RALSTON PURINA CO, DEF 14A, 1997-12-10

RALSTON PURINA CO
DEF 14A, 1997-12-10
GRAIN MILL PRODUCTS

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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, January 29, 1998,
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, and are a
registered shareholder, please complete and return the enclosed request for an
advance registration form.

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.

W. PATRICK MCGINNIS J. PATRICK MULCAHY
co-Chief Executive Officer and co-Chief Executive Officer and
co-President co-President

December 10, 1997
<TABLE>
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TABLE OF CONTENTS

PAGE
- - ------------------------------------------------------------------

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 8

Directors' Meetings, Committees and Fees 13

Item 2. Ratification of the Appointment of Independent Accountants 15

Other Business 15

Executive Compensation 16

Compensation Committee Interlocks and Insider Participation 24

Human Resources Committee Report on Executive Compensation 24

Performance Graphs 30

Section 16(a) Beneficial Ownership Reporting Compliance 31

Solicitation Statement 32

Shareholder Proposals for 1998 Annual Meeting 32

</TABLE>

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, January 29, 1998, 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 one Director to serve a two-year term ending in January,
2000, or until his successor is elected and qualified;

2. To elect four Directors to serve three-year terms ending in
January, 2001, or until
their successors are elected and qualified;

3. To ratify the Board of Directors' appointment of Price Waterhouse
as independent accountants for the Company for the fiscal year ending
September 30, 1998;

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 21,
1997, are entitled to vote at the meeting and any adjournments thereof.

By order of the Board of Directors,

NANCY E. HAMILTON
Secretary

December 10, 1997

<PAGE>
PROXY STATEMENT

VOTING

This Proxy Statement is furnished to the shareholders of Ralston Purina
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 January 29, 1998. This Proxy Statement is being mailed to
shareholders on or about December 10, 1997.

The voting securities of the Company presently consist of its $.10 par
value Common Stock and its $1.00 par value Series A ESOP Convertible
Preferred Stock ("ESOP Preferred Stock"), (collectively, the "Stock"). As of
November 21, 1997, the Company had issued and outstanding 106,656,340 shares
of Common Stock and 2,727,513 shares of ESOP Preferred Stock. The 8,038,326
shares of Common Stock and 418,978 shares of ESOP Preferred 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 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 of
record 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,
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 the meeting at which a quorum is present. Under the Company's
Restated Articles of Incorporation, certain 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 21,
1997, 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.

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 twelve
members organized into three classes, with one class consisting of five
members, one class consisting of four members and one class consisting of
three members, with each Director elected to serve for a three-year term with
the exception of Messrs. McGinnis and Mulcahy who were elected members of the
Board of Directors at the May 22, 1997 Board of Directors meeting.

At this meeting, four Directors are to be elected to serve three-year
terms ending in January, 2001, or until their successors are elected and
qualified. In order that the classes of Directors remain equal in size, one
Director is to be elected to serve a two-year term ending in January, 2000, or
until his successor shall have been elected and qualified. In accordance with
the recommendation of its Nominating Committee, the Board has nominated
Messrs. David R. Banks, M. Darrell Ingram, John F. McDonnell, W. Patrick
McGinnis and J. Patrick Mulcahy 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, 1997.

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

[PHOTO] DAVID R. BANKS, Director Since 1985, Age 60
(Standing for election at this meeting for a term expiring 2001)

Chairman of the Board and Chief Executive Officer, and former President,
Beverly Enterprises, Inc. (health care services). Also a director of
Nationwide Health Properties, Inc. and Wellpoint Health Networks, Inc.

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

[PHOTO] M. DARRELL INGRAM, Director Since 1986, Age 65
(Standing for election at this meeting for a term expiring 2001)

Chairman of the Board, Red Fox Environmental Services, Inc. (pollution control
services). Retired President and Chief Executive Officer, Petrolite
Corporation (specialty chemicals).

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

[PHOTO] JOHN F. MCDONNELL, Director Since 1988, Age 59
(Standing for election at this meeting for a term expiring 2001)

Former Chairman of the Board and Chief Executive Officer, McDonnell Douglas
Corporation (aerospace technology and complementary businesses).

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

[PHOTO] W. PATRICK MCGINNIS, Director Since 1997, Age 50
(Standing for election at this meeting for a term expiring in 2001)

Co-Chief Executive Officer and co-President Ralston Purina Company and
President and Chief Executive Officer, Pet Products Group, a division of
Ralston Purina Company.

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

[PHOTO] J. PATRICK MULCAHY, Director Since 1997, Age 53
(Standing for election at this meeting for a term expiring in 2000)

Co-Chief Executive Officer and co-President Ralston Purina Company and
Chairman of the Board, Chief Executive Officer and President, Eveready Battery
Company, Inc., a subsidiary of Ralston Purina Company.

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

[PHOTO] JOHN H. BIGGS, Director Since 1989, Age 61
(Continuing in office - Term expiring 2000)

Chairman of the Board, President and Chief Executive Officer, Teachers
Insurance and Annuity Association-College Retirement Equities Fund (pension
fund management). Also a director of The Boeing Company and former Chairman
of the Board and Chief Executive Officer of Centerre Trust Co. of St. Louis.

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

[PHOTO] DONALD DANFORTH, JR.*, Director Since 1961, Age 65
(Continuing in Office - Term Expiring in 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)

- - --------------------------------------------------
*Donald Danforth, Jr. and William H. Danforth are brothers.

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

[PHOTO] WILLIAM H. DANFORTH*, Director Since 1969, Age 71
(Continuing in Office - Term Expiring in 1999)

Chairman of the Board and former Chancellor, Washington University. Also a
director of Ralcorp Holdings, Inc.

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

[PHOTO] DAVID C. FARRELL, Director Since 1987, Age 64
(Continuing in Office - Term Expiring 2000)

Chairman of the Board and Chief Executive Officer, The May Department Stores
Company (department store retailing). Also a director of Emerson Electric
Company.

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

[PHOTO] RICHARD A. LIDDY, Director Since 1995, Age 62
(Continuing in Office - Term Expiring in 1999)

Chairman of the Board, President and Chief Executive Officer and former Chief
Operating Officer, General American Life Insurance Company (insurance).
Chairman of the Board of the Reinsurance Group of America, Incorporated
(insurance), and of the registered investment companies of the General
American Capital Company and The Walnut Street Funds, Inc. (investments).
Also a director of Brown Group, Inc. and Union Electric Company.

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

[PHOTO] KATHERINE D. ORTEGA, Director Since 1992, Age 63
(Continuing in Office - Term Expiring in 1999)

Former Alternate Representative of the United States to the 45th General
Assembly of the United Nations. Former Treasurer of the United States. Also
a director of The Kroger Company, Long Island Lighting Company, Rayonier,
Inc., Ultramar Diamond Shamrock Corporation and Washington Mutual Investors
Fund - Advisory Board.

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

*Donald Danforth, Jr. and William H. Danforth are brothers.

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

[PHOTO] WILLIAM P. STIRITZ, Director Since 1981, Age 63
(Continuing in Office - Term expiring 2000)

Chairman of the Board, and former Chief Executive Officer and President,
Ralston Purina Company. Also a director of Angelica Corporation, Ball
Corporation, The May Department Stores Company, Ralcorp Holdings, Inc.,
Reinsurance Group of America, Incorporated and Vail Resorts, Inc.

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

STOCK OWNERSHIP

Table I below sets forth information regarding the persons known by the
Company to beneficially own, as defined by the Securities and Exchange
Commission ("SEC") Rule 13d-3, 5% or more of the Company's Common Stock as of
November 1, 1997.

TABLE I

Name and Address Amount and Nature of % Of Shares Explanatory
Of Beneficial Owner Title of Class Beneficial Ownership Outstanding(A) Notes
- - ----------------------- -------------------- -------------------- -------------- ------

NationsBank Corporation Common Stock 12,731,319 11.28% (B)
NationsBank Plaza
St. Louis, MO 63101

FMR Corporation Common Stock 5,514,265 5.17% (C)
82 Devonshire Street
Boston, MA 02109
- - -----
</TABLE>

(A) Shares outstanding were deemed to be shares actually outstanding on
November 1, 1997 except in the case of NationsBank Corporation, as to whom
shares outstanding were also deemed to include shares into which ESOP
Preferred Stock held by it on that date could be converted. See footnote B
below.

(B) Based on written representations made by the shareholder, this amount
includes shares of Common Stock owned by subsidiaries of NationsBank
Corporation ("NationsBank") including Boatmen's Trust Company. Of these
shares, NationsBank has voting and investment powers as follows: sole
voting--1,786,008 shares; shared voting--4,658,021 shares; sole
investment--758,202 shares; and shared investment--5,494,351 shares. Of such
shares, voting or investment power for 847,980 and 847,821 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 6,272,757 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. NationsBank disclaims beneficial ownership of these shares.

(C) Based on written representations made by the shareholder, this amount
includes shares of Common Stock owned by the following subsidiaries or
associated companies of FMR Corporation ("FMR").---Fidelity Management and
Research Company--4,511,831 shares; Fidelity Management Trust Company--994,134
shares; Fidelity International Limited--8,300 shares. Of these, FMR has sole
power to vote or to direct the vote of 673,524 shares and sole power to
dispose or direct the disposition of 5,505,965 shares.
- - -----------------------------------------------------------------------------

All 2,739,195 shares of the Company's outstanding ESOP Preferred Stock
are held by Boatmen's Trust Company, a subsidiary of NationsBank Corporation,
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, 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,
currently consisting of W. P. McGinnis, Chairman, J. P. Mulcahy, J. R.
Elsesser and C. S. Sommer (and until the sale of Protein Technologies
International, Inc. on December 3, 1997, J. W. Brown), 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 Common Stock
received in such conversion would be invested in the 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 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 Policy Board has the right to vote any shares of 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 Policy Board
each files a Schedule 13G on an annual basis disclosing the above authority
with respect to shares of Stock held in the Plan, but both disclaim any
beneficial ownership.

Table II sets forth information regarding beneficial ownership (as
defined by SEC Rule 13d-3) of Stock by Directors, Nominees for Directors,
Executive Officers named in the Summary Compensation Table on page 16, (the
"Named Executive Officers") and all Directors and Executive Officers as a
group as of November 1, 1997. All such persons possess sole voting and
investment power with respect to the Common Stock, and sole voting power with
respect to the ESOP Preferred Stock, set forth in the table. An asterisk in
the column listing the percentage of shares beneficially owned indicates the
person owns less than 1% of the Stock as of November 1, 1997.

TABLE II

NUMBER OF NUMBER OF
DIRECTORS, SHARES SHARES
NOMINEES FOR DIRECTORS BENEFICIALLY % OF SHARES BENEFICIALLY % OF SHARES EXPLANATORY
AND EXECUTIVE OFFICERS OWNED OUTSTANDING(A) OWNED OUTSTANDING(A) NOTES
- - ------------------------ ------------ -------------- ------------ -------------- ------------

Common % ESOP %
------------ -------------- ------------ --------------
David R. Banks 203 * 0
John H. Biggs 2,035 * 0 (B)(C)
Donald Danforth, Jr. 1,230,516 1.15% 0 (B)(D)
William H. Danforth 947,348 * 0 (B)(C)(E)
David C. Farrell 25,443 * 0 (C)
M. Darrell Ingram 3,676 * 0 (F)
Richard A. Liddy 1,000 * 0
John F. McDonnell 5,129 * 0 (G)
Katherine D. Ortega 1,698 * 0
William P. Stiritz 1,195,648 1.12% 0 * (C)(H)
Jay W. Brown 108,240 * 1,686 * (I)(N)
James R. Elsesser 159,205 * 1,627 * (J)(N)
W. Patrick McGinnis 155,497 * 1,696 * (K)(N)
J. Patrick Mulcahy 160,101 * 957 * (L)(N)
All Directors and 4,137,168 3.85% 12,770 * (M)(N)
Executive Officers as a
Group (19 persons)
</TABLE>

<PAGE>
- - -----

(A) For purposes of calculating the percentage of outstanding Common Stock
and ESOP Preferred Stock, respectively, owned by each individual or the group,
shares outstanding were deemed to be (i) shares actually outstanding on
November 1, 1997, and (ii) with respect to Common Stock, shares attributable
to stock options which could be exercised within 60 days from November 1,
1997.

(B) Excludes 4,016,153 shares of Common Stock, or 3.77% 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.

(C) Excludes 2,552,301 shares of Common Stock, or 2.41 % 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
Directors Biggs, Farrell, and Stiritz are on the University's Board of
Trustees, which consists of 50 members. Messrs. Biggs, W.
Danforth, Farrell, and Stiritz disclaim beneficial ownership of such shares.

(D) Donald Danforth, Jr. has sole voting and investment powers respecting
267,685 shares of Common Stock. He shares voting and investment powers
respecting 857,902 shares of Common Stock, and disclaims beneficial ownership
of 54,851 of such shares of Common Stock. Included are 104,929 shares of
Common Stock owned or held as custodian by his wife.

(E) William H. Danforth has sole voting and investment powers respecting
69,494 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.

(F) Includes 264 shares of Common Stock held in IRA accounts.

(G) Includes 3,094 shares of Common Stock held in trusts of which Mr.
McDonnell serves as co-trustee.

(H) Includes 47,159 shares of Common Stock owned by Mr. Stiritz's wife,
9,123 shares of Common Stock owned jointly with his child and 579,769 shares
of Common Stock which are not presently owned but could be acquired within 60
days by the exercise of stock options. Also includes 15,195 shares
distributed from the Company's Savings Investment Plan. Mr. Stiritz disclaims
beneficial ownership of shares of Common Stock owned by his wife.

<PAGE>
(I) Includes 10,648 shares of Common Stock owned by Mr. Brown's wife and
65,649 shares of Common Stock which are not presently owned but could be
acquired within 60 days by the exercise of stock options. Also includes 821
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.

(J) Includes 71,104 shares of Common Stock which are not presently owned
but could be acquired within 60 days by the exercise of stock options. Also
includes 513 shares of Common Stock which is an approximation of the 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 Retirement Plan 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 Retirement Plan Trust.

(K) Includes 1,869 shares of Common Stock owned by Mr. McGinnis' wife and
71,104 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 717 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.

(L) Includes 12,500 shares of Common Stock owned by Mr. Mulcahy's wife and
71,104 shares of Common Stock which are not presently owned but could be
acquired within 60 days by the exercise of stock options. Also includes 1,539
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.

(M) Includes 85,968 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 6,000 restricted shares of Common
Stock as to which certain of such other Executive Officers presently have only
voting power and 1,011 shares of Common Stock which is an approximation of the
number of shares as to which such other Executive 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
Retirement Plan Trust of which two Executive Officers are two of four trustees
who collectively exercise investment and voting power.

(N) 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.

DIRECTORS' MEETINGS, COMMITTEES AND FEES

The Board currently has six 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. Six
meetings of the Board of Directors were held during fiscal year 1997.
Non-management Directors receive an annual retainer of $30,000. They are also
paid $1,000 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 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 1997 were increased by a 331/3% match by
the Company. Equity Option deferrals 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 Common
Stock at the time of payout. Deferrals are paid out in a lump sum in cash (or,
with respect to deferrals in the Equity Option, in Common Stock if the
Director so elects) 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 1997, 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.

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:

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

<PAGE>
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 Vice President
and 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 Vice President and Director of Internal
Auditing. The Audit Committee met two times in fiscal year 1997.
-----------------

EXECUTIVE COMMITTEE Members: W. P. Stiritz, Chairman; D. Danforth,
Jr., W. H. Danforth, M. D. Ingram
and, since November 20, 1997,
W. P. McGinnis and J. P. Mulcahy

The Executive Committee consists of six Directors 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 two times in
fiscal year 1997.
-----------------

FINANCE COMMITTEE Members: D. R. Banks, Chairman; D. Danforth, Jr.,
D. C. Farrell, R. A. Liddy,
J. F. McDonnell and W. P. Stiritz

The Finance Committee consists of six Directors. 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 three times in fiscal year 1997.
-----------------

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, administers the
1988 and 1996 Incentive Stock Plans and grants awards under the 1996 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 seven times in fiscal year
1997.
-----------------

NOMINATING COMMITTEE Members: D. Danforth, Jr., Chairman; J. H. Biggs
and D. C. Farrell

The Nominating Committee consists of three non-management Directors. 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
one time in fiscal year 1997.

YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR MESSRS. BANKS, INGRAM,
MCDONNELL, MCGINNIS AND MULCAHY.

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, 1998, subject
to ratification by shareholders. Price Waterhouse has performed this function
for the Company since 1955. The firm will be represented at the 1998 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.

OTHER BUSINESS

The Board knows of no business which will be presented for consideration
at the 1998 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.

<PAGE>
EXECUTIVE COMPENSATION

The following tables and narrative text discuss the compensation for
fiscal year 1997, and the two prior fiscal years, awarded to, earned by or
paid to the Company's Chief Executive Officer and the Company's four other
most highly compensated Executive Officers (collectively, "Named Executive
Officers").

SUMMARY COMPENSATION TABLE

Long Term
Annual Compensation Compensation
-------------------- (Awards)
--------------------
Securities Leveraged
Other Annual Underlying Incentive All Other
Compensation Options Plan Compensation
Name and Principal Position Year Salary($) Bonus($) ($) (#) ($) ($)(1)
- - --------------------------- ----- --------- -------- ------------- ---------- --------- ------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>

W. P. Stiritz 1997 $1,000,000 $1,008,000 $97,959 (2) 0 $2,900,000 $ 615,713 (3)
Chairman of the Board, Chief 1996 $1,000,000 $1,071,000 $79,527 600,000 $621,289
Executive Officer & President 1995 $ 900,000 $1,071,000 $14,135 195,000 $601,862

J. W. Brown 1997 $ 315,000 $ 529,200 $ 7,259 0 $ 872,500 $227,770
Vice President, and Chief 1996 $ 300,000 $ 214,100 $ 6,977 0 $ 95,569
Executive Officer and President, 1995 $ 257,500 $ 200,000 $ 7,845 157,500 $ 88,244
Protein Technologies Intl., Inc.

J. R. Elsesser 1997 $ 331,700 $ 262,706 $ 7,468 0 $ 919,200 $212,182 (3)
Vice President and Chief 1996 $ 310,000 $ 224,750 $ 6,498 80,000 $145,246
Financial Officer 1995 $ 277,500 $ 236,000 $ 6,140 55,000 $140,727

W. P. McGinnis 1997 $ 407,625 $ 360,000 $11,156 0 $1,062,625 $218,636
Vice President, and President 1996 $ 345,000 $ 273,000 $ 8,807 100,000 $129,074
and Chief Executive Officer, 1995 $ 310,000 $ 255,000 $10,927 65,000 $119,529
Pet Products Group

J. P. Mulcahy 1997 $ 407,625 $ 360,000 $ 9,036 0 $1,062,625 $189,202
Vice President; and Chairman 1996 $ 345,000 $ 273,000 $ 6,821 100,000 $126,972
of the Board and Chief 1995 $ 310,000 $ 255,000 $ 6,138 65,000 $ 92,701
Executive Officer, Eveready
Battery Company, Inc.
</TABLE>

<PAGE>
- - -----

(1) 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 $68,308, $71,250, $75,505,
$88,216 and $62,336, respectively, for Messrs. Stiritz, Brown, Elsesser,
McGinnis and Mulcahy; (iii) a Company match of 25% of amounts deferred under
the Equity Option of the Deferred Compensation Plan for Key Employees--such
amounts are $252,000, $132,300, $65,677, $90,000 and $65,000, respectively,
for Messrs. Stiritz, Brown, Elsesser, McGinnis and Mulcahy; (iv) amounts
attributable to the portion of split-dollar life insurance premiums paid by
the Company, which will be repaid on a specified future date, valued by
multiplying the premiums outstanding during the fiscal year by the Company's
weighted average short-term borrowing rate during the year--such amounts are
$229,855, $21,703, $66,756, $36,477, and $58,406, respectively, for Messrs.
Stiritz, Brown, Elsesser, McGinnis and Mulcahy; and accrued vacation-pay paid
to Mr. Stiritz upon his retirement.

(2) The amount shown in this item includes $33,894 in expenses incurred by
the Company in connection with use of Company aircraft.

(3) The amount shown in this item does not include compensation paid or
payable by Interstate Bakeries Corporation ("IBC") to Messrs. Stiritz and
Elsesser, who served as directors of IBC during the last fiscal year at the
request of the Company pursuant to the terms of the Shareholder Agreement
between the Company and IBC.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES

VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED ON VALUE OPTIONS AT FY-END(#) AT FY-END($)
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - -------------- --------------------- ---------------------- --------------------- -------------- ----------- -------------
W. P. Stiritz 44,052 2,041,920 579,769 600,000 25,137,738 12,750,000
J. W. Brown 73,420 3,095,754 57,533 238,971 1,457,979 7,911,162
J. R. Elsesser 117,471 6,103,675 59,180 256,457 2,764,029 9,594,199
W. P. McGinnis 117,471 5,445,075 59,180 286,457 2,764,029 10,324,199
J. P. Mulcahy 117,471 5,863,565 59,180 286,457 2,764,029 10,324,199

</TABLE>

LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR

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 ($) ($) ($)
- - ---------------------- ---------------- ----------------- ----------- ------ -------

25% of 3 years' 150% of 3 years'
J. R. Elsesser N/A 9/30/99 aggregate salary N/A aggregate salary

25% of 3 years' 150% of 3 years'
W. P. McGinnis N/A 9/30/99 aggregate salary N/A aggregate salary

25% of 3 years' 150% of 3 years'
J. P. Mulcahy N/A 9/30/99 aggregate salary N/A aggregate salary
</TABLE>

The Committee approved the adoption of a Leveraged Incentive Plan,
effective October 1, 1996, for a select group of executives of the Company
including the Named Executive Officers other than Mr. Stiritz and Mr. Brown.
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 who participate in the Plan
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 certain goals: for an
employee of the corporate division of the Company, 8%, and for an employee of
a business unit, 7% (which reflects a blend of total shareholder return and
controllable earnings of the business unit). Such payment targets increase
ratably to a maximum of 100% of aggregate salary for the period if the annual
return averages 18% for the corporate division and 17% for a business unit.
No payments will be made under this portion of the Plan if the average annual
return for the period is less than 8% for the corporate division or 7% for a
business unit. Messrs. McGinnis and Mulcahy's awards will be measured as a
combination of the business unit and corporate performance goals in proportion
to their service during the term of the Plan as head of business units prior
to October 1, 1997 and as co-Chief Executive Officers on and after that date.
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 19 peer
competitors, the Named Executive Officers who participate in the Plan will be
entitled to receive a payment equal to 50% of aggregate salary for the
three-year period. Such payment would be mandatorily deferred until
retirement, termination, death or long-term disability in the Equity Option of
the Deferred Compensation Plan for Key Employees. No Company match would be
credited to such deferrals. A participant must remain employed by the Company
through the end of the three-year period to be eligible for a payment, except
that prorata payments would be made in the case of retirement, long-term
disability, death, involuntary termination (including the sale of the
participant's business unit), or if the Company should cease to be publicly
traded. In such cases, the prorata payments would be based on performance of
the Company, business units and peer group to date). 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.

RETIREMENT PLAN

The Ralston Purina Retirement Plan may provide pension benefits in the
future to the Named Executive Officers. Substantially all regular U.S.
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 for the Named Executive Officers and other administrative
employees 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, in
the form of a single life, 5-year certain annuity, 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.

PENSION PLAN TABLE

Final Average Years of Service
Earnings 10 15 20 25 30 35 40
<S> <C> <C> <C> <C> <C> <C> <C> <C>

$ 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
$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
$1,800,000 $270,000 $405,000 $540,000 $675,000 $ 810,000 $ 945,000 $1,080,000
$2,000,000 $300,000 $450,000 $600,000 $750,000 $ 900,000 $1,050,000 $1,200,000
$2,500,000 $375,000 $562,500 $750,000 $937,500 $1,125,000 $1,312,500 $1,500,000
</TABLE>

<PAGE>

For the purpose of calculating retirement benefits, the Named Executive
Officers had, as of September 30, 1997, the following whole years of credited
service: Messrs. Stiritz--33 years; Brown--26 years; Elsesser--12 years;
McGinnis--25 years; and Mulcahy--29 years. Earnings used in calculating
benefits under the Retirement Plan and the unfunded supplemental retirement
plan are approximately equal to amounts included in the Salary and Bonus
columns in the Summary Compensation Table on page 16.

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 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 the Executive Life Plan during
fiscal year 1997.

GRANTOR TRUST

The Company has 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 each of the Named
Executive Officers other than Mr. Stiritz, whose agreement terminated upon his
retirement as Chief Executive Officer and President of the Company. 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 three year period
following the Executive Officer's termination of employment, the continuation
of other executive benefits for the same period and certain pension bridging
payments. The three year period is 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.

COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION

Mr. Stiritz serves on the compensation committee of the board of
directors of General American Life Insurance Company, a mutual insurance
company, of which Mr. Liddy is Chairman of the Board, President and Chief
Executive Officer.

The Company has for many years purchased insurance and insurance-related
products and services from General American Life Insurance Company, as well as
other major insurance companies, in the ordinary course of business and on
competitive terms. Insurance policies with General American have principally
included coverage for health, life and disability benefits. Certain of them
are whole life or universal life policies in which premiums are intended to
cover the cost of insurance as well as to increase the cash surrender value of
such policies; the Company from time to time borrows against the cash
surrender value of such policies and repays such borrowings at rates
determined pursuant to the relevant policy's terms. Certain of the whole life
policies purchased by the Company were contributed to the Company's grantor
trust in fiscal year 1994; the Company retains the right to borrow against the
cash value of such policies.

Substantially all of these insurance arrangements were entered into prior
to Mr. Liddy's election to the Company's Board of Directors in 1995, and, to
the Company's knowledge, Mr. Liddy receives no direct or indirect compensation
related to, or has any other material interest in, the existence of these
policies or the Company's ongoing transactions pursuant to their terms. Mr.
Liddy has also disclaimed any material interest in transactions between the
Company and General American. The Company expects that its business
relationship with General American will continue and, as in the past, any such
transactions will be conducted in the ordinary course and on competitive
terms.

HUMAN RESOURCES COMMITTEE
REPORT ON EXECUTIVE COMPENSATION

The Human Resources Committee (the "Committee") consists entirely of
non-employee directors free from relationships with the Company that might be
considered a conflict of interest. It approves direct and indirect
compensation of all Executive Officers and administers, and makes awards under
the 1996 Incentive Stock Plan which was approved by shareholders in February,
1996. Stock-based awards, such as stock options and restricted stock, may be
granted under such Plan to officers and other key employees of the Company.

COMPENSATION PHILOSOPHY

The Company's executive compensation program is designed to provide total
compensation that can attract, retain and motivate key employees. It
implements this plan by employing a pay-at-risk approach in which base pay is
kept below the median for comparable executive positions at comparison
companies while developing incentive programs intended to provide such
employees the opportunity to achieve total compensation at or above a specific
target level for exceptional performance. In determining competitive pay
standards, the Committee is apprised of published surveys of pay practices of
other U.S. based corporations of similar size with which the Company may
compete in recruiting executive talent.

In addition to base salary, the Committee has established compensation
incentives in the form of annual cash bonus awards, intermediate term cash
bonus awards and long-term stock-based incentive awards to compensate its key
executives. The cash awards are tied to the performance of the Company and
the stock-based awards are designed to encourage executives to manage the
Company from the perspective of the shareholders, aligning a substantial
portion of the executives' compensation with the interests of equity owners of
the Company.

SALARIES

The Committee establishes the salaries of executives based on its
assessment of the individual's responsibilities, experience, individual
performance and contribution to the Company's performance. The Committee also
takes into account compensation data from other companies as described above;
historical compensation levels at the Company; the competitive environment for
attracting and retaining executives; and, for the past fiscal year, in the
case of Executive Officers other than Mr. Stiritz, the recommendation of Mr.
Stiritz. In May of 1997, Mr. Stiritz announced that he would be retiring as
Chief Executive Officer of the Company as of the end of fiscal year 1997. At
that time, the Board of Directors of the Company announced that, at Mr.
Stiritz's recommendation, Messrs. McGinnis and Mulcahy would replace him as
co-Chief Executive Officers. In August of 1997, the annual compensation of
Messrs. McGinnis and Mulcahy was increased by the Committee to reflect the
transition already underway as they assumed additional responsibilities prior
to Mr. Stiritz's retirement. Upon Mr. Stiritz's retirement, the Committee
will consult with the new co-Chief Executive Officers with respect to the
compensation of certain of the other Executive Officers. The Company attempts
to set base salary levels at or below the median level for executives holding
positions of similar responsibility and complexity at corporations surveyed by
outside consultants. The salaries for Named Executive Officers are set forth
in the Summary Compensation Table on page ___.

ANNUAL CASH BONUS AWARD PROGRAMS

Annual cash bonuses are set each year at, or shortly after, the end of
the Company's fiscal year. Executive Officers have an opportunity to earn an
award based on a combination of individual performance and the overall
performance of the Company or, in the case of certain operating unit
executives, the performance of that unit. Individual performance is rated
based on a subjective assessment of factors including quality and
implementation of strategic plans, organizational and management development
and special project leadership. For fiscal 1997, the following bonus programs
applied with respect to the Executive Officers:

CHIEF EXECUTIVE OFFICER - Mr. Stiritz's bonus was measured equally on Company
- - ------------------------
performance and a subjective assessment by the Committee of his individual
performance. Company performance was evaluated based on fully-diluted
earnings per share ("EPS") growth versus prior year EPS.

BUSINESS UNIT HEADS BONUS PLAN - The bonus for Mr. McGinnis was measured on
- - ---------------------------------
three components: Company performance was evaluated based on a comparison of
fiscal year 1997 results with fiscal year 1996 with respect to (i) the
Company's EPS (25%) and (ii) business unit earnings before income taxes (25%).
The remaining 50% of the bonus was based on the Committee's consideration of
Mr. McGinnis' election as co-Chief Executive Officer during the fiscal year
and a subjective assessment of his individual performance.

CORPORATE STAFF OFFICERS - Bonuses for Messrs. Elsesser and certain other
- - --------------------------
Corporate staff officers were measured on Company performance (50%) and a
subjective assessment of individual performance (50%). As with Mr. Stiritz,
Company performance was measured by comparing fully-diluted EPS growth for
fiscal year 1997 with the prior year EPS.

PROTEIN SENIOR MANAGEMENT INCENTIVE PLAN- The Protein Technologies bonus plan,
- - -----------------------------------------
in which Mr. Brown participated, measured bonuses based on Protein's
performance and a subjective assessment of individual performance. Protein's
performance was measured based on its earnings before income taxes, adjusted
for unusual items, compared to a similar calculation of the prior year's
earnings. Protein performance accounted for 2/3 of the bonus and individual
performance for 1/3. Mr. Brown participated in the Business Unit Heads bonus
plan for fiscal year 1996, but on the recommendation of Mr. Stiritz, it was
deemed appropriate that his performance in fiscal year 1997 be measured on the
same basis as the other Protein executives.

EVEREADY BATTERY COMPANY - Eveready's bonus plan, in which Mr. Mulcahy and one
- - ------------------------
other Executive Officer participated, measured bonuses based on Eveready's
performance and a subjective assessment of individual performance. Eveready's
performance, which accounted for 70% of Mr. Mulcahy's bonus, was measured
based on its earnings before income taxes, adjusted for unusual items,
compared to a similar calculation of the prior year's earnings. Performance
was ranked subjectively in one of five brackets. The remaining 30% of Mr.
Mulcahy's bonus was based on the Committee's consideration of Mr. Mulcahy's
election as co-Chief Executive Officer during the fiscal year and a subjective
assessment of his individual performance. Mr. Mulcahy participated in the
Business Unit Heads bonus plan for fiscal year 1996, but on the recommendation
of Mr. Stiritz, it was deemed appropriate that his performance in fiscal year
1997 be measured on the same basis as the other Eveready executives.

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 Executive Officers.

<PAGE>
INTERMEDIATE TERM BONUS PLANS

A 1996 Leveraged Incentive Plan was implemented effective October 1,
1996, for a select group of key executives, including Executive Officers of
the Company, other than Mr. Stiritz, whose actions are believed to be able to
positively impact shareholder value. At the end of three years, if certain
Common Stock performance benchmarks described as "Total Shareholder Return" or
"TSR" (Common Stock price appreciation plus reinvested dividends) and, in
addition for executives and other key personnel of operating units, certain
business unit earnings benchmarks, are reached, a cash award equal to a
percentage of three years' aggregate base salary will be payable to the
participants. In addition, if the TSR over the three years meets or exceeds
the 75th percentile of the TSR for a peer competitor group of the Company, an
additional percentage of aggregate base salary for the three year period is
payable. The Committee believes that tying payment under the plan to
increases in shareholder value and business unit performance is consistent
with its philosophy of maintaining a relatively high portion of pay at risk.
Under the terms of the 1994 Leveraged Incentive Plan, measuring TSR for the
three years ending on September 30, 1997, cash awards became payable to
participants, including certain Executive Officers of the Company. Because TSR
did not meet or exceed the 75th percentile of TSR for the peer competitor
group, payments under the 1994 Plan did not include the potential peer group
award of 25% of aggregate salary. With respect to certain Named Executive
Officers, the Committee has mandated deferral of these cash awards to the
extent necessary to preserve the full tax deduction of the Company with
respect to such awards.

DEFERRALS OF BONUS AWARDS

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. It has been determined that deferrals into the Equity
Option of annual cash bonuses earned in fiscal year 1997 will be credited with
a 25% Company match which is subject to certain vesting requirements. The
Committee believes that this provision of the Plan serves the dual purpose of
further aligning the executive's interests with those of shareholders of the
Company by encouraging an investment in Company stock equivalents and adds a
retention feature through the vesting requirement. However, in order not to
discourage senior managers from electing the Equity Option deferral, the
Committee has amended the Plan to provide for acceleration of vesting of the
Company match upon termination at or after attainment of age 50 or the
involuntary termination of employment of the participant (other than for
cause) at any age. Cash awards under the 1994 Leveraged Incentive Plan for
which deferral has been mandated by the Committee will be deferred under the
terms of the Company's Executive Savings Investment Plan, subject to the
contribution limits of that Plan, and will be credited with the Company match
provided by the terms of that Plan. The balance of such awards will be
deferred under the terms of the Deferred Compensation Plan, but such deferral
will not be credited with a Company match under that Plan.

STOCK AWARDS

Stock-based incentive awards consist principally of stock options and
restricted stock awards which are granted from time to time under the 1996
Incentive Stock Plan (the "1996 Plan"). Prior awards were granted under the
1988 Incentive Stock Plan, which is substantially identical to the present
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 1996 Plan, the
number of options and shares of restricted Common 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.

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 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 in three or four segments over a period
of three to ten years after the date of grant, they function as a retention
device while encouraging the executive to take a longer-term view about
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.

No stock options or restricted stock awards were made to Executive
Officers of the Company in fiscal year 1997. Performance options awarded to
certain employees, including Executive Officers, in September, 1995 (the
details of which were described in the Company's Notice of Annual Meeting and
Proxy Statement dated December 15, 1995) have been amended to provide that
performance targets, if not previously met, would be waived on the ninth
anniversary of the date of grant, subject to existing forfeiture provisions of
the awards. Peer group performance options awarded to certain employees,
including Executive Officers, in September, 1996 (the details of which were
described in the Company's Notice of Annual Meeting and Proxy Statement dated
December 6, 1996) have also been amended to provide that the peer group target
in such options would be waived for all unexercised peer group award shares
when the entire or remaining exercise period is six months or less. These
amendments were made in order to eliminate significant negative accounting
charges based on future stock price increases and to reduce associated
earnings volatility. In addition, stock options, including performance
options, previously granted to certain key employees of Protein Technologies
International, including Mr. Brown, have been amended, effective upon the sale
of that business on December 3, 1997, to permit exercise throughout the
balance of the ten-year terms of those options rather than for a limited
period of time following termination of employment, provided that such
individuals remain employed by Protein Technologies International until such
sale. This amendment was deemed appropriate given the significance of these
individuals to the successful completion of the sale of that business.

COMPENSATION FOR THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER

At the end of fiscal 1996, the Committee, in recognition of the
likelihood of Mr. Stiritz's retirement and the importance of succession
planning, awarded Mr. Stiritz a special performance stock option grant, and
determined to (i) freeze Mr. Stiritz's base pay until retirement at the level
it was during fiscal year 1996; (ii) exclude him from future annual stock
award grants; and (iii) exclude him from any further intermediate or long-term
cash bonus plans. Consequently, Mr. Stiritz's base pay during fiscal 1997
remained at the level it was during the previous fiscal year, and he was
excluded from participation in the 1996 Leveraged Incentive Plan. The
Committee did award Mr. Stiritz an annual cash bonus for fiscal year 1997
based on the qualitative and quantitative factors described under "Annual Cash
Bonus Award Programs" above. The qualitative assessment of his performance
also included an evaluation of the ongoing positive effect on the Company of
significant restructuring initiatives and investment decisions undertaken
under Mr. Stiritz's guidance during the past year, including, in particular,
the sale of Protein Technologies International and the monetization of the
Company's investment in Interstate Bakeries Corporation, as well as his
efforts toward the successful transition of responsibilities to the new
co-Chief Executive Officers.

DEDUCTIBILITY OF CERTAIN EXECUTIVE COMPENSATION

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 mandated or reserved the right to mandate the deferral of certain bonus
and salary payments to Named Executive Officers, including payments under the
1994 Leveraged Incentive Plan and a portion of the fiscal 1997 salary of the
Chief Executive Officer, to the extent payment would cause the Company to
forgo its full deduction, and has taken steps with respect to certain option
awards to predicate their exercise on deductibility. 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 SEC filings under the Securities Act of 1933, as amended,
or the Securities Exchange Act of 1934, as amended, 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.

COMPARISON OF CUMULATIVE TOTAL RETURN ON $100 INVESTED IN
RALSTON PURINA COMPANY COMMON STOCK ON SEPTEMBER 30, 1992
VS. S&P 500 AND S&P FOOD INDICES(1)

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(2)

<PAGE>
(1) On July 30, 1993, the Company recapitalized its former single class of
common stock by redesignating it as Ralston-RPG Group stock ("RPG") and
distributing Ralston-CBG Group Stock ("CBG"). 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, 1992
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 - RPG 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 Ralston-RPG closed at $37.25. Lastly, May 15, 1995 (as
depicted by the second solid vertical line) each share of CBG stock was
exchanged for .0886 shares of Ralston 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, 1992 through
September 30, 1997, with the value of each index set to $100 on September 30,
1992. Total return assumes reinvestment of dividends.

(2) The lower graph depicts the cumulative return since August 2, 1993,
the date of initial issuance of RPG and CBG stocks, through May 15, 1995, the
date shares of CBG Stock were exchanged for shares of RPG shares, of $100
invested during that time period in either RPG or CBG stock or one of the
competitor indices. Total return assumes reinvestment of dividends.

(3) The Bakery Index consists of a capitalization-weighted combination of
the common stocks of CBG, Flowers Industries, Inc. and Interstate Bakeries
Corporation.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors and officers, and persons who own more than
ten percent of the Company's Common Stock, to file initial statements of
beneficial ownership (Form 3), and statements of changes in beneficial
ownership (Forms 4 or 5), of the Common Stock with the SEC and the New York
Stock Exchange. Directors, officers, and greater than ten percent
shareholders are required by SEC regulation to furnish the Company with copies
of all such forms they file.

The Company believes that during fiscal year 1997 its directors and
officers complied with all filing requirements applicable to them, based
solely on the Company's review of copies of forms received by it.

<PAGE>
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 Common Stock and
ESOP Preferred Stock.

SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING

Any shareholder proposal intended to be presented at the 1999 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 6, 1998. Any such
proposals must comply in all respects with the rules and regulations of the
SEC and the Bylaws of the Company.

By order of the Board of Directors,

NANCY E. HAMILTON
Secretary

December 10, 1997
<PAGE>

LANGUAGE ON FRONT OF PROXY CARD

Ralston Purina
Company

PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS ON JANUARY 29,
1998 AT 2:30 P.M., HYATT REGENCY ST. LOUIS HOTEL, ST. LOUIS
UNION STATION, 1820 MARKET ST., ST. LOUIS, MO.

The undersigned hereby appoints Messrs. W. Patrick McGinnis, J. Patrick
Mulcahy and James M. Neville, and each 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 January 29, 1998, 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 MATTER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1, 2 AND 3.

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>
- - -----------------------------------------------------------------------------

(Please detach at perforation before mailing)

RALSTON PURINA COMPANY

1998 ANNUAL MEETING OF SHAREHOLDERS
AT THE HYATT REGENCY HOTEL, ST. LOUIS UNION STATION
MARKET STREET BETWEEN 18TH AND 20TH STREET
THURSDAY, JANUARY 29, 1998
2:30 P.M.

Seating Begins at 1:30 p.m.

SHAREHOLDER ADMITTANCE TICKET
(Please bring this ticket with you to the meeting)

This ticket entitles you, the shareholder(s), to attend the 1998 Annual
Meeting
<PAGE>

LANGUAGE ON BACK OF PROXY CARD

1. Election of one Director to serve a two-year term ending in January
2000, or until his successor is elected and qualified: J. Patrick Mulcahy

/ / FOR the nominee listed.
/ / WITHHOLD AUTHORITY to vote for the nominee listed.

2. Election of four Directors to serve three-year terms ending in January
2001, or until their successors are elected and qualified: David R. Banks, M.
Darrell Ingram, John F. McDonnell and W. Patrick McGinnis

/ / FOR all nominees listed.
/ / FOR all nominees listed except ___________________.
/ / WITHHOLD AUTHORITY to vote for all nominees listed.

3. Ratification of appointment of Price Waterhouse as independent
accountants for the fiscal year ending September 30, 1998.

/ /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, and 3 above.

LANGUAGE ON FRONT OF PROXY CARD

Ralston Purina
Company

THIS PROXY RELATES TO ALLSHARES 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, AND 3.

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>
- - ---------------------------------------------------------------------------
(Please detach at perforation before mailing)

RALSTON PURINA COMPANY

1998 ANNUAL MEETING OF SHAREHOLDERS
AT THE HYATT REGENCY HOTEL, ST. LOUIS UNION STATION
MARKET STREET BETWEEN 18TH AND 20TH STREET
THURSDAY, JANUARY 29, 1998
2:30 P.M.

Seating Begins at 1:30 p.m.

SHAREHOLDER ADMITTANCE TICKET
(Please bring this ticket with you to the meeting)

This ticket entitles you, the shareholder(s), to attend the 1998 Annual
Meeting
<PAGE>

LANGUAGE ON BACK OF PROXY CARD

1. Election of one Director to serve a two-year term ending in January
2000, or until his successor is elected and qualified: J. Patrick Mulcahy

/ / FOR the nominee listed.
/ / WITHHOLD AUTHORITY to vote for the nominee listed.

/ / FOR all nominees listed.
/ / FOR all nominees listed except ___________________.
/ / WITHHOLD AUTHORITY to vote for all nominees listed.

3. Ratification of appointment of Price Waterhouse as independent
accountants for the fiscal year ending September 30, 1998.

/ /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, and 3 above.
<PAGE>

LANGUAGE ON FRONT OF PROXY CARD

Ralston Purina
Company

1. Election of one Director to serve a two-year term ending in January
2000, or until his successor is elected and qualified: J. Patrick Mulcahy

/ / FOR the nominee listed.
/ / WITHHOLD AUTHORITY to vote for the nominee listed.

/ / FOR all nominees listed.
/ / FOR all nominees listed except __________________.
/ / WITHHOLD AUTHORITY to vote for all nominees listed.

3. Ratification of appointment of Price Waterhouse as independent
accountants for the fiscal year ending September 30, 1998.

/ /FOR / /AGAINST / /ABSTAIN

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2, AND 3 ABOVE.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MATTER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1, 2 AND 3.

Proxy # Shares Owned

Shareholder(s), please
sign below exactly
as name(s) appears on
front of card; in
the case of joint
holders, all should sign.

________________________

Date ___________________

IMPORTANT -- PLEASE SIGN AND DATE ON BACK OF CARD. RETURN PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE; NO POSTAGE NECESSARY.

<PAGE>
December 10, 1997

Dear Employee:

Enclosed are a proxy statement, a proxy, and an Annual Report for the Annual
Meeting of Shareholders of Ralston Purina Company to be held on January 29,
1998. The enclosed proxy relates to shares of Ralston Common Stock 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 21, 1997, whether or not they
have been credited to participants' accounts. Shares credited to your account
as of November 21, 1997, 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 November 21, 1997, will be voted by the Trustee in the same proportion as
the shares for which instructions were received from all participants.

Please complete, sign and date the enclosed proxy. It should be returned, 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 26, 1998.

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.

Co-CEOs and Presidents,

W. Patrick McGinnis J. Patrick Mulcahy

<PAGE>
APPENDIX

1. The Stock Price Performance Graphs on page 21 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, 1992 vs. S & P 500 and S & P Food Indices' depicts the following returns:

Measurement Point Ralston S & P 500 S & P Food Index
----------------- ------- --------- ----------------
9/30/92 93.12 $110.92 $112.13
9/30/93 85.49 125.31 101.32
9/30/94 116.06 129.92 112.28
9/30/95 165.21 168.56 139.36
9/30/96 199.23 202.84 172.18
9/30/97 280.42 256.84 203.27
</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 Bakery
Point RPG CBG S&P 500 S&P Food Index
- - ----------- ------ --- ------- -------- -----
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>