil
(incorporated herein by reference to Exhibit
10.43 to Amendment No. 1 to Registration
Statement on Form S-1 dated March 24, 1993)

10.32 Stockholders Agreement dated as of March 22,
1993, by and between the Airlie Group, L.P.
and Doskocil (incorporated herein by reference
to Exhibit 10.44 to Amendment No. 1 to
Registration Statement on Form S-1 dated
March 24, 1993)

10.33* Separation Pay Plan, dated March 31, 1993
(incorporated herein by reference to Exhibit 2
to Current Report on Form 8-K, dated June 10,
1993, and filed on July 13, 1993)

10.34 Consulting Agreement between Doskocil
Companies Incorporated and Richard N. Bauch,
dated January 18, 1993 (incorporated herein by
reference to Exhibit 10.46 to Amendment No. 2
to Registration Statement on Form S-1 filed
April 13, 1993)

10.35 Master Equipment Lease between Doskocil and
Cargill Leasing Corporation dated September 1,
1993

10.36 Stock Purchase Agreement between International
Multifoods Corporation and Doskocil Companies
Incorporated dated as of March 17, 1994

11.1 Calculation of Earnings Per Share

20.1** Annual Report on Form 11-K with Respect to
Doskocil Employee Investment Plan

21.1 Subsidiaries of Doskocil

22.1** Proxy Statement for Annual Meeting of
Stockholders Scheduled to be Held June 2, 1994

23.1 Consent of Independent Accountants

* Management contracts and compensatory plans or arrangements
** To be filed by amendment.

Exhibit 3.1

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
DOSKOCIL COMPANIES INCORPORATED

Pursuant to the provisions of Sections 245 and 303 of the
General Corporation Law of the State of Delaware, Doskocil
Companies, Incorporated, a Delaware corporation (the
"Corporation"), hereby certifies as follows:

1. On September 26, 1991, the United States Bankruptcy
Court for the District of Kansas, Topeka Division (the "Bankruptcy
Court"), pursuant to the provisions of Chapter 11 of the United
States Bankruptcy Code, 11 U.S.C. Section 1101 et seq., confirmed the
Third Amended Joint Plan of Reorganization for the Corporation and
Chapter 11 Affiliates, as modified (the "Plan"), In re Doskocil
Companies Incorporated, et al., Reorganization Case Nos. 90-40414-
11 to 90-40432-11.

2. The Corporation was incorporated under the laws of
the State of Delaware in 1964 under the name "American Export
Isbrandsten Company" by filing of its original Certificate of
Incorporation with the Delaware Secretary of State.

3. The Plan provides that the Amended and Restated
Certificate of Incorporation of the Corporation be further amended
and restated in its entirety as of the Effective Date (as defined
in the Plan), so that, as further amended and restated, the
Corporation's Amended and Restated Certificate of Incorporation
shall be duly adopted pursuant to Sections 245 and 303 of the
Delaware General Corporation Law (the "DGCL") and shall read in
full as follows:

ARTICLE FIRST: NAME. The name of the Corporation is
Doskocil Companies Incorporated.

ARTICLE SECOND: REGISTERED OFFICE AND REGISTERED AGENT.
The registered office of the Corporation in the State of Delaware
shall be located at 1209 Orange Street, City of Wilmington, County
of New Castle. The name of the resident agent in charge thereof is
The Corporation Trust Company.

ARTICLE THIRD: PURPOSE. The purpose of the Corporation
is to engage in any lawful act or activity for which corporations
may be organized under the DGCL as presently in effect or as it may
hereafter be amended.

ARTICLE FOURTH: AUTHORIZED CAPITAL STOCK.

Section 4.1 Authorization. The total number of shares
of all classes of stock which the Corporation shall have authority
to issue is Twenty-Four Million (24,000,000) shares, of which
Twenty Million (20,000,000) shares shall be common stock, $.01 par
value per share (the "Common Stock") and Four Million (4,000,000)
shares shall be preferred stock, par value $.01 per share (the
"Preferred Stock"). Authority is hereby expressly vested in the
Board of Directors, subject to the limitations prescribed by law,
to authorize the issuance from time to time of one or more series
of Preferred Stock and with respect to each such series to fix by
resolution or resolutions adopted by the affirmative vote of a
majority of the Board of Directors of the Corporation the number of
shares within such series and the powers, designations,
preferences, and relative, participating, optional or other rights
thereof, if any, or the qualifications, limitations or restrictions
thereof, if any.

Section 4.2 Nonvoting Shares. Notwithstanding
anything to the contrary contained in the DGCL, the Corporation
shall not, to the extent required by 11 U.S.C. Section 1123(a)(6),
issue any class or series of capital stock without voting rights
or with less than proportional voting rights.

ARTICLE FIFTH: LIMITATION ON TRANSFER BY FIVE PERCENT OWNERS.

Section 5.1 Certain Transfers Prohibited. Until (i)
the date that is two (2) years after (A) the Effective Date (as
defined in the Plan) or (B) if the Corporation makes an election
under applicable law to treat a date subsequent to the Effective
Date (the "Election Date") as the date of the "ownership change"
under Section 382 of the Internal Revenue Code of 1986, as amended
from time to time ("IRC Section 382"), the Election Date, or (ii)
such earlier date as shall be designated by the Board of Directors
of the Corporation, no individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity, as
well as any syndicate or group deemed to be a person under
Section 14(d)(2) of the Securities Exchange Act of 1934 (each a
"Person"), who beneficially owns directly or through attribution
(as determined under IRC Section 382) five percent (5%) or more of
the outstanding shares of Common Stock or who, upon the acquisition
of any shares of Common Stock, would beneficially own directly or
through attribution (as determined under IRC Section 382) five
percent (5%) or more of the outstanding shares of Common Stock (a
"Five Percent Holder") shall sell, transfer, dispose, purchase or
acquire or contract to sell, transfer, dispose, purchase or acquire
in any manner whatsoever, whether voluntarily or involuntarily, by
operation of law or otherwise (any such sale, transfer,
disposition, purchase, acquisition or contract being a "Transfer"),
any shares of Common Stock except as authorized pursuant to this
ARTICLE FIFTH. For purposes of this ARTICLE FIFTH, except for
Section 5.4 hereof, "Common Stock" shall include any securities
convertible into of exchangeable for shares of Common Stock, or any
option, warrant or other right to Transfer shares of Common Stock
or any securities convertible into or exchangeable for shares of
Common Stock.

The restrictions contained in this ARTICLE FIFTH are for
the purpose of reducing the risk that any change in stock ownership
may jeopardize the preservation of the Corporation's federal income
tax attributes. In connection therewith, and to provide for the
effective policing of these provisions, any Five Percent Holder who
proposes to Transfer shares of Common Stock shall, prior to the
date of the proposed Transfer, request in writing (a "Request")
that the Board of Directors of the Corporation (or any committee of
the Board of Directors authorized to review and determine whether
to authorize Requests (the "Transfer Review Committee")) or any
officer of the Corporation designated by the Board of Directors to
review and determine whether to authorize Requests (the "Transfer
Review Officer") review the proposed Transfer and authorize the
proposed Transfer pursuant to Section 5.3 of this ARTICLE FIFTH.
A Request shall be mailed or delivered to the Chief Executive
Officer of the Corporation at the Corporation's principal place of
business or telecopied to the Corporation's telecopier number at
its principal place of business. Such Request shall be deemed to
have been delivered when actually received by the Corporation. A
Request shall include (i) the name, address and telephone number of
the Five Percent Holder, (ii) a description of the shares of Common
Stock proposed to be Transferred by or to the Five Percent Holder,
(iii) the date on which the proposed Transfer is expected to take
place, and (iv) the names of the parties to the Transfer or the
method by which the proposed Transfer is to be effected. Within
five (5) business days after receipt by the Chief Executive Officer
of a Request, a meeting of either the Board of Directors or the
Transfer Review Committee shall be held for the purpose of
determining, or the Transfer Review Officer shall determine,
whether to authorize the proposed Transfer described in the Request
under Section 5.3 of this ARTICLE FIFTH. The Board of Directors,
Transfer Review Committee, or the Transfer Review Officer, as the
case may be, shall conclusively determine whether to authorize the
proposed Transfer and shall immediately cause the Five Percent
Holder making the Request to be informed of such determination.

Section 5.2 Effect of Unauthorized Transfer. Any
Transfer of Common Stock in violation of this ARTICLE FIFTH shall
be null and void. In the event of an attempted or purported
Transfer of Common Stock in violation of this ARTICLE FIFTH, the
Corporation shall be deemed to be the exclusive and irrevocable
agent for the transferor of such Common Stock for the limited
purpose of consummating a sale of such shares to an eligible
transferee, which may include, without limitation, the transferor
or, at the same purchase price paid in the attempted or purported
Transfer, the Corporation. The record ownership of the subject
shares shall remain, to the extent practicable, in the name of the
transferor until the shares have been sold by the Corporation or
its assignee, as agent, to an eligible transferee in accordance
with this ARTICLE FIFTH; provided, that even if an attempted or
purported Transfer is shown in the Corporation's transfer records,
all rights of beneficial ownership in the Common Stock shall remain
in the transferor until such shares are transferred to an eligible
transferree. The Corporation shall be entitled to assign its
agency hereunder to any person or entity including, but not limited
to, the intended transferee of the shares, for the purpose of
effecting a permitted sale of such shares. Neither the
Corporation, as agent, nor any assignee of its agency hereunder,
shall be deemed to be a stockholder of the Corporation nor be
entitled to any rights of a stockholder of the Corporation. The
rights to vote and to receive dividends and liquidating
distributions with respect to such shares shall remain, to the
extent practicable, with the transferor. The intended transferee
shall not be entitled to any rights of stockholders of the
Corporation, including, but not limited to, the rights to vote or
to receive dividends and liquidating distributions with respect to
such shares. In the event of a permitted sale and transfer,
whether by the Corporation or its assignee, as agent, the proceeds
of such sale shall be applied first to reimburse the Corporation or
its assignee for any expenses incurred by the Corporation acting in
its role as the agent for the sale of such shares, second to the
extent of any remaining proceeds, to reimburse the intended
transferee for any payments made to the transferor by such intended
transferee for such shares, and the remainder, if any, to the
extent practicable, to the original transferor.

Section 5.3 Authorization of Transfer of Common Stock
by a Five Percent Holder. The Board of Directors, Transfer Review
Committee, or Transfer Review Officer, as the case may be, shall
authorize a Transfer pursuant to a Request if such Transfer will
not jeopardize the Corporation's preservation of its federal income
tax attributes pursuant to IRC Section 382. A Transfer will be
deemed to jeopardize the Corporation's preservation of its federal
income tax attributes pursuant to IRC Section 382 if the percentage
of Common Stock owned by one or more "5-percent shareholders" (as
such term is used in IRC Section 382(g)) has increased or by such
Transfer would increase by more than fifteen (15) percentage points
over the lowest percentage of stock owned by it or them during the
"testing period" provided in IRC Section 382(i). In deciding
whether to authorize any proposed Transfer, the Board of Directors,
Transfer Review Committee, or Transfer Review Officer, as the case
may be, may seek the advice of counsel with respect to the
Corporation's preservation of its federal income tax attributes
pursuant to IRC Section 382 and may request all relevant
information from the Five Percent Holder with respect to all Common
Stock directly or indirectly owned by such Five Percent Holder.
Any Person who makes a Request of the Board of Directors, Transfer
Review Committee, or Transfer Review Officer pursuant to this
ARTICLE FIFTH to Transfer shares of Common Stock shall reimburse
the Corporation, on demand, for all costs and expenses incurred by
the Corporation with respect to any proposed Transfer of Common
Stock, including, without limitation, the Corporation's costs and
expenses incurred in determining whether to authorize that proposed
Transfer.

Section 5.4 Legend on Certificates. All certificates
evidencing shares of Common Stock issued by the Corporation shall
conspicuously bear the following legend:

The Corporation's Certificate of Incorporation
contains restrictions prohibiting the sale, transfer,
disposition, purchase or acquisition of any Common Stock
of the Corporation without the authorization of the
Corporation's Board of Directors or designated officer by
or to any holder (a) who beneficially owns directly or
through attribution (as determined under Section 382 of
the Internal Revenue Code of 1986, as amended from time
to time (the "IRC")) 5% or more of any class of the then
issued and outstanding shares of Common Stock of the
Corporation or (b) who, upon the sale, transfer,
disposition, purchase or acquisition of any shares of
Common Stock of the Corporation, would beneficially own
directly or through attribution (as determined under
Section 382 of the IRC) 5% or more of any class of the
then issued and outstanding shares of Common Stock of the
Corporation. The Corporation will furnish a copy of its
Certificate of Incorporation to the holder of record of
this certificate without charge upon written request to
the Corporation at its principal place of business.

ARTICLE SIXTH: CLASSIFICATION OF THE BOARD OF DIRECTORS.
Directors of the Corporation will be divided into three classes, as
nearly equal in number as possible, with the initial term of office
of the first class of Directors to expire at the 1992 Annual
Meeting of Stockholders of the Corporation, the initial term of
office of the second class of Directors to expire at the 1993
Annual Meeting of Stockholders of the Corporation, and the initial
term of office of the third class of Directors to expire at the
1994 Annual Meeting of Stockholders of the Corporation. At each
Annual Meeting of Stockholders of the Corporation, Directors
elected to succeed those Directors whose terms have thereupon
expired shall be elected for a term of office to expire at the
third succeeding Annual Meeting of Stockholders after their
election. If the number of Directors is changed, any increase or
decrease shall be apportioned among the classes so as to maintain
or attain, as nearly as possible, the equality of the number of
Directors in each class, and when the number of Directors is
increased and newly created directorships are filled by the Board
of Directors, the terms of the additional Directors shall expire at
the next election of the class for which such Directors have been
chosen. In no case will a decrease in the number of Directors
shorten the term of any incumbent Director.

ARTICLE SEVENTH: STOCKHOLDERS.

Section 7.1 Annual Meeting. The Annual Meeting of the
Stockholders of the Corporation shall be held as provided in the
Corporation's Bylaws, as such Bylaws may be amended from time to
time.

Section 7.2 Special Meetings. Special Meetings of the
Stockholders of the Corporation may be called by the Corporation
upon the written request of the holders of record of outstanding
shares representing at least 25% of the voting power of all the
shares of the Corporation then entitled to vote on the issue or
issues to be presented, by the Chief Executive Officer of the
Corporation, or by the Board of Directors pursuant to a resolution
adopted by the affirmative vote of a majority of the entire Board
of Directors.

Section 7.3 First Annual Meeting. The first Annual
Meeting of the Stockholders of the Corporation following the
Effective Date shall take place on a date designated by the Board
of Directors of the Corporation which shall in no event be more
than twelve (12) months after the Effective Date.

ARTICLE EIGHTH: IMPLEMENTATION OF THE PLAN. Pursuant to
the provisions of the Plan, on the Effective Date, the Corporation
shall issue and deliver to the Disbursing Agent (as defined in the
Plan) Six Million (6,000,000) shares of Common Stock to be
available for distribution as described in the Plan.

By virtue of the Plan and without any action on the part
of the holder thereof, on the Effective Date each and every share
of the Existing Common Stock of Doskocil (as defined in the Plan)
shall no longer be outstanding, shall be cancelled and retired, and
shall cease to exist, and each holder of a certificate representing
any shares of Existing Common Stock of Doskocil shall thereafter
cease to have any rights with respect to such Existing Common Stock
of Doskocil, except the right to participate in the distribution of
Common Stock as provided in the Plan in accordance with this
ARTICLE EIGHTH. All options, warrants, or other rights to acquire
any Existing Common Stock of Doskocil which have not been exercised
by the Effective Date shall, by virtue of the Plan, be cancelled
and retired and cease to exist.

If shares of Common Stock are to be issued to a person
other than the registered holder of the certificate surrendered, it
shall be a condition of such issuance that the certificate so
surrendered shall be properly endorsed or otherwise in proper form
for transfer and that the person requesting such issuance shall pay
any transfer taxes or other taxes required by reason of such
issuance to a person other than the registered holder of the
certificate surrendered. If a holder of any certificate
representing any shares of Existing Common Stock of Doskocil is
unable to surrender such certificate because it is destroyed, lost
or stolen, such holder may be issued Common Stock in respect of
Existing Common Stock of Doskocil evidenced by such certificate
upon presenting to the Disbursing Agent, in a form acceptable to
the Disbursing Agent: (i) proof of such holder's title to such
Existing Common Stock of Doskocil; (ii) proof of the destruction or
theft of such certificate or an affidavit to the effect that the
same has been lost and after diligent search cannot be located; and
(iii) such indemnification as may be required by the Disbursing
Agent and all other persons deemed appropriate by the Disbursing
Agent from any loss, action, suit or any claim whatsoever which may
be made as a result of such holder's receipt of Common Stock.

ARTICLE NINTH: BYLAWS. In furtherance and not in
limitation of the powers conferred by the laws of the State of
Delaware, the Board of Directors of the Corporation is authorized
and empowered to make, alter, amend and repeal the Bylaws of the
Corporation in any manner not inconsistent with the laws of the
State of Delaware.

ARTICLE TENTH: INDEMNIFICATION. The Corporation shall,
to the fullest extent permitted by Section 145 of the DGCL, as
presently in effect or as it may hereafter be amended, indemnify
all persons whom it may indemnify pursuant thereto and advance
expenses of litigation to Directors and Officers when so requested.

ARTICLE ELEVENTH: EXCULPATION. To the fullest extent
permitted by the DGCL, as presently in effect or as it may
hereafter be amended, a Director of this Corporation shall not be
liable to the Corporation or its Stockholders for monetary damages
for breach of fiduciary duty as a Director.

ARTICLE TWELVETH: COMPROMISE OR ARRANGEMENT OF CLAIMS.
Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between
this Corporation and its Stockholders or any class of them, any
court of equitable jurisdiction within the State of Delaware may,
on the application in a summary way of this Corporation or of any
creditor or stockholder thereof or on the application of any
receiver or receivers appointed for this Corporation under the
provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or
receivers appointed for this Corporation under the provisions of
Section 279 of Title 8 of the Delaware Code, order a meeting of the
creditors or class of creditors, and/or of the Stockholders or
class of Stockholders of this Corporation, as the case may be, to
be summoned in such manner as the said court directs. If a
majority in number representing three-fourths in value of the
creditors or class of creditors, and/or of the Stockholders or
class of Stockholders of this Corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of
this Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said
application has been made, be binding on all the creditors or class
of creditors, and/or on all the Stockholders or class of
Stockholders, of this Corporation, as the case may be, and also on
this Corporation.

ARTICLE THIRTEENTH: AMENDMENT. The Corporation reserves
the right to amend, alter, change or repeal any provision contained
in this Amended and Restated Certificate of Incorporation, in the
manner now or hereinafter provided by statute, and all rights
conferred upon Stockholders herein are granted subject to this
reservation; provided, however, that the affirmative vote of
Seventy-Five Percent (75%) of the shares of Common Stock entitled
to vote thereon shall be required to delete, modify, or amend any
provision of ARTICLE FIFTH, ARTICLE SIXTH, or this ARTICLE
THIRTEENTH of this Amended and Restated Certificate of
Incorporation.

<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this
Amended and Restated Certificate of Incorporation to be executed by
Bryant P. Bynum, its Vice President, and attested by its Secretary
this 18th day of March, 1994.

DOSKOCIL COMPANIES INCORPORATED

By:(Bryant P. Bynum)

Bryant P. Bynum
Vice President

ATTEST:

(Darian B. Andersen)
Darian B. Andersen
Secretary

Exhibit 3.2
AMENDED AND RESTATED

BYLAWS

DOSKOCIL COMPANIES INCOPORATED

ARTICLE I

STOCKHOLDERS

Section 1. Annual Meeting. The Annual Meeting of Stock-
holders of the Corporation shall be held at the registered office
of the Corporation in the City of Dover, State of Delaware, or at
such other place within or without the State of Delaware, on the
date and at the time fixed from time to time by the Board of
Directors and stated in the notice of meeting, for the election of
Directors and for the transaction of any other proper business that
may come before the meeting.

Section 2. Special Meetings. Special Meetings of the
Stockholders of the Corporation may be called at any time and from
time to time by the President or by a majority of the Directors
then in office, and shall be called by the Secretary upon the writ-
ten request of the Stockholders holding of record at least one-
twentieth (1/20) of the issued and outstanding shares of capital
stock of the Corporation entitled to vote at such meeting. Special
Meetings shall be held at such place within or without the State of
Delaware, at such time and on such date as shall be specified in
the call thereof.

Section 3. Notice of Meetings. Written notice of each
meeting of the Stockholders, stating the place, date and hour
thereof and, in the case of a Special Meeting, the purpose or
purposes for which it is called, shall be delivered personally or
mailed, not less than ten (10) nor more than sixty (60) days before
the date of such meeting (or at such other time as may be required
by statute), to each Stockholder of record entitled to vote at such
meeting. If mailed, such notice is deemed given when deposited in
the United States mail, postage prepaid, directed to each
Stockholder at his or her address as it appears on the records of
the Corporation.

Section 4. Waiver of Notice. Whenever notice is
required to be given of any Annual or Special Meeting of the
Stockholders, a written waiver thereof, signed by the person
entitled to notice, whether before or after the time stated in such
notice, shall be deemed equivalent to notice. Neither the business
to be transacted at, nor the purpose of, any regular or special
meeting of the Stockholders need be specified in any written waiver
of notice. Attendance of a person at a meeting of the Stockholders
shall constitute a waiver of notice of such meeting, except when
the person attends a meeting for the express purpose of objecting,
at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened.

Section 5. Adjournment. When any meeting of the Stock-
holders is adjourned to another time or place, notice need not be
given of the adjourned meeting if the time and place to which the
meeting is adjourned are announced at the meeting at which the
adjournment is taken. At the adjourned meeting any business may be
transacted which might have been transacted at the original
meeting. If the adjournment is for more than thirty (30) days, or
if after such adjournment the Board of Directors shall fix a new
record date for the adjourned meeting, a notice of the adjourned
meeting shall be given to each Stockholder of record entitled to
vote at such meeting.

Section 6. Quorum. At any meeting of the Stockholders,
the presence, in person or by proxy, of the holders of a majority
of the issued and outstanding shares of the capital stock of the
Corporation entitled to vote at such meeting shall be necessary in
order to constitute a quorum for the transaction of any business.
If there shall not be a quorum at any meeting of the Stockholders,
the holders of a majority of the shares entitled to vote present at
such meeting, in person or by proxy, may adjourn such meeting from
time to time, without further notice to the Stockholders other than
an announcement at such meeting, until holders of the amount of
shares required to constitute a quorum shall be present in person
or by proxy.

Section 7. Voting. Each Stockholder shall be entitled
to one vote for each share of capital stock of the Corporation held
by such Stockholder. Voting need not be by ballot, except that all
elections of Directors shall be by written ballot unless otherwise
provided in the Certificate of Incorporation, as such Certificate
may be amended from time to time. Whenever any corporate action is
to be taken by vote of the Stockholders, it shall, except as
otherwise required by law or by the Certificate of Incorporation,
be authorized by a plurality of the votes cast at a meeting of
Stockholders at which a quorum is present by the holders of shares
entitled to vote thereon.

Section 8. Action Without a Meeting. Any action
required or permitted to be taken at any Annual or Special Meeting
of Stockholders may be taken without a meeting thereof, without
prior notice and without a vote, if a consent in writing, setting
forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present
and voted. Prompt notice of the taking of such corporate action
without a meeting by less than unanimous written consent shall be
given to those Stockholders who have not consented in writing.

Section 9. Record Date.

(a) The Board of Directors may fix, in advance, a record
date, which shall not be more than sixty (60) nor less than ten
(10) days before the date of any meeting of Stockholders, nor more
than sixty (60) days prior to any other action, as the record date
for the purpose of determining the Stockholders entitled to notice
of or to vote at any meeting of the Stockholders or any adjournment
thereof, or to express consent to corporate action in writing with-
out a meeting, or entitled to receive payment of any dividend or
distribution or allotment of any rights, or entitled to exercise
any rights in respect of any change, conversion or exchange of
stock or for the purpose of any other lawful action.

(b) If no record date is fixed:

(1) The record date for determining Stockholders
entitled to notice of or to vote at a meeting of Stockholders
shall be at the close of business on the day next preceding
the day of notice, or, if notice is waived, at the close of
business on the day next preceding the day on which the
meeting is held.

(2) The record date for determining Stockholders
for any other purpose shall be at the close of business on the
day on which the Board of Directors adopts the resolution
relating thereto.

Section 10. Proxies. Each Stockholder entitled to vote
at a meeting of Stockholders or to express consent or dissent to
corporate action in writing without a meeting may authorize another
person or persons to act for him or her by proxy, but no such proxy
shall be voted or acted upon after three (3) years from its date,
unless the proxy provides for a longer period.

ARTICLE II
DIRECTORS

Section 1. Number; Qualifications. The number of
directors constituting the Board of Directors shall be fifteen
(15), unless and until otherwise provided in the Bylaws or the
Certificate of Incorporation, provided that the total number of
directors shall always be an odd number.

Section 2. Term of Office. Each Director shall hold
office until the next annual meeting following his election and
until his or her successor is elected and qualified or until his or
her earlier death, resignation, disqualification, or removal.

Section 3. Meetings. A meeting of the Board of
Directors shall be held for the election of Officers and for the
transaction of such other business as may come before such meeting
as soon as practicable after the Annual Meeting of the
Stockholders. Other regular meetings of the Board of Directors may
be held at such times and places as the Board of Directors of the
Corporation may from time to time determine. Special Meetings of
the Board of Directors may be called at any time by the President
of the Corporation or by a majority of the Directors then in
office. Meetings of the Board of Directors may be held within or
without the State of Delaware.

Section 4. Notice of Meetings; Waiver of Notice;
Adjournment. No notice need be given of the first meeting of the
Board of Directors after the Annual Meeting of Stockholders or of
any other regular meeting of the Board of Directors. Notice of a
Special Meeting of the Board of Directors, specifying the place,
date and hour thereof, shall be delivered personally, mailed,
telegraphed or telephoned to each Director at his or her address as
such address appears on the books of the Corporation at least one
(1) business day (Saturdays, Sundays and legal holidays not being
considered business days for the purpose of these Bylaws) before
the date of such meeting. Whenever notice is required to be given
under any provision of the General Corporation Law of the State of
Delaware or of the Certificate of Incorporation or these Bylaws, a
written waiver thereof, signed by the person entitled to notice,
whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a Director at a Special
Meeting shall constitute a waiver of notice of such meeting, except
when the Director attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of
any business because the meeting was not lawfully called or
convened. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the Stockholders,
Directors, or members of a committee of Directors need be specified
in any written waiver of notice unless so required by the
Certificate of Incorporation or these Bylaws. A majority of the
Directors present, whether or not a quorum is present, may adjourn
any meeting to another time and place. Notice need not be given of
the adjourned meeting if the time and place to which the meeting is
adjourned are announced at the meeting at which the adjournment is
taken, and at the adjourned meeting any business may be transacted
that might have been transacted at the original meeting.

Section 5. Quorum; Voting. A majority of the total
number of Directors shall constitute a quorum for the transaction
of business. The vote of the majority of the Directors present at
a meeting at which a quorum is present shall be the act of the
Board of Directors. The Board of Directors may select one of its
number to serve as Chairman of the Board.

Section 6. Participation by Telephone. Members of the
Board of Directors or any committee thereof may participate in a
meeting of the Board of Directors or such committee by means of a
conference telephone or similar communications equipment by means
of which all persons participating in the meeting can hear each
other, and participation in a meeting by such means shall
constitute presence in person at such meeting.

Section 7. Action Without a Meeting. Any action
required or permitted to be taken at any meeting of the Board of
Directors or of any committee thereof may be taken without a
meeting if all members of the Board of Directors or such committee,
as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board of
Directors or of such committee.

Section 8. Committees. The Board of Directors, by
resolution passed by a majority of the entire Board of Directors,
may designate one or more committees, each committee to consist of
one or more of the Directors. At the option of the Investor (as
defined in Article II, Section 10 below, at least one (1) Director
who is an Investor Designee (as defined in the Agreement) shall be
appointed to serve on each committee of the Board, other than
committees appointed for the special purpose of considering
transactions with the Investor or any Investor Affiliate (as
defined in the Agreement). All actions taken by the Board of
Directors shall be recommendations that shall be submitted to the
full Board of Directors for approval unless, prior to such action
being taken, the Board of Directors has adopted a resolution
expressly delegating to the committee the power to take the action
in question. The Board of Directors may designate one or more
directors as alternate members of any such committee, who may
replace any absent or disqualified member at any meeting of such
committee.

Section 9. Removal; Resignation. Any Director or the
entire Board of Directors may be removed with or without cause by
the holders of a majority of the shares of capital stock of the
Corporation then entitled to vote at any election of Directors.
Any Director may resign at any time, upon written notice to the
Corporation.

Section 10. Vacancies. Any vacancy created by the
resignation, death or removal of a director, or by a director
declining to stand for re-election or a director not being
renominated for re-election, shall be filed by (a) the vote of a
majority of the Investor Designees (as defined in that certain
Stock Purchase Agreement (the "Agreement") dated February 16, 1993,
between the Corporation and Joseph Littlejohn & Levy Fund, L.P.
(the "Investor")) then in office, if such director was an Investor
Designee, or (b) the vote of a majority of the NonInvestor
Directors (as defined in the Agreement) then in office, if such
director was a NonInvestor Director, or (c) another Airlie Designee
(as defined in that certain Stockholders Agreement dated March 22,
1993, between the Corporation and The Airlie Group L.P.) who is
approved by the affirmative vote of both a majority of the
Directors who are Invsestor Designees and a majority of the
NonInvestor Designees, if such director was an Airlie Designee, or
(d) by the affirmative vote of both a majority of the Directors who
are Investor Designees and a majority of the NonInvestor Designees,
if such director was the Independent Director (as defined in the
Agreement) other than the Airlie Designee. A director elected to
fill a vacancy shall hold office for the unexpired term of his or
her predecessor. In the event the number of directors is
increased, additional directors shall be elected as Investor
Designees and NonInvestor Directors by the Investor Designees and
NonInvestor Directors, respectively, then in office, to fill the
vacancies created by the increase in the number of directors so
that thereafter the number of Investor Designees shall equal that
number that the Investor would otherwise have the right to nominate
at such time pursuant to the Agreement.

Section 11. Compensation. The Board of Directors may
fix the compensation of Directors.

ARTICLE III
OFFICERS

Section 1. Election; Qualifications. At the first meet-
ing of the Board of Directors and as soon as practicable after each
Annual Meeting of Stockholders, the Board of Directors shall elect
or appoint a President, a Vice President, a Secretary and a Treas-
urer, and may elect or appoint at such time or from time to time
such additional Officers as it deems advisable. No Officer need be
a Director of the Corporation. Any number of offices may be held
by the same person, except that there shall always be two (2)
persons who hold offices which entitle them to sign instruments and
stock certificates.

Section 2. Term of Office; Vacancies. Each Officer
shall hold office until the election and qualification of his or
her successor or until his or her earlier death, resignation or re-
moval. Any vacancy occurring in any office, whether because of
death, resignation or removal, with or without cause, or otherwise,
shall be filled by the Board of Directors.

Section 3. Removal; Resignation. Any Officer may be
removed from office at any time with or without cause by vote of a
majority of the Board of Directors. Any Officer may resign his or
her office at any time upon written notice to the Corporation.

Section 4. Powers and Duties of President. The
President shall be the Chief Executive Officer of the Corporation
and shall have general charge and supervision of its business,
affairs, administration and operations. The President shall from
time to time make such reports concerning the Corporation as the
Board of Directors of the Corporation may require. The President
shall preside at all meetings of the Stockholders and the Board of
Directors. The President shall have such other powers and shall
perform such other duties as may from time to time be assigned to
him or her by the Board of Directors.

Section 5. Powers and Duties of Vice Presidents. Each
Vice President shall be given such titles and designations and
shall have such powers and perform such duties as may from time to
time be assigned to him or her by the Board of Directors.

Section 6. Powers and Duties of the Secretary. The
Secretary shall record and keep the minutes of all meetings of the
Stockholders and of the Board of Directors in a book to be kept for
that purpose. The Secretary shall attend to the giving and serving
of all notices by the Corporation. The Secretary shall be the
custodian of, and shall make or cause to be made the proper entries
in, the minute book of the Corporation and such other books and
records as the Board of Directors may direct. The Secretary shall
be the custodian of the corporate seal for the Corporation and
shall affix or cause to be affixed such seal to such contracts and
other instruments as the Board of Directors may direct. The
Secretary shall have such other powers and shall perform such other
duties as may from time to time be assigned to him or her by the
Board of Directors.

Section 7. Powers and Duties of the Treasurer. The
Treasurer shall be the custodian of all funds and securities of the
Corporation. Whenever required by the Board of Directors, the
Treasurer shall render a statement of the Corporation's cash and
other accounts, and shall cause to be entered regularly in the
proper books and records of the Corporation to be kept for such
purpose full and accurate accounts of the Corporation's receipts
and disbursements. The Treasurer shall at all reasonable times
exhibit the Corporation's books and accounts to any Director of the
Corporation upon application at the principal office of the
Corporation during business hours. The Treasurer shall have such
other powers and shall perform such other duties as may from time
to time be assigned to him or her by the Board of Directors.

Section 8. Powers and Duties of Assistant Secretary and
Assistant Treasurer. The Assistant Secretary and Assistant Treas-
urer (or in the event there be more than one Assistant Secretary or
Assistant Treasurer, in the order of their seniority, designation
or election) shall, in the absence or disability of the Secretary
or Treasurer, respectively, perform the duties and exercise the
powers of the Secretary or Treasurer and shall perform such other
duties as the President or the Board of Directors shall prescribe.

Section 9. Delegation. In the event of the absence of
any Officer of the Corporation or for any other reason that the
Board of Directors may deem sufficient, the Board of Directors may
at any time or from time to time delegate all or any part of the
powers or duties of any Officer to any other Officer or Officers or
to any Director or Directors.

ARTICLE IV
STOCK

The shares of the Corporation shall be represented by
certificates in such form as the Board of Directors may from time
to time prescribe, signed by the President or Vice President and by
the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary. Any or all of the signatures on the
certificates may be a facsimile.

ARTICLE V
EXECUTION OF DOCUMENTS

All contracts, agreements, instruments, bills payable,
notes, checks, drafts, warrants or other obligations of the Corpo-
ration shall be made in the name of the Corporation and shall be
signed by such Officer or Officers as the Board of Directors may
from time to time designate. In the absence of such designation
the signature of the President shall suffice.

ARTICLE VI
SEAL

The seal of the Corporation shall contain the name of the
Corporation, the words "Corporate Seal," the year of its orga-
nization, and the name of the Corporation's state of incorporation.

ARTICLE VII
FISCAL YEAR

The fiscal year of the Corporation shall begin and end on
such days as the Board of Directors shall from time to time
determine.

ARTICLE VIII
INDEMNIFICATION

The Corporation shall indemnify all Directors, Officers,
employees or agents to the full extent as provided in the
Corporation's Certificate of Incorporation, as such Certificate may
be amended from time to time.

ARTICLE IX
AMENDMENT OF BYLAWS

These Bylaws may be amended or repealed, and any new
Bylaws may be adopted, by the Stockholders entitled to vote or by
the Board of Directors.

Exhibit 4.8

DOSKOCIL COMPANIES INCORPORATED
RETIREMENT AND PROFIT SHARING PLAN

(As Amended and Restated Effective as of July 1, 1993)

<PAGE>
DOSKOCIL COMPANIES INCORPORATED
RETIREMENT AND PROFIT SHARING PLAN

(As Amended and Restated Effective as of July 1, 1993)

Table of Contents

ARTICLE 1
General. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Purpose. . . . . . . . . . . . . . . . . . . . . 1
1.3 Source of Funds. . . . . . . . . . . . . . . . . . 2
1.4 Scope of Plan Coverage . . . . . . . . . . . . . . 2
1.5 Definitions. . . . . . . . . . . . . . . . . . . . 2

ARTICLE 2
Eligibility . . . . . . . . . . . . . . . . . . . . . . . . 11
2.1 Eligibility Requirements.. . . . . . . . . . . . . 11
2.2 Leaves of Absence. . . . . . . . . . . . . . . . . 11
2.3 Leased Employees . . . . . . . . . . . . . . . . . 11
2.4 Transferred Participant. . . . . . . . . . . . . . 12
2.5 Disabled Participants. . . . . . . . . . . . . . . 12

ARTICLE 3
Contributions. . . . . . . . . . . . . . . . . . . . . . . . 12
3.1 Elective 401(k) Contributions. . . . . . . . . . . 12
3.2 Qualified Nonelective Contributions. . . . . . . . 13
3.3 Matching Contributions . . . . . . . . . . . . . . 13
3.4 Profit Sharing Contributions . . . . . . . . . . . 14
3.5 No Voluntary Employee Contributions. . . . . . . . 14
3.6 Maximum Annual Addition. . . . . . . . . . . . . . 14
3.7 Dollar Limitation on Elective 401(k)
Contributions. . . . . . . . . . . . . . . . . . . 14
3.8 Additional Limitations on Elective 401(k)
Contributions. . . . . . . . . . . . . . . . . . . 15
3.9 Limitations on Matching Contributions. . . . . . . 15
3.10 Multiple Use Limitation. . . . . . . . . . . . . . 16
3.11 Extent of Fractionalization. . . . . . . . . . . . 17
3.12 Corrective Distributions . . . . . . . . . . . . . 17
3.13 Attributable Income. . . . . . . . . . . . . . . . 17
3.14 Treatment of Certain Family Members. . . . . . . . 18
3.15 Aggregation of Plans . . . . . . . . . . . . . . . 19
3.16 Order of Testing . . . . . . . . . . . . . . . . . 19
3.17 Committee Rules. . . . . . . . . . . . . . . . . . 19
3.18 Rollover Contributions . . . . . . . . . . . . . . 19

ARTICLE 4
Allocation, Accounting and Investment Provisions . . . . . . 20
4.1 Eligibility to Share in an Profit Sharing
Contributions and Forfeitures. . . . . . . . . . . 20
4.2 Allocations of Elective 401(k), Qualified
Nonelective and Matching Contributions . . . . . . 21
4.3 Allocations of Profit Sharing Contributions and
Forfeitures. . . . . . . . . . . . . . . . . . . . 21
4.4 Investment Funds and Elections . . . . . . . . . . 22
4.5 Valuation of Accounts. . . . . . . . . . . . . . . 23
4.6 Doskocil Stock Fund. . . . . . . . . . . . . . . . 24

ARTICLE 5
Amount of Payments to Participants . . . . . . . . . . . . . 24
5.1 General Rule . . . . . . . . . . . . . . . . . . . 24
5.2 Normal Retirement. . . . . . . . . . . . . . . . . 25
5.3 Vesting Schedule.. . . . . . . . . . . . . . . . . 25
5.4 Treatment of Forfeitures . . . . . . . . . . . . . 25

ARTICLE 6
Distributions. . . . . . . . . . . . . . . . . . . . . . . . 26
6.1 Distributions to Participants. . . . . . . . . . . 26
6.2 Distributions to Beneficiaries . . . . . . . . . . 28
6.3 Commencement of Distributions. . . . . . . . . . . 29
6.4 Deferred Distributions . . . . . . . . . . . . . . 31
6.5 Unclaimed Distributions. . . . . . . . . . . . . . 31
6.6 Form of and Consent to Elections . . . . . . . . . 31
6.7 In-Service Withdrawals . . . . . . . . . . . . . . 32
6.8 Rules Applicable to Hardship Withdrawals.. . . . . 33
6.9 Loans. . . . . . . . . . . . . . . . . . . . . . . 35
6.10 Facility of Payment. . . . . . . . . . . . . . . . 36
6.11 Claims Procedure . . . . . . . . . . . . . . . . . 37

ARTICLE 7
Survivor Annuity Rules . . . . . . . . . . . . . . . . . . . 38
7.1 Qualified Joint and Survivor Annuity . . . . . . . 38
7.2 Qualified Preretirement Survivor Annuity . . . . . 38

ARTICLE 8
Named Fiduciaries; Allocation of Responsibilities;
Administration. . . . . . . . . . . . . . . . . . . . . 39
8.1 Named Fiduciaries. . . . . . . . . . . . . . . . . 39
8.2 Insurance Contracts. . . . . . . . . . . . . . . . 41
8.3 Procedural Matters . . . . . . . . . . . . . . . . 42
8.4 Administrative Committee Members as Participants.. 43
8.5 Complete and Separate Allocation of Fiduciary
Responsibilities . . . . . . . . . . . . . . . . . 43
8.6 Exclusive Purpose. . . . . . . . . . . . . . . . . 43
8.7 Reversion to the Employers.. . . . . . . . . . . . 43
8.8 Indemnification of Committee Members.. . . . . . . 43
8.9 Bond . . . . . . . . . . . . . . . . . . . . . . . 44

ARTICLE 9
Amendment or Termination . . . . . . . . . . . . . . . . . . 44
9.1 Amendment. . . . . . . . . . . . . . . . . . . . . 44
9.2 Termination. . . . . . . . . . . . . . . . . . . . 44
9.3 Form of Amendment, Discontinuance of Employer
Contributions and Termination. . . . . . . . . . . 44
9.4 Limitations on Amendments. . . . . . . . . . . . . 44
9.5 Level of Benefits upon Merger. . . . . . . . . . . 45
9.6 Vesting Upon Termination, Discontinuance of
Employer Contributions; Liquidation of Trust . . . 45

ARTICLE 10
Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . 46
10.1 No Guarantee of Employment, etc. . . . . . . . . . 46
10.2 No Assignment of Rights. . . . . . . . . . . . . . 46
10.3 Qualified Domestic Relations Order . . . . . . . . 46
10.4 Receipts by Participants . . . . . . . . . . . . . 46
10.5 Controlling Law. . . . . . . . . . . . . . . . . . 46
10.6 Severability . . . . . . . . . . . . . . . . . . . 47
10.7 Notification of Addresses. . . . . . . . . . . . . 47
10.8 Gender and Number. . . . . . . . . . . . . . . . . 47

ARTICLE 11
Top-Heavy Plan Requirements. . . . . . . . . . . . . . . . . 47
11.1 Definition of Top-Heavy Plan. . . . . . . . . . . 47
11.2 Top-Heavy Plan Requirements . . . . . . . . . . . 48
11.3 Definitions . . . . . . . . . . . . . . . . . . . 48
11.4 Cessation of Top-Heavy Requirements . . . . . . . 49

ARTICLE 12
Adoption by Affiliates . . . . . . . . . . . . . . . . . . . 50
12.1 Adoption of Plan. . . . . . . . . . . . . . . . . 50
12.2 Agents for Employer . . . . . . . . . . . . . . . 50
12.3 Termination . . . . . . . . . . . . . . . . . . . 50
12.4 Data to be Furnished by Employers . . . . . . . . 50
<PAGE>
ARTICLE 1
General
1.1 Purpose. It is the intention of Doskocil Companies
Incorporated to continue to provide for the administration of the
Doskocil Companies Incorporated Retirement and Profit Sharing Plan
(formerly known as the "Doskocil Employee Investment Plan") (the
"Plan") and a Trust Fund in conjunction therewith in accordance
with the provisions of Sections 401 and 501 of the Code and in
accordance with other provisions of law relating to defined
contribution plans. The Plan is designed to be a profit sharing
plan which includes a qualified "cash or deferred arrangement"
described in Section 401(k) of the Code. Except as provided in
Section 8.7, upon the transfer by an Employer of any funds to the
Trust Fund in accordance with the provisions of this Plan, all
interest of the Employer therein shall cease and terminate, and no
part of the Trust Fund shall be used for, or diverted to, purposes
other than the exclusive benefit of Participants and their
beneficiaries and the defrayal of reasonable expenses of
administering the Plan.
1.2 Merger of Plans. For periods prior to July 1, 1993,
Wilson Foods Corporation, an affiliate of Doskocil Companies
Incorporated, actively maintained for the benefit of its eligible
employees the Retirement and Profit Sharing Plan for Salaried
Employees of Wilson Foods Corporation (the "Wilson Plan").
Effective as of July 1, 1993 (the "Merger Date"), the Wilson Plan
shall be merged with and into this Plan; the complete effectuation
of such merger, however, being expressly conditioned upon the
receipt of appropriate approvals from the Internal Revenue Service.

The above-referenced merger of plans shall be made in accordance
with Code Section 414(l) and Treasury Regulation Section 1.414(l)-
1(d) (as pertaining to the merger of defined contribution plans)
and in accordance with the following:
(a) Each participant of the Wilson Plan as of June 30, 1993
shall become a Participant of this Plan as of the Merger
Date.
(b) The fair market value of all of the account balances in
both this Plan and in the Wilson Plan as determined
immediately prior to the Merger Date shall equal the fair
market value of all the assets of this Plan determined as
of the Merger Date.
(c) The assets of this Plan and of the Wilson Plan shall be
combined as of the Merger Date to form the assets of this
Plan.
(d) As of and immediately after the Merger Date, each
participant and beneficiary of the Wilson Plan shall have
an Account balance or balances under this Plan equal to
the sum of the account balances maintained on his or her
behalf under the Wilson Plan immediately prior to the
Merger Date.
(e) Any optional forms of benefits constituting "protected
benefits" within the meaning of Code Section 411(d)(6)
and the regulations thereunder which were available to
participants under the Wilson Plan immediately prior to
the Merger Date shall be preserved and made available to
such individuals under this Plan to the extent required
by law.
(f) Amounts transferred from the Wilson Plan to this Plan in
conjunction with the above-referenced merger which are
attributable to "elective contributions" within the
meaning of Code Section 401(k) and the regulations
thereunder made by participants under the Wilson Plan
shall remain subject to the distribution limitation
provisions of Code Section 401(k)(2)(B) while maintained
under this Plan to the extent required by law.
(g) Pursuant to Code Section 414(l) and IRS Regulation
Section 1.414(l)-1(b)(1), the Wilson Plan and this Plan
are to be treated for the 1993 plan year (the plan year
of merger) as a "single plan" for purposes of the plan
qualification prescriptions of the Code. In that regard,
as with respect to the 1993 plan year, the Wilson Plan
and this Plan will be combined and treated as a single
plan for purposes of demonstrating compliance with:
(i) the minimum coverage standards of Code Section
410(b);
(ii) the actual deferral percentage test set forth
in Code Section 401(k)(3); and
(iii) all other applicable nondiscrimination
standards.
1.3 Source of Funds. The Trust Fund shall be funded and
maintained by contributions of the Employers, by Elective 401(k)
Contributions of Participants, and by such net earnings as are
realized from the investment of the assets of the Trust Fund.
1.4 Scope of Plan Coverage. The provisions of the Plan as
herein stated shall be effective as of July 1, 1993, except as
specifically provided otherwise. Except as may be required by
ERISA or the Code, the rights of any person whose status as a
Covered Employee of an Employer or an Affiliate has terminated
shall be determined pursuant to the Plan as in effect on the date
such status terminated, unless a subsequently adopted provision of
the Plan is made specifically applicable to such person.
1.5 Definitions. When used in the Plan, certain terms are
capitalized and have the respective meanings set forth in this
Article or in certain other Articles of the Plan.
Account. "Account" means any of the various Accounts
maintained under the Plan with respect to any Participant or any
beneficiary of a deceased Participant.
Actual Contribution Percentage. "Actual Contribution
Percentage" means with respect to a group of Participants the
percentage determined under Section 3.9(b).
Actual Deferral Percentage. "Actual Deferral Percentage"
means with respect to a group of Participants the percentage
determined under Section 3.8(b).
Administrative Committee. "Administrative Committee" means
the Committee serving as a named fiduciary as described in Section
8.1(d).
Affiliate. "Affiliate" means any corporation or enterprise,
other than Doskocil, which, as of a given date, is a member of the
same controlled group of corporations, the same group of trades or
businesses under common control, the same affiliated service group
or the same other group of associated organizations, determined in
accordance with Sections 414(b), (c), (m) or (o) of the Code, as is
Doskocil. For purposes of applying the limitations of Section 415
of the Code, however, "Affiliate" shall mean any corporation or
enterprise, other than Doskocil, which, as of a given date, is a
member of the same controlled group of corporations or the same
group of trades or businesses under common control, determined in
accordance with Section 414(b) or (c) of the Code as modified by
Section 415(h) thereof, as is Doskocil.
Annual Addition. "Annual Addition" means with respect to a
Participant for any Plan Year the total of the Elective 401(k)
Contributions, Qualified Nonelective Contributions, Matching
Contributions, Profit Sharing Contributions and Profit Sharing
Forfeitures (if any) allocated to his Accounts for the Plan Year,
plus any other amount so treated as an Annual Addition within the
meaning of Code Section 415(c)(2), which statutory provision is
specifically incorporated herein by reference.
Benefit Commencement Date. The term "Benefit Commencement
Date" means with respect to any Participant the date as of which
all events have occurred which entitle the Participant to receive,
or to begin to receive, a distribution from any of his Accounts
under the Plan.
Board of Directors. "Board of Directors" means the Board of
Directors of Doskocil, as from time to time constituted.
Code. "Code" means the Internal Revenue Code of 1986, as from
time to time amended.
Committee. "Committee" means the Administrative Committee
or the Investment Committee, or both of them, as the context so
indicates.
Compensation. An Employee's "Compensation" for any period is
the sum of:
(a) the total compensation paid to him by an Employer
and all other Affiliates during that period which is currently
treated as wages for income tax withholding purposes pursuant
to Code Section 3401(a) (determined without regard to any
rules under said Code Section that limit the remuneration
included in wages based on the nature or location of the
employment or the services performed);
(b) all other payments of compensation to the Employee
by an Employer or Affiliate for such period which is not
included in (a) above, but which is subject to reporting under
Code Sections 6041(d) and 6051(a)(3); and
(c) other amounts which would be so treated as wages but
for the Employee's election to have a portion of such wages
contributed by an Employer or another Affiliate on his behalf
on a salary reduction basis to a program described under
Section 125 or 401(k) of the Code.
The Compensation, and thus the Considered Compensation, of any
Employee for any annual period taken into account for any purpose
under the Plan shall not exceed $150,000 ($235,840 for 1993), or
such other amount as may be applicable for any annual period
pursuant to Code Section 401(a)(17).
Considered Compensation. Except as provided in Section
3.8(d), Participant's "Considered Compensation" for any period is
his Compensation during such period paid or deemed to be paid to
him by an Employer while he was a Covered Employee and a
Participant under the Plan. Thus, a Participant's "Considered
Compensation" shall not include any Compensation paid to him prior
to his becoming a Participant or while he is deemed to be a
Transferred Participant in accordance with Section 2.4.
Covered Employee. "Covered Employee" means an Employee of an
Employer who is not a Member of a Collective Bargaining Unit and
who is hired by an Employer to perform services on a regularly
scheduled basis for an indefinite period. For purposes of the
foregoing, an Employee shall be deemed to be performing services on
a regularly scheduled basis for an indefinite period if and as of
when such Employee completes 1,000 or more Hours of service during
the 12-month period beginning on his Employment Commencement Date,
or during any subsequent 12-month period beginning on the
anniversary of such date.
Doskocil. "Doskocil" means Doskocil Companies Incorporated,
a Delaware corporation.
Doskocil Stock Fund. "Doskocil Stock Fund" means the fund
maintained under the Plan which is described in Section 4.6.
Election Effective Date. "Election Effective Date" means
January 1, April 1, July 1 and October 1 of each Plan Year.
Elective Deferrals. "Elective Deferrals" means with respect
to any Participant for any period the sum of the contributions (if
any) made on behalf of the Participant by an employer (whether or
not an Employer or an Affiliate):
(a) under a cash or deferred arrangement (as defined in Code
Section 401(k)) to the extent not includable in the Participant's
gross income for that period pursuant to Code Section 402(a)(8)
(determined without regard to Code Section 402(g));
(b) to an individual retirement plan pursuant to a simplified
employee pension to the extent not includable in the Participant's
gross income for that period under Code Section 402(h)(1)(B)
(determined without regard to Code Section 402(g)); or
(c) which was applied toward the purchase of an annuity
contract or custodial account under Code Section 403(b) pursuant to
a salary reduction agreement (within the meaning of Code Section
3121(a)(5)(D)).
Elective 401(k) Contributions. "Elective 401(k)
Contributions" means with respect to a Participant the
contributions of an Employer made on the Participant's behalf
pursuant to the Participant's election as described in Section 3.1.
Elective 401(k) Contribution Account. A Participant's
"Elective 401(k) Contribution Account" means the Account into which
shall be credited the Elective 401(k) Contributions made on behalf
of the Participant pursuant to Section 3.1, and the earnings
attributable to such contributions. If applicable, there shall be
further credited into such Participant's Elective 401(k)
Contribution Account the value of such Participant's Deferred
Account balance under the Wilson Plan representing amounts
attributable to salary reduction contributions made on the
Participant's behalf under said plan which were transferred to this
Plan pursuant to the merger referred to in Section 1.2.
Eligible Participant. An "Eligible Participant" is a
Participant who is eligible to share in the allocations of Profit
Sharing Contributions and Profit Sharing Forfeitures for a given
Plan Year pursuant to Section 4.1(a).
Employee. "Employee" means a common law employee of an
Employer.
Employer. "Employer" means Doskocil, Wilson Foods
Corporation, and any other Affiliate of Doskocil which may become
an Employer with respect to the Plan in accordance with Section
12.1.
Employment Commencement Date. An Employee's "Employment
Commencement Date" means the first date on which the Employee
performs duties for an Employer or an Affiliate as an employee;
provided, however, that in the case of an Employee who returns to
service following his Severance Date, the Employee's "Employment
Commencement Date" means the first date on which he performs duties
for an Employer or an Affiliate as an employee following such
Severance Date.
ERISA. "ERISA" means the Employee Retirement Income Security
Act of 1974, as from time to time amended.
Excess Deferrals. "Excess Deferrals" with respect to a
Participant for any Plan Year means that amount of his Elective
401(k) Contributions, if any, in excess of the dollar limitation
set forth in Section 3.7 as applicable to such Participant for such
Plan Year.
Excess 401(k) Contributions. "Excess 401(k) Contributions"
with respect to a Participant for any Plan Year means that amount
of his Elective 401(k) Contributions for that Plan Year, if any,
which cannot be allocated to his Elective 401(k) Contribution
Account by reason of the limitation set forth under Section 3.8 or
3.10.
Excess Matching Contributions. "Excess Matching
Contributions" with respect to a Participant for any Plan Year
means the amount of his Matching Contributions which cannot be
allocated to his Matching Contribution Account by reason of the
limitation set forth under Section 3.9 or 3.10.
Excess Tentative Contribution. "Excess Tentative
Contribution" with respect to any Plan Year means an excess
contribution (if any) described in Section 4.3(f).
415 Compensation. A Participant's "415 Compensation" for any
Plan Year is the sum of:
(a) the total compensation paid to him by an Employer and all
Affiliates during that Plan Year which is currently treated as
wages for income tax withholding purposes pursuant to Code Section
3401(a) (determined without regard to any rules under said Code
Section that limit the remuneration included in wages based on the
nature or location of the employment or the services performed);
and
(b) all other payments of compensation to the Participant by
an Employer or an Affiliate for such Plan Year which is not
included in (a) above, but which is subject to reporting under Code
Sections 6041(d) and 6051(a)(3).
Highly Compensated Employee. "Highly Compensated Employee"
means, with respect to any Plan Year, an employee of an Employer or
any Affiliate who:
(a) at any time during that Plan Year or the preceding Plan
Year was a five percent owner of an Employer or an Affiliate (as
defined in Section 416(i)(1) of the Code); or
(b) during the preceding Plan Year:
(i) received Compensation in excess of $96,368 (or
such
greater amount as may be prescribed by the Commissioner of
Internal Revenue);
(ii) received Compensation in excess of $64,245 (or
such
greater amount as may be prescribed by the Commissioner of
Internal Revenue) and was among the top 20 percent of all the
employees of an Employer and all Affiliates (disregarding
those
employees excludable under Code Section 414(q)(8)) when ranked
on
the basis of Compensation paid for that Plan Year; or
(iii)was an officer of an Employer or an Affiliate and
either (A)
received Compensation in excess of 50 percent of the
limitation in
effect under Code Section 415(b)(1)(A) for that year (provided
that for this purpose, no more than 50 employees (or, if less,
the
greater of three employees or 10 percent of the total number
of
employees of an Employer and all Affiliates) shall be treated
as
officers); or (B) was the highest paid officer of an Employer
and
all Affiliates for that year; or
(c) during that Plan Year, is both (i) a member of the group
consisting of the 100 employees of an Employer and all Affiliates
receiving the greatest Compensation for that year, and (ii) a
member of the group of employees described in subparagraph (b)
above if such subparagraph (b) were applicable to the current Plan
Year.
A former employee of an Employer or an Affiliate shall be
treated as a Highly Compensated Employee if such employee (i) was
a Highly Compensated Employee with respect to the Plan Year in
which he separated from service or otherwise ceased to perform
services for an Employer and all Affiliates, or (ii) was a Highly
Compensated Employee at any time after attaining age 55.
Hour of Service. An "Hour of Service" with respect to any
employee is:
(a) each hour for which the employee is paid or entitled to
payment for the performance of duties for an Employer or an
Affiliate;
(b) each hour for which back pay, irrespective of mitigation
of damages, is either awarded or agreed to by an Employer or an
Affiliate;
(c) each hour for which the employee is paid or entitled to
payment from an Employer or an Affiliate for a period during which
no duties are performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday, illness,
incapacity, layoff, jury duty, military duty, or leave of absence.
In crediting Hours of Service pursuant to this subparagraph (c),
all payments made or due shall be taken into account, whether such
payments are made directly by an Employer or an Affiliate, or
indirectly (e.g., through a trust fund or insurer to which an
Employer or Affiliate makes payments, or otherwise), except that:
(i) no more than 501 such Hours of Service shall be
credited
for any continuous period during which the employee
performs no duties;
(ii) no such Hours of Service shall be credited if
payments
are made or due under a plan maintained solely for the purpose
of
complying with any workers' compensation, unemployment
compensation or disability insurance laws; and
(iii)no such Hours of Service shall be credited for
payments which are
made solely to reimburse the employee for medical or medically
related expenses.
The Hours of Service, if any, for which an employee is credited for
a period in which he performs no duties shall be computed and
credited to computation periods in accordance with 29 C.F.R.
2530.200b-2 and other applicable regulations promulgated by the
Secretary of Labor. For purposes of computing the Hours of Service
to be credited to an employee with respect to any payment made or
due which is calculated on the basis of units of time, the number
of Hours of Service to be so credited shall be determined by
reference to the employee's regularly scheduled working hours, or,
if the employee does not have a regular work schedule, by reference
to an 8-hour workday.
Investment Committee. "Investment Committee" means the
Committee
described in Section 8.1(c).
Investment Fund. "Investment Fund" means an Investment Fund
described in Section 4.4.
Matching Contributions. "Matching Contributions" means the
contributions of an Employer described in Section 3.3.
Matching Contribution Account. A Participant's "Matching
Contribution Account" means the Account into which shall be
credited both the Matching Contributions made on the Participant's
behalf pursuant to Section 3.3, and the earnings attributable to
such contributions.
Maternity or Paternity Absence. A "Maternity or Paternity
Absence" is an absence from work by an Employee:
(a) by reason of the pregnancy of the Employee;
(b) by reason of the birth of a child of the Employee;
(c) by reason of the placement of a child with the Employee
in connection with the adoption of such child by the Employee; or
(d) for purposes of caring for such child for a period
beginning immediately following such birth or placement.
Member of a Collective Bargaining Unit. "Member of a
Collective Bargaining Unit" means any Employee who is included in
a collective bargaining unit and whose terms and conditions of
employment are covered by a collective bargaining agreement if
there is evidence that retirement benefits were the subject of
good-faith bargaining between representatives of such Employee and
an Employer unless such collective bargaining agreement makes this
Plan applicable to such Employee.
Normal Retirement Date. A Participant's "Normal Retirement
Date" shall be his sixty-fifth birthday.
One-Year Break in Service. A "One-Year Break in Service," as
such term is used in Sections 5.6 and 5.7 with respect to any
Employee, is a one-year period, commencing on the Employee's
Severance Date, during which such Employee does not perform duties
for an Employer or an Affiliate.
Participant. A "Participant" is (a) a current Covered
Employee of an Employer who has become eligible to participate in
the Plan pursuant to Section 2.1, or (b) a former Covered Employee
on whose behalf an Account under the Plan is maintained.
Plan. The "Plan" means the Doskocil Companies Incorporated
Retirement and Profit Sharing Plan, as from time to time in effect.
Plan Year. A "Plan Year" is the twelve month period beginning
January 1 and ending December 31.
Profit Sharing Account. A Participant's "Profit Sharing
Account" means the Account into which shall be credited both the
Participant's allocable share of Profit Sharing Contributions and
Profit Sharing Forfeitures (if any) made to or arising under the
Plan, and the earnings attributable to such contributions and
forfeitures.
Profit Sharing Contributions. "Profit Sharing Contributions"
means the contributions of an Employer described in Section 3.4.
Profit Sharing Forfeitures. "Profit Sharing Forfeitures"
means the value of the Profit Sharing Accounts of former
Participants which become subject to forfeiture in accordance with
Section 5.6.
Qualified Joint and Survivor Annuity. A "Qualified Joint and
Survivor Annuity" is an annuity for the life of a Participant with
payments continued upon the death of the Participant to and for the
life of his spouse in an amount which is fifty percent of the
amount payable while the Participant was living and which is
actuarially equivalent to a single-life annuity otherwise payable
to the Participant.
Qualified Nonelective Contributions. "Qualified Nonelective
Contributions" means the contributions of an Employer described in
Section 3.2.
Qualified Nonelective Contribution Account. A Participant's
"Qualified Nonelective Contribution Account" means the Account into
which shall be credited the Qualified Nonelective Contributions
made on behalf of the Participant pursuant to Section 3.2.
Qualified Preretirement Survivor Annuity. "Qualified
Preretirement Survivor Annuity" means the form of distribution
described in Section 7.2.
QVEC Account. If applicable, a Participant's "QVEC Account"
means the Account maintained under the Plan which reflects the
Participant's account balance under the Wilson Plan attributable to
deductible qualified voluntary employee contributions made by the
Participant to said plan (and the earnings thereon), which account
balance was transferred to this Plan in conjunction with the merger
referred to in Section 1.2.
Required Distribution Year. "Required Distribution Year"
means with respect to:
(a) a Participant who attained age 70-1/2 before January 1,
1988, and who was, at any time during a Plan Year ending in or
after the calendar in which he attains age 70-1/2, a 5 percent
owner of an Employer or an Affiliate within the meaning of Section
416(i)(1) of the Code, the later of:
(i) the calendar year during which he attained age 70-
1/2; and
(ii) the calendar year during which he first became such
a five percent owner;
(b) any other Participant who attained age 70-1/2 before
January 1, 1988, the later of:
(i) the calendar year during which he attained age 70-
1/2; and
(ii) the calendar year during which his employment with
an Employer and all Affiliates terminates; and
(c) a Participant who attains age 70-1/2 after December 31,
1987, the calendar year in which he attains age 70-1/2.
Rollover Account. "Rollover Account" means an Account
maintained under the Plan on behalf of a Participant as described
in Section 3.18. To the extent applicable, a Participant's
Rollover Account may consist in whole or in part of the value of
the Participant's Rollover Account balance under the Wilson Plan,
and the earnings thereon, which account balance represents amounts
attributable to rollover contributions made by the Participant to
said plan and which balance was transferred to this Plan in
conjunction with the merger referred to in Section 1.2.
Severance Date. An Employee's "Severance Date" is the earlier
of:
(a) the date on which he quits, retires, dies or is
discharged, or
(b) the first day following any one-year period (any two-year
period in the case of an Employee on a Maternity or Paternity
Absence) during which he performed no duties for an Employer or an
Affiliate.
Stoppenbach Account. If applicable, a Participant's
"Stoppenbach Account" means the value of the Participant's account
balance under the Stoppenbach, Inc. Thrift Plan and Trust (other
than amounts attributable to voluntary, after-tax contributions),
and the earnings thereon, which account balance was previously
transferred to and maintained under the Wilson Plan and
subsequently transferred to this Plan in conjunction with the
merger referred to in Section 1.2.
Tentative Profit Sharing Contribution. "Tentative Profit
Sharing Contribution" means the contribution described in Section
3.4.
Transferred Participant. A "Transferred Participant" is a
Participant described in Section 2.4.
Trustee. "Trustee" means the Trustee under the Trust referred
to in Section 8.1(b).
Trust Fund. "Trust Fund" means the assets of the Plan as held
in trust pursuant to an Agreement of Trust entered into with the
Trustee.
Valuation Date. "Valuation Date" means the last day of each
Plan Year quarter.
Voluntary Contribution Account. If applicable, a
Participant's "Voluntary Contribution Account" means the Account
maintained under the Plan which reflects, as the case may be, the
Participant's account balance under the Stoppenbach, Inc. Thrift
Plan and Trust or under the Wilson Plan attributable to voluntary,
after-tax contributions, and the earnings thereon, which account
balance was previously transferred to or otherwise became part of
this Plan. Separate subaccounts shall be maintained under the
Voluntary Contribution Account to separately account for:
(a) voluntary contributions made by the Participant under the
Plan or a predecessor plan; and
(b) the earnings attributable to such voluntary
contributions.
Wilson Plan. "Wilson Plan" means the Retirement and Profit
Sharing Plan for Salaried Employees of Wilson Foods Corporation as
in effect prior to the merger of said plan with and into this Plan
as referenced in Section 1.2.
Wilson Retirement Account. If applicable, a Participant's
"Wilson Retirement Account" means the value of the Participant's
Retirement Account balance under the Wilson Plan, and the earnings
thereon, which account balance was transferred to the Plan in
conjunction with the merger referred to in Section 1.2.
Year of Service. A "Year of Service" is a unit of service
credited to an Employee for various purposes under the Plan,
including for the purposes of determining his eligibility to become
a Participant under the Plan and, once becoming a Participant, of
determining the nonforfeitable status of his Matching Contribution
and Profit Sharing Accounts. The Years of Service to be credited
with respect to any Employee under the Plan shall be determined as
provided below.
(a) An Employee shall be credited with one Year of Service
for each full year in the period commencing on his Employment
Commencement Date and ending on his Severance Date. An Employee
shall also be credited with 1/365 of a Year of Service for each
additional day in such period for which he did not receive credit
pursuant to the preceding sentence.
(b) A former Employee who is reemployed and who performs
duties for an Employer or an Affiliate within one year after the
date he last performed duties for an Employer shall also be
credited with 1/365 of a Year of Service for each day in the period
commencing on his Severance Date and ending on his Employment
Commencement Date following such Severance Date.
(c) All of an Employee's Years of Service shall be taken into
account under the Plan, except that Years of Service before a One-
Year Break in Service shall be disregarded until such Employee has
completed one Year of Service after such One-Year Break in Service.

ARTICLE 2
Eligibility
2.1 Eligibility Requirements.
(a) Every Participant in the Plan as of July 1, 1993 shall
continue as such, subject to the provisions of the Plan.
(b) Every individual who was a participant under the Wilson
Plan as of June 30, 1993 shall become a Participant in the Plan as
of July 1, 1993, provided he is then a Covered Employee.
(c) Every other Covered Employee shall be eligible to
participate in the Plan, if he is then employed by an Employer as
a Covered Employee, as of the first day of the first payroll period
pertaining to such Covered Employee coinciding with or next
succeeding the later of the date as of which he:
(i) completes a Year of Service; and
(ii) attains age 21.
(d) A Covered Employee may make a Rollover Contribution to
the Plan prior to the date he would otherwise be eligible to
participate pursuant to subsection (c) above in accordance with and
subject to the conditions set forth in Section 3.18 and, upon such
event, shall become a Participant in the Plan. The scope of such
temporal participation, however, shall be limited to these rights
associated with the maintenance of a Rollover Account on behalf of
the Covered Employee. In that regard, no contributions or
forfeitures will be made on his behalf or otherwise allocated to
his Accounts with respect to any period prior to such date, if any,
as of which his status as a Participant is determined by reference
to subsection (c) above.
(e) Any former Employee of an Employer who was a Participant
or could have become a Participant under subsection (c) above had
he been employed as a Covered Employee, and who is reemployed by an
Employer as a Covered Employee, shall be eligible to participate
immediately upon such reemployment.
2.2 Leaves of Absence. During the period that any
Participant is granted a leave of absence by his Employer, he shall
continue to participate in the Plan in the same manner and subject
to the same conditions as if he were not on leave of absence.
Leaves of absence may be granted in writing pursuant to an
Employer's leave policy which shall be applied in a uniform and
nondiscriminatory manner to all Participants under similar
circumstances.
2.3 Leased Employees.
(a) To the extent required by Section 414(n) of the Code and
the regulations thereunder, a Leased Employee shall be treated as
an Employee. A "Leased Employee" means any individual who is not
an Employee and who provides services for an Employer if:
(i) such services are provided pursuant to an
agreement between an Employer and any other person;
(ii) such individual has performed such services for
an Employer (or a related person within the meaning of
Section 144(a)(3) of the Code) on a substantially full-
time basis for a period of at least one year; and
(iii) such services are a type historically performed
by the employees in the business field of an Employer.
(b) Notwithstanding any other provision of the Plan to the
contrary, a Leased Employee shall be deemed, on an individual-by-
individual basis, to be in a class of Employees not eligible to
participate in this Plan, unless such participation is required as
a condition of the Plan's qualification under Section 401(a)(26) or
410(b) of the Code.
2.4 Transferred Participant. A Participant who is
transferred from an Employer to employment with an Affiliate which
is not an Employer, or while continuing in the employ of an
Employer ceases to be a Covered Employee (a "Transferred
Participant") shall not be considered to have incurred a
termination of employment, service, or, except as provided below in
the next sentence, participation for purposes of the Plan. No
contributions or forfeitures attributable to Compensation paid to
an Employee for any period during which he is a Transferred
Participant shall be credited to his Accounts, but for all other
purposes of the Plan, a Transferred Participant shall be considered
a Participant. Subject to Section 2.1, if a Transferred
Participant again becomes a Covered Employee, he shall become
eligible to participate in the Plan as of that date.
2.5 Disabled Participants. A Participant who becomes
totally and permanently disabled and thereupon ceases to actively
perform services for an Employer shall continue to be treated as an
active Employee for all purposes of the Plan, including the
crediting of Years of Service, until the effective date of such
Participant's resignation from the employment of the service of the
Employers and all Affiliates. Accordingly, such a disabled
Participant shall not be entitled to a distribution from the Plan
prior to such resignation (other than an in-service withdrawal if
so eligible as prescribed in Section 6.7).

ARTICLE 3
Contributions
3.1 Elective 401(k) Contributions.
(a) Subject to the provisions of this Article 3, each
Participant may elect to have the Employers contribute to the Plan
on his behalf for each payroll period an amount equal to 1 percent
or more of his Considered Compensation for such payroll period
(which amount is hereafter referred to as his "Elective 401(k)
Contribution"). A Participant's Elective 401(k) Contribution rate
must generally be a full percentage of the Participant's Considered
Compensation. However, Elective 401(k) Contributions may be made
with respect to non-routine salary payments (for example, bonuses
or final salary payments), or in other unusual circumstances, on
the basis of a flat dollar amount or other fractional percentage of
a Participant's Considered Compensation in accordance with such
policy and procedures as may be effectuated by the Administrative
Committee from time to time. In all events, a Participant may not
designate a contribution rate which would result in his Elective
401(k) Contributions for a Plan Year to exceed 15 percent of his
Compensation for that Plan Year.
(b) A Participant who chooses to have Elective 401(k)
Contributions made on his behalf shall be eligible for Matching
Contributions as provided under Section 3.3 below.
(c) A Participant may elect to have Elective 401(k)
Contributions commence as of the date he first becomes eligible to
participate in the Plan or, thereafter, as of the first day of any
payroll period coinciding with or next following an Election
Effective Date, provided that he timely submits the required
election form to the Administrative Committee or its delegate
before such date. Such election, once made, shall govern until
modified or suspended as hereinafter provided. A Participant may
elect to increase or decrease such contribution rate, to become
effective as of the first payroll period coinciding with or next
following any future Election Effective Date (or, in the case of a
permissible election with respect to a non-routine salary payment,
such as with respect to a bonus or final salary payment, as of the
date prescribed in such election), by timely submitting the
required form to the Administrative Committee or its delegate. A
Participant may also prospectively suspend his Elective 401(k)
Contributions as of the last day of any payroll period by timely
submitting the required form to the Administrative Committee or its
delegate. For purposes of this subsection (c), a form will be
considered timely submitted if it is delivered at least 30 days
before the date it is to become effective.
(d) Upon the granting to a Participant of an unpaid leave of
absence, the Participant's Elective 401(k) Contributions to the
Plan shall be suspended. Upon his return to active employment as
a Covered Employee, Elective 401(k) Contributions shall again be
made on the Participant's behalf on the basis of the election in
effect immediately prior to such suspension, unless modified in
accordance with subsection (c) above.
(e) All Elective 401(k) Contributions made on behalf of
Participants shall be effected by salary reduction and, according-
ly, each Participant's election regarding Elective 401(k)
Contributions shall constitute his agreement with his Employer to
a reduction in his compensation in an amount equal to the amount of
the Elective 401(k) Contributions.
3.2 Qualified Nonelective Contributions. For each payroll
period, the Employers shall contribute to the Plan on behalf of
each Participant an amount equal to one percent of the
Participant's Considered Compensation for such payroll period
(which amount is hereafter referred to as a "Qualified Nonelective
Contribution"); provided, however, that the total Qualified
Nonelective Contributions which may be made on behalf of any
Participant for any Plan Year shall be limited to $250.
3.3 Matching Contributions. Subject to the provisions of
this Article 3, for each payroll period the Employers shall
contribute to the Plan on behalf of each Participant an amount
equal to the lesser of (i) the Elective 401(k) Contributions made
on behalf of such Participant for such payroll period, or (ii)
three percent of the Participant's Considered Compensation for such
payroll period.
3.4 Profit Sharing Contributions. Subject to the right
reserved to Doskocil to alter, amend or discontinue this Plan, the
Employers shall pay to the Trustee for each Plan Year such amounts,
if any, as the Board of Directors may determine (the "Tentative
Profit Sharing Contribution"), less the sum of the Excess Tentative
Contributions for such Plan Year (if any) arising under Section
4.3(f). In no event, however, shall the total contributions made
by an Employer under this Plan for any Plan Year exceed the maximum
amount deductible from the Employer's income under Section 404 of
the Code with respect to that Plan Year unless the board of
directors of such Employer specifically waives this restriction for
such Plan Year.
3.5 No Voluntary Employee Contributions. Participants are
neither required nor permitted to make voluntary, after-tax
contributions under the Plan. Notwithstanding the foregoing,
Voluntary Contribution Accounts shall continue to be maintained
under the Plan on behalf of Participants in accordance with the
terms hereof.
3.6 Maximum Annual Addition. Any other provision of this
Plan notwithstanding, in no event shall the total Annual Additions
with respect to a Participant for any Plan Year (the "Limitation
Year") exceed the lesser of:
(a) $30,000 (or such other amount for such Plan Year as may
be specified by the Secretary of the Treasury or his delegate
pursuant to Section 415(d) of the Code); or
(b) 25% of such Participant's 415 Compensation for that Plan
Year.
3.7 Dollar Limitation on Elective 401(k) Contributions.
(a) In no event may a Participant elect to have Elective
401(k) Contributions made on his behalf at a rate which will result
in his Elective Deferrals for any calendar year to exceed $8,994
(or such greater amount as may be prescribed by the Secretary of
Treasury to take into account cost-of-living increases pursuant to
Code Section 404(g)(5)).
(b) If a Participant's Elective Deferrals with respect to any
calendar year exceeds the annual dollar limit prescribed above, the
Participant may notify the Administrative Committee in writing
prior to April 1 next following the close of such calendar year of
his election to have all or a portion of such "Excess Deferral"
(and the amount thereof) to be allocated under this Plan. A
Participant shall be deemed to have so notified the Administrative
Committee of such Excess Deferrals calculated by taking into
account Elective Deferrals for the applicable calendar year made
under this Plan and all other plans maintained by an Employer or an
Affiliate. Upon such actual or deemed notification, and without
regard to any other provision of the Plan, the Administrative
Committee shall direct the Trustee to distribute to the Participant
prior to the April 15 following immediately thereafter the
Participant's Excess Deferral so allocated under this Plan, plus
any income attributable thereto.
(c) Excess Deferrals arising under the Plan shall continue to
be treated as contributions made by an Employer for purposes of the
Plan, even if distributed to a Participant in accordance with (b)
above, except as provided below:
(i) The amount of any Excess Deferrals distributed to
a
Participant in accordance with subsection (b) above shall not
be
treated as an Elective 401(k) Contribution for purposes of
the
Annual Addition limitation prescribed under Section 3.6.
(ii) Excess Deferrals of a Non-Highly Compensated
Employee
shall not be treated as an Elective 401(k) Contribution for
purposes of the Actual Deferral Percentage tests or the
multiple
use limitation prescribed under Sections 3.8 and 3.10,
respectively. Excess Deferrals of a Highly Compensated
Employee,
however, shall be treated as an Elective 401(k) Contribution
for
such purposes.
3.8 Additional Limitations on Elective 401(k) Contributions.
(a) In no event shall the Actual Deferral Percentage (as
described below) of Eligible Employees (as defined in (c)
below) who are Highly Compensated Employees for any Plan Year
exceed the greater of:
(i) the Actual Deferral Percentage of all other Eligible
Employees for such Plan Year multiplied by 1.25; or
(ii) the Actual Deferral Percentage of all other Eligible
Employees for such Plan Year multiplied by 2, provided
that the Actual Deferral Percentage of Eligible Employees who
are Highly Compensated Employees for that Plan Year does
not exceed that of all other Eligible Employees by more than 2
percentage points.
(b) The "Actual Deferral Percentage" of a group of Eligible
Employees for a Plan Year means the average of the ratios
(determined separately for each Eligible Employee in such group) of
A to B where A equals the sum of the Elective 401(k)
Contributions and Qualified Nonelective Contributions credited to
each such Eligible Employee's Accounts for such Plan Year
(without regard to the portion of any Elective 401(k) Contribution
treated as an Excess Deferral and distributed to the
Eligible Employee as provided under Section 3.7), and where B
equals the Eligible Employee's Considered Compensation for
such Plan Year.
(c) For purposes of this Section 3.8, an "Eligible Employee"
means with respect to any Plan Year any Covered Employee
who directly or indirectly is eligible to make an Elective 401(k)
Contribution under the Plan for all or any portion of said
Plan Year.
(d) For purposes of this Section 3.8, the "Considered
Compensation" of an Eligible Employee with respect to any Plan
Year means the Compensation paid or deemed to be paid to him by an
Employer during such Plan Year while he was an Eligible
Employee.
(e) The Actual Deferral Percentage of an Eligible Employee who
has no Elective 401(k) Contributions nor any Qualified
Nonelective Contributions credited to his Accounts for a Plan Year
is zero.
3.9 Limitations on Matching Contributions.
(a) In no event shall the Actual Contribution Percentage (as
described below) of Participants who are Highly
Compensated Employees for any Plan Year exceed the greater of:
(i) the Actual Contribution Percentage of all other
Participants for such Plan Year multiplied by 1.25; or
(ii) the Actual Contribution Percentage of all other
Participants for such Plan Year multiplied by 2, provided
that the Actual Contribution Percentage of the Participants who
are Highly Compensated Employees for that Plan Year
does not exceed that of all other Participants by more than 2
percentage points.
(b) The "Actual Contribution Percentage" of a group of
Participants for a Plan Year means the average of the ratios
(determined separately for each Participants in such group) of A to
B where A equals the sum of the Matching Contributions
and Qualified Nonelective Contributions credited to each such
Participant's Accounts for such Plan Year and where B equals
the Participant's Considered Compensation for such Plan Year.
3.10 Multiple Use Limitation. If for any Plan Year both
Elective 401(k) Contributions and Matching Contributions are
made under the Plan with respect to any Highly Compensated
Employee, and if both the Actual Deferral Percentage and the
Actual Contribution Percentage of Participants who are Highly
Compensated Employees with respect to such Plan Year exceed
the 1.25 limitations prescribed in Sections 3.8(a)(i) and
3.9(a)(i), respectively, then in no event shall the sum of the
Actual Deferral Percentage and the Actual Contribution Percentage
of Participants who are Highly Compensated Employees for
such Plan Year exceed the greater of (a) or (b) below:
(a) the sum of:
(i) 125 percent of the greater of the Actual Deferral
Percentage or the Actual Contribution Percentage for such Plan
Year of Eligible Employees or Participants, as relevant,
who are not Highly Compensated Employees with respect
to that Plan Year; and
(ii) two percentage points, plus the lesser of the Actual
Deferral Percentage or the Actual Contribution Percentage
of such Non-Highly Compensated Employees for such Plan
Year, provided, however, that in all events, the amount
determined under this paragraph (B) shall not exceed 200
percent of the lesser of the Actual Deferral Percentage
and the Actual Contribution Percentage of such Non-Highly
Compensated Employee group for such Plan Year.
(b) the sum of:
(i) 125 percent of the lesser of the Actual Deferral
Percentage or the Actual Contribution Percentage for such Plan
Year of Eligible Employees or Participants, as relevant,
who are not Highly Compensated Employees with respect
to that Plan Year; and
(ii) two percentage points, plus the greater of the Actual
Deferral Percentage or the Actual Contribution Percentage
of such non-Highly Compensated Employees for such Plan
Year, provided, however, that in all events, the amount
determined under this paragraph (ii) shall not exceed 200
percent of the greater of the Actual Deferral Percentage
and the Actual Contribution Percentage of such non-Highly
Compensated Employee group for such Plan Year.
If the applicable imitation prescribed above is exceeded for any
Plan Year, the corrective distributions shall be made in
accordance with Section 3.12 below.
3.11 Extent of Fractionalization. For purposes of Sections
3.8, 3.9 and 3.10 above, and, if applicable, Section 3.12,
the Actual Deferral Percentage and Actual Contribution Percentage
of any Eligible Employee or Participant, or any group of
such individuals, shall be calculated to the nearest 1/100 of 1
percent (.0001).
3.12 Corrective Distributions.
(a) If at the end of any Plan Year a portion of the Elective
401(k) Contributions or Matching Contributions made on
behalf of Participants who are Highly Compensated Employees cannot
be credited to their Accounts because of the
limitations imposed under Section 3.8, 3.9 or 3.10 above, then the
amount of the Excess 401(k) Contributions or Excess
Matching Contributions, as the case may be, which otherwise would
be credited to the Accounts of such Participants (and the
income thereon as determined in accordance with Section 3.13 below)
shall be reduced and distributed to such Participants
(without regard to any other provision of the Plan) on the basis of
the respective portions of such excess amounts
attributable to such Participants. It is intended that such
corrective distributions shall be made within 2 1/2 months
following, and in all events shall be made within 12 months after,
the end of the Plan Year to which such excess
contributions relate.
(b) The sequence of the reductions and distributions under
subsection (a) above shall begin with the Highly
Compensated Employee having the highest actual deferral ratio or
actual contribution ratio, as applicable. The amount of
the Elective 401(k) Contributions or Matching Contributions
otherwise allocable with respect to such Participant shall be
reduced to cause his actual deferral ratio or actual contribution
ratio, as applicable, to equal the ratio of the Highly
Compensated Employee having the next highest ratio (unless a
lesser reduction would enable the satisfaction of the
limitation being tested, in which case such lesser reduction shall
be applied). This process shall continue until all the
applicable limitations are satisfied, in which event the Trustee
shall distribute the appropriate dollar amounts to the
affected Participants.
3.13 Attributable Income. For purposes of Sections 3.7(b) and
3.12(a) above, the income attributable to a
Participant's Excess Deferrals, Excess 401(k) Contributions or
Excess Matching Contributions, as the case may be, for any
Plan Year shall be the gain or loss of the Trust for the Plan Year
allocable to the Participant's Elective 401(k)
Contribution Account or Matching Contribution Account, as the case
may be, multiplied by a fraction:
(a) the numerator of which is the Participant's Excess
Deferrals, Excess 401(k) Contributions or Excess Matching
Contributions, as relevant, for the Plan Year; and
(b) the denominator of which is the balance of the
Participant's Elective 401(k) Contribution Account or Matching
Contribution Account, as relevant, determined as of the end of the
Plan Year, reduced by any gains or increased by any
losses of the Trust allocated to such Account for the Plan Year.
3.14 Treatment of Certain Family Members.
(a) If with respect to any Plan Year an individual is a member
of the family of a five percent owner of an Employer
(as defined in Code Section 416(a)(1)) or of a Highly Compensated
Employee in the group consisting of the ten Highly
Compensated Employees paid the greatest Compensation (as defined in
Article 1 but determined, if applicable, without regard
to Code Sections 125, 402(a)(8), 402(h)(1)(B) and 403(b)) during
the Plan Year, then:
(i) such individual shall not be considered a separate
employee; and
(ii) any Compensation paid to such individual (and any
applicable contribution made on behalf of such individual)
shall be treated as if paid to (or on behalf of) the five
percent owner or Highly Compensated Employee as prescribed
under applicable Treasury Regulations.
(b) For purposes of this Section 3.14, the term "family" with
respect to any Employee means his spouse and lineal
ascendants and descendants, and the spouses of such lineal
ascendants and descendants.
(c) In the case of any Participant who, with respect to a Plan
Year, is a Highly Compensated Employee subject to the
family aggregation rule prescribed in (a) above, then the combined
Actual Deferral Percentage and Actual Contribution
Percentage for the family group (which is treated as one Highly
Compensated Employee) shall be determined by combining the
Elective 401(k) Contributions, Qualified Nonelective Contributions,
Matching Contributions and Considered Compensation of
all Participants included in that family group.
(d) The Elective 401(k) Contributions, Qualified Nonelective
Contributions Matching Contributions and the Considered
Compensation of all Participants who are members of a family group
shall be disregarded for purposes of determining the
Actual Deferral Percentage and Actual Contribution Percentage for
the non-Highly Compensated Employee group.
(e) If an Employee is required to be aggregated as a member of
more than one family group, all Participants who are
members of those family groups that include that Employee are
aggregated as one family group.
(f) If so required, the determination and correction of Excess
401(k) Contributions or Excess Matching Contributions
of a Highly Compensated Employee subject to the foregoing family
aggregation rules for any Plan Year shall be accomplished
by reducing the actual deferral ratio or the actual contribution
ratio, as applicable, in accord with the above and
allocating said Excess 401(k) Contributions or Excess Matching
Contributions for the family group among the members of such
group in proportion to the Elective 401(k) Contributions or
Matching Contributions, as relevant, made on behalf of each such
family member that are combined to determine the actual deferral
ratio or the actual contribution ratio, as applicable.
3.15 Aggregation of Plans. If in addition to this Plan an
Employer or other Affiliate maintains another qualified
plan providing for elective employer contributions, matching
contributions or employee contributions, then the
Administrative Committee may treat this Plan and any or all such
other plans as a single plan for purposes of applying the
Actual Deferral Percentage test, the Actual Contribution Percentage
test and the multiple use limitation set forth in
Sections 3.8, 3.9 and 3.10 above. In that event, however, such
aggregated plans shall similarly be treated as a single plan
for purposes of the nondiscrimination provisions of Section 410(b)
of the Code (other than as with respect to the
application of the average benefits percentage test prescribed
thereunder).
3.16 Order of Testing. The testing for compliance with the
various limitations imposed under this Article 3 shall be
performed in the following order:
(a) the testing for compliance with the Elective Deferral
limitation set forth in Section 3.7; then
(b) the performance of the Actual Deferral Percentage test set
forth in Section 3.8; then
(c) the performance of the Actual Contribution Percentage test
set forth in Section 3.9; then
(d) the testing for compliance of the multiple use limitation
set forth in Section 3.10; and then
(e) the testing for compliance with the Annual Addition
limitation set forth in Section 3.6.
3.17 Committee Rules. The Administrative Committee may adopt
such rules as it deems necessary or desirable to impose
limitations on the amount of Elective 401(k) Contributions chosen
by Participants pursuant to Section 3.1 for the purpose
of assuring that the various limitations prescribed under this
Article 3 are satisfied.
3.18 Rollover Contributions.
(a) Subject to the following terms and conditions, the
Administrative Committee shall permit the transfer to the
Trust Fund of a Rollover Contribution for the benefit of a
Participant.
(b) A Rollover Contribution is the entire amount held for the
benefit of a Participant (other than that portion
representing voluntary employee contributions)--
(i) in a trust which is exempt from tax under
Section 501(a) of the Code and is part of another plan
described in Section 401(a) of the Code; or
(ii) in an individual retirement account as defined
in Section 408 of the Code, established by or for the
benefit of the Participant, if attributable solely to an
amount which was transferred to such individual
retirement account as a rollover contribution satisfying
the requirements of Section 408(d)(3) of the Code.
(c) Any such Rollover Contribution shall be made from the
Participant concerned within 60 days of the Participant's
receipt thereof, or be made directly from such other trust or
individual retirement account. All Rollover Contributions
must be made in the form of cash.
(d) Any Rollover Contribution which is transferred to the
Trust Fund during a Plan Year for the benefit of a
Participant shall be allocated as of the date received to a
separate Rollover Account established and maintained on the
Participant's behalf. A Participant shall at all times be fully
vested and have a nonforfeitable interest in the balance
of his Rollover Account.
(e) Any Rollover Contribution with respect to a Participant
received directly from a trust maintained under another
plan (i.e., in a trust-to-trust transfer), and the earnings and
losses of such Rollover Contribution, shall be segregated
and separately account for under the Trust Fund. Any optional
forms of benefit distributions available to such Participant
under the transferor plan (i.e., the plan from which such Rollover
Contribution was transferred) shall be made available
hereunder to such Participant under the same terms and conditions
as applied under the transferor plan, but only as to such
segregated assets unless the same optional form of benefit
distribution is generally made available under the Plan to
Participants. Rollover Contributions received other than in a
trust-to-trust transfer (including any amounts received in
an eligible rollover distribution within the meaning of Code
Section 401(a)(31)), and all other amounts held under the Plan
on behalf of the Participant, shall be distributed solely in
accordance with the terms of this Plan.

ARTICLE 4
Allocation, Accounting and Investment Provisions
4.1 Eligibility to Share in an Profit Sharing Contributions
and Forfeitures.
(a) A Participant shall be eligible to share in the
allocations of Profit Sharing Contributions and Profit Sharing
Forfeitures with respect to a Plan Year if he is employed by an
Employer or an Affiliate as of the last day of the Plan Year
for which such contribution or forfeitures are being allocated. A
Participant who is eligible to share in such
contributions and forfeitures for a Plan Year shall be known as an
"Eligible Participant" with respect to that Plan Year.
(b) With respect to each Plan Year, a Participant shall be
eligible to receive an allocation of Matching Contributions
for each payroll period within such Plan Year for which he makes
Elective 401(k) Contributions to the Plan, and shall
further be eligible to receive a Qualified Nonelective Contribution
allocation as prescribed in Section 3.2, regardless of
whether he is employed by an Employer or an Affiliate as of the
last day of that Plan Year.
4.2 Allocations of Elective 401(k), Qualified Nonelective and
Matching Contributions. As of the last day of each
payroll period, there shall be allocated, respectively, to the
Elective 401(k) Contribution Account, the Qualified
Nonelective Contribution Account and the Matching Contribution
Account of each Participant the amounts of Elective 401(k)
Contributions, Qualified Nonelective Contributions and Matching
Contributions made by or on behalf of such Participant for
such payroll period.
4.3 Allocations of Profit Sharing Contributions and
Forfeitures. Subject to the Annual Addition limitations
prescribed under Section 3.6, the Tentative Profit Sharing
Contribution established pursuant to Section 3.4 and any Profit
Sharing Account Forfeitures which become allocable for a Plan Year
shall be allocated to the Profit Sharing Account of each
Eligible Participant on the bases of such Eligible Participant's
Age Factor, Projected Service Factor and Considered
Compensation in accordance with the following provisions.
(a) The Age Factor with respect to each Eligible Participant
shall be determined on the bases of the following table
and the attained age of the Eligible Participant as of the last day
of the Plan Year for which such determination is being
made:
Age Factor Age Factor

16 0.2583 41 1.5751
17 0.2777 42 1.6932
18 0.2985 43 1.8202
19 0.3209 44 1.9567
20 0.3449 45 2.1035
21 0.3708 46 2.2613
22 0.3986 47 2.4309
23 0.4285 48 2.6132
24 0.4606 49 2.8092
25 0.4952 50 3.0198
26 0.5323 51 3.2463
27 0.5723 52 3.4898
28 0.6152 53 3.7515
29 0.6613 54 4.0329
30 0.7109 55 4.3354
31 0.7642 56 4.6605
32 0.8215 57 5.0101
33 0.8832 58 5.3858
34 0.9494 59 5.7898
35 1.0206 60 6.2240
36 1.0972 61 6.6908
37 1.1794 62 7.1926
38 1.2679 63 7.7320
39 1.3630 64 8.3119
40 1.4652 65 and above 8.9353

(b) The Projected Service Factor with respect to each Eligible
Participant for any Plan Year shall be the number of
full Years of Service which such Participant shall have completed
at age 65 as then determined on the basis of the
assumption that such Participant remains continuously employed by
an Employer or an Affiliate until his attainment of age
65. Notwithstanding the foregoing, the Projected Service Factor of
an Eligible Participant age 65 or older as of the end
of any Plan Year shall be the number of full Years of Service
completed by such Participant as of the last day of such Plan
Year.
(c) For each Eligible Participant, there shall then be
performed a calculation to arrive at the product of the
following multipliers:
(i) the Eligible Participant's Age Factor as determined
in (a) above;
(ii) the Eligible Participant's Projected Service Factor
as determined in (b) above; and
(iii) the Eligible Participant's Considered Compensation
for such Plan Year.
The product of such calculation shall hereafter be referred to
as the Eligible Participant's "Weighing Factor."
(d) The sum of the Tentative Profit Sharing Contribution and
any Profit Sharing Forfeitures allocable for the Plan
Year shall then be provisionally allocated to the Profit Sharing
Account of each Eligible Participant in an amount equal
to the ratio that the Weighing Factor of that Eligible Participant
bears to the sum of the Weighing Factors of all Eligible
Participants.
(e) If the provisional allocation amount as determined in (d)
above does not result in the Eligible Participant's
total Annual Additions for the Plan Year to exceed the Maximum
Annual Addition with respect to such Participant for such
year as determined in Section 3.6, then such provisional allocation
amount shall be allocated to such Eligible Participant's
Profit Sharing Account.
(f) If the provisional allocation amount as determined in (d)
above will result in any Eligible Participant's total
Annual Additions for the Plan Year to exceed the Maximum Annual
Addition with respect to such Participant for such year,
then the permissible portion of such provisional amount shall be
allocated to such Eligible Participant's Profit Sharing
Account. The remaining portion of such provisional allocation
shall be treated as an Excess Tentative Contribution, and
shall thus reduce the amount of the actual amount of Profit Sharing
Contribution to be made under the Plan for such Plan
Year as otherwise prescribed under Section 3.4.
4.4 Investment Funds and Elections.
(a) The Trust Fund shall be divided into separate investment
funds ("Investment Funds") as provided in this Section
4.4. Each Investment Fund, as may from time to time be
established, shall be a common fund in which each Participant shall
have an undivided interest in the respective assets of such
Investment Fund. Except as otherwise provided, the value of
each Participant's Accounts in any Investment Fund shall be
measured by the proportion that the net credits to his Accounts
maintained under such Investment Fund bear to the total net credits
to the Accounts of all Participants and beneficiaries
maintained under such Investment Fund as of the date that such
share is being determined. For purposes of the allocation
of income and periodic valuations, each Investment Fund shall be
considered separately. No Investment Fund shall share in
the gains or losses of any other, and no Investment Fund shall be
valued by taking into account any assets of or
distributions from any other.
(b) The particular Investment Funds to be made available under
the Plan shall be determined from time to time in
accordance with the general investment policy established by the
Board of Directors, and by the implementation of such
investment policy by the Investment Committee, as prescribed in
Section 8.1. At all times, however, there shall be made
available at least three separate Investment Funds, each of which
is diversified and has materially different risk and
return characteristics. The Investment Committee may from time to
time make available additional Investment Funds adhering
to the general investment policy established by the Board of
Directors, and may also direct that Investment Funds with
similar investment objectives be consolidated.
(c) Upon becoming eligible to participate in the Plan, a
Participant may make an election directing that the
contributions to be made by him or on his behalf under the Plan be
credited to one or more of the Investment Funds, in
multiples of 10 percent of the aggregate of all such contributions
up to 100 percent thereof. In the event a Participant
declines or otherwise fails to make such an election, the
contributions made under the Plan with respect to such Participant
shall be allocated to one or more Investment Funds pursuant to the
direction of the Investment Committee.
(d) Each Participant may also elect to change the investment
of all future contributions to the Plan in any multiple
of 10 percent of such contributions, effective as of any subsequent
Election Effective Date.
(e) A Participant (or a beneficiary of a deceased Participant)
may elect to transfer amounts from one Investment Fund
to another, in multiples of 10 percent of the value of the Account
maintained under the transferor Investment Fund,
effective as of any Election Effective Date.
(f) In order to be effective, an election made under this
Section 4.4 must be submitted to the Administrative
Committee or its delegate with a reasonable time before the
applicable Election Effective Date. In this regard, such a
submission will be deemed to have been provided in such a
reasonable time if it is made at least 30 days before the intended
Election Effective Date.
(g) The Administrative Committee from time to time in its
discretion adopt administrative rules and procedures, and
may impose other guidelines and limitations pertaining to
investment elections as such Committee shall deem to be
appropriate for the efficient administration of the Plan. Any
costs charged by an Investment Fund with respect to a
transfer of assets may be charged to the Account of the Participant
electing such transfer.
4.5 Valuation of Accounts. Except as may be specifically be
provided otherwise, as of each Valuation Date, each
Account of a Participant (or a beneficiary of a deceased
Participant) in each Investment Fund shall equal:
(a) the Participant's account balance, if any, in that
Investment Fund for that Account as of the immediately
preceding Valuation Date (after adjusting for any transfers between
Investment Funds pursuant to Section 4.4); minus
(b) any withdrawal or other distributions made from that
Account since the immediately preceding Valuation Date; plus
(c) the net earnings of such Account, after adjusting for
expenses and losses, if any, since the immediately preceding
Valuation Date; plus
(d) the amount of contributions, if any, made to that
Investment Fund for that Account by or on behalf of the
Participant since the immediately preceding Valuation Date, plus
any amounts allocated to that Investment Fund for that
Account pursuant to Section 4.6.
4.6 Doskocil Stock Fund.
(a) The Doskocil Stock Fund is an investment fund into which
was credited shares of voting common stock issued by
Doskocil pursuant to the direction of Participants as permissible
under the terms of the Plan as in effect prior to January
1, 1990. Notwithstanding any provision of this Article 4 to the
contrary, the Doskocil Stock Fund shall be treated separate
and apart from the Investment Funds described in Section 4.4.
(b) A Participant shall not have the right to have amounts
held in any other Investment Fund transferred to the
Doskocil Stock Fund, nor may he direct that contributions made by
him or on his behalf under the Plan be credited to the
Doskocil Stock Fund.
(c) A Participant (or a beneficiary of a deceased Participant)
having amounts credited on his behalf under the
Doskocil Stock Fund may elect to have all or a portion of such
amounts liquidated and the proceeds transferred to any other
Investment Fund, effective as of any Election Effective Date, in
accordance with the procedures set forth in Section 4.4.
(d) In the event that the Board of Directors directs the
Trustee to liquidate all or any portion of the Doskocil stock
held on behalf of Participants under the Doskocil Stock Fund, or if
any cash dividends are paid with respect to Doskocil
stock, such proceeds or dividends, as the case may be, shall be
credited to an Investment Fund or Funds in accordance with
each such Participant's investment election as then in effect.

ARTICLE 5
Amount of Payments to Participants
5.1 General Rule. Upon the retirement, resignation, death or
other termination of employment of a Participant, he,
or in the event of his death, his beneficiary, shall be entitled to
receive from his respective Accounts in the Trust Fund
an amount equal to the sum of:
(a) the value of his Matching Contribution and his Profit
Sharing Accounts, to the extent that he is then vested in
such Accounts as determined in accordance with the succeeding
provisions of this Article 5; and
(b) the value of all other Accounts maintained on his behalf
under the Plan.
The right of all persons to receive any payments under this Plan
shall be subject to the provisions of Article 6 concerning
the time and manner of making distributions.
5.2 Normal Retirement. Any Participant may retire on or after
his Normal Retirement Date. The value of the Matching
Contribution and Profit Sharing Accounts of a Participant whose
Severance Date does not precede his Normal Retirement Date
shall become nonforfeitable upon his Normal Retirement Date. If
the retirement of a Participant is deferred beyond his
Normal Retirement Date, he shall continue in full participation in
the Plan and Trust Fund.
5.3 Vesting Schedule.
(a) If the Severance Date of a Participant occurs prior to his
Normal Retirement Date, the nonforfeitable status of
the Participant's Matching Contribution and Profit Sharing Accounts
shall be determined in accordance with the following
schedule:

The Nonforfeitable
If His Years of Vesting Percentage of His Matching
Service as of His Severance Contribution and Profit
Date Shall Have Been Sharing Accounts Shall Be

Less than 3 0%
3 or more 100%

(b) Notwithstanding the foregoing, each Covered Employee
eligible to participate in the Plan on July 1, 1993 shall
at all times be fully vested and have a nonforfeitable interest in
his Matching Contribution Account and his Profit Sharing
Account.
5.4 Treatment of Forfeitures.
(a) If as of his Severance Date a Participant does not have a
fully vested, nonforfeitable interest in his Matching
Contribution and Profit Sharing Accounts, then the value of such
Accounts shall be treated as a forfeiture as of the earlier
of (i) the Valuation Date immediately following the date the
Participant (or his beneficiary) receives a distribution from
the Plan, or (ii) the end of the Plan Year in which such Severance
Date occurred, but only, in each case, if the Participant
is then not reemployed by an Employer or an Affiliate.
(b) Forfeitures of a Participant's Matching Contribution
Account arising as of any date shall be applied, and thus
shall reduce, the amount of the Matching Contributions to be made
by the Employers for succeeding payroll periods pursuant
to Section 3.3.
(c) Forfeitures of a Participant's Profit Sharing Account
shall become allocable to the Profit Sharing Accounts of
Eligible Participants as prescribed in Section 4.3.
(d) If a terminated Participant whose Matching Contribution
and Profit Sharing Accounts were forfeited upon his
earlier separation from service is reemployed by an Employer or an
Affiliate prior to his incurring 5 consecutive One-Year
Breaks in Service, and if before the fifth anniversary of his
reemployment the Participant repays the full amount of his
other Accounts previously distributed to him (if any), the amount
of the repayment and the amount of his Matching
Contribution and Profit Sharing Accounts which was previously
forfeited shall be restored to his respective Accounts as of
the date of such repayment (or, if the Participant had not
previously received a distribution, as of the first day of the
calendar quarter coinciding with or next following his
reemployment). Such restoration shall be made from the applicable
forfeitures which otherwise would be allocable for the Plan Year in
which such restoration event occurs, or, to the extent
such forfeitures are insufficient or have not arisen, shall require
a supplemental contribution from the Employers.

ARTICLE 6
Distributions
6.1 Distributions to Participants.
(a) Except as may otherwise be provided in this Article 6,
benefits under the Plan which are distributable to any
Participant shall be distributed, as the Participant may elect, in
a non-annuity form, as a direct transfer to an eligible
retirement plan, or in an annuity form, (or, to the extent
allowable, in combination thereof) pursuant to and subject to
the terms and conditions prescribed below.
(b) A Participant may elect to receive his benefits under the
Plan distributed to him in a lump sum payment.
Alternatively, a Participant may elect a partial payment form of
distribution providing the Participant with a distribution
of a portion of the value of his Accounts, with the remaining
balance retained for distribution at a later date. A
Participant electing the partial payment form of distribution must
indicate on the distribution election form the amount
of the partial payment. The Administrative Committee shall
establish a policy and procedures regarding the order in which
partial payments are to be charged against particular Investment
Funds and against particular Accounts maintained under such
Investment Funds. All partial payments to be made from an Account
under a Investment Fund must be for at least $250, or,
if less, the total value of the Account.
(c) In lieu of receiving his benefits in a non-annuity form
described above, effective on and after January 1, 1993,
a Participant may elect to have such benefits transferred directly
to an eligible retirement plan. In this regard, an
"eligible retirement plan" means:
(i) a trust described in Section 401(a) of the Code,
which is exempt from tax under Section 501(a) of the Code,
and which forms part of a defined contribution plan, the terms
of which permit the acceptance of rollover
contributions;
(ii) an individual retirement account or an individual
retirement annuity (other than an endowment contract)
described, respectively, in Sections 408(a) or (b) of the Code;
or
(iii) an annuity plan described in Section 403(a) of the
Code.
(d) Notwithstanding the foregoing, if the total amount to be
distributed to a Participant during a Plan Year is
expected to be less than $200, then such distributions shall be
made in a lump sum payment. In addition, if the total
amount to be distributed to a Participant for a Plan Year exceeds
$500, the Participant may elect to have a portion of such
distributable amount paid to him in a lump sum payment or as a
partial payment as prescribed in (b) above, with the
remainder transferred directly to an eligible retirement plan;
provided, however, that the portion elected to be so directly
transferred must be for at least $500. In no event may a
Participant elect to have a distribution transferred directly to
more than one eligible retirement plan. Nor may a Participant
elect to have a portion of his benefits transferred directly
to an eligible retirement plan, with the remaining portion paid to
him in an annuity form as described in (e) below.
(e) Subject to subsection (f) below, a Participant may elect,
in lieu of one of the distribution forms described in
subsections (b) and (c) above, to have the distributable balance of
his Accounts under the Plan paid to him in one of the
following annuity forms, but only if the value of such
distributable balance does not exceed $3,500 (and has not exceeded
$3,500 during any period in which so distributable):
(i) if the Participant is married, as a Qualified Joint and
Survivor Annuity;
(ii) as a single life annuity;
(iii) as a monthly annuity payable for the life of the
Participant and continuing after his death for the life of his
designated contingent annuitant (which annuitant may
be his spouse); or
(iv) as a annuity payable for the life of the Participant, with
a term certain not to exceed five years.
(f) Notwithstanding the foregoing, a Participant who is
married as of his Benefit Commencement Date may not elect an
annuity described in subsection (e) (ii), (iii) or (iv) above
unless the Participant waives the Qualified Joint and Survivor
Annuity form of distribution, and his spouse consents to such
waiver, as prescribed in Sections 6.6(c) and 7.1(c).
(g) Benefits payable in the form of an annuity under
subsection (d) above (or, if applicable, as a Qualified
Preretirement Survivor Annuity under Section 7.2) may be paid by
distributing to the Participant or surviving spouse, as
the case may be, an annuity contract purchased by the Trustee at
the direction of the Administrative Committee for an amount
equal to the distributable balance of the Participant's Accounts as
of the Valuation Date immediately preceding the date
such contract is purchased on the distributee's behalf. Benefits
distributed under such annuity contract shall be subject
to the same consent and other conditions that would apply if such
benefits were paid in the applicable annuity form directly
from the Trust Fund. Any such annuity contract shall be
non-assignable and noncommutable. Delivery of any such contract
shall be in full satisfaction of the rights of the distributee
under this Plan, and upon the delivery of any such contract,
the distributee shall not have any interest in the Trust Fund but
shall look solely to the insurer issuing such contract
for the payment of benefits.
6.2 Distributions to Beneficiaries.
(a) Except as otherwise provided in this Section 6.2 (and, in
the case of a married Participant, subject to the
provisions of Section 7.2), benefits under the Plan which are
distributable by reason of a Participant's death shall be
distributed to the person effectively designated by the Participant
as his beneficiary. Such distribution shall be made
in a lump sum or as a partial payment as described in Section
6.1(b). Effective on and after January 1, 1993, a beneficiary
who is the surviving spouse of a Participant may alternatively
elect to have all or a portion of such survivorship benefits
transferred directly to an individual retirement account or an
individual retirement annuity (other than an endowment
contract) described, respectively, in Sections 408(a) and (b) of
the Code under the terms and conditions generally set forth
in Section 6.1(c) and (d) above.
(b) To be effective, a beneficiary designation must be filed
with the Administrative Committee or its delegate in such
written form as the Administrative Committee requires and may
include contingent or successive beneficiaries; provided that
any designation by a Participant who is married at the time of his
death which fails to name his surviving spouse as the
sole, primary beneficiary shall not be effective unless such
surviving spouse has consented to the designation as provided
in Section 6.6. A Participant may change his beneficiary
designation at any time by filing with the Administrative
Committee or its delegate a new beneficiary designation (with such
spousal consent as may be required).
(c) If a Participant dies and has not filed an effective
beneficiary designation or has revoked all such designations,
or has filed an effective designation but the designated
beneficiary or beneficiaries predeceased him, the distributable
portion of the Participant's Accounts shall be paid to the
Participant's surviving spouse, or, if there is no surviving
spouse, to the executor or administrator of the Participant's
estate.
(d) If the beneficiary, having survived the Participant, shall
die prior to the final and complete distribution of
the Participant's Accounts, then the distributable portion of said
Account shall be paid:
(i) to the contingent or successive beneficiary named in the
most recent effective beneficiary designation filed
by the deceased beneficiary in accordance with such
designation; or
(ii) if no such beneficiary has been named, to the executor,
administrator or other authorized representative of
the beneficiary's estate.
(e) A Participant's beneficiary may either be a natural person
or a trust, the beneficiary of which is a natural
person.
6.3 Commencement of Distributions.
(a) Except as otherwise provided in this Section 6.3, a
Participant may request a distribution from his Accounts to
be made as of any Valuation Date coinciding with or following the
Participant's Severance Date (or as soon thereafter as
is practicable), provided that such request is properly submitted
to the Administrative Committee or its delegatee at least
30 days before such Valuation Date. In the event the request for
distribution is properly submitted within 30 days of a
Valuation Date, then such distribution shall be made as of the
following Valuation Date. Notwithstanding the foregoing,
unless a Participant elects otherwise in writing, distributions
shall commence no later than the 60th day after the close
of the Plan Year in which falls the Participant's (i) Normal
Retirement Date or (ii) Severance Date, whichever is later.
(b) Notwithstanding subsection (a) above, if the distributable
value of a Participant's Accounts exceeds $3,500 (or
at the time of any prior distribution exceeded $3,500) and if such
Accounts are immediately distributable, then in no event
shall a distribution of any portion of such Accounts be made prior
to the Participant's Normal Retirement Date without the
Participant's written consent. In addition, if such a Participant
is married and the Participant elects an annuity form
of benefit other than a Qualified Joint and Survivor Annuity, then
the payment of such annuity benefits may not commence
prior to the Participant's Normal Retirement Date without the
further written consent of the Participant's spouse made in
a manner similar to that described in Section 6.6(b). Not less
than 30 days and no more than 90 days before such a
Participant's Benefit Commencement Date, the Administrative
Committee shall provide the Participant with written notice of
his right to defer the commencement of the distribution of his
benefits until his Normal Retirement Date (or until such
later benefit deferral date as may be available under the Plan).
Except with respect to distributions to be made on or
after a Participant's Normal Retirement Date, in no event shall a
distribution be made to Participant to whom this
subsection (b) applies less than 30 days after such notice has been
provided.
(c) Notwithstanding the provisions of (b) above, the consent
of the Participant to a distribution shall not be
required to the extent that the distribution is required to satisfy
Section 401(a)(9) or Section 415 of the Code. In
addition, upon termination of this Plan, and if neither an Employer
nor any Affiliate maintains another defined contribution
plan (other than an employee stock ownership plan as defined in
Section 4975(e)(7) of the Code), the Participant's Accounts
may, without the Participant's consent, be distributed to the
Participant. However, if an Employer or any Affiliate
maintains another defined contribution plan (other than an employee
stock ownership plan as defined in Section 4975(e)(7)
of the Code), then the Participant's Accounts shall be transferred,
without the Participant's consent, to the other plan
if the Participant does not consent to an immediate distribution
hereunder.
(d) In all events, distributions to a Participant shall
commence on or before the April 1 following the calendar year
first following the Participant's Required Distribution Year. The
amount of such initial distribution, and the amount and
timing of any subsequent distributions, shall be made in accordance
with the provisions of the Code Section 401(a)(9) and
the regulations promulgated thereunder (including the minimum
distribution incidental benefit requirement provisions of IRS
Regulation Section 1.409(a)-2), which statutory provisions and
regulations are specifically incorporated by reference herein.
(e) Except as provided in subsection (f) below, distributions
of benefits to a beneficiary who is the surviving spouse
of a Participant shall be made, if so directed by the spouse,
within a reasonable time after the Participant's death, and,
in all events, shall be made (or, if payable over the life or life
expectancy of the beneficiary, shall commence) on or
before the last day of the calendar year in which falls the later
of (i) the date the Participant would have attained age
70-1/2 had he survived, or (ii) the first anniversary of the
Participant's date of death. Distributions to any other
beneficiary (including, if applicable, to the beneficiary of the
deceased beneficiary of a Participant) shall be made on
or before the last day of the calendar year in which falls the
fifth anniversary of the Participant's date of death.
(f) Notwithstanding the provisions of subsection (e) above, if
the beneficiary of a deceased participant is his
surviving spouse, and if such surviving spouse dies (i) prior to
receiving the full amount of survivorship benefits payable
to such spouse, and (ii) before the date distributions were
required to commence pursuant to subsection (e) above, then the
entire remaining balance of such survivorship benefits shall be
distributed to the spouse's beneficiary on or before the
last day of the calendar year in which falls the fifth anniversary
of the spouse's date of death.
(g) If distribution of a Participant's Accounts has commenced
and the Participant dies (i) before the entire balance
of his Accounts have been distributed to him and (ii) on or after
April 1 following his Required Distribution Year, and if
the distributions to such Participant were designed to be paid over
his life or life expectancy (or the joint life or life
expectancies of the Participant and his beneficiary), then the
remaining balance of such Accounts shall be distributed to
the Participant's beneficiaries as least as rapidly as under the
method of distribution in effect at the time of the
Participant's death.
(h) Notwithstanding anything in this Section 6.3 to the
contrary, if the amount of any distribution required to
commence on a certain date cannot be ascertained by such date, a
payment retroactive to such date may be made no later than
60 days after the earliest date on which such amount can be
ascertained.
(i) Not more than 90 days prior to a Participant's Benefit
Commencement Date, the Administrative Committee shall
furnish each Participant (or other beneficiary entitled to a
distribution) with a written notice of the distribution options
described in Sections 6.1 and 6.2 of the Plan, and the general
income taxation applicable to each form of distribution.
6.4 Deferred Distributions. If the distribution of all or any
portion of a Participant's Accounts is deferred, the
undistributed vested balance of such Accounts shall share in the
net earnings or losses of the Trust Fund as provided in
Section 4.5.
6.5 Unclaimed Distributions. In the event any distribution
cannot be made because the person entitled thereto cannot
be located and the distribution remains unclaimed for 5 years after
the distribution date established by the Administrative
Committee, then such amount shall be treated as a Profit Sharing
Account forfeiture and allocated in accordance with Section
4.3. In the event such person subsequently files a valid claim for
such amount, such amount shall be restored to the
Participant's Accounts in a manner similar to the restoration of
forfeitures described under Section 5.4(d).
6.6 Form of and Consent to Elections.
(a) Any election, revocation of an election, application for
benefits or beneficiary designation made under the Plan
shall not be effective unless it is (i) made on such form, if any,
as the Administrative Committee may prescribe for such
purpose; (ii) in writing; (iii) signed by the Participant or spouse
as the case may be; and (iv) filed with the
Administrative Committee or its delegate.
(b) In addition, any designation of beneficiary to be made
under Section 6.2(a) by a married Participant (other than
a designation of his spouse as his sole, primary beneficiary) must
be consented to by the Participant's spouse. Such consent
must be in writing, must acknowledge its effect, and must be
witnessed by a Plan representative or notary public. Once
consented to by the Participant's spouse, a Participant's
designation of beneficiary may not be changed during the continued
period of marriage without the spouse's further consent.
(c) In addition, an election by a married Participant to waive
the Qualified Joint and Survivor Annuity form of
benefit under Section 7.1 shall not be effective unless such
election (i) specifies the optional form of benefit elected
in lieu of such annuity form, (ii) specifically identifies the
contingent annuitant (if applicable), and (iii) is consented
to by the Participant's spouse. Such spousal consent must be in
writing, must acknowledge its effect, and must be witnessed
by a Plan Representative or a notary public. Once consented to by
the Participant's spouse, a Participant's election in
regard to an optional form of benefit may not be changed during the
continued period of marriage without the spouse's
further consent, unless the change is a reversion to the Qualified
Joint and Survivor Annuity.
(d) Notwithstanding subsections (b) and (c) above, the consent
of the spouse of a Participant is not required if, at
the time of filing such election, the Participant establishes to
the satisfaction of the Administrative Committee that the
consent of the spouse cannot be obtained because there is no
spouse, such spouse cannot be located, or by reason of such
other circumstances as may be prescribed by regulations.
(e) Any consent of a spouse (or establishment that the consent
cannot be obtained) shall be effective only with
respect to that spouse.
6.7 In-Service Withdrawals.
(a) Any Participant for whom a Voluntary Contribution Account
is maintained under the Plan may withdraw part or all
of the funds credited to such Account, to the extent not previously
withdrawn. (b) Any Participant who has attained
age 59-1/2 may withdraw part or all of the funds credited to his
Accounts under the Plan to the extent not previously
withdrawn.
(c) Any Participant under the age of 59-1/2 may withdraw from
his Elective 401(k) Contribution Account and his
Qualified Nonelective Contribution Account part or all of the sum
of the Elective 401(k) Contributions and Qualified
Nonelective Contributions contributed by him or on his behalf to
the Plan (but not the earnings thereon), to the extent not
previously withdrawn, if the withdrawal is made on account of a
hardship within the meaning of Section 6.8 below.
(d) Notwithstanding the foregoing, in the case of a
Participant who has an unpaid loan made pursuant to Section 6.9,
no withdrawal shall be permitted to the extent that the amount
thereof would reduce the value of the nonforfeitable portion
of a Participant's Accounts below an amount equal to twice the
amount of the unpaid loan.
(e) To effectuate a withdrawal, a Participant must submit the
required form to the Administrative Committee or its
delegate, and must indicate on such form the amount requested to be
withdrawn. The Administrative Committee shall establish
a policy and procedures regarding the order in which withdrawals
are to be charged against particular Investment Funds and
against particular Accounts maintained under such Investment Funds.
All withdrawals from an Account under any Investment
Fund must be for at least $250, or, if less, the total value of the
Account.
(f) All withdrawals under the Plan shall be made as soon as
practicable after the end of each calendar month, provided
that the request for such withdrawal is received by the
Administrative Committee or its delegate at least 30 days prior to
the end of such month. Withdrawals for which the request forms are
not received before such 30 day period shall be paid
after the end of the succeeding month.
(g) Withdrawals made under this Section 6.7 shall be paid in
a lump sum or, if the Participant so elects as with
respect to a withdrawal from other than his Voluntary Contribution
Account, by a direct transfer to an eligible retirement
plan as prescribed in Section 6.1(b).
(h) A Participant making a hardship withdrawal under
subsection (c) above shall be suspended from having further
Elective 401(k) Contributions and Qualified Nonelective
Contributions made by or on his behalf under this Plan or any other
plan maintained by an Employer or an Affiliate until the beginning
of the first payroll period coincident with or next
following the end of a period of twelve months commencing with the
date of such withdrawal. Consequently, Matching
Contributions shall also cease to be made on the Participant's
behalf during such suspension period.
(i) Upon making a withdrawal on account of a hardship, the
dollar limitation on Elective 401(k) Contributions
applicable to the Participant under Section 3.7 for the calendar
year immediately following the calendar year in which such
withdrawal is made shall be reduced by the sum of the of Elective
401(k) Contributions and Qualified Nonelective
Contributions made to the Plan by or on the Participant's behalf
for the calendar year of the hardship withdrawal.
6.8 Rules Applicable to Hardship Withdrawals.
(a) For purposes of Section 6.7(c), a withdrawal shall be
deemed to be made on account of a Participant's hardship
only if the withdrawal (i) is made on account of an immediate and
heavy financial need of the Participant, and (ii) is
necessary to satisfy such financial need.
(b) The determination of whether a Participant has an
immediate and heavy financial need is to be made on the basis
of all relevant facts and circumstances. A financial need shall
not fail to qualify as immediate and heavy merely because
such need was reasonably foreseeable or voluntarily incurred by the
Participant.
(c) A withdrawal shall be deemed to be made on account of an
immediate and heavy financial need of a Participant if
the withdrawal is on account of:
(i) medical expenses described in Code Section 213(d)
incurred by the Participant, the Participant's spouse,
or any dependent of the Participant (as defined in Code Section
152), or necessary for those persons to obtain the
medical care described in Code Section 213(d);
(ii) costs directly related to the purchase (excluding
mortgage payments) of a principal residence of the
Participant;
(iii) payment of tuition and related educational fees for
the next twelve months of post-secondary education for
the Participant, his spouse, children or dependents (as defined
in Code Section 152);
(iv) the need to prevent the eviction of the Participant
from his principal residence or foreclosure on the
mortgage of the Participant's principal residence; or
(v) such other reasons as the Commissioner of the
Internal Revenue may prescribe.
(d) A withdrawal shall not be treated as necessary to satisfy
an immediate and heavy financial need of a Participant
to the extent the amount of the withdrawal is in excess of the
amount required to relieve the financial need, or to the
extent such need may be satisfied from other resources that are
reasonably available to the Participant. This determination
is to be made on the basis of all relevant facts and circumstances.
In this regard, the Participant's resources shall be
deemed to include those assets of his spouse and minor children
that are reasonably available to the Participant. The
amount necessary to satisfy an immediate and heavy financial need
may include any amounts necessary to pay any federal,
state or local income taxes or penalties reasonably anticipated to
result from the distribution.
(e) A withdrawal may be treated as necessary to satisfy a
financial need if the Administrative Committee reasonably
relies upon the Participant's representation that the need cannot
be relieved:
(i) through reimbursement or compensation by insurance
or otherwise;
(ii) by reasonable liquidation of the Participant's
assets; or
(iii) by other distributions or nontaxable loans (at the
time of the loan) from plans maintained by an Employer,
an Affiliate or any other employer, or by borrowing from
commercial sources on reasonable commercial terms in an amount
sufficient to satisfy the need.
The need will not be considered able to be relieved by any of the
above actions if the effect would be to increase the
amount of the need.
(f) A distribution shall be deemed necessary to satisfy an
immediate and heavy financial need if:
(i) the distribution is not in excess of the amount
necessary to satisfy the Participant's immediate and heavy
financial need (which may include amounts necessary to pay
federal, state or local income taxes or penalties reasonably
anticipated to result from the distribution);
(ii) the Participant has first obtained all
distributions and withdrawals, other than hardship withdrawals, and
all nontaxable loans currently available under all plans
maintained by an Employer or an Affiliate;
(iii) the Participant's Elective 401(k) Contributions and
Qualified Nonelective Contributions for the next
taxable year under this Plan and any other plans maintained by
an Employer or an Affiliate are limited to the
applicable Elective Deferral limit referred to in Section
3.7(a) for that year, less the Participant's Elective 401(k)
Contributions and Qualified Nonelective Contributions for the
year in which he receives the hardship withdrawal;
(iv) the Participant is precluded, under the terms of a
legally enforceable agreement, from making any further
Elective 401(k) Contributions, and from having any further
elective employee contributions and qualified nonelective
contributions made on his behalf under this Plan or any other
plan maintained by an Employer or an Affiliate, until
the beginning of the first payroll period coincident with or
next following the end of a period of twelve months
commencing with the date of such withdrawal. Consequently,
Matching Contributions shall cease to be made on the
Participant's behalf under this Plan during such suspension
period. For purposes of this paragraph (iv) "any other
plan" includes all qualified and nonqualified plans of deferred
compensation, all stock option, stock bonus and similar
plans, and any cash or deferred arrangement that is part of a
cafeteria plan within the meaning of Code Section 125;
but the term does not include a health or welfare plan,
including one that is part of a cafeteria plan within the
meaning of Section 125; and
(v) the distribution meets such other requirements as
the Commissioner of Internal Revenue may prescribe.
(g) The denial of a Participant's request for a hardship
withdrawal shall be treated as a denial of a claim for a
benefit under the Plan, and shall thus be subject to the claim and
review provisions set forth under Section 6.11.
6.9 Loans.
(a) Upon the request of a Participant, the Administrative
Committee may authorize a loan to such Participant. Loans
shall be made available to all Participants on a reasonably
equivalent basis; provided, however, that no loan shall be made
to a Participant who has terminated his employment with the
Employer and all Affiliates unless otherwise required under
ERISA.
(b) The amount of any loan to a Participant may not be less
than $1,000, nor shall it exceed the lesser of:
(i) 50 percent of the amount which he would be entitled
to receive from his Accounts, if any, if he then had
resigned from the service of an Employer and all
Affiliates; and
(ii) $50,000, reduced by the excess (if any) of--
(A) the highest outstanding balance of the
Participant's loans from the Plan, or from any other qualified
plan maintained by an Employer or an Affiliate, during the
one-year period ending on the date before the date on
which the loan was made, over
(B) the outstanding balance of the Participant's
loans from the Plan, or from any other qualified plan
maintained by an Employer or an Affiliate, on the date on
which such loan was made.
(c) Loans shall be made on such terms as the Administrative
Committee may prescribe, provided that any loan shall be
evidenced by a note, shall bear a rate of interest on the unpaid
principal thereof commensurate with that charged by persons
in the business of lending money for loans which would be made
under similar circumstances, and shall be secured by the
Participant's Accounts and any other security as the Administrative
Committee in its discretion deems appropriate. All
loans made under the Plan shall be subject to an administrative
service charge.
(d) All loans shall be repaid by the Participant by payroll
deductions or any other method approved by the
Administrative Committee at least quarter-annually, over a period
not to exceed 5 years, in accordance with a substantially
level amortization schedule.
(e) Loans shall be deemed to be an earmarked investment of the
Trust Fund by the Participant with respect to his
Accounts. For purposes of Section 4.5, the interest paid on such
loans, together with any income or expenses associated
with any such loans, shall as of each Valuation Date be credited or
charged, as the case may be, to the Account or Accounts
of the Participant from which such loan was made.
(f) The Administrative Committee shall establish a policy and
procedures regarding the order in which loans are to
be charged against particular Investment Funds and against the
particular Accounts maintained under such Investment Funds.
(g) Loans shall not be made with respect to a Participant's
QVEC Account(if applicable), nor may the value of a
Participant's QVEC Account be taken into account for purposes of
the 50 percent limitation set forth in subsection(b)(i)
above.
(h) If as of the Participant's Benefit Commencement Date there
remains any unpaid balance of any loan, including any
unpaid interest, such unpaid balance shall be charged first against
his Accounts, before distribution to the Participant.
If after charging the Participant's Accounts with the unpaid
balance of the loan, including any unpaid interest, there still
remains an unpaid balance of any such loan and interest, then the
remaining unpaid balance of such loan and interest shall
be charged against any property pledged as security with respect to
such loan.
(i) The terms and conditions of a loan program initiated
pursuant to this Section 6.9 shall be contained in a written
document forming part of the Plan. Such document shall include the
following information:
(i) the identity of the person or positions authorized to
administer the loan program;
(ii) the procedure for applying for loans;
(iii) the basis on which loans shall be approved or denied;
(iv) limitations (if any) on the types and amount of loans
offered;
(v) the procedure under the program for determining a
reasonable rate of interest;
(vi) the types of collateral which may secure a
Participant loan; and
(vii) the events constituting default and the steps that
will be taken to preserve Plan assets in the event of such
default.
6.10 Facility of Payment. When, in the Administrative
Committee's opinion, a Participant or beneficiary is under a
legal disability or is incapacitated in any way so as to be unable
to manage his affairs, the Administrative Committee may
direct that payments be made:
(a) directly to the Participant or beneficiary;
(b) to a duly appointed guardian or conservator of the
Participant or beneficiary;
(c) to a custodian for the Participant or beneficiary under
the Uniform Gifts to Minors Act;
(d) to an adult relative of the Participant or beneficiary; or
(e) directly for the benefit of the Participant or
beneficiary.
Any such payment shall constitute a complete discharge therefor
with respect to an Employer, the Administrative Committee,
the Plan, and the Trustee.
6.11 Claims Procedure.
(a) Any person who believes that he is entitled to receive a
benefit under the Plan, including one greater than that
initially determined to be payable, may file a claim in writing
with the Administrative Committee or its delegate.
(b) The Administrative Committee shall within 90 days of the
receipt of a claim either allow or deny the claim in
writing. A denial of a claim shall be written in a manner
calculated to be understood by the claimant and shall include:
(i) the specific reason or reasons for the denial;
(ii) specific references to pertinent Plan provisions on
which the denial is based;
(iii) a description of any additional material or information
necessary for the claimant to perfect the claim and
an explanation of why such material or information is
necessary; and
(iv) an explanation of the Plan's claim review procedure.
(c) A claimant whose claim is denied (or his duly authorized
representative) may, within 60 days after receipt of
denial of his claim:
(i) submit a written request for review to the
Administrative Committee;
(ii) review pertinent documents; and
(iii) submit issues and comments in writing.
(d) The Administrative Committee shall notify the claimant of
its decision on review within 60 days of receipt of a
request for review. The decision on review shall be written in a
manner calculated to be understood by the claimant and
shall include specific reasons for the decision and specific
references to the pertinent Plan provisions on which the
decision is based.
(e) The 90-day and 60-day periods described in subsections (b)
and (d), respectively, may be extended at the
discretion of the Administrative Committee for a second 90- or
60-day period, as the case may be, provided that written
notice of the extension is furnished to the claimant prior to the
termination of the initial period, indicating the special
circumstances requiring such extension of time and the date by
which a final decision is expected.
(f) Participants and beneficiaries shall not be entitled to
challenge the Administrative Committee's determinations
in judicial or administrative proceedings without first complying
with the procedures in this Section. The Administrative
Committee's decisions made pursuant to this Section are intended to
be final and binding on Participants, beneficiaries and
others.

ARTICLE 7
Survivor Annuity Rules
7.1 Qualified Joint and Survivor Annuity.
(a) Notwithstanding any provision of Section 6.1(d) to the
contrary, a married Participant shall not be permitted to
elect an annuity form of distribution under the Plan (other than a
Qualified Joint and Survivor Annuity) unless such
Participant, with the written consent of his spouse as provided
under Section 6.6(c), has properly waived the Qualified
Joint and Survivor Annuity pursuant to subsection (c) below.
(b) Upon the receipt of a married Participant's request for an
annuity form of distribution, the Administrative
Committee or its delegate shall furnish such Participant with a
general written explanation of the terms and conditions of
the Qualified Joint and Survivor Annuity; the Participant's right
to make, and the effect of, a Qualified Joint and Survivor
Annuity waiver election; the rights of the Participant's spouse;
the Participant's right to revoke an election to waive the
Qualified Joint and Survivor Annuity, and the effect of such a
revocation. Such explanation shall also include a general
description of any optional forms of benefits available to the
Participant under the Plan, information explaining the
relative value of such optional forms of benefits and notice of the
Participant's right, if any, to defer receipt of the
distribution. This general explanation shall be furnished to a
Participant not less than 30 days and no more than 90 days
before the Participant's Benefit Commencement Date.
(c) A married Participant may elect to waive the Qualified
Joint and Survivor Annuity and to receive another available
annuity form of distribution at any time after the Participant
receives the notice described in subsection (b) above and
within his Election Period. A Participant's "Election Period" for
this purpose is the 90-day period preceding his Benefit
Commencement Date. Such election may be revoked by the Participant
at any time during the Election Period, and if so
revoked, the Participant's benefit shall automatically be paid in
the form of a Qualified Joint and Survivor Annuity unless
he again properly elects within the Election Period and with the
written consent of his spouse, not to receive his benefit
in such form. Elections and revocations may continue to be made
under this subsection throughout the Election Period.
7.2 Qualified Preretirement Survivor Annuity. The
provisions of this Section 7.2 shall apply only with respect
to a Participant (i) who elects any annuity form of distribution
under the Plan(including a Qualified Joint and Survivor
Annuity), (ii) who dies after making such election but before his
Benefit Commencement Date, and (iii) who was married to
the same spouse throughout the one-year period preceding the date
of his death.
(a) Upon the death of a Participant to whom this Section 7.2
applies, an amount equal to 50 percent of the
distributable balance of the Participant's Accounts shall be
applied toward the purchase of an annuity contract providing
such spouse with monthly payments for the period of her lifetime
(which annuity is referred to herein as a "Qualified
Preretirement Survivor Annuity"). The remaining balance of such
Participants Accounts shall be paid to his beneficiary (who
may in fact be his spouse) as otherwise provided in Section 6.2.
(b) Notwithstanding the foregoing, the surviving spouse of a
deceased Participant may elect, after the death of the
Participant, to receive the benefits otherwise payable to her as a
Qualified Preretirement Survivor Annuity in the form of
a lump sum payment, or as a direct transfer to an individual
retirement account or individual retirement annuity as
generally prescribed in Section 6.2.

ARTICLE 8
Named Fiduciaries;
Allocation of Responsibilities; Administration
8.1 Named Fiduciaries. The following persons are named as
fiduciaries under this Plan and shall be the only named
fiduciaries hereunder:
(a) Doskocil, as Plan sponsor, acting through its Board of
Directors, shall be responsible for all fiduciary functions
under the Plan except insofar as any such authority or
responsibility is assigned by or pursuant to the Plan to another
named fiduciary. In that regard, Doskocil shall be the
"Administrator" of the Plan within the meaning of ERISA. Authority
and responsibility reserved or assigned to Doskocil shall be
exercised by its Board of Directors, and shall include:
(i) the design of the Plan, including the right to
amend and to terminate the Plan;
(ii) the funding of the Plan as provided hereunder;
(iii) the designation of all named fiduciaries of the
Plan, including the right to remove or replace any of them;
(iv) establishment of the general investment policy of
the Plan;
(v) periodic monitoring and evaluating the performance
of all named fiduciaries; and
(vi) the employment of persons to provide services and
advice necessary to the performance of such functions.
Doskocil may, by resolution of its Board of Directors, delegate to
any member of the Investment Committee and/or any officer
of an Employer any authority or responsibility reserved or assigned
to Doskocil pursuant to the Plan.
(b) The Trustee shall be a bank or trust company appointed by
the Board of Directors. Subject to any powers of
Doskocil or a Committee to direct actions of the Trustee as
provided in the trust agreement, the Trustee shall have
exclusive authority, responsibility and discretion to manage and
control the assets held in its trust, in accordance with
such short and long-term objectives of the Trust Fund as are
communicated to the Trustee by Doskocil or the Investment
Committee, except to the extent that Doskocil or the Investment
Committee has delegated such authority, responsibility or
discretion to one or more Investment Managers pursuant to the terms
of the trust agreement and as provided in (e) below.
(c) An Investment Committee, the members of whom shall be
appointed by the Board of Directors, shall have
responsibility and authority to assure the implementation of the
investment policy of the Plan, including:
(i) monitoring and evaluating, pursuant to guidelines
set by the Board of Directors, the performance of the
Trustee and any Investment Manager and the transmittal of
information to the Trustee and Investment Manager concerning
estimated contributions and disbursements;
(ii) making recommendations to the Board of Directors as
to the appointment, continuance or removal of the
Trustee;
(iii) determining the Investment Fund or Funds to which
there are to be allocated the contributions made by or
on behalf of Participants who decline or otherwise fail to make
an investment election under Section 4.4(c); and
(iv) reporting at least annually to the Board of
Directors on investment policy.
(d) An Administrative Committee, the members of whom shall be
appointed by the Board of Directors, shall have the
responsibility and authority to control the operation and
administration of the Plan in accordance with the terms of the
Plan, including:
(i) preparation and filing of all reports required to
be filed with any agency of government, except such
reports as must be prepared or filed by other fiduciaries as
required by applicable law, and preparing such other
reports with respect to the Plan as are reasonable and
appropriate and requested by Doskocil;
(ii) compliance with all disclosure requirements imposed
by state or federal law upon the administrator of the
Plan;
(iii) maintenance of all records of the Plan other than
those required to be maintained by the Trustee;
(iv) issuance of instructions to the Trustee, as may be
required or appropriate, to pay any fees, taxes, charges
or other costs incidental to the operation and management by
the administrator of the Plan and to pay benefits as
provided in the Plan;
(v) the qualification and continuance of qualification
under applicable law of the Plan, any amendments to the
Plan and documents relating to the Plan;
(vi) receiving from the Employers and from Participants
such information as shall be necessary for the proper
administration of the Plan;
(vii) appointing or employing such agents and advisors as
it deems advisable, including legal counsel, accountants
and actuaries, as may be needed for the discharge of its
duties;
(viii) designating persons, who may but need not be
members of the Administrative Committee, to carry out any of
the foregoing duties under such procedures as may be approved
by the Board of Directors;
(ix) recommending Plan amendments to the Board of
Directors;
(x) considering and deciding all appeals of benefit
claims which have been denied, including affording a
reasonable opportunity to any Participant or beneficiary whose
claim for benefits has been denied for a full and fair
review of the decision denying the claim;
(xi) construing and interpreting the Plan, deciding all
questions of eligibility and determining the amount,
manner and time of payment of benefits under the Plan, all in
the sole discretion of the Administrative Committee; and
(xii) performance of such other duties as are assigned to
the Administrative Committee under the Plan.
The Administrative Committee shall have no power to add to,
subtract from or modify any terms of the Plan, nor to
change or add to any benefits provided by the Plan, nor to waive or
fail to apply any requirements of eligibility for a
benefit under the Plan.
(e) The Board of Directors may appoint one or more Investment
Managers to manage (including the power to acquire and
to dispose of) the assets of the Plan or any portion thereof, and,
if more than one Investment Manager is appointed, the
Board of Directors may allocate responsibility for managing
particular assets or particular portions of the assets of the
Plan among such Investment Managers; provided, however, that
custody of assets of the Plan managed by any such Investment
Manager shall be held by the Trustee. Each Investment Manager so
appointed shall be a person or entity qualified under
applicable law to serve as such, shall serve at the pleasure of the
Board of Directors and shall acknowledge in writing to
the Board of Directors that he or it is a fiduciary with respect to
the Plan.
8.2 Insurance Contracts.
(a) The Board of Directors shall have the power to direct the
Trustee to cause the assets of the Plan, or any portion
thereof, to be invested or to continue to be invested in group
annuity contracts, pension investment contracts or such other
contracts issued by any insurance company as such Board of
Directors deems desirable. In connection with and as a part of
any such contract with any insurance company, the Board of
Directors may grant to such insurance company such control over
the investment of funds deposited with or paid to such insurance
company as the Board of Directors deems desirable. Any
such contract with any insurance company may be held by the Trustee
or may be held by an Employer outside of any trust, as
the Board of Directors may from time to time determine.
(b) Notwithstanding the foregoing, in the event that any
assets of the Plan are invested in ordinary or term life
insurance contracts, the aggregate premiums paid on all contracts
on the life of any Participant, measured as a percentage
of the aggregate contributions allocated to the Participant's
Accounts at any particular time, shall be less than 50 percent
in the case of ordinary life insurance, and 25 percent in the case
of term life insurance.
8.3 Procedural Matters.
(a) Designation of Committee. Members of a Committee shall
serve at the pleasure of the Board of Directors and may
be removed by the Board of Directors at any time with or without
cause. A member of a Committee may, but need not be, an
Employee of an Employer. Any member of a Committee may resign by
delivering his written resignation to the Board of
Directors and such resignation shall become effective at delivery
or at any later date specified therein. Vacancies in a
Committee shall be filled by the Board of Directors.
(b) Rules and Decisions.
(i) A Committee may adopt such rules, consistent with
applicable by-laws (if any), as it deems necessary or
desirable. All rules and decision of a Committee shall be
uniformly and consistently applied to all Participants in
similar circumstances.
(ii) Any rule or decision which is not consistent with
the provisions of the Plan shall be conclusive and
binding upon all persons affected by it.
(iii) When making a determination or calculation, a
Committee shall be entitled to rely upon information
furnished by an Employer, the legal counsel of an Employer, or
the actuary for the Plan.
(c) Committee Procedures. A Committee may adopt by-laws and
may act by majority decision of its members in accordance
with such by-laws. A Committee may also elect a secretary (who may
but need not be a member of such Committee), and such
secretary of shall keep a record of all meetings and forward all
necessary communications to all named fiduciaries and
Investment Managers, as appropriate.
A majority of the members of a Committee at the time in office
shall constitute a quorum for the transaction of
business. All resolutions or other actions taken by a Committee at
any meeting shall be by the vote of the majority of the
members of the Committee present at the meeting. Meetings of a
Committee may be held by telephone conference. A Committee
may act without a meeting by written consent of a majority of its
members.
(d) Authorization and Benefit Payments. The Administrative
Committee shall authorize the payment of any benefits
which are to be paid from the Trust Fund pursuant to the provisions
of the Plan, and notify the Trustee in writing with
respect to all such payments of benefits. The Administrative
Committee shall keep on file, in such manner as it may deem
convenient or proper, all reports from the Trustee.
(e) Payment of Expenses. All expenses incident to the
administration or protection of the Plan and Trust, including
but not limited to, actuarial, legal, account and trustee fees,
shall be paid from the Trust Fund, unless paid directly by
the Employers. The members of a Committee who are not employees of
an Employer or an Affiliate shall not receive any
compensation for their services as such.
8.4 Administrative Committee Members as Participants. Any
Administrative Committee member may also be a Participant,
but no Administrative Committee member shall have power to take
part in any discretionary decision or action affecting his
own interest as a Participant under this Plan unless such decision
or action is upon a matter which affects all other
Participants similarly situated and confers no special right,
benefit or privilege not simultaneously conferred upon all
other such Participants.
8.5 Complete and Separate Allocation of Fiduciary
Responsibilities. This Article 8 is intended to allocate to each
named fiduciary and each Investment Manager the individual
responsibility for the prudent execution of the functions
assigned to each. The performance of such responsibilities shall
be deemed a several and not a joint assignment. None of
such responsibilities nor any other responsibility is intended to
be shared by two or more of them unless such sharing shall
be provided by a specific provision of this Plan or the Agreement
of Trust. Whenever one named fiduciary is required by
the Plan to follow the directions of another, the two shall not be
deemed to have been assigned a shared responsibility,
but the responsibility of the one giving the direction shall be
deemed to be its sole responsibility, and the responsibility
of the one receiving such direction shall be to follow it insofar
as such direction is on its face proper under the Plan
and applicable law.
8.6 Exclusive Purpose. All property and funds of the Trust
Fund, including income from investments and from all other
sources, shall be retained for the exclusive benefit of the
Participants, as provided in the Plan, and shall be used to pay
benefits to Participants or their beneficiaries, or to pay expenses
of administration of the Plan and Trust Fund to the
extent not paid by an Employer, except as provided in Section 8.7.
8.7 Reversion to the Employers. The Employers have no
beneficial interest in the Trust Fund and no part of the Trust
Fund shall ever revert or be repaid to an Employer, directly or
indirectly, except that an Employer shall upon written
request have a right to recover:
(a) any amount contributed by an Employer through a mistake of
fact (less any losses attributable thereto), provided
that such disallowed contributions are returned to an Employer
within one year after the date such contributions were made;
(b) any contributions (less any losses attributable thereto)
to the extent that their deduction under Section 404 of
the Code is disallowed, provided that such disallowed contributions
are returned to an Employer within one year after the
disallowance of the deduction; and
(c) at the termination of the Plan, any amounts remaining in
the Excess Forfeiture Suspense Account as prescribed in
Section 4.3(f).
8.8 Indemnification of Committee Members. The Employers shall
indemnify members of the Committees and their
authorized delegates who are employees of an Employer or an
Affiliate for any liability or expenses, including attorneys'
fees, incurred in the defense of any threatened or pending action,
suit or proceeding by reason of their status as members
of such Committees or as an authorized delegate thereto, to the
full extent permitted by law.
8.9 Bond. No member of a Committee shall be required to give
bond unless a bond is required by law and cannot be
waived.

ARTICLE 9
Amendment or Termination
9.1 Amendment. Doskocil reserves the right to amend this Plan
at any time to take effect retroactively or otherwise,
in any manner which it deems desirable including, but not by way of
limitation, the right to increase or diminish
contributions to be made by an Employer hereunder, to change or
modify the method of allocation of its contributions, to
change any provision relating to the distribution or payment, or
both, of any assets of the Trust.
9.2 Termination. Doskocil further reserves the right to
terminate this Plan at any time.
9.3 Form of Amendment, Discontinuance of Employer
Contributions and Termination. Any such amendment, discontinuance
of Employer contributions or termination shall be made only by
resolution or written consent of the Board of Directors.
9.4 Limitations on Amendments. The provisions of this Article
are subject to the following restrictions:
(a) Except as provided in Section 8.7, no amendment shall
operate either directly or indirectly to give an Employer
any interest whatsoever in any funds or property held by the
Trustee under the terms hereof, or to permit corpus or income
of the Trust to be used for or diverted to purposes other than the
exclusive benefit of the Participants and their
beneficiaries.
(b) Except to the extent necessary to conform to the laws and
regulations or to the extent permitted by any applicable
law or regulation, no amendment shall operate either directly or
indirectly to deprive any Participant of his nonforfeitable
beneficial interest in his Accounts as they are constituted at the
time of the amendment.
(c) No amendment shall change any vesting schedule unless each
Participant who has completed 3 or more Years of
Vesting Service is permitted to elect, within such reasonable
period after the adoption of such an amendment as the
Administrative Committee may designate, to have the nonforfeitable
percentage of his Matching Contribution and Profit
Sharing Accounts computed under the Plan without regard to such
amendment. Notwithstanding the foregoing, no election need
be offered to a Participant whose nonforfeitable percentage of such
Accounts cannot at any time be lower than such
percentage determined without regard to such amendment.
(d) Except as permitted by applicable law, no amendment shall
eliminate or reduce an early retirement benefit or a
retirement-type subsidy, or eliminate an optional form of benefit.
9.5 Level of Benefits upon Merger. This Plan shall not merge
or consolidate with, or transfer assets or liabilities
to, any other plan, unless each Participant shall be entitled to
receive a benefit immediately after said merger,
consolidation or transfer (if such other plan were then
terminated) which shall be not less than the benefit he would have
been entitled to receive immediately before said merger,
consolidation or transfer (if this Plan were then terminated).
9.6 Vesting Upon Termination, Discontinuance of Employer
Contributions; Liquidation of Trust.
(a) This Plan shall be deemed terminated if and only if the
Plan terminates by operation of law or pursuant to Section
9.2. In the event of any termination or partial termination within
the meaning of Section 411(d)(3) of the Code, or in the
event an Employers permanently discontinues the making of
contributions to the Plan, the Matching Contribution and Profit
Sharing Accounts of each affected Participant whose Severance Date
has not occurred as of the date of the occurrence of such
event shall become nonforfeitable. Thereupon, such Accounts and
all other Accounts maintained on behalf of Participants
shall be distributed to each Participant as provided under Article
6; provided, however, that in no event shall any
Participant or beneficiary have recourse to other than the Trust
Fund for the satisfaction of benefits hereunder.
(b) In the event of the termination of, or the permanent
discontinuance of contributions to, the Plan, the Trustee
shall make or commence distribution to each Participant or his
beneficiaries of the value of such Participant's Accounts
as provided herein in the manner and within the time prescribed in
Article 6. However, if after such event Doskocil shall
determine it to be impracticable to continue the Trust any longer,
Doskocil may, in its discretion, declare a date to be
treated as the employment termination date for all Participants who
are Employees, and the Trustee shall thereupon, as
promptly as shall then be reasonable under the circumstances and to
the extent permitted by law, liquidate the Trust assets.
Upon such liquidation, the Trustee shall either distribute to each
such Participant his Accounts in the Trust Fund in the
manner provided in Article 6, or transfer the value of such
Accounts to another defined contribution plan maintained by an
Employer or other Affiliate as prescribed in Section 6.3(c). In
all events, if upon termination of the Plan the value of
the Participant's Elective 401(k) Contribution Account and
Qualified Nonelective Contribution Account is not so transferred
to another plan, then such Accounts shall be distributed to the
Participant in a lump sum payment (or by a direct transfer
to an eligible retirement plan as prescribed in Section 6.1).
Upon completion of such liquidation and the concomitant
final distribution or transfer of benefits, the Trust shall finally
and completely terminate.
(c) The liquidation of the Trust, if any, in connection with
any Plan termination shall be accomplished by the
Doskocil. After directing that sufficient funds be set aside to
provide for the payment of all expenses incurred in the
administration of the Plan and the Trust, to the extent not paid or
provided for by an Employers, Doskocil shall, as
promptly as shall then be reasonable under the circumstances,
liquidate the Trust assets and distribute to each Participant
or transfer for his benefit his Accounts in the Trust Fund in the
manner provided in Article 6. Upon completion of such
liquidation and disbursement of Plan assets, the Trust shall
finally and completely terminate. In the event Doskocil is
no longer in existence, the actions to be taken by Doskocil
pursuant to this Section shall be taken by an Employer or by
the Trustee.

ARTICLE 10
Miscellaneous
10.1 No Guarantee of Employment, etc. Neither the creation of
the Plan nor anything contained in the Plan or Trust
Agreement shall be construed as giving any Participant hereunder or
other employee of an Employer any right to remain in
the employ of an Employer, any equity or other interest in the
assets, business or affairs of an Employer, or any right to
complain about any action taken or any policy adopted or pursued by
an Employer.
10.2 No Assignment of Rights. No Participant shall have any
right to sell, assign, pledge, hypothecate, anticipate
or in any way create a lien upon any part of the Trust Fund. To
the maximum extent permitted by ERISA and the Code, no
interest in the Trust Fund, or any part thereof, shall be
assignable in or by operation of law, or be subject to liability
in any way for the debts or defaults of Participants, their
beneficiaries, spouses or heirs-at-law, whether to an Employer
or to others.
10.3 Qualified Domestic Relations Order. Notwithstanding
anything in this Plan to the contrary, the Administrative
Committee shall distribute a Participant's Accounts, or any portion
thereof, in accordance with the terms of any domestic
relations order which the Administrative Committee determines to be
a qualified domestic relations order (QDRO) described
in Section 414(p) of the Code entered on or after January 1, 1985.
Such distribution may be made as soon as practicable,
irrespective of whether or not the Participant has then attained
his "earliest retirement age" as defined under Section
414(p)(4)(B) of the Code. Effective as of January 1, 1993, an
"alternate payee" with respect to a QDRO shall have the same
rights as a Participant in regard to the direct transfer of a
distribution to an eligible retirement plan as prescribed in
Section 6.1.
10.4 Receipts by Participants. Prior to the time that
distributions are to be made hereunder, the Participants, their
spouses, beneficiaries, heirs-at-law or legal representatives shall
have no right to receive cash or other things of value
from an Employer or the Trustees from or as a result of the Plan
and Trust.
10.5 Controlling Law. To the extent not preempted by the laws
of the United States of America, the laws of the State
of Kansas shall be controlling state law in all matters relating to
the Plan.
10.6 Severability. If any provision of this Plan shall be held
illegal or invalid for any reason, said illegality or
invalidity shall not affect the remaining parts of this Plan, but
this Plan shall be construed and enforced as if said
illegal or invalid provision had never been included herein.
10.7 Notification of Addresses. Each Participant and each
beneficiary of a deceased Participant shall file with his
Employer from time to time in writing his post office address and
each change of post office address. Any communication,
statement or notice addressed to the last post office address filed
with an Employer, or if no such address was filed with
an Employer, then to the last post office address of the
Participant or beneficiary as shown on an Employer's records, will
be binding on the Participant and his beneficiary for all purposes
of this Plan, and neither an Employer nor the
Administrative Committee shall be obliged to search for or
ascertain the whereabouts of any Participant or beneficiary.
10.8 Gender and Number. Whenever the context requires or
permits, the gender and number of words shall be
interchangeable.

ARTICLE 11
Top-Heavy Plan Requirements
11.1 Definition of Top-Heavy Plan. The Plan shall be
Top-Heavy with respect to a Plan Year if it is a member of a
Required Aggregation Group and the present value of the accrued
benefits for Key Employees under all plans in the
Aggregation Group exceeds 60 percent of the present value of the
accrued benefits for all employees under all plans in the
Aggregation Group. This ratio shall be computed as provided in
Section 416(g) of the Code. Such present values shall be
determined as of the last day of the preceding Plan Year of each
plan. If all plans in the Aggregation Group do not have
the same Plan Year, then such present values shall be determined as
of the last of each Plan Year ending in the same
calendar year as of the last day of the preceding Plan Year of this
Plan. Under a defined contribution plan, such present
values shall be determined by aggregating the value of all accounts
of all Key Employees and all employees respectively.
As used in this section, the term "accounts" includes certain prior
distributions, Employer contributions payable to the
Plan, employee contributions, and rollover accounts, if any, all in
accordance with Section 416(g) of the Code or
regulations thereunder.
For the purpose of determining such present values under a
defined benefit plan:
(a) The determination shall be made as of the most recent
annual plan valuation date used to compute plan costs for
purposes of compliance with the minimum funding standards of the
Code.
(b) An interest assumption of 5 percent and a post-retirement
morality assumption shall be used. No assumptions with
respect to future withdrawal or compensation increases shall be
used. Except to the extent a plan provides a non-
proportional subsidy, the present value of accrued benefits shall
be determined on the assumption that each Participant's
benefit will commence on the later of his Normal Retirement Date or
the date of the determination. The value of ancillary
benefits not related to retirement benefits, such as pre-retirement
death and disability benefits and post-retirement
medical benefits, shall not be taken into account. The value of
subsidized early retirement benefits and benefit options
shall not be taken into account unless such subsidies are
non-proportional. Any benefit which includes a non-proportional
subsidy shall be deemed to commence as of the Participant's age at
which such benefit has the highest value. A subsidy
shall be considered non-proportional unless the group of
Participants who may receive the subsidy would independently
satisfy the coverage requirements of the Code. The present value
of accrued benefits shall include previous benefit
payments or distributions of annuity contracts only to the extent
required by Section 416 of the Code.
11.2 Top-Heavy Plan Requirements. Notwithstanding any
provision of the Plan to the contrary but subject to the
Doskocil's right to terminate the Plan, the following provisions
shall apply with respect to any Plan Year in which the Plan
is Top-Heavy.
(a) Minimum Vesting. Effective as of the first day of such
Plan Year, the following vesting schedule shall apply,
unless the vesting schedule set forth in Section 5.5 with respect
to any Account is more advantageous:
The Nonforfeitable
If the Participant's Percentage of His
Years of Service Are: Employer Account Shall Be:

Less than 3 years 0%
3 or more years 100%

(b) Minimum Contribution. This subsection (b) shall apply only
to a Participant who is a Non-Key Employee and who in
a Plan Year with respect to which this subsection would otherwise
apply has not had his Accounts in all defined contribution
plans which are members of the Aggregation Group credited with
Employer contributions and forfeitures equal in the aggregate
to 3 or more percent of his Compensation for such Plan Year. An
Employer shall make a supplemental contribution from its
current or accumulated earnings to the Accounts of any such
Participant, in an amount sufficient for the total amount of
Employer contributions allocated to the Accounts of such
Participant to equal 3 percent of such Participant's Compensation
for such Plan Year. For purposes of this subsection, the term
"Participant" means a Participant who was employed by an
Employer on the last day of a Plan Year in which the Plan is
Top-Heavy.
11.3 Definitions. For purposes of this Article:
(a) A "Key Employee" is any current or former Employee (and
the beneficiaries of such Employee) who at any time during
the determination period was:
(i) an officer of an Employer if such individual's annual
compensation for that determination period exceeds 50
percent of the dollar limitation in effect under Section
415(b)(1)(A) of the Code (provided, however, that no more than
50 Employees shall be treated as officers under this
paragraph);
(ii) an owner (or considered an owner under Section 318 of
the Code) of one of the ten largest interests in an
Employer if such individual's annual compensation exceeds 100
percent of the dollar limitation in effect under Section
415(c)(1)(A) of the Code;
(iii) a 5-percent owner of an Employer; or
(iv) a 1-percent owner of an Employer who has an annual
compensation of more than $150,000.
For purposes of determining an Employee's status as a Key Employee,
"annual compensation" means the Employee's 415
Compensation, but including amounts contributed by an Employer or
Affiliate pursuant to a salary reduction agreement which
are excludable from the Employee's gross income under Sections 125,
402(a)(8), 402(h) or 403(b) of the Code. In all
regards, the determination period is the Plan Year containing the
determination date and the four preceding Plan Years.
The determination of who is a Key Employee will be made in
accordance with Section 416(i)(1) of the Code and the regulations
thereunder.
(b) A "Non-Key Employee" is an employee of an Employer other
than a Key Employee.
(c) "Aggregation Group" means a group of qualified plans
consisting of this Plan and certain other defined
contribution plans and defined benefit plans maintained by an
Employer or an Affiliate which are aggregated for purposes
of determining whether the group as a whole is Top-Heavy. The
Aggregation Group includes plans which must be aggregated
for this purpose (the "Required Aggregation Group") and other plans
which are aggregated for this purpose (the "Permissive
Aggregation Group").
(d) The "Required Aggregation Group" shall include:
(i) each employee benefit plan of an Employer or an
Affiliate qualified under Section 401(a) of the Code in which
a Key Employee is a participant; and
(ii) each other qualified plan which enables any plan
described in (i) to meet the anti-discrimination or
coverage requirements of Sections 401(a)(4) and 410 of the
Code.
(e) The "Permissive Aggregation Group" includes such other
qualified plan or plans of an Employer or an Affiliate as
the Administrative Committee may in its discretion elect, provided
the inclusion of any such plan with plans forming part
of the Required Aggregation Group in the Aggregation Group does not
cause any plan in such group to fail to meet the anti-
discrimination or coverage requirements of Sections 401(a)(4) and
410 of the Code.
11.4 Cessation of Top-Heavy Requirements.
(a) Once the Plan has been Top-Heavy but is no longer
Top-Heavy, this Article shall be inapplicable except as provided
in this Section.
(b) The vesting schedule set forth in Section 11.2(a), if
applicable, shall continue to apply to a Participant who
had 3 or more Years of Service as of the last day on which the Plan
was Top-Heavy.
(c) The Accounts of any other Participant constituted as of
the last day on which the Plan was Top-Heavy shall be
separately accounted for as a subaccount until the nonforfeitable
percentage of such Account pursuant to Section 5.5 equals
or exceeds the nonforfeitable percentage of his Account on the last
day on which the Plan was Top-Heavy. In the event such
Participant shall resign or be dismissed from the employ of an
Employer while a subaccount is being maintained, his
nonforfeitable interest in such subaccount shall be computed
pursuant to Section 5.5 but using the same nonforfeitable
percentage as was applicable to him on the last day on which the
Plan was Top-Heavy.

ARTICLE 12
Adoption by Affiliates
12.1 Adoption of Plan. Any Affiliate may adopt this Plan for
the benefit of its eligible employees by resolution of
such Affiliate's board of directors. Upon such adoption, such
Affiliate shall become an "Employer" with respect to the
Plan.
12.2 Agents for Employer. Each Affiliate which adopts and
becomes an Employer with respect to this Plan pursuant to
Section 12.1 hereby irrevocably gives and grants to Doskocil and to
the Administrative Committee full and exclusive power
conferred upon it by the terms of the Plan and authority to take or
refrain from taking any and all action which such
Employer might otherwise take or refrain from taking with respect
to the Plan, including sole and exclusive power to
exercise, enforce or waive any rights whatsoever which such
Employer might otherwise have with respect to the Trust, and
each such Employer, by adopting this Plan, irrevocably appoints
Doskocil and the Administrative Committee its agents for
such purposes. Neither the Trustee nor the Administrative
Committee nor any other person shall have any obligation to
account to any such Employer or to follow the instructions of or
otherwise deal with any such Employer. Each such Employer
shall contribute on behalf of its employees who are Participants in
the Plan such amounts as are determined under Article
3.
12.3 Termination. Any Employer which adopts this Plan
pursuant to Section 12.1 may terminate this Plan with respect
to its own employees by resolution of its board of directors.
12.4 Data to be Furnished by Employers. Each Employer which
adopts this Plan pursuant to Section 12.1 shall furnish
and maintain such records with respect to its employee Participants
as called for hereunder, and its determinations and
notifications with respect thereto shall have the same force and
effect as comparable determinations by Doskocil with
respect to its employee Participants.

Exhibit 4.9

DOSKOCIL COMPANIES INCORPORATED

1992 STOCK INCENTIVE PLAN

TABLE OF CONTENTS

ARTICLE I -- PURPOSE . . . . . . . . . . . . . . . . . . . . . . 1

Section I.1 Purpose . . . . . . . . . . . . . . . . . . . 1
Section I.2 Establishment . . . . . . . . . . . . . . . . 1

ARTICLE II -- DEFINITIONS . . . . . . . . . . . . . . . . . . . 1

ARTICLE III -- ADMINISTRATION . . . . . . . . . . . . . . . . . 4

Section III.1 Administration by Committee . . . . . . . . 4
Section III.2 Committee to Make Rules and Interpret
Plan . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section III.3 Committee Members Ineligible . . . . . . . . 5

ARTICLE IV -- GRANT OF AWARDS; SHARES SUBJECT
TO THE PLAN . . . . . . . . . . . . . . . . . . . 5

Section IV.1 Committee to Grant Awards . . . . . . . . . . 5
Section IV.2 Six-Month Holding Period . . . . . . . . . . 6

ARTICLE V -- ELIGIBILITY . . . . . . . . . . . . . . . . . . . . 6

Section V.1 Eligible Employees . . . . . . . . . . . . . . 6

ARTICLE VI -- STOCK OPTIONS . . . . . . . . . . . . . . . . . . 7

Section VI.1 Grant of Options . . . . . . . . . . . . . . 7
Section VI.2 Conditions of Options . . . . . . . . . . . . 7
Section VI.3 Options to Non-Employee Directors . . . . . . 8

ARTICLE VII -- PERFORMANCE SHARE AWARD . . . . . . . . . . . . . 10

Section VII.1 Grant of Performance Share Awards . . . . . 10
Section VII.2 Conditions of Performance Share Awards . . . 10

ARTICLE VIII -- RESTRICTED STOCK AWARDS . . . . . . . . . . . . 12

Section VIII.1 Grant of Restricted Stock Awards . . . . . 12
Section VIII.2 Conditions of Restricted Stock Awards . . . 12

ARTICLE IX -- OTHER INCENTIVE AWARDS . . . . . . . . . . . . . . 13

Section IX.1 Grant of Other Incentive Awards . . . . . . . 13
Section IX.2 Conditions of Other Incentive Awards . . . . 13

ARTICLE X -- STOCK ADJUSTMENTS . . . . . . . . . . . . . . . . . 13

Section X.1 Adjustment of Shares Available;
Recapitalization . . . . . . . . . . . . . . . 13

ARTICLE XI -- GENERAL . . . . . . . . . . . . . . . . . . . . . 14

Section XI.1 Amendment or Termination of Plan . . . . . . 14
Section XI.2 Dividends and Dividend Equivalents . . . . . 15
Section XI.3 Termination of Employment . . . . . . . . . 15
Section XI.4 Nonassignability . . . . . . . . . . . . . . 15
Section XI.5 Withholding Taxes . . . . . . . . . . . . . 16
Section XI.6 Forfeiture . . . . . . . . . . . . . . . . . 16
Section XI.7 Change of Control . . . . . . . . . . . . . 16
Section XI.8 Amendments to Awards . . . . . . . . . . . . 16
Section XI.9 Regulatory Approval and Listings . . . . . . 16
Section XI.10 Right to Continued Employment . . . . . . . 17
Section XI.11 Beneficiaries . . . . . . . . . . . . . . . 17
Section XI.12 Indemnification . . . . . . . . . . . . . . 17
Section XI.13 Reliance on Reports . . . . . . . . . . . . 18
Section XI.14 Relationship to Other Benefits . . . . . . . 18
Section XI.15 Expenses . . . . . . . . . . . . . . . . . . 18
Section XI.16 Construction . . . . . . . . . . . . . . . . 18
Section XI.17 Governing Law . . . . . . . . . . . . . . . 18

<PAGE>
ARTICLE I

PURPOSE

Section I.1 Purpose. This Stock Incentive Plan is
established by Doskocil Companies Incorporated (the "Corporation")
to create incentives which are designed to motivate participants to
put forth maximum effort toward the success and growth of the
Corporation and to enable the Corporation to attract and retain
experienced individuals who by their position, ability and
diligence are able to make important contributions to the
Corporation's success. Toward these objectives, the Plan provides
for the granting of Options, Restricted Stock Awards, Performance
Share Awards and/or Other Incentive Awards to Participants on the
terms and subject to the conditions set forth in the Plan.

Section I.2 Establishment. The Plan is effective as of
January 1, 1992 (the "Effective Date"), and subject to the
provisions of Section XI.1, Awards (as defined in Section II.1) may
be made as provided herein for a period of 10 years after such
date.

The Plan shall be approved by the holders of a majority
of the outstanding shares of Common Stock, which approval must
occur within the period ending twelve months after the date the
Plan is adopted by the Board. Pending such approval by the
shareholders, Awards under the Plan may be granted to Eligible
Employees (as defined in Section II.10), including persons who are,
or within the preceding six months have been, Insider Participants
(as defined in Section IV.2), but no such Awards may be exercised
or transferred prior to receipt of shareholder approval. In the
event shareholder approval is not obtained within such twelve-month
period, all such Awards shall be void.

The Plan shall continue in effect until all matters
relating to the payment of Awards and administration of the Plan
have been settled.

ARTICLE II

DEFINITIONS

Section II.1 "Award" means, individually, collectively
or in tandem, any Option, Restricted Stock Award, Performance Share
Award, or Other Incentive Award granted under the Plan to a
Participant by the Committee pursuant to such terms, conditions,
restrictions, and/or limitations, if any, as the Committee may
establish by the Award Notice or otherwise.

Section II.2 "Award Notice" means any written instrument
that establishes the terms, conditions, restrictions, and/or
limitations applicable to an Award in addition to those established
by this Plan and by the Committee's exercise of its administrative
powers.

Section II.3 "Board" means the Board of Directors of the
Corporation.

Section II.4 "Change of Control Event" means each of the
following:

(a) A change in shareholder ownership of the
Corporation, whereby a person or company, or a group of
affiliated persons or companies, acquires a sufficiently large
block of Common Stock, which, when voted together with the
shares of Common Stock of all other shareholders of the
Corporation whose proxies or written consents are solicited by
such person, company or group without the benefit of a
management-supported proxy statement at any meeting of the
shareholders of the Corporation, would enable such person or
company or group of affiliated persons or companies to elect
a majority of the members of the Board;

(b) A merger or consolidation of the Corporation
with and into another company, other than with or into a
wholly-owned Subsidiary of the Corporation, where the
Corporation is not the surviving company; or the Corporation
is the surviving company and the members of the Board
immediately prior to the merger or consolidation do not
constitute a majority of the Board of the surviving company
after the merger or consolidation;

(d) Any other kind of a corporate reorganization or
takeover where: (i) the Corporation is not the surviving
company; or the Corporation is the surviving company and the
members of the Board immediately prior to the reorganization
do not constitute a majority of the Board of Directors of the
surviving company.

With respect to the events described in subparagraphs
(b), (c) and (d) above, the Change of Control Event shall be deemed
to occur on the later of the transaction described in such
subparagraph or a shareholder vote approving such a transaction.

Section II.5 "Code" means the Internal Revenue Code of
1986. Reference in the Plan to any section of the Code shall be
deemed to include any amendments or successor provisions to such
section and any regulations under such section.

Section II.6 "Committee" means the Compensation
Committee of the Board, or such other committee designated by the
Board, authorized to administer the Plan under Article III hereof.
The Committee shall consist of not less than two members, each of
whom is, and within the twelve (12) months preceding his or her
appointment to the Committee has been, a "disinterested person"
within the meaning of Rule 16b-3 promulgated under Section 16 of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act").

Section II.7 "Common Stock" means the common stock, par
value $.01 per share, of the Corporation, and after substitution,
such other stock as shall be substituted therefor as provided in
Article X.

Section II.8 "Date of Grant" means the date on which the
granting of an Award is authorized by the Committee or such later
date as may be specified by the Committee in such authorization.

Section II.9 "Director Options" means non-qualified
Options awarded under Section VI.3.

Section II.10 "Eligible Employee" means any employee of
the Corporation or a Subsidiary, or an individual who satisfies the
requirements of Section VI.3.

Section II.11 "Fair Market Value" means (A) during any
such time as the Common Stock is not listed upon an established
stock exchange or the NASDAQ/National Market System, the mean
between dealer "bid" and "ask" prices of the Common Stock in the
over-the-counter market on the day for which such value is to be
determined, as reported by the National Association of Securities
Dealers, Inc. or (B) during such time as the Common Stock is listed
upon an established stock exchange or exchanges or the
NASDAQ/National Market System, the highest closing price of the
Common Stock on such stock exchange or exchanges or the
NASDAQ/National Market System on the day for which such value is to
be determined, or if no sale of the Common Stock shall have been
made on any stock exchange or the NASDAQ/National Market System
that day, on the next preceding day on which there was a sale of
such Common Stock.

Section II.12 "Incentive Stock Option" means an Option
within the meaning of Section 422 of the Code.

Section II.13 "Other Incentive Award" means an Award
granted under Article IX of the Plan.

Section II.14 "Option" means an Award granted under
Article VI of the Plan and includes both non-qualified Options and
Incentive Stock Options to purchase shares of Common Stock.

Section II.15 "Participant" means an Eligible Employee
of the Corporation or a Subsidiary to whom an Award has been
granted by the Committee under the Plan.

Section II.16 "Performance Share Award" means an Award
granted under Article VII of the Plan.

Section II.17 "Plan" means the Doskocil Companies
Incorporated 1992 Stock Incentive Plan.

Section II.18 "Restricted Stock Award" means an Award
granted under Article VIII of the Plan.

Section II.19 "Subsidiary" means any corporation of
which a majority of the outstanding voting stock or voting power is
beneficially owned directly or indirectly by the Corporation.

ARTICLE III

ADMINISTRATION

Section III.1 Administration by Committee. The
Committee shall administer the Plan. Unless otherwise provided in
the by-laws of the Corporation or the resolutions adopted from time
to time by the Board establishing the Committee, the Board may from
time to time remove members from, or add members to, the Committee;
vacancies on the Committee, howsoever caused, shall be filled by
the Board; the Committee shall hold meetings at such times and
places as it may determine; a majority of the Committee shall
constitute a quorum; and the acts of a majority of the members
present at any meeting at which a quorum is present or acts reduced
to or approved in writing by a majority of the members of the
Committee shall be the valid acts of the Committee.

Subject to the provisions of the Plan, the Committee
shall have exclusive power to:

(a) Select the Eligible Employees to participate in
the Plan.

(b) Determine the time or times when Awards will be
made.

(c) Determine the form of an Award, whether an
Option, a Restricted Stock Award, a Performance Share Award,
or Other Incentive Award established by the Committee in
accordance with Article IX below, the number of shares of
Common Stock subject to the Award or with reference to which
the Award is determined, all the terms, conditions (including
performance requirements), restrictions and/or limitations, if
any, of an Award, including the time and conditions of
exercise or vesting, and the terms of any Award Notice, which
may include the waiver or amendment of prior terms and
conditions or acceleration or early vesting or payment of an
Award under certain circumstances determined by the Committee.

(d) Determine whether Awards will be granted
singly, in combination or in tandem.

(e) Grant waivers of Plan terms, conditions,
restrictions, and limitations.

(f) Accelerate the vesting, exercise, or payment of
an Award or the performance period of an Award when such
action or actions would be in the best interest of the Corporation.

(g) Take any and all other action it deems
necessary or advisable for the proper operation or
administration of the Plan.

In exercising the foregoing powers, the Committee shall
seek the recommendation of the Chief Executive Officer of the
Corporation or his delegate.

Section III.2 Committee to Make Rules and Interpret
Plan. The Committee shall have the authority, subject to the
provisions of the Plan, to establish, adopt, or revise such rules
and regulations and to make all such determinations relating to the
Plan as it may deem necessary or advisable for the administration
of the Plan. The Committee's interpretation of the Plan or any
Awards granted pursuant thereto and all decisions and
determinations by the Committee with respect to the Plan shall be
final, binding, and conclusive on all parties unless otherwise
determined by the Board.

Section III.3 Committee Members Ineligible. No
Committee member shall be eligible to participate in the Plan
except to the extent set forth in Section VI.3.

ARTICLE IV

GRANT OF AWARDS; SHARES
SUBJECT TO THE PLAN

Section IV.1 Committee to Grant Awards. The Committee
may, from time to time, grant Awards to one or more Eligible
Employees, provided, however, that:

(a) Subject to Article X, the aggregate number of
shares of Common Stock made subject to Awards may not exceed
810,000.

(b) Any shares of Common Stock related to Awards
which terminate by expiration, forfeiture, cancellation or
otherwise without the issuance of shares of Common Stock, are
settled in cash in lieu of Common Stock, or are exchanged in
the Committee's discretion for Awards not involving Common
Stock, shall be available again for grant under the Plan, so
long as the holder of any such Award received no benefits of
Common Stock ownership (including but not limited to
dividends) from the shares of Common Stock related to such
Award.

(c) Any shares of Common Stock issued by the
Corporation through the assumption or substitution of
outstanding grants from an acquired company shall reduce the
shares available for grants under the Plan.

(d) Common Stock delivered by the Corporation in
payment of any Award under the Plan may be authorized and
unissued Common Stock or Common Stock held in the treasury of
the Corporation or may be purchased on the open market or by
private purchase.

(e) The Committee shall, in its sole discretion,
determine the manner in which fractional shares arising under
this Plan shall be treated.

Section IV.2 Six-Month Holding Period. With respect to
Awards granted hereunder to any Participant who is, or within the
preceding six months was, subject to the provisions of Section 16
of the Exchange Act (an "Insider Participant"), each such Award
which is an equity security must be held and not transferred by
such Insider Participant for a period of six months from the Date
of Grant. Nothing in this Section IV.2 shall be deemed to prohibit
the exercise of Options within the six (6) month period following
the Date of Grant, but the shares of Common Stock received by an
Insider Participant pursuant to the exercise of an Option must be
held and not transferred for a period of six months from the Date
of Grant of the Option so exercised.

ARTICLE V

ELIGIBILITY

Section V.1 Eligible Employees. Those persons who shall
be eligible to receive Awards under the Plan shall be such
employees (including officers, whether or not they are directors)
of the Corporation or its Subsidiaries as the Committee shall
select from time to time. Directors who are not employees of the
Corporation or its Subsidiaries ("Non-Employee Directors") may also
participate in the Plan, but only to the extent set forth in
Section VI.3 hereof.

Subject to the provisions of the Plan, the Committee
shall, from time to time, select from the Eligible Employees those
to whom Awards shall be granted and shall determine the type or
types of Awards to be made and shall establish in the related Award
Notices the terms, conditions, restrictions and/or limitations, if
any, applicable to the Awards in addition to those set forth in the
Plan and the administrative rules and regulations issued by the
Committee.

ARTICLE VI

STOCK OPTIONS

Section VI.1 Grant of Options. The Committee may, from
time to time, subject to the provisions of the Plan and such other
terms and conditions as it may determine, grant Options to Eligible
Employees. These Options may be Incentive Stock Options or non-
qualified Options, or a combination of both. Each grant of an
Option shall be evidenced by an Award Notice executed by the
Corporation and the Participant, and shall contain such terms and
conditions and be in such form as the Committee may from time to
time approve, subject to the requirements of Section VI.2.

Section VI.2 Conditions of Options. Each Option so
granted shall be subject to the following conditions:

(a) Exercise price. As limited by Section VI.2(e)
below, each Option shall state the exercise price which shall
be set by the Committee at the Date of Grant.

(b) Form of payment. The exercise price of an
Option may be paid (i) in cash or by check, bank draft or
money order payable to the order of the Corporation; (ii) in
shares of Common Stock or shares of Restricted Stock as to
which restrictions have lapsed; (iii) a combination of the
foregoing; or (iv) such other consideration as the Committee
may deem appropriate. In addition to the foregoing, subject
to the discretion of the Committee, any Option granted under
the Plan may be exercised by a broker-dealer acting on behalf
of a Participant if (A) the broker-dealer has received from
the Participant or the Corporation a fully- and duly-endorsed
agreement evidencing such Option and instructions signed by
the Participant requesting the Corporation to deliver the
shares of Common Stock subject to such Option to the broker-
dealer on behalf of the Participant and specifying the account
into which such shares should be deposited, (B) adequate
provision has been made with respect to the payment of any
withholding taxes due upon such exercise or, in the case of an
Incentive Stock Option, upon the disposition of such shares
and (C) the broker-dealer and the Participant have otherwise
complied with Section 220.3(e)(4) of Regulation T, 12 CFR,
Part 220 and any successor rules and regulations applicable to
such exercise ("Cashless Exercise"); provided, however, that
an Insider Participant may not elect to utilize a Cashless
Exercise within six (6) months of the date the Option is
granted (unless death or disability occurs prior to the
expiration of such six-month period), and any such election
must be made during any period beginning on the third business
day following the date of release of a summary statement of
the Corporation's quarterly or annual sales and earnings and
ending on the twelfth business day following such date (the
"Window Period"). The Committee shall establish appropriate
methods for accepting Common Stock, whether restricted or
unrestricted, and may impose such conditions as it deems
appropriate on the use of such Common Stock in payment of the
exercise price. Common Stock used to exercise an Option shall
be valued at its then Fair Market Value.

(c) Exercise of Options. Options granted under the
Plan shall be exercisable, in whole or in such installments
and at such times, and shall expire at such time, as shall be
provided by the Committee in the Award Notice. Exercise of an
Option shall be by written notice stating the election to
exercise in the form and manner determined by the Committee.
Every share of Common Stock acquired through the exercise of
an Option shall be deemed to be fully paid at the time of
exercise and payment of the exercise price.

(d) Other terms and conditions. Among other
conditions that may be imposed by the Committee, if deemed
appropriate, are those relating to (i) the period or periods
and the conditions of exercisability of any Option; (ii) the
minimum periods during which Participants must be employed by
the Corporation or its Subsidiaries, or must hold Options
before they may be exercised; (iii) the minimum periods during
which shares acquired upon exercise must be held before sale
or transfer shall be permitted; (iv) conditions under which
such Options or shares may be subject to forfeiture; and (v)
the frequency of exercise or the minimum or maximum number of
shares that may be acquired at any one time.

(e) Special Restrictions Relating to Incentive
Stock Options. Options issued in the form of Incentive Stock
Options shall, in addition to being subject to all applicable
terms, conditions, restrictions and/or limitations established
by the Committee, comply with the requirements of Section 422
of the Code (or any successor section thereto), including,
without limitation, the requirement that the exercise price of
an Incentive Stock Option not be less than 100% of the Fair
Market Value of the Common Stock on the Date of Grant, the
requirement that each Incentive Stock Option, unless sooner
exercised, terminated or cancelled, expire no later than ten
(10) years from its Date of Grant, and the requirement that
the aggregate Fair Market Value (determined on the Date of
Grant) of the Common Stock with respect to which Incentive
Stock Options are exercisable for the first time by a
Participant during any calendar year (under this Plan or any
other plan of the Corporation or any Subsidiary) not exceed
$100,000.

(f) Application of funds. The proceeds received by
the Corporation from the sale of Common Stock pursuant to
Options will be used for general corporate purposes.

Section VI.3 Options to Non-Employee Directors.
Notwithstanding any other provision herein, no Awards shall be
granted hereunder to Non-Employee Directors other than the Director
Options granted pursuant to this Section VI.3.

An Option to purchase 5,000 shares of Common Stock shall
be automatically granted under the Plan to each person who is a
Non-Employee Director on the date the Plan is approved and adopted
by the Board, and any individual who becomes a Non-Employee
Director subsequent to such date shall be granted an Option to
purchase 5,000 shares of the Common Stock on the date he or she
becomes a Non-Employee Director.

Each Director Option shall be evidenced by an Award
Notice executed by the Corporation and the Non-Employee Director,
and shall include the following terms and provisions:

(a) Each Director Option shall become exercisable
with respect to one-third of the shares of Common Stock to
which it relates on each of the first three anniversaries of
the Date of Grant so long as the Non-Employee Director remains
a director at such time. The Option exercise price per share
shall be equal to the Fair Market Value of one such share on
the date the Director Option is granted. The period within
which each Option may be exercised shall expire six (6) years
from the date the option is granted (the "Option Period"),
unless ended sooner due to termination of service or death of
the optionee, or if fully exercised prior to the end of such
six (6) year period. No Director Options shall be granted
hereunder after the ten-year anniversary of the Effective
Date.

(b) If the directorship of an optionee is
terminated within the Option Period for any reason other than
(i) death of the optionee or (ii) on account of any act of
fraud, intentional misrepresentation, embezzlement,
misappropriation, or conversion of assets or opportunities of
the Corporation or any of its Subsidiaries, the Director
Option may be exercised, to the extent the optionee was able
to do so at the date of termination of the directorship,
within three months after such termination (if otherwise
within the Option Period).

(c) If an optionee dies during the Option Period
while a director of the Corporation, or if an optionee dies
within three months of serving as a Non-Employee Director, the
Option may be exercised, to the extent the optionee was
entitled to exercise such Option at the date of his or her
death, within one year after such death (if otherwise within
the Option Period), by the executor or the administrator of
the estate of the optionee, or by the person or persons who
shall have acquired the Option directly from the optionee by
a bequest or an inheritance.

(d) If the directorship of the optionee is
terminated within the Option Period for any of the reasons
enumerated in Section VI.3(b)(ii), the Director Option shall
automatically terminate as of the date of termination of such
directorship.

(e) Payment of the exercise price shall be made in
full, at the election of the Non-Employee Director, in cash,
by check, bank draft or money order payable to the order of
the Corporation concurrently with the exercise of the Director
Option, or by Cashless Exercise; provided, however, that such
election to utilize Cashless Exercise may not be made within
six (6) months of the Date of Grant of such Director Option,
and must be made during the Window Period.

(f) Such Director Options shall be nontransferable
by the optionee other than by will or the laws of descent and
distribution, or pursuant to a qualified domestic relations
order as defined by the Code or Title I of the Employees
Retirement Income Security Act, and shall be exercisable
during the optionee's lifetime only by the optionee or the
optionee's guardian or legal representative.

(g) Upon the termination of the directorship of an
optionee for any reason other than specified in Section
VI.3(b)(ii) within the two (2) year period following the
occurrence of a Change of Control Event, all Director Options
held by such optionee shall be deemed to be immediately
exercisable and the Corporation shall, within the three (3)
month period immediately following such termination, permit
the exercise of Director Options granted hereunder.

ARTICLE VII

PERFORMANCE SHARE AWARD

Section VII.1 Grant of Performance Share Awards. Grants
of Performance Share Awards may be made by the Committee to any
Eligible Employee during the term of the Plan. Each Performance
Share Award shall represent one share of Common Stock. Each
Performance Share Award shall be evidenced by an Award Notice.
There may be more than one award in existence at any one time for
any Participant and performance periods for separate Performance
Share Awards need not be identical.

The Performance Shares will be paid out in full or in
part on the basis of the performance of the Corporation following
the beginning of the Corporation's fiscal year in which the
Performance Share Award is made as hereinafter set forth. In
determining the size of Performance Share Awards, the Committee
shall take into account a Participant's responsibility level,
performance, potential, and cash compensation level, as well as
such other considerations as it deems appropriate. If any
Performance Share Award granted under the Plan shall be forfeited,
cancelled, or not paid out in full, such Performance Share Award
may again be granted under the Plan in accordance with Article VII.

Section VII.2 Conditions of Performance Share Awards.
A Performance Share Award shall be subject to the following terms
and conditions:

(a) Performance Share Account. Performance Share
Awards shall be credited to a Performance Share account to be
maintained for each holder. Each Performance Share Award
shall be deemed to be the equivalent of one share of Common
Stock of the Corporation. A Performance Share Award under the
Plan shall not entitle the holder to any interest in or to any
dividend, voting, or other rights of a shareholder. The value
of the Performance Shares in a holder's Performance Share
account at the time of Award or the time of payment shall be
the Fair Market Value at any such time of an equivalent number
of shares of the Common Stock.

(b) Performance Period and Criteria. Performance
Shares shall be contingent upon the attainment during a
performance period of certain performance objectives. The
length of the performance period for each Performance Share
Award, the performance objectives to be achieved during the
Performance Share Award period, and the measure of whether and
to what degree such objectives have been attained shall be
conclusively determined by the Committee in the exercise of
its discretion. The Committee may revise performance
objectives at such times as it deems appropriate during the
Performance Share Award period in order to take into account
or into consideration any unforeseen events or changes in
circumstances; provided,however, that any such revision which
is adverse to the holder of a Performance Share Award shall
require the holder's consent.

(c) Payment of Award. Following the end of the
Performance Share Award period, the holder of a Performance
Share Award shall be entitled to receive payment of an amount
based on the achievement of the performance measures for such
Performance Share Award period. In the event that a recipient
of a Performance Share Award is, or within the preceding six
(6) months has been, an Insider Participant, no Performance
Share Award shall be payable within the first six (6) months
from the Date of Grant of such Performance Share Award. The
payment to which a holder of a Performance Share Award shall
be entitled at the end of a Performance Share Award period
shall be a dollar amount equal to the Fair Market Value of the
number of shares of Common Stock equal to the number of
Performance Shares earned and payable to such holder.

The Committee may authorize payment of a Performance
Share Award in any combination of cash and shares of Common
Stock or all in cash or all in Common Stock, as it deems
appropriate, provided, however, that in the event a payee is,
or within the preceding six (6) months has been, an Insider
Participant, no cash payment may be made to such person except
during any period beginning on the third business day
following the date of release of a summary statement of the
Corporation's quarterly or annual sales and earnings and
ending on the twelfth business day following such date. Such
shares may include any restrictions on transfer and forfeiture
provisions as the Committee, from time to time, deems
appropriate.

(d) Additional Terms and Conditions. The Committee
may, by way of the Award Notice or otherwise, determine such
other terms, conditions, restrictions and/or limitations, if
any, of any Performance Share Award, provided they are not
inconsistent with the Plan.

ARTICLE VIII

RESTRICTED STOCK AWARDS

Section VIII.1 Grant of Restricted Stock Awards. The
Committee may grant a Restricted Stock Award to any Eligible
Employee. Restricted Stock Awards shall be awarded in such number
and at such times during the term of the Plan as the Committee
shall determine. Each Restricted Stock Award may be evidenced in
such manner as the Committee deems appropriate, including, without
limitation, book-entry registration or issuance of a stock
certificate or certificates, and by an Award Notice setting forth
the terms of such Restricted Stock Award.

Section VIII.2 Conditions of Restricted Stock Awards.
The grant of a Restricted Stock Award shall be subject to the
following:

(a) Restriction period. Vesting of each Restricted
Stock Award shall require the holder to remain in the
employment of the Corporation or a Subsidiary for a prescribed
period (a "Restriction Period"). The Committee shall
determine the Restriction Period or Periods which shall apply
to the shares of Common Stock covered by each Restricted Stock
Award or portion thereof. At the end of the Restriction
Period the restrictions imposed hereunder shall lapse with
respect to the shares of Common Stock covered by the
Restricted Stock Award or portion thereof. The Committee may,
in its sole discretion, modify or accelerate the vesting of a
Restricted Stock Award under such circumstances as it deems
appropriate.

(b) Restrictions. The holder of a Restricted Stock
Award may not sell, transfer, pledge, exchange, hypothecate,
or otherwise dispose of the shares of Common Stock represented
by the Restricted Stock Award during the applicable
Restriction Period. The Committee shall impose such other
restrictions on any shares of Common Stock covered by a
Restricted Stock Award as it may deem advisable including,
without limitation, restrictions under applicable Federal or
state securities laws, and may legend the certificates
representing Restricted Stock to give appropriate notice of
such restrictions.

(c) Rights as shareholders. During any Restriction
Period, the Committee may, in its discretion, grant to the
holder of a Restricted Stock Award all or any of the rights of
a shareholder with respect to said shares, including, but not
by way of limitation, the right to vote such shares and to
receive dividends. If any dividends or other distributions
are paid in shares of Common Stock, all such shares shall be
subject to the same restrictions on transferability as the
shares of Restricted Stock with respect to which they were
paid.

ARTICLE IX

OTHER INCENTIVE AWARDS

Section IX.1 Grant of Other Incentive Awards. The
Committee may, in its discretion, grant other types of awards of,
or based on, Common Stock. Other Incentive Awards are limited to
awards under which Common Stock is or may in the future be
acquired. Such awards may include grants of debt securities
convertible into or exchangeable for shares of Common Stock upon
such conditions, including attainment of performance goals, as the
Committee shall determine.

Section IX.2 Conditions of Other Incentive Awards. Each
grant of an Other Incentive Award shall be evidenced by an Award
Notice executed by the Corporation and the Participant, and shall
contain such terms and conditions and be in such form as the
Committee may from time to time approve. Other Incentive Awards
may not be sold, assigned, transferred, pledged, or encumbered
except as may be provided in the Award Notice, and in no event may
be transferred other than by will or by the laws of descent and
distribution or be exercised, during the life of the participant,
other than by the participant or the participant's guardian or
legal representative. The recipient of an Other Incentive Award
will have the rights of a shareholder only to the extent, if any,
specified in the Award Notice governing such Other Incentive Award.

ARTICLE X

STOCK ADJUSTMENTS

Section X.1 Adjustment of Shares Available;
Recapitalization. In the event that the shares of Common Stock, as
presently constituted, shall be changed into or exchanged for a
different number or kind of shares of stock or other securities of
the Corporation or of another corporation (whether by reason of
merger, consolidation, recapitalization, reclassification, stock
split, combination of shares or otherwise), or if the number of
such shares of Common Stock shall be increased through the payment
of a stock dividend, or a dividend on the shares of Common Stock or
rights or warrants to purchase securities of the Corporation shall
be made, then there shall be substituted for or added to each share
available under and subject to the Plan as provided in Article IV
hereof, and each share theretofore appropriated or thereafter
subject or which may become subject to Performance Share Awards,
Options, Restricted Stock Awards or Other Incentive Awards under
the Plan, the number and kind of shares of stock or other
securities into which each outstanding share of Common Stock shall
be so changed or for which each such share shall be exchanged or to
which each such share shall be entitled, as the case may be. In
the event there shall be any other change in the number or kind of
the outstanding shares of Common Stock, or any stock or other
securities into which the Common Stock shall have been changed or
for which it shall have been exchanged, then if the Committee
shall, in its sole discretion, determine that such change equitably
requires an adjustment in the shares available under and subject to
the Plan, or in any Award theretofore granted or which may be
granted under the Plan, such adjustments shall be made in
accordance with such determination, except that no adjustment of
the number of shares of Common Stock available under the Plan or to
which any Award relates that would otherwise be required shall be
made unless and until such adjustment either by itself or with
other adjustments not previously made would require an increase or
decrease of at least 1% in the number of shares of Common Stock
available under the Plan or to which any Award relates immediately
prior to the making of such adjustment (the "Minimum Adjustment").
Any adjustment representing a change of less than such minimum
amount shall be carried forward and made as soon as such adjustment
together with other adjustments required by this Section X.1 and
not previously made would result in a Minimum Adjustment.
Notwithstanding the foregoing, any adjustment required by this
Section X.1 which otherwise would not result in a Minimum
Adjustment shall be made with respect to shares of Common Stock
relating to any Award immediately prior to exercise, payment or
settlement of such Award.

No fractional shares of Common Stock or units of other
securities shall be issued pursuant to any such adjustment, and any
fractions resulting from any such adjustment shall be eliminated in
each case by rounding downward to the nearest whole share.

ARTICLE XI

GENERAL

Section XI.1 Amendment or Termination of Plan. The
Board may suspend or terminate the Plan at any time. In addition,
the Board may, from time to time, amend the Plan in any manner, but
may not without shareholder approval adopt any amendment which
would:

(a) increase the aggregate number of shares of
Common Stock available under the Plan (except by operation of
Article X);

(b) materially increase the benefits accruing to
Insider Participants under the Plan; or

provided, that any amendment to the Plan shall require approval of
the shareholders if, in the opinion of counsel to the Corporation,
such approval is required by Section 16(b) or any other section of
the Exchange Act, or any other Federal or state law or any
regulations or rules promulgated thereunder. Notwithstanding the
above, Section VI.3, the number of Director Options to be awarded
to Non-Employee Directors pursuant to Section VI.3, the number of
shares of Common Stock to be covered by each Director Option, the
exercise price per share under each Director Option, when and under
what circumstances each Director Option will be granted and the
period within which each such option may be exercised, shall not be
amended more than once every six months (even with shareholder
approval), other than to conform with changes in the Code, ERISA,
or the rules and regulations thereunder.

Section XI.2 Dividends and Dividend Equivalents. If an
Award is granted in the form of a Performance Share Award,
Restricted Stock, or an Option, the Committee may choose, at the
time of the grant of such Award or any time thereafter up to the
time of payment of such Award, to include as part of such Award an
entitlement to receive dividends or dividend equivalents subject to
such terms, conditions, restrictions, and/or limitations, if any,
as the Committee may establish. Dividends and dividend equivalents
granted hereunder shall be paid in such form and manner (i.e., lump
sum or installments), and at such time as the Committee shall
determine. All dividends or dividend equivalents which are not
paid currently may, at the Committee's discretion, accrue interest,
be reinvested into additional shares of Common Stock or, in the
case of dividends or dividend equivalents credited in connection
with a Performance Share Award, be credited as additional
Performance Shares and paid to the Participant if and when, and to
the extent that, payment is made pursuant to such Performance Share
Award.

Section XI.3 Termination of Employment. If a
Participant's employment with the Corporation or a Subsidiary
terminates for a reason other than death, disability, retirement,
or any approved reason, all unexercised, unearned, and/or unpaid
Awards, including, but not by way of limitation, Awards earned, but
not yet paid, all unpaid dividends and dividend equivalents, and
all interest accrued on the foregoing shall be cancelled or
forfeited, as the case may be, unless the Participant's Award
Notice provides otherwise. The Committee shall have the authority
to promulgate rules and regulations to (i) determine what events
constitute disability, retirement, or termination for an approved
reason for purposes of the Plan, and (ii) determine the treatment
of a Participant under the Plan in the event of his or her death,
disability, retirement, or termination for an approved reason.
Such rules and regulations may include, without limitation, the
method, if any, for prorating a Performance Share Award,
accelerating the vesting or exercisability of any Options or
Restricted Stock Award, or providing for the exercise of any
unexercised Options in the event of a Participant's death,
disability, retirement, or termination for an approved reason.

Section XI.4 Nonassignability. No Options, Performance
Share Awards or other derivative securities (as defined in the
rules and regulations promulgated under Section 16 of the Exchange
Act) awarded under the Plan to any person who is or within the
preceding six months has been, an Insider Participant, shall be
subject in any manner to alienation, anticipation, sale, transfer,
assignment, pledge, or encumbrance, except for transfer by will or
the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended
(ERISA), or the rules and regulations thereunder. Any attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of, or
to subject to execution, attachment or similar process, any Option,
Performance Share Award or other derivative security, contrary to
the provisions hereof, shall be void and ineffective, shall give no
right to any purported transferee, and may, at the sole discretion
of the Committee, result in forfeiture of the Award involved in
such attempt.

Section XI.5 Withholding Taxes. The Corporation shall
be entitled to deduct from any payment under the Plan, regardless
of the form of such payment, the amount of all applicable income
and employment taxes required by law to be withheld with respect to
such payment or may require the Participant to pay to it such tax
prior to and as a condition of the making of such payment. In
accordance with any applicable administrative guidelines it
establishes, the Committee may allow a Participant to pay the
amount of taxes required by law to be withheld from an Award by
withholding from any payment of Common Stock due as a result of
such Award, or by permitting the Participant to deliver to the
Corporation, shares of Common Stock, having a Fair Market Value, on
the date of payment, equal to the amount of such required
withholding taxes; provided, however, that in the event the
Participant is, or within the preceding six (6) months has been an
Insider Participant, such an election may not be made within six
(6) months of the date the Award is granted (unless death or
disability of the Participant occurs prior to the expiration of
such six-month period), and must be made either six (6) months
prior to the date of payment or during the Window Period.

Section XI.6 Forfeiture. If the employment of a
Participant is terminated on account of any act of fraud,
intentional misrepresentation, embezzlement, misappropriation, or
conversion of assets or opportunities of the Corporation or any of
its Subsidiaries, any Award granted hereunder, whether and
regardless of the extent to which such Award is vested, earned or
exercisable, shall automatically terminate as of the date of
termination of such employment.

Section XI.7 Change of Control. Awards granted under
the Plan to any Participant may, in the discretion of the
Committee, provide that (a) such Awards shall be immediately
vested, fully earned and exercisable, as appropriate, upon the
termination of such Participant's employment with the Corporation
or any Subsidiary within the two (2) year period following a Change
of Control Event, except as provided in Section XI.6 or as
otherwise provided in any employment contract or similar agreement
between such Participant and the Corporation, and (b) the
Corporation shall, within the three (3) month period immediately
following such termination of employment, make full payment to each
such Participant with respect to any Performance Share Award or
Other Incentive Award, deliver certificates to such Participant
with respect to each Restricted Stock Award, and permit the
exercise of Options, respectively, granted hereunder to such
Participant.

Section XI.8 Amendments to Awards. The Committee may at
any time dunilaterally amend the terms of any Award Notice for any
Award, whether or not presently exercisable, earned, paid or
vested, to the extent it deems appropriate; provided, however, that
any such amendment which is adverse to the Participant shall
require the Participant's consent.

Section XI.9 Regulatory Approval and Listings. The
Corporation shall use its best efforts to file with the Securities
and Exchange Commission as soon as practicable following the
Effective Date, and keep continuously effectively and usable, a
Registration Statement on Form S-8 with respect to shares of Common
Stock subject to Awards hereunder. Notwithstanding anything
contained in this Plan to the contrary, the Corporation shall have
no obligation to issue or deliver certificates representing shares
of Common Stock evidencing Restricted Stock Awards or any other
Award relating to shares of Common Stock prior to:

(a) the obtaining of any approval from, or
satisfaction of any waiting period or other condition imposed
by, any governmental agency which the Committee shall, in its
sole discretion, determine to be necessary or advisable,

(b) the admission of such shares to listing on the
stock exchange on which the Common Stock may be listed, and

(c) the completion of any registration or other
qualification of said shares under any state or Federal law or
ruling of any governmental body which the Committee shall, in
its sole discretion, determine to be necessary or advisable.

Section XI.10 Right to Continued Employment.
Participation in the Plan shall not give any Eligible Employee any
right to remain in the employ of the Corporation or any Subsidiary.
The Corporation or, in the case of employment with a Subsidiary,
the Subsidiary, reserves the right to terminate any Eligible
Employee at any time. Further, the adoption of this plan shall not
be deemed to give any Eligible Employee or any other individual any
right to be selected as a Participant or to be granted an Award.

Section XI.11 Beneficiaries. Each Participant shall
file with the Committee a written designation of one or more
persons as the beneficiary (the "Beneficiary") who shall be
entitled to receive the amount, if any, payable under the Plan upon
his death. A Participant may, from time to time, revoke or change
his Beneficiary designation without the consent of any prior
Beneficiary by filing a new designation with the Committee. The
last such designation received by the Committee shall be
controlling; provided, however, that no designation, or change or
revocation thereof, shall be effective unless received by the
Committee prior to the Participant's death, and in no event shall
be effective as of a date prior to such receipt.

If such Beneficiary designation is in effect at the time
of a Participant's death, or if no designated Beneficiary survives
the Participant, or such designation conflicts with law, the
payment of the amount, if any, payable under the Plan upon his
death shall be made to the Participant's estate. If the Committee
is in doubt as to the right of any person to receive such amount,
the Committee may retain such amount, without liability or any
interest thereon, until the rights thereon are determined, or the
Committee may pay such amount into any court of appropriate
jurisdiction and such payment shall be a complete discharge of the
liability of the Plan, the Corporation and the Committee therefor.

Section XI.12 Indemnification. Each person who is or
shall have been a member of the Committee or of the Board shall be
indemnified and held harmless by the Corporation against and from
any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by such person in connection with or resulting
from any claim, action, suit, or proceeding to which he or she may
be a party or in which he may be involved by reason of any action
or failure to act under the Plan and against and from any and all
amounts paid by such person in satisfaction of judgment in any such
action, suit, or proceeding against such person. He or she shall
give the Corporation an opportunity, at its own expense, to handle
and defend the same before he or she undertakes to handle and
defend it on his or her own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the
Corporation's Articles or Incorporation or Bylaws, as a matter of
law, or otherwise, or any power that the Corporation may have to
indemnify or hold harmless any such person.

Section XI.13 Reliance on Reports. Each member of the
Committee and each member of the Board shall be fully justified in
relying or acting in good faith upon any report made by the
independent public accountants of the Corporation and its
Subsidiaries and upon any other information furnished in connection
with the Plan by any person or persons other than himself. In no
event shall any person who is or shall have been a member of the
Committee or of the Board be liable for any determination made or
other action taken or any omission to act in reliance upon any such
report or information or for any action taken, including the
furnishing of information, or failure to act, if in good faith.

Section XI.14 Relationship to Other Benefits. No
payment under the Plan shall be taken into account in determining
any benefits under any pension, retirement, profit sharing, group
insurance or other benefit plan of the Corporation or any
Subsidiary.

Section XI.15 Expenses. The expenses of administering
the Plan shall be borne by the Corporation subject to such
allocation to its Subsidiaries as it deems appropriate.

Section XI.16 Construction. Masculine pronouns and
other words of masculine gender shall refer to both men and women.
The titles and headings of the sections in the Plan are for the
convenience of reference only, and in the event of any conflict,
the text of the plan, rather than such titles or headings, shall
control.

Section XI.17 Governing Law. The Plan shall be governed
by and construed in accordance with the laws of the State of
Delaware except as superseded by applicable Federal law.

Exhibit 10.18

SEPARATION AGREEMENT AND RELEASE

This Separation Agreement and Release ("Agreement") is made
and entered into this 31st day of December 1993, by and Doskocil
Companies Incorporated, a Delaware corporation ("Company"), and
John T. Hanes ("JH"), an individual.

WHEREAS, the Company and JH entered into an employment
agreement in 1991 (the "Employment Agreement"); and

WHEREAS, the Company and JH desire to sever their
employment relationship; and

WHEREAS, JH previously was granted twenty-five thousand
(25,000) shares of restricted stock of the Company ("Restricted
Stock") and twenty-five thousand (25,000) performance shares of
the Company ("Performance Shares") (the Restricted Stock and the
Performance Shares, together with any additional shares which may
have accrued to JH's benefit as a result of stock dividends,
stock splits or otherwise, are referred to herein as the "Equity
Shares") pursuant to the Company's 1992 Stock Incentive Plan
(the "Incentive Plan") established and administered by the
Company for certain of its senior executives; and

WHEREAS, JH previously was granted non-qualified options to
purchase forty thousand (40,000) shares of common stock of the
Company (the "Stock Options") pursuant to the Incentive Plan; and

WHEREAS, the Company desires to protect its confidential
information and trade secrets and to insure JH's compliance with
certain post-employment covenants that the Company and JH agree
are reasonable and necessary;

WHEREAS, JH desires to receive certain severance payments
and benefits that he would not otherwise be entitled to receive;

NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the
Company and JH hereby agree as follows:

1. Separation. On a date to be determined in the Company's
sole discretion, JH shall be separated permanently from his
employment with the Company (the "Effective Date"). The
Company shall provide JH at least ninety (90) days notice prior
to the effective date. From the Effective Date forward, JH shall
have no authority to, nor shall he make any representations,
commitments or assume any obligations on behalf of the Company.
JH understands and agrees that he shall not at any time apply for
employment or re-employment with the Company nor any of the
Related Entities (as that term is hereinafter defined).

2. Terms of Separation. In consideration of the promises
and covenants set forth herein, the Company agrees to provide the
following to JH:

(a) Severance Pay. Severance Pay as follows: (i) a lump
sum payment equal to the base salary received by JH during the
period September 22, 1993 through December 31, 1993, shall be
payable on or about January 3, 1994; and (ii) twice monthly
severance payments beginning on January 1, 1994 and ending on
December 31, 1994. All severance payments will be provided at
JH's base salary rate as of the Effective Date.

(b) Automobile and Club Allowance. A lump sum payment of
$14,339.00, representing the present value of JH's automobile and
club allowance (Prairie Dunes Country Club, Quail Creek Country
Club, Petroleum Club) through December 31, 1994, shall be payable
on or about January 3, 1994.

(c) Medical Insurance. Continued coverage equal to current
coverage under the Company's group medical insurance plan for JH
and his spouse until the earlier of the following: (i) the
beginning of the month following the date on which JH reaches, or
would have reached, age 65 and (ii) the date on which JH is
offered medical insurance coverage by a new employer.

(d) 401(k) Plan. A lump sum payment of $28,503.00,
representing the present value of amounts the Company would have
contributed to the Doskocil 401(k) plan on behalf of JH had JH
remained employed by the Company until age 65. This lump sum
payment will be provided on or about January 3, 1994.

(e) Life Insurance. The Company agrees to purchase and
maintain until JH attains 65 a separate insurance policy with
coverage equal to current coverage.

(f) Bonus. If the relevant performance objectives described
in the Doskocil Companies Incorporated Annual Incentive Plan (the
"Annual Incentive Plan") are met with respect to the Company's
1993 fiscal year, then JH shall entitled to receive, at the time
incentive bonuses would ordinarily be paid to participants in the
Annual Incentive Plan with respect to the 1993 plan year, an
incentive bonus.

If the relevant performance objectives described in the
Doskocil Companies Incorporated Annual Incentive Plan, (the
"Annual Incentive Plan") are met with respect to the Company's
1994 fiscal year, then JH shall be entitled to receive, at the
time incentive bonuses would ordinarily paid to participants in
the Annual Incentive Plan with respect to the 1994 plan year, an
incentive bonus. The pro-rated incentive bonus shall be
determined by multiplying the incentive bonus which would have
otherwise been payable to JH for such year under the terms and
provisions of the Annual Incentive Plan times a fraction, the
numerator of which shall be the number of days JH was employed by
the Company during the 1994 fiscal year, and the denominator of
which shall be 365.

(g) Stock Options and Equity Shares. All previously
granted but unvested Stock Options shall be exercisable on
January 1, 1994 and the entire option grant of 40,000 shares
shall remain exercisable at $l4.00 per share until the normal
expiration date of February 3, 1998. On January 1, 1994, all
previously granted but unvested Equity Shares shall become fully
vested in JH.

(h) Taxes. JH hereby agrees to provide the Company, as of
the respective vesting dates, with the amount of cash necessary
to cover the income tax withholding obligations with respect to
the vesting of the Equity Shares. The Company and JH understand
and agree that the Company will deduct from amounts payable under
this Agreement any other taxes or other amounts required by him
to be withheld.

(i) Reimbursement for Professional Fees. The Company shall
pay on JH's behalf all bills received by JH's attorneys,
accountants and other advisors in connection with the negotiation
and execution of this Agreement. Such payment by the Company
shall not exceed $7,500.00.

(j) Financial Counseling. JH will be entitled, through
December 31, 1994, to financial counseling services, at the
Company's expense, to the same extent available under the plan in
effect as of the date of JH's execution of this Agreement (the
cost of such services not to exceed $4,000.00).

(k) Loan. The company will provide on interest free loan in
accordance with the terms set forth in the attached Note (Exhibit
A). JH agrees to sign the Note at the time he signs this
Agreement. JH will be responsible for any and all taxes due on
such loan.

3. Releases. JH, in consideration of the promises set
forth herein, and with the intention of binding himself, his
heirs, executors, administrators and assigns, does hereby
irrevocably release, acquit and forever discharge the Company and
its past, present and future parents, subsidiaries, related
companies and affiliated enterprises (such parents, subsidiaries,
related companies and affiliated enterprises shall be referred to
as the "Related Entities"), administrators, agents, officers,
employees, directors, successors, assigns and attorneys of and
from all manner of actions, cause or causes of action, claims,
suits, covenants, controversies, agreements, promises, damages,
charges, and demands, whatsoever, in law or in equity or
otherwise, including, but not limited to, those relating to or
arising under any discrimination statute or law (including the
Age Discrimination in Employment Act of 1967, as amended, and any
statute or law relating to handicap or disability), breach of
contract, express or implied, breach of public policy, wrongful
or retaliatory discharge, personal or business injury, and all
claims to any form of compensation or benefits that he has, had
or may ever have arising out of or in connection with his
employment with the Company or the termination of said
employment. JH hereby expressly waves the benefit of any statute
or rule of law which, if applied to this Release, would otherwise
exclude from its binding effect any claims not now known by JH to
exist. This release shall not apply to any claim for breach of
this Agreement.

The Company, in consideration of the promises set forth
herein, does hereby irrevocably release, acquit and forever
discharge JH from all manner of actions, causes or causes of
action, claims, suits, covenants, controversies, agreements,
promises, damages, charges, and demands, whatsoever, in law or in
equity or otherwise, it has, had or may ever have against JH
arising out of or in connection with JH's employment with the
Company, excepting only claims for breach of this Agreement or
any claim relating to fraud, theft or embezzlement on the part of
JH.

4. Non-Disclosure of Confidential Information/Return of
Property. JH recognizes that, by reason of his employment with
the Company, he has acquired confidential information (including
but not limited to, confidential know-how, trade secrets,
customer lists, business plans end processes, marketing plans,
marketing research, sales information, accounting information)
concerning the Company and the Related Entities. Accordingly, JH
agrees that he shall not, at any time, directly or indirectly
(except to the extent required by law or permitted by the
Company), disclose any secret or confidential information he has
learned by reason of his association with the Company nor use any
such information to the detriment of the Company nor any of the
Related Entities. JH further agrees promptly to return to the
Company any and all property of the Company or any of the Related
Entities.

5. Confidentiality of Agreement. JH understands and agrees
that this Agreement, the terms of this Agreement, the
negotiations leading up to this Agreement, and any and all
matters concerning his separation from the Company are
confidential and shall be accorded the utmost confidentiality.
JH agrees that these matters will not be disclosed to any third
party except for his legal or tax advisor(s) to the extent
necessary to perform services, or except as disclosure of such
matters may be required by law. JH agrees that if any disclosure
is made is permitted under this paragraph, then such person(s)
shall be cautioned about the confidentiality obligations imposed
by this Agreement and required to abide by the terms of this
confidential undertaking.

6. Non-Competition. JH agrees that during the period
beginning on the Effective Date and ending on December 31, 1994,
he shall not engage in any business activity that is materially
competitive with or adverse to any business of the Company or any
of the Related Entities. The Company and its Related Entities
agree that JH may offer consulting services to food and meat
related companies and may participate in acquisitions or baits of
meat or food related companies.

7. Non-Solicitation of Employees. JH agrees that during
the period beginning on the Effective Date and ending on December
31, 1995, he shall not, without the prior written consent
of the Company's Board of Directors, directly or indirectly
solicit any employee of the Company or any of the Related
Entities, unless such employee has been terminated by the Company
or any of the Related Entities, to leave such employment and join
or become affiliated with a business that is competitive with the
business conducted by the Company or any of the Related Entities.
In the event JH violates this paragraph, the Company shall have
no further obligations to JH and, notwithstanding anything in
this Agreement to the contrary, JH shall promptly return to the
Company all payments previously made to JH pursuant to his
Agreement.

8. Irreparable Harm. JH acknowledges that: (i) JH's
compliance with this Agreement is necessary to preserve and
protect the proprietary rights, confidential information and
goodwill of the Company as a going concern; (ii) any failure by
JH to comply with the provisions of this Agreement shall result
in irreparable and continuing injury to the Company for which
there will be no adequate remedy at law and (iii) in the event
that JH should fail to comply with the provisions of this
Agreement, the Company shall be entitled, in addition to such
other relief as may be proper, to all types of equitable relief
(including, but not limited to, the issuance of an injunction or
temporary restraining order) as may be necessary to cause JH to
comply with this Agreement, to restore to the Company its
property, and to make the Company whole.

9. Audit. In the event, JH is notified by the Internal
Revenue Service ("IRS") of the IRS intention to audit any of his
tax returns reflecting the payments described in this Agreement
or the acceleration of vesting described in this Agreement, JH
may notify the Company and may provide to the Company (a) a copy
of the tax return(s) in issue and (b) any communication(s)
reflecting the scope of the intended audit.

Upon receipt of such notice from JH, the Company shall
undertake to provide to JH such legal and/or accounting
representation (as selected by the Company in its sole
discretion) as he may require with respect to such items and to
indemnify him for and hold him harmless against any reasonable
expenses (but not taxes, interest or penalties) incurred by him
in the course of such audit. Such indemnification shall include,
but not be limited to, any reasonable out-of-pocket expenses
incurred by JH in the course of preparation for and/or
participation in the audit, but shall not include any taxes,
interest or penalties. JH shall be responsible for the cost of
such representation to the extent any such audit involves issues
not related to the items described above. JH shall provide
reasonable assistance to the Company in defending him in the
audit as may be requested by the Company, agrees that he will
take reasonable steps to ensure that his personal legal and/or
accounting representatives (as described below) will cooperate
with such representatives as selected hereunder by the Company,
and shall submit to the Company periodically, statement of
expenses incurred, which statement shall be promptly paid by the
Company.

In the event that the scope of the audit includes items
other than the items described above, JH shall have the right to
retain his own legal and/or accounting representatives, at his
expense, and the Company agrees (a) that it shall take all
reasonable stops to ensure that the legal and/or accounting
representatives provided to JH by the Company shall fully
cooperate with those retained by JH and (b) that the legal and/or
accounting representatives provided to JH by the Company shall
not compromise or offer to compromise any claim without the
consent of JH or his legal and/or accounting representatives,
which consent shall not unreasonably be withheld.

10. Hold Harmless - The Company shall continue, through the
Effective Date, to indemnify JH and hold him harmless from any
liability or expense he may incur with respect to his duties as
an officer or director of the Company to the extent such
indemnification is provided as of the date hereof.

11. Office - The Company shall provide to JH appropriate
executive office space, office equipment and office personnel at
no cost to JH for the twelve (12) month per period commencing on
the Effective Date.

12. Entire Agreement. JH represents and warrants that no
promise or inducement has been offered or made except as herein
set forth and that the consideration provided herein is the sole
consideration for this Agreement. This Agreement is a complete
Agreement and, except as sat forth in the final sentence of this
Paragraph 10, states fully all agreements, understandings,
promises and commitments as between the Company and JH and as to
the separation of their employment relationship. It is further
understood and agreed that this Agreement specifically supersedes
any and all prior agreements or understanding, written or oral,
between the Company and JH, including the Employment Agreement
but excluding the "Agreement and Waiver with Respect to
Employment Agreement" executed by JH in March, 1993.

13. Choice of Laws. This Agreement shall be construed and
enforced in accordance with the laws and the State of Kansas
without regard to its principles concerning conflict-of-laws.

14. Resignation. By execution of this document, JH hereby
resigns as an officer and/or director of the Company as of the
Effective Date.

15. No Transfer. JH represents and warrants that he has
not sold, assigned, transferred, conveyed or otherwise disposed
of to any third-party, by operation of law or otherwise, any
action, cause of action, suit, debt, obligation, account,
contract, agreement, covenant, guarantee, controversy, judgment,
damage, claim, counterclaim, liability or demand of any nature
whatsoever relating to any matter covered by this Agreement.

16. Severability/Modification. If any provision of this
Agreement shall be found by a court of competent jurisdiction to
be invalid or unenforceable, in whole or in part, then such
provision shall be deemed modified or restricted to the extent
and in the manner necessary to render the same valid and
enforceable, or shall be deemed excised from this Agreement, as
the case may require, and this Agreement shall be construed and
enforced to the maximum extent permitted by law, as if such
provision had bean originally incorporated herein as so modified
or restricted, or as if such provision had not been originally
incorporated herein, as the case may be.

17. Advice. JH represents and warrants that he has read
this entire Agreement; has had up to twenty-one (21) days to
consider it, has been given the opportunity and has had this
Agreement reviewed by an attorney; understands its meaning and
application; and is signing of his own free will with the intent
of being bound by each and every provision of this Agreement. JH
further understands that he has seven (7) days to revoke this
Agreement after signing it.

(William L. Brady) (John T. Hanes)
DOSKOCIL COMPANIES JOHN T. HANES
INCORPORATED

Dated: December 31, 1993 Dated: December 31, 1993

<PAGE>

EXHIBIT A

FORM OF NOTE

$225,000 Oklahoma City, Oklahoma
December 31, 1993

FOR VALUE RECEIVED, the undersigned, John T. Hanes (the
"Maker"), hereby promises to pay to the order of Doskocil
Companies Incorporated (the "Payee), the principal amount of Two
Hundred Twenty-Five Thousand Dollars ($225,000) , payable to
Doskocil Companies Incorporated on January 3, 1995.

Payments on this Note are to be made to the Payee at such
place as the Payee shall designate to the Maker in writing, in
lawful money of the United States of America in immediately
available funds.

The Maker may prepay this Note in wholly or in part at any
time or times, without penalty, upon three (3) days written
notice to the Payee or any other holder of this Note.

Upon the insolvency, bankruptcy, receivership, dissolution
or liquidation of the Maker, whether voluntary or involuntary, or
the assignment by the Maker of its assets for the benefit or its
creditors or cessation of its active business operations or the
institution of any proceeding for the general application of the
Maker's assets to the payment of the Maker's liabilities the
entire outstanding principal amount of this Note shall
immediately become due and payable.

The Maker hereby expressly waives presentment, demand,
protest, notice of dishonor, notice of protest and other notices
of any kind in connection with this Note.

This Note may not be modified or the face hereof cancelled
except in a writing, signed by the Maker and by the Payee or any
other holder of this Note. This Note shall be governed,
construed and interpreted in accordance with the laws of the
State of New York.

The Maker agrees to pay costs and expenses of collection,
including without limitation, attorneys' fee and disbursements in
the event that any action, suit or proceeding is brought by the
holder hereof to collect this Note.

By: John T. Hanes

Exhibit 10.20
SETTLEMENT AGREEMENT

This Settlement Agreement is entered into on the 6th day of
July, 1993, by and between Theodore A. Myers, an individual
residing in the State of Illinois ("Executive") and Doskocil
Companies Incorporated, a Delaware corporation (the "Company").

WHEREAS, Executive and the Company entered into an employment
agreement, dated as of November 1, 1991 (the "Employment
Agreement"); and

WHEREAS, the Employment Agreement provided, among other
things, for the payment of certain consideration to Executive in
the event his employment with the Company was terminated; and

WHEREAS, the Company and the Executive have agreed that
Executive's employment with the Company will be terminated
effective as of the date hereof; and

WHEREAS, Executive had previously been granted seventeen
thousand five hundred (17,500) shares of restricted stock of the
Company ("Restricted Stock") and seventeen thousand five hundred
(17,500) performance shares of the Company ("Performance Shares")
(the Restricted Stock and the Performance Shares, together with any
additional shares which may have accrued to Executive's benefit as
a result of stock dividends, stock splits or otherwise, are
referred to herein as the "Equity Shares") pursuant to the
Company's 1992 Stock Incentive Plan (the "Incentive Plan")
established and administered by the Company for certain of its
senior executives; and

WHEREAS, Executive had previously been granted options to
purchase 18,000 shares of common stock of the Company (the "Stock
Options") pursuant to the Incentive Plan; and

WHEREAS, Executive and the Company have negotiated and agreed
to a final settlement of their respective rights, obligations and
liabilities under the Employment Agreement.

NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Executive
and the Company hereby agree as follows:

1. On the date hereof (such date being referred to herein as
the "Settlement Date") and subject to such income tax, social
security tax and other payroll tax withholding requirements which
may be necessary under applicable law, the Company shall pay
Executive a lump sum cash payment of no less than Four Hundred
Fifty Two Thousand Seven Hundred Twelve Dollars ($452,712.00) (the
"Settlement"), which payment shall be comprised of the following
amounts:

(a) Four Hundred Twenty-One Thousand Eight Hundred
Seventy-Four Dollars ($421,874), representing the present value of
the unpaid portion of Executive's compensation as set forth in
Section 3 of the Employment Agreement;

(b) Twenty-One Thousand Three Hundred Seven Dollars
($21,307), representing the present value of Executive's automobile
and club allowances as set forth in Section 8 of the Employment
Agreement through December 31, 1994 had Executive remained employed
by the Company; and

(c) Nine Thousand Five Hundred Thirty One Dollars
($9,531.00), representing the present value of amounts the Company
would have contributed to the Doskocil 401(k) Plan on behalf of
Executive through December 31, 1994 had Executive remained employed
by the Company.

In addition to the payments described in subparagraphs (a),
(b) and (c) above, if the relevant performance objectives described
in the Doskocil Companies Incorporated Annual Incentive Plan (the
"Annual Incentive Plan") shall be met with respect to the 1993
fiscal year of the Company, then Executive shall be entitled to
receive, at the time incentive bonuses would ordinarily be paid to
participants in the Annual Incentive Plan with respect to the 1993
plan year, a pro rated incentive bonus equal to one-half of the
amount of the incentive bonus which would have otherwise been
payable to the Executive for such year under the terms and
provisions of the Annual Incentive Plan.

Executive shall also be entitled upon presentation of
appropriate expense statements or receipts, to reimbursement for
the reasonable amount of any business expenses reasonably incurred
by the Executive prior to the Settlement Date in accordance with
the Employment Agreement, and for the reasonable amount of any
moving expenses incurred by Executive in moving his personal
belongings back to the Chicago metropolitan area. Notwithstanding
the foregoing, the amount of reimbursement for such moving expenses
shall not exceed Three Thousand Dollars ($3,000.00).

Executive shall also be entitled for the period beginning on
the Settlement Date and ending on December 31, 1994, to financial
counselling services, at the expense of the Company, to the same
extent provided under the plan for such benefits in existence as of
the Settlement Date, and to continue participation in insurance
plans and programs (excluding life insurance plans) in which, and
to the extent that, he was participating immediately prior to the
Settlement Date pursuant to Section 4 of the Employment Agreement.
As soon as reasonably practicable following the Settlement Date,
Executive and the Company shall cooperate in good faith and use
their best efforts to obtain for Executive a term life insurance
policy owned by Executive which insures the life of Executive at a
death benefit equal to at least $745,000. The Company, for the
period commencing on the Settlement Date and ending on December 31,
1994, shall pay forty percent (40%) (the "Company Portion") of the
premiums for such policy. If Executive is unable to obtain such a
policy at premiums not exceeding an annual rate of $23.10 per
$1,000 of death benefit, then the Company shall pay Executive an
amount equal to the present value of forty percent (40%) of the
premiums payable over a period of 18 months on a rated term life
insurance policy providing a death benefit of at least $745,000,
such premiums not to exceed $23.10 per $1,000 of death benefit.

2. Effective as of the Settlement Date, all funds in
Executive's account under the Doskocil 401(k) Plan, together with
all earnings accrued and allocable with respect thereto, shall at
the direction of Executive to the extent provided in the Plan
document, either remain in the Doskocil 401(k) Plan, be distributed
to Executive or be transferred to a qualified tax-deferred
investment plan designated by Executive.

3. Effective as of the Settlement Date, all previously
granted but unvested Stock Options shall become fully vested and
exercisable in accordance with the terms of the stock option
agreement granting such Stock Options. In addition, on August 2,
1993, all unvested Equity Shares shall become fully vested in the
Employee. Notwithstanding the foregoing, the Executive
acknowledges and reaffirms his prior agreement that no "Change of
Control" has occurred for purposes of accelerating the vesting of
such Stock Options or Equity Shares. The Executive hereby agrees
to provide the Company, as of the vesting date of the Equity
Shares, with the amount of cash necessary to satisfy the income tax
withholding obligation with respect to the vesting of such Equity
Shares. Such amount shall, at the option of Executive, be
delivered to the Company in cash, by delivery of a certified check
or by subtracting such amount from the amount otherwise payable
under Paragraph 1 hereof. Alternatively, under a procedure which
is mutually agreed upon by the parties, Executive may direct the
Company to satisfy such withholding obligation by disposing of some
of the Equity Shares.

4. In the event Executive is notified by the Internal Revenue
Service ("IRS") of the IRS' intention to audit any of Executive's
tax returns reflecting the payments described in paragraph 1 or the
acceleration of vesting described in paragraph 3, Executive shall
notify the Company and shall provide to the Company (a) a copy of
the tax return(s) in issue and (b) any communications(s) reflecting
the scope of the intended audit.

Upon receipt of such notice from Executive, the Company shall
undertake to provide to Executive such legal and/or accounting
representation (as selected by the Company in its sole discretion)
as Executive may require with respect to such items and to
indemnify Executive for and hold him harmless against any
reasonable expenses (but not taxes, interest or penalties) incurred
by Executive in the course of such audit. Such indemnification
shall include, but not be limited to, any reasonable out-of-pocket
expenses incurred by Executive in the course of preparation for
and/or participation in the audit, but shall not include any taxes,
interest or penalties. Executive shall be responsible for the cost
of such representation to the extent any such audit involves issues
not related to the items described in Paragraph 1 or 3. Executive
shall provide reasonable assistance to the Company in defending him
in the audit as may be requested by the Company, agrees that he
will take reasonable steps to ensure that his personal legal and/or
accounting representatives (as described below) will cooperate with
such representatives as selected hereunder by the Company, and
shall submit to the Company periodically, a statement of expenses
incurred, which statement shall be promptly paid by the Company.

In the event that the scope of the audit includes items other
than the items described in paragraph 1 or 3 above, Executive shall
have the right to retain his own legal and/or accounting
representatives, at Executive's expense, and the Company agrees (a)
that it shall take all reasonable steps to ensure that the legal
and/or accounting representatives provided to Executive by the
Company shall fully cooperate with those retained by Executive and
(b) that the legal and/or accounting representatives provided to
Executive by the Company shall not compromise or offer to
compromise any claim without the consent of Executive or his legal
and/or accounting representatives, which consent shall not
unreasonably be withheld.

5. The Company on its own behalf and on behalf of its
predecessors, successors and assigns, releases, remises and forever
discharges the Executive for himself, his heirs, executors,
administrators, legal representatives, successors and assigns, from
and against any and all claims, cross-claims, third party claims,
counterclaims, contribution claims, indemnity claims, debts,
demands, actions, promises, judgments, trespasses, extents,
executions, causes of action, suits, accounts, covenants, sums of
money, dues, reckonings, bonds, bills, liens, attachments, trustee
process, specialties, contracts, controversies, agreements,
promises, damages and all other claims of every kind and nature in
law, equity, arbitration, or other forum which the Company now has
or ever has had up to and including the date of this Settlement
Agreement, whether absolute or contingent, direct or indirect,
known or unknown.

6. In consideration of the fulfillment of the agreements set
forth in paragraphs 1, 2 and 3 above and subject to the collection
of funds for payments pursuant to paragraph 1 that are made by
check, Executive releases, remises and forever discharges the
Company, its legal representatives, successors and assigns, past,
present and future directors, officers, employees, trustees,
shareholders and affiliates from and against any and all claims,
cross-claims, third-party claims, counterclaims, contribution
claims, debts, demands, actions, promises, judgments, trespasses,
extents, executions, causes of action, suits, accounts, covenants,
sums of money, dues, reckonings, bonds, bills, liens, attachments,
trustee process, specialties, contracts, controversies, agreements,
promises, damages, and all other claims of every kind and nature in
law, equity, arbitration, or other forum which Executive now has or
ever has had up to and including the date of this Settlement
Agreement, whether absolute or contingent, direct or indirect,
known or unknown, except that nothing herein shall be deemed to
release, remise or discharge the Company from any claims arising
out of, related to or asserted under this Settlement Agreement.

7. In the event the Company fails to make any of the
payments set forth in paragraph 1(a), (b) or (c) hereof, as such
payments become due, they shall accrue interest from such due date
at the rate of 7% per annum.

8. The Company shall continue to indemnify Executive and
hold Executive harmless from any liability or expenses Executive
may incur with respect to his duties as an officer or director of
the Company through the Settlement Date to the same extent as if
Executive had continued to be an executive officer or director of
the Company.

9. Except as set forth above and except with respect to the
confidentiality provisions set forth in Section 10 of the
Employment Agreement (which expressly survive the termination of
Executive' s employment), the Employment Agreement shall be deemed
terminated as of the Settlement Date, and Executive shall not be
subject to the non-competition provisions of Section 9 thereof.
The parties hereby waive any notice requirements in connection with
the termination of the Employment Agreement.

10. By execution of this document and contingent upon the
payment of the amounts described in paragraph 1 hereof, Executive
hereby resigns as an officer and/or director of the Company and any
and all of its subsidiaries, effective as of the Settlement Date.

11. This Settlement Agreement constitutes the entire
understanding between Executive and the Company on all matters
relevant hereto. There are no representations, understandings or
agreements of any nature or kind whatsoever, oral or written,
regarding anything which is not included herein.

12. No supplement, modification, change or waiver of this
Settlement Agreement or any provision hereof shall be binding
unless executed in writing by Executive and the Company evidencing
their intent to be bound thereby. No waiver of any of the
provisions of this Settlement Agreement shall constitute a waiver
of any other provisions (whether or not similar), nor shall such
waiver constitute a continuing waiver unless otherwise expressly
provided.

13. This Settlement Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective
successors and assigns.

14. This Settlement Agreement shall be governed by, and
construed in accordance with, the laws of the State of Kansas,
without regard to its principles of conflicts of laws.

15. Any provision of this Settlement Agreement which is
prohibited or unenforceable shall be ineffective to the extent of
such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.

16. This Settlement Agreement may be executed in
counterparts, each of which will be deemed to be an original and
all of which taken together will constitute a single instrument.

IN WITNESS WHEREOF, the parties hereto have executed this
Settlement Agreement personally or through their duly authorized
representative on the date hereof.

THEODORE A. MYERS

Theodore A. Myers

DOSKOCIL COMPANIES INCORPORATED

(William L. Brady)
By: William L. Brady
Title: Vice President and Controller

Exhibit 10.35

MASTER EQUIPMENT LEASE

Lease No.025l6

LESSOR: CARGILL LEASING CORPORATION (herein called the
"Lessor")

6000 CLEARWATER DRIVE

MINNETONKA, MINNESOTA 55343-9497

CO-LESSEES: DOSKOCIL COMPANIES, INC.

321 NORTH MAIN

SOUTH HUTCHINSON, KANSAS 67505

DIXIE FOODS COMPANY

3133 COMMERCE ROAD

FORREST CITY, ARKANSAS 72335

(herein collectively called the "Lessee")

1. LEASE

Lessor hereby leases to Lessee, and Lessee hereby leases from
Lessor, the personal property described in Schedule(s) A, attached
hereto and incorporated herein, and all attachments, additions,
accessories, replacement parts, substitutions and repairs
incorporated therein and/or affixed thereto, (herein called the
"Equipment") and proceeds, thereto made pursuant to the terms of
this Master Equipment Lease (herein called the "Lease"). The
parties may from time to time, by mutual agreement, add other items
of equipment to this Lease for such terms and at such rates as may
be agreed by execution of additional Schedule(s) A, and this Lease
shall control and be effective as to such additional items of
equipment as though the same were set forth herein. For purposes of
construing this Lease, all Schedule(s) A attached hereto shall be
incorporated herein and form a part hereof. No respective Schedule
A shall be construed as an independent separate lease.

2. TERM

This Lease shall be in force for a period beginning with the
Commencement Date as set forth in Schedule(s) A and ending at the
expiration of the period ("Expiration Date") set forth in
Schedule(s) A ("Lease Term").

3. RENT

Lessee shall pay to Lessor the payment amounts set forth in
Schedule(s) A ("Rent") for use of the Equipment for the Lease Term.
Rent shall be payable to Lessor at the office of Lessor in
Minnetonka, Minnesota 55343 or at such other location as Lessor may
from time to time instruct Lessee in writing. In the event Lessee
should fail to pay Lessor any Rent within five (5) days of the due
date thereof, or any other sum required to be paid to the Lessor
within five (5) days of demand, Lessee shall pay unto Lessor a
delinquent payment charge from the due date of payment until paid
at an annual rate of 18% unless otherwise prohibited by law, in
which case interest will be charged at the highest lawful rate
allowed. All payments hereunder shall be applied to unpaid
obligations then due hereunder.

4. WARRANTIES

LESSOR, NOT BEING THE MANUFACTURER OF THE EQUIPMENT NOR THE
MANUFACTURER'S AGENT, MAKES NO EXPRESS OR IMPLIED WARRANTY OF
ANY KIND WHATSOEVER WITH RESPECT TO THE EQUIPMENT, INCLUDING BUT
NOT LIMITED TO: THE MERCHANTABILITY OF THE EQUIPMENT OR ITS
FITNESS FOR A PARTICULAR PURPOSE; THE DESIGN OR CONDITION OF THE
EQUIPMENT; THE QUALITY OR CAPACITY OF THE EQUIPMENT; THE
WORKMANSHIP IN THE EQUIPMENT; COMPLIANCE OF THE EQUIPMENT WITH
THE REQUIREMENTS OF ANY LAW, RULE, OR SPECIFICATION; PATENT
INFRINGEMENTS OR LATENT INFRINGEMENTS, IT BEING AGREED THAT THE
EQUIPMENT IS LEASED "AS IS" AND THAT ALL RISKS AS BETWEEN LESSOR
AND LESSEE ARE TO BE BORNE BY LESSEE. LESSOR IS NOT RESPONSIBLE FOR
INSTALLATION OF, OR FOR ANY REPAIRS OR SERVICE TO, THE EQUIPMENT.
LESSOR IS NOT RESPONSIBLE FOR LOSS OF PROFIT OR FINANCIAL LOSS OR
INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED
TO, LOSS OR INTERRUPTION OF BUSINESS, WHICH MAY BE DIRECTLY OR
INDIRECTLY CAUSED BY OR ATTRIBUTABLE TO THE INADEQUACY OF THE
EQUIPMENT. Lessee will be subrogated to Lessor's claims, if any,
against the manufacturer or supplier of the Equipment for breach of
any warranty or representation and, Lessor shall enforce any such
warranty, express or implied, issued on or applicable to any of the
Equipment, provided, that Lessee is not in default under the Lease
pursuant to Section 13, hereof, and Lessor shall not be obligated
to enforce any such warranty unless Lessee agrees in writing to pay
all expenses in connection therewith. All proceeds of any such
warranty recovery from the manufacturer or supplier of the
Equipment shall be used at the discretion of Lessor to either
repair or replace the affected Equipment. NOTWITHSTANDING THE
FOREGOING, LESSEE'S OBLIGATION TO PAY RENT OR ANY OTHER SUM
REQUIRED UNDER THIS LEASE SHALL BE AND IS ABSOLUTE AND
UNCONDITIONAL.

5. TITLE AND IDENTIFICATION

This Lease is intended to constitute a true lease and not a sale of
the related Equipment. However, to the extent, at any time or from
time to time, this Lease is construed to be a transaction intended
as security, Lessor retains and Lessee hereby grants to Lessor a
security interest in and to the Equipment, the proceeds of any sale
thereof, the assignment, lease, or sublease thereof, any insurance
proceeds with respect thereto, and any other rights of Lessee,
tangible or intangible, and to the Equipment, the Lease, and their
proceeds; provided, further, that Lessee may not, to the extent
this Lease is construed to be a transaction intended as security,
sell or otherwise encumber the Equipment without Lessor's prior
written consent. No right, title or interest in the Equipment
shall pass to Lessee other than, conditioned upon Lessee's
compliance with and fulfillment of the terms and conditions of this
Lease, the right to maintain possession and use the Equipment for
the Lease Term as provided in Schedule(s) A. Lessee, at its
expense, will protect and defend Lessor's title to the Equipment
from and against all claims, liens, and legal process of creditors
of Lessee and take such action as is necessary to discharge any
such claim, lien, or legal process. Lessor may require plates or
markings to be affixed to or placed on the Equipment indicating
Lessor is the owner and Lessee will not alter, deface, cover or
remove such ownership identification.

6. TAXES, REGISTRATION, AND LICENSING

Lessee agrees to comply with all laws, regulations and orders
relating to the Lease and to pay when due as additional rent, all
assessments, license fees, taxes (including but not limited to
sales, use, excise, personal property, value added, consumption,
franchise, state income, gross receipts, ad valorem, stamp,
documentary and federal highway use tax) and all other governmental
charges, fees, fines or penalties whatsoever, whether payable by
Lessor or Lessee, on or relating to the Equipment or the use,
registration, rental, shipment, transportation, delivery, ownership
or operation thereof and on or relating to the Lease and the
schedules executed in connection therewith except taxes of Lessor
on net income imposed by the United States or the State of
Minnesota; provided, however, that if under local law or custom
such payments may he made only by Lessor, Lessee shall promptly
notify Lessor, and shall reimburse Lessor, upon demand, for all
payments made by Lessor. Lessor shall include the Equipment, if
applicable, on Lessor's personal property tax return and Lessee
shall reimburse Lessor, upon demand, for all taxes paid by Lessor
with respect thereto. Lessee shall file all other returns required
therefor and furnish copies to Lessor; provided, however, that the
foregoing shall not include any federal and state taxes of Lessor.
Lessee shall obtain such licensing and registration of the
Equipment as is required by federal, state and local law or
regulation. Lessee agrees to notify Lessor promptly in writing not
more than five (5) days after any attachment, tax lien or other
judicial process shall attach to the Equipment and the full
particulars thereof.

7. GENERAL INDEMNIFICATION

Provided that the following is not due to Lessor's fault or
negligence, Lessee assumes liability for, and hereby agrees to
indemnify, protect and hold harmless Lessor, its agents, employees,
officers, directors, successors and assigns from and against any
and all liabilities, obligations, liens, losses, damages, injuries,
claims, demands, penalties, actions, costs and expenses, including
reasonable attorney fees (hereinafter collectively called "Losses")
of whatsoever kind and nature (including any of the foregoing
arising in connection with latent or other defects, or any claim
for patent, trademark or copyright infringement or under the
doctrine of strict liability), arising out of the manufacture,
possession, use, condition, operation, installation, alteration
(with or without Lessor's consent), repair, maintenance, ownership,
selection, delivery, leasing, removal or return of the Equipment,
by Lessee, its agents, its employees or any permitted sublessees,
or arising out of any failure on the part of Lessee to perform or
comply with conditions of this Lease or by operation of law. The
indemnities and assumptions of liabilities and obligations provided
in Sections 6 and 8 hereof and in this Section shall continue in
full force and effect notwithstanding expiration or other
termination of the Lease.

8. TAX INDEMNITY

Lessee agrees that if Lessor shall not be entitled to accelerated
cost recovery deductions (the "MACRS deductions") as allowed under
Section 168 of the Internal Revenue Code of 1986, as amended, ("the
Code") based on 100% of the Original Cost of the Equipment to
Lessor and for the depreciable life referred to in the attached
Schedule(s) A, or if Lessor loses any other intended tax benefit as
a result of any subsequent change in the Code, (including a change
in the maximum federal corporate income tax rates from the rates in
effect under the Tax Reform Act of 1986 hereinafter referred to as
a "Tax Rate Change") or rules and regulations promulgated pursuant
thereto, whether or not retroactive, which impacts Lessor's
intended return and economics from this transaction, or if Lessor
is required to recognize: income other than as contemplated under
the Lease, or if any item of income, gain, loss or deduction is
treated as having been derived from or allocable to sources outside
the U.S. (herein individually and collectively called the "Loss"),
then Lessee shall pay to Lessor, within thirty (30) days alter the
date of such Loss a lump sum amount which, after deduction of all
taxes required to be paid by Lessor in respect of the receipt of
such sum under the laws of any federal, state or local government
or taxing authority, shall preserve Lessor's after-tax discounted
cash flow rate of return on equity, cash flows and book income
based on FASB 13, assumed by Lessor in entering into this Lease
(hereinafter the "Lessor's Economic Return") plus the amount
required to reimburse Lessor on an after tax basis for interest and
penalties (including additions to tax because of underpayment of
estimated tax) which may be payable to any federal, state or local
government or taxing authority in connection with such Loss.
Notwithstanding the foregoing, any payment with respect to a Loss
(except for the amount of Loss, if any, which has occurred to date)
caused by a Tax Rate Change and due during the Lease Term shall be
made through an increase to the Rent sufficient to maintain the
Lessor's Economic Return on an on-going, current basis. Any such
Loss discovered after the expiration of the Lease Term which
occurred during the Lease Term shall be paid in a lump sum as
provided herein.

The amount of such Loss shall be determined by mutual agreement of
Lessor and Lessee or, failing such agreement, by Peat Marwick Main
& Co. or another independent firm of certified public accountants
acceptable to Lessor, at shared expense.

In the event there is a change in tax law which affects the
Stipulated Loss Value schedule as originally completed, then as
soon as reasonably possible after the change in tax law the
Stipulated Loss Value schedule shall be adjusted accordingly. In
making the adjustment Lessor shall use the same assumptions as used
in computing the original Stipulated Loss Value schedule except
that the change in tax law shall he substituted for the old tax
law.

For the purpose of this Lease, the date of any such Loss shall be
the earliest of (i) the occurrence of any event (such as
disposition or change in use of the Equipment) which may cause such
Loss, or (ii) the payment by Lessor (or the consolidated federal
taxpayer group of which Lessor is a part) to the Internal Revenue
Service of the tax increase resulting from such Loss, or (iii)
receipt by Lessor from the appropriate taxing authority of any
notice of proposed deficiency, statutory notice of deficiency or
assessment relating to the Loss or (iv) a determination by Peat
Marwick Main & Co. or another independent firm of certified public
accountants or an independent tax counsel of a nationally
recognized law firm to the effect that Lessor (or the consolidated
federal taxpayer group of which Lessor is a part) is not entitled
to such deduction, or (v) the adjustment of the tax return of
Lessor (or the consolidated federal taxpayer group of which Lessor
is a part) to reflect such Loss. If Lessee is not in default as
defined in Section 13 hereof, Lessee shall not be required to pay
the foregoing amounts if the Loss results solely from the
occurrence of any of the following events: (i) a disqualifying
disposition due to sale by Lessor of the Equipment or the lease
thereof by Lessor, or (ii) a failure of Lessor to timely claim
depreciation for the Equipment in the appropriate tax return of
Lessor (or the consolidated federal taxpayer group of which Lessor
is a part) unless there is no reasonable basis to claim such
deductions, or claiming such deductions is inconsistent with
previous Internal Revenue Service adjustments.

9. LESSOR'S PERFORMANCE OF LESSEE'S OBLIGATIONS

If Lessee shall fail to duly and promptly perform any of its
obligations under this Lease with respect to the Equipment, Lessor
may, at its option, perform any act or make any payment which
Lessor deems necessary for the maintenance and preservation of the
Equipment and Lessor's title thereto, including payments for
satisfaction of liens, repairs, taxes, levies and insurance, and
all sums so paid or incurred by Lessor, together with any
delinquent payment charges pursuant to Section 3 hereof, and any
reasonable legal fees incurred by Lessor in connection therewith,
shall be paid by Lessee to Lessor upon demand. The performance of
any act or payment by Lessor as provided herein shall not be deemed
a waiver or release of any obligation or default on the part of
Lessee.

10. SELECTION, DELIVERY, AND INSTALLATION

Lessee has selected the Equipment, including the type, quantity,
and the supplier thereof, based solely on its own judgment and
expressly disclaims any reliance upon i) any statements or
representations, if any, made by Lessor, its agents or employees
and ii) Lessor's, its agents or employees, skill of judgement, If
any, to select or furnish suitable equipment. Lessee acknowledges
that Lessor is not a dealer, manufacturer, merchant or supplier of
equipment of any kind and that the Equipment subject to this Lease
is of a type, size, design and capacity selected by Lessee and that
Lessor is acquiring the Equipment or the right to possession and
use of the Equipment in connection with this Lease. Lessor shall
have no liability for any delivery or installation of the Equipment
or for any failure by supplier to fill the purchase order or meet
the conditions thereof.

11. USE AND ASSIGNMENT

Lessee will cause the Equipment to be operated in accordance with
any applicable manufacturer's manuals or instructions, applicable
laws, any insurance policies and any warranties of the manufacturer
with respect to the Equipment, by competent and duly qualified
personnel only, in accordance with applicable governmental
regulations, if any, and for its originally intended business
purpose only. Lessee shall not sell, pledge, hypothecate, or
otherwise encumber or suffer a lien upon or against any interest in
this Lease or the Equipment nor shall Lessee move the Equipment
from its place of installation or delivery, as set forth in
Schedule(s) A, without Lessor's prior written consent. LESSEE
SHALL NOT ASSIGN THE LEASE OR ASSIGN OR SUBLET ANY ITEM OF
EQUIPMENT TO ANY ENTITY NOT CONTROLLED BY LESSEE WITHOUT LESSOR'S
PRIOR WRITTEN CONSENT. ANY ASSIGNMENT OR SUBLEASE ENTERED INTO BY
LESSEE WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR, EXCEPT AS
PROVIDED FOR HEREIN, SHALL BE NULL AND VOID. IN THE EVENT LESSEE
ASSIGNS OR SUBLETS THE EQUIPMENT TO AN ENTITY CONTROLLED BY LESSEE,
AS PROVIDED HEREIN, LESSEE AGREES TO PROVIDE LESSOR PRIOR WRITTEN
NOTICE OF SUCH ASSIGNMENT OR SUBLEASE AND FURTHER AGREES TO PROVIDE
LESSOR WITH ANY AND ALL DOCUMENTATION LESSOR DEEMS NECESSARY TO
PROTECT ITS INTEREST IN THE EQUIPMENT. ANY ASSIGNMENT OR SUBLEASE
SHALL NOT RELIEVE LESSEE OF PRIMARY LIABILITY FOR DUTIES AND
OBLIGATIONS UNDER THE LEASE.

Lessee agrees that Lessor may assign, sell or encumber all or any
part of this Lease, the Equipment and the Rent hereunder,
notwithstanding the fact that any such assignment, sale, or
encumbrance may materially change the duty of or materially
increase the burden or risk imposed on Lessee; and upon written
notice Lessee will unconditionally pay to such assignee all Rent
and other sums due on or to become due under this Lease. Lessee
shall not assert against assignee and/or mortgagee any defense,
counterclaim or offset that Lessee may have against Lessor.
Subject to the other terms and conditions herein, this Lease inures
to the benefit of and is binding upon the heirs, legatees, personal
representatives, successors and permitted assigns of the parties
hereto.

12. ALTERATIONS

Without the prior written consent of Lessor, Lessee shall not make
any alterations, additions or improvements to the Equipment. All
permitted alterations, additions and improvements of whatsoever
kind or nature made to the Equipment shall become the property of
Lessor upon expiration or earlier termination of this Lease except
that any of the foregoing which are removed without damage to the
Equipment, without adversely affecting the Equipment's commercial
value or originally intended use shall remain the property of
Lessee. In the event that (i) technological advances in one or
more pieces of the Equipment during the term of this Lease make it
economically advantageous for Lessee to replace such one or more
pieces of Equipment, or (ii) one or more pieces of the Equipment
become obsolete, then Lessee shall have the right, subject to the
consent of Lessor, which consent shall not be unreasonably
withheld, to replace such one or more pieces of Equipment with new
equipment or equipment incorporating such technological advances
and Lessee shall have the right to move such replaced equipment to
any of its other facilities, including facilities of affiliated
companies. Unless otherwise agreed at the time, Lessee shall pay
the cost of purchasing the new equipment, and shall own such new
equipment. No advertising or insignia shall be placed on the
Equipment without the prior consent of Lessor, unless the Equipment
is rolling stock, whereas Lessor hereby consents to the placement
of Lessee's insignia.

13. EVENTS OF DEFAULT

The occurrence of any of the following events shall constitute a
default by Lessee (herein called "Event of Default") in the
performance of Lessee's obligations hereunder:

(i) failure of Lessee to pay Rent within five (5) business
days after receipt of written notice it is due, or failure of
Lessee upon demand to pay any other amount required to be paid
herein or under any other agreement with Lessor; or

(ii) failure of Lessee to timely perform any covenant,
condition or obligation, other than the payment of Rent, required
to be performed by Lessee under this Lease (and such failure shall
continue for ten (10) business days after written notice by Lessor)
or under any material contract, loan or lease agreement; or

(iii) failure by Lessee or any of its guarantors ("Guarantor")
to generally pay its debts as such debts become due, and Lessee or
Guarantor continues generally not paying Lessee's or Guarantor's
debts as such debts become due for a period of three (3) days after
written notice given by Lessor; or

(iv) Lessee or Guarantor becomes insolvent or bankrupt or
makes an assignment for the benefit of creditors or consents to the
appointment of a trustee or receiver, or a trustee or a receiver
shall be appointed for Lessee or Guarantor for a substantial part
of their respective property without its consent and shall not be
dismissed for a period of thirty (30) days, or bankruptcy,
reorganization or insolvency proceedings shall be instituted by or
against Lessee or Guarantor and, if instituted against Lessee or
Guarantor, shall not be dismissed within thirty (30) days of
institution; or

(v) Lessee's or Guarantor's business is dissolved, terminated
or is discontinued; or Lessee or Guarantor dies; or

(vi)Lessee or Guarantor sells, transfers or disposes of all or
substantially all of its assets or property or a material portion
thereof, or merges with any other unaffiliated entity or engages in
any form of corporate reorganization or recapitalization without
the prior written consent of Lessor; or

(vii) a transfer of ownership of the Lessee's or Guarantor's
outstanding voting stock or other action (issuance of new shares,
sale of Treasury shares, purchase of outstanding shares, dividends,
etc.) which results in a controlling interest, or change in the
controlling interest, of 50% or more of Lessee or Guarantor without
the prior written consent of Lessor; or

(viii) Lessee attempts to move, sell, or transfer the
Equipment from its place of installation or domicile as described
in Schedule(s) A attached hereto, or encumber the Equipment or part
with possession, sublet or assign this Lease without Lessor's prior
written consent.

14. REMEDIES

Upon occurrence of any Event of Default and at any time thereafter
so long as the same shall be continuing, Lessor may, at its option,
declare this Lease to be in default and may do one or more of the
following with respect to any or all Equipment as Lessor in its
sole discretion shall elect, all of which are hereby authorized by
Lessee, to the extent permitted by and subject to compliance with
any mandatory requirements of applicable law then in effect:

(i) terminate this Lease effective immediately; or

(ii) cause Lessee, upon written demand and at Lessee's
expense, to promptly return any or all Equipment under all
Schedules to Lessor pursuant to Section 18 hereof; or

(iii) upon forty-eight (48) hours prior written notice or
confirmed facsimile to Lessee, take possession of any or all
Equipment and remove the same without liability for injuries
suffered through or loss caused by such repossession. LESSEE
WAIVES ANY AND ALL RIGHTS TO NOTICE, EXCEPT AS OTHERWISE PROVIDED
HEREIN, AND JUDICIAL HEARING WITH RESPECT TO THE REPOSSESSION OR
ATTACHMENT OF THE EQUIPMENT BY LESSOR IN THE EVENT OF DEFAULT
HEREUNDER BY LESSEE. In the event Lessor proceeds pursuant to this
subsection (iii), Lessor shall use its best efforts to sell any or
all Equipment at public or private sale as is commercially
reasonable given the existing conditions on an "AS IS, WHERE IS"
basis without recourse or warranties of any kind, or otherwise
hold, use, operate, or keep idle such Equipment, as Lessor in its
sole discretion determines is commercially reasonable; or

(iv) by written notice to Lessee, cause Lessee to pay Lessor
(as liquidated damages for loss of a bargain and not as a penalty)
on the date specified in such notice an amount equal to the Rent
due and payable on the first of the month following the date of the
notice of Lease termination plus a sum equal to the appropriate
Stipulated Loss Value determined as of the first of the month
following the date of the notice of Lease termination in accordance
with the Stipulated Loss Value Schedule set out in Schedule(s) A.

(v) Lessor may exercise any other right or remedy which may be
available to it under the Uniform Commercial Code or any other
applicable law or proceed by appropriate court action to enforce
the terms hereof or to recover damages for the breach hereof.

In addition, Lessee shall pay Lessor all costs and expenses
incurred by Lessor as a result of Lessee's default hereunder or the
termination hereof including without limitation, reasonable
attorney's fees, and costs arising out of repossession and disposal
of the Equipment.

Provided Lessee has previously paid to Lessor the sum of the
Stipulated Loss Value, Rent due and owing, and other costs and
expenses incurred pursuant hereto, Lessee shall be entitled to the
proceeds of any such sale, disposition, or re-lease of the
Equipment to the extent they do not exceed the Stipulated Loss
Value. Any excess shall be retained by Lessor. To the extent the
Equipment is released by Lessor, Lessee shall be credited the
present value of the lease rental stream at the discount rate of
Chase Manhattan Prime as of the date the re-lease is agreed to
between the parties. Furthermore, to the extent the parties to this
Lease need to determine the present value of any monies due under
the Lease, the parties agree that the discount rate shall be Chase
Manhattan Prime.

In addition, Lessee shall continue to be liable for all indemnities
under this Lease and for all reasonable attorney fees and other
costs and expenses resulting from the termination hereof and/or the
exercise of Lessor's remedies, including placing any Equipment in
the condition required by Section 18 hereof. No remedy referred to
in this Section is intended to be exclusive, but each shall be
cumulative and in addition to any other remedy referred to above or
otherwise available to Lessor at law or in equity. Any
repossession or subsequent sale or lease by Lessor of the Equipment
shall not bar an action for a deficiency as herein provided and the
bringing of any action or the entry of judgment against the Lessee
shall not bar the Lessor's right to repossess any or all Equipment.
No expressed or implied waiver by Lessor of any default shall
constitute a waiver of any other default by Lessee or a waiver of
any of Lessor's rights.

15. NOTICES

Any notices or demands required to be given herein shall be given
to the parties in writing and shall be deemed given when mailed by
certified mail, postage prepaid, or by confirmed facsimile to the
address herein set forth or to such other address as the parties
may hereafter substitute by written notice.

16. REPAIRS: LOSS AND DAMAGE

Lessee, at its own costs and expense, shall keep the Equipment in
good repair, condition and working order including but not limited
to compliance with all applicable recall orders and shall furnish
all parts, mechanisms and devices and servicing required therefor.
All such parts, mechanisms and devices shall immediately become the
property of Lessor and part of the Equipment for all purposes
hereof.

Lessee agrees to immediately inform Lessor of any damage to the
Equipment or caused by the Equipment or the existence of any
Casualty Occurrence as hereinafter defined. All risk of loss with
respect to the Equipment shall be borne by Lessee.

If Lessor determines that any Equipment is lost, stolen, destroyed,
or damaged for any reason, or in the event of any condemnation,
confiscation, theft or seizure or requisition of title to or the
use of such Equipment (herein called "Casualty Occurrence"), Lessee
will, at the option of Lessor, either (a) replace the same with
like Equipment in good repair or (b) promptly pay to Lessor an
amount equal to the Rent in respect of the Equipment suffering a
Casualty Occurrence due and payable on the first of the month
following the date of the Casualty Occurrence plus a sum equal to
the Stipulated Loss Value of such Equipment determined as of the
first of the month following the date of the Casualty Occurrence in
accordance with the Stipulated Loss Value Schedule set out in the
appropriate Schedule A(s) less any physical damage insurance
proceeds paid to Lessor as a result of said Casualty Occurrence. As
of the date on which the Stipulated Loss Value is due, the Rent for
such Equipment shall cease to accrue and the term of this Lease as
to such Equipment shall terminate and (except in case of the loss,
theft or complete destruction), Lessor shall be entitled to recover
possession of the Equipment. Lessor hereby appoints Lessee its
agent to dispose of any Equipment suffering a Casualty Occurrence
at the best price obtainable on an "AS IS, WHERE IS" basis without
recourse or warranties of any kind. Provided that Lessor has been
paid the Stipulated Loss Value and all Rent or other sums due and
owing as to such Equipment, Lessee shall be entitled to the
proceeds of such sale to the extent they do not exceed the
Stipulated Loss Value of such Equipment. Any excess shall be paid
to Lessor.

17. INSPECTION

Lessor, or its employees or agents, may inspect the Equipment at a
reasonable time or place, and for such purpose enter any building
or place where said Equipment is located.

18. RETURN OF EQUIPMENT

Upon the Expiration Date, or earlier termination as provided
herein, unless Lessee shall have duly exercised a renewal or
purchase option with respect thereto, Lessee, at its own risk and
expense, will immediately return the Equipment as described in such
Schedule(s) A to Lessor in the condition as described in the
Equipment Condition Addendum attached hereto, at such location(s)
as Lessor shall designate, freight and insurance prepaid.

In the event that the Equipment is not returned within three (3)
days after the Expiration Date or such date as earlier terminated,
Lessee shall pay as additional rent an amount equal to the greater
of the fair market daily rental as determined by Lessor or the
daily equivalent of Rent as described in the applicable Schedule(s)
A for each day from, and including the Expiration Date or such date
as earlier terminated until and including the day on which the
Equipment is returned. Payment of additional rent hereunder does
not relieve Lessee of its obligation to return the Equipment
immediately at such time as set forth herein.

19. FINANCIAL REPORTS

Lessee and Guarantor shall furnish Lessor during the Lease Term
hereof with annual audited financial statements within one hundred
twenty (120) days after the end of its fiscal year and such other
financial information as Lessor may from time to time request
including, without limitation, reports filed with federal or state
regulatory agencies. Lessee and Guarantor hereby warrant and
represent that all financial statements heretofore and hereafter
delivered to Lessor by or upon behalf of Lessee and Guarantor will
be prepared in accordance with generally accepted accounting
principles, and any statements and data submitted in writing to
Lessor in connection with this Lease, are true and correct and
present fairly the financial condition of Lessee and Guarantor for
the period involved.

20. NO OFFSET

LESSEE HEREBY WAIVES ANY AND ALL EXISTING AND FUTURE CLAIMS AND
OFFSETS, AGAINST ANY RENT OR OTHER PAYMENTS DUE HEREUNDER; AND
AGREES TO PAY THE RENT AND OTHER AMOUNTS HEREUNDER REGARDLESS OF
ANY OFFSET OR CLAIM WHICH MAY BE ASSERTED BY LESSEE OR ON ITS
BEHALF. LESSEE HEREBY FURTHER ACKNOWLEDGES THAT THE MANUFACTURER
AND/OR SUPPLIER OF THE EQUIPMENT, INCLUDING THEIR RESPECTIVE AGENTS
AND EMPLOYEES, WERE AT NO TIME AND ARE NOT NOW THE AGENT OR UNDER
THE SUPERVISION OF LESSOR, NOR WAS OR IS LESSOR IN ANY MANNER, THE
AGENT OF THE MANUFACTURER AND/OR SUPPLIER.

21. LESSEE'S REPRESENTATIONS

Lessee represents, warrants and agrees that (a) it has the full
power, authority and legal right to enter into and perform this
Lease; the execution, delivery and performance of this Lease have
been duly authorized by all necessary corporate or other legal
action on the part of Lessee, does not require the approval or
consent of any stockholder, trustee or holders of any indebtedness
or obligations of Lessee, and will not contravene any law,
governmental rule, regulation or order binding on Lessee (or the
Certificate of Incorporation or By-Laws of Lessee if it is a
corporation) or contravene the provisions of, or constitute a
default under, or result in the creation of any lien or encumbrance
upon the property of Lessee under any indenture, mortgage, contract
or other agreement to which Lessee is a party, or by which its
subsidiaries may be bound or affected; and (b) all consents and
approvals of, the giving of notice to, registration with, and the
taking of any other action in respect of any federal, state or
foreign governmental authority or agency, necessary, if at all, to
permit the transactions contemplated by this Lease have been taken;
and (c) this Lease constitutes a legal, valid and binding
obligation of Lessee enforceable against Lessee in accordance with
the terms thereof; and (d) there are no pending or threatened
actions or proceedings before any court or administrative agency
which will adversely affect the condition, business or operations
of Lessee or any of its subsidiaries or the ability of Lessee to
perform its obligations under this Lease; and (e) the transactions
contemplated by this Lease will raise no presumption of fraud as
against and will be effective against all creditors of Lessee under
applicable state and federal laws, including, without limitation,
laws relating to fraudulent conveyances or bulk transfers; and (f)
Lessee shall provide Lessor, upon request, with an opinion of
counsel satisfactory to Lessor with respect to the foregoing
matters.

22. FURTHER ASSURANCES

Lessee shall execute and deliver to Lessor, upon Lessor's request,
such further documents, instruments, and assurances as Lessor deems
necessary or advisable for the confirmation or perfection of this
Lease and Lessor's rights hereunder.

23. QUIET ENJOYMENT

Lessor covenants that Lessor will not interfere in Lessee's quiet
enjoyment of the Equipment hereunder during the Lease Term so long
as (i) Lessee is in compliance with each term and condition hereof,
and (ii) no Event of Default has occurred or is continuing.

24. WAIVER

The failure of Lessor to insist, in any one or more instances, upon
strict performance by Lessee of any of the covenants of this Lease,
or to exercise any option herein contained, shall not be construed
as a waiver or relinquishment for the future of such covenant or
option, but the same shall continue and remain in full force and
effect. The receipt by Lessor of Rent, with knowledge of the
breach of any covenant or condition hereof, shall not be deemed a
waiver of such breach and no waiver by Lessor of any provision
hereof shall be deemed to have been made unless expressed in
writing and signed by Lessor.

25. INSURANCE

At its own expense, Lessee shall obtain and maintain for the Lease
Term, physical damage and liability insurance. The physical damage
insurance shall insure against loss or damage to the Equipment
including, without limitation, loss by fire, explosion, wind, hail,
flood, malicious mischief, vandalism, theft, collision, upset,
overturn, glass breakage and any other physical loss to the
Equipment. The amount of insurance against loss or damage to the
Equipment shall not be less than the Stipulated Loss Value of the
Equipment pursuant to Schedule(s) A. Such policy providing
insurance for the damage to the Equipment shall name Lessor as Loss
Payee as Lessor's interest may appear and, shall not have a
deductible amount in excess of $100,000 without the express written
consent of Lessor.

The liability insurance shall provide coverage for the liability of
Lessee and Lessor for damages arising out of the ownership,
maintenance, use, and operation of the Equipment. Such liability
insurance shall also provide a contractual liability provision for
purposes of insuring the performance of Lessee hereunder this
Lease. Liability insurance shall have minimum limits of $1,000,000
per person, $1,000,000 occurrence and $1,000,000 property damage,
or $1,000,000 combined single limit and shall have no deductible
without the express written consent of Lessor. Each insurance
policy shall name Lessee as the named insured and Lessor as an
additional insured and shall contain a clause requiring the insurer
to give Lessor 30 days prior written notice of any material
alteration in the terms of the policy or of the cancellation
thereof. To the extent that Lessee may have liability insurance in
excess of the minimum limits required herein, Lessor shall be named
as an additional insured on any such coverage. Each policy shall
be primary without right of contribution from any other insurance
which is carried by Lessor and shall expressly provide that all of
the provisions thereof except the limits of liability, shall
operate in the same manner as if there were a separate policy
covering each insured.

Lessee or Lessee's insurance agent(s) shall furnish to Lessor a
Certificate of Insurance or other evidence satisfactory to Lessor
that such insurance coverage is in or will be in effect as of the
Commencement Date set forth in Schedule(s) A or the date of
Delivery and Acceptance by Lessee, whichever is earlier; provided,
however, that Lessor shall be under no duty either to ascertain the
existence of or to examine such insurance policy or to advise
Lessee in the event such insurance coverage shall not comply with
the requirements hereof. Lessee further agrees to give to Lessor
prompt written notice not more than five (5) days after any damage
to, or loss of, the Equipment or damage or injury caused by the
Equipment. Lessee shall, at its own expense and cost, have the
duty and responsibility to make all proofs of loss and take all
other steps necessary to effect collections from underwriters for
any loss under any of the above mentioned policies. The proceeds of
such insurance, at the option of Lessor shall he applied (a) toward
the replacement, restoration or repair of the Equipment or (b)
toward payment of the obligations of Lessee hereunder. Lessee
hereby appoints Lessor as Lessee's Attorney-In-Fact to make claim
for, receive payment of, and execute and endorse all documents,
checks or drafts for loss or damage under any such insurance
policy.

Any policies of insurance carried in accordance with this Section
shall provide that in respect of the interests of Lessor in such
policies, the insurance shall not be invalidated by any action or
inaction of Lessee or any other person (other than Lessor)
including, but not limited to, any misrepresentation and shall
insure Lessor's interests, as they appear, regardless of any breach
or violation of any warranties, declarations, or conditions
contained in such policies by or binding upon Lessee or any other
person (other than Lessor).

Lessee shall, to the extent reasonably possible, obtain the
liability insurance required hereunder on an occurrence basis
rather than a claims-made basis. To the extent that the Lessee
must obtain some or all of this coverage on a claims-made basis,
Lessee shall, provide Lessor with satisfactory evidence that the
retroactive date of the claims-made policy is prior to the
Commencement Date or the date of Delivery and Acceptance by Lessee,
whichever is earlier; that the then remaining aggregate amount of
Lessee's coverage is and will be sufficient to meet the minimum
amount of coverage required hereunder, and that the policy will
either remain in force, be renewed, or a satisfactory discovery
period will be purchased to cover any claims which might arise
hereunder in the future.

Lessee's obligation to keep the Equipment insured as provided
herein shall continue until the Equipment is returned to Lessor
pursuant to Section 18 hereof.

26. TERMINATION OPTIONS.

Provided Lessee shall have complied with all terms and conditions
of the Lease and provided Lessee shall not be in default as defined
in Section 13 herein, Lessee shall have the termination options as
set forth in Schedule(s) A.

27. JURISDICTION

Lessee hereby consents to jurisdiction and venue of the federal or
state courts sitting in the State of Minnesota for purposes of
resolving all disputes of any nature whatsoever regarding the
Lease, or any transaction contemplated hereby and Lessee hereby
waives objection which it may now or hereafter have to the laying
of jurisdiction or venue in the federal or state courts of
Minnesota. Lessor and Lessee agree that a summons and complaint
commencing an action or proceeding in any such court shall be
properly served and shall confirm personal jurisdiction if served
personally, by certified mail to it at its address designated
pursuant to the Lease, or as otherwise provided under the
respective rules of the state or federal courts of Minnesota.

28. MISCELLANEOUS

If there should be more than one party executing this Lease as
Lessee, all obligations hereunder to be performed by Lessee shall
be the joint and several liability of all such parties. Any
provision of this Lease which is unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the
remaining provisions hereof and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Time is of
the essence with respect to this Lease. The captions in this Lease
are for convenience only and shall not define or limit any of the
terms hereof.

The parties hereto acknowledge by initialing immediately hereafter
that no waiver, amendment, release or modification of this Lease
shall be established by conduct, custom, or course of dealing but
solely by an instrument in writing duly executed ed by the parties
hereto.

Lessee: (NRJ) Lessor: (DRN)

Lessee agrees that it shall reimburse Lessor all of Lessor's costs
and expenses (including attorneys' fees and court costs, if any) of
any nature whatsoever incurred by Lessor i) to enforce its rights
or remedies as provided in this Lease or as otherwise provided by
law or ii) to resolve any dispute regarding this Lease.

This Lease consists of the foregoing and the Schedules, Exhibits,
Addenda, and Riders referred to herein and correctly sets forth the
entire Lease agreement between Lessor and Lessee. No agreements or
understandings shall be binding on either of the parties hereto
unless specifically set forth in this Lease.

THIS LEASE SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF MINNESOTA, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY, AND PERFORMANCE, REGARDLESS OF
THE STATE OF MINNESOTA'S CHOICE OF LAW PROVISIONS.

IN WITNESS WHEREOF, the parties hereto through a duly authorized
representative have executed this Lease as of this 1st day of
September, 1993.

LESSEE: DOSKOCIL COMPANIES, INC.

By (Neil R. Johnson)
WITNESS/(Darian Andersen)
ATTEST
Title Vice President

LESSEE: DIXIE FOODS COMPANY

By (Neil R. Johnson)
WITNESS/(Darian Andersen)
ATTEST
Title Vice President

LESSOR: CARGILL LEASING CORPORATION

By (Donald R. Nielsen)

Title Vice President

Exhibit 10.36

STOCK PURCHASE AGREEMENT

between

INTERNATIONAL MULTIFOODS CORPORATION
(Seller)

and

DOSKOCIL COMPANIES INCORPORATED
(Buyer)

____________________________

Dated as of March 17, 1994

____________________________

SALE OF FROZEN SPECIALTY FOODS BUSINESS

<PAGE>
TABLE OF CONTENTS

SECTION Page

1. Purchase and Sale of the Shares . . . . . . . . . . . . . . . 1
2. Closing; Determination of Closing Net Assets. . . . . . . . . 1
3. Conditions to Closing . . . . . . . . . . . . . . . . . . . . .5
4. Representations and Warranties of Seller. . . . . . . . . . . 7
5. Covenants of Seller . . . . . . . . . . . . . . . . . . . . . 25
6. Representations and Warranties of Buyer . . . . . . . . . . . 33
7. Covenants of Buyer. . . . . . . . . . . . . . . . . . . . . . 35
8. Mutual Covenants. . . . . . . . . . . . . . . . . . . . . . . 35
9. Employees and Employee Benefits . . . . . . . . . . . . . . . 42
10. Further Assurances. . . . . . . . . . . . . . . . . . . . . . 45
11. Indemnification . . . . . . . . . . . . . . . . . . . . . . . 45
12. Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . 54
13. Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . 57
14. No Third-Party Beneficiaries. . . . . . . . . . . . . . . . . 57
15. Termination . . . . . . . . . . . . . . . . . . . . . . . . . 57
16. Survival of Representations . . . . . . . . . . . . . . . . . 58
17. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 59
18. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . 59
19. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
20. Interpretation. . . . . . . . . . . . . . . . . . . . . . . . 60
21. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 61
22. Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . 61
23. Brokerage Fees. . . . . . . . . . . . . . . . . . . . . . . . 61
24. Severability. . . . . . . . . . . . . . . . . . . . . . . . . 61
25. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 61
26. Disclosure Schedule, etc. . . . . . . . . . . . . . . . . . . 61
27. Waiver of Compliance; Consents. . . . . . . . . . . . . . . . 62
28. Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . 62

Exhibit A Principles and Methodology for Determining Closing
Net Assets
Exhibit B Form of Opinion of Faegre & Benson
Exhibit C Form of Opinion of General Counsel of Seller
Exhibit D Form of Opinion of Skadden, Arps, Slate, Meagher &
Flom
Exhibit E Form of Opinion of Local Counsel to Buyer
Exhibit F Interim Statement of Net Assets
Exhibit G Audited Financial Statements

<PAGE>
STOCK PURCHASE AGREEMENT

STOCK PURCHASE AGREEMENT dated as of March 17, 1994,
between INTERNATIONAL MULTIFOODS CORPORATION, a Delaware
corporation ("Seller"), and DOSKOCIL COMPANIES INCORPORATED, a
Delaware corporation ("Buyer").
Buyer desires to purchase from Seller, and Seller desires
to sell to Buyer, all the issued and outstanding shares of Common
Stock, par value $1.00 per share, of International Multifoods
Foodservice Corp., a Delaware corporation and wholly owned
subsidiary of Seller (the "Company"). The issued and outstanding
shares of Common Stock of the Company are hereinafter collectively
called the "Shares".
Accordingly, in consideration of the premises set forth
herein, the parties hereto hereby agree as follows:
1. Purchase and Sale of the Shares. On the terms and
subject to the conditions of this Agreement, in reliance upon the
representations, warranties and agreements of the respective
parties contained herein, on the Closing Date (as defined in
Section 2(a) hereof) Seller shall sell, transfer and deliver to
Buyer, and Buyer shall purchase from Seller, the Shares for an
aggregate cash purchase price equal to the sum of (i) $70,500,000,
plus (ii) the lesser of (A) the amount of the Closing Net Assets,
determined in the manner set forth in Section 2(b) hereof, or
(B) $72,000,000.
2. Closing; Determination of Closing Net Assets.
(a) Closing. The Closing (the "Closing") of the
purchase and sale of the Shares shall be held at the offices of
Faegre & Benson, 2200 Norwest Center, 90 South Seventh Street,
Minneapolis, Minnesota, at 9:00 a.m. Minneapolis time on May 31,
1994, or, if the conditions to Closing set forth in Section 3 of
this Agreement shall not have been satisfied or waived by the
appropriate party by such time of day on such date, at such time of
day as the parties shall agree on the first business day to occur
following the date on which all of the conditions to Closing set
forth in Section 3 shall have been satisfied or waived as provided
therein (subject to the provisions of Section 15 hereof), or at
such other time of day, place or date as the parties may agree.
Notwithstanding the foregoing, if all of the conditions to Closing
set forth in Section 3 shall have been satisfied or waived as
provided therein by the time and date of Closing determined as
provided above, but Buyer shall not have obtained by such time on
such date financing which, together with Buyer's available cash, is
sufficient to enable Buyer to consummate the transactions
contemplated by this Agreement (which financing Buyer agrees to use
its best efforts to obtain as promptly as practicable), then the
time and date of Closing shall be delayed until such time of day as
the parties shall agree on the first business day to occur
following the date on which such financing first becomes available,
provided that in no event shall the Closing be delayed beyond the
Termination Date (as defined in Section 15(a)(iv) hereof) without
Seller's prior written consent. Buyer agrees that, notwithstanding
the foregoing, the obtaining by Buyer of such financing is not a
condition to Buyer's obligation to purchase and pay for the Shares,
and that nothing stated above shall limit Seller's rights, if any,
to terminate this Agreement under Section 15 hereof and/or to
proceed against Buyer for breach of this Agreement if the Closing
does not occur on or prior to the Termination Date as a result of
the failure of Buyer to obtain such financing. The date on which
the Closing actually occurs and the transactions contemplated
hereby become effective is hereinafter referred to as the "Closing
Date", and the transfer shall for all purposes be considered
effective as of 12:01 a.m. Minneapolis time on the Closing Date.
At the Closing, (i) Buyer shall pay to Seller, by wire transfer to
a bank account designated in writing by Seller prior to the
Closing, immediately available funds in an amount (the "Closing
Date Amount") equal to (A) $70,500,000, plus (B) the lesser of
(1) the amount of the Closing Net Assets, determined in the manner
set forth in Section 2(b) hereof without regard to any post-Closing
determination by the Arbitrator (as hereinafter defined) pursuant
to Section 2(b)(iv) hereof, or (2) $72,000,000, and (ii) Seller
shall deliver to Buyer certificates representing the Shares, duly
endorsed by Seller for transfer to Buyer or accompanied by stock
powers duly executed by Seller in proper form for transfer to
Buyer.
(b) Determination of Closing Net Assets.
(i) A physical inventory of the Frozen Specialty
Business (as defined in Section 8(h) hereof) shall be conducted by
Seller in accordance with the written inventory policies of the
Frozen Specialty Business, copies of which have been delivered to
Buyer, as of the close of business on the last day immediately
preceding the Closing Date, and Buyer shall have the right to
observe the taking of such physical inventory and the
reconciliation thereof. The value of the inventory shown on the
Closing Statement (as hereinafter defined) and included in the
determination of Closing Net Assets shall be based on such physical
inventory. The quantities of each item of inventory determined
pursuant to such physical inventory shall be final and binding for
purposes of determining the value of such inventory and not subject
to any post-Closing adjustment except as may be necessary to
correct manifest computational errors.
(ii) Prior to the Closing, Seller shall prepare, with
Buyer's full participation, a statement (the "Closing Statement")
setting forth Net Assets (as hereinafter defined) as of the close
of business on the last day immediately preceding the Closing Date
("Closing Net Assets"). If there are any disputes between Seller
and Buyer with respect to any matters regarding Closing Net Assets
(other than disputes regarding the quantities of inventory
determined pursuant to the physical inventory conducted under
Section 2(b)(i) hereof, to the extent such physical inventory has
been made final and binding pursuant to Section 2(b)(i)), Seller
and Buyer shall use all reasonable efforts to resolve such disputes
prior to the scheduled time of Closing, which resolutions shall be
reflected in the determination of Closing Net Assets and shall be
final and binding and not subject to any post-Closing adjustment
except as may be necessary to correct manifest computational
errors.
(iii) If there are any disputes between Seller and Buyer
with respect to matters regarding Closing Net Assets (other than
disputes regarding the quantities of inventory determined pursuant
to the physical inventory conducted under Section 2(b)(i) hereof,
to the extent such physical inventory was made final and binding
pursuant to Section 2(b)(i)) which Seller and Buyer mutually
conclude they will be unable to resolve prior to the scheduled time
of Closing, then promptly after reaching such mutual conclusion
each such party, acting in good faith and exercising reasonable
judgment, shall prepare a written statement setting forth in
reasonable detail such matters which remain in dispute and the
Closing Net Assets determined by such party, and shall submit
copies of the same to the other party. If the Closing Net Assets
set forth in Seller's written statement exceed the Closing Net
Assets set forth in Buyer's written statement by $200,000 or less,
then the Closing shall proceed as scheduled based on the Closing
Net Assets set forth in Seller's written statement, which shall be
final and binding and not subject to any post-Closing adjustment
except as may be necessary to correct manifest computational
errors. If the Closing Net Assets set forth in Seller's written
statement exceed the Closing Net Assets set forth in Buyer's
written statement by more than $200,000, then Seller and Buyer
shall immediately submit copies of their written statements to
Arthur Andersen & Co. or, if Arthur Andersen & Co. is unable or
unwilling to act, such nationally recognized independent public
accounting firm as shall be agreed upon by Seller and Buyer in
writing (the "Arbitrator"). The Arbitrator shall review all
matters which remain in dispute (which shall not include any
disputes regarding the quantities of inventory determined pursuant
to the physical inventory conducted under Section 2(b)(i) hereof,
to the extent such physical inventory has been made final and
binding pursuant to Section 2(b)(i)) and endeavor to render in
writing decisions resolving such matters at or prior to the
scheduled time of Closing, which decisions shall be reflected in
the determination of Closing Net Assets (provided that the Closing
Net Assets so determined shall in no event be less than those set
forth in Buyer's written statement nor more than those set forth in
Seller's written statement) and shall be final and binding and not
subject to any post-Closing adjustment except as may be necessary
to correct manifest computational errors. With respect to any such
disputes regarding the value of inventory of the Frozen Specialty
Business, the Arbitrator shall, prior to rendering a decision
resolving such disputes, consult with one or more third parties
selected by the Arbitrator who are recognized industry experts. If
the Arbitrator informs Seller and Buyer that it is unable at or
prior to the scheduled time of Closing to render a decision
resolving all matters which remain in dispute, then the Closing
shall be delayed until such time of day as the parties shall agree
on the first business day to occur following the date on which all
remaining disputes have been resolved, subject to the provisions of
clause (iv) below and Section 15 hereof, provided that the
Arbitrator shall in all events render its decision within five
business days after the previously scheduled time of Closing.
(iv) Notwithstanding the foregoing, if the Arbitrator
informs Seller and Buyer that it is unable at or prior to the
scheduled time of Closing to render a decision only as to any
dispute regarding the value of inventory of the Frozen Specialty
Business (which shall not include any disputes regarding the
quantities of inventory determined pursuant to the physical
inventory conducted under Section 2(b)(i) hereof, to the extent
such physical inventory has been made final and binding pursuant to
Section 2(b)(i)), then the Closing shall proceed as scheduled on
the basis provided below and shall not be delayed until resolution
of such dispute. If the value of such disputed inventory set forth
in Seller's written statement exceeds the value of such disputed
inventory set forth in Buyer's written statement by $200,000 or
less in the aggregate, then the Closing shall proceed based on the
value of such disputed inventory set forth in Seller's written
statement, which shall be final and binding and not subject to any
post-Closing adjustment except as may be necessary to correct
manifest computational errors. If the value of such disputed
inventory set forth in Seller's written statement exceeds the value
of such disputed inventory set forth in Buyer's written statement
by more than $200,000 in the aggregate, then (A) the Closing shall
proceed based on an assumed value of such disputed inventory which
shall equal either (1) the value of such disputed inventory set
forth in Seller's written statement, if the amount in dispute is
$1,000,000 or less, or (2) the average of the value of such
disputed inventory set forth in Seller's written statement and the
value of such disputed inventory set forth in Buyer's written
statement, if the amount in dispute is more than $1,000,000, and
(B) the Arbitrator shall promptly (but in any event within 30 days)
after the Closing render in writing a decision resolving all
remaining disputes regarding such inventory (which shall not
include any disputes regarding the quantities of inventory
determined pursuant to the physical inventory conducted under
Section 2(b)(i) hereof, to the extent such physical inventory has
been made final and binding pursuant to Section 2(b)(i)), provided
that the value of such disputed inventory determined by the
Arbitrator shall in no event be less than the value of such
disputed inventory set forth in Buyer's written statement nor more
than the value of such disputed inventory set forth in Seller's
written statement. If (A) the sum of (1) $70,500,000, plus (2) the
lesser of (x) the Closing Net Assets, determined in the manner set
forth in this Section 2(b) after giving effect to the Arbitrator's
determination, or (y) $72,000,000, exceeds (B) the Closing Date
Amount, then Buyer shall, within ten business days after the
Arbitrator renders its written decision, make payment to Seller by
wire transfer in immediately available funds of the amount of such
excess, together with interest thereon at a rate of 3% per annum
from the Closing Date to the date of payment. If (A) the Closing
Date Amount exceeds (B) the sum of (1) $70,500,000, plus (2) the
lesser of (x) the Closing Net Assets, determined in the manner set
forth in this Section 2(b) after giving effect to the Arbitrator's
determination, or (y) $72,000,000, then Seller shall, within ten
business days after the Arbitrator renders its written decision,
make payment to Buyer by wire transfer in immediately available
funds of the amount of such excess, together with interest thereon
at a rate of 3% per annum from the Closing Date to the date of
payment. As used in this Agreement, the term "Adjusted Purchase
Price" shall mean the Closing Date Amount, less the principal
portion of any amount paid by Seller to Buyer after the Closing
pursuant to this clause (iv) or plus the principal portion of any
amount paid by Buyer to Seller after the Closing pursuant to this
clause (iv), as the case may be, all as adjusted to reflect the
correction of any manifest computational errors.
(v) The procedures for any arbitration pursuant to this
Section 2(b) shall be determined by the Arbitrator, provided that
all disputed matters shall be resolved by the Arbitrator in
accordance with the provisions of clause (vi) hereof. The fees and
disbursements of the Arbitrator shall be borne 50% by Buyer and 50%
by Seller; provided, however, that all other costs and expenses of
Buyer and Seller in connection with any arbitration pursuant to
this Section 2(b) shall be paid in accordance with Section 17.
(vi) As used in this Section 2(b), the term "Net Assets"
shall mean (A) the book value (net of appropriate reserves) of all
assets of the Frozen Specialty Business of a type not expressly
excluded from Net Assets in accordance with the Statement of
Principles and Methodology attached hereto as Exhibit A (the
"Statement of Principles and Methodology"), less (B) the book value
of all liabilities of the Frozen Specialty Business of a type
required to be recorded as liabilities on the face of balance
sheets prepared in accordance with generally accepted accounting
principles and not expressly excluded from Net Assets in accordance
with the Statement of Principles and Methodology; all as determined
on a basis consistent with generally accepted accounting principles
applied by Seller in the preparation of Seller's audited
consolidated financial statements and the methodology set forth in
the Statement of Principles and Methodology.
3. Conditions to Closing.
(a) Buyer's Obligation. The obligation of Buyer to
purchase and pay for the Shares is subject to the satisfaction
prior to the Closing of the following conditions, any one or more
of which may be waived by Buyer:
(i) The representations and warranties of Seller
set forth in this Agreement shall be true and correct in
all material respects as of the date hereof and
immediately prior to the Closing, as though made
immediately prior to the Closing, and Seller shall have
performed and complied in all material respects with all
obligations and covenants required by this Agreement to
be performed and complied with by Seller prior to the
Closing; and Seller shall have delivered to Buyer a
certificate dated the Closing Date and signed by a duly
authorized officer of Seller on its behalf confirming the
foregoing.
(ii) All consents or waivers from third parties to
any instruments, contracts, commitments or agreements
required to be described in Section 4(a) of the
Disclosure Schedule (as defined in the preamble to
Section 4 of this Agreement) in order to avoid a
misrepresentation under Section 4(a) of this Agreement
(which consents or waivers are necessary to permit the
consummation of the transactions contemplated hereby)
shall have been obtained.
(iii) All material consents, approvals, licenses,
permits, orders, authorizations or waivers from
governmental authorities necessary to permit the
consummation of the transactions contemplated hereby, or
the operation by the Company or the Subsidiary (as
defined in Section 4(c)) of the Frozen Specialty Business
immediately after the Closing in substantially the same
manner in which it was operated prior to the Closing,
shall have been obtained.
(iv) Buyer shall have received an opinion dated the
Closing Date of Faegre & Benson, special counsel to
Seller, substantially in the form of Exhibit B attached
hereto and an opinion of Frank W. Bonvino, General
Counsel of Seller, substantially in the form of Exhibit C
attached hereto, together with letters from each such
counsel to Buyer's financing sources permitting such
financing sources to rely on the opinion of such counsel
as if it were addressed and delivered to such financing
sources.
(v) No injunction or order of any court or
administrative agency of competent jurisdiction shall be
in effect as of the Closing which restrains or prohibits
the purchase or sale of the Shares.
(vi) The waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (the "HSR Act") shall
have expired or terminated.
(vii) The Frozen Specialty Business shall have had
positive net earnings before interest and income taxes
for the period from November 27, 1993 through and
including the close of business on the last day
immediately preceding the Closing Date, and Seller shall
have delivered to Buyer a certificate dated the Closing
Date and signed by a duly authorized officer of Seller on
its behalf confirming the same (it being understood that
nothing stated in this clause (vii) limits the condition
set forth in clause (i) hereof).
(b) Seller's Obligation. The obligation of Seller to
sell and deliver the Shares to Buyer is subject to the satisfaction
prior to the Closing of the following conditions, any one or more
of which may be waived by Seller:
(i) The representations and warranties of Buyer set
forth in this Agreement shall be true and correct in all
material respects as of the date hereof and immediately
prior to the Closing, as though made immediately prior to
the Closing, and Buyer shall have performed and complied
in all material respects with all obligations and
covenants required by this Agreement to be performed and
complied with by Buyer prior to the Closing; and Buyer
shall have delivered to Seller a certificate dated the
Closing Date and signed by a duly authorized officer of
Buyer on its behalf confirming the foregoing.
(ii) All material consents, approvals, licenses,
permits, orders, authorizations or waivers from
governmental authorities necessary to permit the
consummation of the transactions contemplated hereby
shall have been obtained.
(iii) Seller shall have received an opinion dated
the Closing Date of Skadden, Arps, Slate, Meagher & Flom,
special counsel to Buyer, substantially in the form of
Exhibit D attached hereto and an opinion of special
counsel to Buyer licensed to practice law in the State of
Minnesota and reasonably acceptable to Seller
substantially in the form of Exhibit E attached hereto.
(iv) No injunction or order of any court or
administrative agency of competent jurisdiction shall be
in effect as of the Closing which restrains or prohibits
the purchase or sale of the Shares.
(v) The waiting period under the HSR Act shall have
expired or terminated.
(c) Certificates. Each of the parties hereto will
furnish to the other party such certificates of such party's
officers or others and such other documents to evidence fulfillment
of the conditions set forth in this Section 3 as the other party
may reasonably request.
4. Representations and Warranties of Seller. Seller
hereby represents and warrants to Buyer that, except as set forth
in the Disclosure Schedule accompanying this Agreement (the
"Disclosure Schedule"), the statements contained in this Section 4
are true and correct as of the date of this Agreement.
(a) Organization and Authority of Seller. Seller is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. Seller has full corporate
power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. All corporate
acts and proceedings required to be taken to authorize the
execution, delivery and performance by Seller of this Agreement and
the consummation by Seller of the transactions contemplated hereby
have been duly and properly taken. This Agreement has been duly
executed and delivered by Seller and, assuming due authorization,
execution and delivery of this Agreement by Buyer, constitutes a
valid and binding obligation of Seller, enforceable against Seller
in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, moratorium and other similar
laws affecting creditors' rights generally and by general
principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law). The execution and
delivery by Seller of this Agreement do not, and the consummation
by Seller of the transactions contemplated hereby (including
without limitation the transactions contemplated by Section 8(i)
hereof) and compliance by Seller with any of the provisions hereof
will not, with or without notice or passage of time, or both,
(i) conflict with, or result in any violation of, any provision of
the charter or by-laws of any of Seller, the Company or the
Subsidiary, (ii) conflict with, result in any violation of, or
constitute a default (or, with respect to instruments, contracts,
commitments or agreements relating primarily to the Frozen
Specialty Business, give rise to any right of termination,
cancellation or acceleration) under, any instruments, contracts,
commitments or agreements to which Seller, the Company or the
Subsidiary is a party or by which Seller, the Company or the
Subsidiary or the property or assets of Seller, the Company or the
Subsidiary are bound (provided that this clause (ii) excludes, and
no representation under this Section 4(a) is made with respect to,
any instruments, contracts, commitments or agreements relating
primarily to the Frozen Specialty Business which do not constitute
Contracts (as defined in Section 4(m) of this Agreement)), or
(iii) conflict with, or result in any violation of, any judgment,
order, writ, injunction or decree to which Seller, the Company or
the Subsidiary has been specifically identified as subject, or any
material statute, law, ordinance, rule or regulation applicable to
Seller, the Company or the Subsidiary or the property or assets of
Seller, the Company or the Subsidiary. No material consent,
approval, license, permit, order or authorization of, or waiver by,
or registration, declaration or filing with, any court,
administrative agency or commission or other governmental authority
or instrumentality, domestic or foreign, is required to be obtained
or made by or with respect to Seller, the Company or the Subsidiary
in order for Seller to execute, deliver and perform this Agreement
or to consummate the transactions contemplated hereby other than
compliance by Seller with and filings by Seller under the HSR Act
and Section 13(a) of the Securities Exchange Act of 1934, as
amended.
(b) The Shares. Seller is the record and beneficial
owner of (and has the right to transfer to Buyer) all of the
Shares, free and clear of all pledges, claims, liens, encumbrances,
security interests, options, charges, rights of third parties and
restrictions whatsoever, except for restrictions upon transfer of
the Shares other than in compliance with federal and state
securities laws, and except for rights of Buyer under this
Agreement and liens created by Buyer. The Shares are not subject
to any voting trust agreement or other contract, agreement,
arrangement, commitment or understanding, including any such
contract, agreement, arrangement, commitment or understanding
restricting or otherwise relating to the voting, dividend rights or
disposition of the Shares, other than this Agreement.
(c) Organization and Standing of the Company and the
Subsidiary. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware. Minnesota Foodservice, Inc. (the "Subsidiary") is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Minnesota. Each of the Company and
the Subsidiary has full corporate power and authority necessary to
own, lease or otherwise hold and operate its properties and assets
and to carry on the Frozen Specialty Business as presently
conducted. Each of the Company and the Subsidiary is duly
qualified or licensed and in good standing to do business as a
foreign corporation in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business
conducted by it makes such qualification necessary, except where
the failure to be so qualified or licensed would not have a
Material Adverse Effect (as defined in Section 20(i)).
Section 4(c) of the Disclosure Schedule sets forth a complete and
correct list of all jurisdictions in which the Company and the
Subsidiary are qualified or licensed to do business as a foreign
corporation. Seller has made available to Buyer true and complete
copies of the charter, as amended to date, and the by-laws, as in
effect on the date hereof, of each of the Company and the
Subsidiary, and true and complete copies of the stock certificates
and the stock transfer ledgers of each of the Company and the
Subsidiary. The minutes of the meetings of the shareholders and
directors of each of the Company and the Subsidiary made available
by Seller to Buyer are, to the Knowledge of Seller, correct and
complete in all material respects.
(d) Capital Stock of the Company and the Subsidiary.
The authorized capital stock of the Company consists of 1,000
shares of Common Stock, par value $1.00 per share, all 1,000 of
which shares are duly authorized, validly issued and outstanding
and fully paid and nonassessable. The authorized capital stock of
the Subsidiary consists of 1,000 shares of Common Stock, par value
$1.00 per share, all 1,000 of which shares are duly authorized,
validly issued and outstanding and fully paid and nonassessable.
Except as set forth above, there are no shares of capital stock of
either the Company or the Subsidiary outstanding. Neither the
Shares nor any outstanding shares of capital stock of the
Subsidiary have been issued in violation of any preemptive or
similar rights. There are no outstanding subscriptions, calls,
warrants, options, agreements, convertible or exchangeable
securities or other commitments pursuant to which Seller, the
Company or the Subsidiary is or may become obligated to issue,
sell, transfer or otherwise dispose of, or purchase, return, redeem
or otherwise acquire, any of the Shares or any other shares of
capital stock of the Company or the Subsidiary other than this
Agreement, and no capital stock of the Company or the Subsidiary is
reserved for issuance for any purpose. The Company owns
beneficially and of record all of the outstanding shares of capital
stock of the Subsidiary, free and clear of all pledges, claims,
liens, encumbrances, security interests, options, charges, rights
of third parties and restrictions whatsoever, except for
restrictions upon transfer of such shares other than in compliance
with federal and state securities laws.
(e) Equity Interests. Except for the Subsidiary, there
are no direct or indirect subsidiaries of the Company or the
Subsidiary, or corporations, partnerships, joint ventures,
unincorporated associations, trusts or other organizations or
entities in which the Company or the Subsidiary, directly or
indirectly, has, or pursuant to any agreement or agreements will
have the right to acquire, any equity interest or investment.
(f) Financial Statements.
(i) Attached hereto as, respectively, Exhibits F and G
are (A) audited Special-Purpose Statements of Assets, Liabilities
and Investments and Advances by Parent of the Frozen Specialty
Business as of February 29, 1992, February 27, 1993 and
November 27, 1993, and audited Special-Purpose Statements of
Revenues and Expenses, and Special-Purpose Statements of Cash
Flows, of the Frozen Specialty Business for the fiscal years ended
February 29, 1992 and February 27, 1993, and for the nine-month
period ended November 27, 1993, together with the report thereon of
KPMG Peat Marwick (collectively, the "Audited Financial
Statements"), and (B) an unaudited Pro Forma Statement of Net
Assets of the Frozen Specialty Business as of November 27, 1993
(the "Interim Statement"). Except as expressly disclosed therein,
the Audited Financial Statements fairly present, in all material
respects, the assets, liabilities and financial condition of the
Frozen Specialty Business at their respective dates and the results
of operations of the Frozen Specialty Business for the periods
covered thereby, and have been prepared from and in accordance with
the books and records of the Frozen Specialty Business and in
conformity with generally accepted accounting principles applied on
a basis consistent with Seller's audited consolidated financial
statements. Except as expressly disclosed therein, the Interim
Statement fairly presents, in all material respects, the Net Assets
of the Frozen Specialty Business at November 27, 1993, and has been
prepared from and in accordance with the books and records of the
Frozen Specialty Business and in conformity with the methodology
set forth in the Statement of Principles and Methodology.
(ii) Except as and to the extent of the amounts
specifically reflected or reserved against in the most recent
Special-Purpose Statement of Assets, Liabilities and Investments
and Advances by Parent included in the Audited Financial
Statements, or except as expressly disclosed therein or excepted
therefrom, neither the Company nor the Subsidiary had, as of the
date of such statement, any material liabilities or obligations of
any nature (whether secured or unsecured, whether absolute,
accrued, contingent or otherwise and whether due or to become due)
which would be required by generally accepted accounting principles
to be reflected on the face of such statement or in the footnote
disclosures thereto, other than the Surimi Liabilities (as defined
in Section 8(h) hereof).
(iii) Notwithstanding the foregoing or any other
provision of this Agreement, no representation is made as to the
accuracy, fairness or reasonableness of any projections provided to
Buyer or the assumptions used in preparing the same, or as to the
likelihood that such projections will be achieved.
(g) Nonforeign Certification. Seller is not a "foreign
person" within the meaning of Section 1445 of the Code (as defined
below).
(h) Taxes.
(i) For purposes of this Agreement, (A) "Tax" or "Taxes"
shall mean any and all federal, state, local, foreign and other
taxes, levies, fees, imposts, duties and governmental charges of
whatever kind (including any interest, penalties or additions to
tax imposed in connection therewith or with respect thereto),
including, without limitation, taxes imposed on, or measured by,
income, franchise, profits or gross receipts, and ad valorem, value
added, sales, use, service, real or personal property, capital
stock, license, payroll, withholding, employment, social security,
unemployment compensation, utility, severance, production, excise,
stamp, occupation, premium, windfall profits, transfer and gains
taxes, and customs duties; (B) "Pre-Closing Tax Period" shall mean
all taxable periods ending before the Closing Date and the portion
ending before the Closing Date of any taxable period that includes
(but does not begin on) such day; (C) "Code" shall mean the
Internal Revenue Code of 1986, as amended, and the regulations
thereunder; and (D) "Tax Return" shall mean returns, reports,
information statements and other documentation (including any
additional or supporting material) filed or maintained, or required
to be filed or maintained, in connection with the calculation,
determination, assessment or collection of any Tax.
(ii) Each of the Company and the Subsidiary, and any
affiliated group, within the meaning of Section 1504 of the Code,
of which the Company or the Subsidiary is or has been a member, has
filed or caused to be filed in a timely manner or has received an
appropriate extension of time to file all material Tax Returns
required to be filed by it. All Taxes shown to be due on such Tax
Returns have been paid in full, or will be specifically identified
by nature, period and amount in the Closing Statement, included as
a liability in the final determination of Closing Net Assets and
taken into account in the calculation of the Adjusted Purchase
Price.
(iii) Neither Seller nor any of its affiliates has made
with respect to the Company or the Subsidiary, or any property held
by the Company or the Subsidiary, any consent under Section 341(f)
of the Code. No property of the Company or the Subsidiary is "tax
exempt use property" within the meaning of Section 168(h) of the
Code. Neither the Company nor the Subsidiary is a party to any
lease made pursuant to Section 168(f)(8) of the Internal Revenue
Code of 1954, as amended. Neither the Company nor the Subsidiary
is a party to any agreement that has resulted in or could result in
an obligation to make payments that would not be deductible under
Section 280G of the Code.
(iv) With respect to any Taxes which are attributable to
the business or operations of the Company or the Subsidiary,
(A) all tax deficiencies asserted or assessed have been paid or
finally settled; (B) all amounts that are required to be collected
or withheld in connection with amounts paid or owing to any
employee or other third party have been duly collected or withheld,
and have been duly remitted or deposited in accordance with law;
(C) to the Knowledge of Seller, no Tax Returns filed or required to
be filed are being examined by the Internal Revenue Service or
other appropriate taxing authority; (D) there is no outstanding
request for any extension of time within which to pay any Taxes or
file any Tax Return; (E) there has been no waiver or extension of
any applicable statute of limitations for the assessment or
collection of any Taxes; (F) there is, to the Knowledge of Seller,
no pending or threatened action, audit, proceeding or investigation
for the assessment or collection of any Taxes; (G) there are no
requests for rulings, subpoenas or information pending with respect
to any taxing authority; (H) any adjustment of Taxes made by the
Internal Revenue Service in any examination which is required to be
reported to state, local, foreign or other taxing authorities has
been so reported, and any additional Taxes due with respect thereto
have been paid; and (I) no power of attorney has been granted by
the Company and/or the Subsidiary, and is currently in force, with
respect to any matter relating to Taxes.
(i) Title to Tangible Personal Property. Each of the
Company and the Subsidiary has good and valid title to all tangible
personal property which it owns, in each case free and clear of all
liens, security interests and other encumbrances, except
(i) mechanics', materialmen's, carriers', workmen's,
warehousemen's, repairmen's, landlord's or other like liens
securing obligations that are not delinquent; (ii) liens for Taxes
and other governmental charges which are not due and payable or
which may be paid without penalty; (iii) liens, security interests
and other encumbrances evidenced by any mortgage agreement, deed of
trust, security agreement, financing statement, purchase money
agreement, conditional sales contract, capital lease, operating
lease or license which is described in Section 4(m)(iv), (v) or (x)
of the Disclosure Schedule or the non-disclosure of which therein
does not constitute a misrepresentation under Section 4(m)(iv), (v)
or (x) of this Agreement; (iv) imperfections of title and
encumbrances which do not, individually or in the aggregate,
materially impair the value or the continued use and operation in
the current manner of the assets to which they relate; and
(v) other liens, security interests and encumbrances, if any,
described in Section 4(i) of the Disclosure Schedule (the liens,
security interests and other encumbrances described in clauses (i),
(ii) and (iii) above being hereinafter referred to collectively as
"Permitted Liens"). This paragraph (i) does not relate to the
capital stock of the Subsidiary, such stock being the subject of
Section 4(d).
(j) Title to Real Property. Section 4(j) of the
Disclosure Schedule sets forth a complete list and brief
description of all real property owned in fee by the Company or the
Subsidiary (individually, an "Owned Property" and collectively, the
"Owned Properties") and all real property leased by the Company or
the Subsidiary (individually, a "Leased Property" and collectively,
the "Leased Properties"). The Company or the Subsidiary has good
fee title to each Owned Property and, assuming good title in the
landlord, a valid leasehold interest in each Leased Property (the
Owned Properties and the Leased Properties being sometimes referred
to herein individually as a "Company Property" and collectively as
the "Company Properties"), in each case free and clear of all
mortgages, liens, security interests, easements, restrictive
covenants, rights-of-way and other encumbrances, except
(i) Permitted Liens; (ii) mortgages, liens, security interests,
easements, restrictive covenants, rights-of-way and other
encumbrances on any Company Property covered by the Title
Commitments (as hereinafter defined) which are shown on the Title
Commitments or are otherwise of record (other than any such
encumbrance not shown on the Title Commitments of which Seller has
Knowledge and which materially interferes with the continued use
and operation of the Company Property to which it relates in the
manner in which such Company Property is currently used and
operated); (iii) any conditions that may be shown by a current,
accurate survey or physical inspection of any Company Property
(other than any such condition not shown on the Surveys (as
hereinafter defined) of which Seller has Knowledge and which
materially interferes with the continued use and operation of the
Company Property to which it relates in the manner in which such
Company Property is currently used and operated); (iv) mortgages,
liens, security interests, easements, restrictive covenants,
rights-of-way and other encumbrances and/or defects, whether or not
of record, against the fee title or other estate held by the
landlord with respect to any Leased Property; (v)(A) platting,
subdivision, zoning, building and other similar legal requirements,
(B) easements, restrictive covenants, rights-of-way, encroachments
and other similar encumbrances, whether or not of record, and
(C) reservations of coal, oil, gas, minerals and mineral interests,
whether or not of record, none of which items set forth in this
clause (v) individually or in the aggregate materially interfere
with the continued use and operation of the Company Property to
which they relate in the manner in which such Company Property is
currently used and operated; and (vi) other mortgages, liens,
security interests, easements, restrictive covenants, rights-of-way
and encumbrances, if any, described in Section 4(j) of the
Disclosure Schedule. There are no eminent domain proceedings
pending or, to the Knowledge of the Seller, threatened against any
Company Property or any material portions thereof. Seller has
delivered or caused to be delivered to Buyer, with respect to the
Owned Properties and certain parcels of Leased Property, true and
correct copies of the title insurance commitments and endorsements
described in Section 4(j) of the Disclosure Schedule (collectively,
the "Title Commitments") and true and correct copies of the surveys
described in Section 4(j) of the Disclosure Schedule (collectively,
the "Surveys").
(k) Condition of Assets. The facilities and equipment
of the Company and the Subsidiary relating to the Frozen Specialty
Business, in the aggregate, are adequate to conduct the Frozen
Specialty Business substantially in the manner in which the Frozen
Specialty Business was conducted during the nine-month period ended
November 27, 1993.
(l) Intellectual Property. Section 4(l) of the
Disclosure Schedule sets forth a true and complete list of (i) all
domestic and foreign letters patent, patents and patent
applications, and all registrations of trademarks, trade names,
service marks and copyrights, and applications for such
registrations, which are held by the Company or the Subsidiary
(other than those used primarily in the operation of the Surimi
Business (as defined in Section 8(h) hereof)), or which are held by
Seller and used in the operation of the Frozen Specialty Business,
together in each case with the identity of the owner thereof, and
(ii) all licenses of the Company or the Subsidiary of, and all
other material rights of the Company or the Subsidiary to use, any
patents, trademarks, software and know-how held by others (other
than those used primarily in the operation of the Surimi Business),
and all licenses of Seller of, and other material rights of Seller
to use, any patents, trademarks, software and know-how held by
others and used in the operation of the Frozen Specialty Business
(in each case other than licenses of commercially available
computer software and licenses calling for annual payments not in
excess of $25,000 per license or $50,000 in the aggregate for all
such licenses), together in each case with the identity of the
licensor (or other owner) and licensee (or other user) thereof.
The Company or the Subsidiary owns (free and clear of all liens,
security interests and other charges and encumbrances other than
(i) liens for Taxes and other governmental charges which are not
due and payable or which may be paid without penalty, and
(ii) other liens, security interests and encumbrances, if any,
described in Section 4(l) of the Disclosure Schedule), or Seller,
the Company or the Subsidiary has a valid right to use without
payment to any other party (other than pursuant to a license
described in Section 4(l) of the Disclosure Schedule or the
non-disclosure of which therein would not constitute a
misrepresentation under Section 4(l) of this Agreement), the
patents, trademarks, trade names, service marks and copyrights used
in the operation of the Frozen Specialty Business (the
"Intellectual Property"), except where the failure of the Company
or the Subsidiary to own, or the failure of Seller, the Company or
the Subsidiary to have the right to use, any such Intellectual
Property would not have, individually or in the aggregate, a
Material Adverse Effect. There is no claim or litigation pending
(with respect to which Seller, the Company or the Subsidiary has
been served or otherwise notified) or, to the Knowledge of Seller,
threatened by any other person challenging or questioning either
the right of the Company or the Subsidiary to use, or the validity
of, any of the Intellectual Property in any jurisdiction, domestic
or foreign. To the Knowledge of Seller, no Intellectual Property,
or product, process, method, substance, part or other material of
the Frozen Specialty Business, presently being sold or employed by
the Company or the Subsidiary infringes on the rights owned or held
by any other person in any material respect. To the Knowledge of
Seller, no product, license, patent, trade name, trade dress,
trademark, process, method, substance, part or other material
presently being sold or employed by any other person infringes any
rights of the Company or the Subsidiary with respect to the
Intellectual Property. None of Seller, the Company or the
Subsidiary has received any written notice that any of the
Intellectual Property has been declared unenforceable or otherwise
invalid by any court or governmental authority.
(m) Contracts. Section 4(m) of the Disclosure Schedule
describes all of the following agreements, contracts,
understandings or arrangements (and all amendments thereto)
relating primarily to the Frozen Specialty Business to which
Seller, the Company or the Subsidiary is a party or by which
Seller, the Company or the Subsidiary or the property or assets of
Seller, the Company or the Subsidiary are bound:
(i) each employment agreement (other than those that
are or at the Closing will be terminable at will by the
Company or the Subsidiary without penalty);
(ii) each agreement containing a covenant not to
compete that restricts the freedom of the Company or the
Subsidiary to compete in any line of business with any
person or in any area or territory;
(iii) each agreement or contract with Seller or any
affiliate of Seller (other than the Company or the
Subsidiary) or any current officer or director of the
Company or the Subsidiary or of Seller or any other
affiliate of Seller (other than (A) employment agreements
which are described in Section 4(m)(i) of the Disclosure
Schedule or the non-disclosure of which therein does not
constitute a misrepresentation under Section 4(m)(i) of
this Agreement, (B) agreements or contracts constituting
Seller's Plans (as defined in Section 4(p) hereof), and
(C) agreements or contracts calling for annual payments
not in excess of $25,000 per agreement or contract or
$50,000 in the aggregate for all such agreements and
contracts);
(iv) each operating lease (as lessor or lessee) of
any Company Property or any tangible personal property
(except leases of tangible personal property calling for
annual payments not in excess of $25,000 per lease or
$50,000 in the aggregate for all such leases);
(v) each license agreement (other than licenses of
commercially available software and licenses calling for
annual payments not in excess of $25,000 per license or
$50,000 in the aggregate for all such licenses);
(vi) each management, service, consulting or other
similar type of contract under which there exists an
aggregate future liability in excess of $25,000 per
contract;
(vii) each advertising agreement under which there
exists an aggregate future liability in excess of $25,000
per contract;
(viii) each written agreement for the purchase or
sale of raw materials, supplies or products in effect as
of the date of this Agreement (other than purchase orders
entered into in the ordinary course of business on an
order-by-order basis and ongoing purchase or sale
agreements calling for annual purchases or sales not in
excess of $50,000 per agreement);
(ix) other than with respect to intercompany loans
or advances to be cancelled without repayment effective
at the Closing pursuant to Section 8(g) hereof, each
agreement or contract under which any money has been
borrowed or loaned, each note, bond, indenture or other
instrument evidencing indebtedness for borrowed money,
and each guaranty of indebtedness for borrowed money;
(x) each mortgage agreement, deed of trust, security
agreement, purchase money agreement, conditional sales
contract or capital lease (other than (A) any purchase
money agreement, conditional sales contract or capital
lease evidencing liens only on tangible personal property
under which there exists an aggregate future liability
not in excess of $25,000 per contract or lease,
(B) protective filings of financing statements under the
Uniform Commercial Code and (C) mortgage agreements,
deeds of trust, security agreements, purchase money
agreements, conditional sales contracts and capital
leases evidencing liens on any Company Property covered
by Title Commitments which are shown on the Title
Commitments or are otherwise of record (other than any
such agreement not shown on the Title Commitments of
which Seller has Knowledge and which materially
interferes with the continued use and operation of the
Company Property to which it relates in the manner in
which such Company Property is currently used and
operated);
(xi) each partnership or joint venture agreement; or
(xii) each other agreement, contract, understanding
or arrangement (other than contracts for the purchase or
sale of goods or services entered into in the ordinary
course of business, Collective Bargaining Agreements, and
agreements, contracts, understandings or arrangements
constituting Seller's Plans) which (A) is not terminable
on ninety or fewer days' notice without penalty, (B) is
over one year in length of obligation by the Seller,
Company or the Subsidiary, and (C) involves an aggregate
future liability in excess of $50,000 per contract.
Each agreement, contract, understanding and arrangement required to
be described in Section 4(m) of the Disclosure Schedule and each
mortgage agreement, deed of trust, security agreement, purchase
money agreement, conditional sales contract and capital lease which
would have been required to be described in Section 4(m) of the
Disclosure Schedule but for the exclusion set forth in
clause (x)(C) above (collectively, the "Contracts") is or at the
Closing will be (i) a valid and binding obligation of the Company
or the Subsidiary and, to the Knowledge of Seller, the other
parties thereto, (ii) in full force and effect, and
(iii) enforceable by the Company or the Subsidiary in all material
respects in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, moratorium
and other similar laws affecting creditors' rights generally and by
general principles of equity (regardless of whether enforceability
is considered in a proceeding in equity or at law). None of
Seller, the Company or the Subsidiary is (with or without the lapse
of time or the giving of notice, or both) in material breach of or
in material default under any of the Contracts. To the Knowledge
of Seller, no other party to any of the Contracts is (with or
without the lapse of time or the giving of notice, or both) in
material breach of or in material default under such Contract, or
has given written notice that it intends to terminate prior to its
expiration date, or alter in any manner materially adverse to the
Company or the Subsidiary, its performance under such Contract. A
true and correct copy of each of the written Contracts and an
accurate summary of each of the other Contracts has been made
available to Buyer. For purposes of this Section 4(m), contracts
terminable at will shall mean oral or written agreements which do
not provide for specified terms, are expressly made terminable at
will or are terminable without penalty, regardless of whether any
covenants of good faith and fair dealing may be implied, as a
matter of law, in connection with any termination thereof.
(n) Litigation; Decrees. No legal, administrative,
arbitration or other proceeding or governmental investigation is
pending (with respect to which Seller, the Company or the
Subsidiary has been served or otherwise notified) or, to the
Knowledge of Seller, threatened (i) against Seller which, if
decided adversely to Seller, would adversely affect the ability of
Seller to consummate the transactions contemplated hereby, or
(ii) against Seller, the Company or the Subsidiary with respect to
the Frozen Specialty Business (other than (A) worker's compensation
claims consistent with the historical experience of the Frozen
Specialty Business which were not pending (or which were pending
but with respect to which none of Seller, the Company or the
Subsidiary had been served or otherwise notified) or, to the
Knowledge of Seller, threatened prior to February 25, 1994, and
(B) legal, administrative, arbitration or other proceedings or
governmental investigations described in the Environmental
Reports). The foregoing representation does not relate to Taxes,
all representations with respect to which are the subject of
Section 4(h). Neither the Company nor the Subsidiary is
specifically identified as a party subject to any restrictions or
limitations under any judgment, order, injunction or decree of any
court, arbitrator, administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign.
(o) Insurance. The primary, excess and umbrella
policies of insurance currently maintained with respect to the
Company and the Subsidiary and their respective assets, properties
and businesses are listed in Section 4(o) of the Disclosure
Schedule. None of Seller, the Company or the Subsidiary has at any
time during the three years immediately preceding the date of this
Agreement been unable to obtain at competitive rates insurance
coverage with respect to the Frozen Specialty Business of types and
in amounts customary for similar companies in the same business.
(p) Employee Benefits; ERISA.
(i) Section 4(p) of the Disclosure Schedule identifies
each employee pension, retirement, profit sharing, stock bonus,
stock option, stock purchase, bonus, incentive, deferred
compensation, hospitalization, medical, dental, vision, vacation,
insurance, sick pay, disability, severance, or other plan, fund,
program, policy, contract or arrangement (including, without
limitation, any "employee benefit plan" as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) providing employee benefits maintained or contributed to
by Seller, the Company or the Subsidiary in which any employees of
the Frozen Specialty Business are participating or under which any
current or former employees of the Frozen Specialty Business have
accrued any benefits to which they remain entitled (the "Seller's
Plans"). Seller has provided Buyer with true and complete copies
of all written Seller's Plans and accurate summaries of all other
Seller's Plans.
(ii) Except as provided in Section 9 of this Agreement
(and except with respect to (A) the general severance policy
included within Seller's Plans (provided that nothing herein shall
limit Seller's agreement with Buyer under Section 9(d) of this
Agreement to pay severance to certain employees of the Frozen
Specialty Business after the Closing), (B) any "multiemployer plan"
(as defined in Section 3(37) of ERISA) included within Seller's
Plans, and (C) any incentive plan included within Seller's Plans
which is designated as a "Non-Executive Incentive Plan" in
Section 4(p) of the Disclosure Schedule ("Non-Executive Incentive
Plan(s)")), none of Buyer, the Company or the Subsidiary will have
after the Closing any liability of any kind payable with respect to
any Seller's Plan that is attributable to benefits accrued prior to
the Closing or the operation or administration of such Seller's
Plan prior to the Closing. In addition, none of Buyer, the Company
or the Subsidiary will have after the Closing any liability of any
kind with respect to any similar plan, fund, program, policy,
contract or arrangement maintained by Seller or any of its
affiliates which is not a Seller's Plan as defined in the preceding
paragraph.
(iii) All contributions required to be made or accrued
by Seller, the Company or the Subsidiary to any Seller's Plan which
is a multiemployer plan or a Non-Executive Incentive Plan for all
periods ending prior to the Closing Date (including periods from
the first day of the current plan year through the last day
immediately preceding the Closing Date) have been or will be prior
to the Closing Date either made by Seller, or made or accrued by
the Company or the Subsidiary. If Seller, the Company and the
Subsidiary were to engage in a complete withdrawal from any such
multiemployer plan immediately prior to the Closing, no withdrawal
liability would be owed to that plan because of the "de minimis"
rule in Section 4209 of ERISA.
(q) Absence of Changes or Events. Since November 27,
1993, the Frozen Specialty Business has been conducted in the
ordinary course substantially consistent with past practice.
Without limiting the generality of the immediately preceding
sentence, since November 27, 1993, the Frozen Specialty Business
has not (except that clauses (ii), (iii) and (iv) apply only to the
Company and the Subsidiary and not the Frozen Specialty Business),
and neither the Company nor the Subsidiary has, as the case may be,
except as contemplated by this Agreement:
(i) suffered any event, change, situation or development
which would have a Material Adverse Effect, other than changes
relating to the historic seasonality of the Frozen Specialty
Business;
(ii) amended its charter or by-laws;
(iii) declared, paid or set aside for payment or making
any dividend or made any other distribution of any of its assets
with respect to the Shares or the capital stock of the Subsidiary
(other than (A) distributions (as dividends, loans or advances) of
any assets by the Subsidiary to the Company) or (B) distributions
(as dividends, loans or advances) of cash by the Company or the
Subsidiary to Seller);
(iv) redeemed or otherwise acquired any shares of its
capital stock, or issued, or authorized or proposed the issuance
of, any capital stock or any option, warrant or right relating
thereto;
(v) adopted or amended any Seller's Plan prior to the
date of this Agreement in a manner which would materially increase
the benefits of employees of the Frozen Specialty Business or
entered into or amended any Collective Bargaining Agreement;
(vi) granted to any employee of the Frozen Specialty
Business any increase in compensation payable or to become payable
or other material benefits, except as was required under existing
agreements or in the ordinary course of business consistent with
past practice or increases for which Seller or any of its
affiliates (other than the Company or the Subsidiary) are solely
obligated; or permitted any sums or other corporate assets to be
paid to or withdrawn from the Company or the Subsidiary by the
directors or officers of the Company or the Subsidiary, except for
ordinary compensation and fees, payments under established benefit
plans and ordinary expense reimbursement and similar payments;
(vii) incurred, assumed or guaranteed any indebtedness
for borrowed money other than intercompany indebtedness to be
cancelled without repayment effective at the Closing pursuant to
Section 8(g) hereof and other indebtedness incurred in the ordinary
course of business consistent with past practice that does not
exceed $50,000 in aggregate principal amount and is prepayable at
any time without penalty;
(viii) granted any mortgage, pledge, lien or encumbrance
on, or agreed to the imposition of any restriction or charge of any
kind (including any lease or license) with respect to, any of its
assets, other than pursuant to purchase money agreements,
conditional sales contracts, capital leases, operating leases or
licenses the non-disclosure of which in Section 4(m)(iv), (v) or
(x) of the Disclosure Schedule would not constitute a
misrepresentation under Section 4(m)(iv), (v) or (x) of this
Agreement;
(ix) cancelled any indebtedness for borrowed money owing
to it having an aggregate value, together with all other such
indebtedness cancelled since November 27, 1993, of more than
$50,000, or waived any other claims or rights of material value
(other than settlements of trade accounts in the ordinary course of
business);
(x) except for distributions (as dividends, loans or
advances) described in clause (iii) above and except for
intercompany transactions in the ordinary course of business,
loaned or advanced any amount to, or sold, transferred or leased
any of its assets to, or entered into any agreement or arrangement
with, Seller or any of its affiliates (other than the Company or
the Subsidiary);
(xi) made any change in any method of accounting or
accounting practice or policy other than those required by
generally accepted accounting principles or contemplated in the
Statement of Principles and Methodology;
(xii) purchased or otherwise acquired any assets of the
Frozen Specialty Business or made any capital expenditures relating
to the Frozen Specialty Business (other than (i) purchases of
inventory in the ordinary course of business consistent with past
practice and (ii) capital expenditures and other purchases of
assets which, together with all other capital expenditures and
other purchases of assets relating to the Frozen Specialty Business
made since November 27, 1993, do not exceed $2,000,000 in the
aggregate);
(xiii) sold or otherwise disposed of any assets of the
Frozen Specialty Business (other than (i) inventory in the ordinary
course of business consistent with past practice and (ii) any other
assets with an individual book value of less than $100,000 and an
aggregate book value, together with all such other assets disposed
of since November 27, 1993, of less than $250,000);
(xiv) modified, amended or terminated in any respect
materially adverse to the business, assets, condition (financial or
otherwise) or results of operations of the Frozen Specialty
Business any of the Contracts, except terminations upon expiration
of a Contract's term;
(xv) paid, discharged or satisfied any material claim,
lien, encumbrance or liability (whether absolute, accrued,
contingent or otherwise and whether due or to become due) other
than in the ordinary course of business consistent with past
practice; or
(xvi) agreed, whether in writing or otherwise, to do any
of the foregoing.
(r) Compliance with Laws. Seller, the Company and the
Subsidiary are conducting the Frozen Specialty Business in
compliance with all applicable statutes, laws, ordinances, rules,
orders, codes, zoning restrictions, licenses, concessions, permits
and regulations of any governmental authority or instrumentality,
domestic or foreign (including common law), including but not
limited to, all applicable labor, civil rights, food and
occupational safety and health laws and regulations, except for
noncompliance disclosed in the Environmental Reports and
noncompliance which would not have, individually or in the
aggregate, a Material Adverse Effect. Seller, the Company and the
Subsidiary together have all governmental licenses and permits
necessary to conduct the Frozen Specialty Business as currently
conducted, such governmental licenses and permits are in full force
and effect, and no proceedings are pending (with respect to which
Seller, the Company or the Subsidiary has been served or otherwise
notified) or, to the Knowledge of Seller, threatened seeking the
revocation or limitation of any such governmental licenses or
permits, except in each case for governmental licenses and permits
the lack of possession of which by Seller, the Company or the
Subsidiary would not have, individually or in the aggregate, a
Material Adverse Effect. All material governmental licenses and
permits possessed by Seller, the Company or the Subsidiary and used
in the operation of the Frozen Specialty Business are listed in
Section 4(r) of the Disclosure Schedule. Neither the Company nor
the Subsidiary is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended. This Section 4(r) does
not relate to Taxes, all representations with respect to which are
the subject of Section 4(h).
(s) Environmental Matters.
(i) Each of the Company and the Subsidiary is, and the
Frozen Specialty Business is being conducted, in compliance with
all Environmental Laws relating to the property of the Frozen
Specialty Business or otherwise applicable to the Frozen Specialty
Business, except for noncompliance disclosed in the Environmental
Reports and noncompliance which would not have, individually or in
the aggregate, a Material Adverse Effect.
(ii) Except as disclosed in the Environmental Reports,
and except for allegations of noncompliance which would not have,
individually or in the aggregate, a Material Adverse Effect,
neither the Company nor the Subsidiary have received any written
communication within the three years preceding the date of this
Agreement from a governmental authority that alleges that the
Company or the Subsidiary is not in full compliance with any
Environmental Laws relating to the property of the Frozen Specialty
Business or otherwise applicable to the Frozen Specialty Business.
(iii) Except as disclosed in the Environmental Reports,
and except for Environmental Claims which would not have,
individually or in the aggregate, a Material Adverse Effect, there
have been no Environmental Claims made against the Company and the
Subsidiary within the three years preceding the date of this
Agreement.
(iv) To the Knowledge of Seller, except as disclosed in
the Environmental Reports, no Hazardous Substance has been disposed
of, spilled or otherwise released by the Company, the Subsidiary or
any other person on any parcel of Company Property, or by the
Company or the Subsidiary from any parcel of Company Property to
the surrounding environment or any site away from such parcel of
Company Property, at any time since such parcel of Company Property
was directly or indirectly acquired by Seller, in such a way as to
create any material current unpaid or future liability of the
Company or the Subsidiary under any Environmental Laws.
(v) To the Knowledge of Seller, except as disclosed in
the Environmental Reports, there are no underground storage tanks,
abandoned wells or landfills on any parcel of Company Property.
(vi) Seller has delivered or caused to be delivered to
Buyer, with respect to the Owned Properties and certain parcels of
Leased Property, true and complete copies of the environmental
reports described in Section 4(s) of the Disclosure Schedule
(collectively, the "Environmental Reports").
(vii) The following definitions apply to this
Section 4(s):
(A) "Hazardous Substance" shall have the meaning
set out in Section 101(14) of the Federal Comprehensive
Environmental Response, Compensation and Liability Act of
1980, 42 U.S.C. Section 9601(14), as in effect on the date
hereof, except that, for purposes of this Agreement, the
term also shall include (A) petroleum (crude oil) and
natural gas (whether existing as a gas or a liquid), and
(B) with respect to any Company Property, any substance
defined as hazardous or toxic by any state or local
regulatory agency having jurisdiction over the operations
of the Company or the Subsidiary at such Company
Property;
(B) "Environmental Laws" means all federal, state,
local and foreign laws, duties and regulations (including
common law) now in effect relating to pollution,
compensation for damage or injury caused by pollution or
protection of human health or the environment;
(C) "Environmental Claim" means any written
communication by a governmental authority alleging
potential liability of the Company or the Subsidiary with
respect to the Frozen Specialty Business (including,
without limitation, potential liability for investigatory
costs, cleanup costs, governmental response costs,
natural resource damages, property damages, personal
injuries or penalties), or by any other person
threatening litigation for alleged liability of the
Company or the Subsidiary with respect to the Frozen
Specialty Business (including, without limitation,
liability for property damages or personal injuries), in
either case arising out of, based upon or resulting from
(1) the presence, or release into the environment, of any
material or form of energy at any location, whether or
not owned by the Company or the Subsidiary or (2) any
violation, or alleged violation, of any Environmental
Laws.
(t) Employee and Labor Relations. Section 4(t) of the
Disclosure Schedule lists all written personnel policies, rules or
procedures applicable to employees of the Frozen Specialty
Business. As of November 27, 1993 and as of the last day
immediately preceding the Closing Date, the Company and the
Subsidiary had or will have paid in full to, or accrued on behalf
of, all employees of the Frozen Specialty Business all material
wages, salaries, vacation pay, commissions, bonuses (other than
bonuses payable under any incentive plan which is designated as an
"Executive Incentive Plan" in Section 4(p) of the Disclosure
Schedule, for all of which bonuses that are not settled at or prior
to the Closing Seller will remain liable after the Closing) and
other direct compensation for services performed by them to such
date, and all amounts required to be reimbursed to such employees
as of such date. Section 4(t) of the Disclosure Schedule lists all
collective bargaining agreements and other contracts with any labor
union representing employees of the Frozen Specialty Business to
which Seller, the Company or the Subsidiary is a party or by which
Seller, the Company or the Subsidiary is bound (collectively, the
"Collective Bargaining Agreements"), and all such agreements or
contracts currently being negotiated. No labor strikes, lockouts
or material labor disputes or work stoppages involving the
employees of the Frozen Specialty Business are, or at any time
during the three years immediately preceding the date of this
Agreement have been, pending or, to the Knowledge of Seller,
threatened against the Company or the Subsidiary. There are (i) no
unfair labor practice charges or grievances pending (with respect
to which Seller, the Company or the Subsidiary has been served or
otherwise notified) before the National Labor Relations Board or
any comparable foreign, state or local agency as of the date of
this Agreement relating to any past or present employee of the
Frozen Specialty Business, and (ii) to the Knowledge of Seller, no
union organizational campaigns presently in progress and no
existing questions concerning representation with respect to the
employees of the Frozen Specialty Business. Neither the Company
nor the Subsidiary has any existing bargaining obligations with any
labor organization that represents employees of the Frozen
Specialty Business. None of Seller, the Company or the Subsidiary
has received at any time during the three years immediately
preceding the date of this Agreement any written notice of any
complaints or charges alleging employment discrimination or
violations of employment laws relating to any past or present
employee of the Frozen Specialty Business which are currently
unresolved or which were resolved during such period following
commencement of a judicial or administrative proceeding. During
the three years immediately preceding the date of this Agreement,
the Company has not effectuated (i) a "plant closing" (as defined
in the Worker Adjustment and Retraining Notification Act (the "WARN
Act")) affecting any site of employment or one or more facilities
or operating units within any site of employment or facility of the
Frozen Specialty Business, or (ii) a "mass layoff" (as defined in
the WARN Act) affecting any site of employment or facility of the
Frozen Specialty Business; nor has either the Company or the
Subsidiary been affected by any transaction or engaged in layoffs
or employment terminations relating to the Frozen Specialty
Business sufficient in number to trigger application of any similar
state or local law. None of the employees of the Frozen Specialty
Business has suffered an "employment loss" (as defined in the WARN
Act) within ninety days prior to the Closing Date.
(u) Banks. Section 4(u) of the Disclosure Schedule sets
forth the name of each financial institution at which the Company
or the Subsidiary has a checking account, deposit account,
securities account, lock box, safe deposit box or other similar
safekeeping arrangement, the number or other identification of all
such accounts and arrangements, and the names of all persons
authorized to draw thereon or have access thereto.
(v) Major Customers and Suppliers. Section 4(v) of the
Disclosure Schedule lists (i) the names of the ten largest
customers (by revenues generated) of the Frozen Specialty Business,
and the approximate total amount of revenues of the Frozen
Specialty Business generated by each such customer, during the
nine-month period ended November 27, 1993, and (ii) the names of
the ten largest suppliers (by purchases made) of products to the
Frozen Specialty Business, and the approximate total amount of the
purchases made by the Frozen Specialty Business from each such
supplier, during such nine-month period. As of the date of this
Agreement, Seller has no Knowledge, based upon any notice received
by Seller, the Company or the Subsidiary from any such customer or
supplier, of any facts or circumstances which have resulted, or are
reasonably likely to result, in a termination of the business
relationships of the Company or the Subsidiary with such customer
or supplier, if termination of such business relationships would
have a Material Adverse Effect.
(w) Directors, Officers and Major Employees.
Section 4(w) of the Disclosure Schedule sets forth (i) a complete
and accurate list of the names and titles of all directors and
officers of the Company and the Subsidiary, and all employees of
the Frozen Specialty Business who report directly to the President
of Seller's Prepared Foods Division or whose annual base salary for
the fiscal year ended February 28, 1994 exceeds $100,000, (ii) the
family relationships, if any, among such persons, and (iii) the
annual base salary for the fiscal year ended February 28, 1994 (and
the annual bonuses for the immediately preceding fiscal year) of
each such person who is an employee of the Frozen Specialty
Business.
(x) Inventory. Substantially all inventory of the
Frozen Specialty Business disposed of by the Company or the
Subsidiary since November 27, 1993 has been disposed of in the
ordinary course of business and at prices and under terms that were
substantially consistent with the past practice of the Frozen
Specialty Business regarding the disposition of similar quantities
of inventory of similar quality. As of the date of this Agreement
and as of the Closing Date, the quantities of inventory of the
Frozen Specialty Business are or will be sufficient for the
operation of the Frozen Specialty Business as conducted at such
date.
(y) Intercompany Services. All material general and
administrative services provided by Seller or any of its affiliates
(other than the Company or the Subsidiary) to the Company or the
Subsidiary in connection with the operation of the Frozen Specialty
Business are described in Section 4(y) of the Disclosure Schedule.
(z) Disclosure. To the Knowledge of Seller, the
representations and warranties of Seller in this Agreement and the
statements contained in the Disclosure Schedule, when considered as
a whole, do not contain any untrue statement of a material fact and
do not omit to state any material fact necessary to make any such
representations, warranties and statements not misleading.
5. Covenants of Seller. Seller covenants and agrees as
follows:
(a) Access. Prior to the Closing, Seller will, and will
cause each of the Company and the Subsidiary to, give Buyer and its
officers, employees, agents and representatives reasonable access,
during normal business hours (and at all times during the weekend
immediately preceding the Closing Date) and upon reasonable notice,
to the personnel, facilities, properties, books and records of the
Company and the Subsidiary which relate to the Frozen Specialty
Business (including without limitation the work papers compiled by
Seller in connection with the preparation of the Closing Statement)
and will cause their officers to furnish Buyer with such financial
and operating data and other information with respect to the
business and properties of the Frozen Specialty Business as Buyer
may from time to time reasonably request, all to enable Buyer to
perform a full due diligence review of the business, assets and
operations of the Frozen Specialty Business and to review the
Closing Statement and resolve any disputes relating thereto;
provided, however, that (i) such access shall not unreasonably
disrupt the normal operations of Seller, the Company or the
Subsidiary, and (ii) Seller may excise from any books and records
to which Buyer and its officers, employees, agents and
representatives have access all information that does not relate to
the Frozen Specialty Business.
(b) Ordinary Conduct. Except as expressly contemplated
by this Agreement (including without limitation Sections 8(g) and
(h) hereof), from the date hereof to the Closing, Seller will and
will cause the Company and the Subsidiary to conduct the Frozen
Specialty Business in the ordinary course in substantially the same
manner as presently conducted and will cause the Company and the
Subsidiary to maintain their corporate existence in good standing,
maintain proper business and accounting records, and make all
reasonable efforts consistent with past practices to preserve their
business organization and relationships with their respective
material customers and suppliers, key employees and others with
whom they have a material business relationship. In addition,
except as expressly contemplated by this Agreement (including
without limitation Sections 8(g) and (h) hereof), prior to the
Closing, Seller will not permit the Company or the Subsidiary to do
any of the following without the prior written consent of Buyer:
(i) amend its charter or by-laws;
(ii) declare, pay or set aside for payment or making
any dividend or make any other distribution of any of its
assets with respect to the Shares or the capital stock of
the Subsidiary; provided, however, that (A) distributions
(as dividends, loans or advances) of any assets may be
made by the Subsidiary to the Company at any time prior
to the Closing, and (B) distributions (as dividends,
loans or advances) of cash may be made by the Company or
the Subsidiary to Seller at any time prior to the close
of business on the last day immediately preceding the
Closing Date (it being understood that the Company and
the Subsidiary intend to distribute directly or
indirectly to Seller on a daily basis substantially all
of their cash and that such intercompany distributions
will be subject to Section 8(g) hereof);
(iii) redeem or otherwise acquire any shares of its
capital stock, or issue, or authorize or propose the
issuance of, any capital stock or any option, warrant or
right relating thereto;
(iv) adopt or amend any Seller's Plan maintained by
the Company or the Subsidiary (rather than by Seller), or
adopt or amend any Seller's Plan (other than any
severance plan for which Seller (and not the Company or
the Subsidiary) shall be solely obligated) maintained by
Seller unless such Seller's Plan also covers other
employees of Seller or any of its affiliates in addition
to employees of the Frozen Specialty Business and Seller
notifies Buyer of such adoption or amendment promptly
after effecting the same, or enter into or amend any
Collective Bargaining Agreement;
(v) grant to any employee of the Frozen Specialty
Business any increase in compensation payable or to
become payable or other material benefits, except as may
be required under existing agreements or in the ordinary
course of business consistent with past practice or
increases for which Seller or any of its affiliates
(other than the Company or the Subsidiary) shall be
solely obligated; or permit any sums or other corporate
assets to be paid to or withdrawn from the Company or the
Subsidiary by the directors or officers of the Company or
the Subsidiary, except for ordinary compensation and
fees, payments under established benefit plans and
ordinary expense reimbursement and similar payments;
(vi) incur, assume or guarantee any indebtedness for
borrowed money other than intercompany indebtedness to be
cancelled without repayment effective at the Closing
pursuant to Section 8(g) hereof and other indebtedness
incurred in the ordinary course of business consistent
with past practice that, together with all such other
indebtedness incurred since November 27, 1993, does not
exceed $50,000 in aggregate principal amount and is
prepayable at any time without penalty, provided that in
no event shall the Company or the Subsidiary incur,
assume or guarantee any long-term indebtedness for
borrowed money;
(vii) grant any mortgage, pledge, lien or
encumbrance on, or agree to the imposition of any
restriction or charge of any kind (including any lease
or license) with respect to, any of its assets, other
than pursuant to purchase money agreements, conditional
sales contracts, capital leases, operating leases or
licenses the non-disclosure of which in Section 4(m)(iv),
(v) or (x) of the Disclosure Schedule would not
constitute a misrepresentation under Section 4(m)(iv),
(v) or (x) of this Agreement;
(viii) cancel any indebtedness for borrowed money
owing to it having an aggregate value, together with all
other such indebtedness cancelled since November 27,
1993, of more than $50,000, or waive any other claims or
rights of material value (other than settlements of trade
accounts in the ordinary course of business);
(ix) except for distributions (as dividends, loans
or advances) permitted under clause (ii) above and except
for intercompany transactions in the ordinary course of
business, loan or advance any amount to, or sell,
transfer or lease any of its assets to, or enter into any
agreement or arrangement with, Seller or any of its
affiliates (other than the Company or the Subsidiary);
(x) make any change in any method of accounting or
accounting practice or policy other than those required
by generally accepted accounting principles or
contemplated in the Statement of Principles and
Methodology;
(xi) purchase or otherwise acquire any assets of the
Frozen Specialty Business or make any capital
expenditures relating to the Frozen Specialty Business
(other than (i) purchases of inventory in the ordinary
course of business consistent with past practice and
(ii) capital expenditures and other purchases of assets
which, together with all other capital expenditures and
other purchases of assets relating to the Frozen
Specialty Business made since November 27, 1993, do not
exceed $2,000,000 in the aggregate);
(xii) sell or otherwise dispose of any of the assets
of the Frozen Specialty Business (other than
(i) inventory in the ordinary course of business
consistent with past practice and (ii) any other assets
with an individual book value of less than $100,000, and
an aggregate book value, together with all such other
assets disposed of since November 27, 1993, of less than
$250,000);
(xiii) modify, amend or terminate in any respect
materially adverse to the business, assets, condition
(financial or otherwise) or results of operations of the
Frozen Specialty Business any of the Contracts, except
terminations upon expiration of a Contract's term;
(xiv) pay, discharge or satisfy any material claim, lien,
encumbrance or liability (whether absolute, accrued,
contingent or otherwise and whether due or to become due)
other than in the ordinary course of business consistent with
past practice; or
(xv) agree, whether in writing or otherwise, to do
any of the foregoing.
(c) Confidentiality. Seller will keep confidential and
cause its affiliates to keep confidential all non-public
information relating to the Frozen Specialty Business or the
Company or Subsidiary (other than any such information which
relates to the Surimi Business), except for (i) disclosures
required by law or administrative process (including without
limitation disclosures required in Tax Returns or in other
governmental filings) and disclosures in the defense of any Third
Party Claim (as defined in Section 11(f)) or the contest of any Tax
Claim (as defined in Section 11(g)), provided that Seller shall
provide Buyer with prompt advance notice of any such required
disclosure so that, if appropriate, Buyer may seek an appropriate
protective order with respect to such disclosure, and
(ii) information which becomes public other than as a result of a
breach of this Section 5(c) or is disclosed by Seller in the
defense of any claim by Buyer or any of its affiliates against
Seller. Seller will, to the extent practicable, excise from any
books and records of Seller or any of its affiliates that relate to
both the Frozen Specialty Business and any other businesses of
Seller or any of its affiliates all information that relates solely
to the Frozen Specialty Business prior to the disclosure of such
books and records to any third party.
(d) Insurance. Seller shall keep, or cause to be kept,
all insurance policies set forth in Section 4(o) of the Disclosure
Schedule, or equivalent replacements therefor, in full force and
effect through the Closing.
(e) Resignations. At the Closing, Seller shall cause to
be delivered to Buyer duly signed resignations, effective
immediately after the Closing, of all directors and officers of the
Company and the Subsidiary (other than those directors and officers
designated in writing by Buyer to Seller at least five business
days prior to the Closing Date), or shall take such other action as
is necessary to assure that such persons are not directors or
officers of the Company or the Subsidiary after the Closing.
(f) Covenant Not to Compete.
(i) Seller hereby agrees that, except as hereinafter
provided, for a period commencing on the Closing Date and
terminating on the third anniversary of the Closing Date, it will
not, except in the case of a Permitted Investment or a Permitted
Co-Pack Arrangement (each as hereinafter defined), without Buyer's
prior written consent, directly or indirectly engage or participate
in (or become a partner, co-venturer, co-marketer or shareholder in
or otherwise participate in the management or operation of any
venture or enterprise of any kind that engages in) the business of
(x) manufacturing any Restricted Products (as hereinafter defined)
for sale anywhere in the Non-Competition Area hereinafter referred
to (the "Restricted Manufacturing Business") or (y) distributing
anywhere in the Non-Competition Area any Restricted Products
manufactured for Seller, under Seller's labels, pursuant to co-pack
or other arrangements with any person other than the Company (the
businesses described in clauses (x) and (y) above being herein
collectively called the "Restricted Business"), provided that
Seller may directly or indirectly own in the aggregate up to 5% of
any outstanding class of equity securities of any entity engaged in
the Restricted Business or any portion thereof in the
Non-Competition Area, the equity securities of which are actively
traded on a national or regional stock exchange, in the national
over-the-counter market in the United States or in an
over-the-counter market in Canada. It is understood that none of
(A) the marketing or distribution by Seller, directly or
indirectly, of products of any nature manufactured by others (other
than products manufactured for Seller, under Seller's labels,
pursuant to co-pack or other arrangements with any person other
than the Company), (B) the manufacture by Seller, directly or
indirectly, of products currently manufactured by the Meat unit of
Seller's Prepared Foods Division, or (C) the manufacture by Seller,
directly or indirectly, of analog seafood products (including
without limitation appetizers containing analog seafood products),
shall be deemed to constitute a Restricted Business for any purpose
hereof. As used herein, the phrase "Restricted Products" shall
mean any products of a type manufactured or under development by
the Frozen Specialty Business at any time during the one-year
period immediately prior to the Closing, including without
limitation frozen appetizers, frozen Italian products, frozen
Mexican products, frozen entrees and frozen portion meats, other
than products of a nature manufactured for sale by the Meat unit of
Seller's Prepared Foods Division as described in Section 4(m)(iii)
of the Disclosure Schedule (provided that a product shall not be
deemed to be "under development" at any time during the one-year
period immediately prior to the Closing if a prototype of such
product has not been produced by the Company during such period, as
evidenced by the written records maintained by the Company's test
kitchens). As used herein, the phrase "Non-Competition Area" shall
mean the United States and Canada.
(ii) For purposes of this Section 5(f), a Permitted
Investment shall be defined as:
(A) an acquisition after the Closing of an entity
(or all or any portion of its equity interests) or
business (the entity or business so acquired being herein
called the "Acquired Business") engaged in the Restricted
Manufacturing Business, if that portion of the Acquired
Business that is engaged in the Restricted Manufacturing
Business generated less than $15,000,000 in revenues and
accounted for less than 15% of the total revenues of the
Acquired Business during the most recently completed
fiscal year of the Acquired Business preceding the date
of the acquisition; and
(B) an acquisition after the Closing (other than
under clause (A) above) of an Acquired Business engaged
in the Restricted Manufacturing Business (or all or any
portion of its equity interests), if (1) that portion of
the Acquired Business that is engaged in the Restricted
Manufacturing Business (the "Competing Business")
generated less than $50,000,000 in revenues and accounted
for less than 25% of the total revenues of the Acquired
Business during the most recently completed fiscal year
of the Acquired Business preceding the date of the
acquisition, (2) Seller gives written notice to Buyer of
the proposed acquisition, the identity of the Acquired
Business and a description of the businesses conducted by
it, including without limitation the Competing Business,
at least ten days before the acquisition if Seller then
has Knowledge that the Acquired Business includes a
Competing Business (or if Seller does not then have such
Knowledge, within ten days after Seller acquires such
Knowledge), (3) Seller has at all times prior to the
disposition of the Competing Business referred to in
clause (4) below the direct or indirect legal right to
dispose of the Competing Business without the consent of
any other holder of a debt or equity interest in the
Acquired Business, and (4) Seller uses its best efforts
to dispose of, or cause the Acquired Business to dispose
of, the Competing Business on commercially reasonable
terms within 18 months after the acquisition.
(iii) Prior to any disposition of a Competing Business
pursuant to clause (ii)(B)(4) above or any solicitation of
proposals or offers from anyone other than Buyer to purchase a
Competing Business to be so disposed of, Seller shall give notice
to Buyer (the "Seller's Notice") of its intent to dispose of, or
cause the Acquired Business to dispose of, such Competing Business.
For 30 days after receipt of the Seller's Notice, Buyer from time
to time shall be given information relating to the Competing
Business of a nature that Seller customarily would give prospective
buyers of the Competing Business at a comparable stage of
evaluation or negotiation (subject to customary confidentiality
obligations of Buyer) and the opportunity to discuss with
representatives of Seller the possible acquisition of the Competing
Business. During the 30 day period referred to above, (A) Buyer
promptly shall give notice to Seller at such time, if any, as it
ceases to be interested in acquiring the Competing Business, in
which event this clause (iii) shall be of no further effect, and
(B) unless any such notice shall have been given by Buyer, Seller
shall negotiate in good faith with Buyer to determine whether the
parties can reach agreement concerning an acquisition of the
Competing Business. If at the end of such period, or any extension
thereof agreed to by the parties, Seller shall determine that it
will be unable to reach such an agreement with Buyer, then Seller
may sell the Competing Business to any person who is not an
affiliate of Seller at such price and on such other terms as Seller
shall in its sole discretion determine without being subject to any
further obligation to Buyer pursuant to this clause (iii) (provided
that if Seller determines after the end of such period to engage in
a general solicitation of bids for the Competing Business, Buyer
shall be given the same opportunity to bid for the Competing
Business as is afforded other prospective buyers).
(iv) For purposes of this Section 5(f), a Permitted
Co-Pack Arrangement shall be defined as:
(A) in the case of an acquisition after the Closing
of an Acquired Business (or all or any portion of its
equity interests) which at the time of such acquisition
distributes one or more Restricted Products in the
Non-Competition Area which are manufactured for it, under
its labels, pursuant to one or more co-pack or other
arrangements, the continued distribution after such
acquisition of such Restricted Products pursuant to one
or more co-pack or other arrangements; and
(B) the distribution by Seller of any Restricted
Products in the Non-Competition Area which are
manufactured for Seller, under Seller's labels, pursuant
to one or more co-pack or other arrangements with one or
more persons other than the Company, if, prior to
entering into such co-pack or other arrangements,
(i) Seller shall have requested that the Company co-pack
such Restricted Products for Seller in accordance with
the bona fide product specifications and other non-price
terms specified by Seller, and (ii) the Company shall
have failed, within a reasonable period of time (not to
exceed seven days) after the making of such request, to
have agreed to co-pack such Restricted Products for
Seller in accordance with such product specifications and
other non-price terms and at a price per unit which is no
higher than the lowest price per unit charged at the time
by the Company to its similar customers purchasing on
similar non-price terms similar quantities of Restricted
Products meeting similar product specifications (or, if
no such customer then exists, for a commercially
reasonable price).
(v) Seller hereby also agrees that, for a period
commencing on the Closing Date and terminating on the third
anniversary of the Closing Date, it will not, without Buyer's prior
written consent, directly or indirectly enter into any agreement or
arrangement with any person other than the Company to purchase any
Restricted Products manufactured by such person, if Seller should
have reasonably known that such agreement or arrangement would,
given the volume of Restricted Products to be acquired under such
agreement or arrangement and the then existing physical capacity of
such person to manufacture such Restricted Products and utilization
by such person of such physical capacity, cause such person to
materially expand such physical manufacturing capacity or to add
additional employee shifts to produce such Restricted Products
(unless any such expansion of physical manufacturing capacity or
addition of employee shifts was primarily caused by factors other
than the entering into of such agreement or arrangement).
(vi) Seller hereby further agrees that, except as
hereinafter provided, for a period commencing on the Closing Date
and terminating on the first anniversary of the Closing Date, it
will not, without Buyer's prior written consent, directly or
indirectly solicit any person who was at any time during the
one-year period immediately prior to the Closing Date a customer of
the Frozen Specialty Business to purchase from Seller any
Restricted Products acquired by Seller from any person other than
the Company, provided that if Seller directly or indirectly
acquires after the Closing an Acquired Business (or all or any
portion of its equity interests) which at the time of such
acquisition sells one or more Restricted Products to any such
customers of the Frozen Specialty Business, such Acquired Business
may continue after such acquisition to solicit such customers to
purchase such Restricted Products.
(vii) Buyer and Seller agree that the duration and the
Non-Competition Area for which the covenant not to compete set
forth in this Section 5(f) is to be effective are reasonable.
However, in the event that any court determines that the duration
or the Non-Competition Area, or both of them, are unreasonable and
that such covenant is to that extent unenforceable, Buyer and
Seller agree that the covenant shall remain in full force and
effect for the greatest time period not longer than that duration
and for the greatest area within the Non-Competition Area that
would not render it unenforceable. Buyer and Seller agree that the
covenant shall be deemed to be a series of separate covenants, one
for each and every state, county or province in the Non-Competition
Area where the covenant not to compete is intended to be effective.
(g) Delivery of Records. At the Closing or as soon
thereafter as practicable, but in no event later than 30 days after
the Closing Date, Seller will deliver or cause to be delivered to
Buyer all corporate records of the Company and the Subsidiary, and
all other original agreements, documents, books and records
relating primarily to the Frozen Specialty Business in the
possession of Seller to the extent not then in the possession of
the Company or the Subsidiary (other than work papers relating to
Taxes, which Seller may retain subject to Buyer's rights of access
pursuant to Section 12(c) hereof); provided, however, that
(i) subject to Seller's obligations under Section 5(c) hereof,
Seller shall have the right to keep copies (but not originals) of
all such Tax Returns and accounting books and records and to use
such copies, and (ii) with respect to books and records (including
without limitation Tax Returns and accounting books and records)
relating to both the Frozen Specialty Business, on the one hand,
and to any other business or operation presently or formerly
conducted by Seller or any of its affiliates, on the other hand,
(A) subject to Seller's obligations under Section 5(c) hereof,
Seller shall have the right to keep copies (but not originals) of
such books and records and to use such copies or otherwise transfer
them to a third party, and (B) excerpts from such books and records
that do not relate to the Frozen Specialty Business may be excised
from the books and records that are delivered to Buyer.
(h) No Shopping. Seller will not, and will cause the
Company and the Subsidiary not to, directly or indirectly, solicit,
encourage, facilitate, participate or engage in (including by way
of furnishing any nonpublic information concerning the business,
properties or assets of the Frozen Specialty Business), any
Acquisition Proposal (as defined below). Seller will notify Buyer
promptly if any formal, written Acquisition Proposal is received by
Seller, the Company or the Subsidiary (but need not disclose to
Buyer the identity of the person making such Acquisition Proposal).
As used in this Agreement, "Acquisition Proposal" shall mean any
proposal received by Seller, the Company or the Subsidiary from a
person other than Buyer for a merger or other business combination
involving the Company or the Subsidiary, for the acquisition of a
substantial equity interest in the Company or the Subsidiary, or
for the acquisition of a substantial portion of the assets of the
Frozen Specialty Business.
(i) Current Information. During the period from the
date of this Agreement to the Closing, Seller (i) shall notify or
cause the Company and the Subsidiary to notify Buyer of (A) any
change in the normal course of business or operations of the Frozen
Specialty Business that would have a Material Adverse Effect,
(B) the making or commencement of any governmental complaints,
investigations or hearings relating to the Frozen Specialty
Business of which Seller has Knowledge that would have a Material
Adverse Effect (or the receipt by Seller, the Company or the
Subsidiary of any communications indicating that the same may be
contemplated), (C) the institution or threat of any material
litigation relating to the Frozen Specialty Business of which
Seller has Knowledge, or the settlement of any material litigation
relating to the Frozen Specialty Business, and (D) any facts or
circumstances of which Seller first obtains Knowledge after the
date of this Agreement, based upon any notice received by Seller,
the Company or the Subsidiary from any customer or supplier named
in Section 4(v) of the Disclosure Schedule, which have resulted, or
are reasonably like to result, in a termination of the business
relationships of the Company or the Subsidiary with such customer
or supplier, if termination of such business relationships would
have a Material Adverse Effect; and (ii) shall keep Buyer fully
informed of such events.
(j) No Representations or Warranties. Seller
acknowledges that neither Buyer nor any other person has made any
representation or warranty, expressed or implied, as to the
accuracy or completeness of any information regarding Buyer not
included in this Agreement or in any certificate delivered pursuant
hereto, and neither Buyer nor any other person will have or be
subject to any liability to Seller, the Company, the Subsidiary or
any other person resulting from the distribution to Seller, the
Company or the Subsidiary, or Seller's use, of any such
information, except as expressly provided in this Agreement.
(k) No Solicitation. For a period of one year from the
date of this Agreement, Seller will not, directly or indirectly,
(i) affirmatively solicit the employment (including any consulting
or similar arrangement) of any employee of the Frozen Specialty
Business listed in Section 5(k) of the Disclosure Schedule at any
time while such person is employed in the Frozen Specialty
Business, or (ii) affirmatively solicit any such person to
otherwise leave such person's employment with the Frozen Specialty
Business.
6. Representations and Warranties of Buyer. Buyer
hereby represents and warrants to Seller that the statements
contained in this Section 6 are true and correct as of the date of
this Agreement.
(a) Organization and Authority of Buyer. Buyer is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. Buyer has full corporate
power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. All corporate
acts and proceedings required to be taken to authorize the
execution, delivery and performance by Buyer of this Agreement and
the consummation by Buyer of the transactions contemplated hereby
have been duly and properly taken, including the due and valid
authorization of the Board of Directors of Buyer. This Agreement
has been duly executed and delivered by Buyer and, assuming the due
authorization, execution and delivery of this Agreement by Seller,
constitutes a valid and binding obligation of Buyer, enforceable
against Buyer in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, moratorium
and other similar laws affecting creditors' rights generally and by
general principles of equity (regardless of whether enforceability
is considered in a proceeding in equity or at law). The execution
and delivery by Buyer of this Agreement do not, and the
consummation by Buyer of the transactions contemplated hereby and
compliance by Buyer with any of the provisions hereof will not,
with or without notice or passage of time, or both, (i) conflict
with, or result in any violation of, any provision of the charter
or by-laws of Buyer, (ii) conflict with, result in any violation
of, or constitute a default under, any instruments, contracts,
commitments or agreements to which Buyer is a party or by which
Buyer or the property or assets of Buyer are bound (except where
any such conflict, violation or default would not adversely effect
the validity of this Agreement or Buyer's ability to consummate the
transactions contemplated hereby or to comply with the provisions
hereof), or (iii) conflict with, or result in any violation of, any
judgment, order, writ, injunction or decree to which Buyer has been
specifically identified as subject, or any statute, law, ordinance,
rule or regulation applicable to Buyer or its property or assets
(except where any such conflict or violation would not adversely
effect the validity of this Agreement or Buyer's ability to
consummate the transactions contemplated hereby or to comply with
the provisions hereof). No material consent, approval, license,
permit, order or authorization of, or waiver by, or registration,
declaration or filing with, any court, administrative agency or
commission or other governmental authority or instrumentality,
domestic or foreign, is required to be obtained or made by or with
respect to Buyer in order for Buyer to execute, deliver and perform
this Agreement or to consummate the transactions contemplated
hereby other than compliance by Buyer with and filings by Buyer
under the HSR Act, and compliance by Buyer with and filings by
Buyer under Section 13(a) or 15(d), as the case may be, of the
Securities Exchange Act of 1934, as amended.
(b) Securities Laws. The Shares purchased by Buyer
pursuant to this Agreement are being acquired for investment only
and not with a view to, or for sale in connection with, any public
distribution thereof, nor with any present intention of
distributing or selling the Shares.
(c) Litigation; Decrees. There are no judgments,
orders, injunctions or decrees of any court, arbitrator,
administrative agency or commission or other governmental authority
or instrumentality, domestic or foreign, to which Buyer is subject
which prohibit or enjoin, or otherwise adversely affect the ability
of Buyer to consummate, the transactions contemplated hereby.
There are no legal, administrative, arbitration or other
proceedings or governmental investigations pending (with respect to
which Buyer has been served or otherwise notified) or, to the
knowledge of Buyer, threatened against Buyer which, if decided
adversely to Buyer, would adversely affect the ability of Buyer to
consummate the transactions contemplated hereby.
(d) Availability of Funds. Buyer has delivered to
Seller a true and correct copy of a commitment of Chemical Bank to
provide financing which, together with Buyer's available cash, is
sufficient to enable Buyer to consummate the transactions
contemplated by this Agreement, and such commitment is in full
force and effect.
7. Covenants of Buyer. Buyer covenants and agrees as
follows:
(a) Confidentiality. Buyer acknowledges that the
information being provided to it by Seller is subject to the terms
of a confidentiality agreement between Buyer and Seller relating to
the Frozen Specialty Business (the "Confidentiality Agreement"),
the terms of which are incorporated herein by reference. The
Confidentiality Agreement shall remain in effect after the Closing
as to all confidential information that does not relate to the
Frozen Specialty Business.
(b) No Representations or Warranties. Buyer
acknowledges that none of Seller, the Company, the Subsidiary or
any other person has made any representation or warranty, expressed
or implied, as to the accuracy or completeness of any information
regarding Seller, the Company, the Subsidiary or the Frozen
Specialty Business not included in this Agreement or in any
certificate delivered pursuant hereto, and none of Seller, the
Company, the Subsidiary or any other person will have or be subject
to any liability to Buyer or any other person resulting from the
distribution to Buyer, or Buyer's use, of any such information,
except as expressly provided in this Agreement.
(c) Retention of Records. Without limiting the
provisions of Sections 11 and 12 hereof, unless otherwise consented
to in writing by Seller (which consent shall not be unreasonably
withheld), Buyer shall at no time after the Closing cause or permit
the Company or the Subsidiary to destroy or otherwise dispose of
any of its books and records existing as of the Closing, which
books and records are less than seven years old at the time of such
proposed destruction, without first offering to surrender to the
Seller such books and records or any portion thereof.
8. Mutual Covenants. Each of Seller and Buyer
covenants and agrees as follows:
(a) Consents. With respect to (i) consents to the
transactions contemplated by this Agreement required from parties
to instruments, contracts, commitments, agreements or arrangements
relating primarily to the Frozen Specialty Business, and (ii) new
governmental licenses, permits and authorizations required as a
result of the change in control of the Company and the Subsidiary
occurring at Closing in order for the Company and the Subsidiary to
conduct the Frozen Specialty Business following the Closing in the
same manner in which the Frozen Specialty Business was conducted
prior to the Closing, Seller and Buyer shall cooperate in any
commercially reasonable manner to attempt to obtain any such
consents and any such new governmental licenses, permits or
authorizations; provided, however, that such cooperation shall not
include any requirement of Seller, Buyer or any of their respective
affiliates to pay money or offer or grant any accommodation
(financial or otherwise) to any third party.
(b) Cooperation. Buyer and Seller shall cooperate with
each other and shall cause their respective, and their respective
affiliates', officers, employees, agents and representatives to
cooperate with each other for a period of 60 days after the Closing
Date to ensure the orderly transition of the Frozen Specialty
Business from Seller to Buyer and to minimize any disruption to the
respective businesses of Seller, Buyer, the Company and the
Subsidiary that might result from the transactions contemplated
hereby. Neither party shall be required by this Section 8(b) to
take any action that would unreasonably interfere with the conduct
of its or its affiliate's businesses.
(c) Use of Trademarks.
(i) With respect to all stationery and packaging
materials of the Company or the Subsidiary which are owned or on
order at the time of Closing and which bear the corporate name of
Seller, the Company or any other affiliate of Seller (other than
the Subsidiary), the name of the Prepared Foods Division of Seller,
or any other trade name, trademark, service mark or logo of Seller
or any affiliate of Seller other than those set forth in
Section 4(l) of the Disclosure Schedule (collectively, the
"Marks"), Seller hereby grants to the Company and the Subsidiary,
effective at the time of Closing, the nontransferable right and
non-exclusive license to use for a reasonable time (not to exceed
12 months) after the Closing all of such stationery and packaging
materials in the ordinary course of conduct of the Frozen Specialty
Business. Buyer agrees that the nature and quality of all products
of the Company or the Subsidiary sold under any of the Marks shall
substantially conform to Seller's past practices, standards and
specifications. If Seller at any time during the Company's or the
Subsidiary's use of such materials after the Closing reasonably
determines that the requirements of the foregoing provision have
not been complied with in all material respects, Seller shall have
the right to immediately terminate the right and license granted
under this Section 8(c) by giving written notice of such
termination to Buyer.
(ii) Immediately after the Closing, Buyer shall take and
cause the Company to take all corporate actions as may be necessary
or required to change the Company's name to a name that does not
include the word "Multifoods" or any variant thereof, including
without limitation the filing with the Delaware Secretary of State
of a certificate of amendment to the Company's charter reflecting
such name change, and shall promptly thereafter file with the
appropriate governmental authorities in each and every jurisdiction
specified in Section 4(c) of the Disclosure Schedule in which the
Company is qualified to do business as a foreign corporation
appropriate forms reflecting such name change.
(iii) As soon as reasonably practicable following the
Closing (but in any event within six months after the Closing
Date), Buyer shall cause the Company and the Subsidiary to relabel
all of their vehicles, building signs and other tangible fixed
assets bearing any of the Marks.
(iv) Other than as contemplated under clause (i), (ii)
or (iii) above, Buyer shall not, without the prior written consent
of Seller, use or permit the Company or the Subsidiary at any time
after the Closing to use in any manner any of the Marks.
(d) Publicity. Seller and Buyer agree that no public
release or announcement concerning the transactions contemplated
hereby shall be issued by either party or the Company prior to the
Closing without the prior written consent of the other party,
except as such release or announcement may be required by law or
the rules or regulations of any United States or foreign securities
exchange, in which case the party required to make the release or
announcement shall, if practicable under the circumstances, allow
the other party reasonable time to comment on such release or
announcement in advance of such issuance.
(e) Best Efforts. Subject to the terms and conditions
of this Agreement (including the limitations set forth in
Section 8(a)), each party will use its best efforts as promptly as
practicable to satisfy all conditions to Closing set forth in this
Agreement that are within such party's control.
(f) Filings. Each of Seller and Buyer will as promptly
as practicable, but in no event later than five days following the
execution and delivery of this Agreement, file with the United
States Federal Trade Commission (the "FTC") and the United States
Department of Justice (the "DOJ") the notification and report form
required for the transactions contemplated hereby and any
supplemental information requested in connection therewith pursuant
to the HSR Act. Such notification and report form and all such
supplemental information filed by Buyer or Seller will be in
substantial compliance with the requirements of the HSR Act. All
filing fees under the HSR Act will be paid by Buyer. Subject to
the terms and conditions of this Agreement (including the
limitations set forth in Section 8(a)), each of Seller and Buyer
will use their best efforts to make or cause to be made all such
other filings and submissions, if any, as may be required under
applicable laws and regulations for the consummation of the
transactions contemplated by this Agreement. Each of Buyer and
Seller shall furnish to the other such necessary information and
reasonable assistance as the other may request in connection with
its preparation of any of the foregoing filings or submissions.
Seller and Buyer shall keep each other apprised of the status of
any communications with, and inquiries or requests for additional
information from, the FTC or the DOJ, and shall use their best
efforts to comply promptly with any such inquiry or request. Each
of Seller and Buyer will request the acceleration of the
termination of the waiting period required under the HSR Act as a
condition to the purchase and sale of the Shares.
(g) Intercompany Accounts. Buyer and Seller agree that
(i) all intercompany accounts between the Company or the
Subsidiary, on the one hand, and Seller or any of its other
affiliates, on the other hand (including without limitation all
receivables of the Company or the Subsidiary for cash advanced
directly or indirectly to Seller and all payables of the Company or
the Subsidiary for direct or indirect overdrafts on Seller's bank
accounts), shall be cancelled effective at the Closing
(automatically and without any repayment or other action of Buyer,
the Company, the Subsidiary or Seller), which cancellation shall be
treated as a distribution and/or a contribution to capital, as the
case may be, and (ii) Closing Net Assets shall be determined after
giving effect to such cancellation.
(h) Disposition of Surimi Business. Buyer and Seller
acknowledge that, prior to the Closing, Seller shall (i) cause the
Company to transfer to any affiliate of Seller designated by it
(for no consideration) all of the assets of the Company (the
"Surimi Assets") primarily constituting, or primarily used in the
conduct of, its business of manufacturing, marketing and
distributing surimi-based analog seafood products (the "Surimi
Business"), including without limitation the assets described in
Section 8(h)(i) of the Disclosure Schedule, which transferred
assets shall in no event include (A) the distribution facilities
located in Rialto, California and Noblesville, Indiana or (B) the
headquarters of Seller's Prepared Foods Division located in
Riverside, California; (ii) cause the Company to transfer to such
affiliate all persons then employed by the Company primarily in
connection with the Surimi Business, including without limitation
each such person on medical, disability, family or other leave of
absence, and each divisional employee named in Section 8(h)(ii) of
the Disclosure Schedule, which transferred employees shall in no
event include any person employed at the distribution facilities or
the headquarters referred to above other than the persons named in
Section 8(h)(ii) of the Disclosure Schedule; and (iii) cause such
affiliate to assume all of the liabilities of the Company (whether
known or unknown, asserted or unasserted, absolute or contingent,
liquidated or unliquidated, or due or to become due) primarily
relating to the ownership of the Surimi Assets or the conduct by
the Company of the Surimi Business (the "Surimi Liabilities").
Buyer and Seller agree that to effectuate such transfers, the
Company may adopt a "Plan of Liquidation" under Section 332 of the
Code. The documents executed to effect the foregoing transactions
shall be in form and substance reasonably satisfactory to Buyer.
As used in this Agreement, the term "Frozen Specialty Business"
shall mean the Company's and the Subsidiary's business of
manufacturing, marketing and distributing appetizers, Italian
products, Mexican products, entrees and portion meats, including
all products listed in Section 8(h)(iii) of the Disclosure
Schedule, and all references in this Agreement to the employees of
the Frozen Specialty Business shall be deemed to include all
persons employed by the Company or the Subsidiary, including those
working at the distribution facilities and headquarters referred to
above, other than any such person employed primarily in connection
with the Surimi Business.
(i) Certain Contracts and Agreements. Subject to the
provisions set forth below, effective at the Closing (automatically
and without any further action of Buyer, the Company or Seller)
(i) Seller shall assign to the Company all of Seller's rights, if
any, under all Collective Bargaining Agreements, Contracts and
other instruments, contracts, commitments, agreements or
arrangements which are described in Section 4(i), 4(j), 4(l), 4(m)
or 4(t) of the Disclosure Schedule, and (ii) without affecting the
indemnification obligations of Buyer, the Company and the
Subsidiary under Section 11 of this Agreement, the Company shall
assume all of Seller's obligations and liabilities, if any, under
such Collective Bargaining Agreements, Contracts and other
instruments, contracts, commitments, agreements or arrangements
(including without limitation Seller's obligations, if any, under
the Collective Bargaining Agreements to participate in the Western
Conference of Teamsters multiemployer pension plan (the "Western
Conference Plan") and all other multiemployer plans referred to in
the Collective Bargaining Agreements), but only to the extent such
obligations or liabilities (x) have been included in the final
determination of Closing Net Assets and taken into account in the
calculation of the Adjusted Purchase Price or (y) accrue after the
Closing. To the extent requested by Seller, Buyer shall use all
reasonable efforts to reach, or cause the Company to reach,
agreements with the local unions that are parties to the Collective
Bargaining Agreements that reflect the agreements of Seller and
Buyer with respect to the Collective Bargaining Agreements set
forth above and in Section 9 hereof. Notwithstanding anything
stated above in this Section 8(i), if the Closing shall occur as a
result of satisfaction or waiver of the conditions set forth in
Sections 3(a) and 3(b) hereof, any instrument, contract,
commitment, agreement or arrangement described in Section 4(i),
4(j), 4(l), 4(m) or 4(t) of the Disclosure Schedule or any right or
obligation thereunder that is not capable of being assigned by
Seller to, or assumed by, the Company without the approval, consent
or waiver of a third party shall not be deemed to have been
assigned or assumed pursuant to this Section 8(i) unless such
approval, consent or waiver shall have been obtained prior to the
Closing, and neither Seller nor Buyer shall be deemed to have
violated this Section 8(i) as a result of such non-assignment or
non-assumption, provided that Seller hereby agrees to hold its
interest in the benefits thereof in trust for the Company or to
enter into such other arrangements as Buyer may reasonably request
in order to permit the Company to obtain the intended benefits
therefrom, and Buyer agrees to indemnify Seller and hold it
harmless, and cause the Company to indemnify Seller and hold it
harmless, from any obligations and liabilities thereunder, but only
to the extent such obligations or liabilities (x) have been
included in the final determination of Closing Net Assets and taken
into account in the calculation of the Adjusted Purchase Price or
(y) accrue after the Closing. In such event Seller and Buyer agree
to use all commercially reasonable efforts following the Closing to
obtain all necessary approvals, consents and waivers to complete
such assignments and assumptions (provided that neither Seller nor
Buyer or their affiliates shall be required to pay money or offer
or grant any accommodation (financial or otherwise) to any third
party to obtain any such approval, consent or waiver), and shall
promptly execute, and Buyer shall cause the Company to promptly
execute, all documents necessary to complete such assignments and
assumptions if such approvals, consents or waivers are obtained.
(j) Disclosure Supplements. From time to time prior to
the Closing, Seller will promptly supplement or amend the
Disclosure Schedule with respect to any matter hereafter arising
which would make any representation or warranty set forth in
Section 4 inaccurate if updated to the Closing Date or as is
necessary to correct any information in the Disclosure Schedule or
in any representation or warranty of Seller made in Section 4. For
purposes of determining the fulfillment of the conditions set forth
in Section 3(a)(i) hereof prior to the Closing and the accuracy of
the representations and warranties contained in Section 4 if the
Closing does not occur, the Disclosure Schedule shall be deemed to
include only that information contained therein on the date of this
Agreement and shall be deemed to exclude any information contained
in any subsequent supplement or amendment thereto. However, for
purposes of determining the accuracy of the representations or
warranties of Seller contained in Section 4 or the liability of
Seller with respect thereto under Section 11(b)(i) should the
Closing occur, the Disclosure Schedule shall be deemed to include
all information contained in any subsequent supplement or amendment
thereto.
(k) Guaranty of Unpaid Accounts Receivable.
(i) Buyer shall, within five days after the
Determination Date referred to below, provide to Seller a notice
listing all accounts receivable of the Frozen Specialty Business
included in the determination of Closing Net Assets (the "Accounts
Receivable") which have not been paid in full on or prior to the
first business day to occur at least 120 days after the Closing
Date (the "Determination Date"), and which Buyer has determined, in
its sole discretion, will be assigned by the Company to Seller
hereunder (the "Unpaid Accounts Receivable"). On the first
business day to occur at least ten days after the giving of Buyer's
notice (the "Receivables Settlement Date"), Buyer shall cause the
Company to assign to Seller all of the Unpaid Accounts Receivable
referred to in the notice that have not been paid in full prior to
the Receivables Settlement Date, and any security granted in
connection with such Unpaid Accounts Receivable, and Seller shall
pay to the Company, by wire transfer in immediately available
funds, the amount, if any, by which the aggregate unpaid face
amount of such Unpaid Accounts Receivable assigned to Seller, as of
the Receivables Settlement Date, exceeds the sum of (A) the
aggregate amount of any valid customer offsets against such Unpaid
Accounts Receivable for promotions payable and customary customer
cash discounts, plus (B) the aggregate amount of the reserve for
doubtful accounts, if any, deducted from the Accounts Receivable in
determining the net value thereof for purposes of calculating
Closing Net Assets.
(ii) Except as provided herein, for purposes of
determining the Accounts Receivable which remain unpaid on the
Determination Date and the Receivables Settlement Date, any payment
from a customer received on or after the Closing Date will be
applied to the unpaid Accounts Receivable of such customer (other
than those with respect to which valid offsets have been claimed by
such customer for promotions payable and customary customer cash
discounts), to the extent of such valid offsets) in order of the
dates of the invoices therefor (i.e., the earliest dated invoices
will be deemed to have been paid first). Notwithstanding the
immediately preceding sentence, if, without solicitation from Buyer
or the Company, a customer designates in writing a different
application at the time of payment or submits with a payment a
different invoice of such customer, or a different application is
clearly established from the timing and amount of a payment, then
the application of such payment shall be as so designated or to the
Accounts Receivable evidenced by such different invoice or as so
clearly established, as the case may be. Buyer shall provide
Seller with a weekly aging of the Accounts Receivable on the last
day of each week prior to the Determination Date. Buyer shall have
no obligation hereunder to bring or cause the Company to bring any
legal proceeding, but shall otherwise use or cause the Company to
use reasonable efforts, in accordance with Buyer's customary
collection procedures, to attempt to collect the Accounts
Receivable. If either Buyer or the Company is notified by a
customer that it is disputing its obligation to pay all or any
portion of the Accounts Receivable, then Buyer will promptly
endeavor to notify Seller of such dispute, provided that failure of
Buyer to give timely notice of any disputed Accounts Receivable
shall not limit the obligations of Seller to make any payment
provided for herein, except to the extent that the delay in giving,
or failure to give, such notice has a material adverse effect upon
the ability of Seller to prevail with respect to the disputed
Accounts Receivable.
(iii) Subject to Sellers' confidentiality obligations
under Section 5(c), Seller and its representatives shall have
reasonable access from time to time after the Closing to the
Company's books and records relating to the Accounts Receivable for
purposes of verifying the status of payment of the Accounts
Receivable.
(iv) Seller shall be entitled to exercise all
commercially reasonably collection procedures to collect the Unpaid
Accounts Receivable assigned to Seller pursuant to clause (i)
above. Such efforts may include the initiation of legal
proceedings. In connection with such collection efforts, Buyer
shall cause the Company to provide Seller and its representatives
with reasonable access to the Company's books and records relating
to such Unpaid Accounts Receivable, subject to Seller's
confidentiality obligations under Section 5(c). It is understood
that nothing in this Agreement shall be deemed to require personnel
of the Company to testify in any legal proceedings initiated by
Seller to collect any Unpaid Accounts Receivable, provided that
nothing stated herein shall limit any rights that Seller may have
under applicable law to subpoena any person to require such
testimony. Notwithstanding anything to the contrary stated in
Section 5(c), nothing therein shall prohibit Seller from disclosing
information obtained pursuant to this Section 8(k) to the extent
such disclosure is required in connection with Seller's efforts to
collect any Unpaid Accounts Receivable.
9. Employees and Employee Benefits.
(a) Provision of Buyer's Plans. Effective at the
Closing, Buyer shall provide or cause the appropriate Company or
Subsidiary to provide (or continue to provide) to each person
employed by the Frozen Specialty Business immediately prior to the
Closing, including without limitation each such person on medical,
disability, family or other leave of absence immediately prior to
the Closing who subsequently returns to active employment with the
Company after the Closing (collectively, the "Employees"), employee
benefit plans (collectively, "Buyer's Plans") under which such
person will be entitled to pension and other benefits (excluding
post-retirement medical, dental or life insurance benefits)
substantially similar to those provided by Buyer in the aggregate
to its existing employees. Buyer represents and warrants to Seller
that true and correct copies of Buyer's existing employee benefit
plans have been previously provided to Seller. Notwithstanding the
foregoing, (i) in the case of Employees covered by a Collective
Bargaining Agreement which provides for the participation by such
Employees in any Seller's Plan which is not a multiemployer plan,
Buyer shall provide or cause the appropriate Company or Subsidiary
to provide (or continue to provide) to such Employees a plan under
which such Employees will be entitled to benefits which, in
combination with benefits accrued under such Seller's Plan prior to
the Closing, are identical to those provided to such Employees
under such Seller's Plan, and (ii) Buyer shall not be obligated to
provide or cause the Company or the Subsidiary to provide any plans
entitling Employees to post-retirement medical, dental or life
insurance benefits. Nothing in this Section 9(a) shall obligate
Buyer, the Company or the Subsidiary to continue to maintain any of
Buyer's Plans for any specific period of time after the Closing,
and, to the maximum extent permitted by law, Buyer shall have the
ability to revise, modify, amend or terminate any of Buyer's Plans
in its sole discretion at any time; provided, however, that Buyer
shall provide to the Employees for a period of at least three years
after the Closing Date (or, if shorter, such period as Buyer shall
provide employee pension plans for its other employees) employee
pension plans under which the Employees will be entitled to
benefits which are no less favorable than the pension benefits, if
any, then provided by Buyer to its other employees. Effective at
the Closing, the Company and the Subsidiary shall withdraw from and
cease to be participating employers in each Seller's Plan
maintained by Seller or any affiliate thereof (other than the
Company or the Subsidiary).
(b) Credit Under Buyer's Plans. For purposes of
eligibility, vesting and entitlement to vacation and severance
benefits, each Employee shall be given credit under Buyer's Plans
(including without limitation the vacation policy(ies) and
severance plans included within Buyer's Plans, but excluding any
post-retirement medical, dental or life insurance plans included
within Buyer's Plans) for such Employee's service with Seller, the
Company, the Subsidiary or any other affiliate of Seller prior to
the Closing Date to the extent such service was credited under
Seller's Plans; and each Employee and covered dependent thereof
shall be allowed to participate in each of Buyer's Plans without
regard to preexisting conditions, waiting periods, or other
exclusions or limitations not imposed on such individual by the
Seller's Plans immediately prior to the Closing Date. Each
Employee shall be credited under the vacation policy(ies) included
within Buyer's Plans with all vacation (including without
limitation all banked vacation), if any, accrued by such Employee
prior to the Closing Date under the vacation policy(ies) included
within the Seller's Plans and not used by such Employee prior to
the Closing Date. Upon termination after the Closing of any
Employee's employment with the Company or the Subsidiary, Buyer
shall pay or cause the appropriate Company or Subsidiary to pay to
such Employee the amount of all banked vacation, if any, accrued by
such Employee prior to the Closing Date and not used by such
Employee prior to such termination of employment.
(c) Incentive Payments. Seller will use reasonable
efforts to cause any incentive plans included within Seller's Plans
which are maintained by the Company or the Subsidiary (other than
the Non-Executive Incentive Plans) to be terminated at or prior to
the Closing, and will either settle at or prior to Closing, or
indemnify and hold harmless Buyer, the Company and the Subsidiary
from, all obligations and liabilities for claims, if any, of
Employees to incentive payments due at Closing or that may
thereafter become due under such incentive plans.
(d) Severance Payments. Seller shall, at the request of
Buyer, directly pay all severance required to be paid under the
severance plans included within Buyer's Plan to any Employees (not
exceeding 90 in number and in no event including the President of
Seller's Prepared Foods Division) who immediately prior to the
Closing are employed at the headquarters of Seller's Prepared Foods
Division located in Riverside, California and whose employment with
Buyer or any of its affiliates (including the Company or the
Subsidiary) is terminated on or prior to the earlier of the date
Buyer closes or causes the Company to close such headquarters or
December 31, 1994, but only to the extent Seller would have been
required to pay such severance to such Employees under the general
severance policy included within Seller's Plans (which is listed
under Item E(1) of Section 4(p) of the Disclosure Schedule) had
such Employees been employed by Seller or any affiliate thereof at
the time of such termination. In addition to the foregoing, Seller
acknowledges that it will be solely obligated after the Closing for
any payments required to be made to any Employees under the
individual severance agreements between Seller and such Employees
which are listed under Item E(2) of Section 4(p) of the Disclosure
Schedule. In no event shall Seller be obligated hereunder to make
any severance or other similar payments to any Employees required
as a result of any failure by Buyer to give on a timely basis any
notice required under the WARN Act or any similar state or local
law or otherwise required by statute.
(e) Medical, Dental, Disability and Life Insurance Plan
Liabilities. Seller shall pay or shall cause the applicable
Seller's Plan to pay any benefits or expenses covered by the group
medical, dental, disability and life insurance plans included
within the Seller's Plans which (i) in the case of any such medical
or dental plans, are incurred with respect to services performed
for the Employees or their dependents prior to the Closing Date,
(ii) in the case of any such disability plans, are payable with
respect to a disability suffered by an Employee prior to the
Closing Date (but not with respect to the recurrence on or after
the Closing Date of any such disability), if such Employee, at the
effective time of the Closing, has qualified for long-term
disability benefits (or subsequently qualifies for such benefits
after meeting any applicable waiting or elimination period) under
such plans with respect to such disability, and (iii) in the case
of any such life insurance plans, are payable to the beneficiaries
of any Employee who dies prior to the Closing Date. To the extent
Employees have enrolled in the applicable Buyer's Plan, Buyer shall
pay or shall cause the applicable Buyer's Plan to pay any such
benefits or expenses which (x) in the case of any such medical or
dental plans, are incurred with respect to services performed for
the Employees or their dependents on or after the Closing Date,
(y) in the case of any such disability plans, are payable with
respect to either (A) a disability suffered by an Employee prior to
the Closing Date, if such Employee, at the effective time of the
Closing, has not yet qualified for long-term disability benefits
(and subsequently does not qualify for such benefits after meeting
any applicable waiting or elimination period) under the group
disability plans included in Seller's Plans with respect to such
disability, or (B) a disability suffered by an Employee at any time
on or after the Closing Date (including without limitation a
recurrence on or after the Closing Date of a disability of an
Employee suffered prior to the Closing Date), and (z) in the case
of any such life insurance plans, are payable to the beneficiaries
of any Employee who dies on or after the Closing Date.
(f) Western Conference Plan Liabilities. In the event
that any of the transactions under this Agreement would result in
a complete or partial withdrawal from the Western Conference Plan
for which withdrawal liability would be imposed under Subtitle E of
Title IV of ERISA, Buyer and Seller, at the request of Seller,
shall each cause the appropriate actions (including the provision
of bonds) to be taken pursuant to Section 4204 of ERISA to avoid
the imposition of such liability. It is agreed that if, at any
time after the Closing, Buyer or any of its affiliates completely
or partially withdraws from the Western Conference Plan with
respect to the operations of the Company or the Subsidiary,
(i) Buyer and its affiliates will be primarily liable for any
withdrawal liability to such plan imposed under Subtitle E of
Title IV of ERISA, and (ii) during the first five plan years
commencing after the Closing Date, Seller will be secondarily
liable for any withdrawal liability it would have had to such plan
at the time of Closing with respect to those operations but for
Section 4204 of ERISA if the liability of Buyer and its affiliates
with respect to such plan is not paid.
(g) Seller's Obligation for Certain Benefits.
Notwithstanding any other provision of this Section 9, Seller
agrees that following the Closing it shall retain, assume or cause
to be assumed liability for any post-retirement life insurance and
medical benefits (including COBRA rights) that the Company or the
Subsidiary is as of the Closing providing to any person whose
employment with the Company or the Subsidiary terminated (or
divorce, if applicable, occurred) prior to the Closing (or any such
former employee's spouse, dependents or beneficiaries), including
without limitation any such person who retired prior to the
Closing.
10. Further Assurances. From time to time after the
Closing, as and when requested by any party hereto, the other party
shall execute and deliver, or cause to be executed and delivered,
all such documents and instruments and shall take, or cause to be
taken, all such further or other actions (subject to the limitation
set forth in Section 8(i)), as may be necessary or desirable to
give full effect to this Agreement.
11. Indemnification.
(a) Tax Indemnification. Seller shall indemnify Buyer
and hold it harmless from (i) all liability of Buyer or any of its
affiliates (including the Company and the Subsidiary) for Taxes of
the Company or the Subsidiary for the Pre-Closing Tax Period,
(ii) all liability (as a result of Treasury Regulation Section 1.1502-
6(a) or otherwise) of Buyer or any of its affiliates (including the
Company and the Subsidiary) for Taxes of Seller or any other
corporation (other than the Company or the Subsidiary) affiliated
at any time prior to the Closing with the Company or the
Subsidiary, (iii) all liability of Buyer or any of its affiliates
(including the Company and the Subsidiary) for income Taxes of the
Company or the Subsidiary to the extent such liability results from
a deemed sale of assets as a result of the Section 338 Election (as
hereinafter defined) required by Section 12(a) of this Agreement,
except to the extent Buyer has specifically agreed to indemnify
Seller with respect to such income Taxes pursuant to the provisions
of clause (iii) of the following paragraph of this Section 11(a),
and (iv) all liability of Buyer or any of its affiliates (including
the Company and the Subsidiary) for reasonable legal fees and
expenses attributable to any item in clause (i), (ii) or (iii)
above. Notwithstanding the foregoing, Seller shall not indemnify
and hold harmless Buyer from any liability of Buyer or any of its
affiliates (including the Company and the Subsidiary) for Taxes of
the Company or the Subsidiary for the Pre-Closing Tax Period, to
the extent such liability has been specifically identified by
nature, period and amount in the Closing Statement, included as a
liability in the final determination of Closing Net Assets and
taken into account in the calculation of the Adjusted Purchase
Price.
Buyer shall, and shall cause the Company and the
Subsidiary to, indemnify Seller and hold it harmless from (i) all
liability of Seller or any of its affiliates for Taxes of the
Company or the Subsidiary for any taxable period ending on or after
the Closing Date (other than Taxes of the Company or the Subsidiary
for which indemnification by Seller has been expressly provided
under the foregoing paragraph of this Section 11(a)), (ii) all
liability of Seller or any of its affiliates for Taxes of the
Company or the Subsidiary for the Pre-Closing Tax Period, to the
extent such liability has been specifically identified by nature,
period and amount in the Closing Statement, included as a liability
in the final determination of Closing Net Assets and taken into
account in the calculation of the Adjusted Purchase Price,
(iii) all liability of Seller or any of its affiliates for income
Taxes of the Company or the Subsidiary payable to any state or
local jurisdiction to the extent such income Taxes are imposed on
a deemed sale of assets as a result of the Section 338 Election and
such jurisdiction successfully asserts that Seller is liable for
income Taxes to such jurisdiction on the sale of the Shares
(provided, however, that Buyer's obligation to indemnify Seller
pursuant to this clause (iii) with respect to any income Taxes
payable to any jurisdiction shall terminate and be of no further
force or effect if, without Buyer's prior written consent (which
consent shall not be unreasonably withheld), Seller or any of its
affiliates, employees or officers (A) reports gain from the sale of
the Shares as taxable income on a Tax Return filed in such
jurisdiction, or (B) takes a position inconsistent with past
practice in such jurisdiction which gives rise to Buyer's
obligation to indemnify Seller pursuant to this clause (iii)), and
(iv) all liability of Seller or any of its affiliates for
reasonable legal fees and expenses attributable to any item in
clause (i), (ii) or (iii) above. If any claim is made by a taxing
authority of any state or local jurisdiction that Seller is liable
to such jurisdiction for income Taxes on the sale of the Shares,
Seller shall promptly notify Buyer in writing of such claim. If
notice of any such claim is received by Seller after the Closing
Date and is not given to Buyer within a sufficient period of time
to allow Buyer to effectively contest such claim, Buyer shall not
be liable to Seller or any of its affiliates to the extent that
Buyer's position is actually prejudiced as a result thereof. If
the amount of any income Taxes of the Company or the Subsidiary
payable to one or more such jurisdictions on the deemed sale of
assets imposed as a result of the Section 338 Election exceeds
$50,000 on an aggregate basis, taking all such jurisdictions into
account, then Buyer shall have the right, at Buyer's option and
expense, to jointly control with Seller the contest of Seller's
liability for income Taxes owed to such jurisdiction or
jurisdictions on the sale of the Shares. Seller and its
affiliates, officers and employees shall cooperate with Buyer in
all reasonable respects in any such contest (with reimbursement by
Buyer of all reasonable out-of-pocket expenses incurred by Seller
in connection therewith at the request of Buyer), including without
limitation extending statutes of limitation or executing forms and
powers of attorney, and upon reasonable notice shall provide Buyer
and its affiliates, employees and officers with access during
normal business hours to all of Seller's books and records
(including Tax Returns) as Buyer reasonably shall deem necessary or
appropriate to such contest. In no case shall Seller admit any
liability with respect to, or settle, compromise or discharge, any
such claim without Buyer's prior written consent, which consent
shall not be unreasonably withheld.
In the case of any taxable period that includes (but does
not begin on) the Closing Date, including without limitation the
final taxable year of the Company for federal income tax purposes
as a member of Seller's affiliated group (a "Straddle Period"):
(1) real, personal and intangible property Taxes
("Property Taxes") of the Company and the Subsidiary for
the Pre-Closing Tax Period (which are subject to
indemnification by Seller to the extent set forth in this
Section 11(a)) shall be equal to the amount of such
Property Taxes assessed with respect to the entire
Straddle Period (regardless of when such Property Taxes
were due and payable) multiplied by a fraction, the
numerator of which is the number of days during the
Straddle Period that are in the Pre-Closing Tax Period
and the denominator of which is the total number of days
in the Straddle Period; and
(2) all other Taxes of the Company and the
Subsidiary for the Pre-Closing Tax Period (which are
subject to indemnification by Seller to the extent set
forth in this Section 11(a)) shall be computed using a
closing-of-the-books method as of the last day
immediately preceding the Closing Date, with all standard
deductions, exemptions, progressivity in rates and other
items calculated with respect to the full Straddle Period
apportioned to the Pre-Closing Tax Period based upon the
ratio of the number of days during the Straddle Period
that are in the Pre-Closing Tax Period to the total
number of days in the Straddle Period.
Seller's indemnity obligation in respect of Taxes for a Straddle
Period shall initially be effected by its payment to Buyer of the
excess of (x) such Taxes for the Pre-Closing Tax Period, over
(y) the sum of (i) the amount of such Taxes paid by Seller or any
of its affiliates (other than the Company or the Subsidiary) at any
time, plus (ii) the amount of such Taxes paid by the Company or the
Subsidiary prior to the close of business on the last day
immediately preceding the Closing Date, plus (iii) the amount of
such Taxes specifically identified by nature, period and amount in
the Closing Statement, included as a liability in the final
determination of Closing Net Assets and taken into account in the
calculation of the Adjusted Purchase Price. Seller shall initially
pay such excess to Buyer within 30 days after the Tax Return with
respect to the liability for such Taxes is required to be filed
(or, if later, is actually filed). If, in the second preceding
sentence, the amount of (y) exceeds (x), Buyer shall pay or cause
the appropriate Company or Subsidiary to pay to Seller the amount
of such excess, in the case of Property Taxes, at the Closing and,
in all other cases, within 30 days after the Tax Return with
respect to the liability for such Taxes is required to be filed.
The payments to be made pursuant to this paragraph by Seller or
Buyer with respect to any Straddle Period shall be appropriately
adjusted to reflect any final determination with respect to Taxes
for such Straddle Period.
(b) Other Indemnification by Seller. Seller shall
indemnify and reimburse Buyer and hold Buyer harmless from any
loss, liability, claim, damage or expense (including reasonable
legal fees and expenses, except as otherwise provided in
Section 11(f) hereof) suffered or incurred by Buyer or any of its
affiliates, including the Company and the Subsidiary (other than
any relating to Taxes, for which indemnification provisions are set
forth in paragraph (a) of this Section 11) to the extent caused by:
(i) any breach of any representation or warranty of
Seller contained in this Agreement or any certificate
delivered pursuant hereto, or
(ii) the Surimi Liabilities or the consummation of
the transactions described in Section 8(h) of this
Agreement, or
(iii) any products liability or similar claims with
respect to products of the Frozen Specialty Business
produced by Seller, the Company or the Subsidiary prior
to the Closing other than any such products sold after
the Closing which were not adulterated at the time of
Closing (or which were adulterated at the time of Closing
if such adulteration should reasonably have been
discovered after the Closing during the course of normal
pre-sale inspection), or
(iv) (A) any worker's compensation claims reported
to Seller or the Company prior to the Closing that are
based upon an occupational condition or disease, and
(B) any worker's compensation claims that are based upon
an injury (and not an occupational condition or disease),
general liability claims or automobile liability claims
arising from an incident occurring prior to the Closing,
or
(v) any other action, lawsuit or proceeding relating
to the Frozen Specialty Business which is pending (and
with respect to which Seller, the Company or the
Subsidiary has been served or otherwise notified)
immediately prior to the Closing in a court of competent
jurisdiction, or
(vi) any claim by a customer of the Frozen Specialty
Business arising out of the institution by Seller after
the Closing of legal proceedings to collect Unpaid
Accounts Receivable assigned to Seller pursuant to
Section 8(k)(i) that does not relate primarily to the
operation of the Frozen Specialty Business after the
Closing;
provided, however, that (A) Seller shall not have any liability
under clause (i) above (except for breaches of Section 4(b), 4(d)
or 4(p) of this Agreement) unless the aggregate of all losses,
liabilities, claims, damages and expenses under clause (i) for
which Seller would, but for this clause (A), be liable exceeds on
a cumulative basis $500,000, and then only to the extent of any
such excess, and (B) Seller shall not have any liability under
clause (i) above (except for breaches of Section 4(b), 4(d) or 4(p)
of this Agreement) to the extent the aggregate of all losses,
liabilities, claims, damages and expenses under clause (i) for
which Seller would, but for the provisions of this clause (B), be
liable exceeds on a cumulative basis an amount equal to 75% of the
Adjusted Purchase Price.
Buyer acknowledges and agrees that, except with respect
to claims based upon breaches of covenants or intentionally
fraudulent breaches of representations and warranties, its sole and
exclusive remedy with respect to any and all claims relating to the
subject matter of this Agreement (including without limitation
claims for breaches of representations and warranties contained in
this Agreement) shall be pursuant to the indemnification provisions
set forth in this Section 11. In furtherance of the foregoing,
Buyer hereby waives, to the fullest extent permitted under
applicable law, except with respect to claims based upon breaches
of covenants and intentionally fraudulent breaches of
representations and warranties, any and all rights, claims and
causes of action Buyer, the Company or the Subsidiary may have
against Seller as a matter of equity or arising under or based upon
any federal, state, local or foreign statute, law, ordinance, rule
or regulation (including, without limitation, those relating to any
hazardous substances) or arising under or based upon common law or
otherwise, except to the extent provided in Sections 11(a) and
11(b).
(c) Other Indemnification by Buyer. Buyer shall, and
after the Closing shall cause each of the Company and the
Subsidiary to, indemnify and reimburse Seller against and hold
Seller harmless from any loss, liability, claim, damage or expense
(including reasonable legal fees and expenses, except as otherwise
provided in Section 11(f)) suffered or incurred by Seller or any of
its affiliates (other than any relating to Taxes, for which
indemnification provisions are set forth in paragraph (a) of this
Section 11) to the extent caused by:
(i) any breach of any representation or warranty of
Buyer contained in this Agreement or any certificate
delivered pursuant hereto, or
(ii) without limiting the generality of clause (iii)
or (iv) hereof, any claims (including without limitation
products liability, auto liability and general liability
claims) in respect of products sold by the Company or the
Subsidiary after the Closing under any of the Marks or
any other use of the Marks by the Company or the
Subsidiary after the Closing, which claims are brought
against Seller or any of its affiliates as a result of
any right or license to use the Marks after the Closing
granted by Seller pursuant to Section 8(c) of this
Agreement, or
(iii) without limiting the generality of clause (iv)
hereof, any action, lawsuit, proceeding or investigation
relating solely to the Frozen Specialty Business (other
than those for which indemnification by Seller has been
expressly provided under Section 11(a) or (b) and has not
terminated under Section 11(e)), or
(iv) any obligation or liability of the Company, the
Subsidiary or, with respect to obligations or liabilities
relating solely to the Frozen Specialty Business, Seller
(other than, except as otherwise provided in clause (v)
hereof, (A) any such obligation or liability of Seller
under any instruments, contracts, commitments, agreements
or arrangements to which Seller, and not the Company or
the Subsidiary, is a party which are not disclosed in
Section 4(i), 4(j), 4(l), 4(m) or 4(t) of the Disclosure
Schedule, (B) any such obligation or liability of Seller
under any instruments, contracts, commitments,
agreements, or arrangements to which Seller, and not the
Company or the Subsidiary, is a party which are disclosed
in Section 4(i), 4(j), 4(l), 4(m) or 4(t) of the
Disclosure Schedule to the extent such obligation or
liability has not (x) been included in the final
determination of Closing Net Assets and taken into
account in the calculation of the Adjusted Purchase Price
or (y) accrued after the Closing, and (C) any other
obligation or liability of the Company, the Subsidiary or
Seller (including the Surimi Liabilities) for which
indemnification by Seller has been expressly provided
under Section 11(a) or (b)), including, without
limitation, any obligation or liability included in the
final determination of Closing Net Assets and taken into
account in the calculation of the Adjusted Purchase Price
and any obligation or liability assumed by the Company
under Section 8(i), or
(v) any obligation or liability of Seller or any
affiliate of Seller to pay or perform any obligation or
liability of the Company or the Subsidiary (if
indemnification by Buyer for such obligation or liability
of the Company or the Subsidiary has been expressly
provided under clause (iv) above) (A) pursuant to any
guaranty or obligation to assure performance given or
made by Seller or such affiliate, (B) that would not have
arisen except as a result of non-compliance by the
Company or the Subsidiary with the provisions of any
applicable bulk sales, corporate, bankruptcy or similar
laws in connection with the consummation of the
transactions described in Section 8(h) of this Agreement,
or (C) that otherwise arises as a matter of law or
contract;
provided, however, that (A) Buyer shall not have any liability
under clause (i) above unless the aggregate of all losses,
liabilities, claims, damages and expenses under clause (i) for
which Buyer would, but for this clause (A), be liable exceeds on a
cumulative basis $500,000, and then only to the extent of any such
excess, and (B) Buyer shall not have any liability under clause (i)
above to the extent the aggregate of all losses, liabilities,
claims, damages and expenses under clause (i) for which Buyer
would, but for the provisions of this clause (B), be liable exceeds
on a cumulative basis an amount equal to 75% of the Adjusted
Purchase Price.
Seller acknowledges and agrees that, except with respect
to claims based upon breaches of covenants or intentionally
fraudulent breaches of representations or warranties, its sole and
exclusive remedy with respect to any and all claims relating to the
subject matter of this Agreement (including without limitation
claims for breaches of representations and warranties contained in
this Agreement) shall be pursuant to the indemnification provisions
set forth in this Section 11. In furtherance of the foregoing,
Seller hereby waives, to the fullest extent permitted under
applicable law, except with respect to claims based upon breaches
of covenants and intentionally fraudulent breaches of
representations and warranties, any and all rights, claims and
causes of action Seller may have against Buyer, the Company or the
Subsidiary as a matter of equity or arising under or based upon any
federal, state, local or foreign statute, law, ordinance, rule or
regulation (including, without limitation, those relating to any
hazardous substances) or arising under or based upon common law or
otherwise, except to the extent provided in Sections 11(a) and
11(c).
(d) Adjustments.
(i) The amount of any loss, liability, claim, damage or
expense for which indemnification is provided under this Section 11
shall be net of any amounts recovered (regardless of time) by the
indemnified party with respect thereto under insurance policies
(including without limitation any of the title insurance policies
issued under the Title Commitments, which policies Buyer agrees to
obtain promptly following the Closing), provided that the
indemnified party shall have no obligation to seek recovery of any
such amounts under any insurance policies other than, with respect
to Buyer, the title insurance policies issued under the Title
Commitments.
(ii) Any indemnity payment made pursuant to this Section
will be treated as an adjustment to the Adjusted Purchase Price for
Tax purposes, unless a final determination (which shall include the
execution of a Form 870-AD or successor form) with respect to the
indemnified party causes any such payment not to constitute an
adjustment to the Adjusted Purchase Price for federal income Tax
purposes.
(e) Termination of Indemnification. The obligations to
indemnify and hold harmless a party hereto, (x) pursuant to
Section 11(a), shall terminate upon the expiration of the
applicable statute of limitations with respect to the Tax liability
in question (giving effect to any waiver, mitigation or extension
thereof), (y) pursuant to Sections 11(b)(i) and 11(c)(i), shall
terminate when the applicable representation or warranty terminates
pursuant to Section 16, and (z) pursuant to the other clauses of
Sections 11(b) and 11(c), shall not terminate; provided, however,
that such obligations to indemnify and hold harmless shall not
terminate with respect to any item as to which the person to be
indemnified shall have, before the expiration of the applicable
period, previously made a claim by delivering a notice pursuant to
Section 11(f) hereof to the party to be providing the
indemnification.
(f) Procedures Relating to Indemnification (Other than
Under Section 11(a)). In order for a party (the "indemnified
party") to be entitled to any indemnification provided for under
this Agreement (other than under Section 11(a)) in respect of,
arising out of or involving a claim or demand made by any person,
firm, governmental authority, corporation or other entity against
the indemnified party (a "Third Party Claim"), such indemnified
party shall notify the indemnifying party in writing of the Third
Party Claim, and deliver to the indemnifying party copies of all
material notices and documents accompanying or constituting the
Third Party Claim, promptly (but in any event in reasonably
sufficient time for the indemnifying party to file a timely answer
to such Third Party Claim, if applicable) after obtaining notice
thereof; provided, however, that failure to promptly give such
notification shall not affect the indemnification provided
hereunder except to the extent the indemnifying party shall have
been actually prejudiced as a result of such failure. Thereafter,
the indemnified party shall deliver to the indemnifying party,
promptly after the indemnified party's receipt thereof, copies of
all material notices and documents (including court papers)
received by the indemnified party relating to the Third Party
Claim; provided, however that failure to promptly deliver such
copies shall not affect the indemnification provided hereunder
except to the extent the indemnifying party shall have been
actually prejudiced as a result of such failure.
If a Third Party Claim is made against an indemnified
party, the indemnifying party will be entitled to participate in
the defense thereof and (if it so chooses and acknowledges in
writing its obligation to indemnify the indemnified party in
accordance with the terms contained in this Section 11 in respect
of such Third Party Claim) to assume the defense thereof with
counsel selected by the indemnifying party and reasonably
satisfactory to the indemnified party. Should the indemnifying
party so elect to assume the defense of a Third Party Claim, which
election must be made within ten business days (in the case of a
Third Party Claim with respect to which a complaint has been filed)
or 30 days (in the case of all other Third Party Claims) after the
indemnifying party receives notice of the Third Party Claim from
the indemnified party, the indemnifying party will not be liable to
the indemnified party for legal expenses incurred by the
indemnified party in connection with the defense thereof, except as
otherwise expressly provided below. If the indemnifying party
assumes such defense, the indemnified party shall have the right,
but not the obligation, to participate in the defense thereof and
to employ counsel, at its own expense, separate from the counsel
employed by the indemnifying party (it being understood that the
indemnifying party shall control such defense), provided that the
indemnifying party will be responsible for the fees and expenses of
one separate counsel for the indemnified party if the indemnified
party reasonably concludes that the counsel selected by the
indemnifying party has a conflict of interest. If the indemnifying
party has not assumed the defense of a Third Party Claim, the
indemnifying party shall be liable for the fees and expenses of
counsel employed by the indemnified party. If the indemnifying
party chooses to defend or prosecute any Third Party Claim, the
indemnified party shall cooperate in the defense or prosecution
thereof with reimbursement by the indemnifying party of reasonable
out-of-pocket expenses of the indemnified party incurred in
connection therewith. Such cooperation shall include, without
limitation, the retention and (upon the indemnifying party's
request) the provision to the indemnifying party of records and
information which are reasonably relevant to such Third Party
Claim, and making employees available on a mutually convenient
basis to provide additional information and explanation of any
material provided hereunder. Whether or not the indemnifying party
shall have assumed the defense of a Third Party Claim, the
indemnified party shall not admit any liability with respect to
such Third Party Claim without the indemnifying party's prior
written consent, which consent shall not be unreasonably withheld.
Notwithstanding anything to the contrary stated herein, neither the
indemnifying party nor the indemnified party shall settle,
compromise or discharge any Third Party Claim for which indemnity
is required hereunder without the consent of the other such party,
which consent shall not be unreasonably withheld. All Tax Claims
(as defined in Section 11(g)) shall be governed by Section 11(g).
(g) Procedures Relating to Indemnification of Tax
Claims. If a claim shall be made by any taxing authority, which,
if successful, might result in an indemnity payment to Buyer or one
of its affiliates pursuant to Section 11(a), Buyer shall promptly
notify Seller in writing of such claim (a "Tax Claim"). If notice
of a Tax Claim ("Tax Notice") received by any of Buyer, the Company
or the Subsidiary after the Closing Date is not given to Seller
within a sufficient period of time to allow Seller to effectively
contest such Tax Claim, Seller shall not be liable to Buyer or any
of its affiliates to the extent that Seller's position is actually
prejudiced as a result thereof.
With respect to any Tax Claim (except to the extent it
relates to Taxes of the Company or the Subsidiary for a taxable
period that includes (but does not end on) the Closing Date),
Seller shall control all proceedings taken in connection with such
Tax Claim (including, without limitation, selection of counsel)
and, without limiting the foregoing, may in its sole discretion
pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with any taxing authority with respect
thereto, and may, in its sole discretion, either pay the Tax
claimed and sue for a refund where applicable law permits such
refund suits (subject to Buyer's obligations, if any, with respect
to such Taxes under Section 11(a) and Buyer's rights, if any, with
respect to such refund under Section 12(d)) or contest the Tax
Claim in any permissible manner. Seller and Buyer shall jointly
control all proceedings taken in connection with any Tax Claim to
the extent it relates to Taxes of the Company or the Subsidiary for
a taxable period that includes (but does not end on) the Closing
Date. Each party hereto shall cooperate and cause their respective
affiliates to cooperate with the other party in contesting any Tax
Claim (with reimbursement by Seller of reasonable out-of-pocket
expenses of Buyer or its affiliates incurred in connection
therewith, except to the extent the Tax Claim relates to Taxes of
the Company or the Subsidiary for a taxable period that includes
(but does not end on) the Closing Date), which cooperation shall
include, without limitation, the retention and the provision of
records and information which are reasonably relevant to such Tax
Claim, and making employees available on a mutually convenient
basis to provide additional information or explanation of any
material provided hereunder or to testify at proceedings relating
to such Tax Claim.
In no case shall Buyer, the Company or the Subsidiary
admit any liability with respect to, or settle, compromise or
discharge, any Tax Claim without Seller's prior written consent,
which consent shall not be unreasonably withheld. In no case shall
Seller admit any liability with respect to, or settle, compromise
or discharge, any Tax Claim relating to Taxes of the Company or the
Subsidiary for a taxable period that includes (but does not end on)
the Closing Date without Buyer's prior written consent, which
consent shall not be unreasonably withheld.
12. Tax Matters.
(a) Buyer and Seller will take all actions necessary to
effect elections under Sections 338(g) and 338(h)(10) of the Code
and any comparable elections under state or local Tax law
(collectively, the "Section 338 Election") with respect to each of
the Company and the Subsidiary including, without limitation, the
filing of Internal Revenue Service Form 8023 ("Corporate Qualified
Stock Purchase Elections"). In connection with such elections,
Buyer and Seller shall jointly determine the amount of the
"adjusted grossed-up basis" of the Shares and the "modified
aggregate deemed selling price" of the assets of the Company and
the Subsidiary and the allocation of such amounts among the assets
of the Company and the Subsidiary in accordance with
Section 338(b)(5) of the Code and the Treasury Regulations
promulgated thereunder (the "Allocations"). For purposes of
allocating "adjusted grossed-up basis" among the assets of the
Company and the Subsidiary, the parties agree that the fair market
value of the Company's real property located in New Rochelle, New
York is $3,000,000. The parties further agree that such amount
represents the fair market value of the real property interests in
New York State owned by the Company and the amount of the Adjusted
Purchase Price apportioned to such interest for purposes of the New
York Real Property Transfer Gains Tax and the New York Real Estate
Transfer Tax. Seller shall file New York Form TP-580 (Transferor
Questionnaire) and Buyer shall file New York Form TP-581
(Transferee Questionnaire) on a basis consistent with this
allocation. The calculations of the "adjusted grossed-up basis"
and the Allocations shall not include the respective investment
banking, legal, accounting and other fees or costs incurred by each
of Seller and Buyer as a result of the transactions contemplated by
this Agreement ("Transaction Costs"). Seller shall calculate gain
or loss, if any, resulting from such elections in a manner
consistent with the Allocations and shall not take any position
inconsistent with the Allocations in any Tax Return or otherwise;
provided, however, that Seller shall be entitled to take into
account its Transaction Costs when calculating such gain or loss.
Buyer shall allocate the "adjusted grossed-up basis" of the Shares
among the assets of the Company and the Subsidiary in a manner
consistent with the Allocations and shall not take any position
inconsistent with the Allocations in any Tax Return or otherwise;
provided, however, that Buyer shall be entitled to add its
Transaction Costs to the "adjusted grossed-up basis" of the Shares
for purposes of allocating among the assets of the Company and the
Subsidiary.
(b) For any taxable period that includes (but does not
end on) the Closing Date, Buyer shall timely prepare and file or
cause the appropriate Company or Subsidiary to timely prepare and
file with the appropriate authorities all Tax Returns required to
be filed, and shall pay or cause the appropriate Company or
Subsidiary to pay all Taxes due with respect to such Tax Returns,
subject to Seller's obligations, if any, with respect to such Taxes
under Section 11(a). For any taxable period of the Company or the
Subsidiary that ends on or before the Closing Date, Seller shall
timely prepare and file with the appropriate authorities all Tax
Returns required to be filed, and shall pay all Taxes due with
respect to such Tax Returns, subject to Buyer's obligations, if
any, with respect to such Taxes under Section 11(a). Buyer and
Seller agree to cause all Tax Returns for any taxable period that
includes (but does not end on) the Closing Date to be filed on the
basis that the relevant taxable period ended on the Closing Date
and on a basis consistent with prior filings by Seller, unless the
relevant taxing authority will not accept a Tax Return filed on
that basis.
(c) Each of Seller, Buyer, the Company and the
Subsidiary shall reasonably cooperate, and shall cause their
respective affiliates, officers, employees, agents, auditors and
other representatives to reasonably cooperate, in preparing and
filing all Tax Returns (including maintaining and making available
to each other all records necessary in connection with Taxes and in
resolving all disputes and audits with respect to all taxable
periods relating to Taxes), and in preparing and filing all
financial statements and reports. Each party hereto recognizes
that the other will need access from time to time after the
Closing, for Tax and financial reporting purposes, to certain Tax,
accounting and other records and information to the extent such
records and information pertain to events occurring on or prior to
the Closing Date. Each party hereto shall, and Buyer shall cause
the Company and the Subsidiary to, properly retain and maintain
such records and information in accordance with the past custom and
practice of such corporation for a period of 12 years after the
Closing Date. Subject to Seller's obligations under Section 5(c)
and Buyer's obligations under the Confidentiality Agreement, each
party, its affiliates and their agents and representatives, at
times and dates mutually acceptable, shall afford the other party
the ability to inspect, review and make copies of such records and
information as is necessary or appropriate from time to time, such
activities to be conducted during normal business hours and at such
other party's expense.
(d) Any refunds or credits of Taxes of the Company or
the Subsidiary for any taxable period ending before the Closing
Date shall be for the account of Seller. Any refunds or credits of
Taxes of the Company or the Subsidiary for any taxable period
beginning on or after the Closing Date shall be for the account of
Buyer. Any refunds or credits of Taxes of the Company or the
Subsidiary for any Straddle Period shall be equitably apportioned
between Seller and Buyer (based on each party's respective
indemnification obligations with respect to such Taxes). Buyer
shall, if Seller so requests and at Seller's expense, cause the
Company or Subsidiary so requested by Seller to file for and obtain
any refunds or credits to which Seller is entitled under this
Section 12(d). Buyer shall permit Seller to control the
prosecution of any such refund claim (other than any such claim for
refund of Taxes for any taxable period that includes (but does not
end on) the Closing Date, which shall be controlled jointly by
Buyer and Seller) and, where deemed appropriate by Seller, shall
cause the applicable Company or Subsidiary to authorize by
appropriate powers of attorney such persons as Seller shall
designate to represent the applicable Company or Subsidiary with
respect to such refund claim. Buyer shall cause the applicable
Company or Subsidiary to forward to Seller any refund to which
Seller is entitled under this Section 12(d) within ten days after
such refund is received (or reimburse Seller for any credit to
which Seller is entitled under this Section 12(d) within ten days
after such credit is allowed or applied against other Tax
liability). Seller and Buyer shall treat any payments under the
preceding sentence that Seller shall receive pursuant to this
Section 12(d) as an adjustment to the Adjusted Purchase Price for
Tax purposes, unless a final determination (which shall include the
execution of a Form 870-AD or successor form) with respect to Buyer
or any of its affiliates causes any such payment not to be treated
as an adjustment to the Adjusted Purchase Price for federal income
Tax purposes.
(e) Seller shall be responsible for filing any amended,
consolidated, combined or unitary Tax Returns for taxable years
ending on or prior to the Closing Date (and, subject to Buyer's
obligations under Section 11(a) hereof, to pay any amount of Tax
due which is shown thereon) which are required as a result of
examination adjustments made by the Internal Revenue Service or by
the applicable state, local or foreign taxing authorities for such
taxable years as finally determined. For those jurisdictions in
which separate Tax Returns are filed by the Company or the
Subsidiary, any required amended Tax Returns resulting from such
examination adjustments, as finally determined, shall be prepared
by Seller and furnished to the applicable Company or Subsidiary for
approval (which approval shall not be unreasonably withheld),
signature and filing at least 10 days prior to the due date for
filing such Tax Returns.
(f) Notwithstanding anything to the contrary provided in
Section 11(a) or otherwise provided in this Agreement, all real
estate transfer and real estate gains, documentary, sales, use,
motor vehicle transfer, gross receipts, registration and other such
Taxes (including any penalties, interest and additions to Tax), if
any, incurred in connection with this Agreement and the
transactions contemplated hereby (other than any such Taxes
expressly required pursuant to the next sentence hereof to be paid
by Seller) shall be paid one-half by Buyer and one-half by Seller,
and Seller and Buyer shall cooperate in timely filing all Tax
Returns as may be required to comply with the provisions of such
Tax laws. Seller shall pay all such Taxes, if any, incurred in
connection with the transactions contemplated by Section 8(h)
hereof which are not paid by the Company or the Subsidiary prior to
Closing (or specifically identified by nature, period and amount on
the Closing Statement, included as a liability in the final
determination of Closing Net Assets and taken into account in the
calculation of the Adjusted Purchase Price) and all stock transfer
Taxes, if any, due as a result of the sale of the Shares.
(g) Seller shall deliver to Buyer at the Closing an
affidavit (a so called "FIRPTA affidavit") in form and substance
reasonably satisfactory to Buyer, duly executed and acknowledged,
certifying facts that would exempt the transaction contemplated
hereby from the provisions of the Foreign Investors Real Property
Tax Act.
(h) Seller shall cause the provisions of any Tax sharing
or apportionment agreement to which the Company or the Subsidiary
is a party or which affects the liability of the Company or the
Subsidiary for the payment of Taxes (or the Company's and the
Subsidiary's obligations under any such agreement) to be terminated
on or before the Closing Date.
13. Assignment. This Agreement and the rights hereunder
shall not be assignable or transferable by either party without the
prior written consent of the other party. Notwithstanding the
foregoing, either party may assign its rights under this Agreement
to an affiliate of such party without the consent of the other
party, provided that no such assignment shall relieve the assigning
party of its obligations hereunder.
14. No Third-Party Beneficiaries. This Agreement is for
the sole benefit of the parties hereto and their permitted
successors and assigns, and nothing herein expressed or implied
shall give or be construed to give to any person or entity, other
than the parties hereto and such successors and assigns, any legal
or equitable rights hereunder.
15. Termination. (a) Anything contained herein to the
contrary notwithstanding, this Agreement may be terminated and the
transactions contemplated hereby abandoned at any time prior to the
Closing:
(i) by mutual written consent of Seller and Buyer;
(ii) by Seller if any of the conditions set forth in
Section 3(b) hereof shall have become incapable of
fulfillment, and shall not have been waived in writing by
Seller;
(iii) by Buyer if any of the conditions set forth in
Section 3(a) hereof shall have become incapable of
fulfillment, and shall not have been waived in writing by
Buyer; or
(iv) by either party hereto, if the Closing does not
occur on or prior to June 15, 1994 (the "Termination
Date");
provided, however, that the party seeking termination pursuant to
clause (ii), (iii) or (iv) is not in breach in any material respect
of any of its representations, warranties, covenants or agreements
contained in this Agreement.
(b) In the event of termination by Seller or Buyer
pursuant to this Section 15, written notice thereof shall forthwith
be given to the other party and the transactions contemplated by
this Agreement shall be terminated, without further action by
either party. If the transactions contemplated by this Agreement
are terminated as provided herein:
(i) Buyer shall return to Seller all documents and
other material received from or on behalf of Seller, the
Company or the Subsidiary relating to the transactions
contemplated hereby, whether so obtained before or after
the execution hereof; and
(ii) all confidential information received by Buyer
shall be treated in accordance with the Confidentiality
Agreement which shall remain in full force and effect in
accordance with the terms thereof notwithstanding the
termination of this Agreement.
(c) If this Agreement is terminated and the transactions
contemplated hereby are abandoned as described in this Section 15,
this Agreement shall become void and of no further force and
effect, except for the provisions of (i) Section 7(a) hereof
relating to the obligation of Buyer to keep confidential certain
information and data obtained by it from Seller, (ii) Section 17
hereof relating to certain expenses, (iii) Section 8(d) hereof
relating to publicity, (iv) Section 23 hereof relating to finder's
fees and broker's fees and (v) this Section 15. Nothing in this
Section 15 shall be deemed to release either party from any
liability for any breach by such party of the terms and provisions
of this Agreement.
16. Survival of Representations. Except as hereinafter
provided in this Section 16, the representations and warranties of
Seller and Buyer in this Agreement and in any certificate delivered
pursuant hereto shall survive the Closing and any investigation at
any time made by or on behalf of any party, solely for purposes of
Section 11 of this Agreement, until the close of business on the
second anniversary of the Closing Date, whereupon such
representations and warranties shall terminate. The
representations and warranties in Section 4(h) shall survive for so
long as the Tax indemnification is available under Section 11(a).
The representations and warranties in Sections 4(b), 4(d) and 4(p)
shall terminate upon expiration of the applicable statute of
limitations.
17. Expenses. Whether or not the transactions
contemplated hereby are consummated, and except as otherwise
provided in this Agreement, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such costs or expenses;
provided, however, that Seller shall pay all such material expenses
of the Company and the Subsidiary incurred prior to the Closing to
the extent the liability therefor has not been included in the
final determination of Closing Net Assets and taken into account in
the calculation of the Adjusted Purchase Price.
18. Amendments. No amendment to this Agreement shall be
effective unless it shall be in writing and signed by both parties
hereto.
19. Notices. All notices or other communications
required or permitted to be given hereunder shall be in writing and
shall be delivered by hand, or sent by telecopy, or sent, postage
prepaid, by United States registered, certified or express mail, or
reputable overnight courier service, and shall be deemed given, if
delivered by hand, when so delivered, or if sent by telecopy, when
received, or if sent by mail, three business days after mailing
(two business days in the case of express mail), or if sent by
overnight courier service, one business day after delivery to such
service, as follows:
(i) if to Buyer, to

Doskocil Companies Incorporated
2601 NW Expressway
Suite 1000
Oklahoma City, Oklahoma 73112

Attention: Bryant Bynum, Vice President,
Planning and Corporate Finance
Facsimile No.: (405)879-5458

with a copy to:

Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022

Attention: Mark C. Smith, Esq.
Facsimile No.: (212)735-2000

(ii) if to Seller, to

International Multifoods Corporation
Multifoods Tower
P. O. Box 2942
33 South Sixth Street
Minneapolis, Minnesota 55402

Attention: Anthony Luiso, Chairman of the Board,
President and Chief Executive Officer
Facsimile No.: (612)340-6502

with copies to:

John E. Sampson, Vice President-
Corporate Planning and Development
Frank W. Bonvino, Vice President,
General Counsel and Secretary
International Multifoods Corporation
Multifoods Tower
P. O. Box 2942
33 South Sixth Street
Minneapolis, Minnesota 55402

Facsimile No.: (612)340-6502

Any party hereto may change the address to which notices and other
communications are to be delivered or sent by giving the other
party notice in the manner herein set forth, provided that notices
of a change of address shall be effective only upon receipt
thereof.
20. Interpretation. In this Agreement, the Disclosure
Schedule and any exhibits annexed hereto:
(a) words denoting the singular include the plural and
vice versa and words denoting any gender include all genders;
(b) the word "including" shall mean "including without
limitation";
(c) the use of headings is for convenience of reference
only and shall not affect the meaning or interpretation of this
Agreement, the Disclosure Schedule or any exhibits annexed hereto;
(d) when calculating the period of time within which or
following which any act is to be done or step taken, the date which
is the reference day in calculating such period shall be excluded
and, if the last day of such period is not a business day (meaning
for all purposes of this Agreement any day other than a Saturday,
Sunday or a day which is a statutory holiday under the laws of the
United States or the State of Minnesota), the period shall end on
the next day which is a business day;
(e) all dollar amounts are expressed in United States
funds;
(f) unless otherwise expressly provided herein, money
shall be tendered by wire transfer of immediately available federal
funds;
(g) as used in this Agreement, the term "affiliate" shall
have the meaning set forth in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended;
(h) as used in this Agreement, the term "person" shall
mean and include an individual, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a
government or any department or agency thereof;
(i) as used in this Agreement, any reference to any
event, change, situation or development having a Material Adverse
Effect means such event, change, situation or development is
materially adverse to the condition (financial or otherwise),
properties, business or results of operations of the Frozen
Specialty Business; and
(j) as used in this Agreement, "Knowledge" of Seller
means the actual knowledge of any officer of Seller, the President
or any Vice President of the Prepared Foods Division of Seller, and
any employee of the Frozen Specialty Business at or above the level
of plant manager.
21. Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original, but all of which
shall be considered one and the same agreement, and shall become
effective when counterparts have been signed by each of the parties
and delivered to the other party.
22. Entire Agreement. This Agreement (including the
Disclosure Schedule, the exhibits annexed hereto and the
certificates referred to herein), and the Confidentiality Agreement
contain the entire agreement and understanding between the parties
hereto with respect to the subject matter hereof and supersede all
prior agreements and understandings relating to such subject
matter. There are no restrictions, promises, representations,
warranties, covenants or undertakings, other than those expressly
set forth or referred to herein.
23. Brokerage Fees. Each party hereto hereby represents
and agrees that (a) the only brokers or finders that have acted for
such party in connection with this Agreement or the transactions
contemplated hereby or that may be entitled to any brokerage fee,
finder's fee or commission in respect thereof are Lehman Brothers
with respect to Seller, and (b) Seller will pay all fees or
commissions which may be payable to Lehman Brothers.
24. Severability. If any provision of this Agreement or
the application of any such provision to any person or circumstance
shall be held invalid, illegal or unenforceable in any respect by
a court of competent jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision hereof.
25. Governing Law. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of
Minnesota applicable to agreements made and to be performed
entirely within such state, without regard to the conflicts of law
principles of such state.
26. Disclosure Schedule, etc. The Disclosure Schedule
and all exhibits attached hereto are hereby incorporated in and
made a part of this Agreement as if set forth in full herein.
Matters reflected in the Disclosure Schedule are not necessarily
limited to matters required by this Agreement to be reflected in
the Disclosure Schedule. Such additional matters are set forth for
informational purposes and do not necessarily include other matters
of a similar nature. The Disclosure Schedule has been arranged in
sections corresponding to the Sections contained in this Agreement,
provided that a disclosure made in any section of the Disclosure
Schedule that is sufficient to reasonably inform Buyer of
information required to be disclosed in another section of the
Disclosure Schedule to avoid a misrepresentation under the
counterpart Section of this Agreement shall be deemed, for all
purposes of this Agreement, to have been made under such other
section of the Disclosure Schedule. In no event shall the mere
listing in the Disclosure Schedule of a document or other item be
deemed adequate to disclose an exception to a representation or
warranty made herein (unless the representation or warranty has to
do with the existence of the document or other item itself or the
mere listing of the document or item in the Disclosure Schedule
otherwise reasonably informs Buyer of an exception to such
representation or warranty).
27. Waiver of Compliance; Consents. Except as otherwise
provided in this Agreement, any failure of either of the parties to
comply with any obligation, covenant, agreement or condition herein
may be waived by the party entitled to the benefits thereof only by
a written instrument signed by the party granting such waiver, but
such waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement or condition shall not operate as
a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consent by or
on behalf of any party hereto, such consent shall be given in
writing in a manner consistent with the requirements for a waiver
of compliance as set forth in this Section 27.
28. Remedies Cumulative. Except as otherwise provided
herein, the remedies provided herein shall be cumulative and shall
not preclude (i) the assertion by Buyer of any other rights
hereunder or the seeking by Buyer of any other remedies against
Seller provided herein, or (ii) the assertion by Seller of any
rights hereunder or the seeking by Seller of any other remedies
against Buyer provided herein.
IN WITNESS WHEREOF, each of the parties have caused this
Agreement to be signed by its duly authorized officer as of the
date first written above.
INTERNATIONAL MULTIFOODS
CORPORATION
(Seller)

By (Duncan H. Cocroft)
Name: Duncan H. Cocroft
Title: Vice President-Finance
and Chief Financial
Officer

DOSKOCIL COMPANIES INCORPORATED
(Buyer)

By (John T. Hanes)
Name: John T. Hanes
Title: Chairman, President and
Chief Executive Officer

MFF09E4E.WP5/MFF100AF.WP5

<TABLE>
Exhibit 11.1

DOSKOCIL COMPANIES INCORPORATED AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE <F1>
(In thousands, except per share figures)
<CAPTION>
Pre-
Post-Confirmation Confirmation
______________________________________ ____________
Fiscal Year Fiscal Year Three Months Nine Months
Ended Ended Ended Ended
Jan. 1, Jan. 2, Dec. 28, Sept. 28,
1994 1993 1991 1991
___________ ___________ ____________ ___________
<S> <C> <C> <C> <C>
Income (loss) before
extraordinary item $ 2,407 $(26,834) $ 3,943 $(48,424)
Extraordinary gain-
forgiveness of debt - - - 113,794
Cumulative effect of change
in accounting for post-
retirement benefits other
than pensions (34,426) - - -
________ ________ ________ ________
Net income (loss) $(32,019) $(26,834) $ 3,943 $ 65,370
======== ======== ======== ========
Primary earnings per share:
Weighted average number of
common shares outstanding 7,419 5,790 5,790 5,116
Common stock equivalents:
Dilutive options
and warrants - - - -
_____ _____ _____ _____
Weighted average number
of common and common
equivalent shares
outstanding 7,419 5,790 5,790 5,116
===== ===== ===== =====
Income (loss) before
extraordinary item $ 0.32 $(4.63) $0.68 $(9.46)
Extraordinary gain-
forgiveness of debt - - - 22.24
Cumulative effect of change
in accounting for post-
retirement benefits other
than pensions (4.64) - - -
______ ______ _____ ______
Net income (loss) per share $(4.32) $(4.63) $0.68 $12.78
====== ====== ===== ======
Fully diluted earnings per share:
Weighted average number of
common shares outstanding 7,419 5,790 5,790 5,116
Common stock equivalents:
Dilutive options
and warrants - - - -
_____ _____ _____ _____
Weighted average number
of common and common
equivalent shares
outstanding 7,419 5,790 5,790 5,116
===== ===== ===== =====
Income (loss) before
extraordinary item $ 0.32 $(4.63) $0.68 $(9.46)
Extraordinary gain-
forgiveness of debt - - - 22.24
Cumulative effect of change
in accounting for post-
retirement benefits other
than pensions (4.64) - - -
______ ______ _____ ______
Net income (loss) per share $(4.32) $(4.63) $0.68 $12.78
====== ====== ===== ======
<FN>
<F1> The per share amounts for the period ended September 28, 1991 do not provide meaningful comparisons due to the Company's
Chapter 11 reorganization.
</TABLE>

EXHIBIT 21.1

LIST OF SUBSIDIARIES

(i) Subsidiaries of Doskocil Companies Incorporated

State of
Name Incorporation

Aeicor International, Inc. Delaware
Aeicorulers, Inc. Delaware
Dixie Foods Company Delaware
Florida Panel Co. Florida
Glendora Holdings Limited Ontario
National Service Center, Inc. Delaware
Northeastern Aluminum Company, Inc. Delaware
Sigma Physical Distribution Systems, Inc. Delaware
Stoppenbach, Inc. Wisconsin
Transocean Gateway Corporation Delaware
Wilson Foods Corporation Delaware
Zenith Natural Gas Company Delaware

Subsidiaries of Wilson Foods Corporation

State of
Name Incorporation

Brennan Packing Co., Inc. Delaware
Concordia Foods Corporation Delaware
Gourmet America, Inc. Delaware
Pafco Importing Company, Inc. Delaware
Shreveport Foods Company Delaware
Tiverton Properties, Inc. Indiana
Toppers Meat Company Delaware
TPCM, Inc. Delaware
Wilson Certified Express, Inc. Delaware

(ii) The stock of certain direct and indirect subsidiaries of the
Company has been pledged pursuant to the Credit Agreement.

Exhibit 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in the registration
statement of Doskocil Companies Incorporated on Form S-8 (File
No. 33-45974) of our report dated March 1, 1994, on our audits of
the consolidated financial statements and financial statement
schedules of Doskocil Companies Incorporated as of January 1,
1994 and January 2, 1993, and for the years ended January 1,
1994, January 2, 1993, the three months ended December 28, 1991,
and the nine months ended September 28, 1991, which report is
included in the Annual Report on Form 10-K.

(Coopers & Lybrand)

COOPERS & LYBRAND

Tulsa, Oklahoma
March 30, 1994