RALSTON PURINA CO, DEF 14A, 1998-12-09

RALSTON PURINA CO
DEF 14A, 1998-12-09
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 Wednesday, February 3, 1999 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 bring the
enclosed Shareholder Admittance Ticket with you.

Whether you plan to attend the meeting or not, we encourage you to read this
Proxy Statement and vote your shares. You may sign, date and return the
enclosed proxy as soon as possible in the postage-paid envelope provided, or,
for the first time, you may vote by telephone or via Internet. However you
decide to vote, we would appreciate your voting as soon as possible.

We look forward to seeing you at the Annual Meeting!

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

December 11, 1998

<PAGE>
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 Wednesday, February 3, 1999, at the Grand Ballroom, Hyatt Regency
St. Louis Hotel, St. Louis Union Station, 1820 Market Street, St. Louis,
Missouri.

The purpose of the meeting is to:

1. elect four directors to serve three-year terms ending at the annual
meeting held in 2002, or until their successors are elected and qualified;
2. ratify the Board of Directors' appointment of PricewaterhouseCoopers LLP
as independent accountants for the Company for the fiscal year ending September
30, 1999;
3. approve and adopt the Ralston Purina Company 1999 Incentive Stock Plan;
4. approve an amendment to the Ralston Purina Company Articles of
Incorporation;

and to act upon such other matters as may properly come before the meeting.

You may vote if you are a shareholder of record on November 30, 1998. It is
important that your shares be represented and voted at the Meeting. Please vote
in one of these ways:

- -- USE THE TOLL-FREE TELEPHONE NUMBER shown on the proxy card;
- -- VISIT THE WEB SITE noted on your proxy card to vote via the Internet; OR
- -- MARK, SIGN, DATE AND PROMPTLY RETURN the enclosed proxy card in the
postage-paid envelope.

By Order of the Board of Directors,

Nancy E. Hamilton
Secretary

December 11, 1998

<PAGE>

PROXY STATEMENT ------- VOTING PROCEDURES
- ---------------------------------------------

YOUR VOTE IS VERY IMPORTANT

The Board of Directors is soliciting proxies to be used at the 1999 annual
meeting. This proxy statement and the form of proxy will be mailed to
shareholders beginning December 11, 1998.

WHO CAN VOTE

Record holders of Ralston Purina Common Stock and Series A ESOP Preferred Stock
("ESOP Preferred Stock") on November 30, 1998 may vote at the meeting. On
November 30, 1998, there were 312,766,733 shares of Common Stock and 2,260,188
shares of ESOP Preferred Stock outstanding. The shares of Common Stock and ESOP
Preferred Stock held in the Company's treasury will not be voted.

HOW YOU CAN VOTE

This year there are three voting methods:
- -- Voting by Mail. If you choose to vote by mail, simply mark your proxy,
date and sign it, and return it in the postage-paid envelope provided.
- -- Voting by Telephone. You can vote your shares by telephone by calling the
toll-free telephone number on your proxy card. Telephone voting is available 24
hours a day. If you vote by telephone you should not return your proxy card.
- -- Voting by Internet. You can also vote via the Internet. The web site for
Internet voting is on your proxy card, and voting is also available 24 hours a
day. If you vote via the Internet you should not return your proxy card.

HOW YOU MAY REVOKE OR CHANGE YOUR VOTE

You can revoke your proxy at any time before it is voted at the meeting by:
- -- sending written notice of revocation to the Secretary;
- -- submitting another proper proxy by telephone, Internet or paper ballot; or
- -- attending the annual meeting and voting in person. If your shares are
held in the name of a bank, broker or other holder of record, you must obtain a
proxy, executed in your favor, from the holder of record to be able to vote at
the meeting.

GENERAL INFORMATION ON VOTING

You are entitled to cast one vote for each share of Common Stock or share of
ESOP Preferred Stock you own on the record date. Shareholders do not have the
right to vote cumulatively in electing directors. The election of each director
nominee, and each of the other items submitted for a vote of shareholders, must
be approved by a majority of shares entitled to vote and represented at the
annual meeting in person or by proxy. Shares represented by a proxy marked
"abstain" on any matter will be considered present at the meeting for purposes
of determining a quorum and for purposes of calculating the vote, but will not
be considered to have voted in favor of the proposal. Therefore, any proxy
marked "abstain" will have the effect of a vote against the matter. Shares
represented by a proxy as to which there is a "broker non-vote" (for example,
where a broker does not have discretionary authority to vote the shares), or a
proxy in which authority to vote for any matter considered is withheld, will be
considered present at the meeting for purposes of determining a quorum, but will
have no effect on the vote.

All shares that have been properly voted - whether by telephone, Internet or
mail - and not revoked will be voted at the annual meeting in accordance with
your instructions. If you sign your proxy card but do not give voting
instructions, the shares represented by that proxy will be voted as recommended
by the Board of Directors.

If any other matters are properly presented at the annual meeting for
consideration, the persons named in the enclosed proxy card will have the
discretion to vote on those matters for you. At the date this proxy statement
went to press, we do not know of any other matter to be raised at the annual
meeting.

VOTING BY PARTICIPANTS IN THE COMPANY'S SAVINGS INVESTMENT PLAN AND DIVIDEND
REINVESTMENT PLAN

- -- If you participate in the Company's Savings Investment Plan and had
an account in the Common Stock Fund or the ESOP Preferred Stock Fund of
that Plan on November 13, 1998, the proxy will also serve as voting
instructions to the trustees, Vanguard Fiduciary Trust Company, an affiliate
of The Vanguard Group of Investment Companies, and Bankers' Trust Company, for

<PAGE>

the shares of Common Stock or ESOP Preferred Stock credited to those accounts
on that date. If the trustees do not receive directions with respect to any
shares of Common Stock or ESOP Preferred Stock held in the Plan, they will
vote those shares in the same proportion as they vote shares for which
directions were received.

- -- If you participate in the Company's Dividend Reinvestment Plan, any proxy
given by you will also include all shares of Common Stock held for your account
under that plan (other than fractional shares) unless contrary instructions are
given by you.

COSTS OF SOLICITATION

The Company will pay for preparing, printing and mailing this proxy statement.
We have engaged Georgeson & Company, Inc. to help solicit proxies from
shareholders for a fee of $[16,000] plus its expenses. Proxies may also be
solicited personally or by telephone by regular employees of the Company without
additional compensation, as well as by employees of Georgeson. The Company will
reimburse banks, brokers and other custodians, nominees and fiduciaries for
their costs of sending the proxy materials to our beneficial owners.

COMPLIANCE WITH SECTION 16(A) REPORTING

The rules of the Securities and Exchange Commission require that the Company
disclose late filings of reports of stock ownership and changes in stock
ownership by its directors and executive officers. To the best of the Company's
knowledge, all of the filings for the Company's executive officers and directors
were made on a timely basis in 1998.

ITEM 1. ELECTION OF DIRECTORS

The Board of Directors is divided into three classes, with four members each,
with terms of service expiring at successive annual meetings.

Four directors will be elected at the 1999 annual meeting to serve for a
three-year term expiring at our annual meeting in the year 2002. The Board has
nominated Donald Danforth, Jr., William H. Danforth, Richard A. Liddy and
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. Each
nominee elected as a director will continue in office until his or her successor
has been elected and qualified. If any nominee is unable to serve as a director
at the time of the annual meeting, your proxy may be voted for the election of
another person the Board may nominate in his or her place, unless you indicate
otherwise.

VOTE REQUIRED. The affirmative vote of a majority of the outstanding shares of
Common Stock and ESOP Preferred Stock entitled to vote and represented in person
or by proxy is required for the election of each director.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THESE NOMINEES FOR
ELECTION AS DIRECTORS.

<PAGE>

INFORMATION ABOUT NOMINEES AND OTHER DIRECTORS

Please review the following information about the nominees and other directors
- --------------------------------------------------------------------------------
continuing in office. The ages shown are as of December 31, 1998.
- ------------------------------------------------------------------------------

[PHOTO] DONALD DANFORTH, JR.*, Director Since 1961, Age 66
(Standing for election at this meeting for a term expiring 2002)

Chairman of the Board, Treasurer and former President, Kennelwood Village, Inc.
(pet care center).
- --------------------------------------------------------------------------------

[PHOTO] WILLIAM H. DANFORTH*, Director Since 1969, Age 72
(Standing for election at this meeting for a term expiring 2002)

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

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

PHOTO] RICHARD A. LIDDY, Director Since 1995, Age 63
(Standing for election at this meeting for a term expiring 2002)

Chairman of the Board, President and Chief Executive Officer, General American
Life Insurance Company (insurance). Chairman of the Board of the Reinsurance
Group of America, Incorporated (insurance), and of General American Capital
Company, a registered investment company (investments). Also a director of
Brown Group, Inc. and Ameren Corporation.

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

[PHOTO] KATHERINE D. ORTEGA, Director Since 1992, Age 64
(Standing for election at this meeting for a term expiring 2002)

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, Rayonier, Inc., Ultramar Diamond Shamrock
Corporation and member of Washington Mutual Investors Fund Advisory Board.

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

[PHOTO] DAVID R. BANKS, Director Since 1985, Age 61
(Continuing in Office - Term Expiring in 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., Wellpoint Health Networks, Inc., Agribrands International,
Inc. and PharMerica, Inc.

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

[PHOTO] M. DARRELL INGRAM, Director Since 1986, Age 66
(Continuing in Office - Term Expiring in 2001)

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

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

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

[PHOTO] JOHN F. MCDONNELL, Director Since 1988, Age 60
(Continuing in Office - Term Expiring in 2001)

Former Chairman of the Board and Chief Executive Officer, McDonnell Douglas
Corporation (aerospace technology and complementary businesses). Also a director
of The Boeing Company.

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

[PHOTO] W. PATRICK MCGINNIS, Director Since 1997, Age 51
(Continuing in Office - 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 54
(Continuing in Office - Term Expiring in 2000)

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

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

[PHOTO] JOHN H. BIGGS, Director Since 1989, Age 62
(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). Former Chairman of the Board and Chief Executive Officer of
Centerre Trust Co. of St. Louis. Also a director of The Boeing Company.

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

[PHOTO] DAVID C. FARRELL, Director Since 1987, Age 65
(Continuing in Office - Term Expiring 2000)

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

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

[PHOTO] WILLIAM P. STIRITZ, Director Since 1981, Age 64
(Continuing in Office - Term expiring 2000)

Chairman of the Board, and former Chief Executive Officer and President,
Ralston Purina Company. Chairman of the Board, Chief Executive Officer and
President, Agribrands International, Inc. (animal feeds and agricultural
products). 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.

<PAGE>

BOARD OF DIRECTORS - COMMITTEES
-------------------------------

Human
Board Member Board Audit Executive Finance Resources Nominating
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>

David R. Banks X X X*
- ------------------------------------------------------------------------------
John H. Biggs X X X
- ------------------------------------------------------------------------------
Donald Danforth, Jr. X X X X*
- ------------------------------------------------------------------------------
William H. Danforth X X X*
- ------------------------------------------------------------------------------
David C. Farrell X X X
- ------------------------------------------------------------------------------
M. Darrell Ingram X X* X X
- ------------------------------------------------------------------------------
Richard A. Liddy X X
- ------------------------------------------------------------------------------
John F. McDonnell X X X
- ------------------------------------------------------------------------------
Katherine D. Ortega X X X
- ------------------------------------------------------------------------------
William P. Stiritz X* X* X
- ------------------------------------------------------------------------------
W. Patrick McGinnis X X
- ------------------------------------------------------------------------------
J. Patrick Mulcahy X X
- ------------------------------------------------------------------------------

Meetings held in 1998 6 2 4 4 6 2
===================== ===== ===== ========= ======= ========= ==========
</TABLE>

*Chairperson

AUDIT: Reviews auditing, accounting, financial reporting and internal control
functions. Recommends our independent accountant and reviews their services.
All members are non-employee directors.

EXECUTIVE: May act on behalf of the Board in the intervals between Board
meetings.

FINANCE: Reviews the Company's financial condition, objectives and strategies
and makes recommendations to the Board concerning financing requirements,
dividend policy, foreign currency management and pension fund performance.

HUMAN RESOURCES: Sets compensation of Executive Officers, approves deferrals
under the Company's Deferred Compensation Plan for Key Employees, administers
the Company's Incentive Stock Plans and grants stock options and other awards
under those plans. Monitors management compensation and benefit programs, and
reviews principal employee relations policies. All members are non-employee
directors.

NOMINATING: Recommends nominees for election as directors or Executive Officers
to the Board. Also recommends committee memberships and compensation and
benefits for directors. Will consider director candidates suggested by
shareholders if name of candidate and appropriate biographical information is
submitted to the Secretary of the Company. All members are non-employee
directors.

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

DIRECTOR COMPENSATION

Employee directors receive no compensation other than their normal salary for
serving on the Board or its Committees.

Non-employee directors receive the following fees for their service on the
Board:

Annual Retainer $30,000
Fee for Each Board Meeting $1,000
Fee for Each Committee Meeting $1,000

The chairpersons of the Committees also receive an additional annual retainer of
$2,000 for each Committee that they chair. Directors can elect to have these
amounts paid quarterly in cash, or defer payment until their retirement under
the terms of the Deferred Compensation Plan for Non-Management Directors. Under
that Plan, they can defer in the form of stock equivalents under the Equity
Option, which tracks the value of the Company's Common Stock, or they can defer
into the Variable Interest Option and receive interest at Morgan Guaranty Trust

<PAGE>

Company of New York's prime rate. Deferrals in the Equity Option in 1998 were
increased by a 33-1/3% match by the Company. Deferrals are paid out in a lump
sum in cash, or, for accounts in the Equity Option, in shares of Common Stock,
if elected by the director.

During 1998, all directors attended 75% or more of the Board meetings and
Committee meetings on which they served.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company has for many years purchased insurance and insurance-related
products and services from General American, as well as other major insurance
companies. These purchases are made 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 those policies and repays the borrowings at rates determined under the
terms of the policies. Certain of the whole life policies purchased by the
Company were contributed to the Company's grantor trust in 1994, and the Company
retains the right to borrow against the cash value of those 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. To the Company's
best knowledge, Mr. Liddy does not receive direct or indirect compensation
related to these policies or the Company's ongoing transactions with respect to
the policies. Mr. Liddy has also disclaimed any material interest in the
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 transactions will be conducted in the ordinary course and on
competitive terms.

ITEM 2. RATIFICATION OF THE APPOINTMENT OF INDEPENDENT ACCOUNTANTS

The shares represented by your proxy will be voted (unless you indicate to the
contrary) to ratify the selection of PricewaterhouseCoopers LLP, independent
public accountants, to examine the financial statements of the Company for the
fiscal year ending September 30, 1999. That firm has performed this function
for the Company since 1955. A partner of PricewaterhouseCoopers LLP will be
present at the 1999 annual meeting and will have the opportunity to make a
statement and respond to questions from shareholders.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE APPOINTMENT
OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT ACCOUNTANTS.

ITEM 3. PROPOSAL TO ADOPT THE 1999 INCENTIVE STOCK PLAN

You are asked to consider and approve adoption of the Ralston Purina Company
1999 Incentive Stock Plan. The Plan is intended to replace the 1996 Incentive
Stock Plan because a significant portion of the Common Stock which the 1996 Plan
authorized for stock awards has been granted or reserved for outstanding awards,
and additional shares are anticipated to be needed for awards in the next
several years. The following is a summary of the Plan. Please refer to Exhibit
A to this Proxy Statement for the full text of the Plan.

PURPOSE. The purpose of the Plan is to promote the interests of the Company and
its shareholders by:
- -- attracting and retaining key employees,
- -- providing participants a significant stake in the performance of the
Company, and
- -- providing an opportunity for participants to increase their holdings of
the Company's Common Stock.

The Plan would also permit the Board of Directors of the Company to grant stock
options and other stock awards to individual directors, if the Board decides
to do so.

<PAGE>

ADMINISTRATION. The Plan is administered by the Human Resources Committee of
the Company's Board of Directors. The Committee has the authority to select
employees to receive awards, to determine the types of awards and the number of
shares of Common Stock covered by awards, and to set the terms and conditions of
awards. The Committee may delegate its authority to select employees other than
corporate officers to receive awards. However, the full Board of Directors will
determine the amount, terms and conditions of stock options or other stock
awards granted to directors. The Committee has the authority to establish rules
for the administration of the Plan, and its determinations and interpretations
are binding.

ELIGIBLE PARTICIPANTS

- -- Any employee or officer (including corporate officers) of the Company or
any of its subsidiaries will be eligible for any award under the Plan if
selected by the Committee. There are about 22,000 employees of the Company and
its subsidiaries that would be eligible for awards under the Plan.
- -- Any of the non-employee directors of the Company will also be eligible
to receive stock options or other stock awards under the Plan if authorized by
the full Board of Directors.

Neither the Committee nor the Board has made any decisions with respect to the
individuals who may receive awards under the Plan or the amount or nature of
future awards.

SHARES AUTHORIZED. The number of shares of the Company's Common Stock which
may be issued as awards under the Plan is 19,000,000, which includes the number
of shares of Common Stock currently available for grants under the Company's
1996 Incentive Stock Plan. If the 1999 Plan is approved, no further awards will
be granted under the 1996 Plan. (The number of shares authorized is subject to
certain adjustments to reflect, for example, stock splits or other corporate
restructurings.)

In addition, if any award is forfeited or expires, all shares which were not
issued under the award will become available for additional awards under the
Plan. If a restoration option is granted when shares of Common Stock are
tendered for the exercise of any options granted under the Plan or the Company's
1988 or 1996 Incentive Stock Plans, the number of shares available for awards
under the Plan will be increased by the number of shares tendered.

Any awards that are payable in cash will not be counted against the reserve
unless the actual payment is made in shares of Common Stock instead of cash.

The closing price of the Common Stock on November 30, 1998 was $34.81.

MAXIMUM NUMBER OF SHARES. The maximum number of shares of the Company's Common
Stock that may be the subject of performance-based awards (including stock
options, but not restoration options) granted under the Plan to an employee or
director during any one fiscal year is 1,900,000. The maximum number of shares
that may be the subject of restoration options granted to an employee or
director in any one fiscal year is 950,000. Any stock-related deferred
compensation will not be applied against this limit.

TYPES OF AWARDS. The Plan permits the grant of a variety of different types of
awards:
- -- Stock options and restoration options;
- -- Stock appreciation rights ("SARs") (also called phantom stock options);

- -- Restricted stock awards;
- -- Stock equivalents; and
- -- Other awards valued by reference to the Company's Common Stock.

Awards may be granted for any amount of cash consideration or for no cash
consideration as long as legal requirements are met.

Stock Options: The Committee may grant stock options that qualify as
--------------
"Incentive Stock Options" under Section 422 of the Internal Revenue Code
("ISOs") or options that do not so qualify ("Non-Qualifieds"). The Committee or
Board may also grant restoration options which are designed to replace shares of
Common Stock used to exercise an option. The restoration options will be
granted at fair market value, will equal no more than the number of shares
tendered, and will be exercisable for the remaining period of the original
option grant. The Committee may grant restoration options upon the exercise of
options granted under the Plan as well as options granted under the Company's
1988 and 1996 Incentive Stock Plans.

<PAGE>

All options granted will be subject to the following:

- -- Options are not exercisable (unless accelerated) for at least one year
after they are granted, and they cannot be exercised more than ten years after
grant.
- -- The exercise price must be paid at the time the option is exercised in
either cash or in other shares of Common Stock.
- -- The exercise price cannot be less than the fair market value of the Common
Stock on the grant date.
- -- The Committee or Board will determine the vesting schedules of options
granted under the Plan and may also impose additional conditions on exercise,
including performance goals.

Stock Appreciation Rights: The holder of an SAR or phantom stock option is
- ---------------------------
entitled to receive the excess of the fair market value of a specific number of
shares on the date of exercise over the value of those shares on the date the
award was granted. Payment of the excess will be in cash unless the Committee
or Board elects to make payment in shares of Common Stock. The Committee or
Board will determine the vesting schedule of SARs granted under the Plan and may
also impose additional conditions on exercise.

Restricted Stock Awards: Shares of restricted stock may be awarded subject to
------------------------
such restrictions and other terms and conditions as the Committee or Board may
impose. Restricted stock may not be transferred by the holder until the
restrictions lapse.

Stock Related Deferred Compensation: The Committee may permit the deferral of
- -------------------------------------
payment of an employee's cash bonus or other cash compensation in the form of
Common Stock equivalents, subject to such terms and conditions as the Committee
may impose. Stock equivalents track the value of the Common Stock, and are
credited with dividend equivalents as dividends are paid on the Common Stock.
Distribution of deferred amounts is made at the employee's retirement or other
termination of employment, or at such other time elected by the employee, under
conditions established by the Committee. Payment is in the form of cash or
Common Stock at the employee's election.

FEDERAL INCOME TAX CONSEQUENCES. The following is a summary of the principal
U.S. federal income tax consequences generally applicable to awards under the
Plan:

Options and SARs.
- ------------------
- -- The grant of an option or SAR is not expected to result in any taxable
income for the recipient.
- -- The holder of an ISO generally will have no taxable income upon exercising
the ISO if certain requirements are met (except that a liability may arise for
alternative minimum tax), and the Company will not be entitled to a tax
deduction when an ISO is exercised.
- -- Upon exercise of a Non-Qualified Option, the holder will recognize
ordinary income equal to the difference between the fair market value of the
shares of Common Stock acquired and the exercise price. The Company will be
entitled to a tax deduction for the same amount.
- -- Upon exercising an SAR, the amount of any cash received and the fair
market value on the exercise date of any Common Stock received will be taxable
as ordinary income and will be deductible by the Company.
- -- The tax consequences upon a sale of shares acquired in an exercise of an
option or SAR will depend on how long the shares were held prior to sale, and
upon whether such shares were acquired in the exercise of an ISO or in the
exercise of a Non-Qualified Option or SAR.
- -- If shares acquired upon exercise of an ISO are held for at least one year
after exercise and two years from the date that the ISO was granted, the holder
will recognize long-term capital gain or loss in an amount equal to the
difference between the option exercise price and the sale price of the shares.
If the shares are not held for that period, gain on the sale of the shares may
be treated as ordinary income.
- -- Any gain realized upon the sale of shares acquired in the exercise of a
Non-Qualified Option or SAR for an amount greater than their fair market value
on the date of exercise, will be capital gain and any loss will be capital loss.
Generally there will be no tax consequences to the Company in connection with
the disposition of shares acquired in the exercise of an option or SAR, except
that the Company may be entitled to a tax deduction in the case of a sale of ISO
shares before the holding periods described above have been satisfied.

<PAGE>

Restricted Stock and Other Awards. Generally, restricted stock awards will not
- ----------------------------------
be taxed until restrictions lapse on all, or any portion, of the award.
- -- When any portion of an award is released from restrictions, the fair
market value of those shares on the date the restrictions lapse will be included
in the recipient's income for that year and will be taxed at ordinary income tax
rates. The recipient's basis in the stock received will be equal to the fair
market value at the time that restrictions lapse, and the holding period will
begin on that date.
- -- A recipient may elect to have the restricted stock award treated as
taxable income in the year granted. The recipient will be taxed at ordinary
income tax rates on the fair market value of the award on the date of grant.
Any future appreciation in value of those shares at the time they are sold will
be taxed as capital gain, and any decline will be treated as a capital loss.
- -- If a recipient elects to be taxed in the year the award is granted, and
the award is later forfeited before restrictions lapse, the income taxes paid
are not recoverable.
- - The Company will have deductible expense equal to the fair market value of
the restricted shares in whatever year the recipient recognizes ordinary income
as a result of the award.

Amounts deferred in the form of stock equivalents, as well as dividend
equivalents earned on such amounts, will be taxed as ordinary income for the
year in which the amounts are actually distributed to the employee. If the
distribution is made in shares of Common Stock, the taxable income will be equal
to the fair market value of the shares on the date distributed, which will also
be the recipient's basis in those shares. The Company will have deductible
expense for the year of distribution equal to the amount distributed.

ADJUSTMENTS. Certain corporate transactions or events such as stock splits,
recapitalizations, spin-offs, mergers, etc. may directly affect the number of
outstanding shares and/or the value of the outstanding Common Stock. If such
transactions occur, the Committee may adjust the number of shares which may be
granted under the Plan, as well as the limits on individual Awards. The
Committee or the Board may adjust the number of shares and the exercise price
under outstanding options, and the performance goals of any options or awards,
and may make other adjustments which are thought appropriate to protect the
value of the award to the recipient.

TRANSFERABILITY. Awards granted under the Plan may not be transferred except:
- -- by beneficiary designation;
- -- by will or the laws of descent and distribution; or
- -- if permitted by the Committee, to an immediate family member, family trust
or family partnership.

AMENDMENTS. The Company's Board of Directors may amend, suspend or terminate
the Plan at any time. Except for permitted adjustments, no amendment, however,
may
- -- increase the number of shares reserved for awards,
- -- withdraw the authority of the Committee to administer the Plan, or
- -- increase the limit on the number of shares which are the subject of
awards granted to any individual, or
- -- change the terms of any awards granted before the amendment in an adverse
manner without the consent of the recipient.

TERM. The Plan will continue until December 31, 2008, unless replaced or
terminated at an earlier time. If shareholders adopt the Plan, it will replace
the 1996 Incentive Stock Plan, which will be considered terminated (except as to
outstanding awards). No new awards will be granted under the 1996 Plan.

<PAGE>

NEW PLAN BENEFITS. Although benefits which may be granted under the Plan have
not been determined, the benefits granted or credited under the Company's 1996
Incentive Stock Plan during fiscal year 1998 are shown in the table below.
Awards to the most highly compensated executive officers are set forth in the
Summary Compensation Table on Page 14.

No. of Shares
Underlying Stock Equivalents Restricted Stock
Options Awards
---------- ----------------- ----------------

<S> <C> <C> <C>
All current Executive
Officers as a Group 803,200 38,295 3,000
- ------------------------------------------------------------------------------------

All current Non-Employee
Directors as a Group 0 0 0
- ------------------------------------------------------------------------------------

All Employees as a Group 3,111,075 169,440 64,000
- ------------------------------------------------------------------------------------
</TABLE>

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ADOPTION OF THE 1999 INCENTIVE
STOCK PLAN.

ITEM 4. AMENDMENT OF THE ARTICLES OF INCORPORATION

In connection with the final maturity on December 31, 1998 of the ESOP notes
issued by the trust for the Company's Savings Investment Plan, the Company has
given notice to the trustee that it intends to redeem the outstanding shares of
its Series A ESOP Convertible Preferred Stock. The shares of ESOP Preferred
Stock held by the trustee will either be redeemed by the Company, or, at the
election of the trustee, exchanged for shares of Common Stock, and will no
longer be outstanding. Under Missouri law, when shares of preferred stock are
retired in this manner, they once more become authorized and unissued shares of
preferred stock, and may be issued as another series of preferred stock under
terms approved by the Board.

The Company's Restated Articles of Incorporation currently provide that the
Company's authorized capital stock consists of 600,000,000 shares of Common
Stock and 10,600,000 shares of preferred stock, of which 4,600,000 shares are
designated as Series A ESOP Convertible Preferred Stock. Because the 4,600,000
shares of ESOP Preferred Stock which have been or will be redeemed or exchanged
may be issued as another series of preferred stock in the same manner as the
other authorized shares of preferred stock, the Board recommends that Article
Three, Section A of the Articles be amended to eliminate the reference to shares
of Series A ESOP Convertible Preferred Stock.

VOTE REQUIRED. The affirmative vote of a majority of the outstanding shares of
Common Stock and ESOP Preferred Stock entitled to vote and represented in
person or by proxy is required for approval of the amendment.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE AMENDMENT OF THE COMPANY'S
RESTATED ARTICLES OF INCORPORATION.

<PAGE>

OTHER BUSINESS

The Board knows of no business which will be presented at the 1999 annual
meeting other than that described above. The Company's Bylaws provide that
shareholders may bring matters before an annual meeting only if they give timely
written notice of the matter to be brought at least 45 days before the month and
day that the Company's proxy statement for the prior year's annual meeting was
mailed. No such notice with respect to the 1999 annual meeting was received by
October 26, 1998, the deadline for the meeting.

STOCK OWNERSHIP INFORMATION

FIVE PERCENT OWNERS OF COMMON STOCK. The table below lists the persons known
by the Company to beneficially own at least 5% of the Company's Common Stock as
of October 31, 1998.

Amount and % of
Nature of Shares
Name and Address Title of Beneficial Outstanding Explanatory
Of Beneficial Owner Class Ownership (A) Notes
- ------------------- -------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
BankAmerica Corporation Common Stock 17,113,662 5.48% (B)
Wealth Management Group
Dallas, TX 75201-02401

</TABLE>

(A) The number of shares outstanding used in this calculation was the number
actually outstanding on October 31, 1998.

(B) Based on a written statement from the shareholder, this amount includes
shares of Common Stock owned by subsidiaries of BankAmerica Corporation
("BankAmerica"). Of these shares, BankAmerica has voting and investment powers
as follows: sole voting - 3,241,663; shared voting - 13,365,687 shares; sole
investment - 2,197,796 shares; and shared investment - 14,576,108. Of such
shares, voting or investment power for 2,366,278 and 2,680,030 shares are shared
with Donald Danforth, Jr. and William H. Danforth, respectively, both of whom
are Directors of the Company (see Common Stock Ownership of Directors and
Executive Officers table).

<PAGE>

COMMON STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS

SHARES TO
BE
SHARES OPTIONS RECEIVED
DIRECTORS SHARES HELD IN EXERCIS- UPON % OF
AND BENEFICIALLY INVEST- ABLE CONVERSION TOTAL OUT-
EXECUTIVE OFFICERS OWNED MENT WITHIN OF ESOP STANDING
PLAN (A) 60 DAYS PREFERRED (B)
STOCK (K)
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
David R. Banks 306 - - - 306 *
- -------------------------- ------------------- ------ --------- ------ ---------- ----
John H. Biggs 6,105 (C) (D) - - - 6,105 *
- -------------------------- ------------------- ------ --------- ------ ---------- ----
Donald Danforth, Jr. 3,513,886 (C)(E) - - - 3,513,886 1.11
- -------------------------- ------------------- ------ --------- ------ ---------- ----
William H. Danforth 2,823,208 (C)(D)(F) - - - 2,823,208 *
- -------------------------- ------------------- ------ --------- ------ ---------- ----
David C. Farrell 76,329 - - - 76,329 *
- -------------------------- ------------------- ------ --------- ------ ---------- ----
M. Darrell Ingram 11,028 - - - 11,028 *
- -------------------------- ------------------- ------ --------- ------ ---------- ----
Richard A. Liddy 3,000 - - - 3,000 *
- -------------------------- ------------------- ------ --------- ------ ---------- ----
John F. McDonnell 15,387 (D) - - - 15,387 *
- -------------------------- ------------------- ------ --------- ------ ---------- ----
Katherine D. Ortega 5,094 - - - 5,094 *
- -------------------------- ------------------- ------ --------- ------ ---------- ----
William P. Stiritz 322,068(G) - 1,102,659 - 1,424,727 *
- -------------------------- ------------------- ------ --------- ------ ---------- ----
W. Patrick McGinnis 251,028(I) 2,175 458,618 14,162 725,983 *
- -------------------------- ------------------- ------ --------- ------ ---------- ----
J. Patrick Mulcahy 253,415(J) 4,670 458,618 8,544 725,247 *
- -------------------------- ------------------- ------ --------- ------ ---------- ----
James R. Elsesser 262,764 (H) 1,556 437,982 13,236 715,538 *
- -------------------------- ------------------- ------ --------- ------ ---------- ----
Patrick Mannix 32,358 0 271,524 10,025 313,907 *
- -------------------------- ------------------- ------ --------- ------ ---------- ----
James M. Neville 79,455 1,335 154,076 12,595 247,461 *
- -------------------------- ------------------- ------ --------- ------ ---------- ----
Anita M. Wray 10,866 (H) 0 50,873 10,025 71,764 *
========================== =================== ====== ========= ====== ========== ====

All Officers and Directors 7,709,368 11,533 2,996,364 92,390 10,809,655
========================== =================== ====== ========= ====== ==========
</TABLE>

In general, "beneficial ownership" includes those shares a director or
executive officer has the power to vote or transfer, as well as shares owned by
immediate family members that reside with the director or officer. The table
above also indicates shares that may be obtained within 60 days upon the
exercise of options or the conversion of each share of ESOP Preferred Stock for
7.12 shares of Common Stock, which is anticipated to occur on January 1, 1999.

[FN]
(A) Column indicates the most recent approximation of the number of shares
of Common Stock as to which participants in the Company's Savings Investment
Plan have voting and transfer rights. Shares of Common Stock which are held in
the 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
allocable to a participant will vary on a daily basis based upon the cash
position of the funds and the market price of the stock.
(B) The number of shares outstanding is the sum of (1) the number actually
outstanding on November 1, 1998, (2) the number of shares of Common Stock which
would be issued if all options listed in Column 4 were exercised, and (3)
16,092,539 shares of Common Stock which are expected to be issued upon the
conversion of the outstanding shares of ESOP Preferred Stock.
(C) Excludes 8,680,200 shares of Common Stock held by the Danforth
Foundation, St. Louis, Mo. Messrs. Biggs, Danforth and Danforth are three of
the ten trustees of the Foundation and disclaim beneficial ownership of its
shares.
(D) Excludes 5,673,762 shares of Common Stock held by Washington University,
St. Louis, Mo. William Danforth is the Chairman of the Board of Trustees of the

<PAGE>

University, and Messrs. Biggs and McDonnell are on the University's Board of
Trustees, which consists of 49 members. All of the directors disclaim
beneficial ownership of those shares.
(E) Mr. Danforth has sole voting and investment powers respecting 789,946
shares of Common Stock. He shares voting and investment powers with respect to
2,723,940 shares, and disclaims beneficial ownership of 46,011 of those shares.
Included are 314,787 shares of Common Stock owned by his wife.
(F) Dr. Danforth has sole voting and investment powers respecting 183,194
shares of Common Stock. He shares voting and investment powers with respect to
2,640,014 shares, and disclaims beneficial ownership of 143,178 of those shares.
(G) Mr. Stiritz disclaims beneficial ownership of 138,477 shares of Common
Stock owned by his wife.
(H) Excludes 5,193,015 shares of Common Stock held to fund retirement
benefits by the Ralston Purina Retirement Plan Trust of which Mr. Elsesser and
Ms. Wray are two of four trustees who collectively exercise voting and
investment power. Mr. Elsesser and Ms. Wray disclaim beneficial ownership of
those shares.
(I) Mr. McGinnis disclaims beneficial ownership of 5,607 shares of Common
Stock owned by his wife.
(J) Mr. Mulcahy disclaims beneficial ownership of 37,826 shares of Common
Stock owned by his wife.
(K) As of the record date, Mr. Mulcahy is the beneficial owner of 1,200
shares of ESOP Preferred Stock; Mr. McGinnis, 1,989 shares; Mr. Elsesser, 1,859
shares: Mr. Neville, 1,769 shares; Mr. Mannix, 1,408 shares; Ms. Wray, 1,408
shares; and all officers and directors of the Company as a group, 12,976 shares.
None of these totals exceeds one percent of the outstanding shares of ESOP
Preferred Stock.

<PAGE>

EXECUTIVE COMPENSATION

The following table shows compensation for each of the last three fiscal years
of the co-Chief Executive Officers and the other four most highly compensated
executive officers ("Named Executive Officers").

SUMMARY COMPENSATION TABLE

Long Term
Annual Compensation Compensation
(Awards)
--------
Other Securities Leveraged
Annual Underlying Incentive All Other
Compensa- Options Plan Compensation
Name and Principal Position Year Salary($) Bonus($) tion($) (#)(1) (%) ($)(2)
- --------------------------- ---- --------- -------- --- ----- ------ -----------

<S> <C> <C> <C> <C> <C> <C> <C>
W. P. McGinnis 1998 $600,000 $638,400 $60,909 402,170 0 $ 240,357
Co- Chief 1997 $407,625 $360,000 $11,156 0 $1,062,625 $ 218,636
Executive Officer & co- 1996 $345,000 $273,000 $ 8,807 309,558 0 $ 129,074
President; and President and
Chief Executive Officer, Pet
Products Group

J. P. Mulcahy 1998 $600,000 $638,400 $50,567 402,170 0 $ 220,907
Co-Chief Executive Officer & 1997 $407,625 $360,000 $ 9,036 0 $1,062,625 $ 189,202
co-President; and Chairman 1996 $345,000 $273,000 $ 6,821 309,558 0 $ 126,972
of the Board and Chief
Executive Officer, Eveready
Battery Company, Inc.

J. R. Elsesser 1998 $350,000 $279,125 $ 6,992 203,825 0 $170,879 (3)
Vice President and Chief 1997 $331,700 $262,706 $ 7,468 0 $ 919,200 $ 212,182
Financial Officer 1996 $310,000 $224,750 $ 6,498 247,650 0 $ 145,246

P.C. Mannix 1998 $310,000 $164,300 $12,743 91,434 0 $ 63,235(4)
President 1997 $290,000 $145,725 $10,944 0 $ 810,500 $ 53,425
Eveready Battery Company, Inc. 1996 $268,000 $135,000 $ 8,634 92,868 0 $ 50,150

J. M. Neville 1998 $275,700 $188,000 $ 6,462 76,434 0 $ 94,369
Vice President and General 1997 $262,500 $168,000 $ 6,643 0 $ 751,400 $ 88,163
Counsel 1996 $250,000 $156,000 $ 6,538 92,868 0 $ 59,188

A. M. Wray 1998 $195,000 $132,893 $ 7,047 97,111 0 $ 36,807
Vice President and Controller 1997 $184,000 $117,613 $ 6,877 0 $ 516,042 $ 49,813
1996 $175,000 $115,150 $ 6,702 61,914 0 $ 41,111

</TABLE>

<PAGE>

[FN]
(1) The number of securities underlying options reflect adjustments to
awards following the spin-off of Agribrands International, Inc. and the
three-for-one stock split during the past fiscal year.

(2) 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 Deferred Compensation Plan for Key Employees:
- -- Mr. McGinnis, $3,943
- -- Mr. Mulcahy, $3,460
- -- Mr. Elsesser, $4,244
- -- Mr. Mannix, $3,227
- -- Mr. Neville, $3,169
- -- Ms. Wray, $1,240
(ii) the Savings Investment Plan and Executive Savings Investment Plan Company
------------------------------------------------------------------
matching contributions or accruals:
- -- Mr. McGinnis, $36,000
- -- Mr. Mulcahy, $48,000
- -- Mr. Elsesser, $22,167
- -- Mr. Mannix, $18,933
- -- Mr. Neville, $17,461
- -- Ms. Wray, $20,324
(iii) the Deferred Compensation Plan for Key Employees a Company match of 25% of
------------------------------------------------
amounts deferred under the Equity Option:
- -- Mr. McGinnis, $159,600
- -- Mr. Mulcahy, $109,600
- -- Mr. Elsesser, $69,781
- -- Mr. Mannix, $41,075
- -- Mr. Neville, $47,000
- -- Ms. Wray, $0
(iv) 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:
- -- Mr. McGinnis, $40,814
- -- Mr. Mulcahy, $59,847
- -- Mr. Elsesser, $74,687
- -- Mr. Mannix, $0
- -- Mr. Neville, $26,739
- -- Ms. Wray, $15,243

(3) The amount shown in this item does not include compensation paid or
payable by Interstate Bakeries Corporation ("IBC") to Mr. Elsesser, who served
as a director 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.

(4) Mr. Mannix holds 15,000 shares of restricted stock, valued at $438,750
as of September 30, 1998, plus restricted cash dividends and accumulated
interest in the amount of $30,284.

<PAGE>

OPTION GRANTS IN LAST FISCAL YEAR

(A) (B) (1) (C) (6) (D) (E) (F)
NUMBER OF % OF TOTAL EXERCISE OR EXPIRATION GRANT DATE
SECURITIES OPTIONS BASE PRICE DATE VALUE ($)
UNDERLYING GRANTED TO ($/SH)
NAME OPTIONS GRANTED EMPLOYEES IN
(#) FISCAL YEAR

<S> <C> <C> <C> <C> <C>
W. Patrick McGinnis 232,170 (4) (6) 4.67% $29.8004 (2) 11-19-07 $2,535,296 (7)
- ------------------- --------------- ----------- ------------ ----------- --------------
170,000 (5) 3.42% $30.875 (3) 9-23-08 $1,883,600 (8)
-------------- ------------ ----------- -------------- --------------

J. Patrick Mulcahy 232,170 (4) (6) 4.67% $29.8004 (2) 11-19-07 $2,535,296 (7)
- ------------------- --------------- ----------- ------------ ----------- --------------
170,000 (5) 3.42% $30.875 (3) 9-23-08 $1,883,600 (8)
-------------- ------------ ----------- -------------- --------------

James R. Elsesser 123,825 (4) (6) 2.49% $29.8004 (2) 11-19-07 $1,352,169 (7)
- ------------------- --------------- ----------- ------------ ----------- --------------
80,000 (5) 1.61% $30.875 (3) 9-23-08 $ 886,400 (8)
-------------- ------------ ----------- -------------- --------------

Patrick C. Mannix 46,434 (4) (6) .93% $29.8004 (2) 11-19-07 $ 507,059 (7)
- ------------------- --------------- ----------- ------------ ----------- --------------
45,000 (5) .91% $30.875 (3) 9-23-08 $ 498,600 (8)
-------------- ------------ ----------- -------------- --------------

James M. Neville 46,434 (4) (6) .93% $29.8004 (2) 11-19-07 $ 507,059 (7)
- ------------------- --------------- ----------- ------------ ----------- --------------
30,000 (5) . 60% $30.875 (3) 9-23-08 $ 332,400 (8)
-------------- ------------ ----------- -------------- --------------

Anita M. Wray 61,911 (4) (6) 1.25% $29.8004 (2) 11-19-07 $ 676,068 (7)
- ------------------- --------------- ----------- ------------ ----------- --------------
35,200 (5) .71% $30.875 (3) 9-23-08 $ 390,016 (8)
-------------- ------------ ----------- -------------- --------------
</TABLE>

[FN]
1) 1) Options granted were options to acquire shares of Common Stock.

2) Market price on date of grant, as adjusted to reflect the effect of the
spin-off of Agribrands International, Inc. on April 1, 1998, and three-for-one
stock split of the Company's Common Stock on July 15, 1998.

3) Market price on date of grant.

4) Options become exercisable at the rate of 25% of total shares on November
20, 1998, in each of the years 1999, 2000, 2001 and 2002, and upon death,
declaration of permanent and total disability, voluntary termination of
employment at or after age 55 with 15 years of service, or at or after age 62,
involuntary termination other than for cause, or upon a change in control of the
Company.

5) Options become exercisable at the rate of 25% of total shares on
September 24, 1998, in each of the years 2000, 2001, 2002 and 2003, and upon
death, declaration of permanent and total disability, voluntary termination of
employment at or after age 55 with 15 years of service, or at or after age 62,
involuntary termination other than for cause, or upon a change of control of the
Company.

6) The number of outstanding options, as well as the exercise price, were
adjusted to reflect the effect of the spin-off of Agribrands International, Inc.
and the three-for-one stock split.

7) Calculated using the binomial option pricing model. Underlying
assumptions used in the calculation include a ten-year expiration, a current
market price and strike price of $29.8004 per share, a ten year volatility
assumption of 19.6 %, a current dividend yield of 0.0% and a risk-free rate of
return of 5.82%, which was derived from the treasury zero-coupon yield curve.
The Company has elected to illustrate the potential realizable value using the
binomial option pricing model as permitted by the rules of the Securities and
Exchange Commission. This does not represent the Company's estimate or
projection of future stock price or of the assumptions utilized; actual gains,
if any, upon future exercise of any of these options will depend on the actual
performance of the Common Stock.

8) Calculated using the binomial option pricing model. Underlying
assumptions used in the calculation include a ten-year expiration, a current
market price and strike price of $30.875 per share, a ten year volatility
assumption of 21.6 %, a current dividend yield of 0.0% and a risk-free rate of

<PAGE>

return of 4.67%, which was derived from the treasury zero-coupon yield curve.
The Company has elected to illustrate the potential realizable value using the
binomial option pricing model as permitted by the rules of the Securities and
Exchange Commission. This does not represent the Company's estimate or
projection of future stock price or of the assumptions utilized; actual gains,
if any, upon future exercise of any of these options will depend on the actual
performance of the Common Stock.

FISCAL YEAR END OPTION VALUES (1)(2)

NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FY-END (#) OPTIONS AT FY-END ($)
--------------------- ---------------------

<S> <C> <C> <C> <C>
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------- ----------- ------------- ----------- -------------

W. P. McGinnis 421,705 1,044,928 6,127,085 7,659,187

J. P. Mulcahy 421,705 1,044,928 6,127,085 7,659,187

J. R. Elsesser 401,069 774,357 5,940,956 7,053,983

P. C. Mannix 234,611 374,779 3,479,967 3,632,026

J. M. Neville 135,620 270,991 1,931,912 2,278,899

A. M. Wray 49,028 359,699 575,836 2,682,585
- -------------- ----------- ------------- ----------- -------------
</TABLE>

[FN]
(1) None of the named officers exercised options during FY98.
(2) The number and exercise price of certain outstanding options were
adjusted to reflect the effect of the spin-off of Agribrands International, Inc.
and the three-for-one stock split of the Company's Common Stock.

RETIREMENT PLAN

The Ralston Purina Retirement Plan may provide pension benefits in the future to
the Named Executive Officers. Most regular U.S. employees that have completed
one year of employment with the Company or certain of its subsidiaries are
eligible to participate in the Retirement Plan. They 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 their Final Average Earnings (the average
of their five highest consecutive annual earnings during the ten years prior to
their termination of employment) by a number which is 1.5% of their actual years
of service (to a maximum of 40 years). That amount is then reduced by up to
one-half of their primary social security benefit at retirement (with the actual
amount of offset determined by their age and years of service at retirement).
In the case of Mr. Mannix, that amount is further reduced to reflect an offset
for benefits he has accrued in the Company's Australian Superannuation Plan,
a funded plan sponsored by one of the Company's foreign affiliates.

With the exception of Mr. Mannix, 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 reduction for social security benefits described above.

<PAGE>

RETIREMENT PLAN TABLE

Final Average Years of Service
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
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
1,500,000 $225,000 $337,500 $450,000 $562,500 $675,000 $787,500 $900,000

</TABLE>

<PAGE>

In addition to the retirement plans described above, Mr. Mannix participates in
the Company's Internationalist Plan, which is unfunded. Internationalist Plan
benefits for Mr. Mannix are computed by multiplying his Final Average Earnings
(the average of his five highest consecutive annual earnings during the ten
years prior to his termination of employment) by a number which is 1.7% of his
actual years of service (to a maximum of 40 years).

Mr. Mannix's benefits under the Internationalist Plan are offset by benefits
payable to him under the Ralston Purina Retirement Plan, the supplemental
retirement plan, and the Superannuation Plan. Mr. Mannix's benefit, payable
under the Superannuation Plan as a single sum payment, is computed by
multiplying his Final Average Base Earnings (the average of his five highest
consecutive base annual earnings during the ten years prior to his termination
of employment) by a number which is 15% of his actual years of service (to a
maximum of 40 years). Based upon prevailing long term bond rates, this single
sum amount would then be converted to an equivalent annuity payable to Mr.
Mannix, with that annuity being used to offset the benefits payable under the
Ralston Purina retirement plans. The actual amount of each pension plan's
offset will be determined by Mr. Mannix's age and years of service at his
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 to Mr. Mannix
from the Internationalist Plan*, assuming age 62 retirement and including the
equivalent value of amounts payable to him from the other offsetting Company
retirement plans.

INTERNATIONALIST PLAN TABLE*

Final Average
Earnings Years of Service
- ------------- ----------------
30 35 40
<S> <C> <C> <C>
$475,000 $242,250 $282,625 $323,000
$525,000 $267,750 $312,375 $357,000
$575,000 $293,250 $342,125 $391,000
$625,000 $318,750 $371,875 $425,000
</TABLE>

*1.7% accrual rate

For the purpose of calculating retirement benefits, the Named Executive
Officers had, as of September 30, 1998, the following whole years of credited
service: Messrs. McGinnis-26 years; Mulcahy-30 years; Elsesser-13 years;
Neville-14 years; Mannix-35 years; and Ms. Wray-19 years. Earnings used in
calculating benefits under the retirement plans are approximately equal to
amounts included in the Salary, Bonus and Leveraged Incentive Plan columns in
the Summary Compensation Table on page 14.

<PAGE>

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 the 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 (1) being enrolled in the Company's Partnership
Life Plan, which is available to almost all non-union administrative and
production employees in the United States, with coverage of at least one times
earnings; and (2) 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. Ms. Wray and
Messrs. Mannix and Neville participated in the Executive Life Plan during fiscal
year 1998.

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 of the Company's 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 those 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. The agreements provide that the Officers will receive
severance compensation in the event of their voluntary or involuntary
termination after a change in control of the Company. The compensation would be
equal to the present value of continuing the Officers' salary and bonus for a
three year period following their termination of employment, the continuation of
other executive benefits for the same period and certain pension bridging
payments. The three year period would be reduced for each complete year the
Officer remains employed following the change in control. No payments would be
made if the Officer terminates employment because of death, disability or normal
retirement, or for cause. Payments would not continue beyond the Officer's
normal retirement date.

<PAGE>

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 bonus
awards payable in cash and/or mandatorily-deferred equity equivalents and
long-term stock-based incentive awards to compensate its key executives. The
cash awards are tied to the performance of the Company and of the executive.
The stock-based awards are designed to encourage Company stock linkage and
ownership by executives and to foster a management perspective that is in
alignment with shareholders' interests.

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 the co-Chief Executive Officers, the
recommendation of Messrs. McGinnis and Mulcahy. 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 14.

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 1998, the following bonus programs applied with respect to the Executive
Officers:

CHIEF EXECUTIVE OFFICERS - Messrs. McGinnis and Mulcahy's bonuses were awarded
- --------------------------
under a bonus plan for the Office of the Chief Executive Officer. Under this
plan, the co-Chief Executive Officers were each awarded a bonus which was
measured on Company performance (80%) and a subjective assessment by the
Committee of their joint performance as co-Chief Executive Officers (20%).
Company performance was evaluated based on fully-diluted earnings per share
("EPS") growth, adjusted for unusual items, for fiscal year 1998 compared to the
prior year EPS.

CORPORATE STAFF OFFICERS - Bonuses for Mr. Elsesser and certain other corporate
------------------------
staff officers were measured on Company performance (50%) and a subjective
assessment of individual performance (50%). As with Messrs. McGinnis and
Mulcahy, Company performance was determined by measuring fully-diluted EPS
growth, adjusted for unusual items, for fiscal year 1998 compared to the prior
year EPS.

<PAGE>

EVEREADY BATTERY COMPANY - Eveready's bonus plan, in which one Executive Officer
- ------------------------
participated, measured bonuses based on Eveready's performance and a subjective
assessment of individual performance. Eveready'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. Performance was ranked
subjectively in one of five brackets. Eveready performance accounted for 70% of
the bonus and individual performance for 30%.

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.

INTERMEDIATE TERM BONUS PLANS

A 1996 Leveraged Incentive Plan was implemented effective October 1, 1996, for a
select group of key executives, including the co-Chief Executive Officers.
Executives were included based on an assessment that the group would be able to
significantly and positively enhance shareholder value. At the end of three
years, if certain Common Stock performance benchmarks are reached, a cash award
equal to a percentage of three years' aggregate base salary will be payable to
the participants. The benchmarks are based on total shareholder return, or
"TSR". This measures Common Stock price appreciation plus reinvested dividends
or, for executives of operating units, certain business unit earnings
benchmarks. 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 may be
earned. The peer group evaluated for this purpose is not identical to the peer
group reflected in the Performance Graph on page 23. 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.

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 1998 will be credited with a 25% Company match which is
subject to certain vesting requirements. The Committee believes that this
provision of the Plan further aligns 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.

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 granted by the Committee entitle the recipient to purchase a
specified number of shares of the Company's Common Stock, after certain vesting
provisions have 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.

<PAGE>

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. Dividends, and interest on
the dividends, accumulate until distributed when 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.

Details of stock options awarded to Executive Officers of the Company in fiscal
year 1998 are set forth on page 16 of this Proxy Statement.

COMPENSATION FOR THE CO-CHIEF EXECUTIVE OFFICERS

Messrs. McGinnis and Mulcahy were elected co-Chief Executive Officers effective
October 1, 1997. On August 1, 1997, their base pay was increased to reflect
their additional responsibilities in the transition period prior to their
election. Their base pay during fiscal year 1998 remained at the same level at
which it had been set August 1, 1997. The Committee has determined that their
base salaries and bonuses will be based on an assessment of their joint
performance as co-Chief Executive Officers.

The Committee awarded an annual bonus to Messrs. McGinnis and Mulcahy based on
qualitative and quantitative factors described under "Annual Cash Bonus Award
Programs" above. This included a subjective assessment of their performance in
their first year as co-Chief Executive Officers. This assessment focused on
several key elements. The Committee rated very highly their ability to work in
tandem to manage the Company's two global businesses. The Committee also took
into account their efforts in connection with the sale of Protein Technologies
International, Inc. and the purchase of Edward Baker Petfoods in December, 1997,
as well as the spin-off of Agribrands International, Inc. in March, 1998.
Messrs. McGinnis and Mulcahy participate in the 1996 Leveraged Incentive Plan.
Each has a base award target of 100% of aggregate earnings over the term of the
Plan, and a peer group target of 50% of such aggregate salary.

In November 1997 and September, 1998, the Committee awarded the co-Chief
Executive Officers options to purchase Company stock. Details of those awards
are found on page 16. In determining the size of the awards, the Committee
reviewed current data derived from a survey of peer companies and reviewed the
economic value of the median award most recently granted to the incumbent chief
executive officers. With the advice of outside consultants, this economic value
was translated into equivalent value in options to purchase Company stock. The
results were then evaluated in the context of competitive market pay and
historical option grants made to Messrs. McGinnis and Mulcahy and to the former
chief executive officer of the Company.

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 those executives
designated as named executive officers in the Proxy Statement. The Committee
has mandated or reserved the right to mandate the deferral of certain bonus and
salary payments to such officers, including payments under the 1996 Leveraged
Incentive Plan and a portion of the fiscal year 1998 salary of the co-Chief
Executive Officers. While it is the general intention of the Committee to meet
the requirements for deductibility, the Committee may approve payment of
non-deductible compensation from time to time if unusual circumstances warrant
it. 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

<PAGE>

PERFORMANCE GRAPH

The graph below is presented in accordance with SEC requirements. You are
cautioned against drawing any conclusions from the data in the graph, as past
results do not necessarily indicate future performance. The graph does not
reflect the Company's forecast of future financial performance.

Despite anything to the contrary 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 Proxy
Statement, in whole or in part, the following graph and the Human Resources
Committee Report on Executive Compensation set forth above will not be
incorporated by reference into any such filings.

The line graph below compares the annual percentage change in cumulative total
shareholder return for Ralston Purina Company's Common Stock with the cumulative
total return of the Standard & Poor's 500 Stock Index and the Standard & Poor's
Food Index.

COMPARISON OF CUMULATIVE TOTAL RETURN ON $100 INVESTED IN RALSTON PURINA
PURINA COMPANY COMMON STOCK ON SEPTEMBER 30, 1993 VS. S&P 500
AND S&P FOOD INDICES

[Insert graph]

[FN]

On March 31, 1994 (as depicted by the first solid vertical line) the Company
issued a dividend of one share of Common Stock of Ralcorp Holdings, Inc. for
every three shares of Ralston-RPG Stock then held, which for performance
purposes for the Company's Common Stock 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 Ralston-RPG Stock. The Ralston-RPG
Stock was subsequently redesignated as Ralston Purina Company Common Stock. On
April 1, 1998 (as depicted by the second solid vertical line), the Company
issued a dividend of one share of Common Stock of Agribrands International, Inc.
for every ten shares of Company Common Stock then held. The Agribrands shares
received are assumed to be liquidated with the proceeds from the sale being
reinvested in Company Common Stock. For the S&P 500 and the S&P Food Indices,
cumulative returns are measured for the period September 30, 1993 through
September 30, 1998, with the value of each index set to $100 on September 30,
1993. Total return assumes reinvestment of dividends.

<PAGE>

SHAREHOLDER PROPOSALS FOR 2000 ANNUAL MEETING

Any proposals to be presented at the 2000 Annual Meeting of Shareholders must
be received by the Company, directed to the attention of the Secretary, no later
than August 12, 1999 in order to be included in the Company's proxy statement
and form of proxy for that meeting. The proposal must comply in all respects
with the rules and regulations of the Securities and Exchange Commission and the
Bylaws of the Company. Under the Company's Bylaws, other proposals which are
not included in the proxy statement will be considered untimely and will not be
presented at that meeting unless they are received by the Company, directed to
the attention of the Secretary, no later than October 27, 1999.

By order of the Board of Directors,

Nancy E. Hamilton
Secretary
December 11, 1998

<PAGE>

EXHIBIT A

RALSTON PURINA COMPANY 1999 INCENTIVE STOCK PLAN

SECTION I. GENERAL PROVISIONS

A. PURPOSE OF PLAN

The purpose of the Ralston Purina Company 1999 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, and to provide equity-linked
compensation for directors.

B. DEFINITIONS OF TERMS AS USED IN THE PLAN

"AFFILIATE" shall mean any entity fifty percent or more of whose outstanding
voting securities, or beneficial ownership for entities other than corporations,
is owned, directly or indirectly, by the Company, or which otherwise controls,
is controlled by, or is under common control with, the Company.

"AWARD" shall mean an Option, including a Restoration Option, or any Other Stock
Award, granted under the terms of the Plan.

"AWARD AGREEMENT" shall mean the document or documents evidencing an Award
granted under the Plan.

"BOARD" shall mean the Board of Directors of the Company.

"CODE" shall mean the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.

"COMMITTEE" shall mean the Human Resources Committee of the Board, or any
successor committee the Board may designate to administer 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 "Non-Employee Director" within the
meaning of Rule 16b-3 under the Exchange Act, or otherwise qualified to
administer the Plan as contemplated by that Rule or any successor Rule under the
Exchange Act.

"COMMON STOCK" shall mean Ralston Purina Company $.10 par value Common Stock,
and, at the discretion of the Board, may also mean any other authorized class or
series of common stock of an Affiliate or common stock of the Company
outstanding upon the reclassification of the Common Stock or any other class or
series of common stock, including, without limitation, by means of any stock
split, stock dividend, creation of targeted stock, or other distributions of
stock in respect of stock, or any reverse stock split, or by reason of any
recapitalization, merger or consolidation of the Company.

"COMPANY" shall mean Ralston Purina Company.

"CORPORATE OFFICER" shall mean any President, Chief Executive Officer, Chief
Financial Officer, Corporate Vice President, Secretary or Treasurer of the
Company, and any other officers designated as corporate officers by the Board.

"DIRECTOR" shall mean any member of the Board.

"EMPLOYEE" shall mean any person who is employed by the Company or an Affiliate,
including Corporate Officers.

"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.

"FAIR MARKET VALUE" of the Common Stock shall mean the closing price as reported
on the Composite Tape of the New York Stock Exchange, Inc. on the date that such
Fair Market Value is to be determined, or if no shares were traded on the
determination date, the immediately preceding day on which the Common Stock was
traded, or the fair market value as determined by any other method adopted by
the Committee (or with respect to Awards granted to Directors, by the Board)
which the Committee or the Board, as the case may be, may deem appropriate under
the circumstances, or as may be required in order to comply with or to conform
to the requirements of applicable laws or regulations.

"INCENTIVE STOCK OPTIONS" shall mean Options that qualify as such under Section
422 of the Code.

"NON-QUALIFIED STOCK OPTIONS" shall mean Options that do not qualify as
Incentive Stock Options.

<PAGE>

"OPTION" shall mean the right, granted under the Plan, to purchase a specified
number of shares of Common Stock, at a fixed price for a specified period of
time.

"OTHER STOCK AWARD" shall mean any Award granted under Section III of the Plan.

"PHANTOM STOCK OPTION" shall mean an Option, granted under the Plan, which
provides that in lieu of receiving shares of Common Stock upon exercise, the
recipient will receive an amount equal to the excess of the Fair Market Value of
the Common Stock at exercise over the exercise price set forth in the Award
Agreement for the Phantom Stock Option.

"RESTORATION OPTION" shall mean an Option granted upon exercise of an
outstanding Option, provided that the exercise price is paid by tendering
previously owned shares of Common Stock by the Employee or Director.

"RESTRICTED STOCK AWARD" shall mean an Award of shares of Common Stock on which
are imposed restrictions on transferability or other shareholder rights,
including, but not limited to, restrictions which subject such Award to a
"substantial risk of forfeiture" as defined in Section 83 of the Code.

"STOCK APPRECIATION RIGHT" shall mean a right granted under the terms of the
Plan to receive an amount equal to the excess of the Fair Market Value of one
share of Common Stock as of the date of exercise of the Stock Appreciation Right
over the price per share of Common Stock specified in the Award Agreement of
which it is a part.

"TERMINATION FOR CAUSE" shall mean an 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 the Employee, (ii) an act or omission believed by the
Employee in good faith to have been in or not opposed to the best interests of
the Company and reasonably believed by the Employee to be lawful, or (iii) the
good faith conduct of the Employee in connection with a change of control
of the Company (including opposition to or support of such change of control).

C. SCOPE OF PLAN AND ELIGIBILITY

Any Employee selected by the Committee, and any member of the Board, shall be
eligible for any Award contemplated under the Plan.

D. AUTHORIZATION AND RESERVATION

The Company shall establish a reserve of authorized shares of Common Stock in
the amount of 19,000,000 shares. This reserve shall represent the total number
of shares of Common Stock that may be presently issued pursuant to Awards,
including Restoration Options, subject to increase as described below. The
reserves may consist of authorized but unissued shares of Common Stock or of
reacquired shares, or both. Upon the forfeiture or expiration of an Award, all
shares of Common Stock not issued thereunder shall become available for the
granting of additional Awards. In addition, when a Restoration Option is
granted upon the tendering of shares of Common Stock in payment of the exercise
price of any Options, the reserve shall be increased in an amount equal to the
number of shares so tendered, and such additional reserved shares shall become
available for the granting of additional Awards. Awards under the Plan which
are payable in cash will not be counted against the reserve unless actual
payment is made in shares of Common Stock instead of cash.

E. GRANT OF AWARDS AND ADMINISTRATION OF THE PLAN

1. The Committee shall determine those Employees eligible to receive Awards and
the amount, type and terms of each Award, subject to the provisions of the Plan,
and it shall have the power to delegate responsibility to others to select
Employees other than Corporate Officers eligible to receive Awards and the
amount of each such Award, on terms determined by the Committee. The Board
shall determine the amount, type and terms of each Award to a Director, subject
to the provisions of the Plan. In making any determinations under the Plan, the
Committee or the Board, as the case may be, 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 or the Board, as the case may
be, shall be final, conclusive and binding upon all parties, including without
limitation, the Company, any Employee or Director, and any other person with

<PAGE>

rights to any Award under the Plan, and no member of the Board or 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. To the extent, however, that such construction and
interpretation or establishment of rules and regulations relates to or affects
any Awards granted to Directors, the Board must ratify such construction,
interpretation or establishment.

3. During the term of the Plan, the aggregate number of shares of Common Stock
that may be the subject of performance-based Awards (as defined in Section
162(m) of the Code), excluding Restoration Options, that may be granted to an
Employee or Director during any one fiscal year may not exceed 1,900,000. The
aggregate number of shares of Common Stock that may be the subject of
Restoration Options that may be granted to an Employee or Director during any
one fiscal year may not exceed 950,000. These amounts are subject to adjustment
as provided in Section VI. F. below. Any stock-related deferred compensation
will not be applied against this limit. Awards granted in a fiscal year but
cancelled during that same year will continue to be applied against the annual
limit for that year, despite cancellation.

4. Awards granted under the Plan shall be evidenced in the manner prescribed by
the Committee from time to time in accordance with the terms of the Plan. The
terms of each Award shall be set forth in an Award Agreement, and the Committee
may require that a recipient execute and deliver the Award Agreement to the
Company in order to evidence his or her acceptance of the Award.

SECTION II. STOCK OPTIONS

A. DESCRIPTION

The Committee or, in the case of Awards granted to Directors, the Board, may
grant Incentive Stock Options and it may grant Non-Qualified Stock Options. At
the discretion of the Committee or the Board, in the case of Options granted to
Directors, an Employee or Director may also be eligible to receive a Restoration
Option in connection with an Option exercise, as more particularly set forth
below.

B. TERMS AND CONDITIONS

1. Each Option shall be set forth in a written Award Agreement containing such
terms and conditions as the Committee, or in the case of Awards granted to
Directors, the Board, may determine, subject to the provisions of the Plan.

2. The option price of shares of Common Stock subject to any Option shall not
be less than the Fair Market Value of the Common Stock at the time that the
Option is granted.

3. The Committee, or in the case of Awards granted to Directors, the Board,
shall determine the vesting schedules and the terms, conditions and limitations
governing exercisability of Options granted under the Plan. Unless accelerated
in accordance with its terms, an Option may not be exercised until a period of
at least one year has elapsed from the date of grant, and the term of any Option
granted hereunder shall not exceed ten years.

4. The purchase price of any shares of Common Stock pursuant to exercise of
any Option must be paid in full upon such exercise. The payment shall be made
in cash, in United States dollars, or by tendering shares of Common Stock owned
by the Employee or Director (or the person exercising the Option). If shares of
Common Stock are tendered, they must have been owned at least six months prior
to the date of tender (or such other time period as may be determined by the
Committee).

5. The terms and conditions of any Incentive Stock Options granted hereunder
shall be subject to and shall be designed to comply with, the provisions of
Section 422 of the Code, and any other administrative procedures adopted by the
Committee from time to time. Incentive Stock Options may not be granted to any
person who is not an Employee at the time of grant.

C. RESTORATION OPTIONS

The Committee, or, in the case of Awards granted to Directors, the Board, may
provide either at the time of grant or subsequently that an option include the
right to acquire a Restoration Option. An option which provides for the grant

<PAGE>

of a Restoration Option shall entitle the Employee or Director, upon exercise of
the option (in whole or in part) prior to termination of employment or
retirement or resignation as a Director, and payment of the exercise price in
shares of Common Stock, to receive a Restoration Option. In addition to any
other terms and conditions set forth in the Award Agreement, the Restoration
Option shall be subject to the following terms: (i) the number of shares of
Common Stock which are the subject of the Restoration Option shall not exceed
the number of shares used to satisfy the option price of the original option
(which shares must have been owned for the time period described in B.4. above),
(ii) the grant date of the Restoration Option will be the date of exercise of
the original option, (iii) the exercise price per share shall be the Fair Market
Value on the Restoration Option grant date, (iv) the Restoration Option, unless
accelerated, in accordance with its terms, shall be exercisable no earlier than
one year after its grant date, (v) the term of the Restoration Option shall not
extend beyond the term of the original option, and (vi) the Restoration Option
will comply with all other provisions of the Plan. The Committee, or in the
case of Awards granted to Directors, the Board, shall, in addition to all other
powers granted to it under the Plan, have the power to designate any limitations
on the frequency of the grants of Restoration Options to any Employee or
Director, and may require, as a condition to the grant of Restoration Options,
that the recipient agree not to resell shares received upon exercise of the
original option (which original option may be a Restoration Option) for a
specific period. The Committee may also grant Restoration Options with respect
to any option granted under the Company's 1988 and 1996 Incentive Stock Plans.

SECTION III. OTHER STOCK AWARDS

In addition to Options, the Committee or, in the case of Awards granted to
Directors, the Board may grant Other Stock Awards payable in Common Stock or
cash, upon such terms and conditions as the Committee or Board may determine,
subject to the provisions of the Plan. Other Stock Awards may include, but are
not limited to, the following types of Awards:

A. RESTRICTED STOCK AWARDS

The Committee or, in the case of Awards granted to Directors, the Board may
grant Restricted Stock Awards, each of which consists of a grant of shares of
Common Stock, subject to terms and conditions determined by the Committee or
Board in its sole discretion as well as to the provisions of the Plan. Such
terms and conditions shall be set forth in a written Award Agreement. The
shares of Common 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 Award Agreement and the Plan. Prior to the
lapse or release of restrictions, all shares of Common Stock which are the
subject of a Restricted Stock Award are subject to forfeiture in accordance with
Section IV of the Plan. Shares of Common Stock issued pursuant to a Restricted
Stock Award will be issued for no monetary consideration.

B. 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 Common Stock or Common Stock equivalents
(with each such equivalent corresponding to a share of Common Stock), under such
terms and conditions as the Committee may prescribe in the Award Agreement
relating thereto, including the terms of any deferred compensation plan under
which such Common Stock equivalents may be granted. In addition, the Committee
may, in any fiscal year, provide for an additional matching deferral to be
credited to an Employee's account under such deferred compensation plans. The
Committee may also permit account balances of other cash or mutual fund accounts
maintained pursuant to such deferred compensation plans to be converted, at the
discretion of the participant, into the form of Common Stock equivalents, or to
permit Common Stock equivalents to be converted into account balances of such
other cash or mutual fund accounts, upon the terms set forth in such plans as
well as such other terms and conditions as the Committee may, in its discretion,
determine. The Committee may, in its discretion, determine whether any deferral
in the form of Common Stock equivalents, including deferrals under the terms of
any deferred compensation plans of the Company, shall be paid on distribution in
the form of cash or in shares of Common Stock.

C. STOCK APPRECIATION RIGHTS AND PHANTOM STOCK OPTIONS

The Committee or in the case of Awards granted to Directors, the Board, may, in
its discretion, grant Stock Appreciation Rights or Phantom Stock Options to

<PAGE>

Employees or Directors, subject to terms and conditions determined by the
Committee or Board in its sole discretion. Such terms and conditions shall be
set forth in a written Award Agreement. Each Stock Appreciation Right or
Phantom Stock Option shall entitle the holder thereof to elect, prior to its
cancellation or termination, to exercise such unit or option and receive either
cash or shares of Common Stock, or both, as the Committee or Board may
determine, in an aggregate amount equal in value to the excess of the Fair
Market Value of the Common Stock on the date of such election over the Fair
Market Value on the date of grant of the Stock Appreciation Right or Phantom
Stock Option; except that if an option is amended to include Stock Appreciation
Right, the designated Fair Market Value in the applicable Award Agreement may be
the Fair Market Value on the date that the Option was granted. The Committee or
Board may provide that a Stock Appreciation Right shall be automatically
exercised on one or more specified dates. Stock Appreciation Rights may be
granted on a "free-standing" basis or in conjunction with all or a portion of
the shares of Common Stock covered by an Option, either at the time of grant of
the Option or at any time thereafter during the term of the Option. In addition
to any other terms and conditions set forth in the Award Agreement, Stock
Appreciation Rights and Phantom Stock Options shall be subject to the following
terms: (i) Stock Appreciation Rights and Phantom Stock Options, unless
accelerated in accordance with their terms, may not be exercised within the
first year after the date of grant, (ii) the Committee or Board, as the case may
be, may, in its sole discretion, disapprove an election to surrender any Stock
Appreciation Right or Phantom Stock Option for cash in full or partial
settlement thereof, provided that such disapproval shall not effect the
recipient's right to surrender the Stock Appreciation Right or Phantom Stock
Option at a later date for shares of Common Stock or cash, and (iii) no Stock
Appreciation Right or Phantom Stock Option may be exercised unless the holder
thereof is at the time of exercise an Employee or Director and has been
continuously since the date the Stock Appreciation Right or Phantom Stock Option
was granted, except that the Committee or Board may permit the exercise of any
Stock Appreciation Right or Phantom Stock Option for any period following the
recipient's termination of employment or retirement or resignation from the
Board, not in excess of the original term of the Award, on such terms and
conditions as it shall deem appropriate and specify in the related Award
Agreement.

SECTION IV. FORFEITURE OF AWARDS

A. Unless the Committee, or in the case of a Director, the Board, shall have
determined otherwise, the recipient of any Award pursuant to the Plan shall
forfeit the Award, to the extent not then payable or 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 Agreement.

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, including, but not limited to,
conduct that breaches the recipient's duty of loyalty to the Company or an
Affiliate or that is materially injurious to the Company or an Affiliate,
monetarily or otherwise. Such activity or conduct may include: (i) disclosing
or misusing any confidential information pertaining to the Company or an
Affiliate; (ii) any attempt, directly or indirectly, to induce any Employee of
the Company or any Affiliate to be employed or perform services elsewhere, or
(iii) any direct or indirect attempt to solicit, or assist another employer in
soliciting, the trade of any customer or supplier or prospective customer of the
Company or any Affiliate.

B. The Committee or the Board, as the case may be, may include in any Award
Agreement any additional or different conditions of forfeiture it may deem
appropriate, and may waive any condition of forfeiture stated above or in the
Award Agreement.

C. In the event of forfeiture, the recipient shall lose all rights in and to
portions of the Award which are not vested or which are not exercisable. Except
in the case of Restricted Stock Awards as to which restrictions have not lapsed,
this provision, however, shall not be invoked to require any recipient to
transfer to the Company any Common 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

<PAGE>

Section, shall be at the sole discretion of the Committee, or in the case of
Awards granted to Directors, of the Board, and such determinations shall be
conclusive and binding.

SECTION V. BENEFICIARY DESIGNATION; DEATH OF AWARDEE

A. 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,
an Option, Stock Appreciation Right or Phantom 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. However, if the Committee shall be in doubt as to the right of any
such beneficiary to exercise any Option, Stock Appreciation Right or Phantom
Stock Option, or to receive any Other Stock Award, the Committee may determine
to recognize only an exercise by, or right to receive of, 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. Upon the death of an Award recipient, the following rules shall apply:

1. An Option, to the extent exercisable on the date of the recipient's death,
may be exercised at any time within three years after the recipient's death, but
not after the expiration of the term of the Option. The 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, or by the transferee of the Option in accordance with
the provisions of Section VI.A.

2. In the case of any Other Stock Award, any shares of Common Stock or cash
payable shall be determined as of the date of the recipient's death, in
accordance with the terms of the Award Agreement, and the Company shall issue
such shares of Common Stock or pay such cash to 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.

<PAGE>
SECTION VI. OTHER GOVERNING PROVISIONS

A. TRANSFERABILITY

Except as otherwise provided 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; provided,
however, that an Award recipient may be permitted, in the sole discretion of the
Committee or its delegee, to transfer to a member of such recipient's
immediate family, family trust or family partnership as defined by the Committee
or its delegee, an Option granted pursuant to Section II hereof, subject to
such terms and conditions as the Committee or its delegee, in their sole
discretion, shall determine.

B. RIGHTS AS A SHAREHOLDER

A recipient of an Award shall, unless the terms of the Award Agreement provide
otherwise, have no rights as a shareholder, with respect to any Options or
shares of Common Stock which may be issued in connection with an Award, until
the issuance of a Common 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 Common 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 Agreement.

C. GENERAL CONDITIONS OF AWARDS

No Employee, Director or other person shall have any rights with respect to the
Plan, the shares of Common Stock reserved or in any Award, contingent or
otherwise, until an Award Agreement shall have been delivered to the recipient
and all of the terms, conditions and provisions of the Plan applicable to such
recipient shall have been met.

D. RESERVATION OF RIGHTS OF COMPANY

Neither the establishment of the Plan nor the granting of an Award shall confer
upon any Employee any right to continue in the employ of the Company or any
Affiliate or interfere in any way with the right of the Company or any Affiliate

<PAGE>

to terminate such employment at any time. No Award shall be deemed to be salary
or compensation for the purpose of computing benefits under any employee
benefit, pension or retirement plans of the Company or any Affiliate, unless the
Committee shall determine otherwise.

E. ACCELERATION

The Committee, or, with respect to any Awards granted to Directors, the Board,
may, in its sole discretion, accelerate the vesting or date of exercise of any
Awards.

F. EFFECT OF CERTAIN CHANGES

In the event of any extraordinary dividend, stock split-up, stock dividend,
issuance of targeted stock, recapitalization, warrant or rights issuance, or
combination, exchange or reclassification with respect to the Common Stock or
any other class or series of common stock of the Company, 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 limits on Awards set forth in Section I.E.3 of the Plan, and the Committee
or Board shall cause such adjustments to be made to the terms of outstanding
Awards to reflect such event and preserve the value of such Awards. In the
event that the Committee or Board determines that any such event has a minimal
effect on the value of Awards, they may elect not to cause any such adjustments
to be made. In all events, the determination of the Committee or Board or their
delegee shall be conclusive. If any such adjustment would result in a
fractional share of Common Stock being issued or awarded under this Plan, such
fractional share 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 of Common Stock withheld by the
Company in satisfaction of such taxes, or to deliver other shares of Common
Stock owned by the recipient in satisfaction of such taxes. With respect to
Corporate Officers, Directors or other recipients subject to Section 16(b) of
the Exchange Act, the Committee or, with respect to Awards granted to Directors,
the Board, 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
Common 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 Agreement, no opinion is
expressed nor warranties made as to the tax effects under federal, foreign,
state or local laws or regulations of any Award granted under the Plan.

I. AMENDMENT OF PLAN

The Board 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 (i) 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, in a manner which would reasonably
be considered to be adverse to the recipient, without the recipient's consent;
(ii) except as provided in Section VI.F., no amendment may be made to increase
the number of shares of Common Stock reserved under Section I.D of the Plan;
(iii) except as provided in Section VI.F., no amendment may be made to increase
the limitations set forth in Section 1.E.3 of the Plan, and (iv) no amendment
may withdraw the authority of the Committee to administer the Plan.

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 of the State of Missouri, without
giving regard to the conflict of laws provisions thereof.

K. UNFUNDED NATURE OF PLAN

The Plan, insofar as it provides for cash payments, shall be unfunded, and the
Company shall not be required to segregate any assets which may at any time be

<PAGE>

awarded under the Plan. Any liability of the Company to any person with respect
to any Award under the Plan shall be based solely upon any contractual
obligations which may be created by the terms of any Award Agreement entered
into pursuant to the Plan. No such obligation of the Company shall be deemed to
be secured by any pledge of, or other encumbrance on, any property of the
Company.

L. SUCCESSORS

All obligations of the Company under the Plan, with respect to any Awards
granted hereunder, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation or otherwise, of all or substantially all of the business
and/or assets of the Company.

SECTION VII. EFFECTIVE DATE AND TERM

The Plan shall be effective upon adoption by the shareholders of the Company.
Upon such approval, no further Awards may be granted under the Company's 1996
Incentive Stock Plan. The Plan shall continue in effect until December 31,
2008, when it shall terminate. Upon termination, any balances in the reserve
established under Section I.D shall be cancelled, 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 or to conclude the administration of the Plan.

<PAGE>

LANGUAGE ON FRONT OF PROXY CARD

Ralston Purina PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Company FOR ANNUAL MEETING OF SHAREHOLDERS ON FEBRUARY 3, 1999 AT
2:30 P.M. HYATT REGENCY 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
February 3, 1999, 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 OWNED BY THE UNDERSIGNED, INCLUDING ANY COMMON
STOCK HELD IN THE UNDERSIGNED'S ACCOUNT UNDER THE DIVIDEND REINVESTMENT PLAN,
AND ANY COMMON STOCK AND ESOP PREFERRED STOCK SHARES CREDITED TO THE
UNDERSIGNED'S ACCOUNT UNDER THE SAVINGS INVESTMENT PLAN. EACH SHARE OF COMMON
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.

Proxy # Shares Owned SIP Shares ESOP Preferred

RAL

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

RALSTON PURINA COMPANY

1999 ANNUAL MEETING OF SHAREHOLDERS
AT THE HYATT REGENCY HOTEL, ST LOUIS UNION STATION
MARKET STREET BETWEEN 18TH AND 20TH STREET
WEDNESDAY, FEBRUARY 3, 1999
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 1999 Annual Meeting
If you require special arrangements to attend this meeting,
-----------------------------------------------------------
please contact the Company at (314) 982-2374 prior to the meeting.
------------------------------------------------------------------
<PAGE>
LANGUAGE ON BACK OF PROXY CARD

1. Election of four Directors to serve three-year terms ending at the annual
meeting held in 2002, or until their successors are elected and
qualified: 01-Donald Danforth, Jr., 02-William H. Danforth, 03-Richard
A. Liddy and 04-Katherine D. Ortega
FOR all nominees listed
FOR all nominees listed except
----------------------------------
WITHHOLD AUTHORITY to vote for all nominees listed

2. Ratification of the appointment of PricewaterhouseCoopers, LLP as
independent accountants for the fiscal year ending September 30, 1999.
FOR AGAINST ABSTAIN

3. Proposal to adopt the 1999 Incentive Stock Plan.
FOR AGAINST ABSTAIN

4. Amendment of the Articles of Incorporation.
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)

Date:
----------------------------------------

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2, 3 AND 4 ABOVE.

VOTE BY TELEPHONE OR INTERNET
QUICK *** EASY *** IMMEDIATE

Your telephone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned your proxy card.

VOTE BY PHONE: CALL TOLL-FREE ON A TOUCH-TONE TELEPHONE 1-888-XXX-XXXX ANYTIME
THERE IS NO CHARGE FOR THIS CALL.
YOU WILL BE ASKED TO ENTER A CONTROL NUMBER LOCATED IN THE
BOX IN THE LOWER RIGHT OF THIS FORM.

OPTION A: To vote as the Board of Directors recommends on ALL proposals:
Press 1

OPTION B: If you choose to vote on each item separately, press 0. You will
hear these instructions:
Item 1: To vote FOR ALL nominees, press 1; TO WITHHOLD FOR ALL
nominees, press 9; TO WITHHOLD FOR AN INDIVIDUAL nominee,
Press 0 and listen to the instructions
Item 2: To vote FOR, press 1; AGAINST, press 9; ABSTAIN,
press 0. The instructions are the same for all remaining
items to be voted.
When asked, you must confirm your vote by pressing 1.
VOTE BY INTERNET: THE WEB ADDRESS IS RALSTON.PROXYINGVOTING.COM
--------------------------

IF YOU VOTE BY PHONE OR INTERNET - DO NOT MAIL THE PROXY CARD
------
THANK YOU FOR VOTING

CALL ** TOLL FREE ** ON A TOUCH TONE TELEPHONE
1-888-XXX-XXXX - ANYTIME 123 456 789 123
THERE IS NO CHARGE TO YOU FOR THIS CALL CONTROL NUMBER FOR
TELEPHONE OR INTERNET VOTING

<PAGE>
LANGUAGE ON FRONT OF PROXY CARD

THIS PROXY RELATES TO SHARES OWNED BY THE UNDERSIGNED, INCLUDING ANY COMMON
STOCK HELD IN THE UNDERSIGNED'S ACCOUNT UNDER THE DIVIDEND REINVESTMENT PLAN.

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

RALSTON PURINA COMPANY

1999 ANNUAL MEETING OF SHAREHOLDERS
AT THE HYATT REGENCY HOTEL, ST LOUIS UNION STATION
MARKET STREET BETWEEN 18TH AND 20TH STREET
WEDNESDAY, FEBRUARY 3, 1999
2:30 P.M.

Seating Begins at 1:30 p.m.

SHAREHOLDER ADMITTANCE TICKET
(PLEASE BRING THIS TICKET WITH YOU TO THE MEETING)

2. Ratification of the appointment of PricewaterhouseCoopers, LLP as
independent accountants for the fiscal year ending September 30, 1999.
FOR AGAINST ABSTAIN

3. Proposal to adopt the 1999 Incentive Stock Plan.
FOR AGAINST ABSTAIN

4. Amendment of the Articles of Incorporation.
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)

Date:
----------------------------------------

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2, 3 AND 4 ABOVE.

VOTE BY TELEPHONE OR INTERNET
QUICK *** EASY *** IMMEDIATE

Your telephone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned your proxy card.

OPTION A: To vote as the Board of Directors recommends on ALL proposals:
Press 1

IF YOU VOTE BY PHONE OR INTERNET - DO NOT MAIL THE PROXY CARD
------
THANK YOU FOR VOTING

CALL ** TOLL FREE ** ON A TOUCH TONE TELEPHONE
1-888-XXX-XXXX - ANYTIME 123 456 789 123
THERE IS NO CHARGE TO YOU FOR THIS CALL CONTROL NUMBER FOR
TELEPHONE OR INTERNET VOTING
<PAGE>
December 11, 1998

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 February 3,
1999. 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 13, 1998, whether or not they have been
credited to participants' accounts. Shares credited to your account as of
November 13, 1998, 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 that were not credited as of November
13, 1998, 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. Alternatively, for the first time this year, you may vote by
telephone or via Internet. However you decide to vote, in order to provide the
Tabulator sufficient time to tabulate the votes, it has been requested that all
proxies be returned, or votes be cast, as promptly as possible, but no later
than February 1, 1999.

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.

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

<PAGE>
APPENDIX

1. The Stock Price Performance Graphs on page 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, 1993 vs. S & P 500 and S & P Food Indices' depicts the following returns:

Measurement Point Ralston S & P 500 S & P Food Index
----------------- ------- --------- ----------------
9/30/93 100.00 100.00 100.00
3/31/94 118.63 98.43 101.61
9/30/94 109.69 103.68 110.82
9/30/95 157.35 134.51 137.55
9/30/96 189.82 161.87 169.94
9/30/97 248.82 227.33 224.97
3/31/98 299.97 266.48 269.50
9/30/98 249.89 247.90 238.53
</TABLE>