DREYERS GRAND ICE CREAM INC, DEF 14A, 1994-04-13

DREYERS GRAND ICE CREAM INC
DEF 14A, 1994-04-13
ICE CREAM & FROZEN DESSERTS

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<PAGE> 1

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant /X/
Filed by a Party other than the Registrant / /

Check the appropriate box:

/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12

Dreyer's Grand Ice Cream, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)

Dreyer's Grand Ice Cream, Inc.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):

/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction applies:

2) Aggregate number of securities to which transaction applies:

3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:

4) Proposed maximum aggregate value of transaction:

Set forth the amount on which the filing fee is calculated and state how it
was determined.

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

2) Form, Schedule or Registration Statement No.:

3) Filing Party:

4) Date Filed:
<PAGE> 2

[LOGO]

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

Notice of Annual

Meeting of Stockholders

and Proxy Statement

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

Meeting of May 11, 1994
<PAGE> 3

[LOGO]

To the Stockholders of Dreyer's Grand Ice Cream, Inc.

You are cordially invited to attend the Annual Meeting of Stockholders of
Dreyer's Grand Ice Cream, Inc. (the "Company") that will be held at the
Claremont Resort Hotel, Ashby and Domingo Avenues, Oakland, California on
Wednesday, May 11, 1994 at 2:00 p.m. We hope you will be able to attend,
participate and hear management's report to stockholders.

On the following pages, you will find a Notice of Annual Meeting and Proxy
Statement. We suggest that you read the Proxy Statement carefully.

It is important that your shares be represented at the meeting, regardless
of the size of your holding. Therefore, we urge you to SIGN, DATE and RETURN AS
SOON AS POSSIBLE the enclosed proxy card in the postage-paid envelope furnished
for that purpose. This should be done whether or not you now plan to attend the
meeting and to vote in person. A summary of the proceedings of the meeting will
be sent to all stockholders.

The Directors and Officers of the Company look forward to meeting with you.

<TABLE>
<S> <C>
T. GARY ROGERS WILLIAM F. CRONK, III
Chairman of the Board and President
Chief Executive Officer
</TABLE>

Oakland, California
April 8, 1994
<PAGE> 4

[LOGO]

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S> <C>
Notice of Annual Meeting of Stockholders.......................................... 1
Proxy Statement................................................................... 2
Introduction...................................................................... 2
Annual Report................................................................... 2
Solicitation by the Board of Directors; Revocation of Proxies................... 2
Costs of Solicitation........................................................... 2
Voting of Board of Directors' Proxies........................................... 2
Shares Outstanding, Voting Rights and Record Date............................... 2
Security Ownership of Certain Beneficial Owners and Management.................... 3
Security Ownership of Certain Beneficial Owners................................. 3
Security Ownership of Management................................................ 4
Executive Compensation............................................................ 5
Summary of Cash and Certain Other Compensation.................................. 5
Stock Options................................................................... 6
Performance Graph............................................................... 8
Employment Contracts, Employment Termination and Change-In-Control
Arrangements................................................................. 8
Remuneration of Directors....................................................... 9
Compensation Committee Interlocks and Insider Participation..................... 9
Compensation Committee Report on Executive Compensation......................... 9
Board of Directors................................................................ 12
Committees of the Board......................................................... 12
Board of Directors Attendance................................................... 12
Compliance with Section 16(a) of the Securities Exchange Act of 1934............ 13
Matters Submitted to the Vote of Stockholders..................................... 14
Election of Directors........................................................... 14
Approval of the Amendment to the Company's Incentive Stock Option Plan (1982)... 15
Approval of the Amendment to the Company's Stock Option Plan (1992)............. 17
Approval of the Company's Stock Option Plan (1993).............................. 20
Approval of Independent Public Accountants...................................... 24
Voting Information................................................................ 25
General Voting Information...................................................... 25
Votes Required for Approval..................................................... 25
Proposals of Stockholders......................................................... 25
Other Matters..................................................................... 26
</TABLE>
<PAGE> 5

[LOGO]

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

MAY 11, 1994

The Annual Meeting of Stockholders of DREYER'S GRAND ICE CREAM, INC. will
be held on Wednesday, May 11, 1994 at 2:00 p.m. at the Claremont Resort Hotel,
Ashby and Domingo Avenues, Oakland, California for the following purposes:

1. Electing two directors to Class III of the Board of Directors;

2. Approving an amendment to the Company's Incentive Stock Option
Plan (1982);

3. Approving an amendment to the Company's Stock Option Plan (1992);

4. Approving the Company's Stock Option Plan (1993);

5. Approving the appointment of Price Waterhouse as independent
public accountants for the fiscal year 1994 and thereafter until its
successor is appointed; and

6. Considering and acting upon such other business as may properly
come before the meeting or at any adjournment or postponement thereof.

A complete list of the stockholders entitled to vote at the meeting,
including the address and number of shares registered in the name of each such
stockholder, will be open for examination by any such stockholder, for any
purpose germane to the meeting, at the Company's corporate office (5929 College
Avenue, Oakland, California) during ordinary business hours for ten days before
the date of the meeting. The list will also be available for inspection at the
meeting.

The close of business on March 25, 1994 has been fixed as the record date
for the determination of stockholders entitled to notice of and to vote at the
meeting. The stock transfer books will not be closed.

EDMUND R. MANWELL
Secretary
April 8, 1994

IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. PLEASE SIGN,
DATE AND MAIL THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO
POSTAGE. YOU MAY NEVERTHELESS VOTE IN PERSON IF YOU ATTEND THE MEETING.

1
<PAGE> 6

PROXY STATEMENT
------------------

INTRODUCTION

This Proxy Statement is furnished to stockholders by the Board of Directors
of Dreyer's Grand Ice Cream, Inc., a Delaware corporation (the "Company"), in
connection with the solicitation of proxies for use at the Annual Meeting of
Stockholders of the Company to be held on Wednesday, May 11, 1994 and at all
adjournments or postponements thereof. The mailing address of the Company is
5929 College Avenue, Oakland, California 94618, and its telephone number is
(510) 652-8187. The approximate date on which this Proxy Statement and the
enclosed form of proxy are to be sent to stockholders is April 12, 1994.

ANNUAL REPORT

The Annual Report of the Company for the year ended December 25, 1993 is
furnished concurrently to all stockholders entitled to vote at the Annual
Meeting. The Annual Report is not to be regarded as proxy soliciting material or
as a communication by means of which any solicitation is to be made except to
the extent portions of the Annual Report are incorporated herein by reference.

SOLICITATION BY THE BOARD OF DIRECTORS; REVOCATION OF PROXIES

The proxy in the form enclosed is solicited by the Board of Directors. A
proxy may be revoked by the stockholder prior to exercise thereof by filing with
the Secretary of the Company a written revocation or a duly executed proxy
bearing a later date. The powers of the proxy holders will be suspended if the
person executing the proxy is present at the stockholders' meeting and elects to
vote in person.

COSTS OF SOLICITATION

The entire cost of soliciting these proxies will be borne by the Company.
The Company may make arrangements with brokerage houses, nominees, fiduciaries
and other custodians to send proxies and proxy materials to beneficial owners of
the Company's stock and may reimburse them for their expenses in so doing. The
Company has retained Skinner & Co. to assist in obtaining proxies from brokers
and nominees at an estimated cost of $3,500 plus out of pocket expenses.

Proxies may be solicited by directors, officers and regular employees of
the Company personally or by telephone, facsimile or mail. These services will
be provided without additional compensation.

VOTING OF BOARD OF DIRECTORS' PROXIES

The shares represented by the Board of Directors' proxies will be voted FOR
the election of the Board of Directors' nominees for Class III of the Board of
Directors, FOR the amendment to the Company's Incentive Stock Option Plan
(1982), FOR the amendment to the Company's Stock Option Plan (1992), FOR the
approval of the Company's Stock Option Plan (1993), FOR the approval of Price
Waterhouse as independent public accountants and at the discretion of the proxy
holders on any other matters that may properly come before the Annual Meeting,
if no contrary instruction is indicated on a proxy.

SHARES OUTSTANDING, VOTING RIGHTS AND RECORD DATE

There were 14,706,484 shares of Common Stock ($1.00 par value) of the
Company and no shares of Preferred Stock ($1.00 par value) outstanding at the
close of business on March 25, 1994. Each share of Common Stock is entitled to
one vote at the meeting. There are no cumulative voting rights.

Pursuant to the By-Laws of the Company, the Board of Directors has fixed
the close of business on March 25, 1994 as the record date for the determination
of stockholders entitled to notice of and to vote at the meeting.

2
<PAGE> 7

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table sets forth information as of March 25, 1994 concerning
the beneficial ownership of Common Stock of the Company by each person
(including any "group" as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934 (the "Exchange Act")) who is known to the
Company to be the beneficial owner of more than five percent of such class.

<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP* CLASS*
------------------------------------ -------------------- ----------
<S> <C> <C>
T. Gary Rogers(1)(2)................................... 1,696,366 11.5%
5929 College Avenue
Oakland, California 94618
General Electric Capital Corporation(3)(4)............. 1,450,000 9.0%
260 Long Ridge Road
Stamford, Connecticut 06927
Trustees of General Electric Pension Trust(3)(5)....... 1,450,000 9.0%
GE Investment Private Placement Partners I, Limited
Partnership
P.O. Box 7900
3003 Summer Street
Stamford, Connecticut 06904
Northern Trust Corporation(6).......................... 1,320,995 9.0%
50 South LaSalle Street
Chicago, Illinois 60675
State of Wisconsin Investment Board(4)................. 1,015,000 6.9%
P.O. Box 7842
Madison, Wisconsin 53707
William F. Cronk, III(1)(7)............................ 948,537 6.4%
5929 College Avenue
Oakland, California 94618
RCM Capital Management(8).............................. 795,000 5.4%
RCM Limited L.P.
RCM General Corporation
Four Embarcadero, Suite 2900
San Francisco, California 94111
</TABLE>

- ----------

* The amounts and percentages indicated as beneficially owned were calculated
pursuant to Rule 13d-3(d)(1) under the Exchange Act which provides that
beneficial ownership of a security is acquired by a person if that person
has the right to acquire beneficial ownership of such security within 60
days through the exercise of a right such as the exercise of an option or
the conversion of a convertible security into common stock. Any securities
not outstanding which are subject to options or conversion privileges are
deemed outstanding for the purpose of computing the percentage of
outstanding securities of the class owned by the person who owns the option
or conversion privilege but are not deemed outstanding for the purpose of
computing the percentage of the class owned by any other person.

(1) Includes options to purchase 8,304 shares of Common Stock under the
Company's Incentive Stock Option Plan (1982) exercisable within 60 days and
options to purchase 2,712 shares of Common Stock under the Company's Stock
Option Plan (1992) exercisable within 60 days.

(2) 1,585,350 and 100,000 of these shares are held directly by the Rogers
Revocable Trust and the Four Rogers Trust, respectively, for which Mr.
Rogers and his wife serve as co-trustees. Mr. Rogers and his wife share the
voting and investment power with respect to such shares.

(3) Assumes full conversion of the 6.25% convertible subordinated debentures due
June 30, 2001 (the "Notes") held by the named entity or entities into the
Company's Common Stock. These parties filed a Schedule 13D (reporting the
beneficial ownership described above) jointly with General Electric Capital
Services, Inc. (formerly known as General Electric Financial Services, Inc.)
and General Electric Company each of which disclaimed beneficial ownership
of all shares of the Company's Common Stock beneficially owned by General
Electric Capital Corporation, Trustees of General Electric Pension Trust and
GE Investment Private Placement Partners I, Limited Partnership.

(4) The holder has sole voting power and sole investment power over all of these
shares.

(5) Trustees of General Electric Pension Trust have sole voting power and sole
investment power over 586,495 of these shares. GE Investment Private
Placement Partners I, Limited Partnership has sole voting power and sole
investment power over 863,505 of these shares.

3
<PAGE> 8

(6) The holder has sole voting power over 977,815 of these shares and shared
voting power over 38,710 of these shares. The holder has sole investment
power over 1,235,025 of these shares and shared investment power over 75,370
of these shares.

(7) 895,521 of these shares are held directly by the Cronk Revocable Trust for
which Mr. Cronk and his wife serve as co-trustees. Mr. Cronk and his wife
share the voting and investment power with respect to such shares. 42,000 of
these shares are held in irrevocable trusts for the benefit of Mr. Cronk's
sons. Mr. Cronk does not have voting or investment power over these 42,000
shares and Mr. Cronk disclaims beneficial ownership of all of the shares
held in these irrevocable trusts.

(8) The holder has sole voting power over 661,000 of these shares and sole
investment power over all of these shares. RCM Capital Management ("RCM
Capital"), RCM Limited L.P. ("RCM Limited"), and RCM General Corporation
("RCM General") agreed to file a joint statement on Schedule 13G under the
Exchange Act in connection with the Common Stock of the Company. On their
jointly filed Schedule 13G, RCM Capital, RCM Limited and RCM General
indicated the following: RCM Capital is an investment adviser registered
under Section 203 of the Investment Advisers Act of 1940. RCM Limited is the
general partner of RCM Capital. RCM General is the general partner of RCM
Limited. RCM Limited and RCM General have beneficial ownership of the
securities reported only to the extent that either of them may be deemed to
have a beneficial ownership of securities managed by RCM Capital.

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth information as of March 25, 1994 concerning
the beneficial ownership of Common Stock of the Company by each director and
nominee of the Company, the Chief Executive Officer and each of the four most
highly compensated executive officers of the Company (the "Named Executive
Officers") and all directors and executive officers of the Company as a group.
Except as otherwise noted, each person has sole voting and investment power with
respect to the shares shown.
<TABLE> <CAPTION>
AMOUNT OF
BENEFICIAL PERCENT OF
NAME OWNERSHIP CLASS
----- ------------ ----------
<S> <C> <C>
T. Gary Rogers (1)(2)............................................. 1,696,366 11.5%
William F. Cronk, III (1)(3)...................................... 948,537 6.4%
Merril M. Halpern................................................. 3,852 *
Jerome L. Katz.................................................... 3,000 *
John W. Larson.................................................... -0- *
Edmund R. Manwell................................................. 24,000 *
Jack O. Peiffer................................................... -0- *
Thomas M. Delaplane(4)............................................ 27,856 *
William R. Oldenburg(5)........................................... 31,856 *
Paul R. Woodland(6)............................................... 22,246 *
Directors and Executive Officers as a Group (11 persons)(7)....... 2,789,913 18.9%
</TABLE>
- ----------
* Less than one percent (1%).

(1) Includes options to purchase 8,304 shares of Common Stock under the
Company's Incentive Stock Option Plan (1982) (the "ISO Plan") exercisable
within 60 days and options to purchase 2,712 shares of Common Stock under
the Company's Stock Option Plan (1992) (the "1992 Plan") exercisable within
60 days.

(3) 895,521 of these shares are held directly by the Cronk Revocable Trust for
which Mr. Cronk and his wife serve as co-trustees. Mr. Cronk and his wife
share the voting and investment power with respect to such shares. 42,000 of
these shares are held in irrevocable trusts for the benefit of Mr. Cronk's
sons. Mr. Cronk does not have voting or investment power over these 42,000
shares and Mr. Cronk disclaims beneficial ownership of all of the shares
held in these irrevocable trusts.

(4) Includes options to purchase 12,340 shares of Common Stock under the ISO
Plan exercisable within 60 days.

(5) Includes options to purchase 12,340 shares of Common Stock under the ISO
Plan exercisable within 60 days.

(6) Includes options to purchase 9,780 shares of Common Stock under the ISO Plan
exercisable within 60 days.

(7) Includes options to purchase 65,648 shares of Common Stock under the ISO
Plan exercisable within 60 days and options to purchase 5,424 shares of
Common Stock under the Company's 1992 Plan exercisable within 60 days.

4
<PAGE> 9

EXECUTIVE COMPENSATION

SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION

The following table shows, for the fiscal years ended December 25, 1993,
December 26, 1992 and December 28, 1991 the cash compensation paid by the
Company, as well as certain other compensation paid or accrued for those years,
to the Named Executive Officers in all capacities in which they served:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------------------
ANNUAL COMPENSATION AWARDS
------------------------------------ ------------------------- PAYOUTS
OTHER ANNUAL SECURITIES ------- ALL OTHER
COMPEN- RESTRICTED UNDERLYING LTIP COMPEN-
NAME AND PRINCIPAL SALARY($) BONUS($) SATION STOCK OPTIONS/SARS PAYOUTS SATION
POSITION YEAR (1) (2) ($)(3)(4) AWARD(S)($) (#) ($)(5) ($)(3)(6)
- -------------------------- ----- --------- -------- ------------ ----------- ------------ ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
T. Gary Rogers............ 1993 415,744(7) -0- 50,145 -0- 93,300(8) -0- 22,808
Chairman of the Board 1992 490,077 -0- 49,435 -0- 21,780 -0- 23,483
and
Chief Executive Officer 1991 441,220 -0- -0- 4,800 -0-
William F. Cronk, III..... 1993 415,744(7) -0- 60,156 -0- 93,300(8) -0- 21,006
President 1992 490,077 -0- 54,726 -0- 21,780 -0- 21,257
1991 441,220 -0- -0- 4,800 -0-
Thomas M. Delaplane....... 1993 265,640 -0- -0- 27,700(8) -0- 21,006
Vice President--Sales 1992 244,884 43,750 -0- 8,520(9) -0- 21,257
1991 221,028 75,000 -0- 2,700 -0-
William R. Oldenburg...... 1993 276,602 -0- -0- 28,000(8) -0- 19,207
Vice 1992 258,923 55,650 -0- 8,520(9) -0- 14,911
President--Operations
1991 230,067 82,250 -0- 2,700 -0-
Paul R. Woodland.......... 1993 257,564 -0- -0- 27,400(8) -0- 21,006
1992 244,884 43,750 -0- 8,520(9) -0- 21,257
Vice President--Finance and
Administration, Chief 1991 220,682 75,000 -0- 2,700 -0-
Financial Officer and
Assistant Secretary
</TABLE>

- ---------------
(1) Includes amounts contributed by the officers to the salary deferral portion
of the Company's Pension Plan and Savings Plan.
(2) Includes amounts accrued under the Company's Incentive Bonus Plan.
(3) In accordance with the transitional provisions applicable to the rules on
executive officer and director compensation disclosure adopted by the
Securities and Exchange Commission (the "SEC") amounts of Other Annual
Compensation and All Other Compensation are excluded for the Company's
fiscal years ending prior to December 15, 1992. Additionally, no disclosure
for fiscal years 1992 and 1993 is made for Messrs. Delaplane, Oldenburg and
Woodland under Other Annual Compensation as the aggregate incremental
compensation otherwise reportable in this column for these individuals does
not require disclosure under the rules.
(4) The amounts reported for each of Mr. Rogers and Mr. Cronk include $31,500
for 1992 and $30,250 for 1993 paid to Price Waterhouse for tax and
accounting services rendered on behalf of Messrs. Rogers and Cronk,
respectively. The amounts reported also include $15,859 in 1992 and $15,583
in 1993 for Mr. Rogers and $16,363 in 1992 and $24,254 in 1993 for Mr. Cronk
in connection with each of Mr. Rogers' and Mr. Cronk's use of Company
automobiles.
(5) LTIP is an acronym for "Long Term Incentive Plan" which term is defined in
Regulation S-K as any plan providing compensation intended to serve as
incentive for performance to occur over longer than one fiscal year other
than restricted stock, options and SARs. The Company currently does not have
a Long Term Incentive Plan.
(6) For each of Messrs. Rogers, Cronk, Delaplane and Woodland, the amounts
reported include contributions of $16,020 in 1992 and $15,610 in 1993 to the
Dreyer's Grand Ice Cream, Inc. Money Purchase Pension Plan (the "Pension
Plan") and $5,237 in 1992 and $5,396 in 1993 to the Dreyer's Grand Ice
Cream, Inc. Savings Plan (the "Savings Plan"). For Mr. Oldenburg the amounts
reported include contributions of $12,816 in 1992 and $16,509 in 1993 to the
Pension Plan and $2,095 in 1992 and $2,698 in 1993 to the Savings Plan.
Additionally, this includes $2,226 in 1992 and $1,802 in 1993 for Mr. Rogers
in split-dollar life insurance premiums paid by the Company.
(7) After being offered the opportunity by the Compensation Committee of the
Board of Directors, Messrs. Rogers and Cronk each elected to receive stock
options granted under the Company's Stock Option Plan (1992) (the "1992
Plan") in lieu of $100,000 of salary, prior to earning such salary
compensation. These elections were made pursuant to the "Income Swap Plan"
of the Compensation Committee. The Income

5
<PAGE> 10

Swap Plan is described in the Compensation Committee's Report on Executive
Compensation on pages 9-11 herein.
(8) For Messrs. Rogers and Cronk the amount listed includes options granted
under the 1992 Plan pursuant to the Income Swap Plan referenced in footnote
7 above and described in the Compensation Committee's Report on Executive
Compensation on pages 9-11 herein. Additionally, each of the Named Executive
Officers earned a bonus for his performance in 1993. Prior to earning such
bonus each Named Executive Officer elected to receive non-qualified stock
options in lieu of a cash bonus pursuant to the Income Swap Plan (referenced
in footnote 7 above and described in the Compensation Committee's Report on
pages 9-11 herein). In this regard, Messrs. Rogers and Cronk each received
an option to purchase 13,100 shares of the Company's Common Stock, Mr.
Delaplane received an option to purchase 8,400 shares of the Company's
Common Stock, Mr. Oldenburg received an option to purchase 8,700 shares of
the Company's Common Stock, and Mr. Woodland received an option to purchase
8,100 shares of the Company's Common Stock. Messrs. Rogers and Cronk's
options have an exercise price of $29.375. Messrs. Delaplane, Oldenburg and
Woodland's options have an exercise price of $23.875 (the fair market value
on the date of grant, March 7, 1994). All of these stock options were
granted, subject to stockholder approval of such plan, under the Company's
Stock Option Plan (1993) (the "1993 Plan") and vest six (6) months from the
date of stockholder approval of such plan. The 1993 Plan is described under
the caption "Approval of the Company's Stock Option Plan (1993)" on pages
20-24 herein.
(9) Includes options to purchase 3,390 shares granted under the ISO Plan which
were later rescinded by the Board of Directors on May 19, 1992.

STOCK OPTIONS

The following table provides information concerning the grant of stock
options made during fiscal 1993 to the Named Executive Officers:

OPTION GRANTS IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------------
PERCENT OF
NUMBER OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR GRANT DATE
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION PRESENT
NAME GRANTED(4) FISCAL YEAR ($/SH) DATE VALUE $(6)
- ------------------------------- ------------ -------------- ------------ ---------- -----------
<S> <C> <C> <C> <C> <C>
T. Gary Rogers(1).............. 8,100 2.3% $24.75 (5) $ 116,744
(1)............ 49,400 13.8 27.50 (5) 770,187
(2)............ 22,700 6.3 29.375 (5) 377,773
William F. Cronk, III(1)....... 8,100 2.3 24.75 (5) 116,744
(1)..... 49,400 13.8 27.50 (5) 770,187
(2)..... 22,700 6.3 29.375 (5) 377,773
Thomas M. Delaplane(3)......... 4,100 1.1 24.75 3/3/99 47,128
(1)..... 15,200 4.2 27.50 (5) 236,981
William R. Oldenburg(3)........ 4,100 1.1 24.75 3/3/99 47,128
(1)..... 15,200 4.2 27.50 (5) 236,981
Paul R. Woodland(3)............ 4,100 1.1 24.75 3/3/99 47,128
(1)......... 15,200 4.2 27.50 (5) 236,981
</TABLE>

- ------------
(1) Options granted pursuant to the Company's Stock Option Plan (1992) (the
"1992 Plan").
(2) Options were granted pursuant to the 1992 Plan and include options received
in lieu of cash compensation pursuant to the Compensation Committee's Income
Swap Plan which plan is described in the Compensation Committee's Report on
Executive Compensation on pages 9-11 herein.
(3) Options granted pursuant to the Company's Incentive Stock Option Plan (1982)
(the "ISO Plan").
(4) Those options described in footnote 8 of the Summary Compensation Table
which were granted in lieu of a cash bonus in 1994 are not included in this
table as such options were not granted during fiscal 1993. The material
terms of the options granted under each of the 1992 Plan and the ISO Plan
are as follows: The options granted begin vesting two years from the date of
grant and may be exercised only as to 40% of the optioned shares after two
years from the date of grant and as to an additional 20% after each of the
succeeding three years. The options are non-transferable except by will or
the laws of descent and distribution. Additional material terms applicable
to the 1992 Plan but not the ISO Plan are as follows: The exercise price of
options granted under the 1992 Plan is the fair market value of the shares
of the

6
<PAGE> 11

Company's Common Stock on the date of grant. In the event of a change in
control of the Company, all then outstanding options issued under the 1992
Plan shall vest and become immediately exercisable. The term
"change-in-control" as defined in the 1992 Plan is more completely described
under the caption "Employment Contracts, Employment Termination and
Change-in-Control Arrangements" on pages 8-9 herein and under the caption
"Approval of the Amendment to the Company's Stock Option Plan (1992)" on
pages 17-20 herein. The options granted to employees under the 1992 Plan
terminate upon the employee's termination of employment from the Company,
death or disability. Additional material terms applicable to the ISO Plan
but not the 1992 Plan are as follows: The exercise price of options granted
under the ISO Plan is the fair market value of the Company's Common Stock on
the date of grant for all employees who own less than 10% of the combined
voting power of all classes of stock of the Company and 110% of the fair
market value of the Company's Common Stock on the date of grant for any
employee owning 10% or more of the combined voting power of all classes of
stock of the Company ("10% Owners"). The options granted under the ISO Plan
terminate six (6) years from the grant date for those persons who are not
10% Owners and five (5) years from the grant date for 10% Owners or upon the
employee's termination of employment from the Company, death or disability
(whether or not the employee is a 10% Owner). Subject to stockholder
approval of the proposed amendment to the ISO Plan, in the event of a change
in control of the Company, all outstanding options issued under the ISO Plan
shall vest and become immediately exercisable. The ISO Plan generally and
the term "change-in-control" in particular as defined in the ISO Plan are
more completely described under the caption "Employment Contracts,
Employment Termination and Change-in-Control Arrangements" on pages 8-9
herein and under the caption "Approval of the Amendment to the Company's
Incentive Stock Option Plan (1982)" on pages 15-17 herein.
(5) Options terminate only upon termination of employment, death or disability.
(6) Present value was calculated using the Black-Scholes option pricing model
which involves an extrapolation to future price levels based solely on past
performance. For the options granted under the ISO Plan with an exercise
price of $24.75, the following assumptions were used in the Black-Scholes
valuation calculation: dividend yield of .97%, risk-free rate of return of
5.55%, 6 year term and a volatility coefficient of .4417. For the options
granted under the 1992 Plan with an exercise price of $24.75, the following
assumptions were used in the Black-Scholes valuation calculation: dividend
yield of .97%, risk-free rate of return of 6.91%, 10 year term and a
volatility coefficient of .4417. For the options granted under the 1992 Plan
with the exercise prices of $27.50 the following assumptions were used in
the Black-Scholes valuation calculation: dividend yield of .87%, risk-free
rate of return of 5.74%, 10 year term and a volatility coefficient of .4261.
For the options granted under the 1992 Plan with an exercise price of
$29.375 the following assumptions were used in the Black-Scholes valuation
calculation: dividend yield of .82%, risk-free rate of return of 5.72%, 10
year term and a volatility coefficient of .4221. The annual dividend yield
equals the quotient of the current annual dividend of $.24 divided by the
stock price on the date of grant. All volatility coefficients used were
based on the daily closing price of the Company's Common Stock over a two
year period. The risk-free rate is the yield on a U.S. Government Zero
Coupon Bond with a maturity equal to the term of the grant. The value
calculated by use of this model should not be viewed in any way as a
forecast of the future performance of the Company's Common Stock.

The following table provides information on option exercises in fiscal 1993
by the Named Executive Officers and the value of such officers' unexercised
in-the-money options as of December 25, 1993:

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

<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY OPTIONS/SARS
NUMBER UNEXERCISED OPTIONS/SARS
OF SHARES AT FY-END(1) AT FY-END($)(1)
ACQUIRED ON VALUE ---------------------------- --------------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------- ----------- -------- ----------- ------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
T. Gary Rogers........... 14,000 $170,450 13,280 114,300 $ 213,441 $ 382,413
William F. Cronk, III.... 14,000 170,450 13,280 114,300 213,441 382,413
Thomas M. Delaplane...... -0- -0- 18,753 32,403 318,908 208,231
William R. Oldenburg..... -0- -0- 19,440 29,490 354,995 154,773
Paul R. Woodland......... 6,000 125,187 6,880 29,490 98,755 154,773
</TABLE>

- ------------
(1) Those options described in footnote 8 of the Summary Compensation Table
which were granted in lieu of a cash bonus in 1994 are not included in this
table as such options were not held by the recipient at the end of fiscal
1993.

7
<PAGE> 12

PERFORMANCE GRAPH

The following graph shows the Company's total return to stockholders
compared to the Standard & Poor's 500 Index and the Standard & Poor's Food
Products Index over the 5 year period from 1989 through 1993:
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*

AMONG DREYER'S GRAND ICE CREAM, INC., THE S&P'S 500 INDEX AND THE S&P'S FOOD
PRODUCTS INDEX

<TABLE>
<CAPTION>
DREYER'S S&P FOOD
MEASUREMENT PERIOD GRAND ICE S&P 500 IN- PRODUCTS IN-
(FISCAL YEAR COVERED) CREAM, INC. DEX DEX
<S> <C> <C> <C>
1988 100.00 100.00 100.00
1989 118.09 131.59 132.24
1990 180.09 126.92 146.79
1991 314.70 161.99 204.06
1992 208.02 180.50 218.08
1993 255.05 197.17 200.42
</TABLE>

* Assumes $100 investment in each of Dreyers Grand Ice Cream, Inc., the S&P 500
Index and the S&P Food Products Index, and the reinvestment of dividends.

EMPLOYMENT CONTRACTS, EMPLOYMENT TERMINATION AND CHANGE-IN-CONTROL ARRANGEMENTS

Currently, all options which have been and may in the future be issued
under the Company's Stock Option Plan (1992) (the "1992 Plan") immediately vest
and become subject to exercise upon a change-in-control of the Company. A
change-in-control is defined in the 1992 Plan to include, (i) the acquisition by
any person (who is not as of the date of adoption by the Company's Board of
Directors a member of the Company's Board of Directors) of beneficial ownership
of 33 1/3% or more of the combined voting power of the Company's outstanding
securities, or (ii) a change in the composition of majority membership of the
Board of Directors within any two year period, or (iii) a change in ownership of
the Company such that the Company becomes subject to the delisting of its Common
Stock from the NASDAQ National Market System, or (iv) the approval by the Board
of the sale of all or substantially all of the assets of the Company, or (v) the
approval by the Board of any merger, consolidation, issuance of securities or
purchase of assets, the result of which would be the occurrence of any event
described in clause (i), (ii) or (iii) above. Subject to stockholder approval of
the amendment to the 1992 Plan, the change-in-control provision therein has been
amended to conform to the change-in-control provisions in each of the Company's
Incentive Stock Option Plan (1982) (the "ISO Plan") and the Company's Stock
Option Plan (1993) (the "1993 Plan"). A more complete description of the revised
change-in-control provisions and the 1992 Plan may be found under the caption
"Approval of the Amendment to the Company's Stock Option Plan (1992)" on pages
17-20 herein.

Subject to stockholder approval of the amendment to the ISO Plan and the
1993 Plan, options which have been and may in the future be issued under either
the ISO Plan or the 1993 Plan will also immediately vest and become subject to
exercise upon a change-in-control of the Company. A more complete description

8
<PAGE> 13

of the ISO Plan in general and the term "change-in-control" as defined therein
may be found under the caption "Approval of the Amendment to the Company's
Incentive Stock Option Plan (1982)" on pages 15-17 herein. A more complete
description of the 1993 Plan in general and the term "change-in-control" as
defined therein may be found under the caption "Approval of the Company's Stock
Option Plan (1993)" on pages 20-24 herein. The 1993 Plan also includes
provisions whereby the options granted an optionee thereunder immediately vest
and become exercisable upon the death or retirement of the optionee.
Additionally, under the 1993 Plan, the Administrator may, in its discretion,
accelerate the vesting of an optionee's options. Except for these provisions of
the Company's stock option plans, the Company has no employment contracts or any
employment termination or change-in-control arrangements.

REMUNERATION OF DIRECTORS

Directors' compensation consists of a meeting fee of $4,000 for each
meeting of the Board of Directors actually attended and an annual fee of $4,000
for each member of each committee. The Board of Directors generally meets four
times each year. Each committee meets at least annually and more frequently if
requested by any member. Employee directors receive no compensation as
directors. If the Company's Stock Option Plan (1993) (the "1993 Plan") is
approved by the Company's stockholders, each member of the Board of Directors
who is not an employee of the Company (each a "Non-Employee Director") will
receive an option to purchase 5,000 shares of the Company's Common Stock on the
date the 1993 Plan is approved. Also, if the 1993 Plan is approved by the
Company's stockholders, additional stock option grants to purchase 1,500 shares
of the Company's Common Stock will be awarded to each Non-Employee Director on
each anniversary of the date the 1993 Plan was approved by the Company's
stockholders. A complete description of the Company's 1993 Plan may be found
under the caption "Approval of the Company's Stock Option Plan (1993)" on pages
20-24 herein.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the Compensation Committee are Messrs. Halpern, Katz,
Larson, Manwell and Peiffer. Mr. Manwell was the Secretary of the Company and a
partner in the law firm of Manwell & Milton, general counsel to the Company,
during fiscal 1993. The Company paid Manwell & Milton $832,150 in fiscal 1993
for services rendered as general counsel to the Company. Mr. Manwell is not
separately compensated for his services as Secretary of the Company although
some of the fees received by Manwell & Milton may be for services which are
commonly performed by the secretary of other corporations.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

Pursuant to regulations adopted by the SEC in October 1992, the
Compensation Committee is required to disclose its bases for compensation of the
Named Executive Officers and to discuss the relationship between the Company's
performance during the last fiscal year and such compensation. The Compensation
Committee notes that except in its capacity as Plan Administrator of the
Company's Incentive Stock Option Plan (1982) (the "ISO Plan"), the Company's
Stock Option Plan (1992) (the "1992 Plan") and, subject to stockholder approval
of the plan, the Company's Stock Option Plan (1993) (the "1993 Plan"), the
Committee does not establish compensation for the Named Executive Officers (or
any other executive officer of the Company) except the Chief Executive Officer
and the President. Except for stock option grants, the compensation of the
Company's executive officers (including the Named Executive Officers other than
the Chief Executive Officer and the President) is determined by the Chief
Executive Officer and the President in their sole discretion.

The Chief Executive Officer's and the President's aggregate compensation is
comprised of three principal components: base salary, bonus and stock options.
While the Committee does not review any specific quantitative issues in
establishing the Chief Executive Officer's and the President's base salary
specifically and total compensation generally, the Committee does consider two
principal factors which are evenly weighted in its deliberations: (1)
performance of the Company measured by the long-term growth of the Company's
income; and (2) the roles of the Chief Executive Officer and the President in
achieving the Company's performance. Although the Committee has not reviewed any
compensation surveys relating specifically to chief executive officer and
president salaries, the Committee believes that each of the Chief Executive

9
<PAGE> 14

Officer's and the President's base salary appropriately reflects the
satisfactory long-term performance of the Company and each of their roles in the
Company's performance and is competitive with the salaries of their counterparts
at other companies of similar size and history (although such other companies
are not necessarily companies which are represented in the performance graph).
While in the past five years the Company's net income before extraordinary items
has risen more than 145%, in the same period each of the Chief Executive
Officer's and the President's base salary has risen only 44% (66% if the option
grants described in the following paragraph are included).

The bonus portion of the Chief Executive Officer's and President's
compensation package is tied directly to the Company's actual performance as
measured against the Company's annual profit plan, which is reviewed by the
Board of Directors at least annually. The potential bonus for each of the Chief
Executive Officer and the President is equal to 50% of their respective base
salaries. The Committee's present policy is to award 50% of the potential bonus
to the Chief Executive Officer and President if the Company earns 80% of planned
after-tax income and an additional bonus, calculated by linear interpolation, if
the Company earns more than 80% but less than 100% of the planned after-tax
income. All of the potential bonus is awarded to the Chief Executive Officer and
President if the Company earns 100% or more of planned after-tax income. The
Committee believes that this approach to the bonus element of compensation
directly ties a substantial portion of the Chief Executive Officer's and the
President's compensation to the performance of the Company. The Committee notes
that while no bonus was awarded to either the Chief Executive Officer or the
President for 1991 or 1992, additional stock options valued at approximately
$208,000 were granted in early 1994 to each of the Chief Executive Officer and
the President in lieu of a cash bonus for 1993 which would have been paid in
early 1994 (pursuant to the Income Swap Plan described below) because the bonus
requirements of the Committee were met.

In awarding options under the ISO Plan, the 1992 Plan and, subject to
stockholder approval of the plan, the 1993 Plan, the Committee has adopted a
policy pursuant to which each year (1) Messrs. Rogers and Cronk will receive
options on common stock with a current market value equal to three times annual
base salary, (2) all other Named Executive Officers (and the other vice
president of the Company) will receive options on common stock with a current
market value equal to two times annual base salary, and (3) approximately
eighteen executive staff members will receive options on common stock with a
current market value equal to their annual base salary. The amounts included in
the Committee's new policy are competitive with a broad general industry
sampling according to a survey of competitive practice in 275 diversified
companies received from the Company's compensation consultants (which survey
included some companies which are represented in the performance graph). The
stock options awarded in fiscal 1993 to the Named Executive Officers generally
and the Chief Executive Officer specifically were at the low end of the range of
stock option awards granted to their respective peers at companies represented
in the survey.

The Committee has also adopted a policy whereby key executive employees of
the Company and its subsidiaries may, at the Committee's discretion, be offered
the opportunity to receive options in lieu of current cash compensation,
including bonuses, for options to purchase shares of the Company's Common Stock
(the "Income Swap Plan"). Options granted in exchange for cash compensation are
non-qualified and may be granted under either the 1992 Plan or, subject to
stockholder approval of such plan, the 1993 Plan. The exchange ratio used to
determine the proper number of shares to be subject to such options is based on
the Black-Scholes valuation method. The exercise price of options granted under
the Income Swap Plan is set at the current fair market value of the Company's
Common Stock as of the date of grant. The vesting of options granted by the
Committee under the Income Swap Plan depends on whether the options are granted
under the 1992 Plan or the 1993 Plan. Vesting for options granted under the 1992
Plan is described in footnote 4 to the table titled "Option Grants in the Last
Fiscal Year" on page 6 herein. Vesting for options granted under the 1993 Plan
is described under the heading "Approval of the Company's Stock Option Plan
(1993)" found on pages 20-24 herein. Options granted under the Income Swap Plan
are exercisable for cash or by utilizing previously-acquired shares of Common
Stock of the Company. Further, any tax withholding requirement can be satisfied
through surrender of additional shares previously acquired by the employee. Upon
the exercise of an option, the individual may receive a "reload" grant equal to
the number of shares of common stock utilized to pay the exercise price and/or
tax withholdings. If granted, the "reload" options will have an exercise price

10
<PAGE> 15

equal to the fair market value of the Company's Common Stock on the date of
grant of the reload option and an exercise term equal to the remaining term of
the option exercised.

In addition to receiving future options which may be granted, a new
executive staff member may be awarded extra option grants when he or she assumes
the new position. In making such an extra award, the Committee has, to date,
honored the employment arrangements negotiated by management in hiring a new
executive staff member. All option grants are made at the fair market value or
higher of the Company's shares at the date of grant and are generally made
subject to a five-year vesting period.

Pursuant to Internal Revenue Code (the "Code") Section 162(m), for tax
years beginning on or after January 1, 1994 publicly-held corporations, subject
to certain exceptions, may no longer deduct that amount of compensation paid to
an individual in excess of $1 million. The SEC now requires a statement of the
Compensation Committee's policy with respect to Code Section 162(m). To date, no
employee of the Company has been paid in excess of $1 million. Therefore, the
Committee has not formulated a policy with respect to Code Section 162(m). The
Committee will address the issues presented by Code Section 162(m) at such time
as an employee or employees of the Company is likely to be compensated in excess
of $1 million. The Committee notes that performance-based compensation in excess
of $1 million is one exception to the compensation deductibility rules. The
Committee has been advised that the terms of the Company's stock option plans in
conjunction with the manner in which it awards stock options under such plans
excepts such awards from the limitation on deductibility imposed by Code Section
162(m).

The Committee notes that generally executive officers granted options will
only realize value to the extent the fair market value of the Company's stock
increases after the date of grant. The Committee believes that this furthers the
Committee's goal of aligning management's interests with those of the Company's
stockholders.

THE COMPENSATION COMMITTEE

Merril M. Halpern
Jerome L. Katz
John W. Larson
Edmund R. Manwell
Jack O. Peiffer

The foregoing Compensation Committee Report on executive compensation shall
not be deemed to be incorporated by reference into any filing of the Company
under the Securities Act of 1933 or the Securities Exchange Act of 1934, except
to the extent that the Company specifically incorporates such information by
reference.

11
<PAGE> 16

BOARD OF DIRECTORS

COMMITTEES OF THE BOARD

Committees of the Board of Directors are the following:

Compensation Committee

The Compensation Committee is composed of five directors, four of whom are
not employees of the Company in any capacity and a fifth member, Mr. Manwell,
who serves as the Secretary of the Company. Mr. Manwell's relationship with the
Company is further described under the caption "Compensation Committee
Interlocks and Insider Participation" appearing above. The Compensation
Committee makes recommendations to the Board of Directors with respect to the
salaries and bonuses and other forms of remuneration to be paid to the Chief
Executive Officer and the President and the terms and conditions of their
employment. In addition, the Compensation Committee is the Administrator of the
Company's Incentive Stock Option Plan (1982), the Company's Section 423 Employee
Stock Purchase Plan (1990), the Company's Employee Secured Stock Purchase Plan
(1990), the Company's Stock Option Plan (1992) and, subject to stockholder
approval, the Company's Stock Option Plan (1993).

Audit Committee

The Audit Committee is composed of five directors, four of whom are not
employees of the Company in any capacity and a fifth member, Mr. Manwell, who
serves as the Secretary of the Company. Mr. Manwell's relationship with the
Company is further described under the caption "Compensation Committee
Interlocks and Insider Participation" appearing above. The Committee meets on
the call of any member and, on at least one occasion each year, it meets with
the independent auditors to discuss: (1) the scope of the audit engagement; (2)
the results of each annual audit and the financial statements and notes included
in the Company's Annual Report to the Stockholders; and (3) other matters
pertaining to the audit, including the Company's accounting policies, and
internal controls. The Committee is also responsible for recommending for
appointment by the Board of Directors, subject to submission to the stockholders
for their approval, independent public accountants to audit the Company's books,
records and accounts, as well as advising the Board of Directors with respect to
the scope of the audit, the Company's accounting policies, and internal
controls.

The purpose and function of the Audit Committee is to review and monitor
the Company's financial reports and accounting practices, as well as to provide
the means for direct communication among the Company's Board of Directors, its
financial management and external auditors.

The Committee is concerned with the accuracy and completeness of the
Company's financial statements and matters that relate to them. However, the
Committee's role does not contemplate providing to stockholders, or others,
special assurances regarding such matters. Moreover, the Committee's role does
not involve the professional evaluation of the quality of the audit conducted by
the independent auditors. While it is believed that the Committee's activities
are beneficial because they provide an ongoing oversight on behalf of the full
Board of Directors, they do not alter the traditional roles and responsibilities
of the Company's management and independent auditors with respect to the
accounting and control functions and financial statement presentation.

Messrs. Halpern, Katz, Larson, Manwell and Peiffer are members of both the
compensation and audit committees.

The Company has no nominating committee.

BOARD OF DIRECTORS ATTENDANCE

During fiscal 1993, there were seven special meetings of the Board of
Directors and all directors attended each meeting occurring while such director
was a member of the Board of Directors. The Compensation Committee met four
times and the Audit Committee met twice. All members of the committees attended

12
<PAGE> 17

each of the meetings of the respective committee on which they sit occurring
while such person was a member of the committee in question.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Officers, directors and greater than ten-percent stockholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file.

Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 (required
by Section 16(a) in the event of failure to comply with certain filing
requirements) were required for those persons, the Company believes that during
fiscal 1993 its officers, directors, and greater than ten-percent beneficial
owners complied with all applicable filing requirements.

(THIS SPACE INTENTIONALLY LEFT BLANK.)

13
<PAGE> 18

MATTERS SUBMITTED TO THE VOTE OF STOCKHOLDERS

ELECTION OF DIRECTORS

General

Under the Company's By-Laws and Certificate of Incorporation, the Board of
Directors consists of seven (7) directors and is divided into three classes,
with each class having a term of three years. The directors of Class III will be
elected at the 1994 Annual Meeting of Stockholders and will hold office until
the 1997 Annual Meeting of Stockholders or until their successors are elected
and qualified. Unless otherwise directed, the persons named in the enclosed form
of proxy will vote such proxy for the election of T. Gary Rogers and William F.
Cronk, III, each of whom has consented to be named as such and to serve if
elected. In case either Mr. Rogers or Mr. Cronk becomes unavailable for election
or declines to serve for any unforeseen reason, an event management does not
anticipate, the persons named in the proxy will have the right to use their
discretion to vote for a substitute. The nominees constitute Class III of the
Board of Directors with each of their terms expiring as of the date of this
annual meeting. No family relationship exists between any nominee and any of the
other directors.

The following brief statements contain biographical information about the
nominees and the years they first became directors.

<TABLE>
<CAPTION>
NOMINEE
YEAR FIRST ELECTED A
DIRECTOR
AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ------------------------- ------------------------------------------
<S> <C>
T. Gary Rogers........... CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER, DREYER'S GRAND
1977 ICE CREAM, INC. Mr. Rogers has served as the Company's Chairman
Age: 51 of the Board and Chief Executive Officer since its incorporation
in February 1977.
William F. Cronk, III.... PRESIDENT, DREYER'S GRAND ICE CREAM, INC. Mr. Cronk has served on
1977 the Company's Board of Directors since its incorporation in
Age: 51 1977. Since April 1981, he has served as the Company's
President.
</TABLE>

Continuing Directors

Directors Merril M. Halpern, John W. Larson and Jack O. Peiffer ("Class I")
will hold office until the 1995 Annual Meeting of Stockholders. Directors Jerome
L. Katz and Edmund R. Manwell ("Class II") will hold office until the 1996
Annual Meeting of Stockholders.

Mr. Peiffer was named to the Board of Directors of the Company pursuant to
the terms of a Securities Purchase Agreement under which General Electric
Capital Corporation, Trustees of General Electric Pension Trust and GE
Investment Private Placement Partners I, Limited Partnership purchased
$100,752,000 of 6.25% convertible subordinated debentures due June 30, 2001 from
the Company.

The following brief statements contain biographical information about each
continuing director and the year he first became a director.

14
<PAGE> 19

<TABLE>
<CAPTION>
NAME
YEAR FIRST ELECTED A
DIRECTOR
AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ------------------------- ------------------------------------------
<S> <C>
Jerome L. Katz........... PRESIDENT AND CO-CHIEF EXECUTIVE, CHARTERHOUSE GROUP
1977 INTERNATIONAL, INC. Mr. Katz has served on the Company's Board
Age: 60 of Directors since its incorporation in 1977 until April 1981
and was re-elected to the Board in June 1981. Since October
1984, he has served as President of Charterhouse. From 1973 to
1984 Mr. Katz served as Executive Vice President of
Charterhouse. Mr. Katz is also a director of Charter Power and
of Cryenco Sciences, Inc., a manufacturer of sophisticated
leak-tight containment systems.
John W. Larson........... PRIVATE INVESTOR. Mr. Larson joined the Company's Board of
1993 Directors in 1993. From 1989 to early 1993, Mr. Larson served as
Age: 56 Chief Operating Officer of The Chronicle Publishing Company, a
privately-held, diversified media company. From 1984 to 1989,
Mr. Larson was a General Partner of J.H. Whitney & Co., a
venture capital and buyout firm. Prior to joining J.H. Whitney,
Mr. Larson was the Managing Director of the San Francisco office
of McKinsey & Company, Inc.
Edmund R. Manwell........ PARTNER, MANWELL & MILTON, GENERAL COUNSEL TO THE COMPANY. Mr.
1981 Manwell has served as Secretary of the Company since its
Age: 51 incorporation in 1977 and as a director of the Company since
April 1981. Mr. Manwell is a partner in the law firm of Manwell
& Milton, general counsel to the Company. Mr. Manwell is also a
director of Hanover Direct, Inc., a direct marketing company.
Jack O. Peiffer.......... SENIOR VICE PRESIDENT -- CORPORATE HUMAN RESOURCES, GENERAL
1993 ELECTRIC (Retired). Mr. Peiffer joined the Company's Board of
Age: 60 Directors in 1993. Mr. Peiffer was employed by GE Company for
over 38 years and held a variety of financial and general
management positions prior to his appointment as senior vice
president including acting as Vice President and General Manager
of GE Supply Company from November 1983 to January 1985.
</TABLE>

APPROVAL OF THE AMENDMENT TO THE COMPANY'S INCENTIVE STOCK OPTION PLAN (1982)

The Board of Directors has approved, subject to stockholder approval, an
amendment to the Dreyer's Grand Ice Cream, Inc. Incentive Stock Option Plan
(1982) (the "ISO Plan") whereby the options granted pursuant to the ISO Plan
would vest immediately prior to a change-in-control in the Company. This
amendment conforms the ISO Plan with the Company's Stock Option Plan (1992) and
the Company's Stock Option Plan (1993) with respect to the immediate vesting of
stock options granted under the ISO Plan upon a change-in-control of the
Company. The following definition of "change-in-control" which is defined as
"Change of Control" for purposes of the ISO Plan will be included in the ISO
Plan:

"A Change of Control for these purposes shall be defined as, (i) the
acquisition by any person of beneficial ownership of forty percent (40%) or
more of the combined voting power of the Company's outstanding securities
immediately after such acquisition (which forty percent (40%) shall be
calculated after including the dilutive effect of the conversion or
exchange of any outstanding securities of the Company convertible into or
exchangeable for voting securities), or (ii) a change in the composition of
majority membership of the Board of Directors over any two-year period
beginning with the date of adoption of this Section 10.B of this Plan by
the Board of Directors, or (iii) a change in ownership of the Company such
that the Company becomes subject to the delisting of its Common Stock from
the NASDAQ National Market System, or (iv) the approval by the Board of
Directors of the sale of all or substantially all of the assets of the
Company, or (v) the approval by the Board of Directors of any merger,
consolidation, issuance of securities or purchase of assets, the result of
which would be the occurrence of any event described in clause (i), (ii) or
(iii) above. Notwithstanding anything to the contrary in this Section 10.B,
acquisitions by any person (or any group of which such a person is a
member) who is as of the date of adoption of this Plan by the Board of
Directors, a member of the Board of Directors, of beneficial ownership of
forty percent (40%) or more of the combined voting power of the Company's
outstanding securities immediately after such acquisition (calculation of
such forty percent

15
<PAGE> 20

(40%) being made as described above), shall not be deemed a Change of
Control for purposes of this Plan."

The ISO Plan permits the grant of options to purchase shares of the
Company's Common Stock. The options are intended to be incentive stock options
under Section 422 of the Internal Revenue Code (the "Code"). The ISO Plan was
approved by the Company's stockholders at the 1982 Annual Meeting of
Stockholders. An amendment to the ISO Plan increasing the number of shares
subject to issuance under the ISO Plan from 150,000 to 300,000 was approved by
the Company's stockholders on May 2, 1984 and an amendment increasing the number
of shares subject to issuance under the ISO Plan to 600,000 was approved by the
Company's stockholders on May 11, 1988. The ISO Plan was also amended effective
January 1, 1987 to reflect certain changes in the federal tax laws resulting
from the Tax Reform Act of 1986. The number of shares subject to issuance under
the ISO Plan was increased to 1,200,000 upon issuance of the 100% stock dividend
on October 1, 1990.

The ISO Plan provides for the grant of options to key employees of the
Company and its subsidiaries who are mainly responsible for the management of
the business of the Company and who are in a position to make substantial
contributions to the sound performance of the Company. The term "key employees"
includes officers as well as other employees devoting full time to the Company
and includes directors who are also active officers or employees of the Company.
No member of the Board who is not an officer or employee devoting full time to
the Company is eligible to receive options under the ISO Plan.

The ISO Plan is administered by the Plan Administrator, who is appointed by
the Board of Directors. Currently, the Compensation Committee of the Board of
Directors is the Plan Administrator. The Plan Administrator has the sole
authority to interpret the ISO Plan, including determining (a) the employees to
whom options shall be granted; (b) the number of shares subject to options to be
granted to each such employee; (c) the price to be paid for the shares upon
exercise of each option, which may not be less than the fair market value per
share (or 110% of fair market value as to any employee owning 10% or more of the
voting power of all classes of the Company's stock) of the Company's Common
Stock at the time of granting the option; (d) the period within which each
option shall be exercised which may not exceed six years (or five years as to
any employee owning 10% or more of the voting power of all classes of the
Company's stock); and (e) subject to the terms of the ISO Plan, the conditions
of the granting of each option.

Under the ISO Plan, the aggregate fair market value (determined at the time
the option is granted) of the stock with respect to which options are
exercisable for the first time by an individual during any calendar year may not
exceed $100,000. An option may be exercised only as to 40% of the optioned
shares after two years from the date of grant and as to an additional 20% after
each of the succeeding three years. The ISO Plan permits exercise of options for
cash or in exchange for shares of Common Stock already owned. No option granted
under the ISO Plan is transferable by the optionee other than upon death.

In the event any change is made to the outstanding shares of Common Stock
of the Company by reason of a stock dividend, stock split, combination or
reclassification of shares, or recapitalization, merger or consolidation,
appropriate adjustments will be made to the maximum number of shares issuable
under the ISO Plan and the number of shares and the option price per share of
the stock subject to each outstanding option in order to prevent the dilution of
benefits under the ISO Plan.

Under the Code, no taxable income is recognized by the participant at the
time an option is granted and no taxable income is recognized at the time an
option is exercised. However, the difference between the option price and the
fair market value of the shares on the date of exercise constitutes an item of
tax preference subject to the alternative minimum tax under Section 55 of the
Code. If the participant does not make a disposition of the purchased shares
within the two year period measured from the date of option grant nor within the
one year period measured from the date of issuance of the shares upon exercise
to the participant, any profit or loss recognized upon disposition will be
capital gain or loss. If the participant disposes of the purchased shares within
either the two year or one year period mentioned above (a "disqualifying
disposition"), then the participant will in general recognize compensation
income for regular tax purposes in the year of disposition equal to the lower of
the amount by which the fair market value of the shares on the date the option
was exercised or the fair market value of the shares on the date of sale
exceeded the exercise

16
<PAGE> 21

price. Any additional gain or loss recognized upon the disposition will be
capital gain or loss. So long as the participant does not make a disqualifying
disposition, no compensation deduction or other deduction may be taken by the
Company. To the extent that the participant must recognize compensation income
due to a disqualifying disposition, the Company will be entitled to a
corresponding compensation deduction. In the case of a participant who is
subject to Section 16(b) of the Securities and Exchange Act of 1934, the amount
of income realized by the optionee upon a disqualifying disposition and the
amount of the corresponding deduction allowable to the Company is measured by
the fair market value of the stock at the time of the expiration of the period,
not to exceed six (6) months, during which a sale of the stock by the optionee
could subject the optionee to liability under Section 16(b).

The aggregate market value of the shares of the Company's Common Stock
which are subject to options under the ISO Plan was $9,757,635 on April 5, 1994.
The last reported sale price of the Company's Common Stock on the NASDAQ
National Market System on April 5, 1994, was $23.00 per share. Generally,
approximately 25 executive-level employees of the Company are eligible to
participate in the ISO Plan.

The following table provides certain information regarding outstanding
options under the ISO Plan:

OPTIONS TO PURCHASE SHARES OUTSTANDING UNDER
DREYER'S GRAND ICE CREAM, INC. INCENTIVE STOCK OPTION PLAN (1982)

<TABLE>
<CAPTION>
NUMBER OF
UNITS/
DOLLAR OPTIONS
RECIPIENTS VALUE(1) OUTSTANDING(2)
--------------------------------------------------- ---------- -------------
<S> <C> <C>
T. Gary Rogers, Chief Executive Officer and nominee
for Director..................................... $ 75,720 14,400
William F. Cronk, III, President and nominee for
Director......................................... 75,720 14,400
Thomas M. Delaplane, Vice President -- Sales....... 142,064 23,730
William R. Oldenburg, Vice
President -- Operations.......................... 142,064 23,730
Paul R. Woodland, Vice President -- Finance and
Administration................................... 112,144 21,170
All current executive officers as a group.......... 655,138 125,560
All current directors who are not executive
officers as a group.............................. 0 0
All employees, including current executive
officers......................................... 2,091,431 424,245
All employees who are not executive officers, as a
group............................................ 1,436,293 298,685
</TABLE>

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

(1) The dollar value of the options received was calculated by subtracting the
exercise price of the option in question from the fair market value of the
Company's Common Stock on April 5, 1994 and multiplying the difference by
the applicable number of shares subject to the option in question. If the
fair market value of the Company's Common Stock on April 5, 1994 was less
than the exercise price of a stock option, the value assigned to that option
was zero.

(2) The numbers reported represent the aggregate number of options held by the
recipient or recipients as of March 25, 1994.

THE BOARD OF DIRECTORS RECOMMENDS THE APPROVAL OF THE AMENDMENT TO THE
COMPANY'S INCENTIVE STOCK OPTION PLAN (1982).

APPROVAL OF THE AMENDMENT TO THE COMPANY'S STOCK OPTION PLAN (1992)

The Board of Directors has approved, subject to stockholder approval, an
amendment to the Dreyer's Grand Ice Cream, Inc. Stock Option Plan (1992) (the
"1992 Plan") pursuant to which the existing change-in-control provision in the
1992 Plan has been amended to conform to the change-in-control provisions in
each of the Company's Incentive Stock Option Plan (1982) and the Company's Stock
Option Plan (1993). If approved by the Company's stockholders, the amendment
shall be effective with respect to options which may be granted under the 1992
Plan in the future. Additionally, such amendment shall be effective with respect
to previously granted options to the extent that the optionees holding such
previously granted options consent to the amendment.

17
<PAGE> 22

Currently, the 1992 Plan provides that in the event of a change of control
of the Company, all then outstanding options shall vest and become immediately
exercisable. A change of control is now defined in the 1992 Plan to include, (i)
the acquisition by any person (who is not as of the date of adoption by the
Company's Board of Directors a member of the Company's Board of Directors) of
beneficial ownership of 33 1/3% or more of the combined voting power of the
Company's outstanding securities, or (ii) a change in the composition of
majority membership of the Board of Directors within any two-year period, or
(iii) a change in ownership of the Company such that the Company becomes subject
to the delisting of its Common Stock from the NASDAQ National Market System, or
(iv) the approval by the Board of the sale of all or substantially all of the
assets of the Company, or (v) the approval by the Board of any merger,
consolidation, issuance of securities or purchase of assets, the result of which
would be the occurrence of any event described in clause (i), (ii) or (iii)
above.

If approved by the Company's stockholders, the following definition of
"change-in-control" which is defined as "Change of Control" for purposes of the
1992 Plan will be included in the 1992 Plan:

"A Change of Control for these purposes shall be defined as, (i) the
acquisition by any person of beneficial ownership of forty percent (40%) or
more of the combined voting power of the Company's outstanding securities
immediately after such acquisition (which forty percent (40%) shall be
calculated after including the dilutive effect of the conversion or
exchange of any outstanding securities of the Company convertible into or
exchangeable for voting securities), or (ii) a change in the composition of
majority membership of the Board of Directors over any two-year period
beginning with the date of adoption of this paragraph of Section 5.D of
this Plan by the Board of Directors, or (iii) a change in ownership of the
Company such that the Company becomes subject to the delisting of its
Common Stock from the NASDAQ National Market System, or (iv) the approval
by the Board of Directors of the sale of all or substantially all of the
assets of the Company, or (v) the approval by the Board of Directors of any
merger, consolidation, issuance of securities or purchase of assets, the
result of which would be the occurrence of any event described in clause
(i), (ii) or (iii) above. Notwithstanding anything to the contrary in this
paragraph of Section 5.D, acquisitions by any person (or any group of which
such a person is a member) who is as of the date of adoption of this Plan
by the Board of Directors, a member of the Board of Directors, of
beneficial ownership of forty percent (40%) or more of the combined voting
power of the Company's outstanding securities immediately after such
acquisition (calculation of such forty percent (40%) being made as
described above), shall not be deemed a Change of Control for purposes of
this Plan."

Originally, the 1992 Plan permitted the grant of options to purchase
100,000 shares of the Company's Common Stock. An amendment to the 1992 Plan
increasing the number of shares subject to issuance under the 1992 Plan from
100,000 to 300,000 was approved by the Company's stockholders on May 10, 1993.

The 1992 Plan is intended to afford key employees of the Company and its
subsidiaries the opportunity to acquire a proprietary interest in the Company
and to encourage such employees to remain in the service of the Company and to
promote the sound performance of the Company.

Currently, pursuant to the 1992 Plan, the Company may issue to key
employees options to purchase up to an aggregate of 300,000 shares of the
Company's Common Stock (which number is subject to adjustment in the event of
stock dividends, stock splits and other similar events). The shares subject to
option may be made available from authorized but unissued shares.

The 1992 Plan is administered by the Plan Administrator, who is appointed
by the Board of Directors. Currently, the Compensation Committee of the Board of
Directors is the Plan Administrator and retains sole authority to interpret the
1992 Plan. Members of the Compensation Committee are not eligible to receive
options under the 1992 Plan. The Compensation Committee makes recommendations to
the Board of Directors concerning the number of shares to be awarded to the
participants under the 1992 Plan. The Board of Directors, by resolution, may
terminate, amend or revise the 1992 Plan with respect to any shares as to which
options have not been granted.

18
<PAGE> 23

Options may be granted to key full-time employees of the Company and its
subsidiaries, including directors of the Company who are active officers or
employees of the Company, who are mainly responsible for the management of the
business of the Company or a subsidiary and are in a position to make
substantial contributions to the performance of the Company or a subsidiary. The
options granted pursuant to the 1992 Plan will vest two years from the date of
grant and may be exercised only to the extent of 40% of the total number of
optioned shares after two years following the date the option is granted and
only to the extent of 20% of the total number of optioned shares after the
expiration of each of the succeeding three years. The exercise price for any
option granted pursuant to the 1992 Plan is the fair market value of the Common
Stock on the date an option was granted. The options granted to employees under
the 1992 Plan terminate upon the employee's termination of employment from the
Company, death or disability, pursuant to terms particularly set forth in the
1992 Plan. The options are non-transferable except by will or the laws of
descent and distribution.

An employee who receives an option under the 1992 Plan will not recognize
any taxable income upon the grant of such option. In general, upon exercise of
an option an employee will be treated as having received ordinary income in an
amount equal to the excess of the fair market value of the shares at the time of
exercise over the grant price. The ordinary income recognized with respect to
the transfer of shares upon exercise of an option under the 1992 Plan will be
subject to both wage withholding and employment taxes.

In addition to the customary methods of satisfying the withholding tax
liabilities which arise upon the exercise of an option, an employee may satisfy
the liability in whole or in part by directing the Company to withhold shares
from those that would otherwise be issuable to the employee or by tendering
other shares of the Company's Common Stock owned by the employee. The withheld
shares and other tendered shares will be valued at their fair market value as of
the date that the tax withholding obligation arises.

An employee's tax basis in the shares received on exercise of such option
will be equal to the amount of any cash paid on exercise, plus the amount of
ordinary income recognized as a result of the receipt of such shares. The
holding period for such shares would begin just after the transfer of such
shares to the employee. A deduction for federal income tax purposes will be
allowed to the Company in an amount equal to the income recognized by the
employee, as a result of the receipt of such shares.

If an employee exercises an option by delivering other shares, the employee
will not recognize gain or loss with respect to the exchange of such shares,
even if their then fair market value is different from the employee's tax basis.
The employee, however, will be taxed as described above with respect to the
exercise of the option as if he had paid the exercise price in cash, and the
Company likewise generally will be entitled to an equivalent tax deduction.
Provided he receives a separate identifiable stock certificate therefor, the
employee's tax basis in that number of shares received on such exercise which is
equal to the number of shares surrendered on such exercise will be equal to his
tax basis in the shares surrendered and his holding period for such number of
shares received will include the holding period for the shares surrendered. The
employee's tax basis and holding period for the additional shares received on
exercise of an option paid for, in whole or in part, with shares will be the
same as if the employee had exercised the option solely for cash.

The aggregate market value of the shares of the Company's Common Stock
which are subject to options under the 1992 Plan was $6,687,480 on April 5,
1994. The last reported sale price of the Company's Common Stock on the NASDAQ
National Market System on April 5, 1994, was $23.00 per share. Approximately 25
executive-level employees of the Company are eligible to participate in the 1992
Plan.

19
<PAGE> 24

The following table provides certain information regarding options granted
under the 1992 Plan:

OPTIONS TO PURCHASE SHARES RECEIVED SINCE INCEPTION UNDER
DREYER'S GRAND ICE CREAM, INC. STOCK OPTION PLAN (1992)

<TABLE>
<CAPTION>
NUMBER OF
UNITS/
DOLLAR OPTIONS
RECIPIENTS VALUE(1) RECEIVED
---------------------------------------------------- -------- -------------
<S> <C> <C>
T. Gary Rogers, Chief Executive Officer, nominee
for Director...................................... $ 50,625 101,980
William F. Cronk, III, President, nominee for
Director.......................................... 50,625 101,980
Thomas M. Delaplane, Vice President -- Sales........ 0 15,200
William R. Oldenburg, Vice
President -- Operations........................... 0 15,200
Paul R. Woodland, Vice President -- Finance and
Administration.................................... 0 15,200
All current executive officers as a group........... 101,250 264,760
All current directors who are not executive officers
as a group........................................ 0 0
All employees, including current executive
officers.......................................... 101,250 290,760
All employees who are not executive officers, as a
group............................................. 0 26,000
</TABLE>

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

THE BOARD OF DIRECTORS RECOMMENDS THE APPROVAL OF THE AMENDMENT TO THE
COMPANY'S STOCK OPTION PLAN (1992).

APPROVAL OF THE COMPANY'S STOCK OPTION PLAN (1993)

On September 9, 1993 the Board of Directors approved, subject to
stockholder approval, the Dreyer's Grand Ice Cream, Inc. Stock Option Plan
(1993) (the "1993 Plan"). The purpose of the 1993 Plan is to (i) provide a
vehicle under which stock option awards may be granted to employees and
directors of the Company and its subsidiaries who are in a position to promote
the sound performance of the Company and its subsidiaries, and (ii) to further
align the interests of management with the stockholders of the Company.

The 1993 Plan permits the grant of options to purchase up to 1,200,000
shares of the Company's Common Stock (which number is subject to adjustment in
the event of stock dividends, stock splits and other similar events). If, at any
time during the term of the 1993 Plan, an option granted under the 1993 Plan
expires or terminates for any reason without having been exercised in full, the
unpurchased shares shall become available for option to other employees. The
shares of Common Stock available under the 1993 Plan may be authorized and
unissued shares or treasury shares. The 1993 Plan is effective, subject to
stockholder approval, as of September 9, 1993. The Board of Directors, by
resolution, may terminate, amend or revise the 1993 Plan at any time and from
time to time, provided however that the Board may not amend the terms of the
1993 Plan more frequently than permitted under Rule 16b-3 in regard to
provisions that affect members of the Board of Directors who are not employees
of the Company. Rights and obligations under any option granted before any
amendment of the 1993 Plan may not be materially altered or impaired adversely
by such amendment, except with consent of the person to whom the option was
granted.

The Compensation Committee of the Board of Directors will act as the
Administrator of the 1993 Plan. Subject to the terms and conditions of the 1993
Plan, the Administrator has the authority to: (i) interpret and determine all
questions of policy and expediency pertaining to the 1993 Plan; (ii) adopt such
rules, regulations, agreements and instruments as it deems necessary for the
1993 Plan's proper administration; (iii) select the key employees to receive
awards; (iv) determine the form and terms of awards; (v) determine the number of
shares subject to awards; (vi) determine whether awards will be granted singly,
in combination, in tandem, in replacement of, or as alternatives to other grants
under the 1993 Plan or any other incentive or

20
<PAGE> 25

compensation plan of the Company, a subsidiary or an acquired business unit;
(vii) grant waivers of the 1993 Plan or award conditions; (viii) accelerate the
vesting of awards; (ix) correct any defect, supply any omission, or reconcile
any inconsistency in the 1993 Plan, any award or any award notice; and (x) take
any and all other actions it deems necessary or advisable for the proper
administration of the 1993 Plan.

The Administrator may also adopt such amendments, procedures, regulations
and subplans as it deems necessary to enable key employees and members of the
Board of Directors who are foreign nationals or are employed outside the United
States to receive stock option awards under the 1993 Plan.

Under the 1993 Plan, key employees may be granted options intended to be
incentive stock options under Section 422 of the Internal Revenue Code (the
"Code") or non-qualified stock options or both. Additionally, key employees may,
in the Administrator's discretion, also receive "Reload Options" (as described
below). Reload Options shall be in such form and contain such terms as the
Administrator deems appropriate under the 1993 Plan. Options granted under the
1993 Plan are non-transferable except by will or the laws of descent and
distribution.

While the terms of options granted to key employees need not be identical,
each option shall be subject to the following terms: (i) the exercise price
shall be the price set by the Administrator but may not be less than 100% of the
fair market value of the Company's Common Stock on the date of the grant; (ii)
the exercise price shall be paid in cash (including check, bank draft, or money
order), or all or part of the purchase price may be paid by delivery of the
Company's Common Stock already owned by the participant for at least six (6)
months and valued at its fair market value, or any combination of the foregoing
methods of payment; (iii) an option shall be treated as exercised on the later
of (x) the date that proper notice of exercise accompanied by the aggregate
exercise price is received by the Company, or (y) such exercise date as may be
specified in such proper notice when accompanied by such aggregate exercise
price; (iv) the term of an option may not be greater than 10 years from the date
of the grant; (v) neither a person to whom an option is granted nor his legal
representative, heir, legatee or distributee shall be deemed to be the holder
of, or to have any of the rights of a holder with respect to, any shares subject
to such option unless and until he has exercised his option.

The following special terms apply to grants of incentive stock options
under the 1993 Plan: (i) no incentive stock option may be granted after the
tenth (10th) anniversary of the date the 1993 Plan was adopted by the Board of
Directors; (ii) the price under each incentive stock option may not be less than
100% of the fair market value of the shares of the Company's Common Stock on the
date of grant provided that the price under each incentive stock option granted
to any employee who directly or indirectly owns stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company must
be at least 110% of the fair market value of the Company's Common Stock on the
grant date (and such option may not be exercisable after the expiration of 5
years from the date of the grant); (iii) no incentive stock option shall be
granted to a person in his capacity as a key employee of a subsidiary if the
Company has less than a 50% ownership interest in such subsidiary; and (iv)
incentive stock options shall contain such other terms as may be necessary to
qualify the options granted therein as incentive stock options pursuant to
Section 422 of the Code, or any successor statute.

Concurrently with the award of options to a participant, the Administrator
may authorize reload options ("Reload Options") granted at fair market value to
purchase for cash or shares a number of shares of the Common Stock. The number
of Reload Options will equal: (i) the number of shares of Common Stock used to
exercise the underlying options plus (ii) the number of shares of Common Stock
used to satisfy any tax withholding requirement incident to the exercise of the
underlying option, including shares withheld from those that would otherwise be
issuable to the optionee pursuant to exercise of the subject option. The grant
of a Reload Option will become effective upon the exercise of the underlying
options or Reload Options through the use of shares of Common Stock held by the
optionee for at least six (6) months. Notwithstanding the fact that the
underlying option may be an incentive stock option, a Reload Option will not be
intended to qualify as an "incentive stock option" within the meaning of Section
422 of the Code. Each Reload Option granted under the 1993 Plan is fully
exercisable six (6) months from the effective date of grant. The exercise price
of a Reload Option shall equal the fair market value of the Company's Common
Stock on the date of grant of the Reload Option. The term of each Reload Option
shall be equal to the remaining option term of the underlying option. No
additional Reload Options shall be granted when options or Reload Options are
exercised pursuant to the terms of the 1993 Plan following cessation of the
optionee's employment with the Company for any reason.

21
<PAGE> 26

On the date of approval of the 1993 Plan by the Company's stockholders (the
"Approval Date"), if ever, each member of the Board of Directors who is not an
employee of the Company or its subsidiaries (each a "Non-Employee Director")
will be awarded a non-qualified stock option for 5,000 shares of the Company's
Common Stock. After the Approval Date, any person who is appointed or elected a
Non-Employee Director shall receive a non-qualified stock option for 5,000
shares of Common Stock on the date such person is so appointed or elected. On
each anniversary of the Approval Date each Non-Employee Director shall receive a
non-qualified stock option for 1,500 shares of Common Stock. Options to
Non-Employee Directors shall be subject to the following terms: (i) the exercise
price shall be equal to 100% of the fair market value of the Company's Common
Stock on the date of the grant; (ii) the term of the options shall be 10 years;
and (iii) the options shall be exercisable beginning six (6) months after the
date of the grant.

All options granted under the 1993 Plan shall, in addition to vesting as
described above, vest and become immediately exercisable (x) immediately prior
to a Change of Control (as defined below), and (y) immediately upon the death or
retirement of an optionee. A Change of Control for these purposes shall be
defined as (i) the acquisition by any person of beneficial ownership of forty
percent (40%) or more of the combined voting power of the Company's outstanding
securities immediately after such acquisition (which forty percent (40%) shall
be calculated after including the dilutive effect of the conversion or exchange
of any outstanding securities of the Company convertible into or exchangeable
for voting securities), or (ii) a change in the composition of majority
membership of the Board of Directors over any two-year period beginning with the
date of adoption of the 1993 Plan by the Board of Directors, or (iii) a change
in ownership of the Company such that the Company becomes subject to the
delisting of its Common Stock from the NASDAQ National Market System, or (iv)
the approval by the Board of Directors of the sale of all or substantially all
of the assets of the Company, or (v) the approval by the Board of Directors of
any merger, consolidation, issuance of securities or purchase of assets, the
result of which would be the occurrence of any event described in clause (i),
(ii) or (iii) above. Acquisitions by any person (or any group of which such a
person is a member) who is as of the date of adoption of the 1993 Plan by the
Board of Directors, a member of the Board of Directors, of beneficial ownership
of forty percent (40%) or more of the combined voting power of the Company's
outstanding securities immediately after such acquisition (the calculation of
such 40% being made as described above), shall not be deemed a Change of Control
for purposes of the 1993 Plan.

As a condition to receiving or exercising an option granted under the 1993
Plan, a participant must pay the Company the amount of all applicable federal,
state, local and foreign taxes required by law to be paid or withheld relating
to receipt or exercise of the option. An optionee may satisfy such withholding
requirements in whole or in part by directing the Company to withhold shares
from those that would otherwise be issuable to the participant or by otherwise
tendering other shares of Common Stock owned by the participant. The withheld
shares and other tendered shares will be valued at the fair market value as of
the date that the tax withholding obligation arises.

Subject to the change of control provisions in the 1993 Plan, no stock
option granted pursuant to the 1993 Plan may be exercisable for at least six (6)
months after the date of grant. No one participant may receive in the aggregate
options granting him more than fifty percent (50%) of the aggregate number of
shares (1,200,000) which may be delivered on exercise of options under the 1993
Plan.

A participant who receives a non-qualified option under the 1993 Plan will
not recognize any taxable income upon the grant of such option. In general, upon
exercise of a non-qualified option a participant will be treated as having
received ordinary income in an amount equal to the excess of the fair market
value of the shares at the time of exercise over the exercise price. The
ordinary income recognized with respect to the transfer of shares upon exercise
of a non-qualified option under the 1993 Plan will be subject to both wage
withholding and employment taxes.

A participant's tax basis in the shares received on exercise of a
non-qualified option will be equal to the amount of any cash paid on exercise,
plus the amount of ordinary income recognized as a result of the receipt of such
shares. The holding period for such shares would begin just after the transfer
of such shares to the participant. A deduction for federal income tax purposes
will be allowed to the Company in an amount equal

22
<PAGE> 27

to the income recognized by the participant, as a result of the receipt of such
shares. The Company's compensation deduction is, however, conditional upon
satisfaction of all applicable withholding requirements.

If a participant exercises a non-qualified option by delivering other
shares, the participant will not recognize gain or loss with respect to the
exchange of such shares, even if their then fair market value is different from
the participant's tax basis. The participant, however, will be taxed as
described above with respect to the exercise of the non-qualified option as if
he had paid the exercise price in cash, and the Company likewise generally will
be entitled to an equivalent tax deduction. Provided he receives a separate
identifiable stock certificate therefor, the participant's tax basis in that
number of shares received on such exercise which is equal to the number of
shares surrendered on such exercise will be equal to his tax basis in the shares
surrendered and his holding period for such number of shares received will
include the holding period for the shares surrendered. The participant's tax
basis and holding period for the additional shares received on exercise of a
non-qualified option paid for, in whole or in part, with shares will be the same
as if the participant had exercised the option solely for cash.

Under the Code, no taxable income is recognized by an employee at the time
an incentive stock option is granted and no taxable income is recognized at the
time such an option is exercised. However, the difference between the option
price and the fair market value of the shares on the date of exercise
constitutes an item of tax preference subject to the alternative minimum tax
under Section 55 of the Code. If the employee does not make a disposition of the
purchased shares within the two-year period measured from the date of option
grant nor within the one-year period measured from the date of issuance of the
shares upon exercise to the participant, any profit or loss recognized upon
disposition will be capital gain or loss. If the employee disposes of the
purchased shares within either the two-year or one-year period mentioned above
(a "disqualifying disposition"), then the employee will in general recognize
compensation income in the year of disposition equal to the lower of the amount
by which the fair market value of the shares on the date the option was
exercised or the fair market value of the shares on the date of sale exceeded
the exercise price. Any additional gain or loss recognized upon the disposition
will be capital gain or loss. So long as the employee does not make a
disqualifying disposition, no compensation deduction or other deduction may be
taken by the Company. To the extent that the employee must recognize
compensation income due to a disqualifying disposition, the Company will be
entitled to a corresponding compensation deduction. In the case of an employee
who is subject to Section 16(b) of the Securities and Exchange Act of 1934, the
amount of income realized by the optionee upon a disqualifying disposition and
the amount of the corresponding deduction allowable to the Company is measured
by the fair market value of the stock at the time of the expiration of the
period, not to exceed six (6) months, during which a sale of the stock by the
optionee could subject the optionee to liability under Section 16(b).

The aggregate market value of the shares of the Company's Common Stock
which are subject to options under the 1993 Plan was $8,298,400 on April 5,
1994. The last reported sale price of the Company's Common Stock on the NASDAQ
National Market System on April 5, 1994 was $23.00 per share. Approximately
twenty-five (25) executive-level employees of the Company and five (5)
Non-Employee Directors are eligible to participate in the 1993 Plan.

23
<PAGE> 28

The following table provides certain information regarding options which
have been granted under the 1993 Plan subject to the approval of the 1993 Plan
by the Company's stockholders:

NEW PLAN BENEFITS

DREYER'S GRAND ICE CREAM, INC. STOCK OPTION PLAN (1993)

<TABLE>
<CAPTION>
NUMBER OF
DOLLAR UNITS/OPTIONS
NAME AND POSITION VALUE($)(1) RECEIVED(2)
--------------------------------------------------- ----------- -------------
<S> <C> <C>
T. Gary Rogers, Chief Executive Officer and nominee
for Director..................................... 0 62,000
William F. Cronk, III, President and nominee for
Director......................................... 0 62,000
Thomas M. Delaplane, Vice President -- Sales....... 0 30,200
William R. Oldenburg, Vice
President -- Operations.......................... 0 30,500
Paul R. Woodland, Vice President -- Finance and
Administration................................... 0 29,900
All current executive officers as a group.......... 0 249,000
All current directors who are not executive
officers as a group.............................. 0 20,000
All employees, including current executive
officers......................................... 0 335,800
All employees who are not executive officers, as a
group............................................ 0 91,800
</TABLE>

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

(1) No stock option granted under the 1993 Plan to date had any value on April
5, 1994 as the fair market value of the Company's Common Stock on such date
was below the exercise price of all options granted.

(2) The total number of units/options received includes non-qualified options,
which each of the listed Named Executive Officers elected to receive
pursuant to the Income Swap Plan (described in the Compensation Committee's
Report on Executive Compensation on pages 9-11 herein), in lieu of a cash
bonus for performance in 1993. In this regard, Messrs. Rogers and Cronk each
received an option to purchase 13,100 shares of the Company's Common Stock,
Mr. Delaplane received an option to purchase 8,400 shares of the Company's
Common Stock, Mr. Oldenburg received an option to purchase 8,700 shares of
the Company's Common Stock, and Mr. Woodland received an option to purchase
8,100 shares of the Company's Common Stock.

THE BOARD OF DIRECTORS RECOMMENDS THE APPROVAL OF THE COMPANY'S STOCK
OPTION PLAN (1993).

APPROVAL OF INDEPENDENT PUBLIC ACCOUNTANTS

Price Waterhouse has been appointed to be the Company's independent public
accountants for the fiscal year ending December 31, 1994, and were the
independent public accountants for the Company during the fiscal year ended
December 25, 1993.

The appointment of independent public accountants is made annually by the
Board of Directors and is subsequently submitted by them to the stockholders for
approval. The decision of the Board of Directors is, in turn, based upon the
recommendation of the Audit Committee of the Board of Directors. In making its
recommendations, the Audit Committee reviews both the audit scope and estimated
audit fees for the coming year. In addition, the Audit Committee reviews the
types of professional services provided by Price Waterhouse to determine whether
the rendering of such services would impair the independence of Price
Waterhouse. Should stockholder approval not be obtained, the Board of Directors
will consider it a directive to select and retain other independent public
accountants.

A representative or representatives of Price Waterhouse will be present at
the stockholders' meeting and will be afforded an opportunity to make a
statement if they so desire and will be available to respond to questions raised
orally at the meeting.

24
<PAGE> 29

THE BOARD OF DIRECTORS RECOMMENDS THE APPROVAL OF PRICE WATERHOUSE AS THE
COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS FOR THE 1994 FISCAL YEAR AND THEREAFTER
UNTIL A SUCCESSOR IS APPOINTED.

VOTING INFORMATION

GENERAL VOTING INFORMATION

A stockholder may, with respect to the election of directors (i) vote for
the election of both director nominees named herein, or (ii) withhold authority
to vote for both director nominees or (iii) vote for the election of one such
director nominee and against the other director nominee by so indicating on the
proxy. Withholding authority to vote for a director nominee will not prevent
such director nominee from being elected. A stockholder may, with respect to
each other matter specified in the notice of the meeting (i) vote "FOR" the
matter, (ii) vote "AGAINST" the matter or (iii) "ABSTAIN" from voting on the
matter. Abstention from voting on a matter may have the legal effect of a vote
against such matter. Shares will be voted as instructed in the accompanying
proxy on each matter submitted to stockholders. If there are no instructions
from the stockholder on an executed proxy, the proxy will be voted as
recommended by the Board of Directors.

When a broker is not permitted to vote stock held in street name on certain
matters in the absence of instructions from the beneficial owner of the stock
and so indicates that it is not voting certain stock on any or all matters on
the proxy, the shares which are not being voted with respect to a particular
matter (the "non-voted shares") will be considered shares not present and
entitled to vote on such matter, although such shares may be considered present
and entitled to vote for other purposes and will count for purposes of
determining the presence of a quorum. (Shares voted to abstain as to a
particular matter will not be considered non-voted shares.) Approval of each
matter specified in the Annual Meeting notice requires the affirmative vote of
either a majority or a plurality of the shares of Common Stock present in person
or by proxy at the meeting and entitled to vote on such matter. Accordingly,
non-voted shares with respect to such matters will not affect the determination
of whether such matters are approved or the outcome of the election of
directors.

VOTES REQUIRED FOR APPROVAL

Election of Directors: Plurality of the votes of the shares of Common Stock
present in person or by proxy and entitled to vote at the meeting.

Approval of the amendment to the Company's Incentive Stock Option Plan
(1982): Majority of the shares of Common Stock present in person or by proxy and
entitled to vote at the meeting.

Approval of the amendment to the Company's Stock Option Plan (1992):
Majority of the shares of Common Stock present in person or by proxy and
entitled to vote at the meeting.

Approval of the Company's Stock Option Plan (1993): Majority of the shares
of Common Stock present in person or by proxy and entitled to vote at the
meeting.

Approval of Price Waterhouse as independent public accountants: Majority of
the shares of Common Stock present in person or by proxy and entitled to vote at
the meeting.

PROPOSALS OF STOCKHOLDERS

The 1995 Annual Meeting of Stockholders will be held on or about May 10,
1995. Proposals of stockholders intended to be presented at the 1995 Annual
Meeting must be received by the Secretary, Dreyer's Grand Ice Cream, Inc., 5929
College Avenue, Oakland, California 94618 no later than December 15, 1994.

25
<PAGE> 30

OTHER MATTERS

The management knows of no other business to be presented at the meeting.
If other matters do properly come before the meeting, it is intended that the
proxy holders will vote on them in accordance with their best judgment.

By Order of the Board of Directors,

EDMUND R. MANWELL
Secretary
DREYER'S GRAND ICE CREAM, INC.
Oakland, California
April 8, 1994

26
<PAGE> 31

COPIES OF DREYER'S GRAND ICE CREAM, INC.'S FORM 10-K REPORT,
A CORPORATE OPERATIONAL AND FINANCIAL REPORT
FILED ANNUALLY WITH THE
SECURITIES AND EXCHANGE COMMISSION,
ARE AVAILABLE WITHOUT CHARGE BUT WITHOUT EXHIBITS
FOR THOSE STOCKHOLDERS WHO WISH TO HAVE MORE DETAILED INFORMATION
ABOUT THE COMPANY.

If you would like a copy, or have any other inquiries
about the Company or your stockholder account, please write to:

WILLIAM C. COLLETT
TREASURER
DREYER'S GRAND ICE CREAM, INC.
5929 COLLEGE AVENUE
OAKLAND, CALIFORNIA 94618
<PAGE> 32

DREYER'S GRAND ICE CREAM, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE 1994
ANNUAL MEETING OF STOCKHOLDERS

The undersigned hereby appoints T. GARY ROGERS, WILLIAM F. CRONK, III
and EDMUND R. MANWELL, or any one of them, each with power of substitution and
revocation, as the proxy or proxies of the undersigned to represent the
undersigned and vote all shares of Common Stock, $1.00 par value, of DREYER'S
GRAND ICE CREAM, INC., which the undersigned would be entitled to vote if
personally present at the Annual Meeting of Stockholders of DREYER'S GRAND ICE
CREAM, INC., to be held at Claremont Resort Hotel, Oakland, California, at 2:00
p.m. on Wednesday, May 11, 1994, and at any postponements or adjournments
thereof, upon the following matters:

<TABLE>
<S> <C> <C>
1. The election of 2 Class III directors.
FOR all the nominees FOR all nominees except WITHHOLD AUTHORITY to vote
listed below / / as crossed out below / / for the nominees listed below / /
</TABLE>

Instruction: To withhold authority for any individual nominee, cross out the
nominee's name in the list below:

William F. Cronk, III T. Gary Rogers

2. The approval of the amendment to the Company's Incentive Stock
Option Plan (1982).

FOR / / AGAINST / / ABSTAIN / /

3. The approval of the amendment to the Company's Stock Option Plan
(1992).

FOR / / AGAINST / / ABSTAIN / /

4. The approval of the Company's Stock Option Plan (1993).

FOR / / AGAINST / / ABSTAIN / /

5. The approval of Price Waterhouse as the Company's independent
public accountants for fiscal year 1994.

FOR / / AGAINST / / ABSTAIN / /

6. With discretionary authority on such matters as may properly come
before the meeting.

THE SHARES COVERED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
CHOICES MADE. WHEN NO CHOICE IS MADE, THIS PROXY WILL BE VOTED FOR THE LISTED
NOMINEES FOR DIRECTOR AND FOR PROPOSALS 2, 3, 4 AND 5.
(Continued, and to be signed, on reverse side)
<PAGE> 33

(Continued from other side)

The Annual Meeting may be held as scheduled only if a majority of the shares
outstanding are represented at the meeting by attendance or proxy. Accordingly,
please complete this proxy and return it promptly in the enclosed envelope.

Please date and sign
exactly as your name(s)
appears on your shares.
If signing for estates,
trusts, or corporations,
title or capacity should
be stated. If shares are
held jointly, each holder
should sign.

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

Signature of
Stockholder(s)
Dated , 1994.
<PAGE> 34

DREYER'S GRAND ICE CREAM, INC.

STOCK OPTION PLAN (1993)

1. Purpose

The purpose of the Plan is to provide a vehicle under which a variety of stock
option awards may be granted to employees and directors of the Company and its
Subsidiaries to further the profits and prosperity of the Company and its
Subsidiaries.

2. Definitions

A. "Award" means any form of stock option granted under the Plan.

B. "Award Notice" means any written notice from the Company to a Participant
or agreement between the Company and a Participant that establishes the terms
applicable to an Award.

C. "Board of Directors" means the Board of Directors of the Company.

D. "Code" means the Internal Revenue Code of 1986, as amended.

E. "Committee" means the Compensation Committee of the Board of Directors,
or such other committee designated by the Board of Directors, which is
authorized to administer the Plan under Section 3 hereof. The Committee, and
any separate committee to which it delegates any of its authority and duties
under the Plan, shall each have membership composition which enable the Plan
to qualify under Rule 16b-3 with regard to Awards to persons who are subject
to Section 16 of the Exchange Act.

F. "Common Stock" means common stock of the Company.

G. "Company" means Dreyer's Grand Ice Cream, Inc., a Delaware corporation.

H. "Director" means a member of the Board of Directors.

I. "Exchange Act" means the Securities Exchange Act of 1934, as amended.

J. "Fair Market Value" means, as of a specified date, the mean of the high
and the low sales price of one share of Common Stock on the over-the-counter
market or the closing price on the principal stock exchange where the
Company's stock prices are officially quoted, or if not traded on that date,
then on the date last traded. If for any reason the Company's stock ceases to
be traded on the over-the-counter market or listed on a stock exchange, the
Committee shall establish the method for determining the Fair Market Value of
the Common Stock.
1
<PAGE> 35

K. "Key Employee" means any employee of the Company or a Subsidiary
responsible for the management of the business of the Company (or a
Subsidiary) who is in a position to make substantial contributions to the
sound performance of the Company (or a Subsidiary). The term "Key Employee"
shall include officers as well as other employees devoting full time to the
Company (or a Subsidiary) and shall include Directors who are also active
officers or employees of the Company (or a Subsidiary).

L. "Non-Employee Director" means a Director who is not an employee of the
Company or a Subsidiary.

M. "Participant" means any individual to whom an Award is granted under the
Plan.

N. "Plan" means this Plan, which shall be known as the Dreyer's Grand Ice
Cream, Inc. Stock Option Plan (1993).

O. "Rule 16b-3" means Rule 16b-3 issued under the Exchange Act or any
successor rule.

P. "Subsidiary" means a corporation or other business entity (i) of which
the Company directly or indirectly has an ownership interest of 50% or more,
or (ii) of which it has a right to elect or appoint 50% or more of the board
of directors or other governing body.

3. Administration.

A. The Plan shall be administered by the Committee. Subject to the terms
and conditions of this Plan, the Committee shall have the authority to:

(i) interpret and determine all questions of policy and expediency
pertaining to the Plan;

(ii) adopt such rules, regulations, agreements and instruments as it deems
necessary for the Plan's proper administration;

(iii) select Key Employees to receive Awards;

(iv) determine the form and terms of Awards;

2
<PAGE> 36

(v) determine the number of shares subject to Awards;

(vi) determine whether Awards will be granted singly, in combination, in
tandem, in replacement of, or as alternatives to other grants under the Plan
or any other incentive or compensation plan of the Company, a Subsidiary or
an acquired business unit;

(vii) grant waivers of Plan or Award conditions;

(viii) accelerate the vesting of Awards;

(ix) correct any defect, supply any omission, or reconcile any
inconsistency in the Plan, any Award or any Award Notice; and

(x) take any and all other actions it deems necessary or advisable for the
proper administration of the Plan.

B. The interpretation and construction of any provision of the Plan by the
Committee shall be final, conclusive and binding on all parties, including the
Company, its Subsidiaries and stockholders, and the Participants, their
estates, executors, administrators, heirs and assigns. No member of the
Committee shall be liable for any action or determination made by him in good
faith.

C. The Committee may adopt such Plan amendments, procedures, regulations,
subplans and the like as it deems are necessary to enable Key Employees and
Directors who are foreign nationals or employed outside the United States to
receive Awards.

D. The Committee may delegate its authority to grant and administer Awards
to a separate committee; however, only the Committee may grant and administer
Awards with respect to persons who are subject to Section 16 of the Exchange
Act.

4. Eligibility

A. Any Key Employee is eligible to become a Participant in the Plan.

B. Non-Employee Directors shall receive Awards in accordance with Section 7.

5. Stock Subject to the Plan.

A. The aggregate number of shares of Common Stock which may be delivered on
exercise of options under this Plan shall not exceed one million two hundred
thousand (1,200,000) shares, subject to adjustment as provided hereinafter.
If, at any time during the term of this Plan, an option granted under this
Plan shall have expired or terminated for any reason without having been
exercised in full, the unpurchased shares shall become available for option to
other employees.

3
<PAGE> 37

B. In the event that (i) the number of outstanding shares of Common Stock
shall be changed by reason of split-ups, combinations or reclassifications of
shares or otherwise, (ii) any share dividends are distributed to the holders
of Common Stock or (iii) the Common Stock is converted into or exchanged for
other shares as a result of any merger, consolidation or recapitalization
then, in any such case, the number of shares for which options may thereafter
be granted under this Plan, both in the aggregate and as to any individual,
and the number of shares then subject to options theretofore granted under
this Plan and the price per share payable upon exercise of such options shall
be appropriately adjusted by the Committee so as to reflect such change.

C. The shares of Common Stock available under the Plan may be authorized and
unissued shares or treasury shares.

6. Term

This Plan shall be effective and operative, subject to approval of the
stockholders of the Company within twelve months after its adoption by the
Board of Directors, from the date that the Plan is approved by the Board of
Directors and shall remain in effect until terminated by the Board of
Directors.

7. Awards to Non-Employee Directors

Non-Employee Directors shall receive awards in accordance with the following
terms:

A. On the day of adoption of this Plan by the Company's stockholders (the
"Approval Date"), each Non-Employee Director shall receive a non-qualified
option for 5000 shares of Common Stock.

B. After the Approval Date, any person who is appointed or elected a
Non-Employee Director shall receive a non-qualified stock option for 5000
shares of Common Stock on the date such person is so appointed or elected.

C. On each anniversary of the Approval Date each Non-Employee Director shall
receive a non-qualified stock option for 1500 shares of Common Stock.

D. Options to Non-Employee Directors shall be subject to the following
terms: (i) the exercise price shall be equal to 100% of the Fair Market Value
of the Common Stock on the date of the grant, payable in accordance with all
the alternatives stated in Section 8.B(ii); (ii) the term of the options shall
be 10 years; (iii) the options shall be exercisable beginning 6 months after
the date of the grant; and (iv) the options shall be subject to Section 10.

4
<PAGE> 38

8. Stock Options

A. Awards shall be granted in the form of stock options. Stock options may
be incentive stock options within the meaning of Section 422 of the Code or
non-qualified stock options (i.e., stock options which are not incentive stock
options).

B. Subject to Section 8.C relating to incentive stock options, options shall
be in such form and contain such terms as the Committee deems appropriate.
While the terms of options need not be identical, each option shall be subject
to the following terms:

(i) The exercise price shall be the price set by the Committee but may not
be less than 100% of the Fair Market Value of the Common Stock on the date
of the grant.

(ii) The exercise price shall be paid in cash (including check, bank
draft, or money order), or all or part of the purchase price may be paid by
delivery of the optionee's delivery of Common Stock, already owned by the
Participant for at least six (6) months and valued at its Fair Market Value,
or any combination of the foregoing methods of payment.

(iii) An option shall be treated as exercised on the later of (i) the date
that proper notice of exercise accompanied by the aggregate exercise price
is received by the Company, or (ii) such exercise date as may be specified
in such proper notice when accompanied by such aggregate exercise price.

(iv) The term of an option may not be greater than 10 years from the date
of the grant.

(v) Neither a person to whom an option is granted nor his legal
representative, heir, legatee or distributee shall be deemed to be the
holder of, or to have any of the rights of a holder with respect to, any
shares subject to such option unless and until he has exercised his option.

5
<PAGE> 39

C. The following special terms shall apply to grants of incentive stock
options:

(i) No incentive stock option shall be granted after the tenth (10th)
anniversary of the date the Plan is adopted by the Board of Directors.

(ii) Subject to Section 8.C.(iii), the exercise price under each incentive
stock option shall not be less than 100% of the Fair Market Value of the
Common Stock on the date of the grant.

(iii) No incentive stock option shall be granted to any employee who
directly or indirectly owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company, unless the
exercise price is at least 110% of the Fair Market Value of the Common Stock
on the date of the grant and such option is not exercisable after the
expiration of 5 years from the date of the grant.

(iv) No incentive stock option shall be granted to a person in his
capacity as a Key Employee of a Subsidiary if the Company has less than a
50% ownership interest in such Subsidiary.

(v) Incentive stock options shall contain such other terms as may be
necessary to qualify the options granted therein as incentive stock options
pursuant to Section 422 of the Code, or any successor statute.

9. Reload Options

A. Concurrently with the award of options to any Participant, the Committee
may authorize reload options ("Reload Options") to purchase for cash or shares
a number of shares of the Common Stock. The number of Reload Options shall
equal:

(i) the number of shares of Common Stock used to exercise the underlying
options; and

(ii) the number of shares of Common Stock used to satisfy any tax
withholding requirement incident to the exercise of the underlying option,
including shares withheld from those that would otherwise be issuable to the
optionee pursuant to exercise of the subject option. The grant of a Reload
Option will become effective upon the exercise of the underlying options or
Reload Options through the use of shares of Common Stock held by the
optionee for at least six (6) months.

6
<PAGE> 40

B. Notwithstanding the fact that the underlying option may be an Incentive
Stock Option, a Reload Option is not intended to qualify as an "incentive
stock option" within the meaning of Section 422 of the Code.

C. Each Award Notice shall state whether the Committee has authorized Reload
Options with respect to the underlying options. Upon the exercise of an
underlying option or other Reload Option, the Reload Option will be evidenced
by an amendment to the underlying Award Notice.

D. The option price per share of Common Stock deliverable upon the exercise
of a Reload Option shall be the Fair Market Value of a share of Common Stock
on the date the grant of the Reload Option becomes effective.

E. Each Reload Option is fully exercisable six (6) months from the effective
date of grant. The term of each Reload Option shall be equal to the remaining
option term of the underlying option.

F. No additional Reload Options shall be granted when options or Reload
Options are exercised pursuant to the terms of this Plan following cessation
of the optionee's employment with the Company for any reason.

10. Exercise of Stock Option Upon Termination of Employment or Services

A. Options granted under Section 7 shall be exercisable upon the
Participant's termination of service within the following periods only.
Subject to Section 17, stock options to other Participants may permit the
exercise of options upon the Participant's termination of employment within
the following periods, or such shorter periods as determined by the Committee
at the time of grant:

(i) if on account of death, within 24 months of such event by the person
or persons to whom the Participant's rights pass by will or the laws of
descent or distribution.

(ii) if on account of disability (as defined in Section 22(e)(3) of the
Code or any successor statute), non-qualified stock options may be exercised
within 24 months of such termination and incentive stock options within 12
months.

(iii) if on account of retirement (as defined from time to time by Company
policy), non-qualified stock options may be exercised within 24 months of
such termination and incentive stock options with 3 months.

7
<PAGE> 41

(iv) if for any reason other than death, disability or retirement (as
defined from time to time by Company policy), options may be exercised
within 3 months of such termination.

B. An unexercised option shall be exercisable only to the extent that such
option was exercisable on the date the Participant's employment or service
terminated. However, terms relating to the exercisability of options may be
amended by the Committee before or after such termination, except in respect
to options granted under Section 7.

C. In no case may an unexercised option be exercised to any extent by anyone
after expiration of its term.

11. Acceleration of Vesting of Options.

A. In the event of a Change in Control (as defined below), death of an
optionee or retirement of an optionee (as defined from time to time by Company
policy), all options which have not yet vested shall vest, mature and become
exercisable in whole or in part immediately prior to the event constituting
the Change of Control, or immediately upon the death or retirement of such
optionee.

B. A Change of Control for these purposes shall be defined as, (i) the
acquisition by any person of beneficial ownership of forty percent (40%) or
more of the combined voting power of the Company's outstanding securities
immediately after such acquisition (which forty percent (40%) shall be
calculated after including the dilutive effect of the conversion or exchange
of any outstanding securities of the Company convertible into or exchangeable
for voting securities), or (ii) a change in the composition of majority
membership of the Board of Directors over any two-year period beginning with
the date of adoption of this Plan by the Board of Directors, or (iii) a change
in ownership of the Company such that the Company becomes subject to the
delisting of its Common Stock from the NASDAQ National Market System, or (iv)
the approval by the Board of Directors of the sale of all or substantially all
of the assets of the Company, or (v) the approval by the Board of Directors of
any merger, consolidation, issuance of securities or purchase of assets, the
result of which would be the occurrence of any event described in clause (i),
(ii) or (iii) above. Notwithstanding anything to the contrary in this Section
11.B, acquisitions by any person (or any group of which such a person is a
member) who is as of the date of adoption of this Plan by the Board of
Directors, a member of the Board of Directors, of beneficial ownership of
forty percent (40%) or more of the combined voting power of the Company's
outstanding securities immediately after such acquisition (calculation of such
forty percent (40%) being made as described above), shall not be deemed a
Change of Control for purposes of this Plan.

8
<PAGE> 42

12. Nonassignability

The rights of a Participant under the Plan shall not be assignable by such
Participant, by operation of law or otherwise, except by will or the laws of
descent and distribution. During the lifetime of the person to whom a stock
option is granted, he or she alone may exercise it.

13. Payment of Withholding Taxes

A. As a condition to receiving or exercising an Award, as the case may be,
the Participant shall pay to the Company the amount of all applicable federal,
state, local and foreign taxes required by law to be paid or withheld relating
to receipt or exercise of the Award.

B. An optionee may satisfy such withholding requirements in whole or in part
by directing the Company to withhold shares from those that would otherwise be
issuable to the Participant or by otherwise tendering other shares of Common
Stock owned by the Participant. The withheld shares and other tendered shares
will be valued at the Fair Market Value as of the date that the tax
withholding obligation arises.

14. Amendments

The Board of Directors may amend the Plan at any time and from time to time,
provided however that the Board shall not amend the terms of the Plan more
frequently than permitted under Rule 16b-3 in regard to provisions that affect
persons receiving Awards under Section 7. Rights and obligations under any
Award granted before amendment of the Plan shall not be materially altered or
impaired adversely by such amendment, except with consent of the person to whom
the Award was granted.

15. Regulatory Approvals and Listings

Notwithstanding any other provision in the Plan, the Company shall have no
obligation to issue or deliver certificates of Common Stock under the Plan
prior to (A) obtaining approval from any governmental agency which the Company
determines is necessary or advisable, (B) admission of such shares to listing
on the stock exchange on which the Common Stock may be listed and (C)
completion of any registration or other qualification of such shares under any
state or federal law or ruling of any governmental body which the Company
determines to be necessary or advisable.

9
<PAGE> 43

16. No Right to Continued Employment or Grants

Participation in the Plan shall not give any Key Employee any right to remain
in the employ of the Company or any Subsidiary. Further, the adoption of this
Plan shall not be deemed to give any Key Employee or other individual the right
to be selected as a Participant or to be granted an Award.

17. Special Provision Pertaining to Persons Subject to Section 16

Notwithstanding any other term of this Plan, the following shall apply to
persons subject to Section 16 of the Exchange Act, except in the case of death
or disability:

A. No stock option granted pursuant to the Plan may be exercisable for at
least 6 months after the date of grant.

18. Limitations on Awards Under the Plan

No one Participant shall receive in the aggregate Awards granting him more
than fifty percent (50%) of the aggregate number of shares (1,200,000) which
may be delivered on exercise of options under the Plan.

10
<PAGE> 44

DREYER'S GRAND ICE CREAM, INC.
STOCK OPTION PLAN (1992)
(AS AMENDED)

1. PURPOSE OF THE PLAN

This Dreyer's Grand Ice Cream, Inc. Stock Option Plan (1992) (the
"Plan") is intended to provide a method whereby officers and other key
executives of Dreyer's Grand Ice Cream, Inc., a Delaware corporation
(the "Company") and its subsidiaries who are mainly responsible for
the management of the business and are in position to make substantial
contributions to its sound development, are encouraged to remain in
the service of the Company and to further the profits and prosperity
of the Company.

2. ADMINISTRATION OF THE PLAN

The Plan shall be administered by the Company's Compensation Committee
of the Board of Directors (the "Administrator"). The Administrator
shall be responsible to the Board of Directors of the Company (the
"Board") for the operation of the Plan, and shall make recommendations
to the Board concerning the number of options to be awarded to the
participants under the Plan. The interpretation and construction of
any provision of the Plan by the Administrator shall be final, unless
otherwise determined by the Board. No member of the Board or the
Administrator shall be liable for any action or determination made by
him in good faith.

The acts of the Administrator shall be evidenced in writing and the
Administrator shall from time to time make such reports as the Board
of Directors shall direct.

3. STOCK SUBJECT TO THE PLAN

The shares to be issued upon exercise of options granted under this
Plan shall be made available, at the discretion of the Board of
Directors, either from the authorized but unissued Common Stock of the
Company or from shares of Common Stock reacquired by the Company.

Subject to the provisions of the next succeeding paragraph, the
aggregate number of shares which may be delivered on exercise of
options under this Plan shall not exceed 300,000 shares. If, at any
time during the term of this Plan, an option granted under this Plan
shall have expired or terminated for any reason without being
exercised in full, the unpurchased shares shall become available for
option to other employees.

In the event that (i) the number of outstanding shares of

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<PAGE> 45
Common Stock of the Company shall be changed by reason of split-ups,
combinations or reclassifications of shares or otherwise, (ii) any
share dividends are distributed to the holders of Common Stock of the
Company, or (iii) the Common Stock of the Company is converted into or
exchanged for other shares as a result of any merger, consolidation or
recapitalization then, in any such case, the number of shares for
which options may thereafter be granted under this Plan, both in the
aggregate and as to any individual, and the number of shares then
subject to options theretofore granted under this Plan and the price
per share payable upon exercise of such options shall be appropriately
adjusted by the Administrator so as to reflect such change.

4. ELIGIBILITY OF OPTIONEES

Options may be granted only to key employees of the Company and of its
subsidiaries who are mainly responsible for the management of the
business of the Company (or a subsidiary) and are in a position to
make substantial contributions to the sound performance of the Company
(or of a subsidiary). The term "key employees" shall include officers
as well as other employees devoting full time to the Company and shall
include Directors who are also active officers or employees of the
Company (or of a subsidiary). Any member of the Board of Directors
who is not an officer or employee devoting full time to the Company
(or a subsidiary) shall not be eligible to receive an option under
this Plan.

Subject to the terms and conditions of this Plan, the Administrator
shall have exclusive jurisdiction (i) to select the employees to be
granted options (it being understood that, subject to the limit
specified in Section 3, more than one grant may be made to the same
employee during any one calendar year or in different calendar years),
(ii) to determine the number of shares subject to each option (subject
to the limit specified in Section 3), (iii) to determine the time or
times when options will be granted, (iv) to determine the time when
each option may be exercised within the limits of this Plan, and (v)
to prescribe the form, which shall be consistent with this Plan, of
the instruments evidencing any options under this Plan.

5. TERMS AND CONDITIONS OF OPTIONS

Options granted under the Plan shall be evidenced by agreements in
such form as the Administrator shall from time to time approve, which
agreements shall comply with and be subject to the following terms and
conditions.

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<PAGE> 46
A. OPTION PRICE

The purchase price of the shares subject to each option shall
be determined by the Administrator according to the following
Section 5 hereof. Such price shall be one hundred percent
(100%) of the Fair Market Value (as hereinafter defined) of
the shares of the Common Stock of the Company on the day on
which such option is granted.

B. NUMBER OF SHARES

Each option shall state the number of shares to which it
pertains.

C. METHOD OF PAYMENT

To exercise an option, the optionee must pay the full exercise
price of the shares being purchased. Payment must be made
either: (i) in cash, (ii) at the discretion of the
Administrator, by delivering shares of the Company's Common
Stock already owned by the optionee and having a Fair Market
Value equal to the applicable exercise price, or (iii) a
combination of cash and such shares.

D. EXERCISE OF OPTIONS

The options granted under the Plan, if any, shall not expire
other than as described below. The Administrator, in its
discretion, may prescribe a shorter period for any individual
grant.

The agreement shall provide that the optionee shall remit to
the Company at the time of any exercise of the option any
taxes required to be withheld by the Company under Federal,
State or local law as a result of the exercise of an option.
An optionee may satisfy such withholding requirements in whole
or in part by directing the Company to withhold shares from
those that would otherwise be issuable to the optionee or by
otherwise tendering other shares of the Company's Common Stock
owned by the optionee. The withheld shares and other tendered
shares will be valued at the Fair Market Value as of the date
that the tax withholding obligation arises.

Each option granted under the Plan, if any, may be exercised
in any event only after two years of continuous employment
with the Company or one of its subsidiaries immediately
following the date the option is granted and, except in cases
provided hereinafter, only during the continuance of the
optionee's employment with the Company (or a subsidiary), and
may be exercised subject to such

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<PAGE> 47
overall limitations, only to the extent of 40% of the total
number of optioned shares after the expiration of two years
following the date the option is granted, and only to the
extent of an additional 20% of the total number of optioned
shares after the expiration of each of the succeeding three
years, such limitations being calculated, in the case of any
resulting fraction, to the nearest lower number of shares.
Subject to the provisions of this Section, each option may be
exercised in whole or, from time to time, in part with respect
to the number of shares as to which it is then exercisable in
accordance with the terms of the Plan.

Notwithstanding anything to the contrary in this Section, in
the event there is a change of control in the Company all
options which are then outstanding shall immediately vest and
be exercisable under the terms of Section 5(G) below
regardless of the date on which such options were granted.

A Change of Control for these purposes shall be defined as,
(i) the acquisition by any person of beneficial ownership of
forty percent (40%) or more of the combined voting power of
the Company's outstanding securities immediately after such
acquisition (which forty percent (40%) shall be calculated
after including the dilutive effect of the conversion or
exchange of any outstanding securities of the Company
convertible into or exchangeable for voting securities), or
(ii) a change in the composition of majority membership of the
Board of Directors over any two-year period beginning with the
date of adoption of this paragraph of Section 5.D of this Plan
by the Board of Directors, or (iii) a change in ownership of
the Company such that the Company becomes subject to the
delisting of its Common Stock from the NASDAQ National Market
System, or (iv) the approval by the Board of Directors of the
sale of all or substantially all of the assets of the Company,
or (v) the approval by the Board of Directors of any merger,
consolidation, issuance of securities or purchase of assets,
the result of which would be the occurrence of any event
described in clause (i), (ii) or (iii) above. Notwithstanding
anything to the contrary in this paragraph of Section 5.D,
acquisitions by any person (or any group of which such a
person is a member) who is as of the date of adoption of this
Plan by the Board of Directors, a member of the Board of
Directors, of beneficial ownership of forty percent (40%) or
more of the combined voting power of the Company's outstanding
securities immediately after such acquisition (calculation of
such forty percent (40%) being made as described above), shall
not be deemed a Change of Control for purposes of this Plan.

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<PAGE> 48
E. NON-TRANSFERABILITY OF OPTIONS

No option granted under the Plan shall be transferable by the
grantee otherwise than by his last will and testament, or by
the laws of descent and distribution, and during his lifetime,
such option shall be exercisable only by such grantee.

F. TERMINATION OF SERVICE TO THE COMPANY EXCEPT DISABILITY
OR DEATH

If an optionee's service to the Company shall cease for any
reason other than his disability (as defined in Internal
Revenue Code Section 22(e)(3)) or his death, after at least
one year of continuous service to the Company (or such
Subsidiary) immediately following the date on which an option,
if any, is granted pursuant to this Plan, the optionee may
exercise such option to the extent such option could be
exercised at the time of such cessation of employment, at any
time within three (3) months after the optionee shall so cease
to be an employee, and in the event of his death within such
three month period, his options, if any, may be exercised to
the extent and in the manner provided in paragraph H of this
Section 5. Any questions as to whether and when there has
been a cessation of service shall be determined by the
Administrator and its determination on such questions shall be
final.

G. TERMINATION OF SERVICE TO THE COMPANY DUE TO DISABILITY

If an optionee's service to the Company (or a subsidiary)
shall cease by reason of his disability (as defined in
Internal Revenue Code Section 22(e)(3)), after at least one
year of continuous service to the Company or such subsidiary
immediately following the date on which an option, if any, is
granted pursuant to this Plan, the optionee may exercise such
option to the extent such option could be exercised at the
cessation of employment, at any time within twelve (12) months
after the optionee shall so cease to perform services as an
employee of the Company.

H. TERMINATION DUE TO DEATH

If an optionee's service to the Company (or a subsidiary)
shall cease due to the optionee's death, or if the optionee
shall die within three (3) months after cessation of for any
reason other than disability, or if he shall die within twelve
(12) months after cessation of service due to disability, any
options theretofore granted under this Plan may be exercised
by the optionee's estate or by the person designated in his
last will and testament, to

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<PAGE> 49
the full extent that such option, if any, could have been
exercised by such deceased optionee immediately prior to death
provided such options are exercised within three (3) months
after such optionee's death.

6. DETERMINATION OF FAIR MARKET VALUE

For purposes of determining the option price and for all other
valuation purposes under the Plan, the Fair Market Value of a share of
Common Stock on any date will be the mean of the lowest and highest
selling prices of one share of Common Stock on the date in question on
the over-the-counter market or the closing price on the principal
exchange where the Company's stock prices are officially quoted.

7. AMENDMENTS AND TERMINATION

The Board of Directors, by resolution, may terminate, amend or revise
the Plan with respect to any shares as to which options have not been
granted. Neither the Board of Directors nor the Administrator may,
without the consent of the holder of an option granted pursuant to the
Plan, alter or impair any option granted hereunder, except as
authorized herein. The Plan shall remain in effect until the
Administrator terminates the Plan. Termination of the Plan shall not
affect any option previously granted hereunder.

8. EFFECTIVE DATE

This Plan shall be effective and operative, subject to approval of the
shareholders of the Company, from the date that the Plan is approved
by the Company's Board of Directors.

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<PAGE> 50

DREYER'S GRAND ICE CREAM, INC.
INCENTIVE STOCK OPTION PLAN (1982)
(AS AMENDED)

1. PURPOSE OF THE PLAN

This Plan is intended to provide a method whereby officers and other
key executives of Dreyer's Grand Ice Cream, Inc. (the "Corporation")
and its subsidiaries who are mainly responsible for the management of
the business and are in a position to make substantial contributions
to its sound development may be encouraged to remain in the employ of
the Corporation or its subsidiaries and to acquire a larger
proprietary interest in the Corporation.

2. ADMINISTRATION OF THE PLAN

This Plan shall be administered by the Plan Administrator (the
"Administrator"), who shall be appointed annually by the
Corporation's Board of Directors. A vacancy in the office of
Administrator shall be filled by appointment by the Board of
Directors.

The acts of the Administrator shall be evidenced in writing and the
Administrator shall from time to time make such reports as the Board
of Directors shall direct.

3. STOCK SUBJECT TO THE PLAN

The shares to be issued upon exercise of options granted under this
Plan shall be made available, at the discretion of the Board of
Directors, either from the authorized but unissued Common Stock of
the Corporation or from shares of Common Stock reacquired by the
Corporation including shares purchased from existing shareholders.

Subject to the provisions of the next succeeding paragraph of this
Section 3, the aggregate number of shares which may be delivered on
exercise of options under this Plan shall not exceed 600,000 shares.
The aggregate fair market value (determined at the time the option is
granted) of the stock with respect to which incentive stock options
are exercisable for the first time by an individual employee during
any calendar year (under all such plans of the Corporation and any
parent or subsidiary corporation of the Corporation) shall not exceed
$100,000. If, at any time during the term of this Plan, an option
granted under this Plan shall have expired or terminated for any
reason without having been exercised in full, the unpurchased shares
shall become available for option to other employees.

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<PAGE> 51
In the event that (i) the number of outstanding shares of Common Stock
of the Corporation shall be changed by reason of split-ups,
combinations or reclassifications of shares or otherwise, (ii) any
stock dividends are distributed to the holders of Common Stock of the
Corporation, or (iii) the Common Stock of the Corporation is
converted into or exchanged for other shares as a result of any
merger, consolidation or recapitalization then, in any such case, the
number of shares for which options may thereafter be granted under
this Plan, both in the aggregate and as to any individual, and the
number of shares then subject to options theretofore granted under
this Plan and the price per share payable upon exercise of such
options may be appropriately adjusted by the Administrator so as to
reflect such change.

4. ELIGIBILITY OF OPTIONEES

Options may be granted only to key employees of the Corporation and of
its subsidiaries who are mainly responsible for the management of the
business of the Corporation (or a subsidiary) and are in a position to
make substantial contributions to the sound performance of the
Corporation (or of a subsidiary). The term "key employees" shall
include officers as well as other employees devoting full time to the
Corporation and shall include Directors who are also active officers
or employees of the Corporation (or of a subsidiary). Any member of
the Board of Directors who is not an officer or employee devoting full
time to the Corporation (or a subsidiary) shall not be eligible to
receive an option under this Plan.

Subject to the terms and conditions of this Plan, the Administrator
shall have exclusive jurisdiction (i) to select the employees to be
granted options (it being understood that, subject to the limit
specified in Section 3, more than one grant may be made to the same
employee during any one calendar year or in different calendar years),
(ii) to determine the number of shares subject to each option (subject
to the limit specified in Section 3), (iii) to determine the time or
times when options will be granted, (iv) to determine the option
price of the shares subject to each option (subject to the limit in
the following Section 5A hereof), (v) to determine the time when each
option may be exercised within the limits of this Plan, and (vi) to
prescribe the form, which shall be consistent with this Plan, of the
instruments evidencing any options under this Plan.

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<PAGE> 52
5. TERMS AND CONDITIONS OF OPTIONS

A. OPTION PRICE

The purchase price of the shares subject to each option shall
be determined by the Administrator according to the following
Section 6 hereof. Such price shall not be less than 100% of
the fair market value of the shares of the Common Stock of the
Corporation on the day on which such option is granted to any
employee owning less than 10% of the combined voting power of
all classes of stock of the Corporation. Such price shall
not be less than 110% of the fair market value of the shares
of the Common Stock of the Corporation on the day on which
such option is granted to any employee owning 10% or more of
the combined voting power of all classes of stock of the
Corporation.

B. NUMBER OF SHARES

Each option shall state the number of shares to which it
pertains.

C. METHOD AND TIME OF PAYMENT

To exercise an option, the optionee must pay the full exercise
price of the shares being purchased. Payment must be made
either: (i) in cash, (ii) at the discretion of the
Administrator, by delivering shares of the Corporation's
Common Stock already owned by the optionee and having a fair
market value equal to the applicable exercise price, or (iii)
a combination of cash and such shares.

D. EXERCISE OF OPTIONS

Each option granted under this Plan shall be terminated not
later than the expiration of six years from the date on which
the grant was made. With respect to any employee owning 10%
or more of the combined voting power of all classes of stock
of the Corporation, an option granted under the Plan shall
terminate not later than five years from the date on which the
grant was made. The Administrator, in its discretion, may
prescribe a shorter period for any individual grant.

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<PAGE> 53
Each option granted under this Plan may be exercised in any
event only after two years of continuous employment with the
Corporation or one of its subsidiaries immediately
following the date the option is granted and, except in cases
provided hereinafter, only during the continuance of the
optionee's employment with the Corporation (or a subsidiary),
and may be exercised, subject to such overall limitations,
only to the extent of 40% of the total number of optioned
shares after the expiration of two years following the date
the option is granted, and only to the extent of an additional
20% of the total number of optioned shares after the
expiration of each of the succeeding three years, such
limitations being calculated, in the case of any resulting
fraction, to the nearest lower whole number of shares.
Subject to the provisions of this Section, each option may be
exercised in whole or, from time to time, in part with respect
to the number of shares as to which it is then exercisable in
accordance with this Plan.

E. PRIOR OUTSTANDING OPTIONS

No option granted prior to January 1, 1987 to an individual
pursuant to this Plan shall be exercised while there is
outstanding any incentive stock option (as defined in Section
422A of the Internal Revenue Code of 1954, as amended) which
was granted before such option to such individual to purchase
Common Stock of the Corporation or of any corporation which
(at the time of the granting of such option) was a parent or
subsidiary corporation of the Corporation, or is a predecessor
corporation of the Corporation or such parent or subsidiary
corporation. An incentive stock option shall be treated as
outstanding until it is exercised in full or allowed to expire
due to lapse of time regardless of whether such option is
cancelled by the Administrator for any reason not related to
termination of active employment of an optionee.

F. NON-TRANSFERABILITY OF OPTIONS

No option granted under this Plan shall be transferable by the
grantee otherwise than by his or her last will and testament,
or by the laws of descent and distribution, and during his
or her lifetime, such option shall be exercisable only by such
grantee.

G. TERMINATION OF EMPLOYMENT EXCEPT DISABILITY OR DEATH

If an optionee's employment with the Corporation (or a
subsidiary) shall cease for any reason other than his or her
disability (as defined in Internal Revenue Code

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<PAGE> 54
Section 105(d)(4)) or his or her death, after at least one
year of continuous employment with the Corporation (or such
subsidiary) immediately following the date on which an option,
if any, is granted, the optionee may exercise such option, to
the extent that such option could be exercised at the time of
such cessation of employment, at any time within three months
after the optionee shall so cease to be an employee, and in
the event of his or her death within such three month period,
his or her options, if any, may be exercised to the extent and
in the manner provided in paragraph I of this Section 5. Any
questions as to whether and when there has been a cessation of
employment shall be determined by the Administrator and its
determination on such questions shall be final.

H. TERMINATION OF EMPLOYMENT DUE TO DISABILITY

If an optionee's employment with the Corporation (or a
subsidiary) shall cease by reason of his or her disability
(as defined in Internal Revenue Code Section 105(d)(4)),
after at least one year of continued employment with the
Corporation (or such subsidiary) immediately following the
date on which an option, if any, is granted, the optionee may
exercise such option, to the extent that such option could be
exercised at the cessation of employment, at any time within
twelve months after the optionee shall so cease to be an
employee.

I. TERMINATION DUE TO DEATH

If an optionee's employment with the Corporation (or a
subsidiary) shall cease due to the optionee's death, or if the
optionee shall die within three months after cessation of
employment for any reason other than disability, or if he or
she shall die within twelve months after cessation of
employment due to disability, any options theretofore granted
under this Plan may be exercised by the optionee's estate or
by the person designated in his or her last will and testament
to the full extent that such option could have been exercised
by such deceased optionee immediately prior to death, provided
such options are exercised within three months after such
optionee's death.

6. DETERMINATION OF FAIR MARKET VALUE

For purposes of determining the option price and for all other
valuation purposes under the Plan, the fair market value of a share
of Common Stock on any date will be the mean of the lowest and highest
selling prices of one share of Common

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<PAGE> 55
Stock on the date in question on the over-the-counter market or the
closing price on the principal exchange where the Corporation's
stock prices are officially quoted.

7. INTERPRETATION OF THE PLAN

The Administrator shall have full power and authority to construe and
interpret this Plan. Decisions of the Administrator shall be
final, conclusive and binding on all parties, including the
Corporation, its subsidiaries and stockholders, and the optionees,
their estates, executors, administrators, heirs and assigns.

8. AMENDMENTS TO PLAN

The Administrator, from time to time, may prescribe, amend and rescind
rules and regulations relating to this Plan, and, subject to the
approval of the Board of Directors of the Corporation, may at any
time terminate, modify or suspend the operation of this Plan, provided
that, without the approval of the shareholders of the Corporation, no
such modification shall:

(i) materially increase the benefits accruing to participants
under this Plan;

(ii) materially increase the number of shares of the Corporation
which may be issued under this Plan; or

(iii) materially modify the requirements as to eligibility for
participation in this Plan.

9. EFFECTIVE DATE

This Plan shall be submitted to the Board of Directors for approval
and shall be effective and operative at the earliest date permitted by
applicable law, consistent with the intention that options granted
under this Plan be incentive stock options as defined in Section 422A
of the Internal Revenue Code.

10. ACCELERATION OF VESTING OF OPTIONS

A. In the event of a Change of Control (as defined below), all
options which have not yet vested shall vest, mature and become
exercisable in whole or in part immediately prior to the event
constituting the Change of Control.

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<PAGE> 56
acquisition (which forty percent (40%) shall be calculated after
including the dilutive effect of the conversion or exchange of any
outstanding securities of the Company convertible into or exchangeable
for voting securities), or (ii) a change in the composition of
majority membership of the Board of Directors over any two-year period
beginning with the date of adoption of this Section 10.B of this Plan
by the Board of Directors, or (iii) a change in ownership of the
Company such that the Company becomes subject to the delisting of its
Common Stock from the NASDAQ National Market System, or (iv) the
approval by the Board of Directors of the sale of all or substantially
all of the assets of the Company, or (v) the approval by the Board of
Directors of any merger, consolidation, issuance of securities or
purchase of assets, the result of which would be the occurrence of any
event described in clause (i), (ii) or (iii) above. Notwithstanding
anything to the contrary in this Section 10.B, acquisitions by any
person (or any group of which such a person is a member) who is as of
the date of adoption of this Plan by the Board of Directors, a member
of the Board of Directors, of beneficial ownership of forty percent
(40%) or more of the combined voting power of the Company's
outstanding securities immediately after such acquisition (calculation
of such forty percent (40%) being made as described above), shall not
be deemed a Change of Control for purposes of this Plan.