UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended October 25, 1997, Commission File No. 1-2402 HORMEL FOODS CORPORATION (Exact name of registrant as specified in its charter) Delaware 41-0319970 (State or other Jurisdiction of (I.R.S. Employer Incorporation or organization) Identification No.) 1 Hormel Place AUSTIN, MINNESOTA 55912-3680 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (507) 437-5611 Securities registered pursuant to Section 12 (b) of the Act: COMMON STOCK, PAR VALUE $.1172 PER SHARE NEW YORK STOCK EXCHANGE TITLE OF EACH CLASS Name of Each Exchange on Which Registered Securities registered pursuant to Section 12 (g) of the Act: NONE (Title of Class) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K. ( ) The aggregate market value of the voting stock held by non-affiliates of the Corporation at December 1, 1997 was $1,294,238,990 based on the closing price of $29.9375 per share. As of December 1, 1997 the number of shares outstanding of each of the Corporation's classes of common stock was as follows: Common Stock, $.1172 Par Value--75,776,510 shares Common Stock Non-Voting, $.01 Par Value--0 shares DOCUMENTS INCORPORATED BY REFERENCE Portions of the Annual Stockholders' Report for the year ended October 25, 1997, are incorporated by reference into Part I and Part II Items 5- 9, and included as a separate section in the electronic filing to the SEC. Portions of the proxy statement for the Annual Meeting of the Stockholders to be held January 27, 1998, are incorporated by reference into Part III, Items 10-13 and included as a separate section in the electronic filing to the SEC. PART I Item 1. BUSINESS General Development of Business (a) Hormel Foods Corporation, a Delaware corporation, was founded by George A. Hormel in 1891 in Austin, Minnesota as George A. Hormel & Company. The Company started as a processor of meat and food products and continues in this line of business. The Company name was changed to Hormel Foods Corporation on January 31, 1995. The parent company is primarily engaged in the production of a variety of meat and food products and the marketing of those products throughout the United States. Although pork remains the major raw material for Hormel products, the Company has emphasized for several years the manufacture and distribution of branded, consumer packaged items rather than the commodity fresh meat business. New product introductions the past few years have emphasized a variety of branded turkey products produced and sold under the Jennie-O label and the fast growing ethnic food market with Chi-Chi's line of Mexican foods, House of Tsang oriental sauces and food products, and Mediterranean food products under the Marrakesh Express and Peloponnese labels. In October 1996, the Company purchased Stagg Foods, Inc., a leading West Coast producer of chili and stew products through an exchange of stock. Stagg Foods is operated as part of the main Hormel business. The Company's larger subsidiaries include Jennie-O Foods, Inc.; Dubuque Foods, Inc.; Hormel Foods International Corporation and Vista International Packaging, Inc. Jennie-O, a Willmar, Minnesota based turkey processor, markets its products nationwide through its own sales force and brokers, providing the Company with a significant presence in this important segment of the industry. Dubuque Foods, Inc. formerly named FDL Marketing, Inc. was formed in 1985 to be the exclusive marketer of the production of FDL Foods, Inc., a Dubuque, Iowa, meat packer. In July of 1993, the Company acquired through two subsidiaries, Dubuque Foods, Inc. and Rochelle Foods, Inc., a portion of the assets of FDL Foods. Dubuque Foods acquired the FDL Foods brands and trademarks. Rochelle Foods acquired the FDL Foods manufacturing operations at Rochelle, Illinois. Rochelle Foods is a co-packer for both Hormel and Dubuque Foods. Dubuque Foods has no production facilities and contracts with various co-packers to supply product under its label. The Company markets its products internationally through Hormel Foods International Corporation. Hormel Foods International has been increasing its presence in the international marketplace through joint ventures and placement of personnel in strategic foreign locations. Joint ventures have been established in Mexico, China, and Australia. Hormel International marketing and sales personnel are located in Spain, China and Australia. Item 1. BUSINESS--CONTINUED Investment of personnel and capital in the foreign operations of the business is expected to continue for the foreseeable future. During 1996 minority investments were made in food companies in Poland and Spain which resulted in an increased Hormel presence in those area. Vista International Packaging, Inc. imports, customizes, and distributes a variety of natural and artificial casings for the meat and food processing industry. Late in 1996, the Company announced its intention to exit the fish business either through sale or closure of its subsidiary Farm Fresh Catfish Company. The sale of Farm Fresh was negotiated and closed during the first quarter of 1997. During the first quarter of fiscal 1998 the Company announced an agreement to sell its bulk gelatin/specialized protein plant and business located in Davenport, Iowa to Goodman Fielder Limited of Sydney, Australia for $71,400,000. The 125 production and administrative employees in Davenport are included in the sale agreement. The sale is expected to close late in January 1998. The Company has not been involved in any bankruptcy, receivership or similar proceedings during its history. Substantially all of the assets of the Company have been acquired in the ordinary course of business. The Company had no significant change in the type of products produced or services rendered, nor in the markets or methods of distribution since the beginning of the fiscal year. Industry Segment (b) Hormel Foods Corporation is engaged in a single industry segment "Meat and Food Processing". The meat and food processing industry is very competitive with respect to price, marketing and customer service. In addition to meat processing firms, the Company competes with consumer packaged food manufacturers as well as seafood, poultry and vegetable protein processors. Description of Business (c) The principal products of the Company are meat and food products which are sold fresh, frozen, cured, smoked, cooked and canned. The percentage of total revenues contributed by classes of similar products for the last three fiscal years of the Company are as follows: Year Ended October October October 25,1997 26,1996 28, 1995 Meat Products 54.1% 52.6% 54.4% Prepared Foods 26.5 28.1 28.0 Poultry, Fish, Other 19.4 19.3 17.6 100.0% 100.0% 100.0% Item 1. BUSINESS--Continued Meat Products includes fresh meats, sausages, hams, wieners and bacon. Prepared Foods products include canned luncheon meats, shelf stable microwaveable entrees, stews, chilies, hash, meat spreads and frozen processed products. Jennie-O turkey and Farm Fresh catfish products are included in the Poultry, Fish and Other category. Hormel Foods has numerous trademarks and patents which are important to the Company's business. Some of the trademarks are registered and some are not. The more significant trademarks are: HORMEL, BLACK LABEL, BY GEORGE, CURE 81, CUREMASTER, DI LUSSO, DINTY MOORE, HOMELAND, LAYOUT PACK, LIGHT & LEAN, LITTLE SIZZLERS, MARY KITCHEN, RANGE BRAND, ROSA GRANDE, SANDWICH MAKER, SPAM, WRANGLERS, JENNIE-O, KID'S KITCHEN, FAST 'N EASY, DUBUQUE, QUICK MEAL, OLD SMOKEHOUSE, and HOUSE OF TSANG. The Company holds 15 foreign and 24 U. S. patents. The Company for the past several years has been concentrating on processed, consumer branded products with year round demand to minimize the seasonal variation experienced with commodity type products. Pork continues to be the primary raw material for Company products. Although, live pork producers are moving toward larger and more efficient year round confinement operations, there is still a seasonal variation in the supply of fresh pork materials. The expanding line of processed items has reduced but not eliminated the sensitivity of Company results to raw material supply and price fluctuations. Quarterly results for fiscal 1997 and 1996 are reported on page 29, Note K to the financial statements in the Annual Report to Stockholders for 1997. On October 25, 1997, the Company had unused lines of credit of $24,475,000. A fee is paid for the availability of fixed credit lines. Long-term debt consists of a private placement of Senior Notes for $110,000,000 maturing October 15, 2002 and October 15, 2006; and $64,400,000 of long-term notes, denominated in Spanish Pesetas, used to purchase a 21.4 percent equity interest in Campofrio Alimentacion, S.A., Madrid, Spain. To provide an almost perfect hedge against currency fluctuations, the investment in Campofrio was also made in Pesetas. Other long-term debt includes $5,700,000 in small issue Industrial Revenue Bonds of varying maturities and $11,046,000 of promissory notes through 2008 secured by limited partnership interests in the Federal Affordable Housing Program. Financial resources and anticipated funds from operations are considered adequate to meet normal operating cash requirements in 1998. The Company has no customers the loss of which would have a significant effect on the Company's business. During fiscal year 1997, no customer accounted for more than 5.3% of sales. Backlog orders are not significant due to the perishable nature of a large portion of the products and orders are accepted and shipped on a current basis. Item 1. BUSINESS--Continued The Company continues to develop and introduce new products each year. No new product in 1997 required a material investment of Company assets. Improving and developing new products is the responsibility of task forces including personnel from operations, marketing, administration, engineering, and research and development. Research and development expenditures for fiscal 1997, 1996 and 1995, respectively, were $8,580,000, $8,022,000, and $7,829,212. There are 29 professional employees engaged in full time research, 18 in the area of improving existing products and 11 in developing new products. As of October 25, 1997, the Company had over 11,000 active employees. Livestock slaughtered by the parent company is purchased by Company buyers, commission dealers, sale barns, terminal markets or under long-term supply contracts at locations principally in Minnesota, Iowa, Nebraska, Colorado and South Dakota. The level of pork production in the United States has an impact on Hormel's operations. Any significant decrease in the supply of pork has an adverse effect because of higher costs and lower margins coupled with an under-utilization of Company facilities. A significant increase in the supply of pork normally results in lower costs and higher margins. To minimize supply variations which impact profitability the live pork industry is rapidly moving to very large, vertically integrated, year-round confinement operations. The Company, as its major competitors, continues to implement options to maximize the benefits of reduced volatility in the supply of fresh pork through long-term contracts and supply agreements. Products under the Hormel label are sold in all 50 states by the parent Company. Products are sold by approximately 575 sales personnel operating in assigned territories coordinated from district sales offices located in most of the larger United States cities, and by approximately 450 brokers and distributors. Distribution of products to customers is by common carrier. The parent Company has a plant at Fremont, Nebraska, that slaughters livestock for processing. The slaughter facilities at the Austin, Minnesota plant are leased to Quality Pork Processors of Dallas, Texas under a custom slaughter arrangement with the Company. A subsidiary, Rochelle Foods, Inc., Rochelle, Illinois, also provides the Company with needed raw materials and product through its pork slaughter and processing operation. Facilities that produce manufactured items are located in Algona, Iowa; Austin, Minnesota; Beloit, Wisconsin; Aurora, Illinois; Osceola, Iowa; Fremont, Nebraska; Knoxville, Iowa; Oklahoma City, Oklahoma; Stockton, California; Tucker, Georgia; and Wichita, Kansas. Custom manufacturing for Hormel is performed by several companies including Owatonna Canning Company, Owatonna, Minnesota; Lakeside Packing Company, Plainview, Minnesota; and Western Steer Mom and Pops of Claremont, North Carolina. Power Logistics, Inc. operates a distribution center for the Company at Osceola, Iowa. Item 1. BUSINESS--Continued JENNIE-O FOODS Jennie-O Foods, Inc., a Willmar, Minnesota, based turkey processor, has turkey raising, slaughter and processing operations at various locations within Minnesota. Jennie-O contracts with turkey growers to supplement the turkeys it raises to meet its raw material requirements for whole birds and processed turkey products. As part of Jennie-O's long term expansion program,the Heartland Food Company plant in Marshall, Minnesota was purchased in October 1997. HORMEL FOODS INTERNATIONAL Hormel Foods International Corporation markets the Company's products in international areas including the Philippines, Japan and various European countries. The Company, through Hormel Foods International, has licensed companies to manufacture SPAM luncheon meat overseas on a royalty basis, principally Tulip International in Denmark. Hormel Foods International owns Hormel FSC, Inc., a foreign sales corporation, which engages in export related activities. Hormel Foods International has offices in Australia, China and Spain to increase the sales and marketing support in the international marketplace. During 1997 a minority investment was made in Campofrio Alimentacion, S.A.,Madrid, Spain. VISTA INTERNATIONAL PACKAGING Vista International Packaging, Inc., previously a subsidiary of Hormel Foods International became a subsidiary of the parent company in 1995. Vista is a food packaging company located in Kenosha, Wisconsin which imports, customizes, and distributes, a variety of natural and artificial casings for the meat and food processing industry. DUBUQUE FOODS Dubuque Foods, Inc., formerly called FDL Marketing, Inc., purchased the brands and trademarks of FDL Foods, Inc., Dubuque, Iowa, in July of 1993. FDL Foods also sold its Rochelle, Illinois slaughter and processing operations to Rochelle Foods, Inc., a sister subsidiary of Dubuque Foods. Dubuque Foods has co-packing arrangements with Rochelle Foods and others to manufacture products under its brand names. Item 1. BUSINESS--Continued Executive Officers of the Registrant (d) Year Which First Elected Name Office Age Officer Joel W. Johnson Chairman of the Board, 54 1991 President and Chief Executive Officer Don J. Hodapp Executive Vice President 59 1969 & Chief Financial Officer Gary J. Ray Executive Vice President 51 1988 Eric A. Brown Group Vice President, 51 1987 Prepared Foods James W. Cole Group Vice President, 63 1990 Foodservice Group David N. Dickson Group Vice President, 54 1989 International and Corporate Development Stanley E. Kerber Group Vice President, 59 1977 Meat Products Michael J. McCoy Vice President and 50 1994 Treasurer Richard W. Schlange Vice President and 62 1969 Controller Mahlon C. Schneider Vice President and 58 1990 General Counsel Richard A. Bross Vice President, 46 1995 Grocery Products Forrest D. Dryden Vice President, Research 54 1987 & Development Ronald W. Fielding Vice President, Hormel 45 1997 and President Hormel Foods International Jerry C. Figenskau Vice President, 57 1994 Specialty Products James A. Jorgenson Vice President, 52 1990 Human Resources Gary C. Paxton Vice President, 52 1992 Manufacturing Item 1. BUSINESS--Continued Year Which First Elected Name Office Age Officer Kenneth P. Regner Vice President, 60 1989 Engineering James N. Rieth Vice President, Hormel 57 1981 and President and Chief Executive Officer Jennie-O Foods Robert A. Slavik Vice President, 52 1993 Meat Products Sales Thomas J. Leake Corporate Secretary 52 1990 No family relationship exists among the executive officers. All of the above executive officers have been employed by the Registrant in an officer capacity for more than the past five years except Mr. Robert A. Slavik, Director Meat Products Sales until January 26, 1993 when he was elected Vice President, Meat Products Sales; Mr. Jerry C. Figenskau, Director of Marketing Services until December 30, 1991 when he was named Director Specialty Products, on January 24, 1994 he was elected Vice President, Specialty Products; Mr. Richard A. Bross, Director of Grocery Products Marketing until January 3, 1994 when he was named General Manager of Grocery Products, on January 30, 1995 he was elected Vice President, Grocery Products; Mr. Michael J. McCoy Vice President, Treasurer of FDL Foods, Inc. until being employed by the Company on special assignment Treasury Division on October 3, 1994, on November 21, 1994 he was appointed Assistant Treasurer, on January 1, 1996 he was elected Treasurer and on January 27, 1997 he was elected Vice President, Treasurer; Mr. Ronald W. Fielding, Regional Manager, Oscar Mayer Foods Corporation until being employed by the Company as Meat Products Regional Sales Manager-Southwest Region on January 24, 1994; on June 5, 1995 he was elected Vice President, Hormel Foods International Corporation; on January 1, 1996 he was elected President, Hormel Foods International; and on January 27, 1997 he was elected Vice President, Hormel and President, Hormel Foods International. The executive officers are elected annually by the Board of Directors at the first meeting following the Annual Meeting of Stockholders. Vacancies may be filled and additional officers elected at any regular or special meeting. Item 2. PROPERTIES Approximate Floor Space (Square Feet) Owned or Expiration Location Unless Noted Leased Date Hormel Foods Corporation Slaughtering and Processing Plants Austin, Minnesota Slaughter 217,000 Owned (Leased Out) Processing 1,024,000 Owned Fremont, Nebraska 637,000 Owned Rochelle, Illinois 434,000 Owned (Rochelle Foods, Inc.) Processing Plants Algona, Iowa 152,000 Owned Austin, Minnesota Annex 83,000 Owned Beloit, Wisconsin 338,000 Owned Davenport, Iowa 148,000 Owned Sale Closing 1/98 Ft. Dodge, Iowa 17,000 Owned (Leased out) Houston, Texas 93,000 Owned (Closed) Knoxville, Iowa 130,000 Owned Oklahoma City, Oklahoma 57,000 Owned Osceola, Iowa Plant 333,000 Owned Osceola, IA Dist.Center 235,000 Owned Stockton, California 139,000 Owned Tucker, Georgia 259,000 Owned Wichita, Kansas 75,000 Owned (Dold Foods, Inc.) Aurora, Illinois 71,000 Owned (Creative Contract Packaging Corp.) Aurora, Illinois 70,000 Owned (Herb-Ox Plant) Research and Development Center Austin, Minnesota 56,000 Owned Corporate Offices Austin, Minnesota 119,000 Owned Stagg Foods, Inc. Hillsboro, Oregon 100,000 Owned (Closed) Dan's Prize, Inc. Long Prairie, 78,999 Owned Minnesota-Plant Item 2. PROPERTIES--continued Jennie-O Foods, Inc. Willmar, Minnesota- Airport Plant 282,000 Owned Willmar, Minnesota- Benson Ave. Plant 79,000 Owned Melrose, Minnesota-Plant 119,000 Owned Turkey farms - acres 9,032 Owned Henning, Minnesota- 5,200 Owned Feed Mill Atwater, Minnesota- 14,000 Owned Feed Mill Montevideo, Minnesota- 80,000 Owned Pelican Rapids, Minnesota- 185,000 Owned West Central Turkeys Plant Marshall, Minnesota Heartland Foods-Plant 140,000 Owned Vista International Packaging, Inc. Kenosha, Wisconsin-Plant 61,000 Owned Algona Food Equipment Company (AFECO) Algona, Iowa-Plant 45,000 Owned The Company has expansion or renovation projects in progress at Austin, Minnesota; Osceola, Iowa; Fremont, Nebraska; Rochelle, Illinois and at various Jennie-O locations. The Company believes its operating facilities are well maintained and suitable for current production volumes, and after the completion of the expansion and renovation for all volumes which are anticipated in the foreseeable future. Item 3. LEGAL PROCEEDINGS The Company knows of no pending material legal proceedings. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to stockholders during the fourth quarter of the 1997 fiscal year. At the Annual Meeting of Stockholders to be held January 27, 1998 shareholders will vote on the following: Approval of the Company's Operators' Share Incentive Compensation Plan to enable certain compensation paid under the Plan to qualify as deductible performance-based compensation under Section 162(m) of the Internal Revenue Code. Approval of the Company's Long-Term Incentive Plan to enable compensation paid under the Plan to qualify as deductible performance-based compensation under Section 162(m) of the Internal Revenue Code. PART II Item 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS The high and low closing price of the Company's Common Stock and the dividends per share declared for each fiscal quarter of 1997 and 1996, respectively, are shown below: 1997 High Low Dividend First Quarter 27-7/8 23-1/2 $.155 Second Quarter 27 23-7/8 $.155 Third Quarter 28-7/16 23-7/8 $.155 Fourth Quarter 32-1/2 28-1/16 $.155 1996 High Low Dividend First Quarter 25-1/2 22-7/8 $.15 Second Quarter 27-3/4 24 $.15 Third Quarter 27 22-7/8 $.15 Fourth Quarter 24-1/4 20-1/2 $.15 Additional information about dividends,principal market of trade and and number of stockholders on page 32 of the Annual Stockholders' Report for the year ended October 25, 1997, is incorporated herein by reference. The Company's Common Stock has been listed on the New York Stock Exchange since January 16, 1990. Item 6. SELECTED FINANCIAL DATA Selected Financial Data for the ten years ended October 25, 1997, on pages 18 and 19 of the Annual Stockholders' Report for the year ended October 25, 1997, is incorporated herein by reference. Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION Management's Discussion and Analysis of Financial Condition and Results of Operations on pages 30 and 31 of the Annual Stockholders' Report for the year ended October 25, 1997, is incorporated herein by reference. Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Consolidated Financial Statements, including unaudited quarterly data, on pages 20 through 29 and the Report of Independent Auditors on page 29 of the Annual Stockholders' Report for the year ended October 25, 1997 is incorporated herein by reference. Item 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. PART III Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Information under "Election of Directors", contained on pages 3 through 5 of the definitive proxy statement for the Annual Meeting of Stockholders to be held January 27, 1998, is incorporated herein by reference. Information concerning Executive Officers is set forth in Item 1(d) of Part I pursuant to Instruction 3, Paragraph (b) of Item 401 of Regulation S-K. Item 11. EXECUTIVE COMPENSATION Information for the year ended October 25, 1997, under "Executive Compensation" on pages 8 through 20 and "Compensation of Directors" on page 5 of the definitive proxy statement for the Annual Meeting of Stockholders to be held January 27, 1998, is incorporated herein by reference. Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Ownership of securities of the Company by certain beneficial owners and management for the year ended October 25, 1997, as set forth on pages 7 and 8 of the definitive proxy statement for the Annual Meeting of Stockholders to be held January 27, 1998, is incorporated herein by reference. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Information under "Other Information Relating to Directors, Nominees, and Executive Officers" for the year ended October 25, 1997, as set forth on page 13 of the definitive proxy statement for the Annual Meeting of Stockholders to be held January 27, 1998, is incorporated herein by reference. PART IV Item 14. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) (1) and (2)--The response to this portion of Item 14 is submitted as a separate section of this report. (3) --List of Exhibits--The response to this portion of Item 14 is submitted as a separate section of this report. (b) The Company filed a Form 8-K on October 26, 1997 announcing the election of John R. Block and Joseph T. Mallof as directors of the Company replacing retiring Board members Earl B. Olsen and Ray V. Rose. The Company filed a Form 8-K on December 17, 1997 announcing the sale of its Davenport, Iowa gelatin/specialized proteins plant to Goodman Fielder Limited of Sydney, Australia for $71,400,000. The sale is scheduled to close in January 1998. (c) The response to this portion of Item 14 is submitted as separate section of this report. (d) The response to this portion of Item 14 is submitted as separate section of this report. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. HORMEL FOODS CORPORATION By /s/ Joel W. Johnson January 23, 1998 Joel W. Johnson, Chairman of the Board, President and Chief Executive Officer Date Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated: Chairman of the Board, President, Chief Executive /s/Joel W. Johnson 1/23/98 Officer and Director Joel W. Johnson Date (Principal Executive Officer) Executive Vice President and Chief Financial Officer and Director /s/ Don J. Hodapp 1/23/98 (Principal Financial and Don J. Hodapp Date Accounting Officer) /s/ Gary J. Ray 1/23/98 Executive Vice President Gary J. Ray Date and Director Group Vice President /s/ Eric A. Brown 1/23/98 Prepared Foods Group Eric A. Brown Date and Director /s/ James W. Cole 1/23/98 Group Vice President James W. Cole Date Foodservice Group and Director Group Vice President International and /s/ David N. Dickson 1/23/98 Corporate Development David N. Dickson Date and Director /s/ Stanley E. Kerber 1/23/98 Group Vice President Stanley E. Kerber Date Meat Products Group and Director /s/ John W. Allen 1/23/98 Director John W. Allen Date /s/ John R. Block 1/23/98 Director John R. Block Date /s/ William S. Davila 1/23/98 Director William S. Davila Date /s/ E. Peter Gillette Jr. 1/23/98 Director E. Peter Gillette Jr. Date /s/ Luella G. Goldberg 1/23/98 Director Luella G. Goldberg Date /s/ Geraldine M. Joseph 1/23/98 Director Geraldine M. Joseph Date /s/ Joseph T. Mallof 1/23/98 Director Joseph T. Mallof Date /s/ Dr. Robert R. Waller 1/23/98 Director Dr. Robert R. Waller Date F-1 ANNUAL REPORT ON FORM 10-K ITEM 14 (a) (1), (2), AND (3) AND ITEM 14 (c) AND (d) LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE FINANCIAL STATEMENT SCHEDULE LIST OF EXHIBITS YEAR ENDED OCTOBER 25, 1997 HORMEL FOODS CORPORATION Austin, Minnesota F-2 Item 14(a) (1), (2) and (3) and Item 14 (c) and (d) LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES HORMEL FOODS CORPORATION October 25, 1997 The following consolidated financial statements of Hormel Foods Corporation included in the Annual Report of the Registrant to its stockholders for the year ended October 25, 1997, are incorporated herein by reference in Item 8 of Part II of this report: Consolidated Statements of Financial Position--October 25, 1997 and October 26, 1996. Consolidated Statements of Operations--Years Ended October 25, 1997, October 26, 1996 and October 28, 1995. Consolidated Statements of Changes in Shareholders' Investment--Years Ended October 25, 1997, October 26, 1996 and October 28, 1995. Consolidated Statements of Cash Flows--Years Ended October 25, 1997, October 26, 1996 and October 28, 1995. Notes to Financial Statements--October 25, 1997. Report of Independent Auditors The following consolidated financial statement schedule of Hormel Foods Corporation required pursuant to Item 14(d) is submitted herewith: Schedule II Valuation and Qualifying Accounts and Reserves..F-3 All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted. FINANCIAL STATEMENTS AND SCHEDULES OMITTED Condensed parent company financial statements of the registrant are omitted pursuant to Rule 5-04(c) of Article 5 of Regulation S-X. F-3 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES HORMEL FOODS CORPORATION (Dollars in Thousands) COL. A COL. B COL. C COL. D COL. E Additions (1) (2) Balance at Charged to Charged to Balance at Beginning Costs and Other Accounts- Deductions- End of Classification of Period Expenses Describe Describe Period Valuation reserve deduction from assets account: Fiscal year ended October 25, 1997 Allowance for doubtful accounts receivable $1,413 $757 $(140)(3) $ 822 (1) $1,273 (65) (2) Fiscal year ended October 26, 1996 Allowance for doubtful accounts receivable $1,413 $453 $0 $ 542 (1) $1,413 (89) (2) Fiscal year ended October 28, 1995 Allowance for doubtful accounts receivable $1,413 $971 $0 $1,189 (1) $1,413 (218) (2) Note (1) - Uncollectible accounts written off. Note (2) - Recoveries on accounts previously written off. Note (3) - Reserve on records of Farm Fresh Catfish Company before the sale occurred during Fiscal 1997. LIST OF EXHIBITS HORMEL FOODS CORPORATION Number Description of Document *(3) A-1 Certification of Incorporation as amended to date. (filed as Exhibit 3A-1 to Annual Report on Form 10-K for fiscal year ended October 26, 1996.) **(3) B-1 By-laws as amended to date. (4) Pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, copies of instruments defining the rights of holders of long-term debt are not filed. The Company agrees to furnish a copy thereof to the Securities and Exchange Commission upon request. (9) None. (10) None. **(11) Statement Regarding Computation of Per Share Earnings. (12) None. **(13) Pages 17 through 32 of the Annual Report to Stockholders for fiscal year ended October 25, 1997. (18) None. (19) None. (22) None. **(23) Consent of Independent Auditors. (24) None. (25) None. **(27) Financial Data Schedule **(99) Proxy Statement for the Annual Meeting of Stockholders to be held January 27, 1998. * Document has previously been filed with the Securities and Exchange Commission and is incorporated herein by reference. ** These Exhibits transmitted via EDGAR. BYLAWS OF HORMEL FOODS CORPORATION NAME 1. The name of the corporation is HORMEL FOODS CORPORATION. (Amended October 26, 1992; Amended December 7, 1995 to conform with Amendment to Articles of Incorporation Effective February 1, 1995) OFFICES 2. The principal office of the corporation in the State of Delaware shall be in the City of Wilmington, County of New Castle, and the name of the resident agent in charge thereof shall be The Corporation Trust Company, whose address is 100 West Tenth Street, Wilmington, Delaware. (Amended April 17, 1930; September 20, 1930; June 13, 1949) In addition to its principal office in the State of Delaware, the corporation may establish and maintain an office or offices at Austin, Minnesota, and at such other places as the Board of Directors may from time to time appoint or the business of the corporation may require. CORPORATE SEAL 3. The corporate seal of the corporation shall be circular in form and shall have inscribed thereon the name of the corporation, the year of its creation (1928) and the words "Seal", "Incorporated", and "Delaware". STOCKHOLDERS' MEETINGS 4. All meetings of the stockholders shall be held at the office of the corporation at Austin, Minnesota, or at such other place as the Board of Directors may previously determine. 5. A. An annual meeting of the stockholders of the corporation shall be held on the last Tuesday of January in each year, at eight o'clock p.m. or at such other time as the Board of Directors may designate, when the stockholders shall elect by plurality vote, by ballot, a Board of Directors, and transact such other business as may properly be brought before the meeting. (Amended November 15, 1938; June 14, 1954; April 18, 1966; October 28, 1968; April 28, 1969; December 20, 1984) B. To be properly brought before the annual meeting of stockholders, business must be (1) specified in the notice of the meeting, (2) directed to be brought before the meeting by the Board of Directors or (3) proposed at the meeting by a stockholder who (i) was a stockholder of record at the time of giving the notice provided for in these Bylaws, (ii) is entitled to vote at the meeting, and (iii) gives prior notice of the matter, which must otherwise be a proper matter for stockholder action, in the manner herein provided. For business to be properly brought before the annual meeting by a stockholder, the stockholder must give written notice to the Secretary of the corporation so as to be received at the principal executive offices of the corporation at least ninety (90) days before the date that is one year after the prior year's annual meeting. Such notice shall set forth (1) the name and record address of the stockholder, (2) the class and number of shares of the corporation owned by the stockholder, (3) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business, and (4) any material interest in such business of the stockholder. The chairman of the meeting may refuse to acknowledge any proposed business not made in compliance with the foregoing procedure. (Added 7-22-96) C. Nominations of persons for election as Directors may be made at the annual meeting of stockholders (a) by or at the direction of the Board of Directors or (b) by any stockholder who (1) was a stockholder of record at the time of giving of the notice provided for in these Bylaws, (2) is entitled to vote at the meeting and (3) gives prior notice of the nomination in the manner herein provided. For a nomination to be properly made by a stockholder, the stockholder must give written notice to the Secretary of the corporation so as to be received at the principal executive offices of the corporation at least ninety (90) days before the date that is one year after the prior year's regular meeting. Such notice shall set forth (a) as to the stockholder giving the notice: (i) the name and record address of the stockholder, and (ii) the class and number of shares of the corporation owned by the stockholder; and (b) as to each person the stockholder proposes to nominate: (i) the name, business address and residence address of the person, (ii) the principal occupation or employment of the person and (iii) the class and number of shares of the corporation's capital stock beneficially owned by the person. The chairman of the meeting may refuse to acknowledge the nomination of any person not made in compliance with the foregoing procedure. (Added 7-22-96) 6. The holders of a majority of the stock issued and outstanding, present in person, or represented by proxy, shall be requisite and shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by law, by the certificate of incorporation, or by these Bylaws. If, however, such majority shall not be present or represented at any meeting of the stockholders, the stockholders present in person or by proxy shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until the requisite amount of stock shall be present. At such adjourned meeting at which the requisite amount of stock shall be represented, any business may be transacted which might have been transacted at the meeting as orig- inally notified. 7. At each meeting of the stockholders every stockholder shall be entitled to vote in person, or by proxy appointed by an instrument in writing subscribed by such stockholder and bearing a date not more than three years prior to said meeting, unless said instrument provides for a longer period. Each stockholder shall have one vote for each share of stock registered in his name on the books of the corporation. The vote for Directors, and, upon demand of any stockholder, the vote upon any question before the meeting, shall be by ballot. All elections shall be held and all questions decided by a plurality vote. (Amended March 23, 1970) 8. Written notice of the annual meeting shall be mailed to each stockholder at such address as appears on the stock book of the corporation at least ten days prior to the meeting. (Amended October 28, 1975) 9. A complete list of the stockholders entitled to vote at the ensuing election, arranged in alphabetical order, with the residence of each, and the number of shares held by each, shall be prepared by the Secretary and filed at the place where the election is to be held, at least ten days before every election, and shall at all times, during the usual hours for business, and during the whole time of said election, be open to the examination of any stockholder. (Amended February 19, 1968) 10. Special meetings of the stockholders, for any purpose, or purposes, unless otherwise prescribed by the statute, may be called by the Chairman of the Board, or Secretary at the request, in writing, of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding. Such request shall state the purpose or purposes of the proposed meeting. (Amended January 31, 1984; Amended September 27, 1993, Effective October 1, 1993; Amended December 7, 1995) 11. Business transacted at all special meetings shall be confined to the objects stated in the call. 12. Written notice of a special meeting of stockholders, stating the time and place and object thereof, shall be mailed, postage prepaid, at least ten days before such meeting, to each stockholder at such address as appears on the books of the corporation. (Amended October 28, 1975) DIRECTORS 13. The property and business of the corporation shall be managed by its Board of Directors. The number of Directors shall be established from time to time by resolution of the stockholders or the Board of Directors. The Directors of the corporation shall be elected annually at the annual meeting of stockholders and each Director shall be elected to serve until his successor shall be elected and shall qualify. (Amended November 16, 1964; June 21, 1965; November 25, 1968; August 25, 1969; December 22, 1969; February 24, 1970; December 19, 1972; July 22, 1974; September 23, 1974; December 22, 1975; November 29; 1976; December 27, 1978; July 23, 1979; January 29, 1980) 14. In addition to the powers and authorities by these Bylaws expressly conferred upon them, the Board may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by Certificate of Incorporation or by these Bylaws directed or required to be exercised or done by the stockholders. DIRECTORS' MEETINGS 15. (Amended September 27, 1993, Effective October 1, 1993; Deleted December 7, 1995) 15. Regular meetings of the Board, after the organizational meeting, shall be held without notice at the Corporate Office of the corporation at Austin, Minnesota, on the fourth Monday of January, March, May, July, September, October and November at 1:00 p.m. or such other time as the Board shall designate, or, without notice, at such other time or place, within or without the State of Minnesota, as the Board of Directors may from time to time designate. (Amended July 16, 1935; June 14, 1954; May 20, 1957; April 17, 1967; February 19, 1968; March 25, 1980; January 28, 1985) 16. Special meetings of the Board may be called by the Chairman of the Board on one day's notice to each Director, either personally or by mail or by telegram or telephone; special meetings shall be called by the Chairman of the Board, or Secretary in like manner or on like notice on the written request of two Directors. (Amended January 31, 1984; Amended September 27, 1993, Effective October 1, 1993; Amended December 7, 1995) 17. At all meetings of the Board, a majority of the number of Directors authorized by the Bylaws shall be necessary and sufficient to constitute a quorum for the transaction of business, and the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute or by the Certificate of Incorporation or by these Bylaws. (Amended January 18, 1965) COMPENSATION OF DIRECTORS 18. Directors, as such, shall not receive any stated salary for their services, but, by resolution of the Board, a fixed sum and expenses of attendance, if any, may be allowed for attendance at each regular or special meeting of the Board; PROVIDED, That nothing herein contained shall be construed to preclude any Director from serving the corporation in any other capacity and receiving compensation therefor. 19. Members of special or standing committees may be allowed like compensation for attending committee meetings. COMMITTEES 20. The Board of Directors may, by resolution or resolutions, passed by a majority of the whole Board, designate one or more committees, each committee to consist of two or more of the Directors of the corporation, which, to the extent provided in said resolution or resolutions or in these Bylaws, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the corporation and may have power to authorize the seal of the corporation to be affixed to all papers which may require it. Such committee or committees shall have such name or names as may be stated in these Bylaws or as may be determined from time to time by resolution adopted by the Board of Directors. 21. The committees shall keep regular minutes of their proceedings and report the same to the Board at each regular meeting. VACANCIES 22. In case of any vacancy in the Board of Directors by reason of death, resignation, or otherwise, the remaining Directors, by majority vote, may elect a successor to hold office until a successor has been elected by the stockholders. (Amended April 18, 1955; November 25, 1974; October 26, 1992 [Bylaw 33 renumbered to Bylaw 23, and following sections renumbered]) OFFICERS 23. The officers of the corporation shall be elected by the Board of Directors and shall be a Chairman of the Board, a President, one or more Vice Presidents of whatever special designation the Board may determine, a Secretary and a Treasurer. The Board may also elect Assistant Vice Presidents, Assistant Secretaries and Assistant Treasurers, and a Controller and Assistant Controllers. The Chairman of the Board and the President must be Directors, but other officers need not be Directors. The designation and duties of any Vice President may be changed by the Board at any time. (Amended November 19, 1929; July 8, 1946; April 18, 1955; April 21, 1958; July 19, 1965; January 15, 1968; February 19, 1968; August 25, 1969; August 24, 1981; April 25, 1983; January 31, 1984; Amended September 27, 1993, Effective October 1, 1993; Amended December 7, 1995) 24. The Board of Directors, at its first meeting after each Annual Meeting of Stockholders, shall elect a Chairman of the Board, a President, one or more Vice Presidents, a Secretary and a Treasurer, and may elect a Controller, Assistant Vice Presidents, Assistant Secretaries, Assis- tant Treasurers and Assistant Controllers. Such action may be taken by unanimous written consent in lieu of a meeting. (Amended May 11, 1942; July 8, 1946; April 18, 1955; July 19, 1965; January 15, 1968; February 19, 1968; August 25, 1969; August 24, 1981; April 25, 1983; January 31, 1984; October 26, 1992; Amended September 27, 1993, Effective October 1, 1993; Amended December 7, 1995) 25. The Board may appoint such other officers and agents as it shall deem necessary, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board. 26. The Board of Directors shall have the right to fix the salaries of all officers of the corporation. 27. The officers of the corporation shall hold office until their successors are elected and qualify in their stead. Any officers elected by the Board of Directors may be removed at any time by the affirmative vote of a majority of the whole Board of Directors. If the office of any officer becomes vacant for any reason, the vacancy shall be filled by the affirmative vote of the majority of the whole Board of Directors. In its discretion, the Board may leave unfilled any office except that of President, Treasurer or Secretary. (Amended April 18, 1955) THE CHAIRMAN OF THE BOARD 28. A. The Chairman of the Board shall preside at all meetings of stockholders and Directors. B. The Chairman of the Board shall be an ex-officio member of all standing committees of the Board except those committees which the Board determines will comprise only nonemployee Directors, specifically including the Audit Committee and the Compensation Committee. C. The Chairman of the Board shall be the Chief Executive Officer of the corporation and shall have general and active management of the business of the corporation. (Bylaw 28 added December 7, 1995) THE PRESIDENT 29. A. In the absence of the Chairman of the Board, the President shall preside at meetings of the stockholders and Directors. In the event of a vacancy in the office of the Chairman of the Board, the President shall exercise the powers of the Chairman of the Board until the vacancy in the office of the Chairman of the Board has been filed. B. The President shall be an ex-officio member of all standing committees of the Board except those committees which the Board determines will comprise only nonemployee Directors, specifically including the Audit Committee and the Compensation Committee. C. The President shall have powers and duties appropriate to the office of President, taking into account Bylaw 28.C. (Bylaw 29 added December 7, 1995) 30. (Amended April 18, 1955; April 16, 1962; July 19, 1965; February 19, 1968; August 25, 1969; August 24, 1981; January 31, 1984; May 19, 1986; deleted September 27, 1993 to be effective October 1, 1993) VICE PRESIDENTS 30. A. In the absence or disability of the President, the duties and powers of the President will be exercised by the Executive Vice Presidents, if any, in the order of their seniority with the Company; if there is no Executive Vice President, then by such of the Group Vice Presidents as are members of the Board in the order of their seniority on the Board, and if any two Group Vice presidents have the same seniority on the Board, then in the order of their seniority with the corporation until the Board of Direc- tors shall designate one of their number to perform such duties. (Amended July 8, 1946; April 18, 1955; April 21, 1958; July 19, 1965; January 15, 1968; February 19, 1968; August 27, 1979; August 24, 1981; April 25, 1983) B. In the absence or disability of the President, or the Executive Vice Presidents and all of the Group Vice Presidents, the Vice Presidents who are members of the Board of Directors in the order of their seniority on the Board shall perform the duties and exercise the powers of the President until the Board of Directors shall designate one of their number to perform such duties. (Amended July 8, 1946; April 21, 1958; July 19, 1965; January 15, 1968; February 19, 1968; August 25, 1969; August 24, 1981; April 25, 1983) THE SECRETARY AND ASSISTANT SECRETARIES 31. A. The Secretary shall attend all sessions of the Board and all meetings of the stockholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose; and shall perform like duties for the standing committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders and of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or Chief Executive Officer of the corporation, under whose supervision he shall be. He shall keep in safe custody the seal of the corporation, and when authorized by the Board, affix it to any instrument requiring it, and when so affixed it shall be attested by his signature or by the signature of the Treasurer. (Amended October 26, 1992; Amended September 27, 1993, Effective October 1, 1993) B. The Assistant Secretaries in the order of their seniority shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary, and shall perform such other duties as the Board of Directors shall prescribe. THE TREASURER AND ASSISTANT TREASURERS 32. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation, and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation, in such depositories as may be designated by the Board of Directors. A. He shall disburse the funds of the corporation as may be ordered by the Board, taking the proper vouchers for such disbursement, and shall render to the Chief Executive Officer of the corporation and Directors, at the regular meetings of the Board, or whenever they may require it, an account of all his transactions as Treasurer and of the financial condition of the corporation. (Amended September 27, 1993, Effective October 1, 1993) B. He shall give the corporation a bond if required by the Board of Directors in a sum, and with one or more sureties satisfactory to the Board, for the faithful performance of the duties of his office, and for the restoration of the corporation in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the corpora- tion. C. The Assistant Treasurers in the order of their seniority shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer, and shall perform such other duties as the Board of Directors shall prescribe. DUTIES OF OFFICERS MAY BE DELEGATED 33. In case of the absence of an officer of the corporation, or for any other reason that the Board may deem sufficient, the Board may delegate, for the time being, the powers or duties, or any of them of such officer to any other officer, or to any Director, PROVIDED, a majority of the entire Board concur therein. CERTIFICATES OF STOCK 34. Stock certificates of the corporation shall be numbered consecutively and shall be entered on the books of the corporation as they are issued. They shall exhibit the holders' names and the number of shares and shall be signed by the Chairman of the Board or the President or a Vice President and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary. Until such other transfer agent is appointed, the Secretary shall sign as transfer agent. Each certificate shall bear the corporate seal or a facsimile thereof. Each certificate shall recite the kind or class of stock it represents. (Amended September 8, 1947; April 18, 1955; November 24, 1959; October 26, 1992; Amended September 27, 1993, Effective October 1, 1993; Amended December 7, 1995) Where a certificate is countersigned by (i) a transfer agent other than the corporation or its employee, or (ii) a registrar other than the Corporation or its employee, either of which countersignatures may be a facsimile, any other signature on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. (Added by amendment January 12, 1942; September 8, 1947; April 18, 1955; November 24, 1959; October 27, 1969; October 26, 1992; November 23, 1992) TRANSFER OF STOCK 35. All transfer of stock of the corporation shall be made on the books of the corporation only by the person named in the certificate or by an attorney lawfully constituted in writing, and upon the surrender of certificates for the stock so transferred. Unless other transfer agents be designated by the Board of Directors, the Secretary shall be the sole transfer agent. CLOSING OF TRANSFER BOOKS 36. The Board of Directors shall have power to close the stock transfer books of the corporation for a period not exceeding sixty (60) days preceding the date of any meeting of stockholders or the date for payment of any dividend or the date for the allotment of rights or the date when any change or conversion or exchange of capital stock shall go into effect; PROVIDED, however, that in lieu of closing the stock transfer books as aforesaid, the Board of Directors may fix in advance a date, not exceeding sixty (60) days preceding the date of any meeting of stockholders or the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect as a record date for the determination of the stockholders entitled to notice of, and to vote at any such meeting, or entitled to receive payment of any such dividend, or to any such allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of capital stock, and in such case only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to such notice of, and to vote at, such meeting, or to receive payment of such dividend, or to receive such allotment of rights, or to exercise such rights, as the case may be, notwithstanding any transfer of any stock on the books of the corporation after any such record date fixed as aforesaid. (Amended November 21, 1966; March 23, 1970) REGISTERED STOCKHOLDERS 37. The corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof and accordingly shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person, whether or not it shall have express or other notice thereof, save expressly provided by the laws of Delaware. LOST CERTIFICATE 38. Any person claiming a certificate of stock to be lost or destroyed shall make an affidavit or affirmation of that fact and advertise the same in such manner as the Board of Directors may require, and the Board of Directors may, in their discretion, before issuing a new certificate, require the owner of the lost or destroyed certificate, or his legal representative, to give the corporation a bond, in such sum as they may direct, not exceeding double the value of the stock, to indemnify the corporation against any claim that may be made against it on account of alleged loss of any such certificate; a new certificate of the same tenor and for the same number of shares as the one alleged to be lost or destroyed may be issued without requiring any bond when, in the judgment of the Directors, it is proper so to do. CHECKS AND NOTES 39. Checks, drafts, orders for the payment of money and promissory notes shall be signed or endorsed in the name of the corporation by such person or persons as the Board of Directors, by resolution, shall from time to time appoint. FISCAL YEAR 40. The fiscal year of the corporation shall end on the last Saturday of October in each year. DIVIDENDS 41. Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, may be declared by the Board of Directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the Directors from time to time, in their absolute discretion, think proper as a reserve fund to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purposes as the Directors shall think conducive to the interests of the corporation. INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS 42. The corporation to the fullest extent permitted by the applicable laws of the State of Delaware in effect from time to time shall indemnify each officer against the expenses of any action to which such officer is a party or is threatened to be made a party in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a "proceeding") by reason of the fact that he is or was an officer of the corporation; and the corporation may purchase and maintain insurance for the purpose of indemnification to the fullest extent permitted by said laws. Notwithstanding any other provision of these Bylaws and except as otherwise specifically provided for herein, the corporation shall be required to indemnify an officer in connection with a proceeding (or part thereof including any counterclaim in any proceeding) commenced by such officer only if the commencement of such proceeding (or part thereof including any counterclaim in any proceeding) by the officer was authorized by the Board of Directors. As used in this Bylaw: (i) the term officer means any person who is, was or may hereafter be a director, officer, employee or agent of this corporation or, at the request of this corporation, of any other corporation or of any partnership, joint venture, trust or other enterprise and the rights of indemnification under this Bylaw shall inure to the benefit of the heirs and legal representatives of any such persons, (ii) the term action means any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative or investigative including those by or in the right of the corporation and whether or not involving an act or omission of an officer in his capacity as such and whether or not he is an officer at the time of such action, and (iii) the term expenses of any action shall include attorneys' fees, judgments, fines, amounts paid in settlement and any other expenses incurred in connection with an action but in the case of actions by or in the right of the corporation the term shall not include judgments or other amounts paid to the corporation. The foregoing terms shall be construed and shall be deemed to be amended from time to time as necessary so as to permit indemnification to the fullest extent permitted under the applicable laws of the State of Delaware then in effect. The corporation's obligation, if any, to indemnify or to advance expenses to any Indemnitee who was or is serving at its request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, or other enterprise shall be reduced by any amount such Indemnitee may collect as indemnification or advancement of expenses from, or insurance related to, such other corporation, partnership, joint venture, trust, or other enterprise. (Bylaw 42 added November 20, 1967; amended May 27, 1980; July 28, 1997) WAIVER OF NOTICES 43. Any stockholder, director or officer may waive any notice required to be given under these Bylaws. AMENDMENTS 44. These Bylaws may be altered or amended by the Board of Directors at any meeting by the affirmative vote of a majority of the whole Board of Directors. The Bylaws may also be altered or amended at any meeting of the stockholders by the affirmative vote of a majority of the stock issued and outstanding. HORMEL FOODS CORPORATION Item 14 a (3) of Form 10-K EXHIBIT 11 - Statement Regarding Computation of Per Share Earnings Year Ended October 25, 1997 October 26, 1996 October 28, 1995 Primary: Average Share Outstanding 76,494,846 76,506,427 76,689,386 Net effect of dilutive stock options based on the treasury stock method using average market price 381,865 178,166 297,276 Total Shares 76,876,711 76,684,593 76,986,662 Net Income $109,492,000 $79,408,000 $120,436,000 Per Share Amount $1.42 $1.04 $1.56 Fully Diluted: Average Shares Outstanding 76,494,846 76,506,427 76,689,386 Net effect of dilutive stock options based on the treasury stock method using the year-end market price if higher than average price 570,825 178,166 297,276 Total Shares 77,065,671 76,684,593 76,986,662 Net Income $109,492,000 $79,408,000 $120,436,000 Per Share Amount $1.42 $1.04 $1.56 EXHIBIT 23 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in this Annual Report (Form 10K) of Hormel Foods Corporation of our report dated November 24, 1997, included in the 1997 Annual Report to Stockholders of Hormel Foods Corporation. Our audits also included the financial statement schedule of Hormel Foods Corporation listed in Item 14(a). This schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. We also consent to the incorporation by reference in Registration Statement Number 333-17327 on Form S-3 dated December 5, 1996, in Post-Effective Amendment Number 2 to Registration Statement Number 33-14614 on Form S-8 dated December 6, 1988, in Registration Statement Number 33-14615 on Form S-8 dated May 27, 1987, in Post-Effective Amendment Number 1 to Registration Number 33-29053 dated January 26, 1990, in Registration Statement Number 33-43246 on Form S-8 dated October 10, 1991, and in Registration Statement Number 33-45408 on Form S-8 dated January 31, 1992, of our report dated November 24, 1997, with respect to the consolidated financial statements incorporated herein by reference, and our report included in the preceding paragraph with respect to the financial statement schedule included in this annual Report (Form 10-K) of Hormel Foods Corporation. /s/ERNST & YOUNG LLP Minneapolis, Minnesota January 23, 1998