Animal Hero medals were awarded after the epic Battle of the Cowshed, when the animals heroically sent the human invaders packing, thus successfully defending the Animalist revolution. Animal Hero First Class medals were awarded to Boxer and Snowball, whereas a Second Class medal was awarded posthumously to an unfortunate sheep that got killed in the conflict.
This distinction between first and second-class medals would appear to violate the Seventh Commandment of Animals, stating that all animals are equal. It would seem that, to use Orwell's famous quip, some animals are more equal than others.
Our original impressions are subsequently confirmed when Napoleon starts using the Animal Hero medals as a tool of propaganda. Not surprisingly, Napoleon—who, in actual fact, was missing in action during the Battle of the Cowshed—has awarded himself both medals, which is an indication that he regards himself as superior to all other animals.
Having denounced Snowball, the true hero of the Battle of the Cowshed, as a traitor, Napoleon promises a Second Class medal—and some apples—to anyone who brings him in. It says a lot about Napoleon that he's only prepared to offer Second Class medals; as far as he's concerned, he's the only animal on the farm deserving of a First Class honor.