<PAGE> 1
SCHEDULE 14A INFORMATION
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 [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
DREYER'S GRAND ICE CREAM, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
Registrant
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rule 14a-6(i)(1) 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 (Set forth the
amount on which the filing fee is calculated and state how
it was determined):
-------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------
(5) Total fee paid:
-------------------------
[ ] Fee paid previously with preliminary materials.
[ ] 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 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
DREYER'S LOGO
- --------------------------------------------------------------------------------
Notice of Annual
Meeting of Stockholders
and Proxy Statement
- --------------------------------------------------------------------------------
Meeting of May 10, 2000
<PAGE> 3
DREYER'S 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 10, 2000 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 7, 2000
<PAGE> 4
DREYER'S 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
Board of Directors..................................... 3
Nominees for Director............................. 3
Continuing Directors.............................. 3
Committees of the Board........................... 4
Attendance at Board and Committee Meetings........ 5
Remuneration of Directors......................... 5
Security Ownership of Certain Beneficial Owners and
Management............................................ 6
Security Ownership of Certain Beneficial Owners... 6
Security Ownership of Management.................. 8
Section 16(a) Beneficial Ownership Reporting
Compliance......................................... 9
Executive Compensation................................. 10
Summary of Cash and Certain Other Compensation.... 10
Stock Options..................................... 11
Performance Graph................................. 13
Employment Contracts, Employment Termination and
Change of Control Arrangements..................... 13
Compensation Committee Report on Executive
Compensation....................................... 14
Compensation Committee Interlocks and Insider
Participation...................................... 16
Other Relationships............................... 17
Matters Submitted to a Vote of Stockholders............ 17
Election of Directors............................. 17
Ratification of Selection of Independent Public
Accountants........................................ 18
Voting Information..................................... 18
General Voting Information........................ 18
Votes Required for Approval....................... 19
Proposals of Stockholders.............................. 19
Other Matters.......................................... 19
</TABLE>
i
<PAGE> 5
DREYER'S LOGO
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 10, 2000
The Annual Meeting of Stockholders of DREYER'S GRAND ICE CREAM, INC. will
be held on Wednesday, May 10, 2000 at 2:00 p.m. at the Claremont Resort Hotel,
Ashby and Domingo Avenues, Oakland, California for the following purposes:
1. Electing three directors to Class III of the Board of Directors;
2. Approving the appointment of PricewaterhouseCoopers LLP as independent
public accountants for the fiscal year 2000 and thereafter until its
successor is appointed; and
3. Considering and acting upon such other business as may properly come
before the meeting or at any adjournments or postponements 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 24, 2000 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 7, 2000
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 10, 2000, 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 on or about April 7,
2000.
ANNUAL REPORT
The Company's Annual Report to Stockholders for the fiscal year ended
December 25, 1999 ("Annual Report to Stockholders") is furnished concurrently to
all stockholders entitled to vote at the Annual Meeting. The Annual Report to
Stockholders 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 to Stockholders 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 approval of PricewaterhouseCoopers LLP 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 28,097,087 shares of Common Stock ($1.00 par value) of the
Company, 1,007,522 shares of Series A Convertible Preferred Stock ($1.00 par
value) of the Company, no shares of Series B Convertible Preferred Stock ($1.00
par value) of the Company, and no shares of Series A Participating Preference
Stock ($1.00 par value) of the Company outstanding at the close of business on
March 24, 2000. Each share of Common Stock is entitled to one vote at the
meeting. Each share of Series A Convertible Preferred Stock is entitled to vote
that number of votes equal to the number of shares of Common Stock into which
such shares of Series A Convertible Preferred Stock is convertible on the record
date for the meeting. On March 24, 2000, the outstanding shares of Series A
Convertible Preferred Stock are convertible into an aggregate of 5,800,000
shares of Common Stock. There are no cumulative voting rights.
2
<PAGE> 7
Pursuant to the By-Laws of the Company, the Board of Directors has fixed
the close of business on March 24, 2000 as the record date for the determination
of stockholders entitled to notice of and to vote at the meeting.
BOARD OF DIRECTORS
NOMINEES FOR DIRECTOR
Under the Company's By-Laws and Certificate of Incorporation, the Board of
Directors consists of nine 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 2000 Annual Meeting of Stockholders and will hold office until
the 2003 Annual Meeting of Stockholders or until their successors are elected
and qualified. The nominees constitute Class III of the Board of Directors with
each of their terms expiring as of the date of this Annual Meeting.
The following brief statements contain biographical information about the
nominees and the years they first became directors:
<TABLE>
<CAPTION>
NOMINEE
YEAR FIRST ELECTED AS DIRECTOR
AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ------------------------------ ------------------------------------------------------------
<C> <S>
T. Gary Rogers CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER, DREYER'S
1977 GRAND ICE CREAM, INC. Mr. Rogers has served as the Company's
Age: 57 Chairman of the Board and Chief Executive Officer since its
incorporation in February 1977. Mr. Rogers is also a
director of Levi Strauss & Company.
William F. Cronk, III PRESIDENT, DREYER'S GRAND ICE CREAM, INC. Mr. Cronk has
1977 served on the Company's Board of Directors since its
Age: 57 incorporation in 1977. Since April 1981, he has served as
the Company's President.
M. Steven Langman MANAGING DIRECTOR, RHONE GROUP LLC. Mr. Langman joined the
1997 Company's Board of Directors in 1997. Prior to joining Rhone
Age: 38 Group LLC, a private investment banking firm, in May 1996,
Mr. Langman was employed with Lazard Freres & Co. L.L.C. for
nine years, most recently serving as a Managing Director.
Mr. Langman worked for Goldman, Sachs & Co. for two years
before joining Lazard Freres.
</TABLE>
CONTINUING DIRECTORS
Directors Jan L. Booth, John W. Larson and Jack O. Peiffer ("Class I") will
hold office until the 2001 Annual Meeting of Stockholders. Directors Robert A.
Helman, Edmund R. Manwell and Timothy P. Smucker ("Class II") will hold office
until the 2002 Annual Meeting of Stockholders.
The following brief statements contain biographical information about each
continuing director and the year she or he first became a director:
<TABLE>
<CAPTION>
YEAR FIRST ELECTED AS DIRECTOR
AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ------------------------------ ------------------------------------------------------------
<C> <S>
Jan L. Booth PRIVATE INVESTOR. Ms. Booth joined the Company's Board of
1997 Directors in 1997. From 1988 to 1990, Ms. Booth was
Age: 49 self-employed as a business consultant. Ms. Booth served as
Vice President -- Marketing of the Company from 1981 to
1987. Before joining the Company, Ms. Booth was employed by
Crown Zellerbach's consumer products division.
</TABLE>
3
<PAGE> 8
<TABLE>
<CAPTION>
YEAR FIRST ELECTED AS DIRECTOR
AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ------------------------------ ------------------------------------------------------------
<C> <S>
Robert A. Helman PARTNER, MAYER, BROWN & PLATT. Mr. Helman joined the
1998 Company's Board of Directors in 1998. Mr. Helman became a
Age: 66 partner at Mayer, Brown & Platt in 1967. Prior to 1967, Mr.
Helman was an associate and partner in the law firm of
Isham, Lincoln & Beale. Mr. Helman is also a director of
Northern Trust Corporation and the General Partner (TC
Pipelines GP, Inc. ) of TC Pipelines, LP, both publicly
traded companies. In addition, Mr. Helman serves as a
director of the following privately-owned organizations: The
Chicago Stock Exchange and The Brookings Institution.
John W. Larson PRIVATE INVESTOR. Mr. Larson joined the Company's Board of
1993 Directors in 1993. From 1989 to early 1993, Mr. Larson
Age: 62 served as 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. Mr. Larson is also a member of the Board of Control of
Crown Pacific Partners, LP, a forest products concern.
Edmund R. Manwell PARTNER, MANWELL & MILTON, COUNSEL TO THE COMPANY. Mr.
1981 Manwell has served as Secretary of the Company since its
Age: 57 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, counsel to the Company.
Jack O. Peiffer RETIRED SENIOR VICE PRESIDENT -- CORPORATE HUMAN RESOURCES,
1993 GENERAL ELECTRIC COMPANY. Mr. Peiffer joined the Company's
Age: 66 Board of 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 -- Corporate Human Resources,
including Vice President and General Manager of GE Supply
Company.
Timothy P. Smucker CHAIRMAN, THE J.M. SMUCKER COMPANY. Mr. Smucker joined the
1997 Company's Board of Directors in 1997. Mr. Smucker has been
Age: 55 employed by The J.M. Smucker Company, a food products
manufacturer, for over 30 years, and has held a variety of
positions prior to his appointment as Chairman. He has been
a director of The J.M. Smucker Company since 1973. Mr.
Smucker is also a director of Huntington BancShares
Incorporated, a regional bank holding company.
</TABLE>
COMMITTEES OF THE BOARD
Committees of the Board of Directors are the following:
Compensation Committee
The Compensation Committee is composed of seven directors, none of whom are
employees of the Company in any capacity. During fiscal 1999, the members of the
Compensation Committee were Ms. Booth and Messrs. Helman, Langman, Larson,
Manwell (Chairman), Peiffer and Smucker. The 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 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 the
Company's Stock Option Plan (1993).
4
<PAGE> 9
Audit Committee
The Audit Committee is composed of seven directors, none of whom are
employees of the Company in any capacity. During fiscal 1999, the members of the
Audit Committee were Ms. Booth and Messrs. Helman, Langman, Larson (Chairman),
Manwell, Peiffer and Smucker. The Committee meets on the call of any member and,
on at least one occasion each year, meets with the independent public
accountants 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 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 financial statements, 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 and recommend to the
Board of Directors the appointment of the independent public accountants, as
well as to provide the means for direct communication among the Company's Board
of Directors, its financial management and independent public accountants.
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 include 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 public accountants. 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 public accountants
with respect to the accounting and control functions and financial statement
presentation.
The Company has no nominating committee nor does any other committee
perform the functions of such a committee.
ATTENDANCE AT BOARD AND COMMITTEE MEETINGS
During fiscal 1999, there were five special meetings of the Board of
Directors and all directors attended each meeting, except Mr. Helman who was
absent from two meetings and Mr. Langman who was absent from one meeting. The
Compensation Committee met four times and the Audit Committee met twice. All
members of the committees attended each of the meetings of the respective
committee, except for Messrs. Helman and Langman who were each absent from one
meeting of the Compensation Committee and one meeting of the Audit Committee.
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. Directors' compensation includes, in addition
to the meeting fee and committee fee, an annual retainer fee of $6,000. The
Company also reimburses the reasonable travel expenses of a director to attend
board meetings. 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. Members of the
Board of Directors who were not employees of the Company (each a "Non-Employee
Director") received an option to purchase 10,000 shares of the Company's Common
Stock on the date the Company's Stock Option Plan (1993) (the "1993 Plan") was
approved by the Company's stockholders or received such an option upon
appointment to the Board of Directors, if appointment occurred subsequent to
such approval. Also, additional stock option grants to purchase 3,000 shares of
the Company's Common Stock are awarded to each Non-Employee Director on each
anniversary of the date the 1993 Plan was approved by the Company's
stockholders.
5
<PAGE> 10
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as of March 24, 2000 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, as amended (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 PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP* CLASS*
------------------------------------ --------------------- ----------
<S> <C> <C>
Nestle Holdings, Inc.(1)....................... 6,112,016 21.8%
c/o Nestle USA, Inc.
800 North Brand Boulevard
Glendale, California 91203
Nestle S.A
Avenue Nestle
Vevey, Switzerland CH-1800
T. Gary Rogers(2)(3)........................... 3,850,373 13.4%
5929 College Avenue
Oakland, California 94618
General Electric Capital Corporation(4)(5)..... 2,900,000 9.4%
260 Long Ridge Road
Stamford, Connecticut 06927
Trustees of General Electric Pension
Trust(4)(6).................................. 2,900,000 9.4%
GE Investment Private Placement Partners I,
Limited Partnership
P.O. Box 7900
3003 Summer Street
Stamford, Connecticut 06904
Cortopassi Family Trust(7)..................... 2,763,534 9.8%
San Tomo Partners
Trecento Investors, Inc.
DACCO, Inc.
Stanislaus Partners
Capecchio Foundation
VICOR, LLC
Alpinello Investors, Inc.
Wright Tract Partners, LP
11292 North Alpine Road
Stockton, California 95212
William F. Cronk, III(2)(8).................... 2,186,162 7.6%
5929 College Avenue
Oakland, California 94618
Lord, Abbett & Co.(9).......................... 1,841,723 6.6%
90 Hudson Street
Jersey City, New Jersey 07302
</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.
6
<PAGE> 11
(1) Nestle Holdings, Inc. ("NHI") has sole voting power and sole investment
power with respect to all of these shares. Nestle S.A. ("Nestle") filed a
joint statement on Schedule 13D with NHI and may be deemed to have sole
voting power and sole investment power with respect to these shares because
NHI is a wholly-owned subsidiary of Nestle.
(2) Includes options to purchase 203,960 shares of Common Stock under the
Company's Stock Option Plan (1992) exercisable within 60 days, and options
to purchase 482,280 shares of Common Stock under the Company's Stock Option
Plan (1993) exercisable within 60 days.
(3) 2,942,072 and 200,000 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. Also includes
22,061 shares held in Mr. Rogers' account in the Dreyer's Grand Ice Cream,
Inc. Savings Plan (a 401(k) plan), based upon the most recent available plan
statement. Mr. Rogers has sole investment power but no voting power with
respect to such shares.
(4) Assumes full conversion of the Series A Convertible Preferred Stock of the
Company 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.
(5) The holder has sole voting power and sole investment power with respect to
all of these shares.
(6) Trustees of General Electric Pension Trust ("GEPT") have sole voting power
and sole investment power with respect to 1,172,990 of these shares. GE
Investment Private Placement Partners I, Limited Partnership ("GEIPPP") has
sole voting power and sole investment power with respect to 1,727,010 of
these shares. GEPT and GEIPPP may constitute a group as such term is used in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.
(7) Each entity has sole voting and sole investment power with respect to only
those shares of Common Stock registered in the name of the entity, as
follows: Cortopassi Family Trust, 1,843,534 shares; San Tomo Partners,
300,000 shares; Trecento Investors, Inc., 150,000 shares; DACCO, Inc.,
150,000 shares; Stanislaus Partners, 100,000 shares; Capecchio Foundation,
100,000 shares; VICOR, LLC, 70,000 shares; Alpinello Investors, Inc., 30,000
shares; and Wright Tract Partners, LP, 20,000 shares. The listed entities
filed a joint statement on Schedule 13D as members of a group.
(8) 1,499,922 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. Excludes
84,000 shares held in irrevocable trusts for the benefit of Mr. Cronk's
sons. Neither Mr. Cronk nor his wife have voting or investment power with
respect to these 84,000 shares, and Mr. Cronk and his wife disclaim
beneficial ownership of all of the shares held in these irrevocable trusts.
(9) Based on information contained in the Schedule 13G dated January 24, 2000,
filed with the Commission by Lord, Abbett & Co. pursuant to Rule 13d-1(b)
under the Exchange Act. The holder has indicated in its Schedule 13G that it
has sole voting power and sole investment power with respect to all of these
shares.
7
<PAGE> 12
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information as of March 24, 2000 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 other
most highly compensated executive officers of the Company (the five officers
shall be referred to herein as 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 sole 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)................................... 3,850,373 13.4%
William F. Cronk, III(1)(3)............................ 2,186,162 7.6%
Thomas M. Delaplane(4)................................. 289,401 1.0%
William R. Oldenburg(5)................................ 262,556 **
J. Tyler Johnston(6)................................... 127,478 **
Edmund R. Manwell(7)................................... 73,000 **
John W. Larson(7)(8)................................... 56,500 **
Jan L. Booth(9)(10).................................... 27,200 **
Jack O. Peiffer(7)..................................... 27,000 **
Timothy P. Smucker(10)................................. 21,000 **
M. Steven Langman(10).................................. 19,000 **
Robert A. Helman(11)................................... 16,000 **
Directors and Executive Officers as a Group (13
persons)(12)......................................... 6,978,927 23.1%
</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.
** Less than one percent.
(1) Includes options to purchase 203,960 shares of Common Stock under the
Company's Stock Option Plan (1992) (the "1992 Plan") exercisable within 60
days, and options to purchase 482,280 shares of Common Stock under the
Company's Stock Option Plan (1993) (the "1993 Plan") exercisable within 60
days.
(2) 2,942,072 and 200,000 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. Also includes
22,061 shares held in Mr. Rogers' account in the Dreyer's Grand Ice Cream,
Inc. Savings Plan, a 401(k) plan (the "Savings Plan"), based upon the most
recent available plan statement. Mr. Rogers has sole investment power but
no voting power with respect to such shares.
(3) 1,499,922 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.
Excludes 84,000 shares held in irrevocable trusts for the benefit of Mr.
Cronk's sons. Neither Mr. Cronk nor his wife have voting or investment
power with respect to these 84,000 shares, and Mr. Cronk and his wife
disclaim beneficial ownership of all of the shares held in these
irrevocable trusts.
(4) Includes options to purchase 30,400 shares of Common Stock under the 1992
Plan exercisable within 60 days, and options to purchase 184,480 shares of
Common Stock under the 1993 Plan exercisable
8
<PAGE> 13
within 60 days. Also includes 33,497 shares held in Mr. Delaplane's account
in the Savings Plan, based upon the most recent available plan statement.
Mr. Delaplane has sole investment power but no voting power with respect to
such shares.
(5) Includes options to purchase 30,400 shares of Common Stock under the 1992
Plan exercisable within 60 days, and options to purchase 186,080 shares of
Common Stock under the 1993 Plan exercisable within 60 days.
(6) Includes options to purchase 2,600 shares of Common Stock under the 1992
Plan exercisable within 60 days, and options to purchase 116,568 shares of
Common Stock under the 1993 Plan exercisable within 60 days.
(7) Includes options to purchase 25,000 shares of Common Stock under the 1993
Plan exercisable within 60 days.
(8) 31,500 of these shares are held directly by trusts for the benefit of Mr.
Larson's adult children for which Mr. Larson serves as trustee.
(9) 4,000 of these shares are held directly by the Herrero/Booth Revocable
Trust for which Ms. Booth and her husband serve as co-trustees. Ms. Booth
and her husband share the voting and investment power with respect to such
shares. Also includes 4,200 shares held by the Herrero Bros. Inc. Employee
Profit Sharing and Retirement Plan & Trust, for which Ms. Booth's husband
serves as a co-trustee and is a plan participant. Ms. Booth and her husband
disclaim beneficial ownership of these shares except to the extent of their
pecuniary interest therein.
(10) Includes options to purchase 19,000 shares of Common Stock under the 1993
Plan exercisable within 60 days.
(11) Includes options to purchase 16,000 shares of Common Stock under the 1993
Plan exercisable within 60 days.
(12) Includes options to purchase 471,320 shares of Common Stock under the 1992
Plan exercisable within 60 days, and options to purchase 1,622,945 shares
of Common Stock under the 1993 Plan exercisable within 60 days.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 1999 its officers, directors, and greater than ten percent beneficial
owners complied with all applicable filing requirements.
9
<PAGE> 14
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for the fiscal years ended December 25, 1999,
December 26, 1998 and December 27, 1997, 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
ANNUAL COMPENSATION COMPENSATION
-------------------------------------------- AWARDS
OTHER ------------
ANNUAL SECURITIES ALL
COMPEN- UNDERLYING OTHER
FISCAL SALARY(1) BONUS(2) SATION(3)(4) OPTIONS COMPENSATION(5)
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) (#) ($)
--------------------------- ------ --------- -------- ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
T. Gary Rogers.................... 1999 689,975 517,485 54,841 167,300 16,097
Chairman of the Board and 1998 682,309 -0- 64,926 85,300 12,374
Chief Executive Officer 1997 666,171 162,500 52,231 120,000 16,021
William F. Cronk, III............. 1999 689,975 517,485 167,300 16,000
President 1998 682,309 -0- 52,157 85,300 12,000
1997 666,171 162,500 57,449 120,000 15,000
William R. Oldenburg.............. 1999 378,082 285,000 55,800 16,000
Vice President -- Operations 1998 366,164 -0- 29,000 12,000
1997 344,787 87,500 40,000 15,000
Thomas M. Delaplane............... 1999 375,205 285,000 55,800 16,000
Vice President -- Sales 1998 351,164 -0- 29,000 12,000
1997 328,632 83,750 40,000 15,000
J. Tyler Johnston................. 1999 347,123 262,500 55,800 16,000
Vice President -- Marketing 1998 330,205 -0- 29,000 12,000
1997 304,787 77,500 40,000 15,000
</TABLE>
- ---------------
(1) Includes amounts contributed by the officers to the salary deferral portion
of Dreyer's Grand Ice Cream, Inc. Savings Plan, a 401(k) plan, (the "Savings
Plan").
(2) Includes amounts paid under the Company's Incentive Bonus Plan.
(3) No disclosure for fiscal years 1999, 1998 and 1997 is made for Messrs.
Oldenburg, Delaplane and Johnston under Other Annual Compensation, and no
disclosure is made for Mr. Cronk for fiscal year 1999 under Other Annual
Compensation, as the aggregate incremental compensation otherwise reportable
in this column for each of these individuals is less than the smaller of
$50,000 or ten percent of the respective officer's combined salary and bonus
for such fiscal years.
(4) The amount reported for Mr. Rogers for 1999, 1998 and 1997 includes $26,000
paid each year to PricewaterhouseCoopers LLP for tax and accounting services
rendered on behalf of Mr. Rogers and $23,670, $28,291 and $23,082
respectively in 1999, 1998 and 1997 for Mr. Rogers' use of a Company
automobile. The amount reported for Mr. Cronk for both 1998 and 1997
includes $26,000 paid each year to PricewaterhouseCoopers LLP for tax and
accounting services rendered on behalf of Mr. Cronk and $26,157 and $27,298
respectively in 1998 and 1997 for Mr. Cronk's use of a Company automobile.
(5) For each Named Executive Officer, the amounts reported include contributions
by the Company of $8,000 in both 1999 and 1998 and $11,200 in 1997 to the
Dreyer's Grand Ice Cream, Inc. Money Purchase Pension Plan. For each Named
Executive Officer the amounts reported include contributions by the Company
of $8,000 in 1999, $4,000 in 1998 and $3,800 in 1997 to the Savings Plan.
Additionally, the Company paid split-dollar life insurance premiums of $97
in 1999, $374 in 1998 and $1,021 in 1997 for the benefit of Mr. Rogers.
10
<PAGE> 15
STOCK OPTIONS
The following table provides information concerning the grant of stock
options made during fiscal 1999 to the Named Executive Officers:
OPTION GRANTS IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE OR GRANT DATE
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION PRESENT
NAME GRANTED(1) FISCAL YEAR ($/PER SHARE) DATE VALUE($)(2)
---- ---------- ------------- ------------- ---------- -----------
<S> <C> <C> <C> <C> <C>
T. Gary Rogers................ 167,300 14.7% $12.38 2/23/09 $883,344
William F. Cronk, III......... 167,300 14.7 12.38 2/23/09 883,344
William R. Oldenburg.......... 55,800 4.9 12.38 2/23/09 294,624
Thomas M. Delaplane........... 55,800 4.9 12.38 2/23/09 294,624
J. Tyler Johnston............. 55,800 4.9 12.38 2/23/09 294,624
</TABLE>
- ---------------
(1) Options were granted pursuant to the Company's Stock Option Plan (1993) (the
"1993 Plan") and begin vesting two years from the date of grant as follows:
The options may be exercised only as to 40 percent of the optioned shares
after two years from the date of grant and as to an additional 20 percent
after each of the succeeding three years. The options granted under the 1993
Plan expire ten years from the date of grant, terminate within various
periods ranging from three to 24 months after the employee's termination of
employment, death or disability, and are non-transferable except by will or
the laws of descent and distribution. The exercise price of options granted
under the 1993 Plan equaled the fair market value of the shares of the
Company's Common Stock on the date of grant. In the event of a Change of
Control of the Company, all then outstanding options issued under the 1993
Plan shall vest and become immediately exercisable. The term "Change of
Control" as defined in the 1993 Plan is more completely described under the
caption "Employment Contracts, Employment Termination and Change of Control
Arrangements" on pages 13 - 14 herein.
(2) Grant date present value was calculated using the Black-Scholes option
pricing model. For the options granted, the following assumptions were used
in the Black-Scholes valuation calculation: dividend yield of 0.97 percent,
risk-free rate of return of 5.21 percent, six year expected term and an
expected volatility of 39.43 percent. The annual dividend yield equals the
quotient of the current annual dividend of $0.12 per share divided by the
per share stock price on the date of grant. The expected volatility used was
based on the monthly closing price of the Company's Common Stock over a
three-year period. The risk-free rate is the yield on a U.S. Treasury Zero
Coupon Strip Bond with a maturity equal to the expected term of the grant.
The approach used in developing the assumptions upon which the Black-Scholes
calculations were based is consistent with the requirements of Statement of
Financial Accounting Standards No. 123 "Accounting for Stock-Based
Compensation." The value calculated by use of this model should not be
viewed in any way as a forecast of the future performance of the Company's
Common Stock.
11
<PAGE> 16
The following table provides information on option exercises in fiscal 1999
by the Named Executive Officers and the value of such officers' unexercised
in-the-money options as of December 25, 1999:
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
NUMBER UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OF SHARES OPTIONS AT FY-END(#) AT FY-END($)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
T. Gary Rogers.............. 0 0 578,640 397,320 1,395,858 789,194
William F. Cronk, III....... 0 0 578,640 397,320 1,395,858 789,194
William R. Oldenburg........ 1,000 0 180,480 132,720 468,680 263,470
Thomas M. Delaplane......... 600 0 178,880 132,720 465,843 263,470
J. Tyler Johnston........... 4,000 12,113 89,848 130,462 105,968 241,551
</TABLE>
12
<PAGE> 17
PERFORMANCE GRAPH
The following graph shows the Company's cumulative total return to
stockholders compared to the Standard & Poor's 500 Index ("S&P 500 Index") and
the Standard & Poor's Foods-500 Index ("S&P Foods - 500 Index") over the
five-year period from January 1, 1995 through December 25, 1999:
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG DREYER'S GRAND ICE CREAM, INC., THE S&P 500 INDEX
AND THE S&P FOODS - 500 INDEX
<TABLE>
<CAPTION>
DREYER'S GRAND ICE CREAM,INC. S&P 500 INDEX S&P FOODS-500 INDEX
----------------------------- ------------- -------------------
<S> <C> <C> <C>
1/1/95 100.00 100.00 100.00
12/31/95 135.40 137.62 127.79
12/29/96 120.05 172.90 154.43
12/28/97 200.39 217.84 211.93
12/27/98 115.94 289.63 239.55
12/25/99 135.72 348.86 184.49
</TABLE>
- ---------------
* Assumes $100 investment on January 1, 1995, in each of Dreyer's Grand Ice
Cream, Inc., the S&P 500 Index and the S&P Foods -- 500 Index, and the
reinvestment of dividends.
EMPLOYMENT CONTRACTS, EMPLOYMENT TERMINATION AND CHANGE OF CONTROL ARRANGEMENTS
Currently, all options that have been and may in the future be issued under
the Company's Incentive Stock Option Plan (1982) (the "ISO Plan"), the Company's
Stock Option Plan (1992) (the "1992 Plan") and the Company's Stock Option Plan
(1993) (the "1993 Plan") (collectively, the "Plans") immediately vest and become
subject to exercise upon a Change of Control of the Company. A Change of Control
is defined under the Plans to include (i) the acquisition by any person of
beneficial ownership of 40 percent or more of the combined voting power of the
Company's outstanding securities immediately after such acquisition (which 40
percent 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
commencing, with respect to the ISO Plan and the 1992 Plan, on or after March 7,
1994, or, with respect to the 1993 Plan, on or after September 9, 1993, or (iii)
a change in ownership of the Company such that the Company
13
<PAGE> 18
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. Further, the acquisition by any
person (or any group of which such a person is a member) who is (with respect to
the ISO Plan and the 1992 Plan, as of March 7, 1994, or, with respect to the
1993 Plan, as of September 9, 1993) a member of the Board of Directors, of
beneficial ownership of 40 percent or more of the combined voting power of the
Company's outstanding securities immediately after such acquisition (the
calculation of such 40 percent being made as described above), shall not be
deemed a Change of Control for purposes of the Plans.
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 of Control
arrangements.
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 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 particular quantitative issues in
establishing the Chief Executive Officer's and the President's base salaries
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 did not review any
compensation surveys relating specifically to chief executive officer and
president salaries in determining the fiscal 1999 compensation of the Chief
Executive Officer and President, it has reviewed an executive compensation
survey prepared by Watson Wyatt Worldwide in determining their compensation for
fiscal 2000. The Committee believes that each of the Chief Executive Officer's
and the President's base salaries for fiscal 1999 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 indices described
under the caption "Performance Graph" on page 13 herein).
For fiscal 1999, the Committee determined that bonus compensation of the
Chief Executive Officer and the President should be based upon the Company's
profit plan earnings per share (the "Profit Plan"). Pursuant to the Committee's
determination, the Profit Plan was achieved. Therefore, a bonus equal to 50
percent of each of these officers' base salaries was awarded. In addition, since
the Profit Plan had been exceeded by more than 25 percent, an additional bonus
of 25 percent of each of these officers' base salaries was awarded. Under this
policy, a bonus of $517,485 was awarded to each of the Chief Executive Officer
and the President for fiscal 1999. The Committee believes that this policy for
awarding bonuses appropriately ties the bonuses of the Chief Executive Officer
and the President to the performance of the Company.
14
<PAGE> 19
In awarding options under the ISO Plan, the 1992 Plan and the 1993 Plan,
the Committee has adopted a policy pursuant to which (1) Messrs. Rogers and
Cronk will receive options to purchase shares of the Company's 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 to purchase the Company's Common Stock with a current market
value equal to two times the average annual base salary of vice presidents of
the Company, (3) approximately 20 executive staff members will receive options
to purchase shares of the Company's Common Stock with a current market value
equal to the average annual base salary of executive staff members, and (4)
approximately 50 management staff members will receive options to purchase
shares of the Company's Common Stock with a current market value equal to one
half the average annual base salary of management staff members. In addition,
the Committee from time to time at its discretion, grants to other employees
options to purchase 1,000 shares of the Company's Common Stock. The size of the
option grants included in the Committee's policy are competitive with a broad
general industry sampling according to a 1993 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 indices
described under the caption "Performance Graph" on page 13 herein). The stock
option grants awarded by the Committee in fiscal 1999 were consistent with the
Committee's stated policies.
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 options and may be granted under either the 1992 Plan or 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.
Options granted under the 1992 Plan vest as follows: The options granted begin
vesting two years from the date of grant and may be exercised only as to 40
percent of the optioned shares after two years from the date of grant and as to
an additional 20 percent after each of the succeeding three years. Options
granted under the 1993 Plan in connection with the Income Swap Plan vest six
months from the date of grant. Options granted under the Income Swap Plan are
exercisable for cash or by exchanging previously-acquired shares of Common Stock
of the Company. Further, any tax withholding requirement can be satisfied
through surrender of Common Stock of the Company previously acquired by the
employee. Options granted under the 1993 Plan in connection with the Income Swap
Plan may have a "reload" feature which would result in the option holder
receiving, upon the exercise of such option, 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 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.
Beginning in 1994, Section 162(m) of the Internal Revenue Code limits the
deductibility of compensation in excess of one million dollars paid to the
Company's chief executive officer and to any of its four other highest paid
executive officers. However, certain performance based compensation is
specifically exempt from the limitation on deductibility. Stock options granted
under the Company's stock option plans are an example of exempt
performance-based compensation. To date, no employee of the Company has been
paid compensation in excess of one million dollars (as defined in Section
162(m)) that would be subject to the Section 162(m) limitation. While the tax
impact of any compensation arrangement is one factor to be considered, such
impact is evaluated in light of the Committee's overall compensation philosophy.
The Committee's general intention is to establish executive officer compensation
programs which will maximize the deductibility of compensation paid by the
Company, if the Committee determines that such actions are consistent with its
philosophy and in the best interests of the Company and its stockholders.
However, from time to time the Committee may award compensation which is not
fully deductible if the Committee determines that such award is consistent with
its philosophy and in the best interests of the Company and its stockholders.
15
<PAGE> 20
The Committee notes that, generally, options granted to executive officers
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
FOR FISCAL YEAR 1999
Edmund R. Manwell, Chairman
Jan L. Booth
Robert A. Helman
M. Steven Langman
John W. Larson
Jack O. Peiffer
Timothy P. Smucker
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.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In June 1993, the Company issued in a private placement to General Electric
Capital Corporation, Trustees of General Electric Pension Trust and GE
Investment Private Placement Partners I, Limited Partnership (each individually,
a "Holder"), pursuant to a Securities Purchase Agreement (the "GE Agreement"),
an aggregate of $100,752,000 of 6.25 percent convertible subordinated debentures
of the Company due June 30, 2001. In August 1995, the Company caused the
conversion of the debentures into Series B Convertible Preferred Stock ($1.00
par value) of the Company. The Series B Convertible Preferred Stock was
converted on October 3, 1997 into a total of 1,007,522 shares of Series A
Convertible Preferred Stock, redeemable on June 30, 2001. The shares of Series A
Convertible Preferred Stock are convertible at an initial conversion price of
$17.37 per share into a total of 5,800,000 shares of Common Stock of the
Company, subject to adjustment.
Jack O. Peiffer was named to the Board of Directors of the Company pursuant
to a provision of the GE Agreement that allows a designated Holder to select one
nominee to the Board of Directors. Mr. Peiffer served as Senior Vice
President -- Corporate Human Resources of General Electric Company ("GEC") until
his retirement in January 1994. GEC is an affiliate of the Holders.
On June 14, 1994 the Company completed a transaction with Nestle Holdings,
Inc. ("NHI") pursuant to a Stock and Warrant Purchase Agreement dated as of May
6, 1994, and amended June 14, 1994 (the "Nestle Agreement") whereby NHI
purchased from the Company, for an aggregate price of $106,000,000, six million
shares of Common Stock of the Company and warrants for the purchase of four
million shares of Common Stock of the Company. Warrants for two million shares
expired unexercised on June 14, 1997 and warrants for the remaining two million
shares expired unexercised on June 14, 1999. NHI agreed that neither it nor its
affiliates will acquire in the aggregate 35 percent or more of the outstanding
Common Stock of the Company (including for purposes of this calculation
outstanding stock options and other securities convertible into, or entitling
the holder thereof to acquire Common Stock, hereafter "Voting Stock") without
the prior consent of the Company's Board of Directors, subject to certain
limited exceptions, for a period of ten years. The Nestle Agreement also
provides that the Company will recommend and use the same efforts as are used to
cause the elections of all other nominees to the Board of Directors of the
Company to cause the election to the Board of two nominees selected by NHI.
Thereafter, throughout the term of the Nestle Agreement, NHI may nominate that
number of nominees proportionate to the amount of Voting Stock owned by NHI and
its affiliates. NHI and its affiliates have certain rights to purchase
additional shares of Common Stock in open market transactions in the event their
aggregate equity ownership in the Company is diluted to certain levels.
16
<PAGE> 21
M. Steven Langman and Robert A. Helman were named to the Board of Directors
of the Company pursuant to the terms of the Nestle Agreement. Mr. Langman was
appointed by NHI in March 1997 to replace Anthony J. Martino, who resigned as a
director of the Company effective December 31, 1996. From time to time, Mr.
Langman in his position as Managing Director of Rhone Group LLC, provides
financial advisory and investment banking services to NHI and its affiliates.
Mr. Helman was appointed by NHI in March 1998 to replace Timm Crull, who
resigned as a director of the Company effective December 31, 1997.
During fiscal 1999, Edmund R. Manwell was the Secretary of the Company and
a partner in the law firm of Manwell & Milton, counsel to the Company. The
Company paid Manwell & Milton $699,850 in fees during fiscal 1999 for services
rendered as 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 that, in other corporations, are
performed by the corporate secretary.
OTHER RELATIONSHIPS
On June 14, 1994, the Company entered into an agreement with Nestle Ice
Cream Company ("NICC"), an affiliate of Nestle Holdings, Inc., to distribute in
certain markets frozen novelty and ice cream products manufactured by or for
NICC (the "NICC Products"). The Company purchases the NICC Products in the
ordinary course of business and at prices consistent with those offered to other
distributors.
Timothy P. Smucker was appointed as a director of the Company on March 4,
1997. Mr. Smucker is Chairman of The J.M. Smucker Company ("JMS"), a supplier
for the Company of certain raw materials used in production of the Company's
products. The Company purchases raw materials from JMS in the ordinary course of
business and at prices consistent with those offered by other suppliers. The
Company also has an agreement with JMS to produce one of the Company's products
in accordance with specifications and quality control provided by the Company.
The Company compensates JMS for such manufacturing services at prices consistent
with those offered by other manufacturers who provide such services.
During fiscal 1998, the Company loaned to Thomas M. Delaplane, Vice
President -- Sales of the Company, an aggregate principal amount of $281,000
pursuant to two separate Secured Promissory Notes ("Notes"). The Notes bear
interest at the annual rate of 6.50 percent and are payable in full on the
earliest to occur of (i) the date of the sale or other disposition of Mr.
Delaplane's primary residence, (ii) the date of Mr. Delaplane's termination of
employment with the Company for any reason or (iii) two years from the date of
the Notes. Mr. Delaplane's obligations under the Notes are secured by 30,000
shares of the Company's Common Stock held in the name of the Delaplane Family
Trust. As of December 25, 1999, the outstanding principal amount of the Notes
was $281,000 and accrued and unpaid interest on the Notes was $19,917.
Any other business relationships existing between any of the nominees or
continuing directors and the Company, or between the Company and any of the
beneficial owners identified under the caption "Security Ownership of Certain
Beneficial Owners" on page 6 herein are described under the caption
"Compensation Committee Interlocks and Insider Participation" on pages 16 - 17
herein.
MATTERS SUBMITTED TO A VOTE OF STOCKHOLDERS
ELECTION OF DIRECTORS
The directors of Class III will be elected at the 2000 Annual Meeting of
Stockholders and will hold office until the 2003 Annual Meeting of Stockholders
or until their successors are elected and qualified. The nominees for directors
of Class III, T. Gary Rogers, William F. Cronk, III and M. Steven Langman,
constitute Class III of the Board of Directors with each of their terms expiring
as of the date of this Annual Meeting. Information regarding the Board of
Directors of the Company, including the business experience of the nominees for
directors of Class III, is set out under the caption "Board of Directors" on
page 3 herein. No family relationship exists between any nominee and any of the
other directors. Any business relationship existing between any of the nominees
or continuing directors and the Company are described under the
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captions "Compensation Committee Interlocks and Insider Participation" and
"Other Relationships" on pages 16-17 herein.
Unless otherwise directed, the persons named in the enclosed form of proxy
will vote such proxy for the election of T. Gary Rogers, William F. Cronk, III,
and M. Steven Langman, each of whom has consented to be named as a director of
the Company and to serve if elected. In case any of Messrs. Rogers, Cronk or
Langman 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.
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
PricewaterhouseCoopers LLP has been appointed to be the Company's
independent public accountants for the fiscal year ending December 30, 2000, and
were the independent public accountants for the Company during the fiscal year
ended December 25, 1999.
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 PricewaterhouseCoopers LLP to
determine whether the rendering of such services would impair the independence
of PricewaterhouseCoopers LLP. 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 PricewaterhouseCoopers LLP 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.
THE BOARD OF DIRECTORS RECOMMENDS THE APPROVAL OF PRICEWATERHOUSECOOPERS
LLP AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS FOR THE 2000 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 all the director nominees named herein, or (ii) withhold
authority to vote for the director nominees or (iii) vote for the election of
any of such director nominee(s) and against any of the other director nominee(s)
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. 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.
Abstentions and broker non-votes are each included in the determination of
the number of shares present for quorum purposes. Abstentions are counted in
tabulations of votes cast on proposals presented to stockholders. While not
counted as votes for or against a proposal, abstentions have the same effect as
votes against a proposal. Broker non-votes will be considered as shares not
entitled to vote and will therefore not be considered in the tabulation of the
votes. 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, including the shares of Common Stock into which the outstanding shares
of Series A Convertible Preferred Stock are convertible on the record date for
the meeting.
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<PAGE> 23
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, including the
shares of Common Stock into which the outstanding shares of Series A Convertible
Preferred Stock are convertible on the record date for the meeting.
Approval of PricewaterhouseCoopers LLP as independent public accountants:
Majority of the shares of Common Stock present in person or by proxy and
entitled to vote at the meeting, including the shares of Common Stock into which
the outstanding shares of Series A Convertible Preferred Stock are convertible
on the record date for the meeting.
PROPOSALS OF STOCKHOLDERS
The 2001 Annual Meeting of Stockholders will be held on or about May 9,
2001. The deadline for submission of proposals by stockholders pursuant to Rule
14a-8 issued under the Securities Exchange Act of 1934 (the "Act"), which are
intended for inclusion in the proxy statement to be furnished to all
stockholders entitled to vote at the 2001 Annual Meeting of Stockholders of the
Company, is December 8, 2000. The deadline for providing timely notice to the
Company of matters that stockholders desire to introduce at the next Annual
Meeting of Stockholders of the Company (which are not otherwise submitted for
inclusion in the proxy statement in accordance with the preceding sentence) is
February 21, 2001. Board of Directors' proxies will be authorized to exercise
discretionary authority with respect to any such stockholder proposal not
included in the Company's proxy materials for the 2001 Annual Meeting of
Stockholders unless the Company receives notice of such proposal prior to
February 21, 2001 and the conditions set forth in Rule 14a-4(c)(2)(i) - (iii)
under the Act are met. In order to curtail any controversy as to the date on
which a proposal was received by the Company, it is suggested that proposals be
submitted by Certified Mail, Return Receipt Requested, addressed to the
Secretary of Dreyer's Grand Ice Cream, Inc., 5929 College Avenue, Oakland CA
94618.
OTHER MATTERS
The Company 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
Oakland, California
April 7, 2000
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<PAGE> 24
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
(LOGO)printed on recycled paper
<PAGE> 25
PROXY
DREYER'S GRAND ICE CREAM, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE 2000
ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints R. Gary Rogers, William F. Cronk, III and
Edmund R. Manwell, or any 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 the Claremont Resort Hotel, Ashby and Domingo
Avenues, Oakland, California 94623 at 2:00 p.m. on Wednesday, May 10, 2000, and
at any postponements or adjournments thereof, upon the following matters:
(CONTINUED, AND TO BE SIGNED, ON REVERSE SIDE.)
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DREYER'S LOGO
<PAGE> 26
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FOR ALL WITHHOLD
FOR ALL nominees AUTHORITY
nominees except as to vote for
listed crossed out nominees listed
below below below
1. The election of three Class III directors. [ ] [ ] [ ] 3. With discretionary authority on such
Instruction: To withhold authority for matters as may properly come before
any individual nominee, cross out the the meeting.
nominee's name in the list below:
THE SHARES COVERED BY THIS PROXY WILL BE
T. Gary Rogers William F. Cronk, III M. Steven Langman VOTED IN ACCORDANCE WITH THE CHOICES
MADE. WHEN NO CHOICE IS MADE, THIS PROXY
FOR AGAINST ABSTAIN WILL BE VOTED FOR THE LISTED NOMINEES
2. The approval of PricewaterhouseCoopers LLP [ ] [ ] [ ] FOR DIRECTOR AND FOR PROPOSAL 2.
as the Company's independent public
accountants for fiscal year 2000. The 2000 Annual Meeting of Stockholders
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.
Signature(s) ____________________________________________________________________________ Dated ___________________, 2000.
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.
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</TABLE>
