<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
RALSTON PURINA COMPANY
----------------------------
(Name of Registrant as Specified In Its Charter)
RALSTON PURINA COMPANY
------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a6(i)(1), 14a-
6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
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2) Aggregate number of securities to which transaction
applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how
it was determined):
------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------
[X] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE> 2
RALSTON PURINA COMPANY
CHECKERBOARD SQUARE
ST. LOUIS, MISSOURI 63164
DEAR SHAREHOLDER:
You are cordially invited to attend the Annual Meeting of
Shareholders of Ralston Purina Company to be held at 2:30 p.m. on
Thursday, February 1, 1996, at the Grand Ballroom, Hyatt Regency St.
Louis Hotel, St. Louis Union Station, 1820 Market Street, St. Louis,
Missouri.
We hope you will attend in person. If you plan to do so, please
complete and return the enclosed request for an advance registration
form. An admission card will be sent to you which will expedite your
admission.
Whether you plan to attend the meeting or not, we urge you to sign,
date and return the enclosed proxy as soon as possible in the
postage-paid envelope provided. This will ensure representation of
your shares in the event that you are unable to attend the meeting.
The Directors and Officers of the Company look forward to meeting
with you.
WILLIAM P. STIRITZ
Chairman of the Board and
Chief Executive Officer
December 15, 1995
<PAGE> 3
<TABLE>
TABLE OF CONTENTS
<CAPTION>
PAGE
----
<S> <C>
Notice of Annual Meeting of Shareholders 3
Proxy Statement 4
Voting 4
Item 1. Election of Directors 5
Information about Nominees and Directors 5
Stock Ownership 7
Directors' Meetings, Committees and Fees 9
Item 2. Ratification of the Appointment of Independent Accountants 11
Item 3. Proposal to Amend the Restated Articles of Incorporation 11
Item 4. Proposal to Adopt the 1996 Incentive Stock Plan 12
Other Business 16
Executive Compensation 17
Human Resources Committee Report on Executive Compensation 21
Performance Graphs 23
Other Transactions 25
Solicitation Statement 25
Shareholder Proposals for 1997 Annual Meeting 25
Exhibit A-Amendment of Restated Articles of Incorporation A-1
Exhibit B-Ralston Purina Company 1996
Incentive Stock Plan B-1
</TABLE>
2
<PAGE> 4
RALSTON PURINA COMPANY
CHECKERBOARD SQUARE
ST. LOUIS, MISSOURI 63164
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders:
The Annual Meeting of Shareholders of Ralston Purina Company will
be held at 2:30 p.m. on Thursday, February 1, 1996, at the Grand
Ballroom, Hyatt Regency St. Louis Hotel, St. Louis Union Station,
1820 Market Street, St. Louis, Missouri.
The meeting will be held for the following purposes:
1. To elect four Directors to serve three-year terms ending in
January, 1999, or until their successors are elected and
qualified;
2. To ratify the Board of Directors' appointment of Price
Waterhouse as independent accountants for the Company for the
fiscal year ending September 30, 1996;
3. To consider certain proposed amendments to the Company's
Restated Articles of Incorporation;
4. To consider adoption of the 1996 Incentive Stock Plan for Key
Management Employees;
and to act upon such other matters as may properly come before the
meeting.
Only shareholders of record at the close of business on November
27, 1995, are entitled to vote at the meeting and any adjournments
thereof.
By order of the Board of Directors,
/s/ James M. Neville
JAMES M. NEVILLE
Secretary
December 15, 1995
3
<PAGE> 5
PROXY STATEMENT
VOTING
This Proxy Statement is furnished to the shareholders of Ralston
Purina Company (the "Company") in connection with the solicitation of
proxies by the Board of Directors of the Company for use at the
Annual Meeting of Shareholders to be held on February 1, 1996. This
Proxy Statement is being mailed to shareholders on or about December
15, 1995.
The voting securities of the Company presently consist of its $.10
par value Ralston-Ralston Purina Group Common Stock ("Common Stock")
and its $1.00 par value Series A ESOP Convertible Preferred Stock
("ESOP Preferred Stock"), (collectively, the "Stock"). As of November
8, 1995, the Company had issued and outstanding 105,863,117 shares of
Common Stock and 3,146,209 shares of ESOP Preferred Stock. The
8,824,359 shares of Common Stock held in the Company's treasury will
not be voted.
The persons named as Proxies on the proxy card accompanying this
Proxy Statement were designated by the Company's Board of Directors
(the "Board"). The shares represented by each such proxy will be
voted in accordance with the terms of the proxy. Proxies also
authorize such persons to vote the shares represented thereby on any
matters not known at the time this Proxy Statement was printed that
may properly be presented for action at the meeting. Any shareholder
giving a proxy has the right to revoke it by notifying the Secretary
of the Company in writing at any time before its exercise. Execution
of the proxy will not affect a shareholder's right to attend the
meeting and vote in person.
Each share of Common Stock and ESOP Preferred Stock outstanding on
the record date will be entitled to one vote. Shareholders do not
have the right under the terms of the Company's Restated Articles of
Incorporation to vote cumulatively in electing directors.
A majority of the outstanding shares of Common Stock and ESOP
Preferred Stock entitled to vote at this meeting, represented in
person or by proxy, will constitute a quorum. With regard to any
proposal submitted to a vote (including the Election of Directors,
Ratification of the Appointment of Independent Accountants, Amendment
of Restated Articles of Incorporation, Adoption of 1996 Incentive
Stock Plan and any other matters properly brought before this
meeting), approval requires the affirmative vote of a majority of the
shares which are entitled to vote on the subject matter and which are
represented in person or by proxy at a meeting at which a quorum is
present. Under the Company's Restated Articles of Incorporation,
certain other amendments to those Articles, and certain transactions
described therein, may require higher thresholds for approval.
Abstentions and broker non-votes as well as the withholding of
authority are counted for purposes of determining the presence or
absence of a quorum for the transaction of business. Abstentions are
counted in tabulations of the votes cast on proposals presented to
stockholders, whereas broker non-votes and directions to withhold
authority are not counted for purposes of determining whether a
proposal has been approved.
Only shareholders of record at the close of business on November
27, 1995, are eligible to vote at the meeting. If a shareholder
participates in the Company's Dividend Reinvestment Plan, any proxy
given by such shareholder will also include all shares held for the
shareholder's account under that plan, unless contrary instructions
are given.
4
<PAGE> 6
ITEM 1. ELECTION OF DIRECTORS
Pursuant to the Company's Restated Articles of Incorporation,
Bylaws and the Board resolution adopted pursuant thereto, the Board
consists of ten members organized into three classes, with two
classes consisting of three members and one class consisting of four
members, with each Director elected to serve for a three-year term.
At this meeting, four Directors are to be elected to serve three-
year terms ending in January, 1999, or until their successors are
elected and qualified. In accordance with the recommendation of its
Nominating Committee, the Board has nominated Messrs. Donald
Danforth, Jr., William H. Danforth, Richard A. Liddy and Mrs.
Katherine D. Ortega for election as Directors at this meeting. Each
nominee is currently serving as a Director and has consented to serve
for a new term. If any nominee should be unable to serve as a
Director, an event not anticipated, proxies not limited to the
contrary may be voted in favor of the election of such other person
as the Board may nominate.
INFORMATION ABOUT NOMINEES AND DIRECTORS
Information about nominees for Directors, and for Directors
continuing in office, follows. Directors' ages are as of December 31,
1995.
----------------------------------------------------------------------
[PHOTO] DONALD DANFORTH, JR.<F*>, Director Since 1961, Age 63
(Standing for election at this meeting for a term
expiring 1999)
Chairman of the Board, Vector Corporation (equipment
manufacturing). Also President, Danforth Agri-Resources
Inc. (diversified investments and management) and
Chairman of the Board, Treasurer and former President,
Kennelwood Village, Inc. (pet care center). Also a
director of Boatmen's Trust Company.
----------------------------------------------------------------------
[PHOTO] WILLIAM H. DANFORTH<F*>, Director Since 1969, Age 69
(Standing for election at this meeting for a term
expiring 1999)
Chairman of the Board and former Chancellor, Washington
University. Also a director of McDonnell Douglas
Corporation and Ralcorp Holdings, Inc.
----------------------------------------------------------------------
[PHOTO] RICHARD A. LIDDY, Director Since 1995, Age 60
(Standing for election at this meeting for a term
expiring 1999)
Chairman of the Board, President and Chief Executive
Officer and former Chief Operating Officer, General
American Life Insurance Company (insurance business).
Director and Chairman of the Board of the Reinsurance
Group of America, Incorporated, and of the registered
investment companies of the General American Capital
Company and The Walnut Street Funds, Inc. Also a
director of Brown Group, Inc. and Union Electric
Company.
----------------------------------------------------------------------
[PHOTO] KATHERINE D. ORTEGA, Director Since 1992, Age 61
(Standing for election at this meeting for a term
expiring 1999)
Former Alternate Representative of the United States to
the 45th General Assembly of the United Nations. Also
former Treasurer of the United States. Also a director
of Diamond Shamrock, Inc., The Kroger Co., Long Island
Lighting Company, Rayonier, Inc. and The Paul Revere
Corporation.
----------------------------------------------------------------------
[FN]
<F*>Donald Danforth, Jr. and William H. Danforth are brothers.
5
<PAGE> 7
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[PHOTO] DAVID R. BANKS, Director Since 1985, Age 58
(Continuing in office-Term Expiring 1998)
Chairman of the Board, President and Chief Executive
Officer, Beverly Enterprises, Inc. (health care
services). Also a director of Nationwide Health
Properties, Inc. and Wellpoint Health Networks, Inc.
----------------------------------------------------------------------
[PHOTO] JOHN H. BIGGS, Director Since 1989, Age 59
(Continuing in office-Term Expiring 1997)
Chairman of the Board and Chief Executive Officer,
Teachers Insurance and Annuity Association-College
Retirement Equities Fund (pension fund management).
Former Chairman of the Board and Chief Executive
Officer of Centerre Trust Co. of St. Louis. Also a
director of McDonnell Douglas Corporation.
----------------------------------------------------------------------
[PHOTO] DAVID C. FARRELL, Director Since 1987, Age 62
(Continuing in office-Term Expiring 1997)
Chairman of the Board and Chief Executive Officer, The
May Department Stores Company (department store
retailing). Also a director of Emerson Electric
Company.
----------------------------------------------------------------------
[PHOTO] M. DARRELL INGRAM, Director Since 1986, Age 63
(Continuing in office-Term Expiring 1998)
Retired President and Chief Executive Officer,
Petrolite Corporation (specialty chemicals).
----------------------------------------------------------------------
[PHOTO] JOHN F. MCDONNELL, Director Since 1988, Age 57
(Continuing in office-Term Expiring 1998)
Chairman of the Board and former Chief Executive
Officer, McDonnell Douglas Corporation (aerospace and
complementary businesses).
----------------------------------------------------------------------
[PHOTO] WILLIAM P. STIRITZ, Director Since 1981, Age 61
(Continuing in office-Term Expiring 1997)
Chairman of the Board, Chief Executive Officer and
President, Ralston Purina Company. Also a director of
Angelica Corporation, Ball Corporation, Boatmen's
Bancshares, Inc., Interstate Bakeries Corporation, The
May Department Stores Company, Ralcorp Holdings, Inc.
and Reinsurance Group of America, Incorporated.
----------------------------------------------------------------------
6
<PAGE> 8
STOCK OWNERSHIP
Table I below sets forth information regarding the sole person
known by the Company to beneficially own, as defined by the
Securities and Exchange Commission ("SEC") Rule 13d-3, more than 5%
of the Company's Common Stock as of November 8, 1995.
<TABLE>
TABLE I
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF % OF SHARES EXPLANATORY
OF BENEFICIAL OWNER TITLE OF CLASS BENEFICIAL OWNERSHIP OUTSTANDING<FA> NOTES
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Boatmen's Bancshares, Inc. Common Stock 13,594,641 12.02% <FB>
One Boatmen's Plaza
St. Louis, MO 63101
<FN>
-----
<FA> Shares outstanding were deemed to be shares actually outstanding
on November 8, 1995 and shares into which ESOP Preferred Stock
held by it on that date could be converted. See footnote B below.
<FB> Based on written representations made by the shareholder, this
amount includes shares of Common Stock owned by the following
subsidiaries of Boatmen's Bancshares, Inc.: Boatmen's Trust
Company-6,371,095 shares and other Boatmen's Bancshares
subsidiaries-18,727 shares. Of these shares, Boatmen's has voting
and investment powers as follows: sole voting-1,743,444 shares;
shared voting-4,638,418 shares; sole investment-622,522 shares;
and shared investment-5,572,343 shares. Of such shares, voting or
investment power for 859,391 and 860,594 shares are shared with
Donald Danforth, Jr. and William H. Danforth, respectively, both
of whom are Directors of the Company (see Table II). Also
includes 7,204,819 shares of Common Stock into which the
Company's ESOP Preferred Stock is convertible at a conversion
rate of 2.29 shares of Common Stock for each share of ESOP
Preferred Stock. Boatmen's disclaims beneficial ownership of
these shares.
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
All 3,146,209 shares of the Company's outstanding ESOP Preferred
Stock are held by Boatmen's Trust Company, a subsidiary of Boatmen's
Bancshares, Inc., as trustee under the Company's Savings Investment
Plan. Voting and investment of such shares are pursuant to the terms
of the Plan. The Company's Employee Benefit Asset Investment
Committee (the "Investment Committee"), currently consisting of J. R.
Elsesser, Chairman, L. L. Fraley, C. S. Sommer and A. M. Wray, each
of whom is an employee of the Company, has authority, subject to
fiduciary obligations, to direct the trustee to convert the ESOP
Preferred Stock into shares of Common Stock. The Investment Committee
also has authority under the Plan to delete or establish other
investment funds. The Company's Benefits Policy Board (the "Benefits
Committee"), currently consisting of W. P. McGinnis, Chairman, C. S.
Sommer, J. W. Brown, J. R. Elsesser, J. P. Mulcahy and W. P. Stiritz,
each of whom is an employee of the Company, has authority to amend
the Plan, which amendment may also include the deletion of such
funds. Upon conversion of the shares of ESOP Preferred Stock into
shares of Common Stock, the shares of stock received in such
conversion would be invested in the RPG Common Stock Fund or
distributed to participants, as required by the terms of the Plan,
and the members of the Investment Committee would have no further
dispositive control over such shares. Upon receipt of directions to
delete such Funds, the appropriate trustee of the Plan would be
required to sell or cause to be converted or redeemed the shares of
such Stock held in the relevant Funds and transfer the proceeds to
accounts in other investment funds established on behalf of
participants in the Plan. Neither the Investment Committee nor the
Benefits Committee has the right to vote any shares of such Stock
held in the Plan. Because of their indirect dispositive power which
could be deemed to be beneficial ownership, the Investment Committee
and the Benefits Committee each files a Schedule 13G on an annual
basis disclosing the above authority with respect to shares of such
Stock held in the Plan, but both disclaim beneficial ownership of the
Stock.
Under the Ralston Purina Company Savings Investment Plan, the
following Named Executive Officers have credited to their accounts
the following number of shares of ESOP Preferred Stock as to which
these individuals have only voting power: Mr. Stiritz-1,130 shares;
Mr. Brown-1,174 shares; Mr. Elsesser-1,168 shares; Mr. McGinnis-1,179
shares; Mr. Mulcahy-532 shares; and all other executive officers as a
group-4,721 shares. In each case, such ownership represents less than
1% of the total shares of ESOP Preferred Stock outstanding.
7
<PAGE> 9
Table II sets forth information regarding beneficial ownership (as
defined by SEC Rule 13d-3) of Common Stock by Directors, Nominees for
Directors, Executive Officers named in the Summary Compensation Table
on page 17, (the "Named Executive Officers") and all Directors and
Executive Officers as a group as of November 8, 1995. Except as
noted, all such persons possess sole voting and investment power with
respect to the shares listed. An asterisk in the column listing the
percentage of shares beneficially owned indicates the person owns
less than 1% of the Common Stock as of November 8, 1995.
<TABLE>
TABLE II
(COMMON STOCK)
<CAPTION>
NUMBER OF
DIRECTORS, SHARES
NOMINEES FOR DIRECTORS BENEFICIALLY % OF SHARES EXPLANATORY
AND EXECUTIVE OFFICERS OWNED OUTSTANDING<FA> NOTES
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
David R. Banks 203 <F*>
John H. Biggs 2,035 <F*> <FB><FC>
Donald Danforth, Jr. 1,239,507 1.17% <FB><FD>
William H. Danforth 960,121 <F*> <FB><FC><FE>
David C. Farrell 25,443 <F*> <FC>
M. Darrell Ingram 3,676 <F*> <FF>
Richard A. Liddy 500 <F*>
John F. McDonnell 5,129 <F*> <FC><FG>
Katherine D. Ortega 1,200 <F*>
William P. Stiritz 1,298,894 1.22% <FC><FH><FI><FO>
Jay W. Brown 147,266 <F*> <FJ><FO>
James R. Elsesser 190,864 <F*> <FK><FO>
W. Patrick McGinnis 195,729 <F*> <FL><FO>
J. Patrick Mulcahy 176,403 <F*> <FM><FO>
All Directors and Executive 4,414,199 4.15% <FN><FO>
Officers as a Group (19 persons)
<FN>
-----
<FA> For purposes of calculating the percentage of shares outstanding
owned by each individual or the group, shares outstanding were
deemed to be (i) shares actually outstanding on November 8, 1995,
and (ii) shares attributable to stock options which could be
exercised for Common Stock within 60 days from November 8, 1995.
<FB> Excludes 4,025,646 shares of Common Stock, or 3.80% of the
outstanding Common Stock, held by The Danforth Foundation, St.
Louis, Missouri. John H. Biggs, Donald Danforth, Jr. and William
H. Danforth are three of the ten trustees of the Foundation.
Messrs. Biggs, D. Danforth, Jr. and W. Danforth disclaim
beneficial ownership of such shares.
<FC> Excludes 899,278 shares of Common Stock, or .85% of the
outstanding Common Stock, held by Washington University, St.
Louis, Missouri. William H. Danforth is Chairman of the Board of
Trustees of the University and he and Directors Biggs, Farrell,
McDonnell and Stiritz are on the University's Board of Trustees,
which consists of 45 members. Messrs. Biggs, Danforth, Farrell,
McDonnell and Stiritz disclaim beneficial ownership of such
shares.
<FD> Donald Danforth, Jr. has sole voting and investment powers
respecting 279,096 shares of Common Stock. He shares voting and
investment powers respecting 842,565 shares of Common Stock and
disclaims beneficial ownership of 54,851 of such shares of Common
Stock. Included are 117,846 shares of Common Stock owned by his
wife.
<FE> William H. Danforth has sole voting and investment powers
respecting 82,267 shares of Common Stock. He shares voting and
investment powers respecting 877,854 shares of Common Stock, and
disclaims beneficial ownership of 99,527 of such shares of Common
Stock.
<FF> Includes 264 shares of Common Stock held in IRA accounts.
<FG> Includes 3,094 shares of Common Stock held in trusts of which Mr.
McDonnell serves as co-trustee.
8
<PAGE> 10
<FH> Includes 10,159 shares of Common Stock owned by Mr. Stiritz's
wife, 8,563 shares of Common Stock owned jointly with his child
and 169,920 shares of Common Stock which are not presently owned
but could be acquired within 60 days by the exercise of stock
options. Also includes 11,114 shares of Common Stock which is an
approximation of the number of shares as to which Mr. Stiritz
presently has only voting power under the Company's Savings
Investment Plan. Mr. Stiritz disclaims beneficial ownership of
shares of Common Stock owned by his wife.
<FI> In December of 1995, Mr. Stiritz filed an amended Form 4 for the
month of January of 1993 and an amended Form 5 for fiscal year
1991 to report, respectively, a purchase of Common Stock on
behalf of his son, and a gift of shares of Common Stock, which
were inadvertently omitted from his original Forms filed. In
addition, at that time, Mr. Stiritz filed a Form 4 for the month
of December, 1992 to report a purchase of Common Stock on behalf
of his son which was inadvertently not previously reported.
<FJ> Includes 21,296 shares of Common Stock owned by Mr. Brown's wife
and 79,797 shares of Common Stock which are not presently owned
but could be acquired within 60 days by the exercise of stock
options. Also includes 798 shares of Common Stock which is an
approximation of the number of shares as to which Mr. Brown
presently has only voting power under the Company's Savings
Investment Plan.
<FK> Includes 101,356 shares of Common Stock which are not presently
owned but could be acquired within 60 days by the exercise of
stock options. Also includes 499 shares of Common Stock which is
an approximation of the number of shares as to which Mr. Elsesser
presently has only voting power under the Company's Savings
Investment Plan. Excludes 1,731,005 shares of Common Stock held
to fund retirement benefits by the Ralston Purina Master
Collective Trust of which Mr. Elsesser is one of four trustees
who collectively exercise investment and voting power. Mr.
Elsesser disclaims beneficial ownership of shares held in the
Master Collective Trust.
<FL> Includes 1,869 shares of Common Stock owned by Mr. McGinnis' wife
and 101,356 shares of Common Stock which are not presently owned
but could be acquired by Mr. McGinnis within 60 days by the
exercise of stock options. Also includes 697 shares of Common
Stock which is an approximation of the number of shares as to
which Mr. McGinnis presently has only voting power under the
Company's Savings Investment Plan. Mr. McGinnis disclaims
beneficial ownership of shares of Common Stock owned by his wife.
<FM> Includes 2,471 shares of Common Stock owned jointly with Mr.
Mulcahy's children and 101,356 shares of Common Stock which are
not presently owned but could be acquired within 60 days by the
exercise of stock options. Also includes 1,496 shares of Common
Stock which is an approximation of the number of shares as to
which Mr. Mulcahy presently has only voting power under the
Company's Savings Investment Plan.
<FN> Includes 68,264 shares of Common Stock which are not presently
owned but could be acquired within 60 days by all other executive
officers by the exercise of stock options. Also includes 19,071
restricted shares of Common Stock as to which certain of such
other officers presently have only voting power and 3,289 shares
of Common Stock which is an approximation of the number of shares
as to which such other officers presently have only voting power
under the Company's Savings Investment Plan. Excludes 1,731,005
shares of Common Stock held to fund retirement benefits by the
Ralston Purina Master Collective Trust of which two executive
officers are two of four trustees who collectively exercise
investment and voting power.
<FO> Shares of Common Stock which are held in the Company's Savings
Investment Plan are not directly allocated to individual
participants but instead are held in separate funds in which
participants acquire units. Such funds also hold varying amounts
of cash and short-term investments. The number of shares of both
classes of Stock reported herein as being held in the Plan with
respect to the executive officers of the Company is an
approximation of the number of such shares in each fund allocable
to each of the executive officers. The number of shares of each
class allocable to a participant in such funds will vary on a
daily basis based upon the cash position of the funds and the
market price of each class of Stock.
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
DIRECTORS' MEETINGS, COMMITTEES AND FEES
The Board currently has seven regular meetings scheduled per year,
and holds such special meetings as deemed advisable to review
significant matters affecting the Company and to act upon matters
requiring Board approval. In addition to seven regular meetings, two
special meetings of the Board of Directors were held during fiscal
year 1995. Non-management Directors receive an annual retainer of
$30,000. They are also paid $1,000
9
<PAGE> 11
for attending each regular or special Board meeting and each standing
committee meeting, including telephonic meetings, and for each
consent to action without a meeting. Non-management Directors who
chair standing committees receive an additional annual retainer of
$2,000. The Company reimburses Directors for travel expenses in
connection with Board meetings and also pays the premiums on
Directors' and Officers' Liability and Travel Accident insurance
policies insuring Directors.
The Company has a Retirement Plan for Non-Management Directors.
Under this plan, a Director who has served at least one year will be
paid a retirement benefit upon retirement or resignation and in
certain other circumstances. The Board's present policy is that no
Director will stand for election after reaching age 70. The annual
retirement benefit ranges from 10 to 100 percent of the annual Board
retainer in effect at the time of the Director's retirement or
resignation, depending on credited Board service. The benefit is paid
in a lump sum equal to the present value of the right to receive such
annual benefit for life, beginning at the date of retirement or
resignation, using assumptions as to discount rate and life
expectancy similar to those used in connection with the Company's
qualified defined benefit retirement plans for employees.
The Company also has a Deferred Compensation Plan for Non-
Management Directors. Under this plan, any non-management Director
may elect to defer, with certain limitations, all retainers and fees.
Deferrals may be made in Common Stock equivalents in an Equity Option
or may be made in cash under a Variable Interest Option. Deferrals in
the Variable Interest Option earn interest at Morgan Guaranty Trust
Company of New York's prime rate; deferrals in the Equity Option in
fiscal year 1995 were increased by a 25% match by the Company, and
earn dividend equivalents to the extent dividends are paid on the
underlying Common Stock. Stock equivalents credited to a Director's
account are valued at market value of the underlying Stock at the
time of payout. Deferrals in both the Variable Interest and Equity
Options are paid out in a lump sum in cash to the Director at the
Director's retirement, termination or total disability, or to the
Director's estate or beneficiary upon the Director's death.
During fiscal year 1995, all Directors attended 75% or more of the
aggregate of the meetings of the Board and of the Board committees to
which they were appointed, except for Mr. McDonnell who attended 67%
of the aggregate of such meetings.
To assist the Board in the discharge of its responsibilities, it
has the following standing committees: Audit, Executive, Finance,
Human Resources and Nominating. A description of each standing
committee and its membership as of the date of this Proxy Statement
follows:
-----------------
AUDIT COMMITTEE Members: M. D. Ingram, Chairman; D. R. Banks,
J. F. McDonnell and K. D. Ortega
The Audit Committee consists of four non-management Directors and
is responsible for matters relating to accounting policies and
practices, financial reporting, and internal controls. Each year it
recommends to the Board the appointment of a firm of independent
accountants to examine the financial statements of the Company. It
reviews with representatives of the independent accountants,
principal corporate officers and the Director of Internal Auditing
the scope of the examination of the Company's financial statements,
results of audits, audit costs, and recommendations with respect to
internal controls and financial matters. The Audit Committee also
reviews nonaudit services rendered by the Company's independent
accountants and periodically meets with or receives reports from
principal corporate officers and the Director of Internal Auditing.
The Audit Committee met two times in fiscal year 1995.
-----------------
EXECUTIVE COMMITTEE Members: W. P. Stiritz, Chairman; D. Danforth, Jr.,
W. H. Danforth and M. D. Ingram
The Executive Committee consists of four members and may exercise
all of the authority of the Board in the management of the Company in
the intervals between meetings of the Board. The Executive Committee
met three times in fiscal year 1995.
-----------------
10
<PAGE> 12
FINANCE COMMITTEE Members: D. R. Banks, Chairman; D. Danforth, Jr.,
D. C. Farrell, J. F. McDonnell and
W. P. Stiritz
The Finance Committee consists of five members. It reviews the
Company's financial condition, objectives and strategies and makes
recommendations and reports to the Board concerning financing
requirements, dividend policy, foreign currency management, and
pension fund performance. The Finance Committee met seven times in
fiscal year 1995.
-----------------
HUMAN RESOURCES COMMITTEE Members: W. H. Danforth, Chairman; J. H. Biggs,
M. D. Ingram and K. D. Ortega
The Human Resources Committee consists of four non-management
Directors. It sets the compensation of all Executive Officers,
approves deferrals under the Company's Deferred Compensation Plan for
Key Employees and grants awards under, and administers, the Incentive
Stock Plan. It also monitors the competitiveness of management
compensation and benefit programs, and reviews principal employee
relations policies and procedures. The Human Resources Committee met
three times in fiscal year 1995.
-----------------
NOMINATING COMMITTEE Members: D. Danforth, Jr., Chairman; J. H. Biggs
and D. C. Farrell
The Nominating Committee consists of three non-management members.
It recommends to the Board nominees for election as Directors and
Executive Officers of the Company. Additionally, it makes
recommendations to the Board regarding election of Directors to
positions on committees of the Board and compensation and benefits
for Directors. The Nominating Committee will consider suggestions
from shareholders regarding possible Director candidates. Such
suggestions, together with appropriate biographical information,
should be submitted to the Secretary of the Company. The Nominating
Committee met four times in fiscal year 1995.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR MESSRS. D. DANFORTH,
W. DANFORTH, R. LIDDY AND MRS. ORTEGA.
ITEM 2. RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT ACCOUNTANTS
Upon the recommendation of the Audit Committee, the Board has
appointed Price Waterhouse as independent accountants to examine the
consolidated accounts of the Company for the fiscal year ending
September 30, 1996, subject to ratification by shareholders. Price
Waterhouse has performed this function for the Company since 1955.
The firm will be represented at the 1996 Annual Meeting of
Shareholders and will have the opportunity to make a statement and
respond to questions from shareholders.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF PRICE WATERHOUSE AS INDEPENDENT ACCOUNTANTS.
ITEM 3. PROPOSAL TO AMEND THE RESTATED
ARTICLES OF INCORPORATION
The Company's Board has determined that certain amendments to the
Company's Restated Articles of Incorporation (the "Articles") are
desirable and recommends them to the Company's shareholders for
adoption. The full text of each resolution necessary to effect the
proposed amendments is contained in Exhibit A to this Proxy
Statement. The proposed amendments would effect the following:
(i) Reduce the number of authorized shares of common stock from
730,600,000 to 610,600,000 (reflecting the elimination of the
authorization to issue 120,000,000 shares of Ralston - Continental
Baking Group Common Stock ("CBG Stock")), and redesignate the
existing Ralston - Ralston Purina Group Common Stock ("Common
Stock") as Ralston Purina Common Stock;
(ii) Eliminate the provisions relating to the variable voting
power of the CBG Stock and the class voting rights of the two
classes of common stock;
11
<PAGE> 13
(iii) Eliminate the provisions relating to the limitations on
dividends on CBG Stock and the Board of Directors' discretion with
respect to the payment of unequal dividends on the two classes of
common stock;
(iv) Eliminate the redemption and exchange provisions with
respect to the CBG Stock and the Common Stock; and
(v) Eliminate the provisions relating to the limited liquidation
rights of the CBG Stock and the provisions relating to the binding
nature of determinations of the Board with respect to the CBG
Stock.
The amendments are permitted under Missouri corporation law and are
consistent with the rules of the New York, Pacific and Chicago Stock
Exchanges upon which the Company's common stock is listed and traded.
It is the intention of the Board that, if the proposed amendments are
approved, the Company's Articles be restated to reflect the
amendments and to delete superseded provisions. Under Missouri law,
the Articles may be restated by the Board.
REASONS FOR AND GENERAL EFFECT OF AMENDMENTS
On April 12, 1995, the Board declared the exchange of each share of
the Company's CBG Stock, which stock reflected the operations and
earnings of the Company's Continental Baking Group (comprised of the
Company's Continental Baking Company subsidiary and certain allocated
assets and expenses), for .0886 shares of Common Stock, which
reflects the operations and earnings of all of the Company's other
businesses. The exchange, which was authorized by the terms of the
Articles, was effective as of May 15, 1995, and since that time the
Common Stock has been the only outstanding class of common stock of
the Company. Effective July 22, 1995, the Company sold all of the
outstanding capital stock of Continental Baking Company to Interstate
Bakeries Corporation and its subsidiary, Interstate Brands
Corporation.
As the Company now has only one class of common stock outstanding
and, by reason of the sale of Continental Baking Company, the
Continental Baking Group is no longer in existence, the provisions of
the Articles relating to (i) the authorization and terms of the CBG
Stock, (ii) the voting and other relative rights of the two classes
of common stock of the Company, and (iii) the redemption and exchange
provisions with respect to the two classes of common stock, are no
longer necessary or relevant, and the continued presence of such
provisions may be confusing to shareholders of the Company.
Elimination of these provisions will not change the voting power or
other rights of the holders of the Common Stock nor the rights of the
Company with respect to the outstanding Common Stock. As no purpose
would be served in retaining provisions related to the CBG Stock in
the Articles, and as the proposed amendments will not affect the
rights of the Company or its shareholders, it is recommended that
such provisions be eliminated from the Articles.
VOTE REQUIRED
The affirmative vote of a majority of the outstanding Common Stock
and ESOP Preferred Stock, voting together as a single class, is
required for approval.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 3, TO AMEND
THE COMPANY'S RESTATED ARTICLES OF INCORPORATION.
ITEM 4. PROPOSAL TO ADOPT THE 1996 INCENTIVE STOCK PLAN
DESCRIPTION OF PLAN
The 1996 Incentive Stock Plan (the "Plan") provides for the
granting of stock options, restricted stock awards and other awards
payable in Common Stock or cash to Company employees, including
Executive Officers. A copy of the Plan as proposed to be adopted is
contained in Exhibit B to this Proxy Statement. The purpose of the
Plan is to enhance the profitability and value of the Company for the
benefit of its shareholders by providing stock awards to attract,
retain and motivate officers and other key employees who make
important contributions to the success of the Company. The Plan will
be administered by the Human Resources Committee of the Board of
Directors (the "Committee"). Terms and conditions of awards will be
set forth in written agreements. The Plan will continue until
December 31, 2005. The Plan provides that 5,000,000 shares of Common
Stock will be available for the granting of awards under the Plan.
The closing price of the Common Stock on November 27, 1995 was
$63 5/8.
12
<PAGE> 14
The Plan is intended to replace the Ralston Purina Company 1988
Incentive Stock Plan (the "1988 Plan"). The 1988 Plan does not expire
by its terms until December 31, 1997, and approximately 4,000,000
shares of Common Stock remain available for issuance under that Plan.
However, regulations proposed by the Internal Revenue Service under
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), provide that, in order for an award to a named Executive
Officer under a qualified performance-based compensation plan to be
deductible by the Company in the event total compensation for such
Executive for the year exceeds $1 million, shareholders must approve
the terms of such plan no later than the first shareholder meeting
following December 31, 1996. Rather than submit the 1988 Plan, which
will soon terminate, to shareholders, the Company determined instead
to submit for shareholder approval a new Incentive Stock Plan which
will continue for a significantly longer period. In the event that
the Plan is approved, the 1988 Plan will be considered terminated
(except with respect to outstanding awards); no new awards will be
granted under the 1988 Plan; and the reserve for remaining shares of
Common Stock to be issued thereunder will be canceled (other than
shares reserved for outstanding awards). Any such reserve for
outstanding awards under the 1988 Plan will, upon cancellation of any
such awards, be reduced by the amount of the canceled awards, and the
shares so canceled will not be added to the available reserves under
the new Plan.
Any employee of the Company or any of its subsidiaries will be
eligible for any award under the Plan if selected by the Committee,
except members of the Committee or Directors of the Company whose
principal employment is not with the Company or any of its
subsidiaries. Subject to the provisions of the Plan, the Committee
will have full authority and discretion to determine the individuals
to whom awards will be granted and the amount and form of such
awards. There are approximately 31,837 persons employed by the
Company and its subsidiaries who would be eligible for selection for
participation by the Committee. No determination has been made by the
Committee with respect to the specific recipients or the amount or
nature of any future awards under the Plan. Other than the amount of
shares available for granting of awards under the Plan, there are no
limitations on the number of shares which may be granted to a single
individual by the Committee.
Under the Plan, the Committee will be authorized (i) to grant stock
options that qualify as "Incentive Stock Options" ("ISOs") under
Section 422 of the Code, and (ii) to grant stock options that do not
so qualify. No stock option can be granted at an option price less
than the fair market value of the Common Stock at the time of grant.
No stock option can be exercised more than ten years after the date
such option is granted. In the case of Incentive Stock Options, the
aggregate fair market value of the Common Stock with respect to which
options are exercisable for the first time by any recipient during
any calendar year cannot, under present tax rules, exceed $100,000.
The Committee will also be authorized to grant Other Stock Awards
including, but not limited to, restricted stock awards and deferrals
of an employee's cash bonus or other compensation in the form of
stock equivalents under such terms and conditions as the Committee
may prescribe. The shares of Common Stock which may be granted
pursuant to a restricted stock award will be restricted and will not
be able to be sold, pledged, transferred or otherwise disposed of
until such restrictions lapse. Shares of Common Stock issued pursuant
to a restricted stock award will be issued for no monetary
consideration.
The Committee has determined that the deferral of cash bonuses and
other compensation under the Plan will be made in accordance with the
provisions of the Deferred Compensation Plan for Key Employees.
Pursuant to that plan, the Committee may, in its discretion, permit
an eligible employee to defer payment of a cash bonus or other cash
consideration under the Equity Option of the Plan. Upon such
deferral, an unfunded account in the employee's name will be credited
with an appropriate number of stock equivalents. In addition, an
additional matching deferral may be credited with respect to all
employee deferrals in any specific fiscal year, subject to forfeiture
if the employee leaves employment with the Company (other than
because of normal retirement) prior to five years following such
crediting. Such employee's account will be credited from time to time
with dividend equivalents if dividends are paid by the Company.
Distributions under the Equity Option may be made only upon the
employee's retirement or other termination of employment; however, in
the event that the Company is in default of its funding obligations
under the Grantor Trust described on page 21 of this Proxy Statement,
payment of all amounts credited will be made as soon as practicable
thereafter, unless the employee elects to continue to defer payment.
Upon distribution, the employee will receive shares of Common Stock
equal to the number of equivalents in such employee's vested balance
account or, at the Committee's discretion, may receive the value of
such shares in cash. Executive Officers may only receive the value of
such shares in cash.
13
<PAGE> 15
The Plan provides that it may be amended by the Board of Directors,
except that no such amendment can increase the number of shares of
stock reserved for awards, withdraw the authority of the Committee to
administer the Plan, change the class of individuals who may be
eligible for awards, or change the term of awards granted prior to
the amendment without the consent of the recipient. Appropriate
adjustments will be made to the number of shares available for awards
and the terms of outstanding awards under the Plan to reflect any
issuance by the Company of another class of common, preferred, or
otherwise targeted stock, any stock split-up, stock dividend,
combination or reclassification with respect to any outstanding
series or class of stock of the Company, the consolidation or merger
of the Company with any other entity or the sale of all or
substantially all of the assets of the Company.
Under current accounting practices, stock options which contain no
specific performance criterion and are granted with an option price
at least equal to the market price of the Common Stock on the date of
grant would not result in any charge against earnings of the Company
either at the time of grant or upon exercise. Stock options with a
performance component will result in a charge to earnings if the
performance criterion is met. If the options are exercised, the
proceeds received will be credited to the Common Stock account and to
the capital in excess of par account and the shares issued would be
added to the total Common Stock outstanding. Other Stock Awards will
result in a charge against earnings.
NEW PLAN BENEFITS
As the Committee has sole discretion to grant awards under the Plan
and, as noted, no determination has been made as to specific
recipients or the amount or nature of awards to be made under the
Plan, the amount or nature of awards which would have been granted in
the last fiscal year had the Plan been in effect cannot be
determined. However, the following table reflects benefits granted or
credited under the 1988 Plan during fiscal year 1995. Shares of
Common Stock issued with respect to such awards will be issued out of
the reserve established for the 1988 Plan. Executive Officers may
receive only cash with respect to stock equivalents credited to their
accounts. Benefits granted in any particular year are solely in the
discretion of the Committee, and amounts shown in this table should
not be assumed to predict any awards which may be granted in future
years under the Plan. The awards shown below for the named
individuals have also been reported in the Summary Compensation Table
on page 17 of this Proxy Statement.
<TABLE>
<CAPTION>
STOCK EQUIVALENTS
STOCK RESTRICTED DOLLAR VALUE($)<F2>
OPTIONS STOCK (AS OF DATE NUMBER OF
NAME AND PRINCIPAL POSITION GRANTED<F1> AWARDS OF CREDITING) STOCK EQUIVALENTS<F2>
--------------------------- ---------- ---------- ------------------ ---------------------
<S> <C> <C> <C> <C>
W. P. Stiritz 195,000 0 $267,750 4,509.474
Chairman of the Board, Chief
Executive Officer and President
J. W. Brown 157,500 0 $50,000 842.105
Vice President, and Chief
Executive Officer and President,
Protein Technologies
International, Inc.
J. R. Elsesser 55,000 0 $59,000 993.684
Vice President and
Chief Financial Officer
W. P. McGinnis 65,000 0 $63,750 1,073.684
Vice President, and President and
Chief Executive Officer,
Pet Products Group
J. P. Mulcahy 65,000 0 $0 0
Vice President; and Chairman of
the Board and Chief Executive
Officer, Eveready Battery
Company, Inc.
All Executive Officers as a Group 718,500<F3> 5,000<F4> $479,275 8,072.000
All Other Employees as a Group 1,180,750<F3> 16,000<F4> $950,524 16,008.836
14
<PAGE> 16
<FN>
-----
<F1> The exercise price, expiration date and other conditions of
option grants to the named individuals are provided in the Option
Grant Table on page 18 of this Proxy Statement. All other options
granted during fiscal year 1995 have the same exercise prices and
expiration dates. All options granted were granted at an option
price equal to the fair market value of the Common Stock on the
date of grant. The weighted average option price per share of all
options granted during fiscal year 1995 was $54.21.
<F2> The amount shown reflects only the 25% Company match on amounts
deferred during the last fiscal year under the Equity Option of
the Deferred Compensation Plan for Key Employees. The 25% Company
match on amounts deferred for fiscal year 1994 for the named
individuals was as follows: Mr. Stiritz-$125,000; Mr. Brown-$0;
Mr. Elsesser-$31,250; Mr. McGinnis-$43,750; Mr. Mulcahy-$26,625;
all Executive Officers as a Group-$260,115; and all Other
Employees as a Group-$771,779.
<F3> Of this amount, 419,000 options granted to all Executive Officers
as a Group and 565,500 options granted to All Other Employees as
a Group have additional target market price restrictions on
exercisability as described in Footnote 3 to the Option Grant
Table on page 18 of this Proxy Statement.
<F4> Restrictions on awards granted during fiscal year 1995 lapse only
upon the recipient's retirement or other termination of
employment following attainment of age 62.
</TABLE>
INCOME TAX CONSEQUENCES
Stock options to be issued under the Plan as ISOs will satisfy the
requirements of Section 422 of the Code. Under the provisions of that
section, the optionee will not be deemed to receive any income at the
time an ISO is granted or exercised. If the optionee disposes of the
shares of Common Stock acquired more than two years after the grant
and one year after the exercise of the ISO, the gain, if any (i.e.,
the excess of the amount realized for the shares over the option
price) will be long-term capital gain. If the optionee disposes of
the shares acquired on exercise of an ISO within two years after the
date of grant or within one year after the exercise of the ISO, the
disposition will constitute a "disqualifying disposition" and the
optionee will have ordinary income in the year of the disqualifying
disposition equal to the fair market value of the stock on the date
of exercise minus the option price. The excess of the amount received
for the shares over the fair market value at the time of exercise
will be short-term capital gain if the shares are disposed of within
one year after the ISO is exercised, or long-term capital gain if the
shares are disposed of more than one year after the ISO is exercised.
If the optionee disposes of the shares in a disqualifying
disposition, and such disposition is a sale or exchange which would
result in a loss to the optionee, then the amount treated as ordinary
income shall not exceed the excess (if any) of the amount realized on
such sale or exchange over the adjusted basis of such shares.
The Company is not entitled to a deduction as a result of the grant
or exercise of an ISO. If the optionee has ordinary income as a
result of a disqualifying disposition, the Company will have a
corresponding deductible expense in an equivalent amount in the
taxable year of the Company in which the disqualifying disposition
occurs.
The difference between the fair market value of the option at the
time of exercise and the option price is a tax preference item for
alternative minimum tax purposes. The basis in stock acquired upon
exercise of an ISO for alternative minimum tax purposes is increased
by the amount of the preference.
Stock options issued under the Plan which do not satisfy the
requirements of Section 422 of the Code will have the following tax
consequences:
1. the optionee will have ordinary income at the time the option is
exercised in an amount equal to the excess of the fair market
value of the Common Stock acquired at the date of exercise over
the option price;
2. the Company will have a deductible expense in an amount equal to
the ordinary income of the optionee;
3. no amount other than the price paid upon exercise of the option
shall be considered as received by the Company for shares so
transferred; and
4. any gain from the subsequent sale of the shares of Common Stock
acquired upon exercise for an amount in excess of fair market
value on the date the option is exercised will be capital gain
and any loss will be capital loss.
15
<PAGE> 17
In general, a recipient of Other Stock Awards, including stock
equivalents pursuant to the Deferred Compensation Plan for Key
Employees, but excluding restricted stock awards (see below), will
have ordinary income equal to the cash or fair market value of the
Common Stock on the date received in the year in which the award is
actually paid. The Company will have a corresponding deductible
expense in an amount equal to that reported by the recipient as
ordinary income in the same year so reported. The recipient's basis
in the stock received will be equal to the fair market value of the
Common Stock when received and his or her holding period will begin
on that date.
With respect to restricted stock awards, such awards do not
constitute taxable income under existing Federal tax law until such
time as restrictions lapse with respect to any installment. When any
installment of shares are released from restriction, the market value
of such shares of Common Stock on the date the restrictions lapse
constitutes income to the recipient in that year and is taxable at
ordinary income rates.
The Code, however, permits a recipient of a restricted stock award
to elect to have the award treated as taxable income in the year of
the award and to pay tax at ordinary income tax rates on the fair
market value of all of the shares awarded based on the price of the
shares on the date the recipient receives a beneficial interest in
such shares. The election must be made promptly within time limits
prescribed by the Code and the regulations thereunder. Any
appreciation in value thereafter would be taxed at capital gain rates
when the restrictions lapse and the stock is subsequently sold.
However, should the market value of the stock, at the time the
restrictions lapse and the stock is sold, be lower than at the date
acquired, the recipient would have a capital loss, to the extent of
the difference. In addition, if, after electing to pay tax on the
award in the year received, the recipient subsequently forfeits the
award for any reason, the tax previously paid is not recoverable.
Since the lapse of restrictions on restricted stock awards is
accelerated in the event of a change in control of the Company, such
an acceleration may result in an excess parachute payment, as defined
in Section 280G of the Code. In such event, the Company's deduction
with respect to such excess parachute payment is denied and the
recipient is subject to a nondeductible 20% excise tax on such excess
parachute payment.
VOTE REQUIRED
The affirmative vote of a majority of the outstanding Common Stock
and ESOP Preferred Stock, voting together as a single class, is
required for approval.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 4, TO ADOPT
THE 1996 INCENTIVE STOCK PLAN.
OTHER BUSINESS
The Board knows of no business which will be presented for
consideration at the 1996 Annual Meeting of Shareholders other than
that stated above. However, certain shareholders may present topics
for discussion if presented in accordance with the provisions of the
Company's Bylaws which require 25 days' advance written notice to the
Secretary of the Company. Should any such matter properly come before
the meeting and be submitted for a vote, votes may be cast pursuant
to proxies granting discretionary authority to the Proxies in respect
to any such matter in the best judgment of the person or persons
acting under the proxies.
16
<PAGE> 18
EXECUTIVE COMPENSATION
The following tables and narrative text discuss the compensation
paid in fiscal year 1995 and the two prior fiscal years to the
Company's Chief Executive Officer and the Company's four other most
highly compensated executive officers (collectively, "Named Executive
Officers").
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION (AWARDS)
------------------------------------------ ------------
SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
COMPENSATION OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($) (#) ($)<F1>
--------------------------- ---- --------- -------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
W. P. Stiritz 1995 $900,000 $1,071,000 $14,135 195,000 $601,862
Chairman of the Board, Chief 1994 $825,000 $500,000 $38,060 0 $345,355
Executive Officer and President 1993 $800,000 $350,000 $26,110 0 $211,569
J. W. Brown 1995 $257,500 $200,000 $ 7,845 157,500 $ 88,244
Vice President, and Chief Executive 1994 $257,500 $150,000 $ 6,368 46,468<F2> $ 36,920
Officer and President, Protein 1993 $250,000 $150,000 $ 6,261 0 $ 33,804
Technologies International, Inc.
J. R. Elsesser 1995 $277,500 $236,000 $ 6,140 55,000 $140,727
Vice President and Chief 1994 $247,500 $125,000 $ 8,277 0 $ 79,300
Financial Officer 1993 $220,000 $105,000 $ 9,822 0 $ 43,743
W. P. McGinnis 1995 $310,000 $255,000 $10,927 65,000 $119,529
Vice President, and President 1994 $257,500 $175,000 $ 7,459 0 $ 78,960
and Chief Executive Officer, 1993 $250,000 $200,000 $ 9,299 0 $ 41,874
Pet Products Group
J. P. Mulcahy 1995 $310,000 $255,000 $ 6,138 65,000 $ 92,701
Vice President; and Chairman of the 1994 $277,500 $166,500 $ 8,465 0 $ 77,379
Board and Chief Executive Officer, 1993 $250,000 $165,000 $12,527 0 $ 47,706
Eveready Battery Company, Inc.
<FN>
-----
<F1> The amounts shown in this column consist of the following: (i)
above market interest accrued with respect to deferrals under the
Fixed Benefit Option of the Company's Deferred Compensation Plan
for Key Employees-such amounts are $65,550, $2,517, $4,244,
$3,943, and $3,460, respectively, for Messrs. Stiritz, Brown,
Elsesser, McGinnis and Mulcahy; (ii) Company matching
contributions or accruals under the Company's Savings Investment
Plan and Executive Savings Investment Plan-such amounts are
$54,000, $15,450, $16,650, $18,600 and $34,933, respectively, for
Messrs. Stiritz, Brown, Elsesser, McGinnis and Mulcahy for fiscal
year 1995. The amounts shown in the column also include $267,750,
$50,000, $59,000 and $63,750, respectively, for Messrs. Stiritz,
Brown, Elsesser and McGinnis as a Company match of 25% of amounts
deferred by such individuals under the Equity Option of the
Deferred Compensation Plan for Key Employees; and (iii) amounts
attributable to the portion of split-dollar life insurance
premiums paid by the Company-these amounts will be repaid on a
specified future date. Amounts included are equal to the premiums
outstanding during the fiscal year multiplied by the Company's
weighted average short-term borrowing rate during the year. Such
amounts are $214,562, $20,277, $60,833, $33,236 and $54,308,
respectively, for Messrs. Stiritz, Brown, Elsesser, McGinnis and
Mulcahy.
<F2> Options granted in 1994 were 524,472 options to acquire CBG
Stock. Upon exchange of shares of CBG Stock for Common Stock on
May 15, 1995, outstanding options to acquire shares of CBG Stock
were, pursuant to the terms of the awards, converted into options
to acquire Common Stock.
</TABLE>
17
<PAGE> 19
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
FOR OPTION TERM<F7>
-----------------------------
(A) (B)<F1> (C) (D)<F2> (E) (F) (G)
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS GRANTED EXERCISE OR
OPTIONS TO EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
---- ----------- --------------- ----------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
W. P. Stiritz 50,000<F3><F6> 2.63% $58 9-27-05 $1,825,689 $ 4,627,748
50,000<F3><F6> 2.63% $58 9-27-05 $1,825,689 $ 4,627,748
50,000<F3><F6> 2.63% $58 9-27-05 $1,825,689 $ 4,627,748
45,000<F4><F6> 2.37% $48 3-22-05 $1,359,824 $ 3,446,874
J. W. Brown 10,000<F3><F6> .53% $58 9-27-05 $ 365,138 $ 925,550
10,000<F3><F6> .53% $58 9-27-05 $ 365,138 $ 925,550
10,000<F3><F6> .53% $58 9-27-05 $ 365,138 $ 925,550
112,500<F5><F6> 5.92% $58 9-27-05 $4,107,800 $10,412,433
15,000<F4><F6> .79% $48 3-22-05 $ 453,275 $ 1,148,958
J. R. Elsesser 13,334<F3><F6> .70% $58 9-27-05 $ 486,850 $ 1,234,066
13,333<F3><F6> .70% $58 9-27-05 $ 486,850 $ 1,234,066
13,333<F3><F6> .70% $58 9-27-05 $ 486,850 $ 1,234,066
15,000<F4><F6> .79% $48 3-22-05 $ 453,275 $ 1,148,958
W. P. McGinnis 16,667<F3><F6> .88% $58 9-27-05 $ 608,563 $ 1,542,583
16,667<F3><F6> .88% $58 9-27-05 $ 608,563 $ 1,542,583
16,666<F3><F6> .88% $58 9-27-05 $ 608,563 $ 1,542,583
15,000<F4><F6> .79% $48 3-22-05 $ 453,275 $ 1,148,958
J. P. Mulcahy 16,667<F3><F6> .88% $58 9-27-05 $ 608,563 $ 1,542,583
16,667<F3><F6> .88% $58 9-27-05 $ 608,563 $ 1,542,583
16,666<F3><F6> .88% $58 9-27-05 $ 608,563 $ 1,542,583
15,000<F4><F6> .79% $48 3-22-05 $ 453,275 $ 1,148,958
<FN>
-----
<F1> Options granted were options to acquire shares of Common Stock.
<F2> Market price on date of grant.
<F3> Reflects one of three tranches each equal to 33 1/3% of
performance options granted to the executive on a single date.
The options are exercisable in such tranches on 9-28-98, 9-28-01
and 9-28-04, provided that, with respect to each tranche, a
target market price (reflecting a 5% per year increase in the
market price of the Common Stock) is met on the respective date;
if the target market price is not met on the relevant date,
shares of that tranche will not become exercisable until and
unless the target market price for a subsequent anniversary of
the date of the grant is met. The target market prices for the
dates on which each tranche of such shares would first become
exercisable are $67.14, $77.73 and $89.99, respectively.
<F4> Exercisable at the rate of 25% of total shares on March 23 in
each of the years 1997 through 2000.
<F5> Exercisable at the rate of 20% of total shares on September 28 in
each of the years 1999 through 2003.
<F6> All options become exercisable upon death, declaration of
permanent and total disability, retirement, involuntary
termination of employment (other than for cause) or change in
control of the Company.
<F7> Potential realizable value is calculated based on an assumption
that the price of the Common Stock appreciates at the annual
rates shown (5%, 10%), compounded annually, from the date of
grant of option until the end of the option term. The value is
net of the exercise price but is not adjusted for the taxes that
would be due upon exercise. The Company has elected to illustrate
the potential realizable value using 5% and 10% assumed rates of
appreciation pursuant to the rules of the Securities and Exchange
Commission. This does not represent the Company's estimate or
projection of future stock prices; actual gains, if any, upon
future exercise of any of these options will depend on the actual
performance of the Common Stock.
</TABLE>
18
<PAGE> 20
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FY-END(#)(F1><F2> AT FY-END($)
ACQUIRED ON VALUE ------------------------------ ---------------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
W. P. Stiritz 0 0 134,148 657,069 $3,457,836 $9,363,855
J. W. Brown 0 0 71,682 298,242 $1,536,827 $2,249,538
J. R. Elsesser 0 0 89,432 263,676 $2,305,215 $4,350,929
W. P. McGinnis 0 0 89,432 273,676 $2,305,215 $4,350,929
J. P. Mulcahy 0 0 89,432 273,676 $2,305,215 $4,350,929
<FN>
-----
<F1> Pursuant to anti-dilution provisions of outstanding option
awards, all outstanding options to acquire shares of CBG Stock
were, on May 15, 1995, concurrent with the exchange of each
outstanding share of CBG Stock for .0886 shares of Common Stock,
converted into options to acquire shares of Common Stock. Both
the number of shares subject to option and the exercise price of
the existing options were adjusted in the conversion based upon
the exchange ratio of .0886, but all other terms, including dates
and periods of exercisability, remained unchanged.
<F2> All options become exercisable upon death, declaration of
permanent and total disability, retirement, involuntary
termination of employment (other than for cause) or change in
control of the Company.
</TABLE>
<TABLE>
LONG-TERM INCENTIVE PLANS-AWARDS IN LAST FISCAL YEAR
<CAPTION>
ESTIMATED FUTURE PAYMENTS
UNDER NON-STOCK PRICE-BASED PLANS
---------------------------------------------
(A) (B) (C) (D) (E) (F)
NUMBER PERFORMANCE
OF SHARES, OR OTHER PERIOD
UNITS OR OTHER UNTIL MATURATION THRESHOLD TARGET MAXIMUM
NAME RIGHTS(#) OR PAYOUT ($) ($) ($)
---- -------------- ---------------- --------- ------ -------
<S> <C> <C> <C> <C> <C>
25% of 3 years' 125% of 3 years'
W. P. Stiritz N/A 9/30/97 aggregate salary N/A aggregate salary
25% of 3 years' 125% of 3 years'
J. W. Brown N/A 9/30/97 aggregate salary N/A aggregate salary
25% of 3 years' 125% of 3 years'
J. R. Elsesser N/A 9/30/97 aggregate salary N/A aggregate salary
25% of 3 years' 125% of 3 years'
W. P. McGinnis N/A 9/30/97 aggregate salary N/A aggregate salary
25% of 3 years' 125% of 3 years'
J. P. Mulcahy N/A 9/30/97 aggregate salary N/A aggregate salary
</TABLE>
The Committee approved the adoption of a Leveraged Incentive Plan,
effective October 1, 1994, for a select group of executives of the
Company including the Named Executive Officers. The plan is designed
to pay a cash bonus to participants if, during the three-year period
commencing on that date, total shareholder return, (defined as stock
price appreciation including reinvestment of dividends), equals or
exceeds certain thresholds for average annual shareholder return set
by the Committee. Each of the Named Executive Officers will be
entitled to a payment under this portion of the Plan ranging from 25%
of his aggregate salary for the three-year period if the average
annual shareholder return for the period equals or exceeds 10%,
increasing ratably to a maximum of 100% of his aggregate salary for
the period if the return averages 20% per year. No payments will be
made under this portion of the Plan if the average annual return is
less than 10% for the period. In addition, if the Company's total
shareholder return for the three-year period is at or above that of
the 75th percentile of a group of approximately 20 peer competitors,
the Named Executive Officers will be entitled to receive a payment
equal to 25% of aggregate salary for the three-year period. A
participant must remain employed by the Company through the end of
the three-year period to be eligible for a payment. Payments that
otherwise would not be deductible under Section 162(m) of the
Internal Revenue Code may, at the sole discretion of the Committee,
be deferred in whole or in part until such time as they are
deductible by the Company.
19
<PAGE> 21
RETIREMENT PLAN
The Purina Retirement Plan for Sales, Administrative and Clerical
Employees (the "Retirement Plan") may provide pension benefits in the
future to the Named Executive Officers. Substantially all regular
U.S. sales, administrative and clerical employees having one year of
service with the Company or certain of its majority-owned
subsidiaries are eligible to participate in the Retirement Plan.
Employees become vested after five years of service. Normal
retirement is at age 65; however, employees who work beyond age 65
may continue to accrue benefits.
Annual benefits are computed by multiplying the participant's Final
Average Earnings (average of participant's five highest consecutive
annual earnings during ten years prior to retirement or earlier
termination) by the product of 1.5% times the participant's years of
service (to a maximum of 40 years) and by subtracting from that
amount up to one-half of the participant's primary social security
benefit at retirement (with the actual amount of offset determined by
age and years of service at retirement).
The following table shows the estimated annual retirement benefits
that would be payable from the Retirement Plan to salaried employees,
including the Named Executive Officers, assuming age 65 retirement.
To the extent a Named Executive Officer's compensation or benefits
exceed certain limits imposed by the Internal Revenue Code of 1986,
as amended, the table also includes benefits payable from an unfunded
supplemental retirement plan. The table reflects benefits prior to
the subtraction of social security benefits as described above.
<TABLE>
PENSION PLAN TABLE
<CAPTION>
REMUNERATION YEARS OF SERVICE
(FINAL AVERAGE -------------------------------------------------------------------------------------------------
EARNINGS) 10 15 20 25 30 35 40
-------------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 300,000 $ 45,000 $ 67,500 $ 90,000 $112,500 $135,000 $157,500 $180,000
400,000 60,000 90,000 120,000 150,000 180,000 210,000 240,000
500,000 75,000 112,500 150,000 187,500 225,000 262,500 300,000
600,000 90,000 135,000 180,000 225,000 270,000 315,000 360,000
700,000 105,000 157,500 210,000 262,500 315,000 367,500 420,000
800,000 120,000 180,000 240,000 300,000 360,000 420,000 480,000
900,000 135,000 202,500 270,000 337,500 405,000 472,500 540,000
1,000,000 150,000 225,000 300,000 375,000 450,000 525,000 600,000
1,200,000 180,000 270,000 360,000 450,000 540,000 630,000 720,000
1,400,000 210,000 315,000 420,000 525,000 630,000 735,000 840,000
1,600,000 240,000 360,000 480,000 600,000 720,000 840,000 960,000
2,000,000 300,000 450,000 600,000 750,000 900,000 1,050,000 1,200,000
2,400,000 360,000 540,000 720,000 900,000 1,080,000 1,260,000 1,440,000
</TABLE>
For the purpose of calculating retirement benefits, the Named
Executive Officers had, as of September 30, 1995, the following years
of credited service: Messrs. Stiritz-32 years; Brown-25 years;
Elsesser-10 years; McGinnis-23 years; and Mulcahy-28 years. Earnings
used in calculating benefits under the Retirement Plan and any
unfunded supplemental retirement plan previously described are
approximately equal to amounts included in the Salary and Bonus
columns in the Summary Compensation Table on page 17.
DEATH BENEFIT PLAN
The Company maintains, at no cost to the participants, an unfunded
Executive Life Plan to provide supplemental benefits to certain key
members of management, generally at the level of division vice
president and above. The Plan provides a death benefit, after
retirement of a plan participant, to his or her named
20
<PAGE> 22
beneficiary in an amount equal, on an after-tax basis, to 50% of the
participant's last full year's salary and bonus prior to retirement.
To be eligible for the benefit, a participant must at the time of
retirement meet certain conditions, including (i) being enrolled in
the Company's Partnership Life Plan, which is available to
substantially all non-union administrative and production employees
in the United States, with elective coverage of at least one times
earnings; and (ii) being age 55 with at least two years of service or
having a combination of age and years of service equal to at least
80. Messrs. Stiritz and Brown participated in this Plan during fiscal
year 1995.
GRANTOR TRUST
During fiscal year 1994, the Company established and funded an
irrevocable grantor trust to provide a source of funds to assist the
Company in meeting its obligations under certain employee benefit
plans and programs in which the Named Executive Officers, as well as
other employees, participate. At the present time, assets of the
trust consist primarily of Common Stock and life insurance policies.
In the event that the Company is in default of its funding
obligations under the trust, payment of obligations under such plans
and programs will immediately accelerate unless the employee elects
to defer payment.
CHANGE-IN-CONTROL AND TERMINATION OF EMPLOYMENT ARRANGEMENTS
The Company has Management Continuity Agreements with the Named
Executive Officers. The purpose of the agreements is to provide
severance compensation to each covered Executive Officer in the event
of the officer's voluntary or involuntary termination after a change
in control of the Company. The compensation provided would be in the
form of a lump sum payment equal to the present value of continuing
the Executive Officer's salary and bonus for a specified period
following the Executive Officer's termination of employment, the
continuation of other executive benefits for the same applicable
period and certain pension bridging payments. The initial applicable
period is four years in the case of Mr. Stiritz, and three years for
the other Named Executive Officers, which periods are subject to
reduction for each complete year the Executive Officer remains
employed following the change in control. No payments would be made
in the event the Executive Officer's termination is due to death,
disability or normal retirement, or is for cause, nor would any
payments continue beyond the Executive Officer's normal retirement
date.
HUMAN RESOURCES COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Human Resources Committee (the "Committee") consists entirely
of non-management directors free from relationships that might be
considered a conflict of interest. The Committee approves direct and
indirect remuneration of all executive officers. It also administers,
and makes awards under, the shareholder-approved Ralston Purina
Company 1988 Incentive Stock Plan pursuant to which stock-based
awards such as stock options and restricted stock may be granted.
The Company's executive compensation program is designed to
attract, retain and motivate key executives of the Company and to
enhance shareholder value by linking each executive's compensation to
both individual and Company performance. The Company intends to
provide an overall package of compensation that is competitive, but
that has a greater "at risk" element than competitive norms. In
determining competitive position, published surveys of a number of
U.S. based corporations of similar size-both corporations engaged in
businesses similar to those of the Company, as well as corporations
engaged in other businesses-are reviewed. Executive compensation for
Mr. Stiritz and other executive officers consists principally of base
salary, cash bonus awards and long-term stock-based incentive awards.
Salary is based on the Committee's assessment of the executive's
responsibilities, experience and performance; compensation data of
other companies; historical compensation levels at the Company; the
competitive environment for attracting and retaining executives; and,
in the case of executive officers other than Mr. Stiritz, on the
recommendation of Mr. Stiritz. While there is no specific weighting
of these factors, competitive positioning is the primary
consideration in setting executive salaries, and then, within that
21
<PAGE> 23
framework, considerations of individual performance, level of
responsibility and experience are used to set specific salaries. The
Company attempts to set base salary levels at or below the median
level for executives holding similar positions at surveyed
corporations.
Annual cash bonuses are set each year at or near the end of the
Company's fiscal year. Factors considered in determining the amount
of cash bonuses are the officer's individual performance (including
the quality of strategic plans, organizational and management
development, special project leadership and similar manifestations of
individual performance); the financial performance of the officer's
business unit relative to the business plan (including such areas as
sales volume, revenues, costs, cash flow and operating profit);
Company financial performance (including the measures of business
unit performance listed above and, in addition, earnings per share,
return on equity and total return to the shareholders in the form of
stock price appreciation and dividends) and historical levels of
salary and bonus payments. The Committee relies heavily, but not
exclusively, on these quantitative and qualitative measures. It
exercises subjective judgment and discretion, in light of these
measures and in view of the Company's compensation objectives and
policies described above, to determine overall bonus funds and
individual bonus awards. For fiscal year 1995, the bonuses of Mr.
Brown and Mr. McGinnis were determined in accordance with the
foregoing principles.
The 1995 annual bonuses of five executive officers of the Company,
including Mr. Stiritz, were determined according to a bonus program
for certain corporate division employees. The plan provided for
payment of a percentage of base salary, the calculation of which was
based in part on a subjective assessment of an employee's performance
and in part on the amount by which the Company's earnings per share
on a fully diluted basis for fiscal year 1995 exceeded such earnings
for the preceding fiscal year.
In addition, the 1995 annual bonuses of the three executive
officers of the Company, including Mr. Mulcahy, employed at its
Eveready Battery Company subsidiary were determined according to the
Eveready Battery Company Operating Units Bonus Plan, which provided
for a bonus equal to a percentage of their base salary. The
percentage is determined by both a subjective evaluation of their
individual performance as well as Eveready's calculation of earnings,
adjusted for unusual items, for the current fiscal year compared to a
calculation of earnings for the prior fiscal year. The comparison of
earnings was given a weight of 70% and the subjective evaluation a
weight of 30% in calculating the percentage used in determining their
bonuses.
The Committee expects to continue to utilize executive bonus plans
with varying measures of individual and/or corporate performance for
determining all or part of bonuses for corporate officers. It
approved an intermediate term incentive plan under which certain key
employees, including the executive officers, may be paid a cash award
at the end of three years if the Company's stock performance equals
or exceeds certain benchmarks. The Committee approved the plan in
order to support an overall compensation package at competitive
levels for key executives whose actions can effect successful
corporate results. Tying payment under the plan to increases in
shareholder value is consistent with its philosophy of maintaining a
relatively high portion of pay at risk. In addition, the Committee
exercises its discretion in determining whether to permit eligible
employees, including executive officers, to defer payment of their
cash bonus or other cash compensation under the terms of the Deferred
Compensation Plan for Key Employees. The terms of that Plan may
include, in any particular year, an additional Company match on
deferrals in the Equity Option of the Plan.
Stock-based incentive awards consist principally of stock options
and restricted stock awards which are granted from time to time under
the 1988 Incentive Stock Plan. In general, the Committee bases its
decisions to grant stock-based incentives on the number of shares of
Common Stock outstanding, the number of shares of Common Stock
authorized by shareholders under the 1988 Incentive Stock Plan, the
number of options and shares of restricted stock held by the
executive for whom an award is being considered and the other
elements of the executive's compensation, as well as the Company's
compensation objectives and policies described above. As with the
determination of base salaries and a portion of bonus awards, the
Committee exercises subjective judgment and discretion in view of the
above criteria and its general policies. In September of 1995, the
Committee granted a special option award to Mr. Brown, in recognition
of his assuming the leadership of one of the Company's core
businesses.
Stock options entitle the recipient to purchase a specified number
of shares of the Company's Common Stock after a specified period of
time and, in the case of performance-based options, after a
performance goal
22
<PAGE> 24
has been met, at an option price which is equal to the fair market
value of the Common Stock at the time of grant. They provide
executives with an opportunity to buy and maintain an equity interest
in the Company while linking the executive's compensation directly to
shareholder value since the executive receives no benefit from the
option unless all shareholders have benefited from an appreciation in
the value of the Company's Common Stock. In addition, since the
options "vest" serially, generally over a period of four to ten years
after the date of grant, they enhance the ability of the Company to
retain the executive while encouraging the executive to take a
longer-term view on decisions impacting the Company.
Restricted stock awards consist of grants of the Company's Common
Stock subject to certain restrictions. The restricted shares may not
be sold, pledged or otherwise transferred until the restrictions
lapse, which occurs serially, generally over a period of four to ten
years after the date of grant. However, certain restricted stock
awards generally do not vest at all until the recipient's attainment
of age 62. Dividends, and interest on the dividends, accumulate until
distributed as restrictions on the underlying shares lapse.
Restricted stock awards further the goal of retaining key executives
by encouraging stock ownership while linking executive performance
with shareholder value.
The Committee increased Mr. Stiritz's fiscal year 1996 salary and
his 1995 annual cash bonus, in September of 1995, based upon the
factors normally considered in fixing base salary and bonus as
described above. During fiscal year 1995, the Committee granted Mr.
Stiritz options to purchase 195,000 shares of Common Stock. In light
of the significance of Mr. Stiritz's contributions to the Company's
performance and his role in strategic decisions designed to promote
the Company's future long-term growth, the Committee believes that
the level of compensation paid to Mr. Stiritz is appropriate and in
the best interests of shareholders.
A feature of the Omnibus Budget Reconciliation Act of 1993 sets a
limit on deductible compensation of $1,000,000 per year per person
for the Chief Executive Officer and the next four highest-paid
executives. The Committee has directed the Company's management to
review executive compensation arrangements and employee benefit plans
in light of this provision. While it is the general intention of the
Committee to meet the requirements for deductibility, the Committee
may, in the exercise of its judgment, approve payment of compensation
from time to time that may not be fully deductible. The Committee
believes this flexibility will enable it to respond to changing
business conditions or to an executive's individual performance. The
Committee will continue to review and monitor its policy with respect
to the deductibility of compensation.
W. H. Danforth-Chairman J. H. Biggs
M. D. Ingram K. D. Ortega
PERFORMANCE GRAPHS
The graphs displayed below are presented in accordance with SEC
requirements. Shareholders are cautioned against drawing any
conclusions from the data contained therein, as past results are not
necessarily indicative of future performance. These graphs in no way
reflect the Company's forecast of future financial performance.
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, that might
incorporate future filings, including this Notice of Annual Meeting
of Shareholders and Proxy Statement, in whole or in part, the
following Performance Graphs and the Human Resources Committee Report
on Executive Compensation set forth above shall not be incorporated
by reference into any such filings.
Set forth below are line graphs comparing the annual percentage
change in cumulative total shareholder return for each class of
Ralston Purina Company's common stock with the cumulative total
return of the Standard & Poor's 500 Stock Index, the Standard &
Poor's Food Index and a Bakery Index as defined in footnote (3) to
the graphs.
23
<PAGE> 25
COMPARISON OF CUMULATIVE TOTAL RETURN ON $100 INVESTED IN
RALSTON PURINA COMPANY COMMON STOCK ON SEPTEMBER 30, 1990
VS. S&P 500 AND S&P FOOD INDICES<F1>
[PERFORMANCE GRAPH]
COMPARISON OF CUMULATIVE TOTAL RETURN ON $100 INVESTED IN
RALSTON-RPG GROUP AND RALSTON-CBG GROUP COMMON STOCKS
FROM AUGUST 2, 1993 THROUGH MAY 15, 1995
VS. S&P 500 AND COMPETITOR INDICES<F2>
[PERFORMANCE GRAPH]
[FN]
- ------------
<F1> On July 30, 1993, Ralston Purina Company recapitalized its former
single class of common stock by redesignating it as Ralston-
Ralston Purina Group Common Stock ("RPG Stock") and distributing
Ralston-Continental Baking Group Common Stock ("CBG Stock"). For
the line designated as "Ralston" the graph depicts the cumulative
return on $100 invested in Ralston Purina Company's former single
class of common stock from September 30, 1990 through July 30,
1993. Since August 2, 1993 (the date of initial issuance of RPG
and CBG Stocks, depicted by the first solid vertical line) the
graph depicts the cumulative return on $100 invested on that date
in a capitalization-weighted combination of RPG and CBG Stock.
Furthermore, on March 31, 1994, Ralston spun-off Ralcorp
Holdings, Inc. via a one for three stock dividend, which for
performance purposes for RPG has been treated as a special one-
time stock dividend in which the Ralcorp dividend was assumed
liquidated with the proceeds from the sale being reinvested in
RPG common. On April 4, 1994, (the initial date of issuance of
the Ralcorp dividend) Ralcorp closed at $15.00 and RPG Stock
closed at $37.25. On May 15, 1995 (as depicted by the second
solid vertical line) each share of CBG Stock was exchanged for
.0886 shares of RPG Stock; the shares of RPG Stock received upon
the exchange are included in the overall performance of RPG Stock
subsequent to that date. For the S&P 500 and S&P Food Indices,
cumulative returns are measured for the period September 30, 1990
through September 30, 1995, with the value of each index set to
$100 on September 30, 1990. Total return assumes reinvestment of
dividends.
<F2> The lower graph depicts the cumulative return since August 2,
1993, the date of initial issuance of RPG Stock and CBG Stock,
through May 15, 1995, the date shares of CBG Stock were exchanged
for shares of RPG Stock, of $100 invested during that time period
in either RPG Stock or CBG Stock or one of the competitor
indices. Total return assumes reinvestment of dividends.
<F3> The Bakery Index consists of a capitalization-weighted
combination of the common stocks of CBG, Flowers Industries, Inc.
and Interstate Bakeries Corporation.
24
<PAGE> 26
OTHER TRANSACTIONS
The Company has for many years purchased insurance and insurance-
related products and services from General American Life Insurance
Company ("General American") as well as other major insurance
companies. Insurance policies with General American have principally
included coverage for life, health and disability benefits. Richard
A. Liddy, who was named a Director of the Company during fiscal year
1995, is Chairman of the Board, President and Chief Executive Officer
of General American. Mr. Liddy has disclaimed any direct or indirect
material interest in transactions between the Company and General
American. The Company believes that all such transactions were in the
ordinary course of its business and were on terms that were
reasonable and competitive. The Company expects that its transactions
with General American will continue and, as in the past, will be
conducted in the ordinary course and on competitive terms.
SOLICITATION STATEMENT
The cost of the solicitation of proxies will be borne by the
Company. In addition to the use of the mails, solicitations may be
made by regular employees of the Company, by telephone or personal
contact. Georgeson & Co. has been retained to assist in the
solicitation of proxies for a fee of $11,000, plus expenses. The
Company will reimburse banks, brokerage firms and other custodians,
nominees and fiduciaries for costs reasonably incurred by them in
sending proxy materials to the beneficial owners of the Ralston-
Ralston Purina Group Common Stock.
SHAREHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
Any shareholder proposal intended to be presented at the 1997
Annual Meeting of Shareholders and to be included in the Company's
proxy statement and form of proxy for that meeting must be received
by the Company, directed to the attention of the Secretary, not later
than August 19, 1996. Any such proposals must comply in all respects
with the rules and regulations of the Securities and Exchange
Commission and the Bylaws of the Company.
By order of the Board of Directors,
/s/ James M. Neville
JAMES M. NEVILLE
Secretary
December 15, 1995
25
<PAGE> 27
EXHIBIT A
AMENDMENT OF RESTATED ARTICLES OF INCORPORATION
RESOLVED, that Article Three-A of the Restated Articles of
Incorporation of Ralston Purina Company entitled CLASSES AND NUMBER
OF SHARES, be amended to read as follows:
"The aggregate number of shares of capital stock which the
corporation is authorized to issue is 610,600,000 shares,
consisting of:
(a) 600,000,000 shares of Common Stock, par value $.10 per share
("Common Stock"); and
(b) 10,600,000 shares of Preferred Stock, par value $1.00 per
share ("Preferred Stock"), of which 4,600,000 shares of
Preferred Stock are designated as Series A ESOP Convertible
Preferred Stock ("ESOP Stock")."
FURTHER RESOLVED that Article Three-D of the Restated Articles of
Incorporation of Ralston Purina Company entitled TERMS OF COMMON
STOCK, be amended to read in its entirety as follows:
"1. Voting Rights. On all matters to be voted on by the holders of
shares of Common Stock, each outstanding share of Common Stock
shall have one vote.
2. Dividend Rights. Subject to the express terms of any
outstanding series of Preferred Stock, dividends may be
declared and paid upon the Common Stock out of funds of the
corporation legally available therefor, in such amounts and at
such times as the Board of Directors may determine. Funds
otherwise legally available for the payment of dividends on the
Common Stock shall not be restricted or reduced by reason of
there being any excess of the aggregate preferential amount of
any series of Preferred Stock outstanding over the aggregate
par value thereof. Before any dividend, other than a dividend
payable in Common Stock of the corporation, may be declared and
paid with respect to any class of Common Stock outstanding, all
cumulative dividends for past quarters and the dividend for the
current quarter with respect to the ESOP Preferred Stock
outstanding must be declared and paid, or declared and set
apart for payment."
A-1
<PAGE> 28
EXHIBIT B
RALSTON PURINA COMPANY 1996 INCENTIVE STOCK PLAN
SECTION I. GENERAL PROVISIONS
A. Purpose of Plan
The purpose of the Ralston Purina Company 1996 Incentive Stock Plan
(the "Plan") is to enhance the profitability and value of the Company
for the benefit of its shareholders by providing for stock options
and other stock awards to attract, retain and motivate officers and
other key employees who make important contributions to the success
of the Company.
B. Definitions of Terms as Used in the Plan
1. "Affiliate" means any subsidiary, whether directly or
indirectly owned, or parent of the Company, or any other entity
designated by the Committee.
2. "Award" means a Stock Option granted under Section II of the
Plan or Other Stock Award granted under Section III of the
Plan.
3. "Committee" means the Human Resources Committee of the Board of
Directors of the Company or any successor committee the Board
of Directors may designate to administer the Plan.
4. "Company" means Ralston Purina Company.
5. "Employee" means any person who is employed by the Company or
an Affiliate.
6. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
7. "Fair Market Value" of any class or series of Stock means the
fair and reasonable value thereof as determined by the
Committee according to prices in trades as reported on the New
York Stock Exchange-Composite Transactions. If there are no
prices so reported or if, in the opinion of the Committee, such
reported prices do not represent the fair and reasonable value
of the Stock, then the Committee shall determine Fair Market
Value by any means it deems reasonable under the circumstances.
8. "RPG Stock" means the Ralston-Ralston Purina Group Common
Stock.
9. "Stock" means the RPG Stock or any other authorized class or
series of common stock or any such other security outstanding
upon the reclassification of any of such classes or series of
common stock, including, without limitation, any stock split-
up, stock dividend, creation of targeted stock, or other
distributions of stock in respect of stock, or any reverse
stock split-up, or recapitalization of the Company or any
merger or consolidation of the Company with any Affiliate.
10. "Termination for Cause" means Employee's termination of
employment with the Company or an Affiliate because of the
Employee's willful engaging in gross misconduct; provided,
however, that a Termination for Cause shall not include
termination attributable to (i) poor work performance, bad
judgment or negligence on the part of Employee, (ii) an act or
omission believed by Employee in good faith to have been in or
not opposed to the best interests of the Company and reasonably
believed by Employee to be lawful, or (iii) the good faith
conduct of Employee in connection with a Change of Control
(including opposition to or support of such Change of Control).
11. "Corporate Officer" means the President, Chief Executive
Officer, Corporate Vice Presidents, Secretary and Treasurer of
the Company.
C. Scope of Plan and Eligibility
Any Employee selected by the Committee, except a member of the
Committee or a director whose principal employment is not with the
Company or an Affiliate, shall be eligible for any Award contemplated
under the Plan.
B-1
<PAGE> 29
D. Authorization and Reservation
There shall be established a reserve of 5,000,000 authorized shares
of RPG Stock, which shall be the total number of shares of Stock that
may be presently issued pursuant to Awards. The reserves may consist
of authorized but unissued shares of Stock or of reacquired shares,
or both. Upon the cancellation or expiration of an Award, all shares
of Stock not issued thereunder shall become available for the
granting of additional Awards.
E. Grant of Awards and Administration of the Plan
1. The Committee shall determine those eligible to receive Awards
and the amount, type and terms of each Award, subject to the
provisions of the Plan. Each member of the Committee shall be
(i) an "outside director" within the meaning of Section 162(m)
of the Code, subject to any transitional rules applicable to the
definition of outside director, and (ii) a "disinterested
person" within the meaning of Rule 16b-3 under the Exchange Act,
or otherwise qualified to administer this Plan as contemplated
by that Rule or any successor Rule under the Exchange Act. In
making any determinations under the Plan, the Committee shall be
entitled to rely on reports, opinions or statements of officers
or employees of the Company, as well as those of counsel, public
accountants and other professional or expert persons. All
determinations, interpretations and other decisions under or
with respect to the Plan or any Award by the Committee shall be
final, conclusive and binding upon all parties, including
without limitation, the Company, any Employee, and any other
person with rights to any Award under the Plan, and no member of
the Committee shall be subject to individual liability with
respect to the Plan.
2. The Committee shall administer the Plan and, in connection
therewith, it shall have full power to construe and interpret
the Plan, establish rules and regulations and perform all other
acts it believes reasonable and proper, including the power to
delegate responsibility to others to assist it in administering
the Plan.
SECTION II. STOCK OPTIONS
A. Description
The Committee may grant options with respect to any class or series
of Stock ("Stock Options") that qualify as "Incentive Stock Options"
under Section 422 of the Internal Revenue Code of 1986, as amended,
and it may grant Stock Options that do not so qualify.
B. Terms and Conditions
1. Each Stock Option shall be set forth in a written agreement
containing such terms and conditions as the Committee may
determine, subject to the provisions of the Plan.
2. The purchase price of any shares exercised under any Stock
Option must be paid in full upon such exercise. The payment
shall be made in such form, which may be cash or Stock, as the
Committee may determine.
3. No Incentive Stock Option may be exercised after the expiration
of ten (10) years from the date such option is granted.
4. The option price of shares subject to any Stock Option shall not
be less than the Fair Market Value of the appropriate class or
series of Stock at the time the option is granted.
5. In the case of an Incentive Stock Option, the aggregate Fair
Market Value (determined as of the time the option is granted)
of the appropriate class or series of Stock with respect to
which options are exercisable for the first time by any Employee
during any calendar year (under all such plans of his employer
corporation and its parent and subsidiary corporations) shall
not exceed $100,000.
B-2
<PAGE> 30
C. Period of Exercise
Unless the Committee shall have determined otherwise, upon the
occurrence of an event described in this Section II. C., any options
that are otherwise exercisable on the date of such event shall remain
exercisable during the period set forth herein:
1. Upon termination of the Award recipient's employment at or after
attainment of age 62, or due to death or declaration by the
Committee of the recipient's total and permanent disability,
options that are exercisable upon such termination shall remain
exercisable for three years after such termination;
2. Upon involuntary termination of the Award recipient's employment
for reasons other than Termination for Cause, or upon voluntary
termination of employment on or after age 55 but before age 62,
options that are exercisable shall remain exercisable for six
months after such termination;
3. Upon a declaration of forfeiture pursuant to Section IV of the
Plan due to (i) Termination for Cause of the Award recipient's
employment, (ii) the Award recipient's voluntary termination of
employment before age 55, (iii) the Award recipient's engaging
in competition with the Company or an Affiliate, or (iv) the
Award recipient's engaging in any activity or conduct contrary
to the best interests of the Company or any Affiliate, options
that are exercisable shall remain exercisable for seven days
thereafter.
SECTION III. OTHER STOCK AWARDS
In addition to Stock Options, the Committee may grant Other Stock
Awards payable in any class or series of Stock upon such terms and
conditions as the Committee may determine, subject to the provisions
of the Plan. Other Stock Awards may include, but are not limited to,
the following types of Awards:
1. Restricted Stock Awards. The Committee may grant Restricted
Stock Awards, each of which consists of a grant of shares of any
class or series of Stock subject to terms and conditions
determined by the Committee in its discretion, subject to the
provisions of the Plan. Such terms and conditions shall be set
forth in written agreements. The shares of Stock granted will be
restricted and may not be sold, pledged, transferred or
otherwise disposed of until the lapse or release of restrictions
in accordance with the terms of the agreement and the Plan.
Prior to the lapse or release of restrictions, all shares of
Stock are subject to forfeiture in accordance with Section IV of
the Plan. Shares of Stock issued pursuant to a Restricted Stock
Award will be issued for no monetary consideration.
2. Stock Related Deferred Compensation. The Committee may, in its
discretion, permit the deferral of payment of an Employee's cash
bonus or other cash compensation in the form of either cash or
any class or series of Stock (or Stock equivalents, each
corresponding to a share of such Stock) under such terms and
conditions as the Committee may prescribe. Payment of such
compensation may be deferred for such period or until the
occurrence of such event as the Committee may determine. The
Committee may, in its discretion, determine whether any
deferral, whether made in cash or such class or series of Stock
(or Stock equivalents) shall be paid on distribution in cash or
in Stock; distributions to Corporate Officers shall be paid only
in cash. If a deferral is permitted in the form of Stock or
Stock equivalents, the number of shares of Stock or number of
Stock equivalents deferred will be determined by dividing the
amount of the Employee's bonus or other cash compensation being
deferred by the average of the closing prices of the appropriate
class or series of Stock, as reported by the New York Stock
Exchange-Composite Transactions, during the ten trading days
preceding the effective date of the Committee's decision to
defer. In addition, the Committee may, in any fiscal year,
provide for an additional matching deferral to be credited to an
Employee's account. If the Committee directs the payments in any
class or series of Stock of any portion of amounts deferred in
cash, the number of shares of such Stock paid will be determined
based on the average of the closing prices of such Stock, as
reported by the New York Stock Exchange-Composite Transactions,
during the ten trading days before the payment is due. The
Committee, in its discretion, may permit the conversion of
deferrals in any class or series of Stock or Stock equivalents
into deferrals in cash, or the conversion of deferrals in cash
into deferrals in any class or series of Stock or Stock
equivalents. In the event such conversion is permitted, the
conversion price of the appropriate class or series of Stock
shall be based on the Fair
B-3
<PAGE> 31
Market Value of such Stock. Additional rights or restrictions
may apply in the event of a change in control of the Company.
SECTION IV. FORFEITURE OF AWARDS
A. Unless the Committee shall have determined otherwise, the
recipient of an Award shall forfeit all amounts not payable or
rights not exercisable upon the occurrence of any of the following
events:
1. The recipient is Terminated for Cause.
2. The recipient voluntarily terminates his or her employment other
than by retirement after attainment of age 62, or such other age
as may be provided for in the Award.
3. The recipient engages in competition with the Company or any
Affiliate.
4. The recipient engages in any activity or conduct contrary to the
best interests of the Company or any Affiliate.
B. The Committee may include in any Award any additional or different
conditions of forfeiture it may deem appropriate. The Committee
also, after taking into account the relevant circumstances, may
waive any condition of forfeiture stated above or in the Award
contract.
C. In the event of forfeiture, the recipient shall lose all rights in
and to the Award. Except in the case of Restricted Stock Awards as
to which the restrictions have not lapsed, this provision,
however, shall not be invoked to force any recipient to return any
Stock already received under an Award.
D. Such determinations as may be necessary for application of this
Section, including any grant of authority to others to make
determinations under this Section, shall be at the sole discretion
of the Committee, and its determinations shall be conclusive.
SECTION V. DEATH OF AWARDEE
Upon the death of an Award recipient, the following rules apply:
1. A Stock Option, to the extent exercisable on the date of a
recipient's death, may be exercised at any time within three (3)
years after the recipient's death, but not after the expiration
of the term of the Option. The Stock Option may be exercised by
the recipient's designated beneficiary or personal
representative or the person or persons entitled thereto by will
or in accordance with the laws of descent and distribution.
2. In the case of any other Award, the Stock due shall be
determined as of the date of the recipient's death, in
accordance with the terms of the Award, and the Company shall
issue the appropriate number of shares of the appropriate class
or series of Stock or pay cash equal to the Fair Market Value
thereof or such other value as the Committee may in its sole
discretion determine. Such issuance of shares of such Stock or
payment of cash shall be made to recipient's designated
beneficiary or personal representative or the person or persons
entitled thereto by will or in accordance with the laws of
descent and distribution.
An Award recipient may file with the Committee a written
designation of a beneficiary or beneficiaries (subject to such
limitations as to the classes and number of beneficiaries and
contingent beneficiaries as the Committee may from time to time
prescribe) to exercise, in the event of the death of the recipient, a
Stock Option, or to receive, in such event, any Other Stock Awards.
The Committee reserves the right to review and approve beneficiary
designations. A recipient may from time to time revoke or change any
such designation or beneficiary and any designation of beneficiary
under the Plan shall be controlling over any other disposition,
testamentary or otherwise; provided, however, that if the Committee
shall be in doubt as to the right of any such beneficiary to exercise
any Stock Option or to receive any Other Stock Award, the Committee
may determine to recognize only an exercise by the legal
representative of the recipient, in which case the Company, the
Committee and the members thereof shall not be under any further
liability to anyone.
B-4
<PAGE> 32
SECTION VI. OTHER GOVERNING PROVISIONS
A. Transferability
Except as otherwise noted herein, no award shall be transferable
other than by beneficiary designation, will or the laws of descent
and distribution, and any right granted under an Award may be
exercised during the lifetime of the holder thereof only by him or by
his guardian or legal representative.
B. Rights as a Shareholder
A recipient of an Award shall, unless the terms of the Award
provide otherwise, have no rights as a shareholder, with respect to
any options or shares which may be issued in connection with the
Award until the issuance of a Stock certificate for such shares, and
no adjustment other than as stated herein shall be made for dividends
or other rights for which the record date is prior to the issuance of
such Stock certificate. In addition, with respect to Restricted Stock
Awards, recipients shall have only such rights as a shareholder as
may be set forth on the certificate or in the terms of the Award.
C. General Conditions of Awards
No Employee or other person shall have any right with respect to
this Plan, the shares reserved or in any Award, contingent or
otherwise, until written evidence of the Award shall have been
delivered to the recipient and all the terms, conditions and
provisions of the Plan applicable to such recipient have been met.
D. Reservation of Rights of Company
The selection of an Employee for any Award shall not give such
person any right to continue as an Employee and the right to
discharge any Employee is specifically reserved.
E. Acceleration
The Committee may, in its sole discretion, accelerate the date of
exercise or other receipt of any Award.
F. Effect of Certain Changes
In the event of any extraordinary dividend, stock split-up, stock
dividend, issuance of any targeted stock, recapitalization, warrant
or rights issuance or combination, exchange or reclassification with
respect to any outstanding class or series of Stock, or
consolidation, merger or sale of all or substantially all of the
assets of the Company, the Committee or its delegee shall cause such
equitable adjustments as it deems appropriate to be made to the
shares reserved under Section I.D. of the Plan and the terms of
outstanding Awards to reflect such event and preserve the value of
such Awards. In the event the Committee determines that any such
event has a minimal effect on the value of Awards, it may elect not
to cause any such adjustments to be made. In all events, the
determination of the Committee or its delegee shall be conclusive. If
any such adjustment would result in a fractional security being
issuable or awarded under this Plan, such fractional security shall
be disregarded.
G. Withholding of Taxes
The Company shall deduct from any payment, or otherwise collect
from the recipient, any taxes required to be withheld by federal,
state or local governments in connection with any Award. The
recipient may elect, subject to approval by the Committee, to have
shares withheld by the Company in satisfaction of such taxes, or to
deliver other shares of Stock owned by the recipient in satisfaction
of such taxes. With respect to Corporate Officers or other recipients
subject to Section 16(b) of the Exchange Act, the Committee may
impose such other conditions on the recipient's election as it deems
necessary or appropriate in order to exempt such withholding from the
penalties set forth in said Section. The number of shares to be
withheld or delivered shall be calculated by reference to the Fair
Market Value of the appropriate class or series of Stock on the date
that such taxes are determined.
H. No Warranty of Tax Effect
Except as may be contained in the terms of any Award, no opinion is
expressed nor warranties made as to the effect for federal, state, or
local tax purposes of any Award.
B-5
<PAGE> 33
I. Amendment of Plan
The Board of Directors of the Company may, from time to time,
amend, suspend or terminate the Plan in whole or in part, and if
terminated may reinstate any or all of the provisions of the Plan,
except that (1) no amendment, suspension or termination may apply to
the terms of any Award (contingent or otherwise) granted prior to the
effective date of such amendment, suspension or termination without
the recipient's consent; (2) no amendment may be made to increase the
number of shares of Stock reserved under Section I.D. of the Plan;
(3) no amendment may withdraw the authority from the Committee to
administer the Plan; and (4) no amendment may change the class of
Employees who may be eligible or make members of the Committee
eligible to receive Awards.
J. Construction of Plan
The place of administration of the Plan shall be in the State of
Missouri, and the validity, construction, interpretation,
administration and effect of the Plan and of its rules and
regulations, and rights relating to the Plan, shall be determined
solely in accordance with the laws, but not the laws pertaining to
choice of laws, of the State of Missouri.
SECTION VII. EFFECTIVE DATE AND TERM
This Plan shall be effective upon adoption by the shareholders of
the Company. The Plan shall continue in effect until December 31,
2005, when it shall terminate. Upon termination, any balances in the
Share Reserve shall be canceled, and no Awards shall be granted under
the Plan thereafter. The Plan shall continue in effect, however,
insofar as is necessary to complete all of the Company's obligations
under outstanding Awards to conclude the administration of the Plan.
SR-1074
B-6
<PAGE> 34
LANGUAGE ON FRONT OF PROXY CARD
RALSTON PURINA
COMPANY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS ON FEBRUARY 1,
1996 AT 2:30 P.M., HYATT REGENCY HOTEL, ST. LOUIS UNION
STATION, 1820 MARKET ST., ST. LOUIS, MO.
The undersigned hereby appoints Messrs. William P. Stiritz and
James M. Neville, and either of them, as lawful proxies, with full
power of substitution, for and in the name of the undersigned, to
vote on behalf of the undersigned, with all the powers the
undersigned would possess if personally present at the Annual
Meeting of Shareholders of Ralston Purina Company on February 1,
1996, and any adjournment thereof. The above named proxies are
instructed to vote all the undersigned's shares of stock on the
proposals set forth in the Notice of Annual Meeting and Proxy
Statement as specified below and are authorized in their discretion
to vote upon such other business as may properly come before the
meeting or any adjournment thereof.
This proxy relates to ALL shares owned by the undersigned,
including any RAL Stock held in the undersigned's account under the
Dividend Reinvestment Plan, and any RAL Stock and ESOP Preferred
Stock shares credited to the undersigned's account under the
Savings Investment Plan. Each share of RAL Stock and ESOP
Preferred Stock is entitled to one vote.
This proxy when properly executed will be voted in the manner
directed herein by the undersigned stockholder. If no direction is
made, this proxy will be voted "FOR" Proposals 1, 2, 3 and 4.
RAL RAL
Proxy # Shares Owned SIP Shares ESOP Preferred
IMPORTANT - PLEASE SIGN AND DATE ON BACK OF CARD. RETURN PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE; NO POSTAGE NECESSARY.
- ------------------------------------
<PAGE> 35
LANGUAGE ON BACK OF PROXY CARD
1. Election of Directors: Donald Danforth, Jr., William H. Danforth,
Richard A. Liddy and Katherine D. Ortega
/ / FOR all nominees listed.
/ / FOR all nominees listed except _____________.
/ / WITHHOLD AUTHORITY to vote for all nominees
listed.
2. Ratification of appointment of Price Waterhouse as independent accountants.
/ /FOR / /AGAINST / /ABSTAIN
3. Proposal to amend the Restated Articles of Incorporation.
/ /FOR / /AGAINST / /ABSTAIN
4. Proposal to adopt 1996 Incentive Stock Plan.
/ /FOR / /AGAINST / /ABSTAIN
Shareholder(s), please
sign below exactly
as name(s) appears on
front of card; in
the case of joint
holders, all should sign.
________________________
________________________
________________________
Signature(s)(Title(s), if
applicable)
Date ___________________
The Board of Directors recommends a vote FOR proposals 1, 2, 3 and 4 above.
<PAGE> 36
LANGUAGE ON FRONT OF PROXY CARD
Ralston Purina
Company
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS ON FEBRUARY 1,
1996 AT 2:30 P.M., HYATT REGENCY HOTEL, ST. LOUIS UNION
STATION, 1820 MARKET ST., ST. LOUIS, MO.
The undersigned hereby appoints Messrs. William P. Stiritz and
James M. Neville, and either of them, as lawful proxies, with full
power of substitution, for and in the name of the undersigned, to
vote on behalf of the undersigned, with all the powers the
undersigned would possess if personally present at the Annual
Meeting of Shareholders of Ralston Purina Company on February 1,
1996, and any adjournment thereof. The above named proxies are
instructed to vote all the undersigned's shares of stock on the
proposals set forth in the Notice of Annual Meeting and Proxy
Statement as specified below and are authorized in their discretion
to vote upon such other business as may properly come before the
meeting or any adjournment thereof.
This proxy relates to ALL shares owned by the undersigned,
including any RAL Stock held in the undersigned's account under the
Dividend Reinvestment Plan. Each share of RAL Stock is entitled to
one vote.
This proxy when properly executed will be voted in the manner
directed herein by the undersigned stockholder. If no direction is
made, this proxy will be voted "FOR" Proposals 1, 2, 3 and 4.
Proxy # Shares Owned
RAL
IMPORTANT - PLEASE SIGN AND DATE ON BACK OF CARD. RETURN PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE; NO POSTAGE NECESSARY.
- ------------------------------------
<PAGE> 37
LANGUAGE ON BACK OF PROXY CARD
1. Election of Directors: Donald Danforth, Jr., William H. Danforth,
Richard A. Liddy and Katherine D. Ortega
/ / FOR all nominees listed.
/ / FOR all nominees listed except _____________.
/ / WITHHOLD AUTHORITY to vote for all nominees
listed.
2. Ratification of appointment of Price Waterhouse as independent accountants.
/ /FOR / /AGAINST / /ABSTAIN
3. Proposal to amend the Restated Articles of Incorporation.
/ /FOR / /AGAINST / /ABSTAIN
4. Proposal to adopt 1996 Incentive Stock Plan.
/ /FOR / /AGAINST / /ABSTAIN
Shareholder(s), please
sign below exactly
as name(s) appears on
front of card; in
the case of joint
holders, all should sign.
________________________
________________________
________________________
Signature(s)(Title(s), if
applicable)
Date ___________________
The Board of Directors recommends a vote FOR proposals 1, 2, 3 and 4 above.
<PAGE> 38
LANGUAGE ON FRONT OF PROXY CARD
Ralston Purina
Company
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS ON FEBRUARY 1,
1996 AT 2:30 P.M., HYATT REGENCY HOTEL, ST. LOUIS UNION
STATION, 1820 MARKET ST., ST. LOUIS, MO.
The undersigned hereby appoints Messrs. William P. Stiritz and
James M. Neville, and either of them, as lawful proxies, with full
power of substitution, for and in the name of the undersigned, to
vote on behalf of the undersigned, with all the powers the
undersigned would possess if personally present at the Annual
Meeting of Shareholders of Ralston Purina Company on February 1,
1996, and any adjournment thereof. The above named proxies are
instructed to vote all the undersigned's shares of stock on the
proposals set forth in the Notice of Annual Meeting and Proxy
Statement as specified below and are authorized in their discretion
to vote upon such other business as may properly come before the
meeting or any adjournment thereof.
This proxy relates to shares of RAL Stock credited to the
undersigned's account under the Interstate Brands Corporation
Savings Investment Plan. Each share of RAL Stock is entitled to
one vote.
This proxy when properly executed will be voted in the manner
directed herein by the undersigned stockholder. If no direction is
made, this proxy will be voted "FOR" Proposals 1, 2, 3 and 4.
RAL
Proxy # SIP Shares
IMPORTANT - PLEASE SIGN AND DATE ON BACK OF CARD. RETURN PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE; NO POSTAGE NECESSARY.
- -------------------------
<PAGE> 39
LANGUAGE ON BACK OF PROXY CARD
1. Election of Directors: Donald Danforth, Jr., William H. Danforth,
Richard A. Liddy and Katherine D. Ortega
/ / FOR all nominees listed.
/ / FOR all nominees listed except _____________.
/ / WITHHOLD AUTHORITY to vote for all nominees
listed.
2. Ratification of appointment of Price Waterhouse as independent accountants.
/ /FOR / /AGAINST / /ABSTAIN
3. Proposal to amend the Restated Articles of Incorporation.
/ /FOR / /AGAINST / /ABSTAIN
4. Proposal to adopt 1996 Incentive Stock Plan.
/ /FOR / /AGAINST / /ABSTAIN
Shareholder(s), please
sign below exactly
as name(s) appears on
front of card; in
the case of joint
holders, all should sign.
________________________
________________________
________________________
Signature(s)(Title(s), if
applicable)
Date ___________________
The Board of Directors recommends a vote FOR proposals 1, 2, 3 and 4 above.
<PAGE> 40
December 15, 1995
Dear Employee:
Enclosed is a proxy statement and a proxy for the Annual Meeting of
Shareholders of Ralston Purina Company to be held on February 1,
1996. The enclosed proxy relates to shares of Ralston Common Stock
as to which you are the record holder and shares of Ralston Common
Stock and ESOP Preferred Stock credited to your account in the
Ralston Purina Savings Investment Plan ("Plan").
The Trustees of the Plan will vote all shares of Common Stock and
ESOP Preferred Stock held in the Plan as of November 27, 1995,
whether or not they have been credited to participants' accounts.
For administrative reasons, shares credited to your account as of
a cut-off date of October 31, 1995, will be voted in accordance
with your instructions on the enclosed proxy card. Any credited
shares for which no instructions are received by the Trustee, and
any shares in the fund which were not credited as of October 31,
1995, will be voted by the Trustee in the same proportion as the
shares for which instructions were received from all participants.
Would you please complete, sign and date the enclosed proxy and
return it, in the post-paid envelope provided, to the Corporation
Trust Company, which acts as Tabulator. In order to provide the
Tabulator with time to tabulate the votes, it has been requested
that all proxies be returned as promptly as possible, but no later
than January 29, 1996.
You may also have received additional proxy statements and proxies
relating to other shares of stock held by you. These proxies are
not duplicates of the one enclosed and we ask that they also be
completed and returned pursuant to the instructions enclosed with
them.
/s/ William P. Stiritz
WILLIAM P. STIRITZ
Chairman of the Board and
Chief Executive Officer
<PAGE> 41
December 15, 1995
TO: Participants in the Ralston Purina Common Stock
Fund of the Interstate Brands Corporation
Savings Investment Plan:
Enclosed is a proxy statement and a proxy for the Annual Meeting of
Shareholders of Ralston Purina Company to be held on February 1,
1996. The enclosed proxy relates to shares of Ralston Common Stock
credited to your account in the Interstate Brands Corporation
Savings Investment Plan ("Plan").
As Trustee of the Plan, Vanguard Fiduciary Trust Company will vote
all shares of Common Stock held in the Plan as of November 27,
1995, whether or not they have been credited to participants'
accounts. For administrative reasons, shares credited to your
account as of a cut-off date of October 31, 1995, will be voted in
accordance with your instructions on the enclosed proxy card. Any
credited shares for which no instructions are received by Vanguard,
and any shares in the fund which were not credited as of October
31, 1995, will be voted by Vanguard in the same proportion as the
shares for which instructions were received from all Plan
participants.
Would you please complete, sign and date the enclosed proxy and
return it, in the post-paid envelope provided, to the Corporation
Trust Company, which acts as Tabulator. In order to provide the
Tabulator with time to tabulate the votes, it has been requested
that all proxies be returned as promptly as possible, but no later
than January 29, 1996.
You may also have received additional proxy statements and proxies
relating to other shares of Ralston Common Stock held by you.
These proxies are not duplicates of the one enclosed and should
also be completed and returned pursuant to the instructions
enclosed with them.
Vanguard Fiduciary
Trust Company
<PAGE> 42
APPENDIX
1. The Stock Price Performance Graphs on page 24 of the printed
document are being transmitted in a format which cannot be
processed by Edgar. A paper copy of the proxy statement
containing these graphs will be mailed to registrant's
branch chief. The Graph titled 'Comparison of Cumulative
Total Return on $100 Invested in Ralston Purina Company
Common Stock on September 30, 1990 vs. S & P 500 and S & P
Food Indices' depicts the following returns:
<TABLE>
<CAPTION>
Measurement Point Ralston S & P 500 S & P Food Index
- ----------------- ------- --------- ----------------
<S> <C> <C> <C>
9-30-90 $100.00 $100.00 $100.00
9-30-91 99.59 131.29 137.21
9-30-92 92.74 145.62 153.85
9-30-93 85.13 164.52 139.01
9-30-94 115.59 170.57 154.06
9-30-95 164.53 221.31 191.21
</TABLE>
The Graph titled "Comparison of Cumulative Total Return on $100
Invested in Ralston - RPG Group and Ralston - CBG Group Common
Stocks from August 2, 1993 through May 15, 1995 vs. S & P 500 and
Competitor Indices" depicts the following returns:
<TABLE>
<CAPTION>
Measurement
Point RPG CBG S & P 500 S & P Food Bakery Index
- ----------- --- --- --------- ---------- ------------
<S> <C> <C> <C> <C> <C>
8-2-93 $100.00 $100.00 $100.00 $100.00 $100.00
9-30-93 102.74 121.44 102.99 105.21 109.75
9-30-94 144.03 69.39 106.78 116.59 96.05
5-15-95 172.88 55.20 123.91 133.91 100.54
</TABLE>
