<PAGE>
INTERNATIONAL DAIRY QUEEN, INC. CLASS A COMMON STOCK
PROXY FOR CLASS A COMMON STOCK
SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS
MARCH 9, 1994
The undersigned stockholder of International Dairy Queen, Inc. (the
"Company"), hereby appoints John W. Mooty and Michael P. Sullivan or either of
them, as attorneys, agents and proxies of the undersigned with full power of
substitution in each of them, to vote, in the name and on behalf of the
undersigned at the Annual Meeting of Stockholders of the Company to be held on
March 9, 1994, at 10:00 a.m., in the General Offices of the Company, 7505 Metro
Boulevard, Minneapolis, Minnesota, and at all adjournments thereof, all of the
shares of Class A Common Stock of the Company which the undersigned would be
entitled to vote if personally present, with all powers the undersigned would
possess if personally present.
<TABLE>
<C> <S> <C>
I. / / Grant authority to vote for the election of the following
/ / Withhold persons to serve as directors (the Board recommends
that you GRANT this authority):
M. Sullivan F. Heit
</TABLE>
YOU MAY WITHHOLD AUTHORITY TO VOTE FOR A NOMINEE BY LINING THROUGH THE
NOMINEE'S NAME ON THE ABOVE LIST
all as set out in the Notice of Annual Meeting of Stockholders and Proxy
Statement dated February 8, 1994, receipt of which is hereby acknowledged.
(CONTINUED, AND TO BE SIGNED, ON OTHER SIDE)
<PAGE>
(CONTINUED FROM OTHER SIDE)
ALL SHARES WILL BE VOTED AS SPECIFIED. IF NO CHOICE IS SPECIFIED, THE SHARES
WILL BE VOTED FOR THE NOMINEES.
Either of said attorneys or their substitutes who shall be present and act,
or if only one shall attend, then that one, shall have and may exercise all the
powers of said attorneys hereunder.
Dated: , 1994.
----------------------------------
----------------------------------
(Signature)
----------------------------------
(Joint Owner's Signature)
When signing as attorney,
guardian, executor, administrator
or trustee, please give title. If
the signer is a corporation,
please give the full corporate
name, and sign by a duly
authorized officer, showing the
officer's title. EACH joint owner
is required to sign.
PLEASE EXECUTE AND RETURN THIS PROXY PROMPTLY, YOUR COOPERATION WILL BE
APPRECIATED
<PAGE>
INTERNATIONAL DAIRY QUEEN, INC. CLASS B COMMON STOCK
PROXY FOR CLASS B COMMON STOCK
SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS
MARCH 9, 1994
The undersigned stockholder of International Dairy Queen, Inc. (the
"Company"), hereby appoints John W. Mooty and Michael P. Sullivan or either of
them, as attorneys, agents and proxies of the undersigned with full power of
substitution in each of them, to vote, in the name and on behalf of the
undersigned at the Annual Meeting of Stockholders of the Company to be held on
March 9, 1994, at 10:00 a.m., in the General Offices of the Company, 7505 Metro
Boulevard, Minneapolis, Minnesota, and at all adjournments thereof, all of the
shares of Class B Common Stock of the Company which the undersigned would be
entitled to vote if personally present, with all powers the undersigned would
possess if personally present.
<TABLE>
<C> <S> <C>
I. / / Grant authority to vote for the election of
/ / Withhold the following persons to serve as
directors (the Board recommends that you
GRANT this authority):
E. Dorn R. Luther J.W. Mooty R. Giertsen
R. Mithun R. Schweigert J.N. Mooty
</TABLE>
YOU MAY WITHHOLD AUTHORITY TO VOTE FOR A NOMINEE BY LINING THROUGH THE NOMINEE'S
NAME ON THE ABOVE LIST
<TABLE>
<C> <S> <C>
II. / / For approving the appointment of Ernst &
/ / Against Young by the Board of Directors as the
/ / Abstain independent auditors of the Company for
the fiscal year ending November 30, 1994
(the Board of Directors recommends you
vote FOR this proposal).
</TABLE>
(CONTINUED, AND TO BE SIGNED, ON OTHER SIDE)
<PAGE>
(CONTINUED FROM OTHER SIDE)
<TABLE>
<C> <S> <C>
III. / / Grant authority to vote, in their discretion,
/ / Withhold upon such other business as may properly
come before the meeting (the Board of
Directors recommends that you GRANT this
authority).
</TABLE>
all as set out in the Notice of Annual Meeting of Stockholders and Proxy
Statement dated February 8, 1994, receipt of which is hereby acknowledged.
ALL SHARES WILL BE VOTED AS SPECIFIED. IF NO CHOICE IS SPECIFIED, THE SHARES
WILL BE VOTED FOR THE NOMINEES, TO APPROVE THE APPOINTMENT OF ERNST & YOUNG AND
IN ACCORDANCE WITH THE PROXIES' DISCRETION IN CONNECTION WITH SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
Either of said attorneys or their substitutes who shall be present and act,
or if only one shall attend, then that one, shall have and may exercise all the
powers of said attorneys hereunder.
Dated: , 1994.
-----------------------------------
-----------------------------------
(Signature)
-----------------------------------
(Joint Owner's Signature)
When signing as attorney, guardian,
executor, administrator or trustee,
please give title. If the signer is
a corporation, please give the full
corporate name, and sign by a duly
authorized officer, showing the
officer's title. EACH joint owner
is required to sign.
PLEASE EXECUTE AND RETURN THIS PROXY PROMPTLY, YOUR COOPERATION WILL BE
APPRECIATED
<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
OF
INTERNATIONAL DAIRY QUEEN, INC.
To the Stockholders of International Dairy Queen, Inc.:
PLEASE TAKE NOTICE that the Annual Meeting of Stockholders of International
Dairy Queen, Inc. will be held on Wednesday, March 9, 1994, at 10:00 a.m. in the
General Offices of the Company at 7505 Metro Boulevard, Minneapolis, Minnesota,
to consider and act upon the following matters:
I. To elect directors for the ensuing year.
II. To consider and act upon the matter of ratifying the appointment of
Ernst & Young as the independent auditors of the Company for the fiscal
year ending November 30, 1994.
III. To transact such other business as may properly come before the
meeting.
In accordance with Delaware law, a list of the Company's stockholders
entitled to vote at the meeting will be available for examination at the General
Offices of the Company for ten business days prior to the meeting, between the
hours of 9:00 a.m. and 5:00 p.m. Minneapolis time, and at the meeting, during
the whole time thereof.
Accompanying this notice is a Proxy and Proxy Statement and a copy of the
Company's Annual Report for the year ended November 30, 1993. Whether or not you
expect to be present at the meeting, please sign and date the Proxy and return
it in the enclosed envelope provided for that purpose. The Proxy may be revoked
at any time prior to the time that it is voted. Only stockholders of record at
the close of business on January 21, 1994, will be entitled to vote at the
meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Michael P. Sullivan
President
February 8, 1994
<PAGE>
PROXY STATEMENT
INTERNATIONAL DAIRY QUEEN, INC.
7505 METRO BOULEVARD
MINNEAPOLIS, MINNESOTA 55439
ANNUAL MEETING OF STOCKHOLDERS -- MARCH 9, 1994
GENERAL
The enclosed Proxy is solicited by the Board of Directors of International
Dairy Queen, Inc. (the "Company"). Such solicitation is being made by mail and
may also be made by directors, officers and employees of the Company. Any Proxy
given pursuant to such solicitation may be revoked by the stockholder at any
time prior to the voting thereof by so notifying the Company in writing at the
above address, attention: David M. Bond, Secretary, or by appearing in person at
the meeting. Shares represented by Proxies will be voted as specified in such
Proxies. In the absence of specific instructions, Proxies received by the Board
of Directors will be voted (to the extent they are entitled to be voted on such
matters): (1) in favor of the nominees for directors named in this Proxy
Statement; (2) for the ratification of the appointment of Ernst & Young as the
independent auditors of the Company; and (3) in the Proxies' discretion upon
such other business as may properly come before the meeting.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the election inspectors appointed for the meeting and will determine whether or
not a quorum is present. The election inspectors will treat abstentions as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum but as unvoted for purposes of determining the approval of
any matter submitted to the stockholders for a vote. If a broker indicates on
the proxy that it does not have discretionary authority as to certain shares to
vote on a particular matter, those shares will not be considered as present and
entitled to vote with respect to that matter.
All of the expenses involved in preparing, assembling and mailing this Proxy
Statement and the material enclosed herewith will be paid by the Company. The
Company may reimburse banks, brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy material
to beneficial owners of stock. This Proxy Statement is being mailed to
stockholders on or about February 9, 1994.
PROPOSALS OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the Company's 1995
Annual Meeting of Stockholders should be received by the President of the
Company at the above address no later than November 11, 1994, in order to be
included in the Company's Proxy Statement and form of Proxy relating to that
meeting.
OUTSTANDING STOCK
Class A Common Stock, $.01 par value ("Class A Common Stock"), of which
there were 15,534,049 shares outstanding on the record date, and Class B Common
Stock, $.01 par value ("Class B Common Stock"), of which there were 9,024,448
shares outstanding on the record date, constitute the only classes of
outstanding voting securities issued by the Company. Each holder of Class A
Common Stock will be entitled to cast one vote in person or by proxy for each
share of Class A Common Stock held for the election of directors to be elected
by the holders of the Class A Common Stock. Each holder of Class B Common Stock
will be entitled to cast one vote in person or by proxy for
1
<PAGE>
each share of Class B Common Stock held for the election of the directors to be
elected by the holders of the Class B Common Stock and for all other matters
voted on at the meeting. Only stockholders of record at the close of business on
January 21, 1994, will be entitled to vote at the meeting.
Information as to the name, address and stock holdings of each person known
by the Company to be the beneficial owner of more than 5% of its Class A Common
Stock or Class B Common Stock and as to name and the stock holdings of each
director and nominee for election to the Board of Directors and by all officers
and directors, as a group, as of January 21, 1994, is set forth below. Except as
indicated below, the Company believes that each of such persons has the sole (or
joint with spouse) voting and investment powers with respect to such shares.
<TABLE>
<CAPTION>
CLASS A COMMON STOCK CLASS B COMMON STOCK
--------------------------- --------------------------------
AMOUNT PERCENT AMOUNT PERCENT
BENEFICIALLY OF BENEFICIALLY OF
STOCKHOLDER/DIRECTOR OWNED CLASS OWNED CLASS
- -------------------------------------------------- ------------ --------- --------------- ---------
<S> <C> <C> <C> <C>
Rudy Luther 1,579,292 10.1% 1,631,850 18.0%
5353 Wayzata Blvd.
Minneapolis, MN 55416
Nicholas Company, Inc. (1) 2,707,600(1) 17.4% 974,400 10.8%
700 North Water Street
Milwaukee, WI 53202
John W. Mooty 573,541(2) 3.7% 873,614(2) 9.7%
33 South Sixth Street
Suite 3400
Minneapolis, MN 55402
Gilbert Stein 220,882(3) 1.4% 845,760(3) 9.3%
4 Bay Ridge
Springfield, IL 62707
Rudy Luther Trusts for Children 100,800 0.6% 550,000 6.1%
7505 Metro Boulevard
Minneapolis, MN 55439
Dean Witter InterCapital Inc. 940,300(4) 6.0% None --
130 Liberty Street
29th Floor
New York, NY 10006
Jane N. Mooty 63,037(5) 0.4% 585,336(5) 6.5%
7505 Metro Boulevard
Minneapolis, MN 55439
Ernest F. Dorn None -- None --
Richard I. Giertsen 37,994 0.2% 134,905(6) 1.5%
Frank L. Heit 16,230(7) 0.1% 3,000 --
Raymond Mithun None -- None --
Raymond C. Schweigert 17,694 0.1% 11,796 0.1%
Michael P. Sullivan 42,196(8) 0.3% 41,880(8) 0.5%
All officers and directors 3,075,633(9) 19.5% 4,109,663(9) 45.4%
as a group (23 persons)
<FN>
- ------------------------
(1) The Nicholas Company, Inc. is an investment advisor. Based on information
provided by the Nicholas Company, funds managed by it hold sole voting
power with respect to these shares.
(2) Does not include securities shown opposite Mrs. Mooty's name.
(3) Includes shares owned by Capitol Dairy Queen, Inc. and Illinois Dairy
Queen, Inc.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
(4) Based on information provided by Dean Witter InterCapital Inc.
(5) Does not include securities shown opposite Mr. Mooty's name.
(6) Includes 25,645 shares owned by a trust of which Mr. Giertsen is a
co-trustee.
(7) Includes 16,230 shares subject to options to acquire shares of the
Company's Class A Common Stock which are exercisable within 60 days of the
date of this Proxy Statement.
(8) Does not include shares owned by the Rudy Luther Trusts for Children, the
trustee of which is Mr. Sullivan. Includes 18,850 shares subject to
options to acquire shares of the Company's Class A Common Stock which are
exercisable within 60 days of the date of this Proxy Statement.
(9) Includes shares owned by the Rudy Luther Trusts for Children. Includes
206,867 shares subject to options to acquire shares of the Company's Class
A Common Stock which are exercisable within 60 days of the date of this
Proxy Statement.
</TABLE>
ELECTION OF DIRECTORS
The Company's by-laws provide that the size of the Board of Directors shall
be not less than five nor more than fifteen directors. The Proxies granted by
the holders of Class A Common Stock will be voted at the meeting for the
election of the two persons listed below as Class A Nominees as directors of the
Company. The Proxies granted by the holders of Class B Common Stock will be
voted at the meeting for the election of the seven persons listed below as Class
B Nominees as directors of the Company. All of the following persons were
elected as directors at the Annual Meeting of Stockholders on March 12, 1993, to
hold office until the next Annual Meeting of Stockholders and thereafter until
their successors have been duly elected and qualified. In the event that one or
more of the below named persons shall unexpectedly become unavailable for
election (the Company has no knowledge of any such unavailability), votes will
be cast pursuant to authority granted by the enclosed Proxy for such person or
persons as may be designated by the Board of Directors, unless the Board
determines to reduce its size appropriately. In no event will the proxies
granted by stockholders be voted for more than two Class A Nominees or seven
Class B Nominees.
<TABLE>
<CAPTION>
NAME, AGE AND DIRECTOR
POSITIONS WITH THE COMPANY SINCE PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
- ---------------------------------------- --------- -----------------------------------------------------------
<S> <C> <C>
CLASS A NOMINEES:
*Michael P. Sullivan -- 59 1984 President of the Company since November 30, 1987. Mr.
President and Chief Executive Officer Sullivan is a director of Valspar Corporation.
of the Company and a Director
Frank L. Heit -- 57 1992 Private Investor. Mr. Heit retired from his position as
Director Executive Vice President and Treasurer of the Company in
January 1994. Mr. Heit had held this position for more than
five years.
CLASS B NOMINEES:
*John W. Mooty -- 71 1970 Member of the Minneapolis law firm of Gray, Plant, Mooty,
Chairman of the Board of Directors Mooty & Bennett, P.A. for more than the last five years.
and Executive Committee
Ernest F. Dorn -- 86 1970 Chairman of the Board of Directors of Community Credit Co.
Director for more than the last five years.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE AND DIRECTOR
POSITIONS WITH THE COMPANY SINCE PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
- ---------------------------------------- --------- -----------------------------------------------------------
<S> <C> <C>
Richard I. Giertsen -- 48 1993 General Manager of Giertsen Company, a construction
Director company, for more than five years; Vice President of Nebco
Evans, Inc., a food distribution company, since December
1990; President of LL Distribution Systems, Inc., a food
distribution company, from February 1976 to December 1990;
and Secretary/Treasurer of MIRI Enterprises, Inc. a fast
food restaurant, for more than five years.
*Rudy Luther -- 76 1970 President of Hansord Pontiac Company, an automobile dealer,
Director for more than the last five years.
Raymond Mithun -- 84 1970 Private investor for more than the last five years.
Director
Jane N. Mooty -- 72 1970 Private investor for more than the last five years.
Director
Raymond C. Schweigert -- 81 1970 Private investor for more than the last five years.
Director
<FN>
- ------------------------
* Member of the Executive Committee of the Board of Directors.
</TABLE>
Jane N. Mooty is the wife of John W. Mooty. There is no other family
relationship between any of the persons listed above. Board members are paid
$1,000 per board meeting attended.
During fiscal 1993, the Board of Directors of the Company met six times and
the Executive Committee of the Board of Directors met four times. During this
period all directors attended at least 75% of the meetings of the Board of
Directors and all committees of the Board of Directors on which they served. The
Board of Directors does not have a nominating committee.
Messrs. Luther and Mooty serve on the Board of Director's Compensation
Committee. The Compensation Committee met twice during fiscal 1993.
Messrs. Dorn, Giertsen and Schweigert are members of the Board of Directors'
Audit Committee. This committee met twice during fiscal 1993 to review the
results for the 1992 audit and the plan for the 1993 audit. The functions of the
Audit Committee include recommending to the Board of Directors, subject to
stockholder approval, the independent auditors; reviewing and approving the
results of the annual audit; and instructing the auditors, as deemed
appropriate, to undertake special assignments.
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE CHARTER. The purpose of the Compensation Committee
of the Board of Directors is to oversee compensation of officers, key employees,
and directors of the Company. The Committee's policy is to insure that
compensation programs contribute directly to the success of the Company. The
Committee comprises two members of the Board of Directors, neither of whom is an
employee of the Company.
EXECUTIVE COMPENSATION POLICIES AND PROGRAMS. The Company's executive
compensation programs are designed to attract and retain qualified executives.
There are three basic components to the Company's executive compensation
program: base pay, annual incentive bonus, and long-term,
4
<PAGE>
equity-based incentive compensation in the form of stock options. Each component
is established in light of individual and Company performance, compensation
levels generally in the Minneapolis/St. Paul metropolitan area, equity among
employees, and cost effectiveness.
BASE PAY. Base pay is designed to be competitive, although conservative
as compared to salary levels for equivalent positions at comparable
companies in the Minneapolis/St. Paul metropolitan area. The executive's
actual salary within this competitive framework depends on the individual's
performance, responsibilities, experience, leadership, and potential future
contribution.
ANNUAL INCENTIVE BONUS. In addition to base pay, each executive is
eligible to receive an annual cash bonus. For fiscal 1993 the bonus was
based on the Company's and the individual's performance in comparison to a
plan established at the beginning of the year. In its evaluation of
executive officers and the determination of discretionary bonuses, the
Committee makes a judgment after considering the factors it deems relevant,
which may include consequences for performance that is below expectations.
The initial recommendation with respect to all executive officers other than
the President, is made by the President.
LONG-TERM, EQUITY-BASED INCENTIVE COMPENSATION. The long-term,
equity-based compensation program is tied directly to stockholder return.
Under the current program, long-term incentive compensation consists of
stock options that generally do not fully vest until after five years. Stock
options are awarded with an exercise price equal to the fair market value of
the Company's Common Stock on the date of grant. Accordingly, the executive
is rewarded only if the stockholders receive the benefit of appreciation in
the price of the Common Stock.
Because long-term options vest over time, the Company periodically
(generally once each year) grants new options to provide continuing
incentives for future performance. The size of previous grants and the
number of options held are considered by the Committee, but are not entirely
determinative of future grants. Like the annual bonus, each executive's
actual grants are based upon performance measured against the criteria
described in the preceding paragraphs.
ANNUAL REVIEWS. Each year the Committee reviews its executive compensation
policies and programs and determines what changes, if any, are appropriate for
the following year. In addition, the Committee reviews the performance of the
President.
CHIEF EXECUTIVE OFFICER. The President and Chief Executive Officer's
compensation is established by the Committee based on a subjective consideration
of his performance and the extent to which the Company achieves its strategic
and economic goals established at the beginning of the year, his current level
of compensation in comparison with the level of compensation paid the Chief
Executive Officers of the largest 100 companies in the Minneapolis/St. Paul
metropolitan area and, with respect to grants of additional stock options, the
number of shares of the Company's Common Stock and options he currently owns.
The Committee also considers the President's level of compensation as it relates
to other executive officers of the Company and to the Company's employees in
general.
The foregoing report is submitted by Rudy Luther and John Mooty, members of
the Compensation Committee.
5
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and non-cash compensation awarded to
or earned by the Chief Executive Officer of the Company and the four other
highest paid executive officers for fiscal 1993, all of whom were executive
officers at the end of the fiscal year (the "Named Executive Officers").
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
FISCAL ------------------------ -------------
NAME YEAR SALARY BONUS OPTIONS (#)
- -------------------------------- --------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Michael P. Sullivan, 1993 $ 324,000 $ 100,000 14,000 shs.
President and Chief 1992 314,250 103,000 15,750 shs.
Executive Officer 1991 300,000 90,000 9,000 shs.
Edward A. Watson, 1993 166,157 45,000 12,000 shs.
Executive Vice 1992 159,357 42,000 11,550 shs.
President -- Operations 1991 152,131 36,000 6,600 shs.
Mark S. Broin, 1993 147,254 9,029 9,000 shs.
Vice President 1992 141,351 9,733 7,875 shs.
Information Services 1991 135,248 8,070 4,500 shs.
Frank L. Heit, 1993 114,166 41,000 6,000 shs.
Executive Vice 1992 124,393 42,000 11,550 shs.
President and 1991 190,004 66,000 6,600 shs.
Treasurer*
Gary H. See, 1993 142,747 9,898 9,000 shs.
Vice President 1992 136,847 9,445 10,500 shs.
Marketing and 1991 130,938 7,611 6,000 shs.
Consumer Research
<FN>
- ------------------------
* Mr. Heit retired from his position as Executive Vice President and Treasurer
in January 1994.
</TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth for the Named Executive Officers the stock
options granted by the Company in fiscal 1993 and the potential value of these
stock options determined pursuant to Securities and Exchange Commission
requirements.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
INDIVIDUAL GRANTS (1) ANNUAL RATES OF
- ---------------------------------------------------------------------------- STOCK PRICE
PERCENT OF TOTAL EXERCISE APPRECIATION FOR
OPTIONS GRANTED OR BASE OPTION TERM
OPTIONS TO EMPLOYEES IN PRICE EXPIRATION ----------------------
NAME GRANTED FISCAL YEAR ($/SH) DATE 5%($) (2) 10%($) (2)
- ---------------------- --------- ----------------- ---------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Michael P. Sullivan 14,000 5.6% $ 17.50 3/17/00 $ 99,740 $ 232,436
Edward A. Watson 12,000 4.8% 17.50 3/17/00 85,491 199,231
Mark S. Broin 9,000 3.6% 17.50 3/17/00 64,118 149,423
Frank L. Heit 6,000 2.4% 17.50 3/17/00 42,746 99,615
Gary H. See 9,000 3.6% 17.50 3/17/00 64,118 149,423
<FN>
- ------------------------
(1) All stock options granted have an exercise price equal to the fair market
value on the date of grant.
(2) The hypothetical potential appreciation shown in these columns reflects
the required calculations at annual rates of 5% and 10% set by the
Securities and Exchange Commission and therefore is not intended to
represent either historical appreciation or anticipated future
appreciation of the Company's Common Stock price.
</TABLE>
6
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth for the Named Executive Officers the value
realized from stock options exercised during fiscal 1993 and the number and
value of exercisable and unexercisable stock options held at November 30, 1993.
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONS OPTIONS
ACQUIRED ON --------------- ----------------
EXERCISE EXERCISABLE/ EXERCISABLE/
(#) UNEXERCISABLE UNEXERCISABLE
-------------- --------------- ----------------
<S> <C> <C> <C>
Michael P. Sullivan None 9,450/35,900 $8,154/$3,468
Edward A. Watson None 8,250/28,500 7,854/ 3,168
Mark S. Broin None 5,625/20,250 5,356/ 2,159
Frank L. Heit None 8,250/22,500 7,854/ 3,168
Gary H. See None 7,500/24,000 7,140/ 2,880
</TABLE>
CERTAIN TRANSACTIONS
During fiscal 1993, the Company leased cars from a company owned by Rudy
Luther, a director of the Company, and in connection therewith paid to such
company $811,484. During fiscal 1993, the Company utilized the services of a
travel agency owned by Mr. Luther. The agency primarily is compensated for such
services by airlines, hotels and others with which the agency makes travel
arrangements for the Company. The Company believes that the lease payments for
the cars and the services provided by the travel agency were as favorable as
could have been obtained from nonaffiliated companies.
During fiscal 1993, the Company paid the law firm of Gray, Plant, Mooty,
Mooty & Bennett, P.A., of which firm John W. Mooty, the Chairman of the Board of
Directors and Executive Committee of the Company, is a member, $1,610,301 for
legal services.
7
<PAGE>
STOCKHOLDER RETURN COMPARISON
Shown below is a line graph comparing the yearly dollar change in the
cumulative total stockholder return on the Company's Common Stock as against the
cumulative total return of the NASDAQ Total Return Index and a "Peer" group of
companies selected by the Company for the period November 30, 1988 through
November 30, 1993. The graph and table assume the investment of $100 on November
30, 1988 in each of the Company's Common Stock, the NASDAQ Total Return Index,
and the Peer Group.
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
----------------------------------------
11/88 11/89 11/90 11/91 11/92 11/93
----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
INTERNATIONAL DAIRY QUEEN INDQA 100 140 158 168 168 158
PEER GROUP PPEER1 100 133 101 166 224 237
NASDAQ STOCK MRKT --US INAS 100 125 102 152 191 220
</TABLE>
- ------------------------
(1) The Peer Group, each of which companies is engaged to varying degrees in the
franchising of restaurants, includes the following: Carl Karcher
Enterprises, Inc., Checkers Drive-In Restaurants, Rally's Hamburgers Inc.,
Sbarro Inc., Sonic Corp., TCBY Enterprises Inc. and Wendys International
Inc.
8
<PAGE>
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
directors and executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. Officers,
directors and greater than ten-percent stockholders are also required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and representations that no other reports were
required, during the fiscal year ended November 30, 1993, all Section 16(a)
filing requirements applicable to its officers, directors and greater than
ten-percent beneficial owners were complied with.
SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has appointed Ernst & Young as independent auditors
of the Company for the fiscal year ending November 30, 1994, it being intended
that such appointment would be presented for ratification by the holders of
Class B Common Stock. This firm audited the financial statements of the Company
for the year ended November 30, 1993, and for prior years, and has advised the
Company that neither the firm nor any of its partners has any direct or indirect
material financial interest in the Company or any of its subsidiaries, nor have
they had any connection during the past three years with the Company or any of
its subsidiaries, in any capacity other than that of independent accountants and
auditors. Ernst & Young will have representatives at the meeting who will have
an opportunity to make a statement and will be able to respond to appropriate
questions.
In the event the holders of Class B Common Stock (the only class of stock
entitled to vote on this matter) do not ratify the appointment of Ernst & Young,
the selection of other independent auditors will be considered by the Board of
Directors. The Board of Directors recommends that the holders of Class B Common
Stock vote for ratification of the appointment of Ernst & Young.
OTHER MATTERS
The Board of Directors does not intend to bring before the meeting any
business other than as set forth in this Proxy Statement, and has not been
informed that any other business is to be presented to the meeting. However, if
any matters other than those referred to above should properly come before the
meeting, it is the intention of the persons named in the enclosed Proxy to vote
such Proxy in accordance with their best judgment.
Please sign and return promptly the enclosed Proxy or Proxies if you are
both a holder of Class A Common Stock and Class B Common Stock in the envelope
provided. The signing of a Proxy will not prevent your attending the meeting and
voting in person.
BY ORDER OF THE BOARD OF DIRECTORS
Michael P. Sullivan
President
Dated: February 8, 1994
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