HUDSON FOODS INC, 424B1, 1994-11-15

HUDSON FOODS INC
424B1, 1994-11-15
POULTRY SLAUGHTERING AND PROCESSING

Previous: DUKE REALTY INVESTMENTS INC, 10-Q, 1994-11-15

Next: SMITH BARNEY SHEARSON EQUITY FUNDS, 497, 1994-11-15

<PAGE>

PURSUANT TO RULE 424(b)(1)
REGISTRATION NO. 33-56019
PROSPECTUS
- ----------

4,000,000 SHARES

[LOGO OF HUDSON APPEARS HERE]
CLASS A COMMON STOCK

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

Of the 4,000,000 shares of Class A common stock offered hereby, 2,500,000
shares are being sold by Hudson Foods, Inc. ("Hudson" or the "Company") and
1,500,000 shares are being sold by certain stockholders of the Company (the
"Selling Stockholders"). See "Selling Stockholders." The Company will not
receive any proceeds from the sale of the shares by the Selling Stockholders.

Of the 4,000,000 shares of Class A common stock offered hereby, 3,200,000
shares are being offered in the United States and Canada by the U.S.
Underwriters (the "U.S. Offering") and 800,000 shares are being offered in a
concurrent offering outside the United States and Canada by the International
Underwriters (the "International Offering" and, together with the U.S.
Offering, the "Offerings"). The public offering price and the underwriting
discount per share are identical for the Offerings. See "Underwriting."

The Company's Class A common stock is listed on the New York Stock Exchange,
Inc. under the symbol "HFI." On November 14, 1994, the last reported sale
price of the Class A common stock on the New York Stock Exchange was $21 3/4.
See "Price Range of Common Stock."
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO PROCEEDS TO
PUBLIC DISCOUNT (1) COMPANY (2) SELLING STOCKHOLDERS (2)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share.............. $21.75 $1.03 $20.72 $20.72
- -------------------------------------------------------------------------------------------------------
Total(3)............... $87,000,000 $4,120,000 $51,800,000 $31,080,000
- -------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
(1) The Company and the Selling Stockholders have agreed to indemnify the
several Underwriters against certain liabilities under the Securities Act
of 1933. See "Underwriting."
(2) Before deducting expenses of the offering estimated at $417,913 payable by
the Company and $16,447 payable by the Selling Stockholders.
(3) One of the Selling Stockholders has granted each of the U.S. Underwriters
and the International Underwriters an option exercisable within 30 days
after the date hereof to purchase up to 480,000 and 120,000 additional
shares of Class A common stock, respectively, solely to cover over-
allotments, if any. If such options are exercised in full, the total Price
to Public, Underwriting Discount and Proceeds to Selling Stockholders will
be $100,050,000, $4,738,000 and $43,512,000, respectively. See
"Underwriting."
---------------
The shares of Class A common stock are offered by the several Underwriters,
subject to prior sale, when, as and if issued to and accepted by them, subject
to approval of certain legal matters by counsel for the Underwriters and
certain other conditions. The Underwriters reserve the right to withdraw,
cancel or modify such offer and to reject orders in whole or in part. It is
expected that delivery of the shares of Class A common stock will be made in
New York, New York on or about November 21, 1994.
---------------
MERRILL LYNCH & CO.

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

A.G. EDWARDS & SONS, INC.
---------------
The date of this Prospectus is November 14, 1994
<PAGE>

AVAILABLE INFORMATION

The Company has filed with the Securities and Exchange Commission,
Washington, D.C. 20549, a Registration Statement on Form S-3 (the "Registration
Statement") under the Securities Act of 1933, as amended, with respect to the
Class A common stock offered hereby. The Prospectus does not contain all the
information set forth in the Registration Statement and exhibits and schedules
thereto. For further information with respect to the Company and such Class A
common stock, reference is made to the Registration Statement and the exhibits
and schedules filed as part thereof. Statements contained in this Prospectus as
to the contents of any contract or any other document referred to are not
necessarily complete, and, in each instance, reference is made to the copy of
such contract or document filed as an exhibit to the Registration Statement,
each such statement being qualified in all respects by such reference to such
exhibit.

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). The Registration
Statement, including exhibits and schedules thereto, such reports, proxy
statements and other information filed by the Company may be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at
the Commission's following Regional Offices: 7 World Trade Center (13th Floor),
New York, New York 10048; and Suite 1400 Citicorp Center, 500 West Madison
Street, Chicago, Illinois 60661. In addition, copies of such material can be
obtained by mail from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, at prescribed
rates.

The Company's Class A common stock is listed on the New York Stock Exchange.
Reports, proxy statements and other information concerning the Company can be
inspected at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed by the Company with the Commission are hereby
incorporated by reference: (i) the Company's Annual Report on Form 10-K for the
fiscal year ended October 1, 1994; (ii) the Company's Annual Report on Form 10-
K for the fiscal year ended October 2, 1993; (iii) the Company's proxy
statement for its annual meeting of stockholders held on February 11, 1994;
(iv) the Company's Form 10-Q for the quarter ended January 1, 1994; (v) the
Company's Form 10-Q for the quarter ended April 2, 1994; (vi) the Company's
Form 10-Q for the quarter ended July 2, 1994; (vii) the description of the
Class A common stock contained in the Company's Form 8-A Registration Statement
filed January 22, 1986, as amended by Form 8 filed January 19, 1987; (viii) the
Company's Form 8-K filed October 13, 1994; and (ix) the Company's Form 8-K
filed October 28, 1994.

All reports and other documents filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of this offering shall be deemed to be
incorporated by reference into this Prospectus, and to be a part hereof from
the date of filing such documents.

Any statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein, or in any other subsequently filed document which also is or is deemed
to be incorporated by reference herein, modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.

The Company will provide without charge to each person to whom a copy of this
Prospectus is delivered, upon the written or oral request of such person, a
copy of any or all of the foregoing documents incorporated herein by reference
other than exhibits to such documents (unless such exhibits are specifically
incorporated by reference therein). Requests for such copies should be directed
to Tommy D. Reynolds, Secretary, Hudson Foods, Inc., P.O. Box 777, Rogers,
Arkansas 72757-0777, (501) 636-1100.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CLASS A COMMON
STOCK OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE
OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

2
<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial statements, including the notes thereto, appearing
elsewhere in this Prospectus. Unless indicated otherwise, the information
contained in this Prospectus assumes that the Underwriters' over-allotment
option is not exercised.

THE COMPANY

Hudson is a major U.S. producer of further-processed poultry and meat
products with sales for fiscal 1994 of over $1 billion. The Company was
established in 1972 as a regional poultry company selling commodity-type
products. Through sales growth and product line expansion, Hudson has grown
into one of the country's largest domestic poultry producers. In recent years
the Company has implemented a strategy to increase sales of further-processed
poultry products, to increase sales to targeted large customers under supply
and pricing arrangements that yield more stable profit margins and to diversify
its product line to include non-poultry products. The Company's product lines
and their percentage of total sales for fiscal 1994 were: chicken, 51.2%;
portioned entrees, 16.9%; luncheon meats, 15.8%; turkey, 10.9%; and other
products, 5.2%. The Company's products are marketed nationwide to club store
chains, fast food chains and full service restaurants, retail supermarket
chains, prepared food companies, and various institutional customers. Its
largest customers are Wal-Mart Stores, Inc. ("Wal-Mart"), including its Sam's
Club division, and the Burger King system. The Company is also a principal
supplier to the Boston Chicken system.

The Company continues to implement the following business strategies:

. Increasing sales of further-processed poultry products. The production
and sale of further-processed products reduces the influence of feed
grain costs on the Company's profitability. As additional processing is
performed, this cost becomes a decreasing percentage of a product's total
production cost. The sales prices of further-processed products also
fluctuate less than commodity poultry prices. In implementing this
strategy, Hudson has expanded, upgraded and modified most of its poultry
production facilities to accommodate the production of further-processed
items.

. Increasing sales represented by cost-plus or firm-price sales
arrangements. Sales under cost-plus or firm-price arrangements generally
lead to more stable margins. To increase its sales under such
arrangements, the Company has recently agreed to customize specific
production facilities to meet a portion of the production requirements of
the Burger King system and the Boston Chicken system. In turn, these
customers have entered into long-term supply agreements with cost-plus or
firm-price arrangements.

. Developing foodservice and club store sales. Sales to foodservice and
club store customers involve higher and more predictable volumes. In
recent years the Company expanded its production facilities and marketing
staff to focus on these customers. Over the past three fiscal years sales
to these customers have increased more than 51%.

. Diversifying the portioned entree and luncheon meat product lines. By
increasing the breadth of its product line, the Company is able to
develop new customers and further penetrate existing accounts. The
Company has implemented this strategy primarily through acquisition and
expansion of existing portioned entree and luncheon meat brands such as
Pierre(TM), Ohse(R), Schweigert(R) and Roegelein(R).

. Increasing international sales. Due to U.S. consumers' preference for
chicken breast meat the Company has targeted international markets to
generate sales of leg quarters. In 1992, the Company established an
international sales department to expand the volume of leg quarters and
other products sold abroad. As a result of this effort, sales in these
markets have grown from less than 1% of total sales in fiscal 1991 to
more than 5% for fiscal 1994.

. Assessing appropriate acquisition opportunities. The Company continues to
assess appropriate acquisition opportunities to satisfy growing customer
demands and to continue to broaden the Company's product base.

3
<PAGE>

On October 12, 1994, Hudson entered into a five-year, cost-plus supply
agreement with Boston Chicken, Inc., ("Boston Chicken") a franchisor and
operator of food service stores specializing in complete meals featuring
rotisserie roasted chicken. The agreement provides for Boston Chicken to
purchase 100% of the capacity of two Hudson chicken processing plants. One
plant in Dexter, Missouri will be expanded to process approximately 650,000
chickens per week and is expected to begin production for Boston Chicken in the
spring of 1995. The other plant will be part of an integrated chicken
processing complex to be built near Henderson, Kentucky. The Henderson plant is
expected to begin production for Boston Chicken in the spring of 1996, with
initial production averaging 325,000 chickens per week. When the Henderson
plant reaches full capacity, scheduled for 1998, its production is expected to
average 1.3 million chickens per week. The Company currently processes
approximately 4.3 million chickens per week.

The Company is nearing completion of a hamburger processing plant in
Columbus, Nebraska. The Burger King system has committed to purchase for a
multi-year period a majority of the capacity of this facility. These sales will
be made to the Burger King system at a formula price plus raw material costs.
In addition, the Company is a minority co-investor with the Burger King
Corporation and SBS Processing, Inc. in a second hamburger plant currently
being constructed in Petersburg, Virginia.

The Company's executive offices are located at 1225 Hudson Road, Rogers,
Arkansas 72756, and its telephone number is (501) 636-1100.

THE OFFERINGS

<TABLE>
<S> <C>
Class A common stock offered by the
Company.............................. 2,500,000 shares
Class A common stock offered by the
Selling Stockholders................. 1,500,000 shares
Common stock to be outstanding after
the Offerings:
Class A............................. 12,599,524 shares (1)
Class B............................. 7,002,834 shares
Use of proceeds....................... To finance capital expenditures and for
general corporate purposes
New York Stock Exchange symbol........ HFI
Dividend policy....................... Currently, $.03 per share per quarter on
Class A common stock and $.025 per share
per quarter on Class B common stock. See
"Dividend Policy."
</TABLE>
- --------
(1) Excludes 482,309 shares of Class A common stock reserved for issuance and
exercisable under the Company's stock option plans as of October 1, 1994.

4
<PAGE>

SUMMARY CONSOLIDATED FINANCIAL DATA

The following table sets forth selected consolidated financial data of the
Company for the five fiscal years ended October 1, 1994. The information has
been derived from the consolidated financial statements of the Company which
have been audited by Coopers & Lybrand L.L.P., independent certified public
accountants. This data should be read in conjunction with the Company's
consolidated financial statements and the notes thereto and "Management's
Discussion and Analysis of Results of Operations and Financial Condition." The
Company's fiscal year is a 52- or 53-week period ending each year on the
Saturday closest to September 30.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED (AS RESTATED)(1)
--------------------------------------------------------------------
SEPT. 29, 1990 SEPT. 28, 1991 OCT. 3, 1992 OCT. 2, 1993 OCT. 1, 1994
(52 WEEKS) (52 WEEKS) (53 WEEKS) (52 WEEKS) (52 WEEKS)
-------------- -------------- ------------ ------------ ------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Sales................... $666,697 $765,292 $809,243 $920,545 $1,040,840
Gross profit............ 60,477 74,976 76,215 118,543 155,592
Operating income........ 16,830 21,196 7,775 33,922 51,139
Income before
income taxes........... 13,850 13,529 3,641 25,417 44,987
Net income.............. 8,712 8,542 2,170 15,905 26,992
Earnings per share:
Primary................ 0.60 0.58 0.15 1.01 1.62
Fully diluted.......... 0.60 0.58 0.15 1.01 1.61
Weighted average shares
outstanding:
Primary................ 14,621 14,733 14,303 15,751 16,632
Fully diluted.......... 14,621 14,733 14,303 15,751 16,732
Cash dividends per
share:
Class A................ $ 0.12 $ 0.12 $ 0.12 $ 0.12 $ 0.12
Class B................ 0.10 0.10 0.10 0.10 0.10
Total dividends paid.... 1,537 1,513 1,503 1,706 1,796
OTHER FINANCIAL DATA:
Capital expenditures.... $ 32,446 $ 31,326 $ 46,960 $ 21,453 $ 49,161
Depreciation and
amortization........... 14,346 16,536 17,911 22,943 22,279
</TABLE>

<TABLE>
<CAPTION>
OCTOBER 1, 1994
-----------------------
ACTUAL AS ADJUSTED(2)
-------- --------------
<S> <C> <C>
BALANCE SHEET DATA:
Working capital......................................... $100,096 $147,740
Total assets............................................ 473,180 520,824
Long-term obligations, less current portion............. 75,169 65,890
Total stockholders' equity.............................. 209,189 266,113
</TABLE>
- --------
(1) Amounts for fiscal years 1990 through 1993 have been restated for the
adoption of Statement of Financial Accounting Standards No. 109. See
"Management's Discussion and Analysis of Results of Operations and
Financial Condition--Accounting Policies."
(2) Reflects the sale by the Company of the shares of Class A common stock in
the Offerings and the retirement subsequent to October 1, 1994 of $9.3
million of 8% Convertible Subordinated Debentures of which $5.5 million
were converted to 263,837 shares of common stock.

5
<PAGE>

USE OF PROCEEDS

The net proceeds to the Company from the sale of shares of Class A common
stock offered by the Company hereby are estimated to be $51,382,087 million.
The Company will not receive any proceeds from the sale of 1,500,000 shares of
Class A common stock (2,100,000 shares of Class A common stock if the
Underwriters' over-allotment option is exercised in full) offered by the
Selling Stockholders.

The Company intends to use a portion of the net proceeds to finance the
construction of an integrated poultry processing complex near Henderson,
Kentucky, dedicated to production for Boston Chicken, and a hamburger
processing plant in Columbus, Nebraska, dedicated to production for the Burger
King system, and for general corporate purposes. Pending application of the
proceeds as described above, the Company intends to invest in short-term,
interest-bearing bank deposits, repurchase obligations and governmental
securities. See "Management's Discussion and Analysis of Results of Operations
and Financial Condition."

DIVIDEND POLICY

The Company's Board of Directors has declared cash dividends every fiscal
quarter since the Company's initial public offering in February 1986. Since
April 1987, the Board has declared quarterly dividends of $.03 per share of
Class A common stock and $.025 per share of Class B common stock. The Company's
certificate of incorporation restricts the per share dividends declared and
paid on Class B common stock to not more than 90% of the per share dividends
declared and paid on Class A common stock.

Payment of future dividends will depend upon the Company's financial
condition, results of operations and other factors deemed relevant by the Board
of Directors. Additionally, the Company has entered into certain loan
agreements that restrict its ability to pay dividends. The Company's primary
credit facility restricts dividend payments to a maximum of $2.75 million in
any fiscal year.

PRICE RANGE OF COMMON STOCK

The Company's Class A common stock is traded on the New York Stock Exchange
("NYSE") under the symbol "HFI." The following table sets forth on a per share
basis, for the period indicated, the high and low sales prices of the Class A
common stock as reported on the NYSE composite tape.

<TABLE>
<CAPTION>
FISCAL 1993 HIGH LOW
----------- ------- -------
<S> <C> <C>
First Quarter............................................. $14 $ 7 1/2
Second Quarter............................................ 15 3/8 10 3/8
Third Quarter............................................. 13 7/8 10 1/4
Fourth Quarter............................................ 11 3/8 10 1/4
<CAPTION>
FISCAL 1994
-----------
<S> <C> <C>
First Quarter............................................. 13 1/2 10 5/8
Second Quarter............................................ 16 5/8 11 1/8
Third Quarter............................................. 18 3/8 12 3/4
Fourth Quarter............................................ 25 1/8 17 7/8
<CAPTION>
FISCAL 1995
-----------
<S> <C> <C>
First Quarter (through November 14, 1994)................. 24 1/2 20 3/4
</TABLE>

On November 14, 1994, the closing price of the Class A common stock on the
NYSE was $21 3/4 per share. At November 7, 1994, 8,599,524 shares of Class A
common stock were outstanding; these shares were held by approximately 1,314
holders of record.

The Class B common stock is not traded on the NYSE or any other exchange, and
the Company is not aware of any public market for such shares. At November 7,
1994, 8,502,834 shares of Class B common stock were outstanding; these shares
were held by approximately 21 holders of record.

6
<PAGE>

CAPITALIZATION

The following table sets forth unaudited information regarding the
capitalization of the Company as of October 1, 1994, and as adjusted to give
effect to (i) the sale by the Company of the shares of the Class A common
stock in the Offerings and the application of the net proceeds therefrom, (ii)
conversion of 1.5 million shares of Class B common stock into an equivalent
number of shares of Class A common stock by certain Selling Stockholders for
sale in the Offerings, and (iii) the retirement, subsequent to October 1,
1994, of $9.3 million of 8% Convertible Subordinated Debentures, of which $5.5
million were converted to 262,885 shares of Class A common stock and $26,000
were converted to 952 shares of Class B common stock. This table should be
read in conjunction with "Selected Consolidated Financial Data" and the
Consolidated Financial Statements of the Company appearing elsewhere herein.
See "Index to Consolidated Financial Statements."

<TABLE>
<CAPTION>
OCT. 1, 1994
--------------------------
(DOLLARS IN THOUSANDS)
ACTUAL AS ADJUSTED
----------- -------------
<S> <C> <C>
Long-term obligations (less current portion)(1)..... $ 75,169 $ 65,890
----------- -----------
Stockholders' equity:
Common stock:
Class A, $.01 par value, issued 9,233,893 shares
(13,496,778 shares as adjusted)(2).............. 92 135
Class B, $.01 par value, issued 8,501,882 shares
(7,002,834 shares as adjusted).................. 85 70
Additional capital................................ 97,505 154,401
Retained earnings................................. 122,923 122,923
Treasury stock, at cost (933,854 Class A shares).. (11,416) (11,416)
----------- -----------
Total stockholders' equity........................ 209,189 266,113
----------- -----------
Total capitalization................................ $ 284,358 $ 332,003
=========== ===========
</TABLE>
- --------
(1) See Note 6 of Notes to Consolidated Financial Statements.
(2) Excludes 482,309 shares of Class A common stock reserved for issuance and
exercisable under the Company's stock option plans as of October 1, 1994.

7
<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA

<TABLE>
<CAPTION>
FISCAL YEAR ENDED (AS RESTATED)(1)
--------------------------------------------------------------------
SEPT. 29, 1990 SEPT. 28, 1991 OCT. 3, 1992 OCT. 2, 1993 OCT. 1, 1994
(52 WEEKS) (52 WEEKS) (53 WEEKS) (52 WEEKS) (52 WEEKS)
-------------- -------------- ------------ ------------ ------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Sales................... $666,697 $765,292 $809,243 $920,545 $1,040,840
Cost of sales........... 606,220 690,316 733,028 802,002 885,248
-------- -------- -------- -------- ----------
Gross profit............ 60,477 74,976 76,215 118,543 155,592
Selling................. 27,270 37,135 49,907 63,926 78,698
General and
administrative......... 16,377 16,645 18,533 20,695 25,755
-------- -------- -------- -------- ----------
Operating income........ 16,830 21,196 7,775 33,922 51,139
Interest................ 7,571 9,073 8,476 7,975 6,152
Other, net.............. (4,591) (1,406) (4,342) 530 --
-------- -------- -------- -------- ----------
Income before income
taxes.................. 13,850 13,529 3,641 25,417 44,987
Income tax expense...... 5,138 4,987 1,471 9,512 17,995
-------- -------- -------- -------- ----------
Net income.............. $ 8,712 $ 8,542 $ 2,170 $ 15,905 $ 26,992
======== ======== ======== ======== ==========
Earnings per share:
Primary................ $ 0.60 $ 0.58 $ 0.15 $ 1.01 $ 1.62
Fully diluted.......... 0.60 0.58 0.15 1.01 1.61
Weighted average shares
outstanding:
Primary................ 14,621 14,733 14,303 15,751 16,632
Fully diluted.......... 14,621 14,733 14,303 15,751 16,732
Cash dividends per
share:
Class A................ $ 0.12 $ 0.12 $ 0.12 $ 0.12 $ 0.12
Class B................ 0.10 0.10 0.10 0.10 0.10
Total dividends paid.... 1,537 1,513 1,503 1,706 1,796

OTHER FINANCIAL DATA:
Capital expenditures.... $ 32,446 $ 31,326 $ 46,960 $ 21,453 $ 49,161
Depreciation and
amortization........... 14,346 16,536 17,911 22,943 22,279

BALANCE SHEET DATA:
Working capital......... $ 89,822 $ 88,564 $ 81,475 $103,811 $ 100,096
Total assets............ 342,269 360,191 402,188 416,503 473,180
Long-term obligations,
less current portion... 89,675 97,418 125,695 88,985 75,169
Total stockholders'
equity................. 126,005 133,499 134,330 173,902 209,189
</TABLE>
- --------
(1) Amounts for fiscal years 1990 through 1993 have been restated for the
adoption of Statement of Financial Accounting Standards No. 109. See
"Management's Discussion and Analysis of Results of Operations and
Financial Condition--Accounting Policies."

8
<PAGE>

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

GENERAL

Historically, the Company's operating results have been heavily influenced by
two external factors: the cost to the Company of feed grains and the price
received by the Company for its commodity-based finished products. These two
factors have fluctuated significantly and independently. Inflation has not
materially affected results of operations.

In recent years the Company has undertaken a business strategy focused
largely on the following: increased production and sale of further-processed
poultry and other processed food products, and increased sales to larger
customers such as club store and fast food chains. This strategy decreased the
proportion of feed grain costs in relation to total cost of sales, which
reduced the impact of commodity cost fluctuations. In addition, the sales
prices of further-processed products are less sensitive to commodity poultry
price fluctuations. Another result of this strategy has been increased sales to
large customers under firm-price or cost-plus contracts utilizing dedicated
plant arrangements. Although an increase in feed grain costs or a decrease in
finished product prices could have an adverse effect on the Company, management
believes that the implementation of this strategy has reduced the Company's
vulnerability to such price fluctuations.

While the Company believes the above factors will result in more predictable
and stable profit margins, increased sales to large customers and sales of
further-processed products have tended to increase costs relating to
commissions, advertising, distribution, demonstration and storage expenses. For
example, introductions of new products in fiscal 1992 and 1993 into Sam's Club
stores, a division of Wal-Mart ("Sam's Club"), required the Company to sponsor
and pay for in-store product demonstrations, thereby increasing selling
expenses in those years. Although there can be no assurances, the Company
expects that future selling expenses as a percentage of sales will approximate
current levels.

RESULTS OF OPERATIONS

<TABLE>
<CAPTION>
PERCENTAGE OF SALES
-----------------------------------------------------
FISCAL YEAR ENDED
-----------------------------------------------------
SEPT. 28, 1991 OCT. 3, 1992 OCT. 2, 1993 OCT. 1, 1994
(52 WEEKS) (53 WEEKS) (52 WEEKS) (52 WEEKS)
-------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Sales.................... 100.0% 100.0% 100.0% 100.0%
Cost of sales............ 90.2 90.6 87.1 85.1
----- ----- ----- -----
Gross profit............. 9.8 9.4 12.9 14.9
Selling.................. 4.8 6.1 6.9 7.5
General and
administrative.......... 2.2 2.3 2.3 2.5
----- ----- ----- -----
Operating income......... 2.8 1.0 3.7 4.9
Interest................. 1.2 1.0 0.9 0.6
Other, net............... (0.2) (0.5) 0.1 --
----- ----- ----- -----
Income before income
taxes................... 1.8 0.5 2.7 4.3
Income tax expense....... 0.7 0.2 1.0 1.7
----- ----- ----- -----
Net income............... 1.1 0.3 1.7 2.6
===== ===== ===== =====
</TABLE>

Fiscal 1994 Compared with Fiscal 1993

Sales from the Company's operations were $1,040.8 million for fiscal 1994, an
increase of $120.3 million, or 13.1%, over fiscal 1993. The sales increase
primarily resulted from the following:

. Chicken sales increased 17.3% to $533.4 million in fiscal 1994 from
$454.9 million in fiscal 1993 due to higher finished product prices, a
change in the product mix to include additional further-processed and
convenience products and a 13.7% increase in volume. The volume increase
was primarily due to increased sales in international markets.

9
<PAGE>

. Portioned entree sales increased 22.3% to $175.5 million in fiscal 1994
from $143.5 million in fiscal 1993 primarily due to higher finished
product prices and a 15.8% increase in volume which was primarily due to
new sales to the Burger King system and sales of meal kit products.

. Luncheon meat sales increased 3.0% to $164.7 million in fiscal 1994 from
$159.9 million in fiscal 1993 due to higher finished product prices.

. Turkey sales increased 12.5% to $113.2 million in fiscal 1994 from $100.6
million in fiscal 1993 due to higher finished product prices and sales of
additional further-processed products.

Cost of sales was $885.2 million for fiscal 1994, an increase of $83.2
million, or 10.4%, over fiscal 1993. As a percentage of sales, cost of sales
decreased to 85.1% in fiscal 1994 from 87.1% in fiscal 1993 primarily due to a
higher percentage of sales of further-processed products and improved operating
efficiencies. This improvement was partially offset by a 6.9% increase in feed
costs per ton.

Gross profit was $155.6 million for fiscal 1994, an increase of $37.0
million, or 31.3%, over fiscal 1993. As a percentage of sales, gross profit
increased to 14.9% in fiscal 1994 from 12.9% in fiscal 1993 largely due to the
improvements described above.

Selling and general and administrative expenses were $104.5 million in fiscal
1994, an increase of $19.8 million, or 23.4%, over fiscal 1993. As a percentage
of sales, selling and general and administrative expenses increased to 10.0% in
fiscal 1994 from 9.2% in fiscal 1993. This increase was due to higher
advertising, distribution, demonstration, and product handling expenses
primarily related to increased international sales, meal kit products and Sam's
Club sales. In addition, there was an increase in incentive compensation
accruals.

Operating income was $51.1 million in fiscal 1994, an increase of $17.2
million, or 50.8%, over fiscal 1993. This increase was primarily due to the
improvements in the Company's operations as described previously.

Interest expense was $6.2 million in fiscal 1994, a decrease of $1.8 million,
or 22.9%, from fiscal 1993. This decrease was due primarily to the redemption
of 14% Convertible Subordinated Debentures in the second quarter of fiscal
1993.

Fiscal 1993 Compared with Fiscal 1992

Sales from the Company's operations were $920.5 million for fiscal 1993, an
increase of $111.3 million, or 13.8%, over fiscal 1992. The sales increase
primarily resulted from the following:

. Chicken sales increased 10.2% to $454.9 million in fiscal 1993 from
$412.9 million in fiscal 1992 due to higher finished product prices,
changes in product mix to include additional further-processed and
convenience products and a 1.3% increase in volume which was primarily
due to new sales to the Burger King system, increased sales to Sam's Club
and the Company's entrance into new international markets such as Russia
and Eastern Europe, Mexico and Central America, Southeast Asia and the
Middle East.

. Portioned entree sales increased 34.4% to $143.5 million in fiscal 1993
from $106.8 million in fiscal 1992 due to higher finished product prices
and a 27.8% increase in volume. Volume increased due to increased sales
to Sam's Club and sales of new products such as meal kits and sandwiches.

. Luncheon meat sales increased 5.3% to $159.9 million in fiscal 1993 from
$151.9 million in fiscal 1992 due to increased volume of 5.5% which was
partially offset by a slight decline in finished product prices.

10
<PAGE>

. Turkey sales increased 28.6% to $100.6 million in fiscal 1993 from $78.2
million in fiscal 1992 primarily due to a 32.2% increase in volume
resulting from late Thanksgiving and Christmas orders placed after fiscal
1992 year-end and also increased sales of further-processed products such
as deli turkey breasts. This increase was partially offset by a slight
decline in finished product prices.

Cost of sales was $802.0 million for fiscal 1993, an increase of $69.0
million, or 9.4%, over fiscal 1992. As a percentage of sales, cost of sales
decreased to 87.1% in fiscal 1993 from 90.6% in fiscal 1992 primarily due to a
higher percentage of further-processed product sales, a 4.2% decrease in feed
costs per ton and improved operating efficiencies.

Gross profit increased to $118.5 million for fiscal 1993, an increase of
$42.3 million, or 55.5%, over fiscal 1992. As a percentage of sales, gross
profit increased to 12.9% in fiscal 1993 from 9.4% in fiscal 1992 largely due
to the improvements described above.

Selling and general and administrative expenses were $84.6 million in fiscal
1993, an increase of $16.2 million, or 23.6%, over fiscal 1992. As a percentage
of sales, selling and general and administrative expenses increased to 9.2% in
fiscal 1993 from 8.4% in fiscal 1992. This increase was due to higher
commissions, advertising, distribution, demonstration, rebates, storage and
product handling expenses relating to Sam's Club sales, meal kit and portioned
entree products and increased international sales.

Operating income was $33.9 million in fiscal 1993, an increase of $26.1
million, or 336.3%, over fiscal 1992. This increase was primarily due to the
improvements in the Company's operations discussed above.

Fiscal 1992 Compared with Fiscal 1991

Sales from the Company's operations were $809.2 million for fiscal 1992, an
increase of $44.0 million, or 5.7%, over fiscal 1991. The sales increase
primarily resulted from the following:

. Chicken sales increased 9.2% to $412.9 million in fiscal 1992 from $378.1
million in fiscal 1991 due to higher finished product prices, changes in
product mix to include additional further-processed and convenience
products and a 3.1% increase in volume which was primarily due to
increased sales to Sam's Club.

. Portioned entree sales increased 42.8% to $106.8 million in fiscal 1992
from $74.8 million in fiscal 1991 due to higher finished product prices
and a 31.7% increase in volume which was due to additional sales to Sam's
Club and sales of new products.

. Luncheon meat sales decreased 2.7% to $151.9 million in fiscal 1992 from
$156.1 million in fiscal 1991 due to lower finished product prices offset
by a 4.7% increase in volume.

. Turkey sales decreased 14.3% to $78.2 million in fiscal 1992 from $91.3
million in fiscal 1991 primarily due to a 14.2% decrease in volume
resulting from late Thanksgiving and Christmas orders placed after fiscal
1992 year-end.

Cost of sales was $733.0 million for fiscal 1992, an increase of $42.7
million, or 6.2%, over fiscal 1991. As a percentage of sales, cost of sales
increased to 90.6% in fiscal 1992 from 90.2% in fiscal 1991 primarily due to a
3.1% increase in feed costs per ton partially offset by sales of more further-
processed products.

Gross profit increased to $76.2 million for fiscal 1992, an increase of $1.2
million, or 1.7%, over fiscal 1991. As a percentage of sales, gross profit
decreased to 9.4% in fiscal 1992 from 9.8% in fiscal 1991, largely due to the
factors described above.

Selling and general and administrative expenses were $68.4 million in fiscal
1992, an increase of $14.7 million, or 27.3%, over fiscal 1991. As a percentage
of sales, selling and general and administrative expenses increased to 8.4% in
fiscal 1992 from 7.0% in fiscal 1991. This increase was due to higher
commissions, advertising, distribution, demonstration and storage expenses
relating to portioned entree, luncheon meat and Sam's Club sales.

11
<PAGE>

Operating income was $7.8 million in fiscal 1992, a decrease of $13.4
million, or 63.3%, from fiscal 1991. This decrease was primarily due to the
items discussed above.

Other, net for fiscal 1992, includes $3.9 million of casualty gains from
insurance proceeds received in excess of the book value of assets destroyed by
fire.

LIQUIDITY AND CAPITAL RESOURCES

Working capital at October 1, 1994 was $100.1 million compared with $103.8
million at October 2, 1993 and the current ratio was 1.87 to 1 and 2.28 to 1 at
October 1, 1994 and October 2, 1993, respectively. The Company's total
capitalization, as represented by long-term obligations plus stockholders'
equity, was $284.4 million on October 1, 1994, compared with $262.9 million on
October 2, 1993. Long-term obligations represented 26.4% and 33.8% of total
capitalization on October 1, 1994 and October 2, 1993, respectively.

Notes payable due under the Company's unsecured credit agreements were $16.8
million on October 1, 1994 compared with no outstanding balance on October 2,
1993. Notes payable increased due to the higher levels of capital spending
during fiscal 1994. Total long-term obligations decreased $13.8 million as a
result of $8.1 million of 8% Convertible Subordinated Debentures that were
converted into Class A common stock and scheduled long-term debt repayments of
$5.7 million.

Class A common stock and additional capital increased $9.9 million to $97.6
million at October 1, 1994 from $87.7 million at October 2, 1993. The increase
was due primarily to $8.1 million of 8% Convertible Subordinated Debentures
converted into common stock, stock options exercised under the Company's Stock
Option Plan and stock issued under the Company's Employee Stock Purchase Plan
(from treasury stock).

The Company's cash flow provided by operating activities was $36.3 million
for fiscal 1994 compared with $29.0 million for fiscal 1993. The increase was
due primarily to higher net income.

For fiscal 1994 and 1993, the Company had capital expenditures of $49.2
million and $21.5 million, respectively. Those expenditures were primarily for
upgrading and expanding production facilities and related equipment. The
capital expenditures have been financed by operations, borrowings under the
Company's credit agreement and/or lease arrangements.

The Company recently announced plans to build a new chicken complex near
Henderson, Kentucky the capacity of which will be dedicated to Boston Chicken.
Additionally, during the third quarter of fiscal 1994, the Company began
construction of a beef processing plant in Columbus, Nebraska that will supply
hamburger patties to the Burger King system. It is expected that during fiscal
1995 capital expenditures for these and other projects will be approximately
$94.0 million. To achieve this level of capital expenditures, the Company will
be required to obtain waivers from certain lenders. Management believes that
such waivers will be obtained. However, there can be no assurance that such
waivers will be granted. The capital expenditures will be financed by
operations, borrowings under the Company's credit agreements, lease
arrangements and proceeds of the Offerings.

Historically, the Company's operations have been financed through internally
generated funds, borrowings, lease arrangements and the issuance of common
stock. On April 26, 1994, the Company entered into a $100 million unsecured
revolving credit agreement that expires June 30, 1997. At October 1, 1994, the
Company had available under this agreement $85.0 million. The credit agreement,
among other things, limits the payment of dividends to approximately $2.8
million in any fiscal year and limits annual capital expenditures and lease
obligations. It requires the maintenance of minimum levels of working capital
and tangible net worth and that the current ratio, leverage ratio and cash flow
coverage ratio be maintained at certain levels. It also limits the creation of
new secured debt to $25.0 million and new unsecured short-term debt with
parties outside the credit agreement to $20.0 million. Additionally, an event
of default will exist if the aggregate outstanding voting power of James T.
Hudson and his immediate family in the Company is reduced below 51%.

On May 18, 1994, the Company entered into an unsecured term loan agreement
with a financial institution giving the Company the right to borrow up to $50.0
million of senior notes fixed at a rate to be

12
<PAGE>

determined at drawdown. The Company had not borrowed under the agreement at
October 1, 1994. The agreement expires February 24, 1996.

On July 8, 1994, the Company entered into an unsecured short-term line of
credit agreement with a financial institution giving the Company the right to
borrow up to $10.0 million. The agreement expires June 1, 1995. At October 1,
1994, the Company had $10.0 million, payable on demand, outstanding under this
agreement. Additionally, on August 10, 1994, the Company entered into an
unsecured short-term line of credit agreement with a financial institution
giving the Company the right to borrow up to $10.0 million. Borrowings under
this agreement, if any, are due and payable within 30 days. The Company had not
borrowed under this agreement at October 1, 1994.

TAX MATTERS

The Internal Revenue Service has examined the Company's 1989 and 1990 federal
income tax returns and has issued a notice of deficiency asserting additional
taxes of $22.4 million and penalties of $5.8 million. If an assessment is
ultimately upheld, it will result in the acceleration of previously recorded
deferred income taxes. However, since most of the items in dispute relate to
the timing of the recognition of income or deductions, a portion of the income
taxes for years subsequent to 1990 would be refundable. Management is
contesting the notice of deficiency and the case has been docketed for a
hearing in early 1995 in federal tax court. Management believes that ultimate
resolution of these matters will not have a material impact on the Company's
financial position or results of operations.

ACCOUNTING POLICIES

Beginning in fiscal 1994, the Company adopted Statement of Financial
Accounting Standards No. 109 (SFAS 109), "Accounting for Income Taxes," which
requires that deferred tax liabilities and assets be recognized for any
difference between the tax basis of assets and liabilities and their financial
reporting amounts measured by using presently enacted tax laws and rates. The
Company elected to apply the provisions of SFAS 109 retroactively to September
28, 1986.

The Company uses the farm price method of inventory valuation for income tax
reporting which results in current deferred income taxes for financial
reporting. The Company anticipates that it will be able to maintain its
inventory at current levels and, accordingly, does not expect a significant
portion of the current deferred income tax to be paid in the near future.

13
<PAGE>

BUSINESS

GENERAL

Hudson is a major U.S. producer of further-processed poultry and meat
products with sales for fiscal 1994 of over $1 billion. The Company was
established in 1972 as a regional poultry company selling commodity-type
products. Through sales growth and product line expansion, Hudson has grown
into one of the country's largest domestic poultry producers. In recent years
the Company has implemented a strategy to increase sales of further-processed
poultry products, to increase sales to targeted large customers under supply
and pricing arrangements that yield more stable profit margins and to diversify
its product line to include non-poultry products. The Company's product lines
and their percentage of total sales for fiscal 1994 were: chicken, 51.2%;
portioned entrees, 16.9%; luncheon meats, 15.8%; turkey, 10.9%; and other
products, 5.2%. The Company's products are marketed nationwide to club store
chains, fast food chains and full service restaurants, retail supermarket
chains, prepared food companies, and various institutional customers. Its
largest customers are Wal-Mart, including Sam's Club, and the Burger King
system. The Company is also a principal supplier to the Boston Chicken system.

COMPANY HISTORY

The Company was organized in 1972 by James T. Hudson to purchase a broiler
processing plant in Noel, Missouri and other related assets from the Ralston
Purina Company. The Company's poultry operations grew in subsequent years
through a series of acquisitions including an integrated turkey operation in
1979 and a major poultry company in 1986 which doubled Hudson's size and made
it one of the nation's ten largest poultry producers. Between 1987 and 1990 the
Company expanded into luncheon meats with the acquisitions of three established
regional brands: Ohse, Schweigert and Roegelein. In 1990, the Company entered
the market for frozen portioned entrees through the acquisition of Pierre
Frozen Foods, Inc. ("Pierre") and expanded those operations in 1992 with the
purchase of an additional manufacturing plant.

RECENT EVENTS

On October 12, 1994, Hudson entered into a five-year, cost-plus supply
agreement with Boston Chicken, a franchisor and operator of food service stores
specializing in complete meals featuring rotisserie roasted chicken. The
agreement provides for Boston Chicken to purchase 100% of the capacity of two
Hudson chicken processing plants. One plant in Dexter, Missouri will be
expanded to process approximately 650,000 chickens per week and is expected to
begin production for Boston Chicken in the spring of 1995. The other plant will
be part of an integrated chicken processing complex to be built near Henderson,
Kentucky. The Henderson plant is expected to begin production for Boston
Chicken in the spring of 1996, with initial production averaging 325,000
chickens per week. When the Henderson plant reaches full capacity, scheduled
for 1998, its production is expected to average 1.3 million chickens per week.
The Company currently processes approximately 4.3 million chickens per week.

14
<PAGE>

BUSINESS STRATEGY

The Company continues to implement the following business strategies:

PRODUCTS, MARKETING AND CUSTOMERS

The following table sets forth for the periods indicated the net sales of
each of the Company's major product lines.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
-----------------------------------------------------
SEPT. 28, 1991 OCT. 3, 1992 OCT. 2, 1993 OCT. 1, 1994
(52 WEEKS) (53 WEEKS) (52 WEEKS) (52 WEEKS)
-------------- ------------ ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Chicken(1)........... $378.1 $412.9 $454.9 $ 533.4
Portioned entrees.... 74.8 106.8 143.5 175.5
Luncheon meats....... 156.1 151.9 159.9 164.7
Turkey(1)............ 91.3 78.2 100.6 113.2
Other................ 65.0 59.4 61.6 54.0
------ ------ ------ --------
Total sales........ $765.3 $809.2 $920.5 $1,040.8
====== ====== ====== ========
</TABLE>
- --------
(1) The sales figures for chicken and turkey do not include poultry products
processed and sold as luncheon meats and portioned entrees.

15
<PAGE>

The following table sets forth for the periods indicated the net sales to
each of the Company's customer groups.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
-----------------------------------------------------
SEPT. 28, 1991 OCT. 3, 1992 OCT. 2, 1993 OCT. 1, 1994
(52 WEEKS) (53 WEEKS) (52 WEEKS) (52 WEEKS)
-------------- ------------ ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Foodservice and club
stores.................. $384.2 $441.8 $538.0 $ 580.5
Retail................... 302.0 290.0 307.3 381.0
Other.................... 79.1 77.4 75.2 79.3
------ ------ ------ --------
Total sales.............. $765.3 $809.2 $920.5 $1,040.8
====== ====== ====== ========
</TABLE>

Chicken. Per capita consumption of chicken in the United States has increased
73.5% from 1970 to 1993, as consumers have changed their diet toward foods with
lower fat, cholesterol and calorie content. Chicken consumption has also
increased as the convenience of further-processed chicken products has become
more important to consumers, and as fast food and full-service restaurants have
expanded their menus to satisfy demand for affordable, healthier foods. In
response to this demand, the Company offers a wide variety of further-processed
chicken products for convenient preparation and consumption at home and in
restaurants.

The Company's principal further-processed products are individually frozen
boneless and bone-in chicken pieces, breaded and fried chicken breast patties,
chicken breast tenderloins, chicken nuggets, buffalo-style wings and chicken
cordon bleu. These products are sold primarily to club stores under the
Hudson(R) brand name. Hudson's customers for individually frozen products
include the nation's leading club store chains, with the largest club store
customer being Sam's Club. Additionally, Hudson is a principal supplier of
chicken products to the Burger King system.

One of the Company's fastest growing further-processed products is fresh
rotisserie chicken. Hudson is a principal supplier of rotisserie chickens to
the Boston Chicken system and has recently announced an agreement to dedicate
the production of its Dexter, Missouri plant and its planned Henderson,
Kentucky plant to the requirements of that customer's system. See "Business--
Recent Events."

In addition to further-processed products, Hudson sells ice-packed and chill-
packed fresh chicken parts and whole birds. The Company's chill-packed products
are marketed under the Hudson brand name. Hudson's ice-packed products are sold
in bulk to small and medium-sized food retailers and franchisees of fast food
chains directly and through independent distributors.

U.S. consumer preference for chicken breast meat has led the Company to
develop a marketing strategy for leg quarters that targets international
markets, such as Russia and Eastern Europe, Mexico and Central America,
Southeast Asia and the Middle East. The Company has established a sales office
and distribution center in Gdynia, Poland and a sales office in Moscow, Russia.
Exports accounted for 5.8% of the Company's total sales during fiscal 1994.

Portioned Entrees. The Company entered the portioned entree business with its
acquisition of Pierre in 1990. This acquisition significantly broadened the
range of products offered by the Company, particularly to club store and
foodservice customers. The Company has continued to develop this business, and
portioned entree sales have grown from an annualized $49.1 million in fiscal
1990 to $175.5 million in fiscal 1994.

The Company's portioned entrees consist of a full line of portion-controlled
products including fried and flame-broiled hamburgers, sausage patties and
links, country-fried steak, chicken nuggets and chicken patties, meal kits and
related products. These products are distributed nationwide to club store
chains and

16
<PAGE>

foodservice customers such as restaurants, employee cafeterias, colleges and
universities, and health-care facilities. The Company is also one of the
nation's largest processors of United States Department of Agriculture ("USDA")
commodity beef and pork into further-processed products for school lunch
programs. In addition, the portioned entree division sells to vending machine
operators and sandwich makers that service convenience stores.

Luncheon Meats. The Company formed its luncheon meats division with the
acquisition in 1987 of Ohse Meat Products and the subsequent acquisitions of
the Schweigert and Roegelein luncheon meat brands. This division produces a
line of further-processed meat products including luncheon meats, wieners,
sausage, hams and bacon. Its principal customers consist of retail supermarket
chains, cooperative supermarket warehouses and club store chains, together with
foodservice customers such as restaurants, schools and other vendors. This
division is a major supplier of ham to the Burger King system. Products are
marketed under the Ohse, Schweigert and Roegelein brand names as well as
various private labels.

The luncheon meats division sells products, for example a line of
microwaveable sandwiches, made by the portioned entree division under all three
of its brand names. In turn, the luncheon meats division supplies certain
products to the portioned entree division. The Company believes this synergy
between the two divisions increases the profitability of both.

Turkey. Many of the factors that led to the increase in chicken consumption
in the United States also positively affected turkey consumption, which
increased 119.8% on a per capita basis from 1970 to 1993. In response to this
demand, in 1990 Hudson began the process of transforming the turkey division
from being solely a grower and seller of whole turkeys to becoming also a
supplier of further-processed turkey products, including smoked turkey, turkey
sausage, turkey pastrami, turkey salami, turkey bologna and turkey ham sold
under the Hudson brand name. The Company markets individually packaged whole
turkeys, both fresh and frozen, during seasonal peaks under the Hudson brand
name and private label. The Company's further-processed turkey products are
sold primarily to retail grocery chains, delicatessens, institutional
foodservice customers and club store chains. In addition, the Company has begun
exporting turkey products to Mexico.

Major Customers. The Company's sales to Wal-Mart in fiscal 1993 and fiscal
1994 constituted approximately 17.9% and 17.7% of total sales in those periods,
respectively. No other customer accounted for more than 10% of the Company's
sales in fiscal 1993 or fiscal 1994. However, due to recent agreements, the
Company believes that sales to the Burger King system will increase
significantly in fiscal 1995. The loss of either of these customers may have a
material adverse effect on the Company.

PRODUCTION AND FACILITIES

Chicken. The Company's chicken operations include breeding, hatching,
rearing, ingredient procurement, feed formulation and milling, veterinary and
other technical services, and related transportation and delivery services. The
Company contracts with independent growers to maintain the Company's flocks of
breeder chickens which have the capability of laying eggs. The Company
transfers the eggs to its hatcheries. The newly hatched broiler chicks are then
delivered to independent contract growers or Company owned farms where they are
raised until they reach processing weight, usually within seven weeks. During
the grow-out period, the Company provides growers with feed and other items, as
well as supervisory and technical assistance. The broilers are then transported
by the Company's trucks to its processing plants.

The Company currently processes approximately 4.3 million chickens per week,
yielding approximately 775 million pounds of dressed chicken on an annual
basis. In addition, from time to time the Company purchases chicken from
outside sources.

The Company operates six chicken processing plants devoted to various phases
of slaughtering, dressing, cutting, packaging, deboning and further-processing.
It operates six feed mills, seven broiler hatcheries and four protein
facilities.

Portioned Entrees. The Company produces its portion controlled products at
plants in Cincinnati, Ohio and Caryville, Tennessee which have annual
production capacity of approximately 100 million pounds. The Company purchases
its raw materials of beef and pork, and some poultry products, from outside
sources.

17
<PAGE>

Luncheon Meats. The Company produces luncheon meats, wieners and sausage
products at two plants, one in Topeka, Kansas, and one in Albert Lea,
Minnesota. All hams and bacon for the division are produced at the plant in
Wichita, Kansas. The three plants' annual production capacity for processed
meat products is approximately 170 million pounds. The Company purchases its
raw materials of beef and pork, and some poultry products, from outside
sources.

Turkey. The Company operates two turkey processing facilities in Springfield,
Missouri one of which is a further-processing plant. These facilities have an
annual capacity to produce 140 million pounds of turkey products.

COMPETITION

The primary competitive factors in the poultry industry include price,
product quality, product development, brand identification and customer
service. Hudson's poultry products compete primarily with other integrated
poultry companies. Some competitors have greater financial and marketing
resources than the Company. Although poultry is relatively inexpensive in
comparison with other meats, the Company also competes indirectly with the
producers of other meats and fish, as changes in the relative prices of these
foods may affect consumer buying patterns.

The Company's portioned entree division competes with regional and national
meat processing companies, some of which are divisions of fully integrated
companies. Its involvement in USDA commodity conversion programs has resulted
in increased marketing opportunities on a nationwide basis.

The Ohse, Schweigert and Roegelein brands compete primarily with national and
regional meat processing companies. Price and brand name recognition are
important factors in the business. Through a strong marketing program and a
consistent, quality product that is competitively priced, Ohse, Schweigert and
Roegelein have gained strong brand name recognition in their marketing areas.

REGULATION

The poultry industry is subject to significant government regulation,
particularly in the health and environmental areas by the USDA, the Food and
Drug Administration ("FDA") and the Environmental Protection Agency. The
Company anticipates increased regulation by the USDA concerning food safety as
well as by the FDA regarding the use of medication in feed. The Company's food
processing facilities are subject to on-site examination, inspection and
regulation by the USDA. The FDA inspects the production of the Company's feed
mills. Compliance with applicable regulations has not had a material adverse
effect upon the Company's earnings or competitive position in the past, and is
not anticipated to have a material adverse effect in the future. Management
believes that the Company is in substantial compliance with all applicable laws
and regulations relating to the operation of its facilities.

The Company takes all reasonable precautions to ensure that its flocks are
healthy and that its processing plants and other facilities operate in a
sanitary and environmentally sound manner. However, events beyond the control
of the Company, such as an outbreak of poultry disease in its flocks or the
adoption by the government of more stringent environmental regulations, could
adversely affect its operations.

CONTROL BY HUDSON FAMILY

As of November 7, 1994, there were 8,599,524 shares of Class A common stock
and 8,502,834 shares of Class B common stock outstanding. James T. Hudson and
his family currently own in excess of 99% of the outstanding shares of Class B
common stock. Each share of Class A common stock is entitled to one vote in
matters requiring a stockholder vote, while each share of Class B common stock
is entitled to ten votes. Consequently, Mr. Hudson and his family hold
sufficient voting power to control the outcome of matters submitted to a
stockholder vote, including approval of extraordinary corporate transactions
and the election of all directors, thereby insuring their ability to control
the future direction and management of the Company.

18
<PAGE>

MANAGEMENT

Set forth below are the names, ages, positions and certain other information
concerning the current directors and executive officers of the Company as of
October 1, 1994.

<TABLE>
<CAPTION>
NAME AGE POSITION WITH COMPANY
---- --- ---------------------
<S> <C> <C>
James T. Hudson......... 70 Chairman of the Board of Directors and Chief Executive Officer
Michael T. Hudson....... 47 President, Chief Operating Officer and Director
Charles B. Jurgensmeyer. 50 Chief Financial Officer, Executive Vice President and Director
James R. Hudson......... 35 Vice President--Director of Transportation Division and Director
Donard W. Perkins....... 63 Vice President--Director of Broiler Division
James B. Clemmons....... 55 President--Ohse Foods Division
Joe E. Campbell......... 64 Vice President--Director of Acquisitions
Tommy D. Reynolds....... 40 Secretary and Treasurer
Elmer W. Shannon........ 73 Director
Jerry L. Hitt, M.D...... 48 Director
Kenneth N. May.......... 63 Director
Jane M. Helmich......... 42 Director
</TABLE>

James T. Hudson has served as Chairman of the Board and Chief Executive
Officer of the Company since its organization in February 1972. He was
President of the Company from its organization until October 1985. Prior to
1972, Mr. Hudson was with Ralston Purina for 26 years, the last seven as
Operating Director of the West Central Region. Mr. Hudson was also Chairman of
the Board of the National Broiler Council from 1982 to 1984 and is a past
President of the Arkansas Poultry Federation.

Michael T. Hudson has served as President of the Company since October 1985
and Chief Operating Officer since August 1987. Prior to joining the Company in
1972, he was employed for two years in the Southeast Region of Ralston Purina's
poultry operations. Since joining the Company, Mr. Hudson has served as Vice
President--Sales, Vice President--Sales and Marketing and Vice President--
Production and he has been a Director since 1972.

Charles B. Jurgensmeyer is Chief Financial Officer and Executive Vice
President of the Company. Prior to joining Hudson in 1972, he was employed in
the West Central Region of Ralston Purina's poultry operations for seven years,
primarily in finance and accounting positions. Mr. Jurgensmeyer has previously
served as Secretary/Treasurer and Controller of the Company and has been a
Director since July 1985.

James R. Hudson has been Vice President-Director of Transportation Division
of the Company since September 1992, and previously served as the Company's
Director of Fleet Operations from November 1984 until August 1992. Mr. Hudson
has been a Director since November 1992 and previously served as a Director
from July 1985 until December 1985.

Donard W. Perkins has served as Vice President-Director of the Broiler
Division since July 1988. Prior to joining the Company, he was Senior Vice
President--Processing, Sales & Marketing for Pilgrim's Pride Corporation from
1976 to May 1983; Vice President--General Manager of Spring Valley (a division
of Lane Poultry) from May 1983 to December 1986; and Senior Vice President--
Processing, Sales & Marketing for Cagle's Inc. from December 1986 until his
employment with the Company.

James B. Clemmons has served as President--Ohse Foods Division since December
1987. Prior to joining the Company, he was Product Manager for the Frozen Food
Division of Armour from 1980 to 1984; Senior Product Manager for the Frozen
Food Division of Armour from 1984 to 1985; and General Manager for the Frozen
Food Division of Armour from 1985 until his employment with the Company.

19
<PAGE>

Joe E. Campbell has served as Vice President--Director of Acquisitions since
October 1994 and served as Director of Foodservice Operations for Hudson Foods,
Inc. from November 1989 to October 1994. Prior to joining Hudson he was Vice
President and Chief Operating Officer for Holly Farms Food Service Inc. from
1980 to 1986, and President and Chief Executive Officer of Holly Farms Food
Service Inc. from 1986 until his employment with the Company.

Tommy D. Reynolds has been employed by the Company since May 1979 in various
accounting, auditing and finance positions. He has served as Secretary and
Treasurer since October 1992, and previously served as Assistant Secretary and
Assistant Treasurer since 1986. Mr. Reynolds is a certified public accountant
in the state of Arkansas.

Elmer W. Shannon began service with the Company in 1972 as Marketing Manager.
He retired as Vice President and Director of Marketing in April 1984 and was
subsequently retained by the Company as a consultant. Mr. Shannon has been a
Director since December 1986.

Jerry L. Hitt is a physician engaged in family practice at Rogers Medical
Center, Rogers, Arkansas since 1971. Dr. Hitt has been a Director since
November 1989.

Kenneth N. May is currently a consultant to the Company. Previously he was
Chairman and Chief Executive Officer of Holly Farms Foods, Inc. from January
1988 through August 1989; President and Chief Executive Officer of Holly Farms
Foods, Inc. from October 1985 through January 1988; and Vice President--
Research and Quality Assurance of Holly Farms Foods, Inc. from September 1973
through September 1985. Dr. May has been a Director since December 1989. Dr.
May also serves as a director of Embrex, Inc.

Jane M. Helmich is a homemaker and has been a Director since November 1992.

Michael T. Hudson, James R. Hudson and Jane M. Helmich are the children of
James T. Hudson.

20
<PAGE>

SELLING STOCKHOLDERS

The following table sets forth certain information with respect to the
beneficial ownership by the Selling Stockholders of the Company's classes of
common stock as of November 7, 1994, and as adjusted to reflect the sale of
shares of Class A common stock offered hereby by the Company and the Selling
Stockholders (assuming the over-allotment option is not exercised).

CLASS A COMMON STOCK
<TABLE>
<CAPTION>
NUMBER OF
SHARES
BENEFICIALLY
OWNED
AFTER THE
PERCENT OF OFFERING
NUMBER OF SHARES CLASS OWNED SHARES BEING --------------
NAME BENEFICIALLY OWNED BENEFICIALLY(1) OFFERED(2) NUMBER %
- ---- ------------------ --------------- --------------- --------- ----
<S> <C> <C> <C> <C> <C>
DIRECTORS AND OFFICERS
James T.
Hudson(3)(4)(7)........ 8,038,385 51.4% 1,300,000 6,738,385 36.8%
James R.
Hudson(4)(5)(7)........ 505,800 5.6 100,000 405,800 3.1
Jane M.
Helmich(4)(5)(7)....... 538,585 5.9 100,000 438,585 3.4

CLASS B COMMON STOCK
<CAPTION>
NUMBER OF
SHARES
BENEFICIALLY
OWNED
SHARES BEING AFTER THE
PERCENT OF CONVERTED OFFERING
NUMBER OF SHARES CLASS OWNED TO CLASS A --------------
NAME BENEFICIALLY OWNED BENEFICIALLY(1) FOR OFFERING(2) NUMBER %
- ---- ------------------ --------------- --------------- --------- ----
<S> <C> <C> <C> <C> <C>
DIRECTORS AND OFFICERS
James T. Hudson(6)(7)... 8,500,000 99.9% 1,300,000 7,000,000 99.9%
James R. Hudson(7)...... 500,000 5.9 100,000 400,000 5.7
Jane M. Helmich(7)...... 500,000 5.9 100,000 400,000 5.7
</TABLE>
- --------
(1) Calculated based on 8,599,524 shares of Class A common stock outstanding
and 8,502,834 shares of Class B common stock outstanding as of November 7,
1994. However, for purposes of computing the beneficial ownership of any
individual, it was assumed that such individual had exercised all options
and/or made all conversions by which that individual had the right, within
60 days following November 7, 1994, to acquire shares of Class A common
stock.
(2) The certificate of incorporation allows the holders of Class B common
stock to convert such shares to an equal number of shares of Class A
common stock at any time. All shares of Class A common stock to be sold by
the Selling Stockholders in the Offerings will be converted from shares of
Class B common stock prior to consummation of the Offerings by the Selling
Stockholders.
(3) James T. Hudson holds 100 shares of Class A common stock in his own name.
He has rights under revocable proxies to vote 1,000,000 shares of Class A
common stock, which are held in blocks of 500,000 each by Charles B.
Jurgensmeyer and Gary L. Anderson, a former officer of the Company. Mr.
Hudson's wife holds 1,000 shares of Class A common stock in her own name.
Because of the revocable proxies and Mrs. Hudson's stock ownership, Mr.
Hudson is considered beneficially to own 1,001,000 shares of Class A
common stock. Mr. Hudson has disclaimed beneficial ownership of those
shares. Mr. Hudson also holds a total of 7,000,000 shares of Class B
common stock, which may be converted at any time into a like number of
shares of Class A common stock, and is thus considered to own the shares
of Class A common stock into which his shares of Class B common stock may
be converted.
(4) Includes shares of Class A common stock that the named individual may
acquire within the next 60 days by exercise of stock options, in the
following amounts: James T. Hudson, 37,285; James R. Hudson, 5,800; and
Jane M. Helmich, 37,285 (through the exercise of options held by her
husband, Larry E. Helmich).
(5) James R. Hudson and Jane M. Helmich each hold 500,000 shares of Class B
common stock, which may be converted at any time into a like number of
shares of Class A common stock. Mr. Hudson and Ms. Helmich are thus
considered beneficially to own the shares of Class A common stock into
which their shares of Class B common stock may be converted.
(6) James T. Hudson holds 7,000,000 shares of Class B common stock in his own
name. In addition, Mr. Hudson has rights under revocable proxies to vote
another 1,500,000 shares, which are held in blocks of 500,000 each by
Michael T. Hudson, James R. Hudson and Jane M. Helmich, and thus is
considered a beneficial owner of those shares. James T. Hudson cannot
convert these shares of Class B common stock to Class A common stock and,
therefore, such shares are not attributed to him as Class A common stock.
Mr. Hudson has disclaimed beneficial ownership of the shares for which he
holds revocable proxies.
(7) See "Management" for the position, office or other relationship such
person has with the Company.

21
<PAGE>

DESCRIPTION OF COMMON STOCK

The Company's certificate of incorporation permits the issuance of up to
40,000,000 shares each of Class A common stock, $.01 par value, and Class B
common stock, $.01 par value. On November 7, 1994, there were 9,533,378 shares
of Class A common stock issued (including 933,854 shares held in treasury) and
8,502,834 shares of Class B common stock issued and outstanding. The Transfer
Agent and Registrar for both classes of common stock is Chemical Trust Company
of Los Angeles, California.

The Class A common stock has one vote per share, while the Class B common
stock has ten votes per share in all matters submitted to a vote of the
Company's stockholders. Except as required by law or the certificate of
incorporation, holders of Class A or Class B common stock shall vote together
as a single class. Holders of Class A and Class B common stock are entitled to
receive such dividends and other distributions as may be determined by the
Board of Directors out of any funds of the Company legally available therefor;
provided, however, that no dividend may be declared and paid on the Class B
common stock unless a dividend is also declared and paid on the Class A common
stock, and, in such an event, the dividend per share of Class B common stock
may not exceed 90% of the dividend per share of Class A common stock. Certain
members of the Hudson family own substantially all of the Class B common stock
which concentrates voting control over the Company in James T. Hudson and the
Hudson family. The Class B common stock voting power is sufficient to, among
other things, approve or prevent extraordinary corporate transactions, such as
mergers, consolidations or sales of substantially all of the Company's assets
and to elect or remove the members of the Board of Directors.

Transfer of the Class B common stock may only be made to a "permitted
transferee" as defined in the Company's certificate of incorporation, but
shares of Class B common stock may be converted by the holder into an equal
number of shares of Class A common stock at any time. The Company may not issue
additional shares of Class B common stock without the approval of a majority of
the votes of the outstanding shares of Class A common stock and Class B common
stock, each voting separately as a class, except in connection with stock
splits and stock dividends. The board of directors and the holders of a
majority of the outstanding shares of Class B common stock may approve the
conversion of all of the Class B common stock into shares of Class A common
stock.

In the event of a liquidation of the Company, all assets available for
distribution after payment of all prior claims would be divided among and paid
ratably to the holders of Class A common stock and Class B common stock.

Subject to any conversion rights of the holders of Class B common stock,
holders of Class A and Class B common stock have no preemptive rights to
subscribe for or receive any part of the authorized stock of the Company,
additional or increased issues of stock of any class or of any obligations
convertible into any class or classes of stock. Further, no stockholder has the
right to cumulate votes in the election of directors.

22
<PAGE>

CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS
FOR NON-U.S. HOLDERS OF COMMON STOCK

The following discussion concerns the material United States federal income
and estate tax consequences of the ownership and disposition of the Company's
Class A common stock (the "Common Stock") applicable to non-U.S holders of such
common stock. In general, a "Non-U.S. Holder" is any person holding Common
Stock other than (a) a citizen or resident of the United States, (b) a
corporation or partnership created or organized in the United States or under
the laws of the United States or of any State, or (c) an estate or trust whose
income is includable in gross income for United States federal income tax
purposes regardless of its source. The discussion is based on current
provisions of the Internal Revenue Code of 1986 (the "Code"), and
administrative and judicial interpretations of the Code as of the date hereof,
all of which are subject to change, and is for general information only. The
discussion does not address aspects of taxation other than United States
federal income and estate taxation and does not address all aspects of United
States federal income and estate taxation. The discussion does not consider any
specific facts or circumstances that may apply to a particular Non-U.S. Holder.
Accordingly, prospective investors are urged to consult their tax advisors
regarding the United States federal, state, local and non-U.S. income and other
tax consequences of holding and disposing of shares of Common Stock.

DIVIDENDS

In general, dividends with respect to the Common Stock paid to a Non-U.S.
Holder will be subject to United States federal withholding tax at a 30% rate
(or any lower rate prescribed by an applicable tax treaty) unless the dividends
are (a) effectively connected with a trade or business carried on by the Non-
U.S. Holder within the United States, and (b) if a tax treaty applies,
attributable to a permanent establishment maintained by the Non-U.S. Holder in
the United States. Dividends effectively connected with such a trade or
business and, if applicable, attributable to such a permanent establishment,
will generally not be subject to withholding (if the Non-U.S. Holder files
certain forms with the payor of the dividend) and generally will be subject to
United States federal income tax at the same rates applicable to U.S. holders.
In the case of a Non-U.S. Holder which is a corporation, such effectively
connected income also may be subject to the United States federal branch
profits tax (which is generally imposed on a foreign corporation on the
repatriation from the United States of effectively connected earnings and
profits) at a 30% rate (or any lower rate provided by an applicable income tax
treaty if certain requirements are met). To determine the applicability of a
tax treaty providing for a lower rate of withholding, dividends paid to an
address in a foreign country are presumed under current Treasury regulations to
be paid to a resident of that country in the absence of definite knowledge to
the contrary.

SALE OF COMMON STOCK

Generally, a Non-U.S. Holder will not be subject to United States federal
income tax on any gain realized upon the sale or other disposition of such
holder's common stock unless (a) the Company is or has been a "U.S. real
property holding corporation" for United States federal income tax purposes
and, provided the common stock continues to be regularly traded on an
established securities market (as defined in Treasury Regulations), the Non-
U.S. Holder held, directly or indirectly at any time during the five-year
period ending on the date of disposition, more than 5% of the Common Stock; (b)
the gain is effectively connected with a trade or business carried on by the
Non-U.S. Holder within the United States and, if a tax treaty applies,
attributable to a permanent establishment maintained by the Non-U.S. Holder in
the United States; (c) the Common Stock is disposed of by a Non-U.S. Holder who
is an individual, who holds the Common Stock as a capital asset and who is
present in the United States for 183 days or more in the taxable year of the
disposition and certain other requirements are met. At present, the Company has
made no determination as to whether it is a United States real property holding
corporation, and there can be no assurance that the Company is not now or will
not become, or be determined to be, such a corporation.

23
<PAGE>

ESTATE TAX

Common stock owned or treated as owned by an individual who is not a citizen
or domiciliary of the United States at the time of death will be includable in
the individual's gross estate for United States federal estate tax purposes,
unless an applicable tax treaty provides otherwise, and may be subject to
United States federal estate tax.

BACKUP WITHHOLDING AND INFORMATION REPORTING

The Company must report annually to the Internal Revenue Service and to each
Non-U.S. Holder the amount of dividends paid to, and the tax withheld with
respect to, each Non-U.S. Holder. These reporting requirements apply regardless
of whether withholding was reduced by an applicable tax treaty. Copies of these
information returns also may be made available under the provisions of a
specific treaty or agreement to the tax authorities in the country in which the
Non-U.S. Holder resides. United States backup withholding tax (which generally
is a withholding tax imposed at the rate of 31% on certain payments to persons
that fail to furnish the information required under the United States
information reporting requirements) generally will not apply under existing
Treasury regulations to dividends paid on Common Stock to a Non-U.S. Holder who
is subject to United States federal withholding tax.

The payment of the proceeds from the disposition of the Company's Common
Stock to or through the United States office of a broker will be subject to
information reporting and backup withholding unless the owner certifies, among
other things, its status as a Non-U.S. Holder or otherwise establishes an
exemption. The payment of the proceeds from the disposition of Common Stock to
or though a non-U.S. office of a non-U.S. broker will not be subject to backup
withholding and generally will not be subject to information reporting. Under
the existing Treasury regulations, unless the broker has documentary evidence
in its files that the owner is a Non-U.S. Holder and certain other conditions
are met (or the owner otherwise establishes an exemption), information
reporting (but not backup withholding) will apply to dispositions through (a) a
non-U.S. office of a U.S. broker, and (b) a non-U.S. office of a non-U.S.
broker that is either a "controlled foreign corporation" for United States
federal income tax purposes or a person 50% or more of whose gross income from
all sources for a certain three-year period was effectively connected with a
United States trade or business.

Any amounts withheld under the backup withholding rules from a payment to a
Non-U.S. Holder will be refunded (or credited against the Non-U.S. Holder's
United States federal income tax liability, if any), provided that the required
information is furnished to the Internal Revenue Service.

24
<PAGE>

UNDERWRITING

Subject to the terms and conditions set forth in a purchase agreement (the
"U.S. Purchase Agreement") among the Company, the Selling Stockholders and
each of the underwriters named below (the "U.S. Underwriters"), and
concurrently with the sale of 800,000 shares of Common Stock to the
International Underwriters (as defined below), the Company and the Selling
Stockholders have severally agreed to sell to each of the U.S. Underwriters,
and each of the U.S. Underwriters has severally agreed to purchase, the
aggregate number of shares of Common Stock set forth opposite its name below.

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
------------ ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated...................................... 506,668
Donaldson, Lufkin & Jenrette Securities Corporation........ 506,666
A.G. Edwards & Sons, Inc................................... 506,666
CS First Boston Corporation................................ 80,000
Dean Witter Reynolds Inc. ................................. 80,000
Goldman, Sachs & Co. ...................................... 80,000
Morgan Stanley & Co. Incorporated.......................... 80,000
NatWest Securities Limited................................. 80,000
PaineWebber Incorporated................................... 80,000
Prudential Securities Incorporated......................... 80,000
Salomon Brothers Inc....................................... 80,000
Smith Barney Inc. ......................................... 80,000
Wertheim Schroder & Co. Incorporated....................... 80,000
Robert W. Baird & Co. Incorporated......................... 40,000
George K. Baum & Company................................... 40,000
Cowen & Company............................................ 40,000
Crowell, Weedon & Co. ..................................... 40,000
Dain Bosworth Incorporated................................. 40,000
Davenport & Co. of Virginia, Inc. ......................... 40,000
D. A. Davidson & Co. Incorporated.......................... 40,000
Fahnestock & Co. Inc. ..................................... 40,000
Ferris, Baker Watts, Incorporated.......................... 40,000
First Albany Corporation................................... 40,000
Huntleigh Securities Corporation........................... 40,000
Janney Montgomery Scott Inc. .............................. 40,000
C.J. Lawrence/Deutsche Bank Securities Corporation......... 40,000
Legg Mason Wood Walker, Incorporated....................... 40,000
Morgan Keegan & Company, Inc............................... 40,000
Needham & Company, Inc. ................................... 40,000
Parker/Hunter Incorporated................................. 40,000
Piper Jaffray Inc.......................................... 40,000
The Robinson-Humphrey Company, Inc. ....................... 40,000
Scott & Stringfellow, Inc. ................................ 40,000
Stephens Inc. ............................................. 40,000
Wheat, First Securities, Inc. ............................. 40,000
---------
Total................................................ 3,200,000
=========
</TABLE>

Merrill Lynch, Pierce, Fenner & Smith Incorporated, Donaldson, Lufkin &
Jenrette Securities Corporation and A.G. Edwards & Sons, Inc. are acting as
representatives (the "U.S. Representatives") of the several U.S. Underwriters.

25
<PAGE>

The Company and the Selling Stockholders have also entered into a purchase
agreement (the "International Purchase Agreement") with certain underwriters
outside the United States and Canada (the "International Underwriters") for
whom Merrill Lynch International Limited, Donaldson, Lufkin & Jenrette
Securities Corporation and A.G. Edwards & Sons, Inc. are acting as
representatives (the "International Representatives"). Subject to the terms and
conditions set forth in the International Purchase Agreement, and concurrently
with the sale of 3,200,000 shares of Common Stock to the U.S. Underwriters, the
Company and the Selling Stockholders have severally agreed to sell to the
International Underwriters, and the International Underwriters severally have
agreed to purchase, an aggregate of 800,000 shares of Common Stock. The public
offering price per share of Common Stock and the underwriting discount per
share of Common Stock are identical under the U.S. Purchase Agreement and the
International Purchase Agreement.

In the U.S. Purchase Agreement the several U.S. Underwriters have agreed,
subject to the terms and conditions set forth therein, to purchase all of the
shares of Common Stock being sold pursuant to such Agreement if any of the
shares of Common Stock being sold pursuant to such Agreement are purchased and
in the International Purchase Agreement the several International Underwriters
have agreed, subject to the terms and conditions set forth therein, to purchase
all the shares of Common Stock being sold pursuant to such agreement if any of
the shares of Common Stock being sold pursuant to such agreement are purchased.
Under certain circumstances, the commitments of nondefaulting U.S. Underwriters
and International Underwriters (collectively, the "Underwriters") may be
increased. The closings with respect to the sale of shares of Common Stock to
be purchased by the U.S. Underwriters and the International Underwriters are
conditioned upon one another.

The U.S. Underwriters propose initially to offer the shares of Common Stock
to the public at the public offering price set forth on the cover page of this
Prospectus and to certain dealers (who may include U.S. Underwriters) at such
price less a concession not in excess of $.60 per share of Common Stock. The
U.S. Underwriters may allow, and such dealers may reallow, a discount not in
excess of $.10 per share of Common Stock to certain other dealers. After the
initial public offering, the public offering price, concession and discount may
be changed.

James T. Hudson, one of the Selling Shareholders, has granted to the U.S.
Underwriters an option to purchase up to an aggregate of 480,000 additional
shares of Common Stock, and the International Underwriters an option to
purchase up to an aggregate of 120,000 shares of Common Stock, in each case
exercisable for 30 days after the date hereof, to cover overallotments, if any,
at the public offering price, less the underwriting discount. To the extent
that the U.S. Underwriters exercise this option, each of the U.S. Underwriters
will have a firm commitment, subject to certain conditions, to purchase
approximately the same percentage of such shares of Common Stock that the
number of shares of Common Stock to be purchased by it shown in the foregoing
table bears to the total number of shares of Common Stock initially offered to
the U.S. Underwriters hereby.

The U.S. Underwriters and the International Underwriters have entered into an
Intersyndicate Agreement (the "Intersyndicate Agreement") that provides for the
coordination of their activities. Pursuant to the Intersyndicate Agreement,
sales may be made between the U.S. Underwriters and the International
Underwriters of such number of shares of Common Stock as may be mutually
agreed. The price of any shares of Common Stock so sold shall be the public
offering price, less an amount not greater than the selling concession.

Under the terms of the Intersyndicate Agreement, the U.S. Underwriters and
any dealer to whom they sell shares of Common Stock will not offer to sell or
sell shares of Common Stock to persons who are non-United States or non-
Canadian persons or to persons they believe intend to resell to persons who are
non-United States or non-Canadian persons, and the International Underwriters
and any dealer to whom they sell shares of Common Stock will not offer to sell
or sell shares of Common Stock to United States or Canadian persons or to
persons they believe intend to resell to United States or Canadian persons,
except, in each case, for transactions pursuant to the Intersyndicate
Agreement.

26
<PAGE>

The Company, each executive officer and director of the Company will agree,
for a period of 120 days after the commencement of the public offering of the
shares of Common Stock, not to sell, offer to sell, grant any option for the
sale of, or otherwise dispose of, any shares of Common Stock or securities
convertible into shares of Common Stock, without the prior written consent of
the U.S. Representatives.

The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended, or to contribute to payments the
Underwriters may be required to make in respect thereof.

LEGAL MATTERS

The validity of the shares of common stock offered hereby is being passed
upon for the Company by Wright, Lindsey & Jennings, Little Rock, Arkansas.
Certain legal matters will be passed upon for the Underwriters by Shearman &
Sterling, New York, New York.

INDEPENDENT PUBLIC ACCOUNTANTS

The consolidated balance sheets as of October 2, 1993, as restated, and
October 1, 1994 and the consolidated statements of operations and cash flows
for each of the two years in the period ended October 2, 1993, as restated,
and the year ended October 1, 1994 included in this prospectus, have been
included herein in reliance on the report of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
auditing and accounting. The consolidated balance sheet as of October 3, 1992,
as restated, and the consolidated statements of operations and cash flows for
the year ended September 28, 1991, as restated, incorporated by reference in
this prospectus, have been incorporated herein in reliance on the report of
Coopers & Lybrand, independent accountants, given on the authority of that
firm as experts in auditing and accounting. With respect to the unaudited
interim financial information for the periods ended January 1, 1994, January
2, 1993, April 2, 1994, April 3, 1993, July 2, 1994, and July 3, 1993
incorporated by reference in this prospectus, the independent accountants have
reported that they have applied limited procedures in accordance with
professional standards for a review of such information. However, their
separate report included in the Company's quarterly reports on Form 10-Q for
the quarter ended January 1, 1994, April 2, 1994 and July 2, 1994, and
incorporated by reference herein, states that they did not audit and they do
not express an opinion on that interim financial information. Accordingly, the
degree of reliance on their report on such information should be restricted in
light of the limited nature of the review procedures applied. The accountants
are not subject to the liability provisions of Section 11 of the Securities
Act of 1933 for their report on the unaudited interim financial information
because that report is not a "report" or a "part" of the registration
statement prepared or certified by the accountants within the meaning of
Sections 7 and 11 of the Act.

27
<PAGE>

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Accountants......................................... F-2
Consolidated Balance Sheet as of October 2, 1993 and October 1, 1994...... F-3
Consolidated Statement of Operations for the years ended October 3, 1992,
October 2, 1993 and October 1, 1994...................................... F-4
Consolidated Statement of Cash Flows for the years ended October 3, 1992,
October 2, 1993 and October 1, 1994...................................... F-5
Notes to Consolidated Financial Statements................................ F-6
Supplemental Quarterly Financial Data (unaudited) for the years ended
October 2, 1993 and October 1, 1994...................................... F-14
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
Hudson Foods, Inc.

We have audited the accompanying consolidated balance sheet of Hudson Foods,
Inc. and subsidiaries as of October 2, 1993, as restated, and October 1, 1994,
and the related consolidated statements of operations and cash flows for each
of the two years in the period ended October 2, 1993, as restated, and the year
ended October 1, 1994. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

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 consolidated 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 consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Hudson
Foods, Inc. and subsidiaries as of October 2, 1993, and October 1, 1994, and
the consolidated results of their operations and their cash flows for each of
the three years in the period ended October 1, 1994, in conformity with
generally accepted accounting principles.

COOPERS & LYBRAND L.L.P.

Tulsa, Oklahoma
October 26, 1994

F-2
<PAGE>

HUDSON FOODS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
OCTOBER 2,
1993
(AS RESTATED, OCTOBER 1,
SEE NOTE 7) 1994
------------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................ $ 3,891 $ 1,899
Receivables:
Trade............................................... 58,441 66,490
Other............................................... 219 481
-------- --------
58,660 66,971
Less allowance for doubtful accounts................. 1,208 1,463
-------- --------
57,452 65,508
Inventories.......................................... 116,497 135,501
Other................................................ 7,275 12,073
-------- --------
Total current assets................................. 185,115 214,981
Property, plant and equipment, net.................... 205,613 229,050
Excess cost of investment over net assets acquired,
net.................................................. 15,807 15,244
Other assets.......................................... 9,968 13,905
-------- --------
Total assets.......................................... $416,503 $473,180
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable........................................ $ -- $ 16,800
Current portion of long-term obligations............. 5,085 5,109
Accounts payable..................................... 31,555 41,188
Accrued liabilities.................................. 33,198 40,581
Deferred income taxes (Note 7)....................... 11,466 11,207
-------- --------
Total current liabilities............................ 81,304 114,885
-------- --------
Long-term obligations................................. 88,985 75,169
-------- --------
Deferred income taxes and deferred gain (Notes 7
and 9)............................................... 72,312 73,937
-------- --------
Commitments and contingencies (Note 9)
Stockholders' equity:
Common stock:
Class A, $.01 par value, issued 8,630,407 and
9,233,893 shares................................... 86 92
Class B, $.01 par value, issued and outstanding
8,502,052 and 8,501,882 shares..................... 85 85
Additional capital................................... 87,638 97,505
Retained earnings.................................... 97,727 122,923
-------- --------
185,536 220,605
Treasury stock, at cost (958,358 and 933,854 Class A
shares)............................................. (11,634) (11,416)
-------- --------
Total stockholders' equity........................... 173,902 209,189
-------- --------
Total liabilities and stockholders' equity............ $416,503 $473,180
======== ========
</TABLE>

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

F-3
<PAGE>

HUDSON FOODS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
--------------------------------
OCTOBER 3, OCTOBER 2, OCTOBER 1,
1992 1993 1994
(AS RESTATED,
SEE NOTE 7)
---------- ---------- ----------
(DOLLARS IN THOUSANDS, EXCEPT
PER SHARE DATA)
<S> <C> <C> <C>
Sales...................................... $809,243 $920,545 $1,040,840
Cost of sales.............................. 733,028 802,002 885,248
-------- -------- ----------
Gross profit............................... 76,215 118,543 155,592
Selling expenses........................... 49,907 63,926 78,698
General and administrative expenses........ 18,533 20,695 25,755
-------- -------- ----------
Operating income........................... 7,775 33,922 51,139
-------- -------- ----------
Other expense (income):
Interest expense......................... 8,476 7,975 6,152
Other, net............................... (4,342) 530 --
-------- -------- ----------
Total other expense...................... 4,134 8,505 6,152
-------- -------- ----------
Income before income taxes................. 3,641 25,417 44,987
Income tax expense......................... 1,471 9,512 17,995
-------- -------- ----------
Net income................................. $ 2,170 $ 15,905 $ 26,992
======== ======== ==========
Earnings per share:
Primary.................................. $0.15 $1.01 $1.62
Fully diluted............................ 0.15 1.01 1.61
</TABLE>

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

F-4
<PAGE>

HUDSON FOODS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
------------------------------------------
OCTOBER 3, OCTOBER 2, OCTOBER 1,
1992 1993 1994
(AS RESTATED, SEE NOTE 7)
------------ ------------ ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income...................... $ 2,170 $ 15,905 $26,992
Non-cash items included in net
income:
Depreciation.................. 16,701 21,629 21,246
Amortization.................. 1,210 1,314 1,033
Deferred income taxes......... 794 171 209
Other......................... -- (1,004) (2,777)
Changes in assets and
liabilities:
Trade and other receivables... (3,566) (10,667) (8,056)
Inventories................... (5,748) (8,461) (19,004)
Other......................... 1,452 (3,331) (4,798)
Accounts payable.............. 452 1,430 9,633
Accrued liabilities........... (5,709) 12,021 11,814
------------ ------------ -------
Cash flows provided by operating
activities..................... 7,756 29,007 36,292
------------ ------------ -------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of property, plant and
equipment...................... (46,960) (21,453) (49,161)
Disposition of property, plant
and equipment, net............. 3,830 1,262 4,271
Proceeds from sale-leaseback
agreements (Note 9)............ -- 19,167 --
Acquisitions of businesses...... (4,701) (825) --
Other........................... (3,462) 523 (4,407)
------------ ------------ -------
Cash flows used for investing
activities..................... (51,293) (1,326) (49,297)
------------ ------------ -------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Additions (reductions) to notes
payable........................ 15,000 (15,000) 16,800
Additions to long-term
obligations.................... 34,631 3,370 --
Reductions of long-term
obligations.................... (4,002) (15,769) (5,635)
Dividends....................... (1,503) (1,706) (1,796)
Exercise of stock options and
other.......................... 164 1,366 1,644
------------ ------------ -------
Cash flows provided by (used
for) financing activities...... 44,290 (27,739) 11,013
------------ ------------ -------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS................. 753 (58) (1,992)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD.............. 3,196 3,949 3,891
------------ ------------ -------
CASH AND CASH EQUIVALENTS AT END
OF PERIOD........................ $ 3,949 $ 3,891 $ 1,899
============ ============ =======
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Cash paid during the year for:
Interest, net of amounts
capitalized.................... $ 11,623 $ 7,090 $ 6,321
Income taxes.................... 2,815 7,299 13,300
</TABLE>

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

F-5
<PAGE>

HUDSON FOODS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Following is a summary of significant accounting policies employed by Hudson
Foods, Inc. and subsidiaries ("the Company") in the preparation of the
consolidated financial statements.

PRINCIPLES OF CONSOLIDATION. The consolidated financial statements include
the accounts of the Company and its wholly-owned subsidiaries.

CASH AND CASH EQUIVALENTS. The Company considers all highly liquid
investments purchased with a maturity of three months or less to be cash
equivalents. At October 2, 1993 and October 1, 1994, cash and cash equivalents
included temporary cash investments in certificates of deposit, U.S. treasury
bills, repurchase agreements and U.S. government agency securities of
$12,960,000 and $12,500,000, respectively. Cash equivalents are stated at cost,
which approximates market value, and have been used to offset book overdrafts.

CONCENTRATIONS OF CREDIT RISK. Financial instruments which potentially
subject the Company to concentrations of credit risk consist primarily of trade
receivables from large domestic companies. The Company generally does not
require collateral from its customers. Such credit risk is considered by
management to be limited due to the Company's broad customer base. In fiscal
years 1992, 1993 and 1994, one customer accounted for approximately 15.7%,
17.9% and 17.7% of consolidated sales, respectively.

INVENTORIES. Inventories are stated at the lower of cost (first-in, first-out
method) or market. Inventory cost includes the cost of raw materials and all
applicable costs of processing.

PROPERTY, PLANT AND EQUIPMENT. Property, plant and equipment are stated at
cost. When assets are sold or retired, the costs of the assets and the related
accumulated depreciation are removed from the accounts and the resulting gains
or losses are recognized. Depreciation is computed using the straight-line
method over the estimated useful lives of the assets. Interest costs of
approximately $2,874,000, $1,467,000 and $1,702,000 were capitalized during
1992, 1993 and 1994, respectively.

EARNINGS PER SHARE. Earnings per share are based on the weighted average
number of shares outstanding. The primary earnings per share computation
assumes that outstanding dilutive stock options were exercised and the proceeds
used to purchase common shares. Earnings per share, assuming full dilution,
gives effect to the conversion of outstanding convertible debentures and the
exercise of dilutive stock options. In addition, 1992 earnings per share
include the effect of the contingently issuable shares associated with the
acquisition of Pierre Frozen Foods, Inc.

EXCESS COST OF INVESTMENT OVER NET ASSETS ACQUIRED. The excess cost of
investment over net assets acquired is being amortized using the straight-line
method over periods ranging from 33 to 40 years. Accumulated amortization was
$3,729,000 and $4,244,000 at October 2, 1993 and October 1, 1994, respectively.

INCOME TAXES. The Company utilizes the asset and liability approach for
financial accounting and reporting for income taxes as set forth in Statement
of Financial Accounting Standards No. 109 ("SFAS 109"): Accounting for Income
Taxes. SFAS 109 utilizes the liability method and deferred income taxes are
recorded to reflect the expected tax consequences in future years of
differences between the tax basis of assets and liabilities and their financial
reporting amounts at each year-end.

FISCAL YEAR. The Company utilizes a 52-53 week accounting period which ends
on the Saturday closest to September 30.

F-6
<PAGE>

HUDSON FOODS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. INVENTORIES
<TABLE>
<CAPTION>
OCT. 2, OCT. 1,
1993 1994
------- -------
(DOLLARS IN
THOUSANDS)
<S> <C> <C>
Field inventory--broilers and breeder stock............... $ 26,333 $ 29,248
Field inventory--turkeys and breeder stock................ 8,914 10,432
Feed, eggs and other...................................... 21,318 21,581
Finished products......................................... 59,932 74,240
-------- --------
Total................................................... $116,497 $135,501
======== ========
</TABLE>

3. PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
OCT. 2, OCT. 1,
1993 1994
------- -------
(DOLLARS IN
THOUSANDS)
<S> <C> <C>
Land...................................................... $ 10,620 $ 10,644
Buildings and improvements................................ 162,606 165,482
Machinery and equipment................................... 126,505 131,433
Construction in progress.................................. 7,219 42,027
-------- --------
306,950 349,586
Less accumulated depreciation............................. 101,337 120,536
-------- --------
Total................................................... $205,613 $229,050
======== ========
</TABLE>

4. FINANCING ARRANGEMENTS

The Company's line of credit agreement (the "Agreement"), which expires June
30, 1997, provides for aggregate borrowings or letters of credit up to $100
million. At October 2, 1993, the Company had issued $7.2 million in letters of
credit, and at October 1, 1994, had $6.8 million of short-term debt outstanding
and had issued $8.2 million in letters of credit. The Agreement, among other
things, limits the payment of dividends to approximately $2.8 million in any
fiscal year and limits annual capital expenditures and lease obligations. It
requires the maintenance of minimum levels of working capital and tangible net
worth and that the current ratio, leverage ratio and cash flow coverage ratio
be maintained at certain levels. It also limits the creation of new secured
debt to $25.0 million and new unsecured short-term debt with parties outside
the credit agreement to $20.0 million. At October 2, 1993 and October 1, 1994,
$92.8 million and $85.0 million, respectively, was unused under the Agreement.

On May 18, 1994, the Company entered into an unsecured term loan agreement
with a financial institution giving the Company the right to borrow up to $50.0
million of senior notes with a fixed interest rate determined at the date of
initial borrowing. The Company had not borrowed under the agreement at October
1, 1994. The agreement expires February 24, 1996.

F-7
<PAGE>

HUDSON FOODS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5. ACCRUED LIABILITIES
<TABLE>
<CAPTION>
OCT. 2, OCT. 1,
1993 1994
------- -------
(DOLLARS IN
THOUSANDS)
<S> <C> <C>
Payroll and benefits........................................ $18,098 $25,173
Income, property and other taxes............................ 4,963 2,455
Interest.................................................... 195 339
Other....................................................... 9,942 12,614
------- -------
Total..................................................... $33,198 $40,581
======= =======
</TABLE>

6. LONG-TERM OBLIGATIONS
<TABLE>
<CAPTION>
OCT. 2, OCT. 1,
1993 1994
------- -------
(DOLLARS IN
THOUSANDS)
<S> <C> <C>
8% Convertible Subordinated Debentures due 2006............. $17,436 $ 9,279
8.99% Notes payable to an insurance company due March 15,
1998....................................................... 16,031 15,302
9.99% Notes payable to an insurance company due April 12,
1997....................................................... 15,000 15,000
7.62% Notes payable to an insurance company due Sept. 1,
2002....................................................... 14,709 13,084
9.95% Note payable to a bank due June 30, 1999.............. 7,800 7,250
7.20%-7.64% Notes payable to a bank due Sept. 1, 2002....... 9,084 8,084
7.68% Notes payable to an insurance company due Sept. 1,
2002....................................................... 5,625 5,000
8.14% Notes payable to an insurance company due March 15,
1998....................................................... 5,201 4,980
Other--6%-9% payable in various maturities through 2002..... 3,184 2,299
------- -------
Total....................................................... 94,070 80,278
Less current portion of long-term obligations............... 5,085 5,109
------- -------
Long-term obligations....................................... $88,985 $75,169
======= =======
</TABLE>

On September 6, 1994, the Company called the 8% convertible subordinated
debentures. Bondholders had the option of redeeming their debentures at 101.6%
of the stated principle amount plus accrued interest, or converting their
debentures into Class A common stock at $21 per share. As of October 1, 1994,
the Company had converted $8.1 million of the debentures into 388,388 shares of
common stock. Subsequent to October 1, 1994, the Company converted an
additional $5.5 million of the debentures into 264,789 shares of common stock
and redeemed the remaining $3.8 million, recognizing a $132,000 loss on the
extinguishment.

Certain of the Company's loan agreements require the maintenance of minimum
working capital, and that net tangible asset, debt-to-equity and working
capital ratios be maintained at specified levels. Also, such loan agreements
contain limitations on capital expenditures, additional indebtedness and
payment of dividends.

The fair value of the Company's long-term obligations is based on discounted
future cash flows using current interest rates. The fair value of the Company's
long-term obligations at October 1, 1994, including current portion, is
estimated to be approximately $80.4 million.

At October 1, 1994, the aggregate amount of long-term obligations which will
become due during each of the next five fiscal years is as follows: $5,109,000
in 1995; $5,216,000 in 1996; $20,301,000 in 1997; $22,259,000 in 1998; and
$9,898,000 in 1999.

F-8
<PAGE>

HUDSON FOODS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7. INCOME TAXES

Beginning in fiscal year 1994, the Company adopted Statement of Financial
Accounting Standards No. 109 (SFAS 109), "Accounting for Income Taxes," which
requires that deferred income tax liabilities and assets be recognized for
differences between the tax basis of assets and liabilities and their financial
reporting amounts, measured by using presently enacted tax laws and rates. The
Company elected to apply the provisions of SFAS 109 retroactively to September
28, 1986. As a result, a deferred tax liability and a corresponding increase in
property, plant and equipment of $13,535,000 was recognized for the difference
between the assigned values and the tax basis of assets and liabilities
previously acquired in 1986 (Corbett Enterprises, Inc.), 1987 (Thies Companies,
Inc.) and 1990 (Pierre Frozen Foods, Inc.). The adoption of SFAS 109 did not
effect net income or earnings per share since increases in depreciation
expense, due to adjustments for prior business combinations, were offset by the
amortization of the deferred income taxes.

Consolidated income tax expense for each of the three years in the period
ended October 1, 1994 consists of the following:

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
---------------------
OCT. OCT.
3, 2, OCT. 1,
1992 1993 1994
---- ---- -------
(DOLLARS IN
THOUSANDS)
<S> <C> <C> <C>
Current provision:
Federal................................................ $ 606 $8,323 $16,067
State.................................................. 71 1,019 1,719
Deferred provision:
Federal................................................ 707 168 306
State.................................................. 87 2 (97)
------ ------ -------
Total income tax expense................................. $1,471 $9,512 $17,995
====== ====== =======
</TABLE>

Reconciliations of the statutory federal income tax rate with the effective
income tax rate for each of the three years in the period ended October 1, 1994
are as follows:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
-----------------------
OCT. 3, OCT. 2, OCT. 1,
1992 1993 1994
------- ------- -------
<S> <C> <C> <C>
Federal income tax rate................................ 34.0% 34.8% 35.0%
State income taxes, net of federal benefit............. 4.0 3.6 2.7
Nondeductible items related to business acquisitions,
net................................................... .9 .1 .1
Jobs/research tax credit............................... -- (2.1) (.7)
Other.................................................. 1.5 1.0 2.9
---- ---- ----
Effective income tax rate.............................. 40.4% 37.4% 40.0%
==== ==== ====
</TABLE>

F-9
<PAGE>

HUDSON FOODS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
An analysis of the Company's net current and long-term deferred tax
liabilities (assets) at October 2, 1993 and October 1, 1994 is as follows:

<TABLE>
<CAPTION>
OCT. 2, OCT. 1,
1993 1994
------- -------
(IN THOUSANDS)
<S> <C> <C>
Current:
Inventory.................................................. $13,346 $15,057
Allowance for doubtful accounts............................ (530) (563)
Accrued liabilities........................................ (1,026) (3,037)
Other...................................................... (324) (250)
------- -------
Total current deferred income taxes...................... $11,466 $11,207
======= =======
Long-term:
Property, plant and equipment.............................. $22,806 $27,124
Change from the cash basis to the accrual basis of
accounting in 1988 for the "Family Farm" subsidiaries..... 38,159 38,159
Other...................................................... 1,616 1,700
------- -------
Total long-term deferred income taxes.................... $62,581 $66,983
======= =======
</TABLE>

The Internal Revenue Service has examined the Company's 1989 and 1990 Federal
income tax returns and has issued a notice of deficiency assessing additional
taxes of $22.4 million and penalties of $5.8 million. If an assessment is
ultimately upheld, it will result in the acceleration of previously recorded
deferred income taxes. However, since most of the items in dispute relate to
the timing of the recognition of income or deductions, a portion of the income
taxes for years subsequent to 1990 would be refundable. Management is
contesting the notice of deficiency and the case has been docketed for a
hearing in early 1995 in federal tax court. Management believes that ultimate
resolution of these matters will not have a material impact on the Company's
financial position or results of operations.

F-10
<PAGE>

HUDSON FOODS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8. EMPLOYEE BENEFIT AND COMPENSATION PLANS

STOCK OPTION PLAN. The 1985 Stock Option Plan (the "Option Plan"), as
amended, reserves 1,200,000 and 300,000 shares of the Company's Class A common
stock for issuance as incentive stock options and nonqualified stock options,
respectively. The Option Plan provides for the grant of options to key
employees upon terms and conditions determined by a committee of the Board of
Directors.

Options expire no later than the tenth anniversary of the date of grant, and
are exercisable at a price which is at least 100% of the fair market value of
such shares on the date of grant (110% in the case of individuals holding at
least 10% of the Company's Class A common stock).

A summary of stock option activity related to the Option Plan for each of the
three years in the period ended October 1, 1994 is as follows:
<TABLE>
<CAPTION>
NUMBER NUMBER OF
OF OPTION PRICE SHARES
SHARES PER SHARE EXERCISABLE
------ ------------ -----------
<S> <C> <C> <C>
Outstanding at September 28, 1991............ 797,782 $5.06-$12.31 384,759
=======
Granted...................................... 21,000 $6.94
Exercised.................................... (31,200) $5.06-$ 7.13
Cancelled.................................... (13,900) $7.00-$10.00
--------
Outstanding at October 3, 1992............... 773,682 $5.06-$12.31 593,105
=======
Granted...................................... 344,650 $7.56-$10.69
Exercised.................................... (168,805) $5.06-$10.50
Cancelled.................................... (38,600) $6.94-$10.00
--------
Outstanding at October 2, 1993............... 910,927 $6.94-$12.31 569,394
=======
Granted...................................... -- --
Exercised.................................... (214,928) $7.00-$12.31
Cancelled.................................... (4,450) $7.13-$10.50
--------
Outstanding at October 1, 1994............... 691,549 $6.94-$10.69 482,309
======== =======
</TABLE>

EMPLOYEE STOCK PURCHASE PLAN. The Company has reserved 1,000,000 shares of
common stock for purchase under the 1990 Employee Stock Purchase Plan (the
"Purchase Plan"), the purpose of which is to make available to eligible
employees a means of purchasing shares of the Company's common stock at current
market prices. Under the terms of the Purchase Plan, the Company contributes an
amount annually, in cash or Class A stock, equal to 15% of the undistributed
total of participants' contributions for the past ten years. All full-time
employees of the Company (except those owning 10% or more of the Company's
Class A stock) are eligible to participate in the Purchase Plan.

RETIREMENT PLAN. In November 1985, the Company adopted a 401(k) Plan which,
as amended, provides for Company matching of 50% of employee contributions not
exceeding 4% of the participants' salary. The Company's contribution was
$723,000 in 1992; $919,000 in 1993; and $1,168,000 in 1994.

F-11
<PAGE>

HUDSON FOODS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9. COMMITMENTS AND CONTINGENCIES

The Company leases distribution facilities, transportation and delivery
equipment, poultry farms, and other equipment under operating leases expiring
during the next five to ten years. Management expects that in the normal course
of business the leases will be renewed or replaced by other leases.

In November and December 1992, under sale-leaseback agreements, the Company
sold certain equipment with a net book value of $4.5 million for $19.2 million
cash. Annual payments under the operating lease agreements are $3.5 million.
The gain of $14.7 million is being amortized over the terms of the leases. At
October 2, 1993 and October 1, 1994, the unamortized portion of the deferred
gain is included in the balance sheet captions "accrued liabilities"
($2,777,000 for both years) and "deferred income taxes and deferred gain"
($9,731,000 and $6,954,000, respectively).

Total rental expense (net of amortized gain) was $21,158,000 in 1992;
$20,603,000 in 1993; and $23,042,000 in 1994.

At October 1, 1994, future minimum rental payments required under leases that
have initial or remaining noncancellable terms in excess of one year are as
follows: $18,727,000 in 1995; $16,762,000 in 1996; $13,619,000 in 1997;
$8,303,000 in 1998; and $4,347,000 in 1999.

The Company maintains a self-insurance program for employee health care and
workman's compensation costs. Self-insurance costs are accrued based upon the
aggregate of the liability for reported claims and an estimated liability for
claims incurred but not yet reported.

On March 16, 1993, the United States of America, by the Attorney General of
the United States acting at the request of the Environmental Protection Agency,
filed a civil complaint against the Company alleging violations of the Federal
Water Pollution Control Act (the "Act"). The complaint seeks, among other
things, an injunction preventing the Company from discharging wastewater in
violation of the Act from one of its processing facilities, and a civil penalty
of up to $25,000 per day for each violation of the Act. A trial has been
scheduled to commence in July 1995. In the event this matter results in an
unfavorable outcome, it is not possible to estimate the amount of civil
penalties or other expenditures, if any, that the court may award. The Company
continues to vigorously contest this matter. Management believes that the
outcome will not have a material adverse effect on the Company's consolidated
financial position or results of operations.

The Company is involved in litigation incidental to its business. Such
litigation is not considered by management to be significant.

10. RELATED PARTY TRANSACTIONS

Lease payments for transportation equipment made to the Company's chairman
amounted to $907,000 in 1992; $936,000 in 1993; and $956,000 in 1994.

Certain officers and employees of the Company own turkey and broiler farms
and enter into grower contracts with the Company which provide for the payment
of grower fees. The Company's arrangements with these officers and employees
are similar to contracts with unrelated growers and, as such, do not include an
ongoing commitment by the Company. Grower fees paid to these officers and
employees amounted to $891,000 in 1992; $651,000 in 1993; and $689,000 in 1994.

At October 2, 1993 and October 1, 1994, other current assets include $215,000
and $217,000, respectively, and other assets include $3,356,000 and $3,933,000,
respectively, of accounts and notes receivable from an officer and director and
entities controlled by this person.

11. SUBSEQUENT EVENT

On October 12, 1994, the Company announced plans for a public offering of up
to 2,500,000 shares of Class A common stock. The Company's proceeds from the
offering are intended to be used for capital expenditures, including the
construction of an integrated chicken processing complex near Henderson,
Kentucky. Also, the Company announced that certain of its major stockholders
will offer up to an additional 2,100,000 shares of Class A common stock. The
Company will not receive any proceeds from the sale of the shares by such major
stockholders.

F-12
<PAGE>

HUDSON FOODS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12.STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK
----------------------------------
CLASS A CLASS B
---------------- -----------------
NUMBER OF NUMBER OF ADDITIONAL RETAINED TREASURY
SHARES AMOUNT SHARES AMOUNT CAPITAL EARNINGS STOCK
--------- ------ --------- ------ ---------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at September 28,
1991................... 6,397,041 $64 8,503,758 $85 $62,277 $82,861 $(11,788)
Net income............. -- -- -- -- -- 2,170 --
Stock exchange......... 706 -- (706) -- -- -- --
Exercise of stock
options............... 31,200 -- -- -- 180 -- --
Purchase of common
stock................. -- -- -- -- -- -- (124)
Issuance of stock under
the Employee Stock
Purchase Plan......... -- -- -- -- 21 -- 87
Cash dividends:
Class A $.12 per
share................ -- -- -- -- -- (652) --
Class B $.10 per
share................ -- -- -- -- -- (851) --
--------- --- --------- --- ------- -------- --------
Balance at October 3,
1992................... 6,428,947 64 8,503,052 85 62,478 83,528 (11,825)
Net income............. -- -- -- -- -- 15,905 --
Stock exchange......... 1,000 -- (1,000) -- -- -- --
Exercise of stock
options............... 168,805 2 -- -- 1,193 -- --
Contingent payment for
1990 acquisition...... 35,603 -- -- -- (825) -- --
Conversion of 14%
debentures............ 1,996,052 20 -- -- 24,777 -- --
Issuance of stock under
the Employee Stock
Purchase Plan......... -- -- -- -- 15 -- 191
Cash dividends:
Class A $.12 per
share................ -- -- -- -- -- (856) --
Class B $.10 per
share................ -- -- -- -- -- (850) --
--------- --- --------- --- ------- -------- --------
Balance at October 2,
1993................... 8,630,407 86 8,502,052 85 87,638 97,727 (11,634)
Net income............. -- -- -- -- -- 26,992 --
Stock exchange......... 170 -- (170) -- -- -- --
Exercise of stock
options............... 214,928 2 -- -- 1,641 -- --
Conversion of 8%
debentures............ 388,388 4 -- -- 8,154 -- --
Issuance of stock under
the Employee Stock
Purchase Plan......... -- -- -- -- 72 -- 218
Cash Dividends:
Class A $.12 per
share................ -- -- -- -- -- (946) --
Class B $.10 per
share................ -- -- -- -- -- (850) --
--------- --- --------- --- ------- -------- --------
Balance at October 1,
1994................... 9,233,893 $92 8,501,882 $85 $97,505 $122,923 $(11,416)
========= === ========= === ======= ======== ========
</TABLE>

On February 6, 1987, the Company's Restated Certificate of Incorporation was
amended to create two classes of common stock. The amendment authorized the
issuance of up to 40,000,000 shares of Class A common stock, par value $.01 per
share, and 40,000,000 shares of Class B common stock, par value $.01 per share.
Upon adoption of the amendment, each outstanding share of common stock
converted automatically into a share of Class A common stock. During fiscal
1987, the Company concluded a one-time-only exchange offer in which holders of
Class A common stock were given the opportunity to exchange their shares for an
equivalent number of shares of Class B common stock. The Class B common stock
has ten votes per share in most matters submitted to a vote of the Company's
stockholders, while the Class A common stock has one vote per share. As a
result of the exchange offer, voting control of the Company rests with the
holders of Class B common stock. In addition, the dividend per share of Class B
common stock may not exceed 90 percent of the dividend per share of Class A
common stock. The number of outstanding Class A shares at October 2, 1993 and
October 1, 1994 were 7,672,049 and 8,300,039, respectively.

F-13
<PAGE>

HUDSON FOODS, INC. AND SUBSIDIARIES

SUPPLEMENTAL QUARTERLY FINANCIAL DATA (UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
QUARTER ENDED 1993
--------------------------------------------------------------------------
(AS RESTATED, SEE NOTE 7)
JANUARY 2 APRIL 3 JULY 3 OCTOBER 2 FISCAL 1993
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Sales .................. $231,691 $220,148 $224,887 $243,819 $920,545
Cost of sales........... 203,352 192,589 192,794 213,267 802,002
-------------- -------------- -------------- -------------- --------------
Gross profit............ 28,339 27,559 32,093 30,552 118,543
Selling................. 14,145 16,701 16,912 16,168 63,926
General and
administrative......... 4,811 5,132 5,320 5,432 20,695
-------------- -------------- -------------- -------------- --------------
Operating income........ 9,383 5,726 9,861 8,952 33,922
Other expense, net...... 2,456 2,576 1,719 1,754 8,505
-------------- -------------- -------------- -------------- --------------
Income before income
taxes.................. 6,927 3,150 8,142 7,198 25,417
Income tax expense...... 2,654 1,289 3,151 2,418 9,512
-------------- -------------- -------------- -------------- --------------
Net income.............. $ 4,273 $ 1,861 $ 4,991 $ 4,780 $ 15,905
============== ============== ============== ============== ==============
Earnings per share:
Primary................ $ .30 $ .12 $ .30 $ .29 $1.01
Fully diluted.......... .29 .13 .30 .29 1.01
Dividends:
Class A................ .030 .030 .030 .030 .12
Class B................ .025 .025 .025 .025 .10
Market price (high-low). $14-7 1/2 $15 3/8-10 3/8 $13 7/8-10 1/4 $11 3/8-10 1/4 $15 3/8-7 1/2
<CAPTION>
QUARTER ENDED 1994
--------------------------------------------------------------------------
JANUARY 1 APRIL 2 JULY 2 OCTOBER 1 FISCAL 1994
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Sales .................. $250,292 $256,327 $266,773 $267,448 $1,040,840
Cost of sales........... 212,646 222,284 224,352 225,966 885,248
-------------- -------------- -------------- -------------- --------------
Gross profit............ 37,646 34,043 42,421 41,482 155,592
Selling................. 19,257 18,839 20,223 20,379 78,698
General and
administrative......... 6,474 6,122 6,309 6,850 25,755
-------------- -------------- -------------- -------------- --------------
Operating income........ 11,915 9,082 15,889 14,253 51,139
Other expense, net...... 1,829 1,717 1,442 1,164 6,152
-------------- -------------- -------------- -------------- --------------
Income before income
taxes.................. 10,086 7,365 14,447 13,089 44,987
Income tax expense...... 3,991 2,993 5,616 5,395 17,995
-------------- -------------- -------------- -------------- --------------
Net income.............. $ 6,095 $ 4,372 $ 8,831 $ 7,694 $ 26,992
============== ============== ============== ============== ==============
Earnings per share:
Primary................ $ .37 $ .26 $ .53 $ .46 $1.62
Fully diluted.......... .36 .26 .52 .46 1.61
Dividends:
Class A................ .030 .030 .030 .030 .12
Class B................ .025 .025 .025 .025 .10
Market price (high-low). $13 1/2-10 5/8 $16 5/8-11 1/8 $18 3/8-12 3/4 $25 1/8-17 7/8 $25 1/8-10 5/8
</TABLE>

F-14
<PAGE>

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

NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, IN CONNECTION WITH THE OFFERING MADE HEREBY, AND INFORMATION OR
REPRESENTATIONS NOT HEREIN CONTAINED, IF GIVEN OR MADE, MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING STOCKHOLDERS OR THE
UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SO-
LICITATION OF AN OFFER TO BUY, SHARES IN ANY JURISDICTION WHERE, AS TO ANY
PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JU-
RISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUN-
DER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS NOT
BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF
THE COMPANY SINCE THE DATE HEREOF.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information..................................................... 2
Incorporation of Certain Documents by Reference........................... 2
Prospectus Summary........................................................ 3
Use of Proceeds........................................................... 6
Dividend Policy........................................................... 6
Price Range of Common Stock............................................... 6
Capitalization............................................................ 7
Selected Consolidated Financial Data...................................... 8
Management's Discussion and Analysis of Results of Operations and
Financial Condition...................................................... 9
Business.................................................................. 14
Management................................................................ 19
Selling Stockholders...................................................... 21
Description of Common Stock............................................... 22
Certain United States Federal Tax Considerations for Non-U.S. Holders of
Common Stock............................................................. 23
Underwriting.............................................................. 25
Legal Matters............................................................. 27
Independent Public Accountants............................................ 27
Index to Consolidated Financial Statements................................ F-1
</TABLE>

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

4,000,000 SHARES

[LOGO OF HUDSON APPEARS HERE]

CLASS A COMMON STOCK

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

MERRILL LYNCH & CO.

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

A.G. EDWARDS & SONS, INC.

NOVEMBER 14, 1994

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]
PROSPECTUS
4,000,000 SHARES

[LOGO OF HUDSON APPEARS HERE]
CLASS A COMMON STOCK

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

Of the 4,000,000 shares of Class A common stock offered hereby, 800,000
shares are being offered outside the United States and Canada by the
International Underwriters (the "International Offering") and 3,200,000 shares
are being offered in a concurrent offering in the United States and Canada by
the U.S. Underwriters (the "U.S. Offering" and, together with the International
Offering, the "Offerings"). The public offering price and the underwriting
discount per share are identical for the Offerings. See "Underwriting."

The Company's Class A common stock is listed on the New York Stock Exchange,
Inc. under the symbol "HFI." On November 14, 1994, the last reported sale price
of the Class A common stock on the New York Stock Exchange was $21 3/4. See
"Price Range of Common Stock."
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO PROCEEDS TO
PUBLIC DISCOUNT (1) COMPANY (2) SELLING STOCKHOLDERS (2)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share.............. $21.75 $1.03 $20.72 $20.72
- -------------------------------------------------------------------------------------------------------
Total(3)............... $87,000,000 $4,120,000 $51,800,000 $31,080,000
- -------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
(1) The Company and the Selling Stockholders have agreed to indemnify the
several Underwriters against certain liabilities under the Securities Act
of 1933. See "Underwriting."
(2) Before deducting expenses of the offering estimated at $417,913 payable by
the Company and $16,447 payable by the Selling Stockholders.
(3) One of the Selling Stockholders has granted each of the International
Underwriters and the U.S. Underwriters an option exercisable within 30 days
after the date hereof to purchase up to 120,000 and 480,000 additional
shares of Class A common stock, respectively, solely to cover over-
allotments, if any. If such options are exercised in full, the total Price
to Public, Underwriting Discount and Proceeds to Selling Stockholders will
be $100,050,000, $4,738,000 and $43,512,000, respectively. See
"Underwriting."
---------------
The shares of Class A common stock are offered by the several Underwriters,
subject to prior sale, when, as and if issued to and accepted by them, subject
to approval of certain legal matters by counsel for the Underwriters and
certain other conditions. The Underwriters reserve the right to withdraw,
cancel or modify such offer and to reject orders in whole or in part. It is
expected that delivery of the shares of Class A common stock will be made in
New York, New York on or about November 21, 1994.
---------------
MERRILL LYNCH INTERNATIONAL LIMITED

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

A.G. EDWARDS & SONS, INC.

DEUTSCHE BANK NATWEST SECURITIES LIMITED NOMURA INTERNATIONAL
AKTIENGESELLSCHAFT

PARIBAS CAPITAL MARKETS UBS LIMITED
---------------
The date of this Prospectus is November 14, 1994
<PAGE>

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

AVAILABLE INFORMATION

No action has been taken or will be taken in any jurisdiction by the Company
or any Underwriter that would permit a public offering of the Class A common
stock or possession or distribution of this Prospectus in any jurisdiction
where action for that purpose is required, other than the United States.
Persons into whose possession this Prospectus comes are required by the Company
and the Underwriters to inform themselves about and to observe any restrictions
as to the offering of the Class A common stock and the distribution of this
Prospectus.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed by the Company with the Commission are hereby
incorporated by reference: (i) the Company's Annual Report on Form 10-K for the
fiscal year ended October 1, 1994; (ii) the Company's Annual Report on Form 10-
K for the fiscal year ended October 2, 1993; (iii) the Company's proxy
statement for its annual meeting of stockholders held on February 11, 1994;
(iv) the Company's Form 10-Q for the quarter ended January 1, 1994; (v) the
Company's Form 10-Q for the quarter ended April 2, 1994; (vi) the Company's
Form 10-Q for the quarter ended July 2, 1994; (vii) the description of the
Class A common stock contained in the Company's Form 8-A Registration Statement
filed January 22, 1986, as amended by Form 8 filed January 19, 1987 and (viii)
the Company's Form 8-K filed October 13, 1994; and (ix) the Company's Form 8-K
filed October 28, 1994.

2
<PAGE>

[Alternate Page for International Prospectus]

UNDERWRITING

Subject to the terms and conditions set forth in a purchase agreement (the
"International Purchase Agreement") among the Company, the Selling
Stockholders and each of the underwriters named below (the "International
Underwriters"), and concurrently with the sale of 3,200,000 shares of Common
Stock to the U.S. Underwriters (as defined below), the Company and the Selling
Stockholders have severally agreed to sell to each of the International
Underwriters and each of the International Underwriters has severally agreed
to purchase, the aggregate number of shares of Common Stock set forth opposite
its name below.

<TABLE>
<CAPTION>
NUMBER
OF
UNDERWRITERS SHARES
------------ -------
<S> <C>
Merrill Lynch International Limited............................... 200,000
Donaldson, Lufkin & Jenrette Securities Corporation............... 200,000
A.G. Edwards & Sons, Inc.......................................... 200,000
Banque Paribas.................................................... 40,000
Deutsche Bank Aktiengesellschaft.................................. 40,000
NatWest Securities Limited........................................ 40,000
Nomura International plc.......................................... 40,000
UBS Limited....................................................... 40,000
-------
Total......................................................... 800,000
=======
</TABLE>

Merrill Lynch International Limited, Donaldson, Lufkin & Jenrette Securities
Corporation and A.G. Edwards & Sons, Inc. are acting as representatives (the
"International Representatives") of the several International Underwriters.

The Company and the Selling Stockholders have also entered into a purchase
agreement (the "U.S. Purchase Agreement") with certain underwriters inside the
United States and Canada (the "U.S. Underwriters") for whom Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Donaldson, Lufkin & Jenrette Securities
Corporation and A.G. Edwards & Sons, Inc. are acting as representatives (the
"U.S. Representatives"). Subject to the terms and conditions set forth in the
U.S. Purchase Agreement, and concurrently with the sale of 800,000 shares of
Common Stock to the International Underwriters, the Company and the Selling
Stockholders have severally agreed to sell to the U.S. Underwriters, and the
U.S. Underwriters severally have agreed to purchase, an aggregate of 3,200,000
shares of Common Stock. The public offering price per share of Common Stock
and the underwriting discount per share of Common Stock are identical under
the International Purchase Agreement and the U.S. Purchase Agreement.

In the International Purchase Agreement the several International
Underwriters have agreed, subject to the terms and conditions set forth
therein, to purchase all of the shares of Common Stock being sold pursuant to
such Agreement if any of the shares of Common Stock being sold pursuant to
such Agreement are purchased and in the U.S. Purchase Agreement the several
U.S. Underwriters have agreed, subject to the terms and conditions set forth
therein, to purchase all the shares of Common Stock being sold pursuant to
such agreement if any of the shares of Common Stock being sold pursuant to
such agreement are purchased. Under certain circumstances, the commitments of
nondefaulting U.S. Underwriters and International Underwriters (collectively,
the "Underwriters") may be increased. The closings with respect to the sale of
shares of Common Stock to be purchased by the U.S. Underwriters and the
International Underwriters are conditioned upon one another.

The International Underwriters propose initially to offer the shares of
Common Stock to the public at the public offering price set forth on the cover
page of this Prospectus and to certain dealers (who may include International
Underwriters) at such price less a concession not in excess of $.60 per share
of Common Stock. The International Underwriters may allow, and such dealers
may reallow, a discount not in excess of $.10 per share of Common Stock to
certain other dealers. After the initial public offering, the public offering
price, concession and discount may be changed.

25
<PAGE>

[Alternate Page for International Prospectus]

James T. Hudson, one of the Selling Shareholders, has granted to the
International Underwriters an option to purchase up to an aggregate of 120,000
additional shares of Common Stock, and the U.S. Underwriters an option to
purchase up to an aggregate of 480,000 shares of Common Stock, in each case
exercisable for 30 days after the date hereof, to cover overallotments, if any,
at the public offering price, less the underwriting discount. To the extent
that the International Underwriters exercise this option, each of the
International Underwriters will have a firm commitment, subject to certain
conditions, to purchase approximately the same percentage of such shares of
Common Stock that the number of shares of Common Stock to be purchased by it
shown in the foregoing table bears to the total number of shares of Common
Stock initially offered to the International Underwriters hereby.

Each International Underwriter has agreed that (i) it has not offered or sold
and will not offer or sell in the United Kingdom by means of any document any
shares of Common Stock offered hereby other than to persons whose ordinary
business it is to buy or sell shares of debentures, whether as principal or
agent or any shares of Common Stock offered hereby in circumstances which do
not constitute an offer to the public within the meaning of the Companies Act
1985, (ii) it has complied and will comply with all applicable provisions of
the Financial Services Act of 1986 with respect to anything done by it in
relation to the Common Stock in, from, or otherwise involving the United
Kingdom, and (iii) it has only issued or passed on and will only issue or pass
on to any person in the United Kingdom any document received by it in
connection with the issuance of Common Stock to a person who is of a kind
described in Article 9(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1988 or is a person to whom the document may
otherwise lawfully be issued or passed on.

LEGAL MATTERS

26
<PAGE>

[Alternate Page for International Prospectus]

INDEPENDENT PUBLIC ACCOUNTANTS

27
<PAGE>

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, IN CONNECTION WITH THE OFFERING MADE HEREBY, AND INFORMATION OR
REPRESENTATIONS NOT HEREIN CONTAINED, IF GIVEN OR MADE, MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING STOCKHOLDERS OR THE UN-
DERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICI-
TATION OF AN OFFER TO BUY, SHARES IN ANY JURISDICTION WHERE, AS TO ANY PERSON
TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDIC-
TION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS NOT BEEN
ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF.

IN THIS PROSPECTUS, REFERENCE TO "DOLLARS" AND "$" ARE TO UNITED STATES DOL-
LARS UNLESS STATED OTHERWISE.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information..................................................... 2
Incorporation of Certain Documents by Reference........................... 2
Prospectus Summary........................................................ 3
Use of Proceeds........................................................... 6
Dividend Policy........................................................... 6
Price Range of Common Stock............................................... 6
Capitalization............................................................ 7
Selected Consolidated Financial Data...................................... 8
Management's Discussion and Analysis of Results of Operations and
Financial Condition...................................................... 9
Business.................................................................. 14
Management................................................................ 19
Selling Stockholders...................................................... 21
Description of Common Stock............................................... 22
Certain United States Federal Tax Considerations for Non-U.S. Holders of
Common Stock............................................................. 23
Underwriting.............................................................. 25
Legal Matters............................................................. 26
Independent Public Accountants............................................ 27
Index to Consolidated Financial Statements................................ F-1
</TABLE>

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

4,000,000 SHARES

[LOGO OF HUDSON APPEARS HERE]

CLASS A COMMON STOCK

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

MERRILL LYNCH INTERNATIONAL LIMITED

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

A.G. EDWARDS & SONS, INC.

DEUTSCHE BANK
AKTIENGESALLECHAFT

NATWEST SECURITIES LIMITED

NOMURA INTERNATIONAL

PARIBAS CAPITAL MARKETS

UBS LIMITED

NOVEMBER 14, 1994

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