Bridgford Foods
Annual Report 2010

Plain-text annual report

048-1041 Annual Report 03_Layout 1 1/26/11 2:32 PM Page 1 Bridgford Foods Corporation 1308 North Patt Street P.O. Box 3773 Anaheim, California 92803 Phone (714) 526-5533 www.bridgford.com Major Operating Facilities Chicago, Illinois Dallas, Texas Statesville, North Carolina Transfer Agent and Registrar Continental Stock Transfer & Trust Company 17 Battery Place, 8th Floor New York, NY 10004 1-800-509-5586 Independent Accountants Squar, Milner, Peterson, Miranda & Williamson, LLP Newport Beach, California ©2010 Bridgford Foods. YW 048-1041 ANNUAL REPORT 2010 Notice of 2011 Annual Meeting and Proxy Statement 048-1041 Annual Report 03_Layout 1 1/26/11 2:32 PM Page 3 TO OUR SHAREHOLDERS Despite dramatic increases in the costs of key commodities, Bridgford Foods Corporation again achieved solid profitability in the 2010 fiscal year. Higher prices for grains, meats and petroleum products were offset by lower operating costs resulting from strategic changes implemented in recent years. Sales during our 2010 fiscal year were $117,655,000, a decrease of 4.1% from sales of $122,665,000 in 2009. The Company recorded a net profit of $4,319,000 in 2010, equal to $.46 per share. A one-time cash dividend of $.10 per share was declared by the Board of Directors on November 8, 2010. SALES AND MARKETING HIGHLIGHTS The refinement of our Chicago based direct route sales distribution system for dry sausage products and meat snacks continued during the year. Vice President Chris Cole guided the increased emphasis on sales of products manufactured by the Company. During 2010, Bridgford Foods entered into an agreement with Golden Flake Snack Foods to sell and distribute the Company’s dry sausage and meat snack products in the Southeast United States. This arrangement supplements the Company’s own direct-store delivery routes and existing relationships with other regional distributors. Bridgford Monkey Bread, manufactured at our Superior Foods plant in Dallas under the direction of Division President Blaine Bridgford, continues to be a great success. During the year, we developed a single-serve version of this product, which is currently being test-marketed in several venues. In our North Carolina plant, emphasis continued on the development and marketing of shelf-stable sandwich and bakery products. These items are now offered for sale in a variety of retail and on-line outlets, complementing existing business with domestic and overseas military entities. We also believe these items have great potential in the disaster relief/emergency preparedness markets. OPERATIONS Commodity costs during 2010 were unfavorable when compared with those experienced in 2009, with generally higher expenses for bakery flour, meat, gasoline and diesel fuel. In 2010, the costs for these key components exceeded those experienced in 2009 by almost $3.9 million. The Company continued its emphasis on producing, rather than purchasing, the products sold in the Chicago division, and we currently produce more than 98% of the products marketed through the distribution channels serviced by this operation. Our unique beef jerky production system is now producing 100% of the Company’s jerky requirements. Under the direction of Baron R.H. Bridgford, President of Bridgford Foods of Illinois, we introduced several new items during the year, including Beef Stick and Pepperoni Stick Value Packs, and Turkey Party Bites. All of the Company’s manufacturing facilities passed multiple food safety inspections during the fiscal year, conducted by various third-party, military and government agencies. In the frozen food division, new food service products introduced during the year included Sweet Yeast Roll Dough, Sub & Hoagie Roll Dough, Whole Grain Roll Dough and White Whole Wheat Roll Dough. Under the direction of Plant Manager Monty Griffith, our Statesville, North Carolina division implemented new packaging technology for our shelf-stable products, increasing efficiency and reducing material costs. Vice President of Manufacturing Joe deAlcuaz has contributed greatly to the progress we have made this year in improving our operations in Dallas, Chicago and Statesville. We also took steps to bolster the management teams in Chicago and Statesville with an eye toward continued progress and increased capacity in those operations. FINANCIAL MATTERS Our working capital totaled $29,836,000 at October 29, 2010, $3,037,000 (11.3%) higher than at the beginning of the fiscal year, and our working capital ratio increased to 3.6 to 1 at October 29, 2010, compared to 3.0 to 1 at October 30, 2009. The increase in working capital and improvement in working capital ratio resulted from net income of $4,319,000 and lower levels of capital spending in recent years. We repurchased 27,000 shares of the Company’s common stock in the amount of $277,000 ($10.26 average price paid per share) during 2010. Projected contributions of $1,175,000 were recorded as a current liability related to our defined benefit pension plan at October 29, 2010, and we contributed a total of $1,943,000 towards this plan during the 2010 fiscal year. The defined benefit plan was frozen in the 3rd quarter of 2006 and replaced with a 401(k) defined contribution plan. The Company has been free of interest bearing debt for twenty-four consecutive years and we maintain a line of credit with Wells Fargo Bank in the amount of $2,000,000 which expires December 15, 2012. We are currently in compliance with all affirmative covenants required under the line of credit agreement. Shareholders’ equity totaled $36,200,000, an increase of $3,777,000 (11.6%) compared to the end of the prior year. Net income increased shareholders’ equity by $4,319,000 and cash dividends of $933,000 were paid during the 2010 fiscal year, as the Board of Directors declared a cash dividend in November 2009 in recognition of the positive operating results achieved during the 2009 fiscal year. The Board of Directors declared a ten cent per share cash dividend in November 2010 which will be recorded in the first quarter of fiscal year 2011. Approximately 371,000 shares remain available for repurchase under the 2 million share repurchase plan previously authorized by the Board of Directors. Shareholders’ equity per share was $3.88 at October 29, 2010 compared to $3.45 at October 30, 2009. The Company successfully completed the third year of its Sarbanes-Oxley Section 404 (a) compliance program. Management assessed the effectiveness of the Company’s internal control over financial reporting for the fiscal year ended October 29, 2010 and believes our control systems are effective. Management’s Report on Internal Controls over Financial Reporting is included in the Form 10-K report. No significant weaknesses in internal accounting control, to the extent identified, were unresolved at the conclusion of the 2010 fiscal year. The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law by the President on July 21, 2010, permanently exempted the Company from the requirement to obtain an external audit on the effectiveness of internal financial reporting controls provided in Section 404 (b) of the Sarbanes-Oxley Act of 2002. SUMMARY Some of the factors that contributed to our strong performance in 2009 moderated in 2010, but your Company was able to sustain its positive momentum during the year. In light of the increased commodity costs noted earlier, our results in 2010 constituted a solid financial performance for Bridgford Foods. The outlook for commodity costs in 2011 is uncertain, as our domestic markets are increasingly affected by global factors in addition to the normal influences of supply and demand. As always, we will strive for improvement in every facet of our business, and will always make our business decisions with the best long-term interests of all of our stakeholders as our main concern. Primary to that goal, we will never compromise the quality of our products or the service we provide to our customers. We again appreciate the loyalty and hard work of our associates, and are gratified to see that effort produce positive results in the 2010 fiscal year. On behalf of all of our directors and officers, we thank our shareholders, customers and suppliers for their support during 2010, and we look forward to reporting positive results in 2011. Respectfully submitted, January 14, 2011 William L. Bridgford Chairman John V. Simmons President Raymond F. Lancy Chief Financial Officer DIRECTORS OFFICERS DIVISION MANAGERS Allan L. Bridgford Jeffrey D. Robinson Senior Chairman, Board of Directors Bakery Manager Allan L. Bridgford Senior Chairman Bruce H. Bridgford Vice President William L. Bridgford Chairman Richard A. Foster Retired (formerly President, Interstate Electronics Corporation) Robert E. Schulze Retired (formerly President and member of the Executive Committee, Bridgford Foods Corporation) Paul R. Zippwald Retired Bank of America) Todd C. Andrews D. Gregory Scott Managing Director, Peak Holdings, LLC (formerly Regional Vice President, John V. Simmons Vice President and Controller, Joe deAlcuaz Public Storage, Inc. Vice President Manufacturing Chairman, Executive Committee Baron R. H. Bridgford Anaheim- Bread Division Bruce H. Bridgford Chairman & President, Bridgford Foods of California Anaheim- Deli Division President, Bridgford Processing Company of Illinois Bridgford Foods of Illinois Joseph deAlcuaz Vice President Dallas- Frozen-Rite Division Blaine K. Bridgford President Dallas- Superior Foods Division Monty Griffith Vice President Bridgford Foods of North Carolina and member of the Executive Committee Bruce H. Bridgford Vice President Hugh Wm. Bridgford and Vice President William L. Bridgford Chairman, and member of the Executive Committee Raymond F. Lancy Executive Vice President, Chief Financial Officer, Treasurer, and member of the Executive Committee President and member of the Executive Committee Daniel R. Yost Senior Vice President Chris Cole Vice President Bob Delong Vice President, Information Technologies Cindy Matthews–Morales Corporate Secretary and Controller Michael Bridgford Assistant Secretary 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 29, 2010 Commission file number: 0-2396 BRIDGFORD FOODS CORPORATION (Exact name of Registrant as specified in its charter) California (State of incorporation) 95-1778176 (I.R.S. Employer Identification No.) 1308 North Patt Street Anaheim, California 92801 (Address of principal executive offices) (714) 526-5533 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Common Stock, par value $1.00 per share, the NASDAQ Stock Market LLC. Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes (cid:134) No (cid:95) Indicate by check mark whether the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes (cid:134) No (cid:95) 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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes (cid:95) No (cid:134) Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files. Yes (cid:134) No (cid:134) 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 amendment to this Form 10-K. (cid:95) Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer (cid:134) Non-accelerated filer (cid:134) (Do not check if a smaller reporting company) Smaller reporting company (cid:95) Accelerated filer (cid:134) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act. Yes (cid:134) No (cid:95) The aggregate market value of voting stock held by non-affiliates of the registrant on April 16, 2010 was $22,201,000. As of January 12, 2011, there were 9,322,778 shares of common stock outstanding. Portions of the registrant’s Proxy Statement for the registrant’s Annual Meeting of Shareholders to be held March 23, 2011 are incorporated by reference into Part III, Items 10-14 of this Annual Report on Form 10-K. INDEX TO FORM 10K PART I Item 1. Business Item 1A. Risk Factors Item 1B. Unresolved Staff Comments Item 2. Properties Item 3. Legal Proceedings Item 4. Reserved PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Item 6. Selected Financial Data Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Item 7A. Quantitative and Qualitative Disclosures about Market Risk Item 8. Consolidated Financial Statements and Supplementary Data Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Item 9A. Controls and Procedures Item 9B. Other Information PART III Item 10. Directors, Executive Officers and Corporate Governance Item 11. Executive Compensation Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Item 13. Certain Relationships and Related Transactions, and Director Independence Item 14. Principal Accountant Fees and Services PART IV Item 15. Exhibits and Financial Statement Schedules SIGNATURES Page 3 3 6 7 7 8 8 9 9 10 10 15 15 15 15 16 16 16 16 16 16 16 17 17 18 2 Item 1. Business PART I This Annual Report on Form 10-K contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and Bridgford Foods Corporation intends that such forward-looking statements be subject to the safe harbors created thereby. Readers are cautioned that such statements, which may be identified by words including ‘‘anticipates,’’ ‘‘believes,’’ ‘‘intends,’’ ‘‘estimates,’’ ‘‘expects,’’ and similar expressions, are only predictions or estimations and are subject to known and unknown risks and uncertainties. These forward-looking statements include, but are not limited to, statements regarding the following: general economic and business conditions; the impact of competitive product and pricing; success of operating initiatives; development and operating costs; advertising and promotional efforts; adverse publicity; acceptance of new product offerings; consumer trial and frequency; changes in business strategy or development plans; availability, terms and deployment of capital; availability of qualified personnel; commodity, labor, and employee benefit costs; changes in, or failure to comply with, government regulations; weather conditions; construction schedules; and other factors referenced in this Report. The forward-looking statements included herein are based on current expectations that involve a number of risks and uncertainties. These forward-looking statements are based on assumptions regarding our business, which involve judgments with respect to, among other things, future economic and competitive conditions, and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the assumptions underlying the forward-looking statements are reasonable, actual results may differ materially from those set forth in the forward-looking statements. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as representation by us or any other person that the objectives or plans of our company will be achieved. The forward-looking statements contained herein speak as of the date of this Report and we undertake no obligation to update such statements after the date hereof. Background of Business Bridgford Foods Corporation (collectively with its subsidiaries, “Bridgford”, the “Company”, “We” or “Our”) is a California corporation and was organized in 1952. We originally began operations in 1932 as a retail meat market in San Diego, California and evolved into a meat wholesaler for hotels and restaurants, a distributor of frozen food products, a processor and packer of meat, and a manufacturer and distributor of frozen food products for sale on a retail and wholesale basis. For the past five years we and our subsidiaries have been primarily engaged in the manufacturing, marketing and distribution of an extensive line of frozen, refrigerated, and snack food products throughout the United States. We have not been involved in any bankruptcy, receivership, or similar proceedings since inception nor have we been party to any merger, acquisition, etc. or acquired or disposed of any material amounts of assets during the past five years. Substantially all of our assets have been acquired in the ordinary course of business. We have had no significant change in the type of products produced or distributed, nor in the markets we serve. Independent distributors now serve approximately 2,300 stores of all types in areas impractical to serve by our Company-owned vehicles. Description of Business Bridgford Foods Corporation operates in two business segments - the processing and distribution of frozen food products and the processing and distribution of refrigerated and snack food products. For information regarding the separate financial performance of the business segments refer to Note 7 of the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K. The following table shows sales, as a percentage of consolidated sales, for each of these segments during each of the last two fiscal years: Frozen Food Products Refrigerated and Snack Food Products 2010 2009 46% 54% 100% 45 % 55 % 100 % We manufacture and distribute an extensive line of food products, including biscuits, bread dough items, roll dough items, dry sausage products, beef jerky, and a variety of sandwiches and sliced luncheon meats. The products we purchase for resale include a variety of jerky, cheeses, salads, party dips, Mexican foods, nuts, and other delicatessen type food products. Products manufactured, processed or packaged by Bridgford Products manufactured or processed by third parties for distribution 2010 2009 86% 14% 100% 83 % 17 % 100 % 3 Although we have recently introduced several new products, most of these products have not contributed significantly to our revenue growth for the fiscal year. Our sales are not subject to material seasonal variations. Historically we have been able to respond quickly to the receipt of orders and, accordingly, do not maintain a significant sales backlog. Bridgford Foods Corporation and its industry generally have no unusual demands or restrictions on working capital items. During the last fiscal year we did not enter into any new markets or any significant contractual or other material relationships. Major Product Classes Frozen Food Products Our frozen food division serves both food service and retail customers. Approximately 150 unique frozen food products are sold through wholesalers, cooperatives, and distributors to approximately 21,000 retail outlets and 22,000 restaurants and institutions. Frozen Food Products – Food Service The food service industry is composed of establishments that serve food outside the home and includes restaurants, the food operations of health care providers, schools, hotels, resorts, corporations, and other traditional and non-traditional food service outlets. Growth in this industry has been driven by the increase in away-from-home meal preparation, which has accompanied the expanding number of both dual income and single-parent households. Another trend within the food service industry is the growth in the number of non-traditional food service outlets such as convenience stores, retail stores, and supermarkets. These non-traditional locations often lack extensive cooking, storage, or preparation facilities resulting in a need for pre-cooked and prepared foods similar to those we provide. The expansion in the food service industry has also been accompanied by the continued consolidation and growth of broadline and specialty food service distributors, many of which are long-standing customers. We supply our food service customers generally through distributors that take title to the product and resell it. Among our customers are many of the country’s largest broadline and specialty food service distributors. These and other large end purchasers occasionally go through extensive qualification procedures and their manufacturing capabilities are subjected to thorough review by the end purchasers prior to our approval as a vendor. Large end purchasers typically select suppliers that can consistently meet increased volume requirements on a national basis during peak promotional periods. We believe that manufacturing flexibility, national presence, and long-standing customer relationships should allow us to compete effectively with other manufacturers seeking to provide similar products to our current large food service end purchasers, although no assurances can be given. Frozen Food Products – Retail Customers The majority of our existing and targeted retail customers are involved in the resale of branded and private label packaged foods. The same trends which have contributed to the increase in away-from-home meal preparation have also fueled the growth in easy to prepare, microwaveable frozen and refrigerated convenience foods. Among the fastest growing segments is the frozen and refrigerated hand-held foods market. This growth has been driven by improved product quality and variety and the increasing need for inexpensive and healthy food items that require minimal preparation. Despite rapid growth, many categories of frozen and refrigerated hand-held foods have achieved minimal household penetration. We believe we have been successful in establishing and maintaining supply relationships with certain selected leading retailers in this market. Frozen Food Products – Sales and Marketing Our frozen food business covers the United States and Canada. In addition to regional sales managers, we maintain a network of independent food service and retail brokers covering most of the states as well as Canada. Brokers are compensated on a commission basis. We believe that our broker relationships, in close cooperation with the regional sales managers, are a valuable asset providing significant new product and customer opportunities. The regional sales managers perform several significant functions for us, including identifying and developing new business opportunities and providing customer service and support to our distributors and end purchasers through the effective use of our broker network. Our annual advertising expenditures are directed towards retail and institutional customers. These customers participate in various special promotional and marketing programs and direct advertising allowances we sponsor. We also invest in general consumer advertising in various newspapers and periodicals including free standing inserts and coupons to advertise in major markets. We direct advertising toward food service customers with campaigns in major industry publications and through our participation in trade shows throughout the United States. Refrigerated and Snack Food Products Our refrigerated and snack food products division sells approximately 220 different items through a direct store delivery network serving approximately 28,000 supermarkets, mass merchandise and convenience retail stores located in 49 states and Canada. These customers are comprised of large retail chains and smaller “independent” operators. This part of our business is highly competitive. Proper placement of our product lines is critical to selling success since most items could be considered “impulse” items which are often consumed shortly after purchase. Our ability to sell successfully to this distribution channel depends on aggressive marketing and maintaining relationships with key buyers. 4 Refrigerated and Snack Food Products — Sales and Marketing Our direct store delivery network consists of two separate divisions, refrigerated and non-refrigerated snack food products. Refrigerated snack food products are distributed through eight different regions located in the southwest, primarily operating in California, Arizona, and Nevada. Non-refrigerated snack food products are distributed across the United States and Canada. Our regional sales managers perform several significant functions for us including identifying and developing new business opportunities and providing customer service and support to our customers. We also utilize the services of brokers, where appropriate, to support efficient product distribution and customer satisfaction. Independent distributors now serve approximately 2,300 customers of all types in areas impractical to serve by our Company-owned vehicles. Product Planning and Research and Development We continually monitor the consumer acceptance of each product within our extensive product line. Individual products are regularly added to and deleted from our product line. The addition or deletion of any individual product has not had a material effect on our operations in the current fiscal year. We believe that a key factor in the success of our products is our system of carefully targeted research and testing of our products to ensure high quality and that each product matches an identified market opportunity. The emphasis in new product introductions in the past several years has been in single service items. We are constantly searching to develop new products to complement our existing product line and improved processing techniques and formulas for our existing product line. We utilize in-house test kitchens to research and experiment with unique food preparation methods, to improve quality control and to analyze new ingredient mixtures. We also retain consultants to assist us in these efforts. Competition Our products are sold under highly competitive conditions. All food products can be considered competitive with other food products, but we consider our principal competitors to include national, regional and local producers and distributors of refrigerated, frozen and snack food products. Several of our competitors include large companies with substantially greater financial and marketing resources than ours. Existing competitors may broaden their product lines and potential competitors may enter or increase their focus on our market, resulting in greater competition for us. We believe that our products compete favorably with those of our competitors. Such competitors’ products compete against ours for retail shelf space, institutional distribution and customer preference. Effect of Government Regulations Our operations are subject to extensive inspection and regulation by the United States Department of Agriculture (the “USDA”), the Food and Drug Administration (the “FDA”), and by other federal, state, and local authorities regarding the processing, packaging, storage, transportation, distribution, and labeling of products that we manufacture, produce and process. Our processing facilities and products are subject to continuous inspection by the USDA and/or other federal, state, and local authorities. The USDA has issued strict policies concerning the control of listeria monocytogenes in ready-to-eat meat and poultry products and contamination by food borne pathogens such as E. coli and salmonella, and established a new system of regulation known as the Hazard Analysis Critical Control Points (“HACCP”) program. The HACCP program requires all meat and poultry processing plants to develop and implement sanitary operating procedures and other program requirements. We believe that we are currently in compliance with governmental laws and regulations and that we maintain the necessary permits and licenses relating to our operations. To date, federal, state, and local environmental laws and regulations, including those relating to the discharge of materials into the environment, have not had a material effect on our business. Importance of Key Customers Sales to Wal-Mart® comprised 10.1% and 11.4% of revenues for fiscal years 2010 and 2009, respectively. Accounts receivable from Wal-Mart® was 9.4% and 13.3% of total accounts receivable at October 29, 2010 and October 30, 2009, respectively. Sources and Availability of Raw Materials We purchase large quantities of pork, beef, and flour. These ingredients are generally available from a number of different suppliers although the availability of these ingredients is subject to seasonal variation. We build ingredient inventories to take advantage of downward trends in seasonal prices or anticipated supply limitations. Employees We had 530 employees at October 29, 2010 approximately 47% of whose employment relationship is governed by collective bargaining agreements. Most agreements expire between February 2011 and December 2012. We believe that our relationship with all of our employees is favorable. Executive Officers of the Registrant The names, ages, and positions of all our executive officers as of January 1, 2011 are listed below. Messrs. Hugh Wm. Bridgford and Allan L. Bridgford are brothers. William L. Bridgford is the son of Hugh Wm. Bridgford and the nephew of Allan L. Bridgford. Officers are normally appointed annually by the Board of Directors at it's meeting immediately following the annual 5 meeting of shareholders. All executive officers are full-time employees of our company, except for Allan L. Bridgford, who works 60% of full-time effective March 2005. Name Allan L. Bridgford Hugh Wm. Bridgford William L. Bridgford John V. Simmons Raymond F. Lancy Age 75 79 56 55 57 Position(s) with our company Senior Chairman and member of the Executive Committee Vice President and Chairman of the Executive Committee Chairman and member of the Executive Committee President and member of the Executive Committee Chief Financial Officer, Executive Vice President, Treasurer and member of the Executive Committee Availability of SEC Filings and Code of Conduct on Internet Website We maintain an Internet website at http://www.bridgford.com. Available on this website, free of charge, are annual reports on Form 10-K, quarterly reports on Form 10-Q, and reports filed under Section 16 of the Securities Exchange Act of 1934 which we file with the Securities and Exchange Commission. Our Code of Conduct is also available on the website. Item 1A. Risk Factors In addition to the other risks described in this Annual Report on Form 10-K, the continuing operations and the price of our common stock are subject to the following risks, each of which could materially adversely affect our business, financial condition, and results of operations. The risks described below are only the risks that we currently believe are material to our business. Additional risks not presently known, or risks that are currently believed to be immaterial, may also impair our business operations. We are subject to general risks in the food industry, including risks relating to changes in consumer preference and economic conditions, any of which risks, if realized, could negatively impact our operating results and financial position. The food industry, and the markets within the food industry in which we compete, are subject to various risks, including the following: evolving consumer preferences, nutritional and health-related concerns, federal, state and local food inspection and processing controls, consumer product liability claims, risks of product tampering, and the availability and expense of liability insurance. The meat and poultry industries are subject to scrutiny due to the association of meat and poultry products with recent outbreaks of illness, and on rare occasions even death, caused by food borne pathogens. Product recalls are sometimes required in the food industry to withdraw contaminated or mislabeled products from the market. Additionally, the failure to identify and react appropriately to changes in consumer trends, demands and preferences could lead to, among other things, reduced demand and price reduction for our products. Further, we may be adversely affected by changes in domestic or foreign economic conditions, including inflation or deflation, interest rates, availability of capital markets, consumer spending rates, and energy availability and costs (including fuel surcharges). These and other general risks related to the food industry, if realized by us, could have a significant adverse affect on demand for our products, as well as the costs and availability of raw materials, ingredients and packaging materials, thereby negatively affecting our operating results and financial position. Fluctuations in the prices that we pay for raw materials could negatively impact our financial results. We purchase large quantities of commodity pork, beef, and flour. Historically, market prices for products we process have fluctuated in response to a number of factors, including changes in the United States government farm support programs, changes in international agricultural and trading policies, weather, and other conditions during the growing and harvesting seasons. Our operating results are heavily dependent upon the prices paid for raw materials. The marketing of our value-added products does not lend itself to instantaneous changes in selling prices. Changes in selling prices are relatively infrequent and do not compare with the volatility of commodity markets. While fluctuations in significant cost structure components, such as ingredient commodities and fuel prices, have had a significant impact on profitability over the last two years, the impact of general price inflation on our financial position and results of operations has not been significant. Future volatility of general price inflation or deflation and raw material cost and availability could adversely affect our financial results. We are subject to extensive government regulations and a failure to comply with such regulations could negatively impact our financial results. Our operations are subject to extensive inspection and regulation by the United States Department of Agriculture (the “USDA”), the Food and Drug Administration (the “FDA”), and by other federal, state, and local authorities regarding the processing, packaging, storage, transportation, distribution, and labeling of products that are manufactured, produced and processed by us. Our processing facilities and products are subject to continuous inspection by the USDA and/or other federal, state, and local authorities. The USDA has issued strict policies concerning the control of listeria monocytogenes in ready-to-eat meat and poultry products and contamination by food borne pathogens such as E. coli and salmonella, and established a new system of regulation known as the Hazard Analysis Critical Control Points (“HACCP”) program. The HACCP program requires all meat and poultry processing plants to develop and implement sanitary operating procedures and other program requirements. We believe that we are currently in compliance with governmental laws and regulations and that we maintain all necessary permits and licenses relating to our operations. 6 A failure to obtain or a loss of necessary permits and licenses could delay or prevent us from meeting current product demand and could adversely affect our operating performance. Furthermore, we are routinely subject to new or modified laws, regulations and accounting standards. If found to be out of compliance with applicable laws and regulations in these or other areas, we could be subject to civil remedies, including fines, injunctions, recalls, or asset seizures, as well as potential criminal sanctions, any of which could have a significant adverse effect on our financial results. We depend on our key management, the loss of which could negatively impact our operations. Our executive officers and certain other key employees have been primarily responsible for the development and expansion of our business, and the loss of the services of one or more of these individuals could adversely effect us. Our success will be dependent in part upon our continued ability to recruit, motivate, and retain qualified personnel. We can not assure you that we will be successful in this regard. We have no employment or non-competition agreements with key personnel. We depend on our major customers and any loss of such customers could have a negative impact on our profitability. We could suffer significant reductions in revenues and operating income if we lost one or more of our largest customers, including, Wal-Mart®, which accounted for 10.1% of revenues in fiscal year 2010. Many of our customers, such as supermarkets, warehouse clubs, and food distributors have consolidated in recent years. Such consolidation has produced large, sophisticated customers with increased buying power who are more capable of operating with reduced inventories while demanding lower pricing and increased promotional programs. These customers also may use their shelf space for their own private label products. Failure to respond to these trends could reduce our volume and cause us to lower prices or increase promotional spending for our product lines which could adversely affect our profitability. With more than 80% concentration of beneficial ownership of our stock held by the Bridgford family, there are risks that they can exert significant influence or control over our corporate matters. Members of the Bridgford family beneficially own, in the aggregate, approximately 81% of our outstanding stock. In addition, three members of the Bridgford family serve on the Board of Directors. As a result, members of the Bridgford family have the ability to exert substantial influence or actual control over our management and affairs and over substantially all matters requiring action by our shareholders, including amendments to by-laws, election and removal of directors, any proposed merger, consolidation or sale of all or substantially all of our assets and other corporate transactions. This concentration of ownership may also delay or prevent a change in control otherwise favored by our other shareholders and could depress our stock price. Additionally, as a result of the Bridgford family’s significant ownership of the outstanding voting stock, we have relied on the “controlled company” exemption from certain corporate governance requirements of the NASDAQ Stock Market, LLC and have elected to have the full Board of Directors perform the functions of the Nominating Committee. Item 1B. Unresolved Staff Comments Not applicable for smaller reporting companies. Item 2. Properties We own the following properties: Property Location Anaheim, California *** Modesto, California ** Dallas, Texas * Dallas, Texas * Dallas, Texas * Dallas, Texas * Statesville, North Carolina * Chicago, Illinois ** Building Square Footage Acreage 100,000 0 94,000 30,000 16,000 3,200 42,000 156,000 5.0 0.3 4.0 2.0 1.0 1.5 8.0 1.5 * - property used by Frozen Food Products Segment ** - property used by Refrigerated and Snack Food Segment ***- property used by both Frozen Food Products and Refrigerated and Snack Food Segments 7 We generally fully utilize the foregoing properties for processing, warehousing, distributing and administrative purposes. The Company also leases warehouse and/or office facilities throughout the United States and Canada through month-to-month rental agreements. We believe that our properties are generally adequate to satisfy our foreseeable needs. Additional properties may be acquired and/or plants expanded if favorable opportunities and conditions arise. Item 3. Legal Proceedings No material legal proceedings were pending against us at October 29, 2010 or as of the date of filing of this Annual Report on Form 10-K. We are likely to be subject to claims arising from time to time in the ordinary course of our business. In certain of such actions, plaintiffs may request punitive or other damages that may not be covered by insurance and, accordingly, no assurance can be given with respect to the ultimate outcome of any such possible future claims or litigation or their effect on us. Any adverse litigation trends and outcomes could significantly and negatively affect our financial results. Item 4. Reserved 8 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Common Stock and Dividend Data Our common stock is traded on the Nasdaq Global Market under the symbol “BRID”. The following table reflects the high and low closing sale prices reported by Nasdaq as well as cash dividends paid for each of the last eight fiscal quarters. Fiscal Year 2010 First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal Year 2009 First Quarter Second Quarter Third Quarter Fourth Quarter High $ $ $ $ High $ $ $ $ Low 11.41 $ 13.02 $ 16.84 $ 15.63 $ Low 4.88 $ 4.55 $ 9.32 $ 9.79 $ Cash Dividends Paid 7.27 $ 9.77 $ 11.48 $ 11.54 $ Cash Dividends Paid 3.71 $ 2.53 $ 4.31 $ 6.91 $ 0.10 0.00 0.00 0.00 0.00 0.00 0.00 0.00 On November 10, 2010, Bridgford Foods Corporation issued a press release announcing that its Board of Directors had approved a one-time cash dividend of $0.10 per share of common stock which was distributed on December 20, 2010 to shareholders of record on November 23, 2010. On January 12, 2011, the closing sale price for our common stock on the Nasdaq Global Market was $12.04 per share. As of January 12, 2011, there were 292 shareholders of record in our common stock. The payment of any future dividends will be at the discretion of our Board of Directors and will depend upon future earnings, financial requirements, and other factors. Unregistered Sales of Equity Securities During the period covered by this Report we did not sell or issue any equity securities that were not registered under the Securities Act of 1933, as amended. Repurchases of Equity Securities by the Issuer During fiscal year 2010, we repurchased an aggregate of 26,902 shares of our common stock for $277,000 pursuant to our repurchase plan previously authorized by the Board of Directors. The following table provides information regarding our repurchases of common stock in each of the four periods comprising the fourth quarter of fiscal year 2010. 9  Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs (2) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (2) 0 $ 13 $ 1,323 $ 689 $ 2,025 $ 0.00 11.69 11.90 12.00 11.93 0 13 1,323 689 2,025 373,168 373,155 371,832 371,143 Period (1) July 10, 2010 - August 6, 2010 (4 weeks) August 7, 2010 - September 3, 2010 (4 weeks) September 4, 2010 - October 1, 2010 (4 weeks) October 2, 2010 - October 29, 2010 (4 weeks) Total (1) (2) The periods shown are our fiscal periods during the sixteen-week quarter fiscal ended October 29, 2010. All repurchases reflected in the foregoing table were made on the open market. Our stock repurchase program was approved by the Board of Directors in November 1999 (1,500,000 shares authorized, disclosed in a Form 10-K filed on January 26, 2000) and was expanded in June 2005 (500,000 additional shares authorized, disclosed in a press release and Form 8-K filed on June 17, 2005). Under the stock repurchase program, we are authorized, at the discretion of management and the Board of Directors, to purchase up to an aggregate of 2,000,000 shares of our common stock on the open market. We have established a stock purchase plan (“Purchase Plan”) that is administered by Citigroup Global Markets Inc. (“CGM”) for purchase of shares of our common stock in the market. The Purchase Plan complies with the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934 (“Exchange Act”). Commencing on October 14, 2010 and continuing through and including October 13, 2011, CGM shall act as our exclusive agent to purchase Stock under the Purchase Plan. This Purchase Plan supplements any purchases of stock by us “outside” of the Purchase Plan, which may occur from time to time, in open market transactions pursuant to Rule 10b-18 of the Exchange Act. The daily purchase quantity is defined as a number of shares up to, but not to exceed, each day’s applicable Rule 10b-18 maximum volume limit (i.e. 25% of the prior four calendar weeks’ average daily trading volume); however, once per week a block of stock may be purchased that exceeds the Rule 10b- 18 average daily trading volume condition, provided that no other Purchase Plan purchases are made on any day on which such a block is purchased. As of October 29, 2010, the total maximum number of shares that may be purchased under the Purchase Plan is 371,143 at a purchase price not to exceed $12.00 per share for a total maximum aggregate price (exclusive of commission) of $4,453,716. Equity Compensation Plan Information Our only shareholder approved equity compensation plan expired by its terms on April 29, 2009. No further stock options or rights are available for grant under this plan and all previously outstanding options and rights have also expired by their terms. No stock options, warrants or rights were granted during the fiscal years ended October 29, 2010 and October 30, 2009 and none were outstanding as of October 29, 2010. Item 6. Selected Financial Data Not applicable to smaller reporting company. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations For a complete understanding, this Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Consolidated Financial Statements and Notes to the Consolidated Financial Statements contained in this Report. Certain statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this report constitute “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of Bridgford Foods Corporation to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions; the impact of competitive products and pricing; success of operating initiatives; development and operating costs; advertising and promotional efforts; adverse publicity; acceptance of new product offerings; consumer trial and frequency; changes in business strategy or development plans; availability, terms and deployment of 10 capital; availability of qualified personnel; commodity, labor, and employee benefit costs; changes in, or failure to comply with, government regulations; weather conditions; construction schedules; and other factors referenced in this Report. Results of Operations (in thousands except percentages) Fiscal Year Ended October 29, 2010 (52 weeks) Compared to Fiscal Year Ended October 30, 2009 (52 weeks) Net Sales-Consolidated Net sales in fiscal 2010 decreased $5,010 (4.1%) when compared to the prior year. The changes in net sales were comprised as follows: Impact on Net Sales - Consolidated Selling price per pound Unit volume in pounds Promotional activity Returns activity Increase (decrease) in net sales Net Sales-Frozen Food Products Segment -7.0% $ 3.3% -0.6% 0.2% -4.1% $ (9,477) 4,489 (409) 387 (5,010) Net sales in the Frozen Food Products segment in fiscal 2010 decreased $725 (1.3%) compared to the prior year. The changes in net sales were comprised as follows: Impact on Net Sales - Frozen Food Products Segment Selling price per pound Unit volume in pounds Promotional activity Returns activity Increase (decrease) in net sales Net Sales-Refrigerated and Snack Food Products Segment -6.2% $ 5.0% -0.5% 0.4% -1.3% $ (3,766) 3,023 (193) 211 (725) Net sales in the Refrigerated and Snack Food Products segment in fiscal 2010 decreased $4,285 (6.3%) compared to the prior year. The changes in net sales were comprised as follows: Impact on Net Sales - Refrigerated and Snack Food Products Segment Selling price per pound Unit volume Promotional activity Returns activity Increase (decrease) in net sales Cost of Products Sold and Gross Margin-Consolidated -7.7% $ 2.0% -0.6% -0.1% -6.4% $ (5,711) 1,466 (216) 176 (4,285) Cost of products sold in fiscal 2010 decreased $2,509 (3.4%) compared to the prior year. Favorable changes in product mix primarily contributed to the decline in cost of sales. The gross margin decreased from 40.4% in fiscal 2009, to 40.0%, in fiscal 2010. Higher costs for major commodities ($827) and employee benefits ($849) were partially off-set by lower depreciation ($271) on plant equipment and higher unit volumes lowered per unit overhead costs. The realignment of the Company’s distribution system to remote geographic areas significantly lowered freight costs ($405). Cost of Products Sold and Gross Margin–Frozen Food Products Segment Cost of products sold in the Frozen Food Products segment in fiscal 2010 decreased $54 (0.2%) compared to the prior year. Lower flour commodity costs in fiscal 2010 were the primary contributing factor causing this decrease. Favorable changes in product mix also contributed to the decline in cost of sales. The gross margin in the Frozen Food Products segment decreased from 42.0% in fiscal 2009 to 41.3% in fiscal 2010. The cost of purchased flour declined approximately $381 in fiscal 2010 compared to the prior year, partially off-setting the overhead cost increases related primarily to employee benefits. Cost of Products Sold and Gross Margin–Refrigerated and Snack Food Products Segment Cost of products sold in the Refrigerated and Snack Food Products segment in fiscal 2010 decreased $2,129 (5.0%) compared to the prior year. Lower sales of Refrigerated and Snack Food products was the primary factor causing this change. Freight costs 11 decreased significantly compared to the prior fiscal year. The gross margin in the Refrigerated and Snack Food Products segment decreased from 39.1% in fiscal 2009 to 38.9% in fiscal 2010. The cost of major meat commodities increased approximately $1,208 in fiscal 2010 compared to the prior year. Higher costs for employee benefits were more than off-set by lower depreciation on plant equipment and higher unit volumes lowered per unit overhead costs significantly. Selling, General and Administrative Expenses-Consolidated Selling, general and administrative expenses in fiscal 2010 decreased $982 (2.3%) when compared to the prior year. The decrease in this category did not directly correspond to the change in sales. The table below summarizes the primary expense variances in this category: Wages and bonus Benefits-healthcare Fuel Bad debts Depreciation Cash surrender value (gain) Outside consultants Loss on sale investment Other Total 52 Weeks Ended October 29, 2010 October 30, 2009 Expense/Loss Increase (Decrease) 17,780 (1,327) 16,453 877 1,997 2,874 528 4,809 5,337 (429) 78 (351) (293) 831 538 (235) (558) (323) 186 1,459 1,273 (159) 159 (130) 15,947 (982) 42,551 — 15,817 41,569 Employee headcount declined in the 2010 fiscal year compared to the prior year which decreased wages. Lower profitability levels decreased profit sharing expenses. The Company’s self-insured healthcare benefit expense was negatively impacted in the period due to adverse plan experience resulting in higher claim payments. Headcount decreases were insufficient to overcome negative trends in healthcare plan experience. The increase in fuel expense was driven by per gallon fuel price increases compared to the prior year as a result of negative trends in petroleum markets. The Company released a significant portion of the allowance for doubtful accounts during the fourth quarter of fiscal 2010 due to favorable trends in the accounts receivable aging. The gain in cash surrender value resulted from changes in the underlying markets that support them. The increase in outside consultants resulted from increased investment in information system data management. Depreciation and overall capital spending has declined in recent years as we carefully scrutinize capital investments for short term pay-back. Selling, General and Administrative Expenses-Frozen Food Products Segment Selling, general and administrative expenses in the Frozen Food Products segment in fiscal 2010 remained essentially flat compared to the prior year. Increases in this category were as a result of increased profit sharing expenses as a result of higher segment profitability. The allocation of corporate support costs also increased due to higher segment revenues. Expenses related to advertising decreased compared to the prior year. In addition, a significant portion of the bad debt reserve was released and helped to offset increases in this category. Selling, General and Administrative Expenses-Refrigerated and Snack Food Products Segment Selling, general and administrative expenses in the Refrigerated and Snack Food segment in fiscal 2010 decreased $941 (3.7%) compared to the prior year. This decrease was primarily caused by lower sales and a significant reduction in the bad debt reserve. Income Taxes The effective income tax rate was 21.8% and 3.6% in fiscal years 2010 and 2009, respectively. In fiscal year 2010, the effective income tax rate differed from the applicable mixed statutory rate of approximately 39.6% primarily due to recording a full valuation allowance on our deferred tax assets of $8,049 (Refer to Note 4). The 2010 provision for taxes on income of $1,204 consists of minimum federal and state income taxes. In fiscal year 2009, the effective income tax rate differed from the applicable mixed statutory rate of approximately 38.0% primarily due to recording a full valuation allowance on our deferred tax assets. The 2009 provision for taxes on income of $255 consists of minimum federal and state income taxes. 12 Liquidity and Capital Resources (in thousands except share and per share amounts) Our need for operations growth, capital expenses and share repurchases are expected to be met with cash flows provided by operating activities. Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation Provision (recovery) for losses on accounts receivable Gain on sale of property, plant and equipment Loss on sale of equity securities Deferred income taxes, net Tax valuation allowance Changes in operating working capital Net cash provided by operating activities 2010 2009 $ 4,319 $ 6,787 2,168 (351 ) (31 ) - 395 (395 ) (1,391 ) 4,714 $ 2,733 78 (11) 159 171 (171) (310) 9,436 $ For fiscal year 2010, net cash provided by operating activities was $4,714. We funded additions to property, plant and equipment in the amount of $1,769 and share repurchases of $277 from cash balances. For fiscal year 2009, net cash provided by operating activities was $9,436, which enabled us to fund additions to property, plant and equipment in the amount of $1,303 and share repurchases of $638. The available cash balance increased by $1,775 during the 2010 fiscal year compared to an increase of $7,819 during the 2010 firscal year. In November 2009, we declared a one-time cash dividend of $0.10 per share of common stock for shareholders of record on December 8, 2009, payable on January 4, 2010, based on operations for fiscal year 2009. On November 10, 2010, we declared a noe-time cash dividend of $0.10 per share of common stock payable on December 20, 2010 to shareholders of record on November 23, 2010, based on operations for fiscal 2010. Significant changes in operating working capital are as follows: 2010 – Operating cash flows increased primarily due to net income of $4,319 and a decrease in accounts receivable of $2,460. Operating cash flow was increased by a reduction in accounts receivable, a decrease in prepaids and an increase in accrued payroll, advertising and other expenses. An increase in inventory, a decrease in refundable income taxes, and a decrease in the current portion of non-current liabilities partially offset the cash flow increases during 2010. During the 2010 fiscal year we funded $1,943 toward our defined benefit pension plan. 2009 – Operating cash flows increased primarily due to net income of $6,787 and non-cash depreciation expense of $2,733. Operating cash flow was increased by a reduction in inventories, increase in accounts payable and increase in the current portion of non-current liabilities. Significant increases in accounts receivable and other non-current assets and decreases in accrued payroll, advertising and other expenses offset the cash flow increases during 2009. During the 2009 fiscal year we funded $989 toward our defined benefit pension plan. Cash used in investing activities: Proceeds from sale of property, plant and equipment Proceeds from sale of investments Additions to property, plant and equipment Net cash used in investing activities 2010 2009 40 $ - (1,769 ) (1,729 ) $ 56 268 (1,303) (979) $ $ Expenditures for property, plant and equipment include the acquisition of new equipment, upgrading of facilities to maintain operating efficiency and investments in cost effective technologies to lower costs. Overall capital spending has declined in recent years as we carefully scrutinize capital investments for short term pay-back. In general, we capitalize the cost of additions and improvements and expense the cost for repairs and maintenance. The Company may also capitalize costs related to improvements that extend the life, increase the capacity, or improve the efficiency of existing machinery and equipment. Specifically, capitalization of upgrades of facilities to maintain operating efficiency includes acquisitions of machinery and equipment used on packaging lines and refrigeration equipment used to process food products. 13 The table below highlights the additions to property, plant and equipment for the fifty-two weeks ended: Processing equipment Computer software and hardware Delivery vehicles Quality control Office and building improvements Temperature control Packaging lines Projects in process $ Additions to property, plant and equipment $ Cash used in financing activities: October 29, 2010 998 150 125 75 62 76 65 218 1,769 Shares repurchased Dividends paid Net cash used in financing activities 2010 2009 $ $ (277) $ (933) (1,210) $ (638 ) - (638 ) During fiscal year 2010, we repurchased an aggregate of 26,902 shares of our common stock for $277 pursuant to our repurchase plan previously authorized by the Board of Directors. We have remained free of interest-bearing debt for twenty-four consecutive years. We maintain a line of credit with Bank of America that expires on April 30, 2011. Under the terms of this line of credit, we may borrow up to $2,000 at an interest rate equal to the bank’s prime rate, unless we elect an optional interest rate. The borrowing agreement contains various covenants, the more significant of which require us to maintain certain levels of shareholders’ equity and working capital. We are currently in compliance with all provisions of the agreement. There were no borrowings under this line of credit during the 2010 fiscal year. Management believes that our strong financial position and our capital resources are sufficient to provide for our operating needs and capital expenditures for fiscal 2011. Impact of Inflation Our operating results are heavily dependent upon the prices paid for raw materials. The marketing of our value-added products does not lend itself to instantaneous changes in selling prices. Changes in selling prices are relatively infrequent and do not compare with the volatility of commodity markets. While fluctuations in significant cost structure components, such as ingredient commodities and fuel prices, have had a significant impact on profitability over the last two fiscal years, the impact of general price inflation on our financial position and results of operations has not been significant. However, future volatility of general price inflation or deflation and raw material cost and availability could adversely affect our financial results. Off-Balance Sheet Arrangements We do not currently have any off balance sheet arrangements within the meaning of Item 303(a)(4) of Regulation S-K. Contractual Obligations (in thousands) We have remained free of interest bearing debt for twenty-four consecutive years and had no other debt or other contractual obligations except for leases existing at October 30, 2010. We lease certain transportation equipment under operating leases through 2011. Future minimum lease payments are approximately (in thousands): Net Lease Commitments 2011 $ 382 Critical Accounting Policies The preparation of financial statements in conformity with generally accepted accounting principles requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenues and expenses during the respective reporting periods. Actual results could differ from those estimates. Amounts estimated related to liabilities for self-insured workers’ compensation, employee healthcare and pension benefits are especially subject to inherent uncertainties and these estimated liabilities may ultimately 14 settle at amounts not originally estimated. We record promotional and returns allowances and bad debt allowances based on recent and historical trends. Management believes its current estimates are reasonable and based on the best information available at the time. Disclosure concerning our policies on credit risk, revenue recognition, cash surrender or contract value for life insurance policies, deferred income tax and the recoverability of our long-lived assets are provided in Notes 1 and 4 to the Consolidated Financial Statements. Recently Issued Accounting Pronouncements and Regulations Various accounting standard-setting bodies have been active in soliciting comments and issuing statements, interpretations and exposure drafts. For information on new accounting pronouncements and the impact, if any, on our financial position or results of operations, see Note 1 of the Notes to the Consolidated Financial Statements. Item 7A. Quantitative and Qualitative Disclosures about Market Risk Not applicable for smaller reporting company. Item 8. Consolidated Financial Statements and Supplementary Data The consolidated financial statements and supplementary data required by this Item are set forth under Item 15. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable. Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Our management, with the participation and under the supervision of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d- 15(e)) as of the end of the period covered by this Report. Based on this evaluation the principal executive officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective as of the end of the period covered by this Report in their design and operation to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to management and recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms. Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving our stated goals under all potential future conditions; over time, a control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. We maintain and evaluate a system of internal accounting controls, and a program of internal auditing designed to provide reasonable assurance that our assets are protected and that transactions are performed in accordance with proper authorization, and are properly recorded. This system of internal accounting controls is continually reviewed and modified in response to evolving business conditions and operations and to recommendations made by the independent registered public accounting firm and internal auditor. We have established a code of conduct. Our management believes that the accounting and internal control systems provide reasonable assurance that assets are safeguarded and financial information is reliable. The Audit Committee of the Board of Directors meets regularly with our financial management and counsel, and with the independent registered public accounting firm engaged by us. Internal accounting controls and the quality of financial reporting are discussed during these meetings. The Audit Committee has discussed with the independent registered public accounting firm matters required to be discussed by Statement of Auditing Standards No. 114 (Communication with Audit Committees). In addition, the Audit Committee and the independent registered public accounting firm have discussed the independent registered public accounting firm’s independence from the Company and its management, including the matters in the written disclosures required by Public Company Accounting Oversight Board Rule 3526 “Communicating with Audit Committees Concerning Independence”. 15 Management’s Annual Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of our internal control over financial reporting for our fiscal year ended October 29, 2010. In making this assessment, it used the criteria set forth in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on management’s assessment and those criteria, management believes that the internal control over financial reporting for our fiscal year ending October 29, 2010 was effective. The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law by the President on July 21, 2010, permanently exempts "smaller reporting companies" from the requirement to obtain an external audit on the effectiveness of internal financial reporting controls provided in Section 404(b) of the Sarbanes-Oxley Act of 2002. As a result, an attestation report on internal controls over financial reporting by an independent registered public accounting firm is not included in this Annual Report on Form 10-K. Changes in Internal Control over Financial Reporting There has been no change in our internal control over financial reporting during the fiscal quarter ended October 29, 2010 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information Not applicable. Item 10. Directors, Executive Officers and Corporate Governance PART III The other information required by this Item is incorporated herein by reference to our definitive proxy statement, which will be filed within 120 days of the end of the fiscal year covered by this Annual Report on Form 10-K, and will be delivered to shareholders in connection with our 2011 Annual Meeting of Shareholders. Item 11. Executive Compensation The information required by this Item is incorporated herein by reference to our definitive proxy statement, which will be filed within 120 days of the end of the fiscal year covered by this Annual Report on Form 10-K, and will be delivered to shareholders in connection with our 2011 Annual Meeting of Shareholders. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information concerning our equity compensation plans is set forth in Part I, Item 5, hereof under the heading "Equity Compensation Plan Information." The other information required by this Item is incorporated herein by reference to our definitive proxy statement, which will be filed within 120 days of the end of the fiscal year covered by this Annual Report on Form 10-K, and will be delivered to shareholders in connection with our 2011 Annual Meeting of Shareholders. Item 13. Certain Relationships and Related Transactions, and Director Independence (not in thousands) The information required by this Item is incorporated herein by reference to our definitive proxy statement, which will be filed within 120 days of the end of the fiscal year covered by this Annual Report on Form 10-K, and will be delivered to shareholders in connection with our 2011 Annual Meeting of Shareholders. Our general legal counsel is the son of the senior chairman of the board of directors. For these services, he currently is paid a fee of one thousand five hundred dollars for each meeting attended. Total fees paid for fiscal year 2010 were $16. In addition, legal services are performed on our behalf and filled by a firm in which he is partner. Total fees billed under this arrangement for fiscal year 2010 were approximately $70. Item 14. Principal Accountant Fees and Services The information required by this Item is incorporated herein by reference to our definitive proxy statement, which will be filed within 120 days of the end of the fiscal year covered by this Annual Report on Form 10-K, and will be delivered to shareholders in connection with our 2011 Annual Meeting of Shareholders. 16 PART IV Item 15. Exhibits and Financial Statement Schedules (a)(1) Financial Statements . The following documents are filed as a part of this report: Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets as of October 29, 2010 and October 30, 2009 Consolidated Statements of Operations for years ended October 29, 2010 and October 30, 2009 Consolidated Statements of Shareholders’ Equity and Comprehensive Income for years October 29, 2010 and October 30, 2009 Consolidated Statements of Cash Flows for years ended October 29, 2010 and October 30, 2009 Notes to Consolidated Financial Statements Page 19 20 21 22 23 24 (2) Financial Statement Schedule The following financial statement is filed herewith: Schedule II - Valuation and Qualifying Accounts (3) Exhibits (a) The exhibits below are filed or incorporated herein by reference . Exhibit Number 3.5 Restated Articles of Incorporation, dated December 29, 1989 (filed as Exhibit 3.5 to Form 10-K on January 28, 1993 and incorporated herein by reference). Description 3.6 Amendment to Articles of Incorporation, dated July 27, 1990 (filed as Exhibit 3.6 to Form 10-K on January 28, 1993 and incorporated herein by reference). 3.7 By-laws, as amended (filed as Exhibit 2 to Form 10-K on January 28, 1993 and incorporated herein by reference). 3.8 10.1 10.2 10.3 Certificate of Amendment to By-laws (filed as Exhibit 99.1 to Form 8-K on October 10, 2007 and incorporated herein by reference). Bridgford Foods Corporation Defined Benefit Pension Plan (filed as Exhibit10.1 to Form 10-K on January 28, 1993 and incorporated herein by reference).* Bridgford Foods Corporation Supplemental Executive Retirement Plan (filed as Exhibit 10.2 to Form 10-K on January 28, 1993 and incorporated herein by reference).* Bridgford Foods Corporation Deferred Compensation Savings Plan (filed as Exhibit 10.3 to Form 10-K on January 28, 1993 and incorporated herein by reference).* 21.1 Subsidiaries of the Registrant. 24.1 Power of Attorney (included as part of the signature page) 31.1 Certification of Principal Executive Officer, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of Principal Financial Officer, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 32.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Principal Executive Officer). Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Principal Financial Officer). * Each of these Exhibits constitutes a management contract, compensatory plan or arrangement. 17 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. SIGNATURES BRIDGFORD FOODS CORPORATION By: /s/ WILLIAM L. BRIDGFORD William L. Bridgford Chairman of the Board Date: January 14, 2011 POWER OF ATTORNEY We, the undersigned directors and officers of Bridgford Foods Corporation, do hereby constitute and appoint William L. Bridgford and Raymond F. Lancy, or either of them, with full power of substitution and resubstitution, our true and lawful attorneys and agents, to do any and all acts and things in our name and behalf in our capacities as directors and officers and to execute any and all instruments for us and in our names in the capacities indicated below, which said attorneys and agents, or either of them, or their substitutes, may deem necessary or advisable to enable said corporation to comply with the Securities Exchange Act of 1934, as amended, and any rules, regulations and requirements of the Securities and Exchange Commission in connection with this Annual Report on Form 10-K, including specifically, but without limitation, power and authority to sign for us or any of us in our names and in the capacities indicated below, any and all amendments; and we do hereby ratify and confirm all that the said attorneys and agents, or either of them, shall do or cause to be done by virtue hereof. 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 dates indicated. Signature Title Date /s/ WILLIAM L. BRIDGFORD William L. Bridgford Chairman of the Board (Principal Executive Officer) January 14, 2011 /s/ ALLAN L. BRIDGFORD Allan L. Bridgford /s/ BRUCE H. BRIDGFORD Bruce H. Bridgford /s/ JOHN V. SIMMONS John V. Simmons /s/ RAYMOND F. LANCY Raymond F. Lancy /s/ TODD C. ANDREWS Todd C. Andrews /s/ RICHARD A. FOSTER Richard A. Foster /s/ ROBERT E. SCHULZE Robert E. Schulze /s/ D. GREGORY SCOTT D. Gregory Scott /s/ PAUL R. ZIPPWALD Paul R. Zippwald Senior Chairman January 14, 2011 Director President Chief Financial Officer, Vice President, Treasurer and Assistant Secretary (Principal Financial and Accounting Officer) Director Director Director Director Director 18 January 14, 2011 January 14, 2011 January 14, 2011 January 14, 2011 January 14, 2011 January 14, 2011 January 14, 2011 January 14, 2011 Report Of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders Bridgford Foods Corporation We have audited the accompanying consolidated balance sheets of Bridgford Foods Corporation (the "Company") as of October 29, 2010 and October 30, 2009 and the related consolidated statements of operations, shareholders’ equity and comprehensive income (loss) and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Bridgford Foods Corporation as of October 29, 2010 and October 30, 2009 and the results of its consolidated operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles. /s/ Squar, Milner, Peterson, Miranda & Williamson, LLP Newport Beach, California January 14, 2011 19 BRIDGFORD FOODS CORPORATION CONSOLIDATED BALANCE SHEETS October 29, 2010 and October 30, 2009 (in thousands, except per share amounts) Current assets: ASSETS Cash and cash equivalents Accounts receivable, less allowance for doubtful accounts of $80 and $404, respectively and promotional allowances of $1,932 and $1,962, respectively Inventories, less inventory reserves of $166 and $101, respectively Prepaid expenses Refundable income taxes Deferred income taxes, less valuation allowance of $2,478 and $1,852, respectively Total current assets Property, plant and equipment, net of accumulated depreciation of $56,007 and $55,362, respectively Other non-current assets Deferred income taxes, less valuation allowance of $5,571 and $6,592, respectively Total assets LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable Accrued payroll, advertising and other expenses Current portion of non-current liabilities Total current liabilities Non-current liabilities Total liabilities Contingencies and commitments (Notes 3, 5 and 6) Shareholders’ equity: Preferred stock, without par value Authorized - 1,000 shares; issued and outstanding – none Common stock, $1.00 par value Authorized - 20,000 shares; issued and outstanding – 9,328 and 9,355 in 2010 and 2009, respectively Capital in excess of par value Retained earnings Accumulated other comprehensive loss Total shareholders’ equity 2010 2009 $ 15,686 $ 13,911 7,609 16,307 291 1,594 — 41,487 7,892 11,144 — 60,523 $ 3,364 $ 5,532 2,755 11,651 12,672 24,323 — — 9,385 10,396 24,471 (8,052 ) 36,200 60,523 $ 9,718 15,595 621 168 — 40,013 8,300 10,586 — 58,899 4,227 5,320 3,667 13,214 13,262 26,476 — — 9,412 10,646 21,085 (8,720) 32,423 58,899 $ $ $ See accompanying notes to consolidated financial statements. 20 BRIDGFORD FOODS CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS For the years ended October 29, 2010 and October 30, 2009 (in thousands, except share and per share amounts) Net sales Cost of products sold Gross margin Selling, general and administrative expenses Income before taxes Provision for income taxes Net income Basic earnings per share 2010 2009 $ 117,655 $ 122,665 70,563 73,072 47,092 49,593 41,569 42,551 5,523 7,042 1,204 255 4,319 $ 6,787 0.46 $ 0.72 $ $ Shares used to compute basic earnings per common share 9,334,004 9,411,181 See accompanying notes to consolidated financial statements 21 BRIDGFORD FOODS CORPORATION CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME (LOSS) For the years ended October 29, 2010 and October 30, 2009 (in thousands) Balance, October 31, 2008 Shares repurchased and retired Net income Other comprehensive net income (loss): Unrealized gain on investment (Note 1) Net change in defined benefit plans Net change in other benefit plans Comprehensive income Balance, October 30, 2009 Shares repurchased and retired Cash dividends paid Net income Other comprehensive net income: Net change in defined benefit plans Net change in other benefit plans Comprehensive income Balance, October 29, 2010 Capital in excess of par value Retained earnings Accumulated other comprehensive income (loss) Total shareholders’ equity Shares Amount 9,435 $ (80) 9,492 $ (80) 11,204 $ 14,298 $ (2,459 ) $ (558) 6,787 180 (6,247 ) (194 ) 9,355 (27) 9,412 (27) 10,646 21,085 (8,720 ) (250) (933) 4,319 589 79 9,328 $ 9,385 $ 10,396 $ 24,471 $ (8,052 ) $ 32,535 (638) 6,787 180 (6,247) (194) 526 32,423 (277) (933) 4,319 589 79 4,987 36,200 See accompanying notes to consolidated financial statements. 22 BRIDGFORD FOODS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended October 29, 2010 and October 30, 2009 (in thousands) 2010 2009 Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash provided by operating activities: $ 4,319 $ 2,168 (351 ) (31 ) --- 395 (395 ) 2,460 (712 ) 330 (1,426 ) (527 ) (863 ) 212 (885 ) 20 4,714 --- 40 (1,769 ) (1,729 ) (277 ) (933 ) (1,210 ) 1,775 13,911 15,686 $ 6,787 2,733 78 (11) 159 171 (171) (929) 457 1 296 (750) 1,154 (1,525) 2,071 (1,085) 9,436 268 56 (1,303) (979) (638) --- (638) 7,819 6,092 13,911 2,710 $ 318 Depreciation Provision (recovery) for losses on accounts receivable Gain on sale of property, plant and equipment Loss on sale of equity securities Deferred income taxes, net Tax valuation allowance Changes in operating assets and liabilities: Accounts receivable Inventories Prepaid expenses Refundable income taxes Other non-current assets Accounts payable Accrued payroll, advertising and other expenses Current portion of non-current liabilities Non-current liabilities Net cash provided by operating activities Cash used in investing activities: Proceeds from sale of equity investments Proceeds from sale of property, plant and equipment Additions to property, plant and equipment Net cash used in investing activities Cash used in financing activities: Shares repurchased Cash dividends paid Net cash used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Supplemental disclosure of cash flow information: Cash paid for income taxes $ $ See accompanying notes to consolidated financial statements. 23 BRIDGFORD FOODS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands except share amounts, per share amounts, time periods and percentages) NOTE 1- The Company and Summary of Significant Accounting Policies: The consolidated financial statements include the accounts of our Company and its subsidiaries, all of which are wholly- owned. All inter-company transactions have been eliminated. Use of estimates and assumptions The preparation of financial statements in conformity with generally accepted accounting principles requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses during the respective reporting periods. Actual results could differ from those estimates. Amounts estimated related to liabilities for self-insured workers’ compensation, employee healthcare and pension benefits and impairment of deferred tax assets are especially subject to inherent uncertainties and these estimated liabilities may ultimately settle at amounts which may vary from current estimates. Other areas with underlying estimates include cash surrender or contract value for life insurance policies, promotional allowances, the allowance for doubtful accounts, and inventory reserves. Management believes its current estimates are reasonable and based on the best information available at the time. We are required to test long-lived assets for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If an impairment is indicated, we must measure the fair value of assets to determine if and when adjustments are to be recorded. Subsequent events On November 10, 2010, we issued a press release announcing that our Board of Directors approved a cash dividend of $0.10 per share on common stock which was distributed on December 20, 2010 to shareholders of record on November 23, 2010. Concentrations of credit risk Our credit risk is diversified across a broad range of customers and geographic regions. Losses due to credit risk have recently been immaterial. The carrying amount of cash equivalents, accounts and other receivables, accounts payable and accrued liabilities approximate fair market value due to the short maturity of these instruments. We maintain cash balances at financial institutions, which may at times exceed the amounts insured by the Federal Deposit Insurance Corporation of (currently $250 per institution through December 31, 2013). However, management does not believe there is significant credit risk associated with these financial institutions. The provision for doubtful accounts receivable is based on historical trends and current collectibility risk. We have significant amounts receivable with a few large, well known customers which, although historically secure, could be subject to material risk should these customers’ operations suddenly deteriorate. Sales to Wal-Mart® comprised 10.1% of revenues in fiscal year 2010 and 9.4% of accounts receivable was due from Wal-Mart® at October 29, 2010. Sales to Wal-Mart® comprised 11.4% of revenues in fiscal year 2009 and 13.3% of accounts receivable was due from Wal-Mart® at October 30, 2009. Business segments Our Company and its subsidiaries operate in two business segments - the processing and distribution of frozen foods, and the processing and distribution of refrigerated and snack food products. See Note 7 to the financial statements for further information. Fiscal year We maintain our accounting records on a 52-53 week fiscal basis. Fiscal years 2010 and 2009 included 52 weeks. Reclassification The Company has changed the presentation of the Consolidated Statements of Operations to present a gross margin line item. As a result, depreciation previously presented separately is now part of cost of products sold and selling, general and administrative expenses. Prior year amounts have been reclassified to give effect to this presentation. Revenues Revenues are recognized upon passage of title to the customer, typically upon product pick-up, shipment or delivery to customers. Products are delivered to customers primarily through our own long-haul fleet or through a Company owned direct store delivery system. These delivery costs, $5,315 and $5,248 for 2010 and 2009, respectively, are included in selling, general and administrative expenses in the accompanying consolidated financial statements. The Company also uses independent distributors to deliver products in remote geographic areas of the country. Revenues are recognized upon shipment to the distributor, net of return allowances. Historically, returns from distributors have been minimal. The distributor pays for these products in full, typically within 24 15 days, and such payment is not contingent upon payment from the large chain stores. As a convenience to certain large chain stores, we bill these customers on behalf of the distributor. We record promotional and returns allowances based on recent and historical trends. Revenue is recognized as the net amount estimated to be received after deducting estimated amounts for discounts, trade allowances and product terms. Promotional allowances, including customer incentive and trade promotion activities, are recorded as a reduction to sales based on amounts estimated being due to customers, based primarily on historical utilization and redemption rates. Promotional allowances deducted from sales for fiscal years 2010 and 2009 were $7,629 and $7,147, respectively. Advertising expenses Advertising and other promotional expenses are recorded as selling, general and administrative expenses. Advertising expenses for fiscal years 2010 and 2009 were $3,530 and $3,602, respectively. Cash and cash equivalents We consider all investments with original maturities of three months or less to be cash equivalents. Cash equivalents include money market funds and treasury bills. We had cash and cash equivalents of $15,686 at October 29, 2010 and $13,911 at October 30, 2009. Investments We routinely classify certain equity securities as available for sale and measure them at market value (fair value). All equity securities were sold in October 2009. Changes in unrealized gains or losses are recorded in other comprehensive income as a component of shareholders' equity. We did not hold any equity securities in fiscal 2010. Fair value measurements: We classify levels of inputs to measure the fair value of financial assets: (cid:121) Level 1 inputs: Level 1 inputs are quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date. (cid:121) Level 2 inputs: Level 2 inputs are from other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. (cid:121) Level 3 inputs: Level 3 inputs are unobservable and should be used to measure fair value to the extent that observable inputs are not available. The hierarchy noted above requires us to minimize the use of unobservable inputs and to use observable market data, if available, when determining fair value. Financial assets carried at fair value as of October 29, 2010 are classified below: 2010 Money market funds Total Inventories Level 1 Level 2 Level 3 Total $ $ 6,042 $ 6,042 $ — $ — $ — $ — $ 6,042 6,042 Inventories are valued at the lower of cost (which approximates actual cost on a first-in, first-out basis) or market. Costs related to warehousing, transportation and distribution to customers are considered when computing market value. Inventories include the cost of raw materials, labor and manufacturing overhead. We regularly review inventory quantities on hand and write down any excess or obsolete inventories to net realizable value. An inventory reserve is created when potentially slow-moving or obsolete inventories are identified in order to reflect the appropriate inventory value. Changes in economic conditions, production requirements, and lower than expected customer demand could result in additional obsolete or slow-moving inventory that cannot be sold or must be sold at reduced prices and could result in additional reserve provisions. Property, plant and equipment Property, plant and equipment are carried at cost less accumulated depreciation. Major renewals and improvements are charged to the asset accounts while the cost of maintenance and repairs is charged to expense as incurred. When assets are sold or otherwise disposed of, the cost and accumulated depreciation are removed from the respective accounts and the resulting gain or loss is credited 25 or charged to income. Depreciation is computed on a straight-line basis over 10 to 20 years for buildings and improvements, 5 to 10 years for machinery and equipment, and 3 to 5 years for transportation equipment. Life insurance policies We record the cash surrender value or contract value for life insurance policies as an adjustment of premiums paid in determining the expense or income to be recognized under the contract for the period. Income taxes Deferred taxes are provided for items whose financial and tax bases differ. A valuation allowance is provided against deferred tax assets when it is expected that it is more likely than not that the related asset will not be fully realized. During the fourth quarter of fiscal 2008, management recorded a full valuation allowance with respect to its deferred tax assets. The determination as to whether or not a deferred tax asset can be fully realized is subject to a significant degree of judgment, based at least partially upon a projection of future taxable income, which takes into consideration past and future trends in profitability, customer demand, supply costs, and multiple other factors, none of which are predictable. The Company's policy outlines measurable objective criteria that must be met before a release of the valuation allowance will occur. Due to the degree of judgment involved, actual taxable income could differ materially from management's estimates, or the timing of taxable income could be such that the net operating losses could expire prior to their utilization. Management could determine in the future that the deferred tax assets are realizable, materially increasing net income in one or many periods. Following recognition, management could again change its determination in the future, materially decreasing income. We provide tax reserves for federal, state, local and international exposures relating to audit results, tax planning initiatives and compliance responsibilities. The development of these reserves requires judgments about tax issues, potential outcomes and timing. (See Note 4 to the financial statements). Although the outcome of these tax audits is uncertain, in management’s opinion adequate provisions for income taxes have been made for potential liabilities emanating from these reviews. If actual outcomes differ materially from these estimates, they could have a material impact on our results of operations. Foreign currency transactions Our foreign branch located in Canada enters into transactions that are denominated in a foreign currency. The related transaction gains and losses arising from changes in exchange rates are not material and are included in selling, general and administrative expenses in the consolidated statement of operations in the period the transaction occurred. Comprehensive income (loss) Comprehensive income (loss) consists of net income (loss), additional minimum pension liability adjustments and unrealized gains and losses on equity securities. Recently issued accounting pronouncements and regulations In December 2008, the FASB issued additional guidance on an employers' disclosures about plan assets of a defined benefit pension or other postretirement plan. This interpretation is effective for financial statements issued for fiscal years ending after December 15, 2009. We adopted this interpretation in fiscal 2010. The adoption of this interpretation increased disclosures in the financial statements related to the assets of our defined benefit pension plan. 26 NOTE 2- Composition of Certain Financial Statement Captions: 2010 2009 Inventories: Meat, ingredients and supplies Work in process Finished goods Property, plant and equipment: Land Buildings and improvements Machinery and equipment Asset impairment Transportation equipment Construction in process Accumulated depreciation Other non-current assets: Cash surrender value benefits Intangible asset Accrued payroll, advertising and other expenses: Payroll, vacation, payroll taxes and employee benefits Accrued advertising and broker commissions Property taxes Others Current portion of non-current liabilities: Incentive compensation Defined benefit retirement plan Other accrued retirement plans Post retirement healthcare Non-current liabilities: Incentive compensation Defined benefit retirement plan Other accrued retirement plans Post retirement healthcare $ $ $ $ $ $ $ $ $ $ $ $ 3,155 $ 1,192 11,960 16,307 $ 1,807 $ 13,558 41,821 (233 ) 6,516 430 63,899 (56,007 ) 7,892 $ 11,134 $ 10 11,144 $ 3,603 $ 1,182 322 425 5,532 $ 1,023 $ 1,175 500 57 2,755 $ 1,424 $ 6,878 3,482 888 12,672 $ 4,488 1,647 9,460 15,595 1,807 13,476 41,412 (176) 6,931 212 63,662 (55,362) 8,300 10,576 10 10,586 3,596 1,012 372 340 5,320 661 2,394 544 68 3,667 1,224 7,647 3,394 997 13,262 27 NOTE 3- Retirement and Other Benefit Plans: Noncontributory-Trusteed Defined Benefit Retirement Plans for Sales, Administrative, Supervisory and Certain Other Employees We have noncontributory-trusteed defined benefit retirement plans for sales, administrative, supervisory and certain other employees. In the third quarter of fiscal 2006, we froze future benefit accruals under this plan for employees classified within the administrative, sales or supervisory job classifications or within any non-bargaining class. The benefits under these plans are primarily based on years of service and compensation levels. The funding policy of the plan is to make contributions which are at least equal to the minimum required contributions needed to avoid a funding deficiency. The measurement date for the plan is our fiscal year end. Net pension cost consisted of the following: Service cost Interest cost Expected return on plan assets Amortization of unrecognized loss Amortization of unrecognized prior service costs Net pension cost Years Ended 2010 2009 125 $ 1,959 (1,995 ) 428 1 518 $ 102 2,023 (1,702) 89 1 513 $ $ Net pension costs and benefit obligations are determined using assumptions as of the beginning of each fiscal year. Weighted average assumptions for each fiscal year are as follows: Discount rate Rate of increase in salary levels Expected return on plan assets 2010 2009 5.45% N/A 8.00% 5.75 % N/A 8.00 % The benefit obligation, plan assets, and funded status of these plans as of the fiscal years ended are as follows: Change in benefit obligations: Benefit obligations - beginning of year Service cost Interest cost Actuarial loss Benefits paid Benefit obligations - end of year Change in plan assets: Fair value of plan assets - beginning of year Employer contributions Actual return on plan assets Benefits paid Fair value of plan assets - end of year Funded status of the plans Unrecognized prior service costs Unrecognized net actuarial loss Net amount recognized 2010 2009 35,042 $ 125 1,959 1,171 (1,007 ) 37,290 25,001 1,943 3,300 (1,007 ) 29,237 (8,053 ) 7 9,641 1,595 $ 25,819 102 2,023 8,062 (964) 35,042 21,548 989 3,428 (964) 25,001 (10,041) 7 10,202 168 $ $ Current accounting principles require that an internal rate of return analysis be included in the discount rate selection process. The discount rates were based on Citigroup Pension Liability Index as of October 29, 2010 and October 30, 2009, respectively. Plan assets are primarily invested in marketable equity securities, corporate and government debt securities and are administered by an investment management company. The plans’ long-term return on assets is based on the weighted-average of the plans’ investment allocation as of the measurement date and the published historical returns for those types of asset categories, taking into consideration inflation rate forecasts. Our expected employer contribution to the plan in fiscal year 2011 is $1,175. 28 The actual and target allocation for plan assets are as follows: Asset Class Large Cap Equities Mid Cap Equities Small Cap Equities International (including Non-U.S. Fixed Income) Fixed Income Other (Government/Corporate, Bonds) Cash Total 2010 Target Asset Allocation 2009 Target Asset Allocation 37.4 % 0.0 % 3.5 % 22.2% 27.3 % 2.0 % 7.6 % 100.0 % 40.0 % 0.0 % 5.0 % 25.0 % 26.0 % 2.0 % 2.0 % 100.0 % 32.7 % 6.7 % 4.2 % 18.3 % 30.0 % 0.0 % 8.1 % 100.0 % 40.0 % 10.0 % 5.0 % 20.0 % 0.0 % 25.0 % 0.0 % 100.0 % The fair value of our pension plan assets and the Level under which fair values were determined, using the hierarchy described in Note 1, is as follows: Level 1 Level 2 Level 3 Total Year Ended 2010 Total plan assets 29,237 29,237 Expected payments for the pension benefits are as follows: Fiscal Years 2011 2012 2013 2014 2015 2016-2020 Pension Benefits $ $ $ $ $ $ 1,161 1,246 1,402 1,505 1,640 9,888 Non-Qualified Supplemental Retirement Plan for Certain Key Employees In fiscal year 1991, we adopted a non-qualified supplemental retirement plan for certain key employees. Benefits provided under the plan are equal to 60% of the employee’s final average earnings, less amounts provided by our defined benefit pension plan and amounts available through Social Security. Effective January 1, 1991 we adopted a deferred compensation savings plan for certain key employees. Under this arrangement, selected employees contribute a portion of their annual compensation to the plan. We contribute an amount to each participant’s account by computing an investment return equal to Moody’s Average Seasoned Bond Rate plus 2%. Employees receive vested amounts upon death, termination or attainment of retirement age. No benefit expense was recorded under these plans for fiscal years 2010 and 2009. Benefits payable related to these plans and included in other non-current liabilities in the accompanying financial statements were $3,482 and $3,394 at October 29, 2010 and October 30, 2009, respectively. In connection with this arrangement we are the beneficiary of life insurance policies on the lives of certain key employees and retirees. The aggregate cash surrender value of these policies, included in non-current assets, was $11,134 and $10,576 at October 29, 2010 and October 30, 2009, respectively. Expected payments for other postretirement benefits are as follows: Fiscal Years 2011 2012 2013 2014 2015 2016-2020 Other Postretirement Benefits $ $ $ $ $ $ 507 507 507 517 451 1,146 29 Incentive Compensation Plan for Certain Key Executives We provide an incentive compensation plan for certain key executives, which is based upon our pretax income. The payment of these amounts is generally deferred over three or five-year periods. The total amount payable related to this arrangement was $2,447 and $1,885 at October 29, 2010 and October 30, 2009, respectively. Future payments are approximately $1,023, $851, $445, $88 and $40 for fiscal years 2011 through 2015, respectively. Postretirement Healthcare Benefits for Selected Executive Employees We provide postretirement health care benefits for selected executive employees. Net periodic postretirement healthcare cost is determined using assumptions as of the beginning of each fiscal year, except for the total actual benefit payments and the discount rate used to develop the net periodic postretirement benefit expense, which is determined at the end of the fiscal year. Net periodic postretirement healthcare cost consisted of the following: Service cost Interest cost Amortization of prior service cost Amortization of actuarial loss Net periodic postretirement healthcare cost Years Ended 2010 2009 18 $ 82 75 (20 ) 155 $ 11 62 75 (23) 125 $ $ Weighted average assumptions for the fiscal years ended October 29, 2010 and October 30, 2009 are as follows: Discount rate Medical trend rate next year Ultimate trend rate Year ultimate trend rate is achieved 2010 2009 5.45% 9.50% 5.00% 2020 5.75 % 8.50 % 5.00 % 2016 The table below shows the estimated effect of a 1% increase in healthcare cost trend rate on the following: Interest cost plus service cost Accumulated postretirement healthcare obligation 2010 2009 $ $ 8 $ 91 $ 7 106 The table below shows the estimated effect of a 1% decrease in healthcare cost trend rate on the following: Interest cost plus service cost Accumulated postretirement healthcare obligation 2010 2009 $ $ (6 ) $ (76 ) $ (6) (89) The healthcare obligation and funded status of this plan as of the fiscal years ended are as follows: Change in accumulated postretirement healthcare obligation: Healthcare obligations - beginning of year Service cost Interest cost Actuarial loss (gain) Benefits paid Healthcare obligations - end of year Funded status of the plans Unrecognized prior service costs Unrecognized net actuarial loss Unrecognized amounts recorded in other comprehensive income Postretirement healthcare liability 2010 2009 1,066 $ 18 82 (201 ) (20 ) 945 $ 945 (75 ) 265 (190 ) 945 $ 806 11 63 216 (30) 1,066 1,066 (149) 84 65 1,066 $ $ $ 30 Expected payments for the postretirement benefits are as follows: Fiscal Years 2011 2012 2013 2014 -2018 Postretirement Heathcare Benefits $ $ $ $ 57 57 55 371 401(K) Plan for Sales, Administrative, Supervisory and Certain Other Employees During the fiscal year ended November 3, 2006, we implemented a qualified 401(K) retirement plan (the “Plan”) for our sales, administrative, supervisory and certain other employees. During fiscal years 2010 and 2009, we made total contributions to the Plan in the amounts of $421 and $409, respectively. NOTE 4- Income Taxes: The provision for taxes on income includes the following: Current: Federal State Deferred: Federal State 2010 2009 $ $ 749 $ 455 1,204 — — — 1,204 $ 25 230 255 — — — 255 The total tax provision differs from the amount computed by applying the statutory federal income tax rate to income before income taxes as follows: Provision for federal income taxes at the applicable statutory rate Increase in provision resulting from state income taxes, net of federal income tax benefit Research & development tax credit Non-taxable life insurance gain Change in valuation allowance Other, net 2010 2009 $ 1,878 $ 2,394 65 (4 ) (190 ) (595 ) 50 1,204 $ 521 (16) (110) (2,551) 17 255 $ 31 Deferred income taxes result from differences in the bases of assets and liabilities for tax and accounting purposes. Receivables allowance Returns allowance Inventory packaging reserve Inventory capitalization Incentive compensation State taxes Employee benefits Other Valuation allowance Current tax assets, net State Taxes Incentive compensation Pension and health care benefits Depreciation Net operating loss carry-forward and credits Valuation allowance Non-current tax assets, net 2010 2009 34 $ 217 61 333 275 143 1,371 44 (2,478 ) — $ 280 609 $ 4,705 (210 ) 187 (5,571 ) — $ 161 189 26 236 39 78 1,045 78 (1,852) — — 489 4,598 47 1,458 (6,592) — $ $ $ $ Management is required to evaluate whether a valuation allowance should be established against its deferred tax assets based on the consideration of all available evidence using a "more likely than not" standard. Realization of deferred tax assets is dependent upon taxable income in prior carryback years, estimates of future taxable income, tax planning strategies, and reversals of existing taxable temporary differences. Forming a conclusion that a valuation allowance is not needed is difficult when there is negative evidence such as cumulative losses in recent years or losses expected in early future years. At the end of 2008, poor economic conditions included decreases in building and real estate values and a sharp decline in the stock market. Management concluded at the end of 2008 that it was more likely than not that deferred tax assets would not be realized and recorded a full valuation allowance on all deferred tax assets during the fourth quarter of fiscal 2008. Management reevaluated the need for a full valuation allowance at the end of 2010. Management evaluated both positive and negative evidence. Although operating results improved significantly compared to the 2008 fiscal year, the weight of negative factors and level of economic uncertainty in our current business continued to support the conclusion that the realization of the Company's deferred tax assets does not meet the more likely than not standard. Therefore, a full valuation allowance remained against the net deferred tax assets as of October 29, 2010. However, management will continue to periodically reevaluate the necessity of such valuation allowance and, to the extent that conditions change in a manner that would make it more likely than not that the Company can realize its deferred tax assets, some or all of such valuation allowance could be reversed in future periods. As of October 29, 2010, the Company had federal and state net operating loss carryforwards of approximately $0 and $2,219 respectively. These loss carryforwards will expire at various dates from 2012 through 2028. In July 2006, the FASB issued guidance to clarify the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. This interpretation prescribed a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The guidance also discussed derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The cumulative effect, if any, of applying this guidance is to be reported as an adjustment to the opening balance of retained earnings in the year of adoption. As of October 29, 2010, we have provided a liability of $95 for unrecognized tax benefits related to various federal and state income tax matters. This entire amount would reduce our effective income tax rate if the asset is recognized in future reporting periods. We have not identified any new unrecognized tax benefits. As of October 30, 2009, we have provided a liability of $103 for unrecognized tax benefits related to various federal and state income tax matters. This entire amount would reduce our effective income tax rate if the asset is recognized in future reporting periods. We have not identified any new unrecognized tax benefits. 32 A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows: Balance at beginning of year Additions based on tax positions related to the current year Additions for tax positions of prior years Reductions for tax positions of prior years Settlements Balance at end of year $ $ 2010 103 $ 15 14 (2 ) (35 ) 95 $ 2009 97 5 1 --- --- 103 We recognize any future accrued interest and penalties related to unrecognized tax benefits in income tax expense. As of October 29, 2010, we had approximately $1 in accrued interest and penalties which is included as a component of the $95 unrecognized tax benefit noted above. During the year ended October 29, 2010, the Internal Revenue Service settled its audit of our U.S. federal income tax returns for fiscal years ended November 1, 2002, October 31, 2003, November 3, 2006 and November 2, 2007. This settlement resulted in the reversal of $35 of unrecognized tax benefits associated with R&D credits we reported, which increased our tax expense by $5. Our federal income tax returns are open to audit under the statute of limitations for fiscal years 2008 and 2009. We are subject to income tax in California and various other state taxing jurisdictions. Our state income tax returns are open to audit under the statute of limitations for the fiscal years ended October 30, 2006 through 2009. We do not anticipate a significant change to the total amount of unrecognized tax benefits within the next 12 months. NOTE 5- Line of Credit: Under the terms of a revolving line of credit with Bank of America, we may borrow up to $2,000 through April 30, 2011. The interest rate is at the bank’s reference rate unless we elect an optional interest rate. The borrowing agreement contains various covenants, the more significant of which require us to maintain certain levels of shareholders’ equity and working capital. We are currently in compliance with all provisions of the agreement. There were no borrowings under this line of credit during the years ended October 29, 2010 or October 30, 2009. NOTE 6- Contingencies and Commitments: We lease certain transportation under operating leases through fiscal year 2011. The terms of the transportation leases provide for annual renewal options and contingent rental payments based upon mileage and adjustments of rental payments based on the Consumer Price Index. The Company also leases warehouse and/or office facilities throughout the United States and Canada through month-to-month rental agreements. Minimum rental payments were $382 in fiscal year 2010 and $425 in fiscal year 2009. Contingent payments were approximately $124 in fiscal year 2010 and $56 in fiscal year 2009. Future minimum lease payments are approximately $382 in fiscal year 2011. NOTE 7- Segment Information: We have two reportable operating segments, Frozen Food Products (the processing and distribution of frozen products), and Refrigerated and Snack Food Products (the processing and distribution of refrigerated meat and other convenience foods). We evaluate each segment’s performance based on revenues and operating income. Selling and general administrative expenses include corporate accounting, information systems, human resource and marketing management at the corporate level. These activities are allocated to each operating segment based on revenues and/or actual usage. 33 The following segment information is for the years ended October 29, 2010 and October 30, 2009: 2010 Sales Intersegment sales Net sales Cost of products sold Gross margin Selling, general and administrative expenses Income (loss) before taxes Provision for income taxes Net income (loss) Total assets Additions to property, plant and equipment 2009 Sales Intersegment sales Net sales Cost of products sold Gross margin Selling, general and administrative expenses Income (loss) before taxes Provision for income taxes Net income (loss) Total assets Additions to property, plant and equipment Frozen Food Products Refrigerated and Snack Food Products Other 54,015 $ --- 54,015 31,682 22,333 16,769 5,564 1,205 4,359 $ 63,640 $ 1,228 64,868 40,109 24,759 24,666 93 (1) 94 $ Elimination --- $ $ (1,228) (1,228) (1,228) 134 (134) --- (134) --- --- --- $ Totals 117,655 --- 117,655 70,563 47,092 41,569 5,523 1,204 4,319 11,668 $ 20,937 $ 27,918 $ --- $ 60,523 805 $ 954 $ 10 $ --- $ 1,769 Frozen Food Products Refrigerated and Snack Food Products Other 54,740 $ — 54,740 31,736 23,004 16,774 6,230 224 6,006 $ 67,925 $ 902 68,827 42,238 26,589 25,607 982 31 951 $ — $ Elimination — $ (902) (902) (902) 170 (170) — (170) — — — $ Totals 122,665 — 122,665 73,072 49,593 42,551 7,042 255 6,787 11,416 $ 22,520 $ 24,963 $ — $ 58,899 730 $ 283 $ 290 $ — $ 1,303 $ $ $ $ $ $ $ $ NOTE 8- Unaudited Interim Financial Information Not applicable to smaller reporting company. 34 BRIDGFORD FOODS CORPORATION SUBSIDIARIES OF REGISTRANT Name of Subsidiary Bridgford Marketing Company Bridgford Meat Company Bridgford Food Processing Corporation Bridgford Food Processing of Texas, L.P.** A.S.I. Corporation Bridgford Distributing Company of Delaware (inactive) American Ham Processors, Inc.* Bert Packing Company (inactive) Moriarty Meat Company * - No shares have been issued. ** - Limited Partnership. Exhibit 21.1 State in which Incorporated California California California Texas California Delaware Delaware Illinois Illinois 35 Exhibit 31.1 I, William L. Bridgford, certify that: 1. I have reviewed this annual report on Form 10-K of Bridgford Foods Corporation; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a. b. c. d. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a. b. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. Dated: January 14, 2011 /s/ WILLIAM L. BRIDGFORD William L. Bridgford, Chairman of the Board (Principal Executive Officer) 36 Exhibit 31.2 I, Raymond F. Lancy, certify that: 1. I have reviewed this annual report on Form 10-K of Bridgford Foods Corporation; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a. b. c. d. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a. b. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. Dated: January 14, 2011 /s/ RAYMOND F. LANCY Raymond F. Lancy Chief Financial Officer, Vice President, Treasurer and Assistant Secretary (Principal Financial and Accounting Officer) 37 Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Exhibit 32.1 I, William L. Bridgford, Chairman of the Board of Bridgford Foods Corporation (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that: (1) the Annual Report on Form 10-K of the Company for the fiscal year ended October 29, 2010 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 780(d)); and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: January 14, 2011 This certification accompanies the Annual Report on Form 10-K pursuant to Section 13(a) and Section 15(d) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934. /s/ WILLIAM L. BRIDGFORD William L. Bridgford Chairman of the Board (Principal Executive Officer) 38 Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Exhibit 32.2 I, Raymond F. Lancy, Chief Financial Officer, Vice President, Treasurer and Assistant Secretary of Bridgford Foods Corporation (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that: (1) the Annual Report on Form 10-K of the Company for the fiscal year ended October 29, 2010 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 780(d)); and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: January 14, 2011 /s/ RAYMOND F. LANCY Raymond F. Lancy Chief Financial Officer, Vice President Treasurer and Assistant Secretary (Principal Financial and Accounting Officer) This certification accompanies the Annual Report on Form 10-K pursuant to Section 13(a) and Section 15(d) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934. 39  BRIDGFORD FOODS CORPORATION _________________________________ NOTICE OF 2011 ANNUAL MEETING OF SHAREHOLDERS March 23, 2011 10:00 a.m. Pacific Time _________________________________ To the Shareholders of BRIDGFORD FOODS CORPORATION: The annual meeting of the shareholders of Bridgford Foods Corporation, a California corporation, will be held at the offices of Bridgford Foods Corporation, 1308 North Patt Street, Anaheim, California 92801, on Wednesday, March 23, 2011 at 10:00 a.m. Pacific Time, for the following purposes: (1) To elect eight directors to hold office for one year or until their successors are elected and qualified. (2) To ratify the appointment of Squar, Milner, Peterson, Miranda & Williamson, LLP as the Company's independent public accountants for the fiscal year ending on October 28, 2011. (3) To hold an advisory vote on executive compensation. (4) To hold an advisory vote on the frequency of holding an advisory vote on executive compensation. (5) To transact such other business as may properly come before the meeting, or any postponements or adjournments thereof. The Board of Directors recommends that you vote “FOR” each of the eight director nominees referenced in Proposal 1, “FOR” Proposals 2 and 3, and for a “THREE YEAR” frequency with respect to Proposal 4. Each of the Proposals are described in greater detail in the proxy statement accompanying this notice. Only shareholders of record at the close of business on February 4, 2011 are entitled to notice of and to vote at the meeting or any adjournment thereof. Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to Be Held on March 23, 2011. Pursuant to the rules of the Securities and Exchange Commission, or the SEC, the Company has elected to provide access to its proxy materials both by sending you a full set of proxy materials, including this notice of meeting, the accompanying proxy statement and proxy card, and the 2010 Annual Report to Shareholders, and by notifying you of the availability of the proxy materials on the Internet. The notice of annual meeting, proxy statement, proxy card and 2010 Annual Report to Shareholders are available at https://materials.proxyvote.com/108763. All shareholders are cordially invited to attend the annual meeting. HOWEVER, TO ENSURE YOUR REPRESENTATION AT THE MEETING, THE BOARD OF DIRECTORS RESPECTFULLY URGES YOU TO SIGN, DATE AND RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE. If you attend the meeting in person, you may withdraw your proxy and vote your shares. Shareholders attending the meeting whose shares are held in the name of a broker or other nominee who desire to vote their shares at the meeting should bring with them a proxy or letter from that firm confirming their ownership of shares. The meeting will be held at the principal offices of Bridgford Foods Corporation, which are located at 1308 North Patt Street, Anaheim, California 92801, one block east of Lemon St. and just south of the 91 Freeway in the city of Anaheim, California. Driving directions may be obtained by contacting the office manager at 714-526-5533. Your vote is extremely important. Please vote as soon as possible to ensure that your vote is recorded promptly even if you plan to attend the annual meeting. Anaheim, California February 18, 2011 By order of the Board of Directors /s/ Cindy Matthews-Morales Cindy Matthews-Morales Secretary BRIDGFORD FOODS CORPORATION 1308 North Patt Street, Anaheim, California 92801 _________________________________ PROXY STATEMENT _________________________________ Annual Meeting of Shareholders to be held March 23, 2011 The enclosed proxy is solicited by the Board of Directors of Bridgford Foods Corporation, a California corporation (the “Company”), for use at the annual meeting of shareholders of the Company (the “Annual Meeting”) to be held at the offices of the Company, which are located at 1308 North Patt Street, Anaheim, California 92801, on Wednesday, March 23, 2011 at 10:00 a.m. Pacific Standard Time, and at any adjournment thereof. All shareholders of record at the close of business on February 4, 2011 are entitled to notice of and to vote at such meeting. This Proxy Statement and the accompanying proxy are being mailed on or about February 18, 2011. The persons named as proxies were designated by the Board of Directors and are officers and directors of the Company. Any proxy may be revoked or superseded by executing a later proxy or by giving notice of revocation in writing prior to, or at, the Annual Meeting, or by attending the Annual Meeting, withdrawing the proxy and voting in person. Attendance at the Annual Meeting will not in and of itself constitute revocation of the proxy. All proxies, which are properly completed, signed and returned to the Company prior to the Annual Meeting, and not revoked, will be voted in accordance with the instructions given in the proxy. If a choice is not specified in the proxy, the proxy will be voted “FOR” election of each of the eight director nominees proposed by the Board of Directors, “FOR” ratification of the Company’s appointment of Squar, Milner, Peterson, Miranda & Williamson, LLP as independent public accountants for the Company, “FOR” the approval, on an advisory basis, of the compensation of the Company's named executive officers, and for the approval, on an advisory basis, of a resolution to hold an advisory vote on executive compensation every “THREE YEARS.” Management does not know of any matters which will be brought before the Annual Meeting other than those specifically set forth in the notice hereof. However, if any other matter properly comes before the Annual Meeting, it is intended that the proxies, or their substitutes, will vote on such matters in accordance with their best judgment. Solicitation of proxies will be primarily by mail, although some of the officers, directors and employees of the Company may solicit proxies personally or by telephone, facsimile or electronic mail. All expenses incurred in connection with this solicitation will be borne by the Company. The Company will reimburse brokers and others who incur costs to send proxy materials to beneficial owners of stock in the name of a broker or nominee. On February 4, 2011, there were 9,322,150 shares of common stock of the Company outstanding. The presence at the meeting of a majority of the outstanding shares, in person or by proxy relating to any matter to be acted upon at the meeting, is necessary to constitute a quorum for the meeting. Each share of common stock entitles the holder thereof to one vote on each matter to be voted upon by such shareholders and, upon prior notice, to cumulate votes for the election of directors. For purposes of the quorum and the discussion below regarding the vote necessary to take shareholder action, shareholders of record who are present at the meeting in person or by proxy and who abstain or withhold their vote, including brokers holding customers’ shares of record who cause abstentions to be recorded at the meeting, are considered shareholders who are present and entitled to vote and count toward the quorum. Brokers holding shares of record for customers generally are not entitled to vote on certain matters unless they receive voting instructions from their customers. As used herein, “uninstructed shares” means shares held by a broker who has not received instructions from its customers on such matters and the broker has so notified the Company on a proxy form in accordance with industry practice or has otherwise advised the Company that it lacks voting authority. As used herein, “broker non-vote” means the votes that could have been cast on the matter in question by brokers with respect to uninstructed shares if the brokers had received their customers’ instructions. The effect of proxies marked “withheld” as to any director nominee or “abstain” as to any other Proposal, and the effect of broker non- votes on each of the Proposals, is discussed in each Proposal below. 1  PROPOSAL 1 ELECTION OF DIRECTORS The directors of the Company are elected annually to serve until the next annual meeting of the shareholders or until their respective successors are elected and duly qualified. At the Annual Meeting, eight directors are to be elected. The election of directors shall be by the affirmative vote of the holders of a plurality of the shares voting in person or by proxy at the Annual Meeting. Every shareholder, or his proxy, entitled to vote upon the election of directors may cumulate his or her votes and give one candidate a number of votes equal to the number of directors to be elected multiplied by the number of votes to which his or her shares are entitled, or distribute his or her votes on the same principle among as many candidates as he or she thinks fit. No shareholder or proxy, however, shall be entitled to cumulate votes unless such candidate or candidates have been nominated prior to the voting and the shareholder has given notice at the meeting, prior to the voting, of the shareholder’s intention to cumulate such shareholder’s votes. If any one shareholder gives such notice, all shareholders may cumulate their votes for candidates in nomination. Each of these individuals has served as a director since the last annual meeting. All current directorships are being filled. Unless otherwise instructed, shares represented by the proxies will be voted “FOR” the election of each of the nominees listed below. Broker non-votes and proxies marked “withheld” as to one or more of the nominees will result in the respective nominees receiving fewer votes. However, the number of votes otherwise received by the nominee will not be reduced by such action. Each nominee has indicated that he is willing and able to serve as director if elected. In the event that any of such nominees shall become unavailable for any reason, an event which management does not anticipate, it is intended that proxies will be voted for substitute nominees designated by management. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH OF THE DIRECTOR NOMINEES NAMED BELOW. The following table and biographical summaries set forth, with respect to each nominee for director, his age, the positions he holds in the Company and the year in which he first became a director of the Company. Data with respect to the number of shares of the Company’s common stock beneficially owned by each of such directors as of February 4, 2011 appears under the caption “PRINCIPAL SHAREHOLDERS AND MANAGEMENT” below. Name Allan L. Bridgford William L. Bridgford Bruce H. Bridgford Robert E. Schulze Todd C. Andrews D. Gregory Scott Richard A. Foster Paul R. Zippwald Current Position at the Company Age 75 Senior Chairman of the Board and Member of the Executive Committee (1)(4) 56 Chairman of the Board and Member of the Executive Committee (1)(4) 58 Director (1)(4) 76 Director (2)(3)(4) 45 Director (2)(3)(4) 54 Director, Audit Committee and Compensation Committee Chairman (2)(3)(4) 75 Director (2)(3)(4) 73 Director (2)(3)(4) (1) William L. Bridgford and Bruce H. Bridgford are cousins and are also each nephews of Allan L. Bridgford. (2) Member of the Compensation Committee. (3) Member of the Audit Committee. (4) Member of the Nominating Committee. Directors Allan L. Bridgford Year First Became Director 1952 2004 2009 1980 2004 2006 2001 1992 Allan L. Bridgford has served as Senior Chairman of the Board since March of 2006. From March of 1995 through March of 2006, Mr. Bridgford served as Chairman of the Board. He has been an employee of the Company since 1957, and reduced his work schedule to 80% in March of 2000 and 60% in March of 2005. Mr. Bridgford’s base compensation was reduced by the same percentage as his work schedule reduction. Mr. Bridgford has also served as a member of the Executive Committee since 1972. He is a graduate of Stanford University with a degree in Economics. Mr. Bridgford has extensive knowledge of the Company’s business and experience in the food industry developed during his 54 year tenure with the Company. He is one of the principal owners of Bridgford Industries Inc., the majority stockholder of Bridgford Foods Corporation. The Board believes he is qualified to serve as a director based on these experiences as well as his other valuable attributes and skills. 2 William L. Bridgford William L. Bridgford has served as Chairman of the Board since March of 2006. He previously served as President of the Company from June of 2004 until March of 2006, and Secretary of the Company for more than five years. Mr. Bridgford has been a full-time employee of the Company since 1981. Mr. Bridgford has also served as a member of the Executive Committee since 2004. Mr. Bridgford is a graduate of California State University of Fullerton with a degree in Business Management. Mr. Bridgford brings to the Board extensive experience in the operations of the Company and provides strong leadership skills that provide strategic business guidance to the Company. He is one of the principal owners of Bridgford Industries Inc., the majority stockholder of Bridgford Foods Corporation. The Board believes his executive managerial experience and Company knowledge base combined with his understanding of corporate values and culture qualify him to serve as a member of the Board. Bruce H. Bridgford Bruce H. Bridgford has served as President of Bridgford Foods of California, a division of the Company, since March of 1999. Mr. Bridgford has been a full time employee of the Company since 1977 and earned a B.S. degree in Business concentration in finance and marketing from the University of Southern California. Mr. Bridgford provides key insight into the direct store delivery operations of the Company as well as strategic direction for the sales management and marketing functions of the Company. He is one of the principal owners of Bridgford Industries Inc., the majority stockholder of Bridgford Foods Corporation. The Board believes these skills and experiences qualify him to serve as a member of the Board. Robert E. Schulze Robert E. Schulze is a Certified Public Accountant (inactive) and previously served the Company in several capacities including President, Executive Vice President, Principal Financial Officer, Secretary and Treasurer. Mr. Schulze retired as an employee effective as of June 30, 2004. He attended Saint Louis University and the University of California at Los Angeles, and holds a B.S. degree in Accounting from the California State University at Long Beach. Mr. Schulze brings to the Board extensive experience with the operations and management of the Company developed during his tenure with the Company serving in various leadership positions over a period of more than 40 years. He provides an essential link between management and the Board of Directors and enables the Board to provide oversight with the benefit of management’s perspective of the business. Mr. Schulze has over five years experience in public accounting with PricewaterhouseCoopers. In addition, due to his financial and accounting experience, Mr. Schulze qualifies as an audit committee financial expert and is financially sophisticated within the applicable NASDAQ rules. The Board believes that his Company experience combined with his financial and accounting experience qualify him to serve as a member of the Board. Todd C. Andrews Todd C. Andrews is a Certified Public Accountant (inactive) and presently serves as Vice President and Controller of Public Storage, a member of the S&P 500, headquartered in Glendale, California. Mr. Andrews has been employed by Public Storage since 1997. Mr. Andrews graduated cum laude with a Bachelor of Science degree in Business Administration in 1988 with an emphasis in accounting and finance from California State University, Northridge. Mr. Andrews is qualified to be a director due to his extensive experience in multiple accounting and finance roles over a period of more than 20 years. In particular, Mr. Andrews is experienced in the areas of financial reporting and analysis, treasury management, SEC reporting, internal controls and operational analysis. In addition, Mr. Andrews brings a diverse set of perspectives to the Board from serving in positions in multiple industries, including public accounting, entertainment, and real estate. Mr. Andrews qualifies as an audit committee financial expert and is financially sophisticated within the meaning of the NASDAQ rules. D. Gregory Scott D. Gregory Scott is a Certified Public Accountant (inactive) and currently serves as the Managing Director of Peak Holdings, LLC, an investment management company, based in Beverly Hills, California. Mr. Scott has been with Peak Holdings, LLC for more than the past five years. Peak Holdings, LLC and its affiliates own and manage in excess of three million square feet of office, retail and warehouse space throughout the United States. Mr. Scott qualifies as an audit committee financial expert and is financially sophisticated within the meaning of the NASDAQ rules. Mr. Scott brings to the Board extensive financial and managerial experience which qualify him to serve as a member of the Board. Richard A. Foster Richard A. Foster was the President of Interstate Electronics Corporation, a wholly owned subsidiary of Figgie International, Inc., from 1979 until his retirement in 1991. Mr. Foster also served as Vice President of Figgie International, Inc. from 1986 to 1991. He holds a B.S. degree from Stanford University and an M.S. degree from the University of California at Los Angeles. 3 Mr. Foster has significant experience and background in corporate operations and has provided many years of service to the Company as a member of the Board. The Board believes that Mr. Foster is qualified to serve as a director of the Company due to his extensive business and managerial expertise. Paul R. Zippwald Paul R. Zippwald was Regional Vice President and Head of Commercial Banking for Bank of America NT&SA, North Orange County, California, for more than five years prior to his retirement in July 1992. Mr. Zippwald is currently retired. He is a graduate of the Graduate School of Credit and Financial Management at the Amos Tuck School of Business Administration of Dartmouth College, and also holds a graduate degree from the American Institute of Banking. Mr. Zippwald brings to the Board a background and expertise in banking and investment advisory services. He has provided many years of service to the Company as a member of the Board. We believe that Mr. Zippwald is qualified to serve as a director of the Company due to his business expertise and executive managerial experience. Public Company Directorships Except as indicated above, none of the directors has been a director at any other public company in the past five years. Board Meetings During fiscal year 2010, the Company’s Board of Directors held twelve regular monthly meetings. Each of the nominees holding office during this period attended at least 75% of the aggregate number of monthly meetings of the Board of Directors and meetings of committees upon which he served. Non-employee directors were paid $1,350 for each of the first three Board meetings held in fiscal year 2010 and $1,500 for each subsequent Board meeting in fiscal year 2010. Employee directors received no additional compensation for attending the meetings. Arrangements or Understandings with Directors There are no agreements or understandings pursuant to which any of the directors was selected to serve as a director. Controlled Company Status The Company is considered a “controlled company” within the meaning of Rule 5615(c)(1) of the NASDAQ Listing Rules based on the approximate 77% ownership of the Company by Bridgford Industries Incorporated and is therefore exempted from various rules pertaining to certain “independence” requirements of its directors and certain requirements with respect to the committees of the Board. Nevertheless, the Board of Directors has determined that Messrs. Andrews, Foster, Schulze, Scott and Zippwald, constituting a majority of the Board, are all “independent directors” within the meaning of Rule 5605 of the NASDAQ Listing Rules. Board Committees The Board of Directors maintains three committees, the Compensation Committee, the Audit Committee and the Nominating Committee. Compensation Committee The Compensation Committee for fiscal year 2010 and as of the date of mailing of this proxy statement consists of Messrs. Andrews, Foster, Schulze, Scott and Zippwald. Each of the members of the Compensation Committee is a non-employee director and is independent as defined in Rule 5605(a)(2) of the NASDAQ Listing Rules. The Compensation Committee is responsible for establishing and administering the Company’s compensation arrangements for all executive officers. The Compensation Committee meets no less frequently than annually as circumstances dictate to discuss and determine executive officer and director compensation. The Compensation Committee does not generally retain the services of any compensation consultants. However, from time to time it utilizes compensation data from companies that the Compensation Committee deems to be competitive with the Company in connection with its annual review. The Compensation Committee has the power to form and delegate authority to subcommittees when appropriate, provided that such subcommittees are composed entirely of directors who would qualify for membership on the Compensation Committee. See “Compensation Discussion and Analysis” and “Director Compensation.” The Compensation Committee held one meeting during fiscal year 2010, which was attended by all committee members. No additional compensation is paid to directors for participation on the Compensation Committee. The Compensation Committee operates under a written charter, which was adopted on October 11, 2010 and is attached as Exhibit A to this proxy statement. The charter is not available on the Company’s website. 4 Audit Committee The Audit Committee for fiscal year 2010 and as of the date of mailing of this proxy statement consists of Messrs. Andrews, Foster, Schulze, Scott and Zippwald. The Audit Committee has been established in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) and each of the members of the Audit Committee is an “independent director” as defined in Rule 5605(c)(2) of the NASDAQ Listing Rules. In addition, the Board has determined that Messrs. Andrews, Schulze and Scott qualify as “audit committee financial experts” as such term is used in the rules and regulations of the SEC. The Audit Committee meets periodically with the Company’s independent registered public accountants and reviews the Company’s accounting policies and internal controls. It also reviews the scope and adequacy of the independent registered public accountants’ examination of the Company’s annual financial statements. In addition, the Audit Committee selects the firm of independent registered public accountants to be retained by the Company, subject to shareholder approval, pre-approves services rendered by its independent registered public accountants and pre-approves all related-party transactions. The Audit Committee held 12 meetings during fiscal year 2010. Each of the members of the Audit Committee receive $300 or $500 per meeting depending on the length of each meeting attended. In addition, the Audit Committee holds a pre-earnings release conference with the Company’s independent registered public accountants on a quarterly basis. The Audit Committee operates under an Amended and Restated Audit Committee Charter, which was approved on November 8, 2010 and is attached as Exhibit B to this proxy statement. The charter is not available on the Company’s website. Nominating Committee The Board of Directors has decided that the full Board should perform the functions of a Nominating Committee for the Company. It made that decision because the Board believes that selecting new Board nominees is one of the most important responsibilities the Board members have to the Company’s shareholders and, for that reason, all of the members of the Board should have the right and responsibility to participate in the selection process. Because of its status as a “controlled company” within the meaning of Rule 5615(c)(1) of the NASDAQ Listing Rules, the Company is not required to have a Nominating Committee comprised solely of independent directors. In its role as Nominating Committee, the full Board identifies and screens new candidates for Board membership. Nevertheless, actions of the Board, in its role as Nominating Committee, can be taken only with the affirmative vote of a majority of the independent directors on the Board, as defined by the NASDAQ Listing Rules. The Board last met in its role as Nominating Committee in August 2008 to approve the appointment of one new director. The Nominating Committee does not act pursuant to a written charter. Director Nomination Process In identifying new Board candidates, the Board will seek recommendations from existing Board members and executive officers. In addition, the Board will consider any candidates that may have been recommended by any of the Company’s shareholders who have made those recommendations in accordance with the shareholder nomination procedures described below. The Board, in its capacity as Nominating Committee, does not evaluate nominees recommended by shareholders differently from its evaluation of other director nominees. The Board also has the authority to engage an executive search firm and other advisors as it deems appropriate to assist in identifying qualified candidates for the Board. In assessing and selecting Board candidates, the Board will consider such factors, among others, as the candidate’s independence, experience, knowledge, skills and expertise, as demonstrated by past employment and board experience; the candidate’s reputation for integrity; and the candidate’s participation in local community and local, state, regional or national charitable organizations. When selecting a nominee from among candidates considered by the Board, it will conduct background inquiries of and interviews with the candidates the Board members believe are best qualified to serve as directors. The Board members will consider a number of factors in making their selection of a nominee from among those candidates, including, among others, whether the candidate has the ability, willingness and enthusiasm to devote the time and effort required of members of the Board; whether the candidate has any conflicts of interest or commitments that would interfere with the candidate’s ability to fulfill the responsibilities of directors of the Company, including membership on Board committees; whether the candidate’s skills and experience would add to the overall competencies of the Board; and whether the candidate has any special background or experience relevant to the Company’s business. Board Consideration of Diversity The Board believes that differences in experience, knowledge, skills and expertise enhance the performance of the Board. Accordingly, the Board, in its capacity as Nominating Committee, considers such diversity in selecting and evaluating proposed Board nominees. However, the Board has not implemented a formal policy with respect to the consideration of diversity for the composition of the Board. Shareholder Recommendation of Board Candidates Any shareholder desiring to submit a recommendation for consideration by the Board of a candidate that the shareholder believes is qualified to be a Board nominee at any upcoming shareholders meeting may do so by submitting that recommendation in writing to the Board not later than 120 days prior to the first anniversary of the date on which the proxy materials for the prior year’s 5 annual meeting were first sent to shareholders. However, if the date of the upcoming annual meeting has been changed by more than 30 days from the date of the prior year’s meeting, the recommendation must be received within a reasonable time before the Company begins to print and mail its proxy materials for the upcoming annual meeting. In addition, the recommendation should be accompanied by the following information: (i) the name and address of the nominating shareholder and of the person or persons being recommended for consideration as a candidate for Board membership; (ii) the number of shares of voting stock of the Company that are owned by the nominating shareholder, his or her recommended candidate and any other shareholders known by the nominating shareholder to be supporting the candidate’s nomination; (iii) a description of any arrangements or understandings, that relate to the election of directors of the Company, between the nominating shareholder, or any person that (directly or indirectly through one or more intermediaries) controls, or is controlled by, or is under common control with, such shareholder and any other person or persons (naming such other person or persons); (iv) such other information regarding each such recommended candidate as would be required to be included in a proxy statement filed pursuant to the proxy rules of the SEC; and (v) the written consent of each such recommended candidate to be named as a nominee and, if nominated and elected, to serve as a director. No director nominations by shareholders have been received as of the filing of this Proxy Statement. Board Leadership Structure and the Role of the Board in Risk Management Oversight Board Leadership Structure. The Board is comprised of a total of eight directors. One of those directors, Allan L. Bridgford, serves as the Senior Chairman of the Board. In this capacity, he is principally charged with fulfilling the following duties: • Presiding as the Chairman of the meetings of the Board where the Chairman is not present; • Serving as a conduit of information between the independent directors and members of management; • Together with the Chairman of the Board, preparing agendas and schedules for Board meetings; • Providing advisory services to the Board; • Providing mentoring services to the Chairman of the Board; • Such other responsibilities and duties as the Board of Directors shall designate. Another one of those directors, William L. Bridgford, serves as the Chairman of the Board. In this role he is responsible for fulfilling the following duties: • Presiding as the Chairman of the meetings of the Board of Directors; • Serving as a conduit of information between the independent directors and members of management; • Approving Board of Director meeting agendas and schedules; • Calling executive session meetings of the Independent Directors, as needed; • Reviewing information sent to the Board of Directors; • Working with the Chief Financial Officer and Corporate Secretary to ensure the Board has adequate resources to support its decision-making obligations; • Meeting with shareholders as appropriate; and • Such other responsibilities and duties as the Board of Directors shall designate. The Company has not appointed a Chief Executive Officer. Instead, the Company has historically utilized a five-member Executive Committee to serve in the capacity of Chief Executive Officer. The Board believes that the Executive Committee structure is appropriate for the Company because it requires a full committee of officers, each of whom bring their own experiences and perspectives to bear on their decision making, to discuss and vote on important decisions affecting the Company. The Company has utilized an Executive Committee in lieu of appointing a Chief Executive Officer for more than twenty years. See "Executive Officers" for further discussion about the role and membership of the Executive Committee. The Chairman of the Board and Senior Chairman of the Board each serve on the Executive Committee. Thus, the roles of Chairman of the Board and Chief Executive Officer are intertwined to some extent. However, the Senior Chairman of the Board and Chairman of the Board represent only two of the five members of the Executive Committee and no other directors serve on the Executive Committee. Accordingly, three members of the Executive Committee, comprising a majority of the voting power on the Executive Committee, are not directors of the Company. The Board believes that this structure properly maintains the independence of the Board as a whole, and of the Chairman of the Board, from the management team. The Board’s Role in Risk Oversight. The responsibility for the day-to-day management of risk lies with the Executive Committee. Risk management is not viewed by the Executive Committee as a separate function, but rather is viewed as part of the day-to-day process of running the Company. It is the Board’s responsibility to oversee the Executive Committee with respect to its risk management function and to ensure that the Company’s risk management system is well-functioning and consistent with the Company’s overall corporate strategy and financial goals. In fulfilling that oversight role, the Board focuses on the adequacy of the Company's overall risk management system. The Board believes that an effective risk management system will adequately identify the material risks to the Company’s business, monitor the effectiveness of the risk mitigating policies and procedures, and provide the Executive Committee with input with respect to the risk management process. 6 Code of Ethics The Company adopted a code of ethics that is applicable to, among other individuals, its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, and posted the code of ethics on its website at http://www.bridgford.com (and designated therein as the Code of Conduct). Any amendment or waiver to the Company’s code of ethics that applies to its directors or executive officers will be posted on its website or in a report filed with the SEC on Form 8-K. Communications with the Board Shareholders may communicate with the Board or any of the directors by sending written communications addressed to the Board of Directors generally, or to any director(s), to Bridgford Foods Corporation, 1308 North Patt Street, Anaheim, California 92801, Attention: Corporate Secretary. All communications are compiled by the Corporate Secretary and forwarded to the Board or the individual director(s) accordingly. Director Attendance at Annual Meetings The Company does not currently have a specific policy regarding director attendance at annual shareholder meetings. However, directors are strongly encouraged to attend annual shareholder meetings. All eight directors attended the 2010 annual meeting of the Company’s shareholders. Executive Officers Members of the Company’s Executive Committee, comprised of the five executive officers named below, act in the capacity of Chief Executive Officer of the Company. The following five executive officers are elected annually to serve on the Executive Committee at the pleasure of the Board of Directors: Allan L. Bridgford Hugh Wm. Bridgford William L. Bridgford John V. Simmons Raymond F. Lancy Senior Chairman of the Board and Member of the Executive Committee (1) Vice President and Chairman of the Executive Committee (1) Chairman of the Board and Member of the Executive Committee (1) President and Member of the Executive Committee Chief Financial Officer, Vice President, Treasurer and Member of the Executive Committee (1) William L. Bridgford is the son of Hugh Wm. Bridgford, the nephew of Allan L. Bridgford and the cousin of Bruce H. Bridgford. Hugh Wm. Bridgford and Allan L. Bridgford are brothers. A biographical summary regarding Messrs. Allan L. Bridgford and William L. Bridgford is set forth above under the caption “Directors.” Biographical information with respect to the Company’s other executive officers is set forth below: Hugh Wm. Bridgford, age 79, has served as Vice President of the Company and Chairman of the Executive Committee since March of 1995. He previously served as Chairman of the Board of Directors of the Company for more than five years and has been a full time employee of the Company since 1955 and has served as a member of the Executive Committee since 1972. He is a graduate of Stanford University with a degree in Economics and completed the Executive Program at the University of California at Los Angeles Graduate School of Business. John V. Simmons, age 55, has served as President of the Company and member of the Executive Committee since 2006. He previously served as Vice President of the Company for more than the five years. Mr. Simmons earned a B.A. degree in Psychology from the University of Wisconsin. Raymond F. Lancy, age 57, has served as Treasurer of the Company for more than the past five years. He has also served as a member of the Executive Committee since 2001, Vice President since 2001 and Chief Financial Officer since 2003. Mr. Lancy is a Certified Public Accountant (inactive) and worked ten years as an auditor at PricewaterhouseCoopers. He earned a Bachelor of Science degree with a major in Administration with high honors from the California State University at San Bernardino. There are no agreements or understandings pursuant to which any of the executive officers was selected to serve as an executive officer. 7 PRINCIPAL SHAREHOLDERS AND MANAGEMENT The following table sets forth certain information known to the Company with respect to the beneficial ownership of the Company’s common stock as of February 4, 2011 by each shareholder known by the Company to be the beneficial owner of more than 5% of the Company’s common stock, by each director and nominee for director, by each executive officer named in the Summary Compensation Table and by all executive officers and directors as a group. The information as to each person or entity has been furnished by such person or group. Name and Address of Beneficial Owner(1) Bridgford Industries Incorporated 1707 Good-Latimer Expressway Dallas, TX 75226 Hugh Wm. Bridgford Allan L. Bridgford Bruce H. Bridgford Baron R.H. Bridgford 170 North Green St. Chicago, IL 60607 Robert E. Schulze William L. Bridgford John V. Simmons 1707 Good-Latimer Expressway Dallas, TX 75226 Todd C. Andrews Richard A. Foster D. Gregory Scott Paul R. Zippwald All directors and executive officers as a group (12 persons) Amount and Nature of Shares Beneficially Owned Sole Voting and Investment Power Shared Voting and Investment Power(2) Total Beneficially Owned(3) Percentage of Outstanding Shares Beneficially Owned(3) 7,156,396 47,917 155,882 7,986 1,654 167,870 6,175 363 200 2,234 8,550 1,452 — 7,156,396 7,156,396 7,156,396 7,156,396 — 7,156,396 — — — 7,156,396 7,204,313 7,312,278 7,164,382 7,158,050 167,870 7,162,571 363 200 2,234 8,550 1,452 7,556,679 7,156,396 7,556,679 76.8 77.3 78.4 76.9 76.8 1.8 76.8 * * * 0.1 * 81.1 * Represents ownership of less than one percent (1%) of the outstanding shares. (1) Unless otherwise indicated, the address of such beneficial owner is the Company’s principal executive offices, which are located at 1308 North Patt Street, Anaheim, California 92801. (2) Represents shares beneficially owned by Bridgford Industries Incorporated, a Delaware corporation (“BII”) as reported on Schedule 13D filed with the SEC on April 5, 2010. Other than ownership of these shares, BII does not presently have any significant business or assets. Allan L. Bridgford, Hugh Wm. Bridgford, William L. Bridgford, Bruce H. Bridgford and Baron R.H. Bridgford presently own 16.49%, 10.82%, 7.68%, 10.56% and 9.83%, respectively, of the outstanding voting capital stock of BII. The remaining percentage of BII stock is owned of record, or beneficially, by 32 additional members of the Bridgford family. The officers of BII jointly vote all of the Company’s shares held by BII. (3) Applicable percentage of ownership as of February 4, 2011 is based upon 9,322,150 shares of common stock outstanding. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting and investment power with respect to shares shown as beneficially owned. Except as otherwise indicated, and subject to community property laws where applicable, to the knowledge of the Company the persons listed above have sole voting and investment power with respect to all shares shown as beneficially owned by them. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s directors, executive officers, and holders of more than 10% of the Company’s common stock, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock of the Company. Officers, directors and 10% shareholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file. To the Company’s knowledge, based solely on the review of copies of such reports furnished to the Company and written representations that no other reports were required, during the fiscal year ended October 29, 2010, all of the Company’s officers, directors and 10% shareholders complied with all applicable Section 16(a) filing requirements. 8 COMPENSATION OF EXECUTIVE OFFICERS Compensation Discussion and Analysis Compensation Overview This Compensation Discussion and Analysis provides information regarding the compensation paid to the Company’s “named executive officers” or “NEOs,” all of whom are members of the Executive Committee. The Company has historically been and continues to be principally managed by the Executive Committee. The Executive Committee, as a unit, serves as the Company’s “Chief Executive Officer.” The Executive Committee currently consists of the following five members: • Hugh Wm. Bridgford, Vice President and Chairman of the Executive Committee • Allan L. Bridgford, Senior Chairman of the Board • William L. Bridgford, Chairman of the Board and Principal Executive Officer • • Raymond F. Lancy, Chief Financial Officer, Vice President, Treasurer and Principal Financial Officer John V. Simmons, President The Company’s executive compensation program is overseen by the Compensation Committee (the “Committee”), which is comprised of certain non-employee members of the Board. The basic responsibility of the Committee is to review the performance of the officers and key employees toward achieving the Company’s strategic goals and to help ensure that the Company is able to attract and retain individuals who can lead the Company to achieve those goals. Each member of the Committee is an independent director as defined in Rule 5605(a)(2) of the NASDAQ Listing Rules. One of the Company’s primary strategic goals is to increase shareholder value while meeting its objectives for customer satisfaction, improved sales and financial performance, sound corporate governance, and competitive advantage. The Company’s current emphases on controlling costs and improving profit margins on a consistent basis are also important factors which affect the Company’s compensation decisions. The Committee’s goal is to work with management to balance the Company’s financial goals and circumstances with the need to attract, motivate and retain the fully qualified and capable individuals the Company needs to meet and surpass its customers’ and shareholders’ expectations in a highly-competitive industry. Compensation Philosophy and Objectives The core of the Company’s executive compensation philosophy is to pay for performance. To that end, incentive bonus targets are set each year to reward excellent executive performance based upon the achievement of profit objectives by business unit and the Company’s overall profitability based on pretax income, thus stimulating all executives to assume broad responsibility for the Company’s overall financial welfare and financial performance. The Committee’s guiding principles are as follows: • Work with management to provide a compensation program that recognizes individual contributions as well as the Company’s overall business results; • Provide reasonable levels of total compensation which will enable the Company to attract and retain qualified and capable executive talent within its industry while also considering the Company’s current goals of controlling costs and effecting consistent improvements in its overall financial condition; • Motivate executive officers to deliver optimum individual and departmental performance; • Develop and reward a leadership team that is capable of successfully operating and growing an increasingly competitive and complex business in a rapidly changing industry; • Ensure that executive compensation-related disclosures are made to the public on a timely basis. Role of the Compensation Committee The Compensation Committee sets and approves the NEO’s total compensation. The compensation of all NEO’s is recommended by the Executive Committee and, after review and analysis, approved by the Compensation Committee. The Compensation Committee met one time during fiscal year 2010. The responsibilities of the Compensation Committee are as follows: • Review and approve, on an annual basis, the total compensation and compensation structure for the Executive Committee, including base salary, benefits, bonuses and equity compensation (if any). The Board’s evaluation of the Executive Committee’s performance is considered in setting incentives. The Committee seeks to maintain an appropriate balance, in light of overall Company performance and profitability, between the compensation of the Executive Committee and the compensation of other officers and employees generally. The Committee may also make any interim adjustments in any such compensation or plan as the Committee may deem appropriate, or as may be requested by the Board or the Compensation Committee. • Provide consultation and oversight of senior management’s decisions concerning the compensation of management, including evaluation procedures for Company officers and other executives deemed eligible for bonuses or equity compensation. • Review and approve compensation packages for new executives and, as needed, termination packages for departing officers or other executives. • Review and, as deemed necessary or desirable, oversee the administration of the Company’s stock incentive and stock purchase plans, if any. 9 • Assist the Board of Directors and management in developing and evaluating potential candidates for executive positions. • Advise the Board of Directors in its succession-planning initiatives for the Company’s executive officers and other senior officers. • Oversee preparation of a report on executive compensation as required for inclusion in the Company’s annual proxy statement. Role of Management in the Compensation Determination Process The Company’s senior management team, primarily the Senior Chairman and the Chairman of the Executive Committee, support the Committee in the executive compensation decision-making process. At the request of the Compensation Committee, the Senior Chairman presents his performance assessment and recommendations to the Committee regarding base salaries, bonus payments, incentive plan structure and other compensation-related matters for the Company’s executives (other than with respect to his own compensation). Role of Compensation Consultant The Compensation Committee has decided not to utilize the services of a paid compensation consultant after concluding that such a consultant would provide insufficient value compared to the cost. Total Compensation for Executive Officers The compensation packages offered to the Company’s executive officers are comprised of one or more of the following elements: • Base salary; • Discretionary cash bonuses; • Post retirement healthcare and pension benefits. The Company does not have any formal policies which dictate the amount to be paid with respect to each element, nor does it have any policies which dictate the relative proportion of the various elements. The Company also does not have any formal policies for allocating between cash and non-cash compensation or short-term and long-term compensation. Instead, the Company relies on the judgment of the Compensation Committee and input and feedback from the management team, including in particular the Senior Chairman of the Board and the Chairman of the Executive Committee. The Committee has no plans to adopt any such formulas, ratios or other such targets that might artificially dilute the Company’s effectiveness in achieving its overall profit objectives. In fact, all of the Company’s compensation policy decisions are made in the context of its current financial position and are subordinated to the Company’s current goal of achieving overall profitability on an annual basis. Each of the compensation components is described in more detail below. Base Salary The Company provides executive officers and other employees with base salary to compensate them for services rendered during the fiscal year. The purpose of base salary is to reward effective fulfillment of the assigned job responsibilities, and to reflect the position’s relative value to the Company and competitiveness of the executive job market. Base salaries for executive officers are determined based on the nature and responsibility of the position, salary norms for comparable positions, the expertise and effectiveness of the individual executive, and the competitiveness of the market for the executive officer’s services. The Company has successfully held most base salaries at the low end of the competitive range in order to reduce its overall cost structure and to achieve systematic improvement in the financial performance of the business without incurring a large turnover in executive talent and leadership. Any “merit increases” for the Company’s executive officers are subject to the same budgetary constraints that apply to all other employees. Executive officer salaries are evaluated as part of the Company’s annual review process and may be adjusted where justified in the context of the Company’s current focus on profitability and controlling expenses. For fiscal year 2010, the Compensation Committee set a base salary of $4,345 per week for each Executive Committee member, reduced on a pro-rata basis for any member working less than a full time schedule. This change represented an approximate 3% increase in the base salary compared to fiscal year 2009, which was derived from management’s assessment of the increase in the cost of living. The same percentage increase was applied to all non-executive, non-union team members when evaluating salary changes. Discretionary Cash Bonuses The Company’s policy is to make a significant portion of each executive’s total compensation contingent upon the Company’s financial performance. The Compensation Committee believes that the payment of cash bonuses allows the Company to offer a competitive total compensation package despite relatively lower base salaries, while aligning a portion of the executive compensation with the achievement of positive Company financial results. However, while the payment of these cash bonuses to the executives is generally correlated with the achievement of positive Company financial results, there are no specific performance targets communicated to the executives, and the bonuses are ultimately paid at the discretion of the Compensation Committee after receiving input from the Chairman of the Board. For fiscal year 2010, bonuses were accrued to members of the Executive Committee 10 in the amounts set forth in the column titled “Bonus” in the caption “Summary Compensation Table” below. The bonus amounts reflected for fiscal year 2010 were calculated based on 3% of the Company’s pre-tax income (before bonus), and were pro-rated for part-time employment. Long-Term Equity-Based Incentive Compensation The Compensation Committee has concluded that long-term stock-related compensation has very limited if any value as an employee incentive or retention tool. Historically, the Company’s equity-based incentive awards have proved to have little or no value to the recipient. Beginning in 2005, U.S. accounting rules required the Company to expense any stock option awards according to a formula which could impose a costly charge on the Company’s income statements, thereby burdening or erasing its profit margins. Because of these factors, the Company has not granted stock options and awards to avoid the adverse effects of such expenses. Instead, the Compensation Committee aims to align the interests of the executive officers with those of the Company's shareholders by creating a link between the payment of executive compensation and the achievement of Company financial goals as described above. Stock Options. In fiscal year 2010, the Company did not award any stock options to the named executive officers or any of its other employees or directors. Historically, the number of stock options granted to an executive officer is based upon the executive officer’s position and level of responsibility. The Company does not issue discounted stock options or permit the re-pricing or reissue of previously issued options. Restricted Stock. In fiscal year 2010, the Company did not award any shares of restricted common stock to the named executive officers or to any of its other employees or directors. As with stock options, the number of shares of restricted stock that may be awarded to a named executive officer in the future, if any, will be based upon the executive’s position and level of responsibility. The Company’s 1999 Stock Incentive Plan expired by its own terms on April 29, 2009 and no additional stock options or restricted stock may be granted thereunder. Non-Qualified Deferred Compensation Effective January 1, 1991 the Company adopted a deferred compensation savings plan for certain key employees. Under this arrangement, selected employees contributed a portion of their annual compensation to the plan. The Company contributed an amount to each participant’s account by computing an investment return equal to Moody’s Average Seasoned Bond Rate plus 2%. The purpose of the plan was to provide tax planning and supplemental funds upon retirement or death for certain selected employees and to aid in retaining and attracting employees of exceptional ability. Separate accounts are maintained for each participant to properly reflect his or her total vested account balance. Pension and Retirement Benefits Retirement Plan for Employees of Bridgford Foods Corporation for Administrative and Sales Employees. The Company has a defined benefit plan (the “Primary Benefit Plan”) for certain of its employees not covered by collective bargaining agreements. The Primary Benefit Plan, administered by a major life insurance company, presently provides that participants receive an annual benefit on retirement equal to 1.5% of their total compensation from the Company during their period of participation from 1958. Benefits are not reduced by Social Security payments or by payments from other sources and are payable in the form of fully-insured monthly lifetime annuity contracts commencing at age 65 or the participant’s date of retirement, whichever is later. Effective May 12, 2006, future benefit accruals under the Primary Benefit Plan were frozen. Supplemental Executive Retirement Plan. Retirement benefits otherwise available to certain key executives under the Primary Benefit Plan have been limited by the effects of the Tax Equity and Fiscal Responsibility Act of 1982 (“TEFRA”) and the Tax Reform Act of 1986 (“TRA”). To offset the loss of retirement benefits associated with TEFRA and TRA, the Company has adopted a non-qualified “makeup” benefit plan (the “Supplemental Executive Retirement Plan”). Benefits will be provided under the Supplemental Executive Retirement Plan in an amount equal to 60% of their final average earnings minus any pension benefits and primary insurance amounts available to them under Social Security. However, in all cases the benefits are capped at $120,000 per year for Allan L. Bridgford and Hugh Wm. Bridgford. Benefits provided under this plan for William L. Bridgford and Raymond F. Lancy are calculated at 50% of final average earnings, capped at $200,000 per year, without offsets for other pension or Social Security benefits. Bridgford Foods Retirement Savings 401(k) Plan. The Company implemented a 401(k) plan effective May 13, 2006. The Company makes a matching contribution to each employee’s account based on pretax contributions in an amount equal to 100% of the first 3% of compensation and 50% of the next 2% of compensation contributed to the Plan. No amounts are contributed by the Company unless the employee elects to make a pretax contribution to the plan. Perquisites and Other Benefits The Company provides its executive officers with various health and welfare programs and other employee benefits which are generally available on the same cost-sharing basis to all of its employees. However, in keeping with the Company’s policy of 11 controlling costs in connection with its profitability objectives, it does not provide any significant perquisites or other special benefits to its executive officers including, but not limited to, payment of club memberships, fees associated with financial planning, executive dining rooms or special transportation rights. The Company does not own an airplane and does not provide aircraft for executives for business or personal purposes. The Company provides post-retirement healthcare for certain executives and their spouses (who are within fifteen years of age of the employee) who have reached normal retirement age. This coverage is secondary to Medicare. Coverage for spouses continues upon the death of the employee. The maximum benefit under the plan is $100,000 per year per retiree. The plan is subject to annual renewal by the Board of Directors and may be discontinued at the Board’s discretion. The plan was renewed for one year at the Board of Directors meeting held in December 2010. The combined cost of this plan during fiscal year 2010 was $155,000 for all active and retired participants. The Company pays life and disability insurance premiums on policies under which the Company’s President is the named owner and beneficiary. Employment Agreements The Company currently does not have any employment, severance, change of control or similar agreements with any of its NEOs. Refer to the compensation discussion below for information on pension, deferred compensation, and benefit-related payments payable in the event of a qualifying event such as employment termination, disability, death, or sale/merger/acquisition. Tax and Accounting Implications The Compensation Committee is responsible for considering the deductibility of executive compensation under Section 162(m) of the Internal Revenue Code, which provides that it may not deduct non-performance-based compensation of more than $1,000,000 that is paid to its executive officers. The Company believes that the compensation paid under the current management incentive programs is fully deductible for federal income tax purposes. In certain situations, the Committee may approve compensation that will not meet the requirements for deductibility in order to ensure competitive levels of compensation for its executives and to meet its obligations under the terms of various incentive programs. However, the issue of deductibility has not come before the Committee in recent years and is not expected to be a concern for the foreseeable future. Summary Compensation Table The table below provides summary information concerning cash and certain other compensation paid to or accrued for the Company’s NEOs during fiscal years 2008, 2009 and 2010, respectively. Each of the NEOs named below are also members of the Executive Committee, which acts in the capacity of Chief Executive Officer of the Company. See “Compensation Discussion and Analysis” for further discussion of compensation arrangements pursuant to which the amounts listed in the table below were paid or awarded and the criteria for such payment or award. Name and Principal Position Allan L. Bridgford Senior Chairman of the Board Hugh Wm. Bridgford Vice President and Chairman of the Executive Committee William L. Bridgford Chairman of the Board (Principal Executive Officer) John V. Simmons President Raymond F. Lancy Chief Financial Officer, Vice President and Treasurer (Principal Financial Officer) Base Salary 135,557 131,609 126,547 225,929 219,348 210,912 Bonus (1) 115,338 147,042 — 192,230 245,070 — Year 2010 2009 2008 2010 2009 2008 2010 2009 2008 225,929 219,348 210,912 192,230 245,070 — 2010 2009 2008 2010 2009 2008 225,929 219,348 210,912 225,929 219,348 210,912 192,230 245,070 — 192,230 245,070 — Stock Awards (2) Option Awards (3) Non-Equity Incentive Plan Compensation (4) Change in Pension Value and Non- Qualified Deferred Compensation Earnings (5) All Other Compensation (6) — — — — — — — — — — — — — — — 0 0 137,271 0 0 142,529 98,762 162,676 12,357 12,404 96,549 12,357 98,959 131,463 0 0 0 1,713 10,130 9,799 11,275 12,305 8,774 8,545 34,601 33,150 7,454 10,219 8,559 8,436 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 12 Total 250,895 278,651 265,531 428,289 474,217 364,716 529,226 635,868 231,814 465,164 594,117 230,723 527,337 604,440 219,348 (1) These amounts reflect the discretionary cash bonuses earned by each of the NEOs in fiscal year 2010. These bonuses are being paid in three equal annual installments beginning in January 2011. (2) The Company did not grant any stock awards to any of the NEOs during fiscal years 2008, 2009 or 2010. (3) The Company did not grant any option awards to any of the NEOs during fiscal years 2008, 2009 or 2010. (4) The Company did not utilize any non-equity incentive plans in order to pay compensation to its NEOs in fiscal year 2010. While it is the Company’s policy to pay cash bonuses to the NEO’s that are correlated with the Company’s financial performance, the payment of the bonuses is ultimately subject to the discretion of the Compensation Committee. See “Compensation Discussion and Analysis – Total Compensation for Executive Officers – Discretionary Cash Bonuses.” (5) Includes the change in present value of each of the non-qualified deferred compensation plan and pension and retirement benefits described in the Compensation Discussion and Analysis above. In accordance with SEC rules, to the extent the change in present value for a particular fiscal year would have been a negative amount, the amount has instead been reported as $0 and the aggregate compensation for the named executive officer in the “Total” column has not been adjusted to reflect the negative amount. The aggregate negative change in the present value of the non-qualified deferred compensation plan and pension and retirement benefits for certain NEOs in certain fiscal years was as follows: (i) fiscal year 2010 (Allan L. Bridgford, ($107,334)) and (Hugh Wm. Bridgford, ($118,466)), (ii) fiscal year 2009 (Allan L. Bridgford, ($20,322)) and (Hugh Wm. Bridgford, ($18,663)), and (iii) fiscal year 2008 (Raymond F. Lancy, ($36)). (6) Includes matching contributions to the Bridgford Foods Retirement Savings 401(k) plan made by the Company on behalf of each of the NEOs. In addition, the amount for Mr. Simmons includes premiums in the amount of $24,376 for life and disability insurance policies issued for the benefit of Mr. Simmons and his designees. The amounts disclosed in this column for fiscal year 2009 have been adjusted from the disclosure in the prior year’s proxy statement to remove the previously included amount that reflected the change in market value of healthcare benefits plans accrued to the NEOs in fiscal year 2009 because the Company did not incur any incremental cost with respect to those plans in fiscal year 2009. Narrative to Summary Compensation Table See “Compensation Discussion and Analysis” for further discussion of compensation arrangements pursuant to which the amounts listed under the Summary Compensation Table were paid or awarded and the criteria for such payment or award. Grants of Plan-Based Awards There were no stock options, restricted stock, restricted stock units or equity or non-equity-based performance awards granted to the Company’s NEOs during fiscal years 2010, 2009 or 2008. Outstanding Equity Awards at Fiscal Year-End There were no outstanding option or stock awards held by any NEO as of October 29, 2010. Option Exercises and Stock Vested There were no shares acquired upon the exercise of stock options or vesting of stock awards during fiscal years 2008, 2009 or 2010 by any NEO. Pension Benefits The tables below provide information concerning retirement plan benefits for each NEO and payments due upon certain termination scenarios. Retirement Plan for Employees of Bridgford Foods Corporation for Administrative and Sales Employees Normal Retirement: Benefits commence upon reaching the” Normal Retirement Date”, which is the first day of the month on or after attainment of age 65. Pension benefit payments begin at normal retirement date and continue until death. Early Retirement: A participant may choose to retire up to ten years before the normal retirement date. If a participant retires early, the accrued pension will be reduced by a percentage to reflect the longer period over which pension benefits will be received. If a participant is married for at least one year and dies before retirement, a pension benefit will be payable to the surviving spouse for his or her life; provided certain eligibility requirements have been met. Death Benefits: Payments to a surviving spouse will begin on the first day of the month following a participant’s death but not sooner than the earliest date a participant could have elected to retire. Disability Benefits: A disability benefit is the accrued pension credited to a participant as of the date of disability. A disability is defined as a physical or mental condition which has existed continually for not less than six months and which renders a 13 participant incapable of any employment and which does not result from military service, any felonious activity, use of narcotics, habitual drunkenness, or is intentionally inflicted. The years of credited service, present value of accumulated plan benefits and payments made during the fiscal year were as follows: For the Fiscal Year ended October 29, 2010: Name Allan L. Bridgford Hugh Wm. Bridgford William L. Bridgford John V. Simmons Raymond F. Lancy Number of Years Credited Service 52 54 37 31 18 Present Value of Accumulated Benefit (1) $ $ $ $ $ 799,767 $ 671,917 $ 374,466 $ 297,051 $ 276,074 $ Payments During Fiscal Year 71,419 51,403 — — — (1) The assumed discount rate used was 5.45% to compute the present value of the accumulated benefit. The RP-2000 Combined Mortality Table was used and an expected return on assets of 8.0% was assumed. For the Fiscal Year ended October 30, 2009: Name Allan L. Bridgford Hugh Wm. Bridgford William L. Bridgford John V. Simmons Raymond F. Lancy Number of Years Credited Service 51 53 36 30 17 Present Value of Accumulated Benefit (1) $ $ $ $ $ 835,956 $ 713,754 $ 358,735 $ 284,647 $ 260,146 $ Payments During Fiscal Year 71,989 51,808 — — — (1) The assumed discount rate used was 5.75% to compute the present value of the accumulated benefit. The RP-2000 Combined Mortality Table was used and an expected return on assets of 8.00% was assumed. For the Fiscal Year ended October 30, 2008: Name Allan L. Bridgford Hugh Wm. Bridgford William L. Bridgford John V. Simmons Raymond F. Lancy Number of Years Credited Service 50 52 35 29 16 Present Value of Accumulated Benefit (1) $ $ $ $ $ 777,405 $ 647,922 $ 241,188 $ 188,098 $ 173,912 $ Payments During Fiscal Year 69,342 49,909 — — — (1) The assumed discount rate used was 8.00% to compute the present value of the accumulated benefit. The 1983 Group Annuity Mortality Table was used and an expected return on assets of 8.00% was assumed. Supplemental Executive Retirement Plan (SERP) Payment of Retirement Benefit: All retirement, disability and death benefits shall be paid in monthly installments beginning on the Commencement Date following the participant’s retirement, disability or death and shall continue for a period of fifteen years. Normal Retirement: Benefits commence upon reaching the” Normal Retirement Date”, which means the date on which the participant has both attained age 65 and completed at least ten years of participation. SERP benefit payments begin at normal retirement date and continue until death. Early Retirement: A participant may choose to retire up to ten years before the normal retirement date if the participant has completed at least five years of participation. If a participant retires early, the SERP benefit will be determined based on the vested percentage attained as the time of retirement. 14 Death Benefits: If a participant dies prior to having commenced receipt of benefits and is eligible for benefits hereunder, the participant’s beneficiary shall be entitled to receive an annual death benefit equal to the Normal Retirement Benefit determined as if the participant attained Normal Retirement Age on the date of his death, or, if after the Participant’s Normal Retirement Date, equal to the Late Retirement Benefit. If a participant dies after having commenced receipt of benefits, benefits shall continue to be paid but to the Participant’s Beneficiary at the same time and in the same form as the benefits would have been payable to the participant. No benefit will be payable to a participant’s beneficiary if the participant terminates employment with the Company before he is eligible for a retirement benefit and thereafter dies. Disability Benefits: A disability benefit is the vested percentage of SERP benefit credited to a participant as of the date of disability. A disability is defined as a physical or mental condition which has existed continually for not less than twelve months and which renders a participant incapable of any employment and which does not result from military service, any felonious activity, use of narcotics, habitual drunkenness, or is intentionally inflicted. The present value of accumulated plan benefits and payments made during the fiscal year were as follows: For the Fiscal Year ended October 29, 2010: Present Value of Accumulated Benefit (1) Payments During Last Fiscal Year $ $ $ $ $ 247,763 $ 293,688 $ 1,080,124 $ — $ 1,080,124 $ 51,528 61,080 — — — Present Value of Accumulated Benefit (1) Payments During Last Fiscal Year $ $ $ $ $ 277,293 $ 328,692 $ 997,093 $ — $ 997,093 $ 51,528 61,080 — — — Present Value of Accumulated Benefit (1) Payments During Last Fiscal Year $ $ $ $ $ 306,820 $ 363,840 $ 951,864 $ — $ 951,864 $ 51,528 61,080 — — — Name Allan L. Bridgford Hugh Wm. Bridgford William L. Bridgford John V. Simmons Raymond F. Lancy (1) A 6.25% discount rate was used to compute the present values. For the Fiscal Year ended October 30, 2009: Name Allan L. Bridgford Hugh Wm. Bridgford William L. Bridgford John V. Simmons Raymond F. Lancy (1) A 7.00% discount rate was used to compute the present values. For the Fiscal Year ended October 30, 2008: Name Allan L. Bridgford Hugh Wm. Bridgford William L. Bridgford John V. Simmons Raymond F. Lancy (1) A 7.00% discount rate was used to compute the present values. 15 The following table estimates the present value of SERP benefits under different employment termination scenarios as of October 29, 2010: Present Value of Benefits Upon Voluntary Termination of Employment (1) 247,763 $ 293,688 $ 460,895 $ — $ 460,865 $ $ $ $ $ $ Name Allan L. Bridgford Hugh Wm. Bridgford William L. Bridgford (2) John V. Simmons Raymond F. Lancy (2) Present Value of Involuntary Termination of Employment Due to Sale/Merger/ Acquisition (1) 247,763 293,688 1,080,124 — 1,080,124 Present Value of Benefits if Disabled (1) 247,763 $ 293,688 $ 1,080,124 $ — $ 1,080,124 $ Present Value of Benefit Upon Death (1) 247,763 $ 293,688 $ 1,080,124 $ — $ 1,080,124 $ (1) In each scenario above, the benefit amount shown is calculated at October 29, 2010. A 6.25% discount rate was used to compute the present values. In the case of a voluntary termination, the participant shall be entitled to the vested portion of any such early retirement benefit but shall not commence receipt of such early retirement benefit until the commencement date following the date the participant would have attained the early retirement date had the participant remained employed by the Company. Upon a finding that the participant (or, after the participant’s death, a beneficiary) has suffered an unforeseeable emergency, the Committee may at the request of the participant or beneficiary, and subject to compliance with Internal Revenue Code Section 409A, accelerate distribution of benefits under the SERP in the amount reasonably necessary to alleviate such unforeseeable emergency. (2) Death benefits for William L. Bridgford and Raymond F. Lancy are payable as a lump sum payment. All other benefits are paid in the form of a monthly annuity. The actual payment amount for William L. Bridgford and Raymond F. Lancy would be determined using a discount rate similar to the rate required for qualified plans. The rate assumed for these estimates is 6.25%. The following table estimates future SERP payments under different termination scenarios as of October 29, 2010: Name Allan L. Bridgford Hugh Wm. Bridgford Payment Upon Voluntary Termination of Employment Payment if Disabled (1) Death Benefit from Plan (2) Continues to receive $4,294 for another 68 months Continues to receive $5,090 for another 68 months Continues to receive $4,294 for another 68 months Continues to receive $5,090 for another 68 months Continues to receive $4,294 for another 68 months Continues to receive $5,090 for another 68 months William L. Bridgford $3,889 per month for $9,114 per month for $9,114 per month for John V. Simmons Raymond F. Lancy 180 months beginning on 10/29/2010 — 180 months commencing after disability — 180 months beginning just after death — $3,889 per month for $9,114 per month for $9,114 per month for 180 months beginning on 10/29/2010 180 months commencing after disability 180 months beginning just after death Involuntary Termination of Employment Due to Sale/Merger/ Acquisition Continues to receive $4,294 for another 68 months Continues to receive $5,090 for another 68 months Lump Sum payment due at termination of $1,080,124 — Lump Sum payment due at termination of $1,080,124 (1) Disability amount is decreased by any Company paid disability insurance policies, Social Security disability benefits, or other Federal or State disability programs. In the case of a voluntary termination, the participant shall be entitled to the vested portion of any such early retirement benefit but shall not commence receipt of such early retirement benefit until the commencement date following the date the participant would have attained the early retirement date had the participant remained employed by the Company. Upon a finding that the participant (or, after the participant’s death, a beneficiary) has suffered an unforeseeable emergency, the Committee may at the request of the participant or beneficiary, and subject to compliance with Internal Revenue 16 Code Section 409A, accelerate distribution of benefits under the SERP in the amount reasonably necessary to alleviate such unforeseeable emergency. (2) Assumes death on October 29, 2010. The discount rate used to calculate the lump sum amount is 6.25%. See “Compensation Discussion and Analysis – Total Compensation for Executive Officers -- Pension and Retirement Benefits” for further discussion of the pension benefits contained in the tables above. Non-Qualified Deferred Compensation The table below provides information concerning deferred compensation plan benefits for each NEO during the fiscal year ended October 29, 2010. Name Allan L. Bridgford Hugh Wm. Bridgford William L. Bridgford John V. Simmons Raymond F. Lancy Executive Contributions in Fiscal Year Company Contributions in Fiscal Year Aggregate Earnings in Fiscal Year Aggregate Withdrawals/ Distributions $ $ $ $ $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ 76,161 $ 76,161 $ — $ — $ — $ Aggregate Balance at Fiscal Year End 351,071 351,071 — — — The table below provides information concerning deferred compensation plan benefits for each NEO during the fiscal year ended October 30, 2009. Name Allan L. Bridgford Hugh Wm. Bridgford William L. Bridgford John V. Simmons Raymond F. Lancy Executive Contributions in Fiscal Year Company Contributions in Fiscal Year Aggregate Earnings in Fiscal Year Aggregate Withdrawals/ Distributions $ $ $ $ $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ 77,081 $ 77,081 $ — $ — $ — $ Aggregate Balance at Fiscal Year End 398,696 398,696 — — — The table below provides information concerning deferred compensation plan benefits for each NEO during the fiscal year ended October 31, 2008. Name Allan L. Bridgford Hugh Wm. Bridgford William L. Bridgford John V. Simmons Raymond F. Lancy Executive Contributions in Fiscal Year Company Contributions in Fiscal Year Aggregate Earnings in Fiscal Year Aggregate Withdrawals/ Distributions Aggregate Balance at Fiscal Year End 448,043 448,043 — — — 76,632 $ 76,632 $ — $ — $ — $ $ $ $ $ $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ 17 The following table estimates the present value of benefits under different employment termination scenarios as of October 29, 2010: Present Value of Benefit at Termination of Employment Present Value of Benefit in the Event of Disability, $ $ $ $ $ 357,071 $ 357,071 $ — $ — $ — $ 357,071 $ 357,071 $ — $ — $ — $ Present Value of Benefit Upon Death 357,071 $ 357,071 $ — $ — $ — $ Present Value of Benefit Upon Involuntary Termination of Employment Due to Sale/Merger/ Acquisition 357,071 357,071 — — — Name Allan L. Bridgford Hugh Wm. Bridgford William L. Bridgford John V. Simmons Raymond F. Lancy Allan L. Bridgford and Hugh Wm. Bridgford each currently receive a monthly deferred compensation payment of $6,330. As of October 29, 2010, sixty eight (68) such monthly payments are remaining for each recipient. The deferred compensation amounts are calculated using a crediting rate equal to Moody’s Average Seasoned Bond Rate, plus 2%. This rate is subject to fluctuation. Upon death, the deferred compensation benefits are paid in a lump sum equal to the individual’s remaining account balance. See “Compensation Discussion and Analysis – Total Compensation for Executive Officers – Non-Qualified Deferred Compensation” for further discussion of the non-qualified deferred compensation benefits contained in the tables above. Director Compensation The table below summarizes the total compensation paid by the Company to directors who were not NEOs during fiscal year 2010. Directors who were NEOs did not receive any additional compensation for their services as directors. Name Richard A. Foster Robert E. Schulze Paul R. Zippwald Todd C. Andrews D. Gregory Scott Fees Earned or Paid Cash $ $ $ $ $ 18,850 $ 20,650 $ 22,150 $ 22,150 $ 17,150 $ Stock awards Option awards Non-Equity Incentive Plan Compensation Change in Pension Value and Non- Qualified Deferred Compensation Earnings All Other Compensation Total — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ 18,850 20,650 22,150 22,150 17,150 (1) The amount reflected above includes the change in present value of the defined benefit pension plan, assuming a discount rate of 5.75%, and the SERP and Non-Qualified Deferred Compensation Plan, assuming a discount rate of 7.00%. Mr. Schulze received contributions to such plans as an employee of the Company prior to his retirement on June 30, 2004. The Company uses cash compensation to attract and retain qualified candidates to serve on its Board of Directors. In setting director compensation, the Company considers the demands that have been placed and will continue to be placed on the directors and the skill-level required by its directors. In addition, as with the Company’s executive officers, compensation decisions for directors are made in the context of the Company’s focus on controlling costs and increased profitability. The directors are not paid an annual retainer for their service on the Board. Instead, each non-employee director was paid $1,350 for each of the first three Board meetings attended during fiscal year 2010 and $1,500 for each subsequent Board meeting attended in fiscal year 2010. Members of the Audit Committee were paid $300 or $500 for each Audit Committee meeting attended depending on the length of the meeting. The members of the Compensation Committee were not paid any additional compensation for their service. 18 CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS The Company's general legal counsel is the son of the Senior Chairman of the Board of Directors. For these services, he currently is paid a fee of $1,600 for each Board of Directors meeting attended. Total fees paid under this arrangement were $16,050 in fiscal year 2010 and $16,200 in fiscal year 2009. In addition, legal services are performed on behalf of the Company and billed by a firm in which he is a partner. Total fees billed under this arrangement for each of fiscal years 2010 and 2009 were approximately $70,000. Other than the relationship noted above, the Company is not aware of any related party transactions that would require disclosure as a related party transaction under SEC rules. The Company’s executive officers, directors, nominees for directors and principal shareholders, including their immediate family members and affiliates, are prohibited from entering into a related party transaction with the Company that would be reportable under Item 404 of Regulation S-K without the prior approval of its Audit Committee (or other independent committee of the Board of Directors in cases where it is inappropriate for the Audit Committee to review such transaction due to a conflict of interest). Any request for the Company to enter into a transaction with an executive officer, director, or nominee for director, principal shareholder or any of such persons’ immediate family members or affiliates that would be reportable under Item 404 of Regulation S-K must first be presented to the Audit Committee for review, consideration and approval. In approving or rejecting the proposed agreement, the Audit Committee will consider the relevant facts and circumstances available and deemed relevant, including but not limited to, the risks, costs, and benefits to the Company, the terms of the transactions, the availability of other sources for comparable services or products, and, if applicable, the impact on director independence. The Audit Committee shall only approve those agreements that, in light of known circumstances, are in or are not inconsistent with, the Company’s best interests, as determined in good faith by the Audit Committee (or other independent committee, as applicable). The requirement for the Audit Committee to review related-party transactions is set forth in the Amended and Restated Audit Committee Charter, which was approved on November 8, 2010 and is attached as Exhibit A to this proxy statement. 19 RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS PROPOSAL 2 The Audit Committee of the Board of Directors has, subject to ratification by the shareholders, appointed Squar, Milner, Peterson, Miranda & Williamson, LLP as the Company’s independent registered public accounting firm for the fiscal year ending October 28, 2011. The affirmative vote of a majority of the shares present or represented by proxy at the Annual Meeting and entitled to vote on the matter is required to ratify the appointment of Squar, Milner, Peterson, Miranda and Williamson, LLP. Abstentions will have the same effect as votes against the Proposal. Brokers have discretion to vote uninstructed shares with respect to this Proposal. Accordingly, broker non-votes will not occur with respect to this Proposal. Proxies received in response to this solicitation will be voted “FOR” the approval of such firm unless otherwise specified in the proxy In the event of a negative vote on such ratification, the Audit Committee of the Board of Directors will reconsider its selection. Representatives of Squar, Milner, Peterson, Miranda & Williamson, LLP will be present at the meeting and available for questions. They will have the opportunity to make a statement if they so desire. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF SQUAR, MILNER, PETERSON, MIRANDA & WILLIAMSON, LLP AS THE COMPANY’S INDEPENDENT ACCOUNTANTS FOR FISCAL YEAR 2011. CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS Haskell & White LLP completed the audit of the Company's financial statements for the year ended October 31, 2008 on January 28, 2009. On January 22, 2009, we dismissed Haskell & White LLP as our independent public accounting firm. The decision to dismiss Haskell & White LLP was made by the Audit Committee of the Board of Directors. The reports of Haskell & White LLP on the consolidated financial statements of the Company for the years ended October 31, 2008 and November 2, 2007, did not contain an adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principle. In addition, during the fiscal years ended October 31, 2008 and November 2, 2007, and through the subsequent interim period ended January 28, 2009, there were no disagreements with Haskell & White LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Haskell & White LLP, would have caused it to make reference thereto in its reports on the financial statements for such years. On January 22, 2009, the Audit Committee of the Board of Directors appointed Squar, Milner, Peterson, Miranda & Williamson, LLP as the Company's new independent registered public accounting firm. Audit Fees PRINCIPAL ACCOUNTANT FEES AND SERVICES Fees billed by Squar, Milner, Peterson, Miranda & Williamson, LLP for the audit and review of the Company’s annual financial statements and quarterly reports on Form 10-Q for fiscal year 2010 totaled $151,200. Fees billed by Squar, Milner, Peterson, Miranda & Williamson, LLP for the audit and review of the Company’s annual financial statements and quarterly reports on Form 10- Q for fiscal year 2009 totaled $148,000. Audit-Related Fees Audit-related fees typically consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements and are not reported under “Audit Fees.” These services may include consultations related to the Sarbanes-Oxley Act and consultations concerning financial accounting and reporting standards. Fees billed by Squar, Milner, Peterson, Miranda & Williamson, LLP during fiscal year 2010 for these types of services totaled $5,500. There were no audit-related fees billed by Squar, Milner, Peterson, Miranda & Williamson, LLP for fiscal year 2009. Tax Fees Tax fees are comprised of services that include assistance related to state tax compliance services and consultations regarding federal and state research and development tax credits. There were no tax fees billed by Squar, Milner, Peterson, Miranda & Williamson, LLP for fiscal years 2010 or fiscal year 2009. All Other Fees All other fees are comprised of fees for initial planning for certification of internal controls over financial reporting. No such fees were billed by Squar, Milner, Peterson, Miranda & Williamson, LLP in fiscal year 2010 or fiscal year 2009. In addition, the Company incurred fees to Haskell & White LLP for fiscal year 2009 in the amount of $15,000 for the provision of consents relating to the preparation and filing of the Company’s annual report in that year. 20 POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT SERVICES AND PERMISSIBLE NON-AUDIT SERVICES OF INDEPENDENT ACCOUNTANTS The Audit Committee’s policy is to pre-approve all audit and permissible non-audit services performed by the independent accountants. These services may include audit services, audit-related services, tax services and other services. During fiscal years 2010 and 2009, the Audit Committee approved all such services rendered by its independent accountants. For audit services, the independent accountant provides the Audit Committee with an audit plan including proposed fees in advance of the annual audit. The Audit Committee approves the plan and fees for the audit. For non-audit services, the Company’s senior management will submit from time to time to the Audit Committee for approval non-audit services that it recommends the Audit Committee engage the independent accountant to provide during the fiscal year. The Company’s senior management and the independent accountant will each confirm to the Audit Committee that each non- audit service is permissible under all applicable legal requirements. A budget, estimating non-audit service spending for the fiscal year, will be provided to the Audit Committee along with the request. The Audit Committee must approve both permissible non-audit services and the budget for such services. REPORT OF THE AUDIT COMMITTEE Pursuant to a meeting of the Audit Committee on January 10, 2011, the Audit Committee reports that it has: (i) reviewed and discussed the Company’s audited financial statements with management; (ii) discussed with the independent registered public accountants the matters (such as the quality of the Company’s accounting principles and internal controls) required to be discussed by Statement on Auditing Standards No. 61, as adopted by the Public Company Accounting Oversight Board in Rule 3200T; and (iii) received written confirmation from Squar, Milner, Peterson, Miranda & Williamson, LLP that it is independent and written disclosures regarding such independence as required by Independence Standards Board Standard No. 1, as adopted by the Public Company Accounting Oversight Board in Rule 3600T, and discussed with the independent registered public accountants the accountants’ independence. Based on the review and discussions referred to in items (i) through (iii) above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s annual report for the Company’s fiscal year ended October 29, 2010. AUDIT COMMITTEE Todd C. Andrews, Chairman Richard A. Foster D. Gregory Scott Robert E. Schulze Paul R. Zippwald The foregoing Audit Committee Report shall not be deemed soliciting material, shall not be deemed filed with the SEC and shall not to be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. 21 PROPOSAL 3 ADVISORY VOTE ON EXECUTIVE COMPENSATION The recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act"), enables the Company's shareholders to vote to approve, on an advisory (nonbinding) basis, the compensation of the Company's named executive officers as disclosed in this proxy statement in accordance with the SEC’s rules. The Company is asking its shareholders to indicate their support for its named executive officer compensation as described in this proxy statement. This proposal, commonly known as a “say-on-pay” proposal, gives the Company's shareholders the opportunity to express their views on the compensation paid to the Company's named executive officers. This vote is not intended to address any specific item of compensation, but rather the overall compensation of the Company's named executive officers and the philosophy, policies and practices described in this proxy statement. Accordingly, the Company is asking its shareholders to vote “FOR” the following resolution at the Annual Meeting: “RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s proxy statement for the 2011 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission." Adoption of the resolution will require the affirmative vote of a majority of the shares present or represented by proxy at the Annual Meeting and entitled to vote on the matter. Abstentions will have the same effect as votes against the Proposal. Brokers do not have discretion to vote uninstructed shares with respect to this Proposal. Accordingly, if brokers do not receive voting instructions from beneficial owners of the shares, they will not be able to vote the shares and broker non-votes may occur with respect to this Proposal. However, broker non-votes will not affect the outcome of the voting on the Proposal because it requires the majority of the shares present or represented by proxy at the Annual Meeting (as opposed to a majority of the shares outstanding). The "say-on-pay" vote is advisory, and therefore is not binding on the Company, the Compensation Committee or the Board of Directors. However, the Board and the Compensation Committee value the opinions of the shareholders and, to the extent there is any significant vote against the named executive officer compensation as disclosed in this proxy statement, will consider the shareholders’ concerns and the Board and Compensation Committee will evaluate whether any actions are necessary to address those concerns. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE COMPENSATION OF THE COMPANY'S NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT PURSUANT TO THE COMPENSATION DISCLOSURE RULES OF THE SEC. 22 PROPOSAL 4 ADVISORY VOTE ON THE FREQUENCY OF AN ADVISORY VOTE ON EXECUTIVE COMPENSATION The Dodd-Frank Act also enables the Company's shareholders to indicate how frequently the Company should seek an advisory vote (non-binding) on the compensation of its named executive officers, as disclosed pursuant to the SEC’s compensation disclosure rules. By voting on this Proposal, shareholders may indicate whether they would prefer an advisory vote on the compensation paid to the Company's named executive officers once every one year, two years, or three years. After careful consideration of this Proposal, the Board of Directors has determined that an advisory vote on executive compensation that occurs every three years is the most appropriate alternative. Shareholders who have concerns about executive compensation during the interval between "say on pay" votes are welcome to bring their specific concerns to the attention of the Board. Please see the disclosure under the heading "Communications with the Board." The Board understands that the Company's shareholders may have different views as to what is the best approach for the Company and looks forward to hearing from shareholders on this Proposal. The proxy card provides the Company's shareholders with the opportunity to choose among four alternatives with respect to this Proposal (holding the vote every one, two or three years, or abstaining) and, therefore, shareholders will not be simply voting to approve or disapprove the Board's recommendation. The alternative that receives the greatest number of votes (holding the vote every one, two or three years) will be the frequency that shareholders choose. Abstentions will not be taken into account in determining the outcome of the vote. Brokers do not have discretion to vote uninstructed shares with respect to this Proposal. Accordingly, if brokers do not receive voting instructions from beneficial owners of the shares, they will not be able to vote the shares and broker non-votes may occur with respect to this Proposal. However, broker non-votes will not affect the outcome of the vote. Although the vote on the frequency of the "say on pay" vote is nonbinding, the Board and the Compensation Committee will take into account the outcome of the vote when considering the frequency of future advisory votes on executive compensation. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE OPTION OF ONCE EVERY "THREE YEARS" AS THE FREQUENCY WITH WHICH SHAREHOLDERS ARE PROVIDED AN ADVISORY VOTE ON EXECUTIVE COMPENSATION, AS DISCLOSED PURSUANT TO THE COMPENSATION DISCLOSURE RULES OF THE SEC. 23 SHAREHOLDER PROPOSALS Proposals of shareholders intended to be presented at the 2012 Annual Meeting of Shareholders must be received at the Company’s principal office no later than October 14, 2011 in order to be considered for inclusion in the proxy statement and form of proxy relating to that meeting. Matters pertaining to such proposals, including the number and length thereof, eligibility of persons entitled to have such proposals included and other aspects are regulated by the Securities Exchange Act of 1934 and the rules and regulations of the Securities and Exchange Commission. Additionally, if the Company is not provided notice of a shareholder proposal, which the shareholder has not previously sought to include in the Company’s proxy statement, by December 28, 2011, the Company will be allowed to use its discretionary voting authority when the proposal is raised at the meeting, without any discussion of the matter in the proxy statement. HOUSEHOLDING; SHAREHOLDERS SHARING THE SAME ADDRESS The SEC rules permit brokers and other persons who hold the Company's shares for beneficial owners, to participate in a practice known as “householding,” which means that only one copy of the proxy statement and annual report will be sent to multiple shareholders who share the same address unless other instructions are provided to us. Householding is designed to reduce printing and postage costs and, therefore, results in cost savings for the Company. If you receive a household mailing this year and would like to have additional copies of this proxy statement and/or the 2010 Annual Report mailed to you, or if you would like to opt out of this practice for future mailings, please contact your broker or other nominee record holder, or submit your request to Bridgford Foods Corporation, 1308 North Patt Street, Anaheim, California 92801, Attention: Corporate Secretary. Upon receipt of any such request, the Company agrees to promptly deliver a copy of this proxy statement and/or the 2010 Annual Report to you. In addition, if you are currently a shareholder sharing an address with another shareholder and wish to receive only one copy of future proxy materials for your household, please contact us using the contact information set forth above. The Board of Directors is not aware of any matters to be acted upon at the meeting other than the Proposals described in this proxy statement. If, however, any other matter shall properly come before the meeting, the persons named in the proxy accompanying this statement will have discretionary authority to vote all proxies with respect thereto in accordance with their best judgment. OTHER MATTERS FORM 10-K The Corporation will furnish without charge to each person whose proxy is being solicited, upon request of any such person, a copy of the Annual Report of the Corporation on Form 10-K for the fiscal year ended October 29, 2010, as such was filed with the SEC, including financial statements and associated schedules. Such report was filed with the SEC on January 14, 2011 and is available on the SEC’s website, www.sec.gov , as well as the Company’s website, http:// www.bridgford.com. Requests for copies of such report should be directed to Bridgford Foods Corporation, 1308 North Patt Street, Anaheim, California 92801, Attention: Corporate Secretary. 24  EXHIBIT A BRIDGFORD FOODS CORPORATION COMPENSATION COMMITTEE CHARTER (Effective October 11, 2010) Introduction The Compensation Committee (the “Committee”) of the Board of Directors of Bridgford Foods Corporation, a California corporation (the “Company”), shall have the purposes, responsibilities and authority described below. This Charter is intended to comply with applicable rules of The NASDAQ Stock Market, Inc. (“NASDAQ”) and to provide the Committee with direction in performing its responsibilities on behalf of the Company’s Board of Directors. This Charter has been approved by the Company’s Board of Directors (the “Board”). The Purpose of the Compensation Committee The purpose of the Committee is to assist the Board in meeting its responsibilities with regard to oversight and determination of executive compensation. Among other things, the Committee (a) reviews the performance of the members of the Executive Committee (who collectively serve as the Company’s Chief Executive Officer), (b) reviews, recommends and approves the Company’s compensation arrangements, including arrangements with executive officers and directors, (c) publishes a report to be included in the Company’s annual proxy statement, and (d) administers the Company’s equity incentive plans (including reviewing, recommending and approving stock option and other equity incentive grants to executive officers and directors). Membership and Structure The Committee shall be comprised of at least three (3) directors, each of whom must (i) meet the director independence requirements set forth in the listing rules of The NASDAQ Stock Market, Inc. and (ii) be “Non-Employee Directors” under Rule 16b- 3 promulgated under the Securities Exchange Act of 1934, as amended. In addition, at least two (2) directors serving on the Committee must be qualified “outside directors” under Section 162(m) of the Internal Revenue Code, as amended, and related regulations. Each of the foregoing shall be determined by the Board. Appointment to the Committee, including the designation of the Chair of the Committee, shall be made by the full Board annually. Each member of the Committee shall serve at the pleasure of the Board and the Board has the authority to remove members from the Committee in its sole discretion. Meetings of the Committee shall be held at such times and places as circumstances dictate (but no less frequently than annually), including by written consent. Meetings may be called by the Chair of the Committee or upon the request of any two of its members. The Chair of the Committee shall determine the time, place and method for holding and the agenda for all Committee meetings and, when present, shall preside over all Committee meetings. A majority of the members present at any meeting at which a quorum is present may act on behalf of the Committee. When necessary, the Committee shall meet in executive session outside of the presence of any executive officer of the Company. The Chair of the Committee (or his or her designee) shall keep record of the Committee’s meetings and report on activities of the Committee to the full Board. In fulfilling its responsibilities, the Committee shall have authority to delegate its authority to subcommittees composed entirely of directors who would otherwise qualify for membership on the Committee, in each case to the extent permitted by applicable law. Primary Responsibilities and Duties In carrying out its purpose, the Committee shall have direct authority to perform the following responsibilities and duties (it being understood that the Committee may condition its approval of any compensation on Board ratification to the extent so required to comply with applicable tax law): • determine the compensation of the members of the Executive Committee, after taking into account the Board’s assessment of the performance of the Executive Committee, as well as any other executive officers of the Company. • determine the compensation of the Chairman of the Board and the other directors of the Company. • assess the performance of the executive officers of the Company other than the members of the Executive Committee (whose performance is assessed by the Board). • review and make recommendations to the Board regarding the Company’s compensation policies and philosophy. • review and make recommendations to the Board with respect to the employment agreements, severance agreements, change of control agreements and other similar agreements between the Company and its executive officers. 25 • administer the Company’s equity incentive plans, including the review and grant of stock option and other equity incentive grants. • review and discuss the Compensation Discussion and Analysis (“CD&A”) section of the Company’s annual proxy statement with management, and recommend to the Board that the CD&A be included in the Company’s proxy statement as required. • produce an annual report on executive compensation for inclusion in the Company’s proxy statement. • as requested by Company management, review, consult and make recommendations and/or determinations regarding employee compensation and benefit plans and programs generally, including employee bonus and retirement plans and programs. • assist the Board and management in developing and evaluating potential candidates for executive officer positions. • advise the Board in its succession-planning initiatives for the Company’s executive officers and other senior officers. Additional Powers and Responsibilities In addition to the specific responsibilities set forth above, the Committee will: • engage in an annual self-assessment with the goal of continuing improvement. • annually review and reassess the adequacy of this Charter, and recommend any changes to the full Board. • have the authority to engage independent legal, accounting and other advisers, as it determines necessary to carry out its duties, and to discuss matters with such advisers as the members of the Committee deem necessary or appropriate. The Committee shall have sole authority to approve the fees and retention terms of any such advisers. • have sole authority to approve the ordinary administrative expenses of the Committee that are necessary or appropriate for carrying out its duties. In addition to the powers and responsibilities expressly delegated to the Committee in this Charter, the Committee may exercise any other powers and carry out any other responsibilities delegated to it by the Board from time to time consistent with the Company’s bylaws. The powers and responsibilities delegated by the Board to the Committee in this Charter or otherwise shall be exercised and carried out by the Committee as it deems appropriate without requirement of Board approval, and any decision made by the Committee shall be at the Committee’s sole discretion. 26 EXHIBIT B BRIDGFORD FOODS CORPORATION AMENDED AND RESTATED AUDIT COMMITTEE CHARTER (As Adopted November 8, 2010) One committee of the board of directors will be known as the audit committee and will be comprised of at least three members of the board. Committee members will be appointed by the board annually to serve until their successors are elected. Unless a chairperson is elected by the full board, the members of the audit committee may designate a chairperson by majority vote. Only independent directors, as determined by the board, will serve on the audit committee. An independent director is free of any relationship that could influence his or her judgment as a committee member. An independent director may not be associated with a major vendor to, or customer of, the Company. When there is some doubt about independence, as when a member of the committee has a short-term consulting contract with a major customer, the director should excuse himself or herself from any decision that might be influenced by that relationship. Apart from his or her capacity as a member of the board or any committee of the board, no audit committee member shall be an affiliated person of the Company or any Company subsidiary as required under applicable SEC and NASDAQ Marketplace Rules. Each member of the audit committee shall (i) be an independent director, as defined in NASDAQ Marketplace Rule 5605(a)(2) and the rules of the SEC (including, without limitation, Rule 10A-3 under the Securities Exchange Act of 1934), (ii) not have participated in the preparation of the financial statements of the Company or any current subsidiary of the Company at any time during the past three (3) years, and (iii) be able to read and understand fundamental financial statements at the time of appointment, in accordance with the requirements set forth in NASDAQ Marketplace Rule 5605(c)(2)(A). In addition, at least one member must have past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in the individual’s financial sophistication, including being or having been a chief executive officer, chief financial officer, or other senior officer with financial oversight responsibilities in accordance with NASDAQ Marketplace Rule 5605(c)(2)(A). Further, at least one member must qualify as an “audit committee financial expert” within the meaning of Item 407(d)(5) of Regulation S-K. As part of the commitment of the Company and board of directors to good governance practices, the audit committee regularly reviews its charter and recommends to the board changes to the charter. The board adopted this amended and restated charter on November 8, 2010. The primary function of the audit committee is to assist the board in fulfilling its oversight responsibilities by reviewing (i) the financial information that will be provided to the shareholders and others, (ii) the systems of disclosure controls and internal controls management that the board of directors has established, (iii) the Company’s compliance with legal and regulatory requirements, and (iv) all audit processes, including, but not limited to, the independent accountant’s qualifications, independence, and performance. GENERAL RESPONSIBILITIES 1. 2. 3. 4. 5. 6. The audit committee provides open avenues of communication among the internal auditors, the independent accountant, and the board of directors. The audit committee must report committee actions to the full board of directors and may make appropriate recommendations. The audit committee has the power to conduct or authorize investigations into matters within the committee’s scope of responsibilities with full access to all books, records, facilities, and personnel of the Company. The committee is authorized to retain independent counsel, accountants, or others it needs to carry out its responsibilities, including, but not limited to, any specific investigation. The committee will meet at least four times each year or more frequently if circumstances make that preferable. The audit committee chairperson has the power to call a committee meeting whenever he or she thinks there is a need. The audit committee chairperson will provide the agenda for the committee’s meetings and any member may suggest items for consideration. Briefing materials will be provided to the committee as far in advance of meetings as practicable. An audit committee member should not vote on any matter in which he or she is not independent. The committee may ask members of management or others to attend the meeting and is authorized to requisition all pertinent information from management. At the option of the audit committee chairperson, a meeting may conclude with an executive session of the committee absent members of management. The audit committee shall establish and maintain procedures for receiving, retaining, and treating complaints received by the Company regarding accounting, internal accounting controls, or auditing matters including procedures for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters. The audit committee shall establish procedures for the hiring of employees and former employees of the independent accountant. 27 7. The audit committee will maintain written minutes of its meetings, which minutes will be filed with the minutes of the meetings of the board. 8. The committee will do whatever else the law, the Company’s charter or bylaws, or the board of directors require. RESPONSIBILITIES FOR ENGAGING INDEPENDENT ACCOUNTANTS 1. 2. 3. 4. 5. 6. 7. 8. The audit committee will select (and recommend that the board submit for shareholder ratification, if applicable) the independent accountants for Company audits. The audit committee also will review and set any fees paid to the independent accountants, both for audit and lawfully permitted non-audit services, and review and approve dismissal of the independent accountants. The audit committee shall have the sole authority to approve the hiring and firing of the independent accountants and all compensation and retention terms with respect to any engagement of the independent accountants. The independent accountants shall report directly to the audit committee. The audit committee shall review and evaluate the performance of the independent accountants and ascertain that the lead (or concurring) audit partner from any public accounting firms performing audit services, serves in that capacity for no more than five fiscal years of the Company. The audit committee will approve in advance the retention of the independent accountants for the performance of all audit and lawfully permitted non-audit services and the fees for such services (provided that pre-approval of non-audit services will not be required in those circumstances where a subsequent approval is permissible under applicable SEC and NASDAQ rules). The audit committee will confirm and assure the independence of the independent accountant, including a review of management consulting services provided by the independent accountant and the fees paid for them. To facilitate this confirmation, the audit committee shall obtain on a periodic basis a formal written statement from the independent accountant regarding relationships and services with the Company which may impact independence and present this statement to the board of directors and to the extent there are such relationships, monitor and investigate them. The audit committee shall, at least annually, obtain and review a report by the independent accountants describing: (i) the accounting firm’s internal quality-control procedures; and (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities or a private sector regulatory board, within the preceding five years, respecting one or more independent audits performed by the firm, and any steps taken to deal with any such issues. The audit committee will consider, in consultation with the independent accountant, the audit scope and procedural plans made by the independent accountant. The audit committee will oversee the resolution of disagreements between management and the independent accountant, if they arise. The audit committee will listen to management and the primary independent accountant if either believes there might be a need to engage additional auditors. The audit committee will decide whether to engage an additional firm and, if so, which one. RESPONSIBILITIES FOR REVIEWING THE ANNUAL EXTERNAL AUDIT AND THE REVIEW OF QUARTERLY AND ANNUAL FINANCIAL STATEMENTS 1. 2. The audit committee will confirm that the independent accountant (i) views the committee as its client, (ii) will be available to the full board of directors at least annually, and (iii) provides the committee with a timely analysis of significant financial reporting issues. The audit committee will review significant risks and exposures with management and the independent accountant and will assess management’s steps to minimize them. 3. The audit committee will review the following with the independent accountant and management: (a) The adequacy and effectiveness of the Company’s disclosure controls and procedures and the Company’s internal controls, including computerized information system controls and security. (b) Any significant finding and recommendations made by the independent accountant together with management’s responses to them. 4. Shortly after the annual examination is completed, and prior to filing with the SEC, the audit committee will review the following with management and the independent account: (a) The Company’s annual financial statements and related footnotes. (b) The independent accountant’s audit of and report on the financial statements. 28  (c) The effect of regulatory and accounting initiatives, as well as off-balance sheet structures on the Company’s financial statements, if any. (d) The independent accountant’s qualitative judgments about the appropriateness, not just the acceptability, of accounting principles and financial disclosures and how aggressive (or conservative) the accounting principles and underlying estimates are. (e) Any difficulties or disputes encountered during the course of the audit, including any restrictions on the scope of his or her work or access to required information. (f) The Company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” including, without limitation, all critical accounting policies and practices used by the Company. (g) All alternative treatments of financial information within GAAP that have been discussed with management, the ramifications of each alternative, and the treatment preferred by the Company. (h) Anything else about the audit procedures or findings that GAAP requires the auditors to discuss with the committee. 5. 6. 7. 8. The audit committee will review all material written communications between the independent accountant and management. The audit committee will review annual filings with the SEC and other published documents containing the Company’s financial statements, including but not limited to earnings press releases, and will consider whether the information in the filings is consistent with the information in the financial statements. The audit committee will pay particular attention to any pro forma or adjusted non-GAAP financial information. The audit committee will review and discuss the interim financial reports, including the Company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” with management and the independent accountant(s) before those interim results are released to the public in an earnings release or filed with the SEC or other regulators. The audit committee shall direct the Company’s independent accountants to review such interim financial statements using professional standards and procedures for such reviews. The audit committee will prepare a letter for inclusion in the annual report that describes the committee’s composition and responsibilities and how the responsibilities were fulfilled. The committee will also prepare a report for the Company’s proxy statement in accordance with the requirements of Item 407(d)(3) of Regulation S-K and any other item required for inclusion in this proxy statement. 9. In connection with each periodic report of the Company, the audit committee will review: (a) management’s disclosure to the committee under Section 302 of the Sarbanes-Oxley Act of 2002. (b) the contents of the chief executive officer and the chief financial officer certificates to be filed under Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. OVERSIGHT OF INTERNAL AUDIT 1. 2. 3. 4. 5. The audit committee shall oversee the Company’s establishment and maintenance of an appropriate control process for reviewing and approving its internal transactions and accounting, whether such process is implemented through an internal audit department of the Company, through outsourcing or otherwise (the “internal audit function”). When the internal audit function is established, the audit committee shall oversee the activities, organizational structure and qualifications of the internal audit function. The audit committee shall discuss with the internal audit function any changes to, and the implementation of, the internal audit plan and any special projects and discuss with the internal audit function the results of the internal audits and special projects. The audit committee shall review the regular internal reports to management (or summaries thereof) prepared by the internal audit function, as well as management’s response. The audit committee shall discuss with the internal audit function any audit problems or difficulties, including any restrictions on the scope of the internal audit function’s activities or on access to requested information, and management’s response to same and any other matters required to be brought to its attention. 6. The audit committee shall review the effectiveness of the internal audit function. 29 PERIODIC RESPONSIBILITIES 1. 2. 3. 4. 5. 6. 7. 8. 9. The audit committee shall review and update its charter at least annually and recommend to the board of directors any necessary amendments. The audit committee shall review polices and procedures covering officers’ expense accounts and perquisites, including their use of corporate assets, and consider the results of any review of those areas by the independent accountant. The audit committee shall review, approve, and monitor with the independent accountant, the Company’s code of conduct and such other codes of business conduct that the Company may adopt from time to time pertaining to its directors, officers, or employees, as well as the Company’s system to monitor compliance with the same. The audit committee shall review, in conjunction with counsel at the discretion of the audit committee, legal and regulatory matters that may have a material effect on the organization’s financial statements, compliance policies and programs, and reports from regulators. The audit committee shall provide oversight and review of the Company’s risk management policies, including an annual review of the Company’s investment policies and performance for cash and short-term investments. The audit committee shall meet with the independent accountants and management in separate executive sessions to discuss matters the committee or these groups believe should be discussed privately with the audit committee. The audit committee will meet separately with the Company’s chief executive officer and chief financial officer at least annually to review the financial affairs of the Company, including a review of the Company’s internal controls. The audit committee will meet separately with the independent accountants of the Company at such times as it deems appropriate to review the independent accountant’s examination and management report. In consultation with the independent accountants and the internal audit function (if applicable), the audit committee shall review the integrity of the Company’s financial reporting processes (both internal and external). As the audit committee deems appropriate, it shall obtain advice and assistance from outside legal, accounting, or other advisors; in this regard, the audit committee shall have the authority to engage, oversee, and require funding for outside legal, accounting, or other advisors. The audit committee shall review and approve in advance all related party transactions (defined as those transactions required to be disclosed under Item 404 of Regulation S-K) for potential conflict of interest. 10. The audit committee shall conduct an annual performance assessment relative to the audit committee’s purpose, duties, and responsibilities outlined herein. COMPENSATION 1. 2. The Company shall provide appropriate funding, as determined by the audit committee, in its capacity as a committee of the board, for the payment of: (i) compensation to any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review, or attest services for the Company; (ii) compensation to any advisors employed by the audit committee pursuant to the terms of this charter; and (iii) ordinary administrative expenses of the audit committee that are necessary or appropriate in carrying out its duties. Members of the audit committee shall receive such fees, if any, for their service as audit committee members as may be determined by the board of directors in its sole discretion. Such fees may include retainers or per meeting fees. Fees may be paid in such form of consideration as is determined by the board of directors. Members of the audit committee may not receive any compensation from the Company except fees that they receive for service as a member of the board of directors or any committee thereof and reasonable expense reimbursement. 30 048-1041 Annual Report 03_Layout 1 1/26/11 2:32 PM Page 3 TO OUR SHAREHOLDERS DIRECTORS OFFICERS DIVISION MANAGERS Jeffrey D. Robinson Bakery Manager Anaheim- Bread Division Bruce H. Bridgford Chairman & President, Bridgford Foods of California Anaheim- Deli Division Baron R. H. Bridgford President, Bridgford Processing Company of Illinois Bridgford Foods of Illinois Joseph deAlcuaz Vice President Dallas- Frozen-Rite Division Blaine K. Bridgford President Dallas- Superior Foods Division Monty Griffith Vice President Bridgford Foods of North Carolina Allan L. Bridgford Senior Chairman Bruce H. Bridgford Vice President William L. Bridgford Chairman Richard A. Foster Retired (formerly President, Interstate Electronics Corporation) Robert E. Schulze Retired (formerly President and member of the Executive Committee, Bridgford Foods Corporation) Paul R. Zippwald Retired (formerly Regional Vice President, Bank of America) Todd C. Andrews Vice President and Controller, Public Storage, Inc. D. Gregory Scott Managing Director, Peak Holdings, LLC Allan L. Bridgford Senior Chairman, Board of Directors and member of the Executive Committee Bruce H. Bridgford Vice President Hugh Wm. Bridgford Chairman, Executive Committee and Vice President William L. Bridgford Chairman, and member of the Executive Committee Raymond F. Lancy Executive Vice President, Chief Financial Officer, Treasurer, and member of the Executive Committee John V. Simmons President and member of the Executive Committee Joe deAlcuaz Vice President Manufacturing Daniel R. Yost Senior Vice President Chris Cole Vice President Bob Delong Vice President, Information Technologies Cindy Matthews–Morales Corporate Secretary and Controller Michael Bridgford Assistant Secretary FINANCIAL MATTERS Despite dramatic increases in the costs of key commodities, Bridgford Our working capital totaled $29,836,000 at October 29, 2010, Foods Corporation again achieved solid profitability in the 2010 fiscal $3,037,000 (11.3%) higher than at the beginning of the fiscal year, year. Higher prices for grains, meats and petroleum products were offset and our working capital ratio increased to 3.6 to 1 at October 29, 2010, by lower operating costs resulting from strategic changes implemented compared to 3.0 to 1 at October 30, 2009. The increase in working in recent years. Sales during our 2010 fiscal year were $117,655,000, capital and improvement in working capital ratio resulted from net income a decrease of 4.1% from sales of $122,665,000 in 2009. The Company of $4,319,000 and lower levels of capital spending in recent years. recorded a net profit of $4,319,000 in 2010, equal to $.46 per share. We repurchased 27,000 shares of the Company’s common stock in the A one-time cash dividend of $.10 per share was declared by the Board of Directors on November 8, 2010. SALES AND MARKETING HIGHLIGHTS amount of $277,000 ($10.26 average price paid per share) during 2010. Projected contributions of $1,175,000 were recorded as a current liability related to our defined benefit pension plan at October 29, 2010, and we contributed a total of $1,943,000 towards this plan during the The refinement of our Chicago based direct route sales distribution 2010 fiscal year. The defined benefit plan was frozen in the 3rd system for dry sausage products and meat snacks continued during the quarter of 2006 and replaced with a 401(k) defined contribution plan. year. Vice President Chris Cole guided the increased emphasis on sales of products manufactured by the Company. During 2010, Bridgford Foods entered into an agreement with Golden Flake Snack Foods to sell and distribute the Company’s dry sausage and meat snack products in the Southeast United States. This arrangement supplements the Company’s own direct-store delivery routes and existing relationships with other regional distributors. Bridgford Monkey Bread, manufactured at our Superior Foods plant in Dallas under the direction of Division President Blaine Bridgford, continues to be a great success. During the year, we developed a single-serve version of this product, which is currently being test-marketed in several venues. In our North Carolina plant, emphasis continued on the development and marketing of shelf-stable sandwich and bakery products. These items are now offered for sale in a variety of retail and on-line outlets, complementing existing business with domestic and overseas military entities. We also believe these items have great potential in the disaster relief/emergency preparedness markets. OPERATIONS Commodity costs during 2010 were unfavorable when compared with those experienced in 2009, with generally higher expenses for bakery flour, meat, gasoline and diesel fuel. In 2010, the costs for these key components exceeded those experienced in 2009 by almost $3.9 million. The Company continued its emphasis on producing, rather than purchasing, the products sold in the Chicago division, and we currently produce more than 98% of the products marketed through the distribution channels serviced by this operation. Our unique beef jerky production system is now producing 100% of the Company’s jerky requirements. Under the direction of Baron R.H. Bridgford, President of Bridgford Foods of Illinois, we introduced several new items during the year, including Beef Stick and Pepperoni Stick Value Packs, and Turkey Party Bites. All of the Company’s manufacturing facilities passed multiple food safety inspections during the fiscal year, conducted by various third-party, military and government agencies. In the frozen food division, new food service products introduced during the year included Sweet Yeast Roll Dough, Sub & Hoagie Roll Dough, Whole Grain Roll Dough and White Whole Wheat Roll Dough. Under the direction of Plant Manager Monty Griffith, our Statesville, North Carolina division implemented new packaging technology for our shelf-stable products, increasing efficiency and reducing material costs. Vice President of Manufacturing Joe deAlcuaz has contributed greatly to the progress we have made this year in improving our operations in The Company has been free of interest bearing debt for twenty-four consecutive years and we maintain a line of credit with Wells Fargo Bank in the amount of $2,000,000 which expires December 15, 2012. We are currently in compliance with all affirmative covenants required under the line of credit agreement. Shareholders’ equity totaled $36,200,000, an increase of $3,777,000 (11.6%) compared to the end of the prior year. Net income increased shareholders’ equity by $4,319,000 and cash dividends of $933,000 were paid during the 2010 fiscal year, as the Board of Directors declared a cash dividend in November 2009 in recognition of the positive operating results achieved during the 2009 fiscal year. The Board of Directors declared a ten cent per share cash dividend in November 2010 which will be recorded in the first quarter of fiscal year 2011. Approximately 371,000 shares remain available for repurchase under the 2 million share repurchase plan previously authorized by the Board of Directors. Shareholders’ equity per share was $3.88 at October 29, 2010 compared to $3.45 at October 30, 2009. The Company successfully completed the third year of its Sarbanes-Oxley Section 404 (a) compliance program. Management assessed the effectiveness of the Company’s internal control over financial reporting for the fiscal year ended October 29, 2010 and believes our control systems are effective. Management’s Report on Internal Controls over Financial Reporting is included in the Form 10-K report. No significant weaknesses in internal accounting control, to the extent identified, were unresolved at the conclusion of the 2010 fiscal year. The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law by the President on July 21, 2010, permanently exempted the Company from the requirement to obtain an external audit on the effectiveness of internal financial reporting controls provided in Section 404 (b) of the Sarbanes-Oxley Act of 2002. SUMMARY Some of the factors that contributed to our strong performance in 2009 moderated in 2010, but your Company was able to sustain its positive momentum during the year. In light of the increased commodity costs noted earlier, our results in 2010 constituted a solid financial performance for Bridgford Foods. The outlook for commodity costs in 2011 is uncertain, as our domestic markets are increasingly affected by global factors in addition to the normal influences of supply and demand. As always, we will strive for improvement in every facet of our business, and will always make our business decisions with the best long-term interests of all of our stakeholders as our main concern. Primary to that goal, we will never compromise the quality of our products or the service we provide to our customers. We again appreciate the loyalty and hard work of our associates, and are gratified to see that effort produce positive results in the 2010 fiscal year. Dallas, Chicago and Statesville. We also took steps to bolster the On behalf of all of our directors and officers, we thank our shareholders, management teams in Chicago and Statesville with an eye toward customers and suppliers for their support during 2010, and we look forward continued progress and increased capacity in those operations. to reporting positive results in 2011. Respectfully submitted, January 14, 2011 William L. Bridgford Chairman John V. Simmons President Raymond F. Lancy Chief Financial Officer 048-1041 Annual Report 03_Layout 1 1/26/11 2:32 PM Page 1 Bridgford Foods Corporation 1308 North Patt Street P.O. Box 3773 Anaheim, California 92803 Phone (714) 526-5533 www.bridgford.com Major Operating Facilities Chicago, Illinois Dallas, Texas Statesville, North Carolina Transfer Agent and Registrar Continental Stock Transfer & Trust Company 17 Battery Place, 8th Floor New York, NY 10004 1-800-509-5586 Independent Accountants Squar, Milner, Peterson, Miranda & Williamson, LLP Newport Beach, California ©2010 Bridgford Foods. YW 048-1041 ANNUAL REPORT 2010 Notice of 2011 Annual Meeting and Proxy Statement 

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