SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
INTERNATIONAL DAIRY QUEEN, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(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 Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions 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
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
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 Tuesday, March 18, 1997, 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 LLP as the independent auditors of the Company for the
fiscal year ending November 30, 1997.
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, 1996. 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 31, 1997, will be entitled to
vote at the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Michael P. Sullivan
President
February 21, 1997.
PROXY STATEMENT
INTERNATIONAL DAIRY QUEEN, INC.
7505 METRO BOULEVARD
MINNEAPOLIS, MINNESOTA 55439
ANNUAL MEETING OF STOCKHOLDERS -- MARCH 18, 1997
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 LLP 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 21, 1997.
PROPOSALS OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the Company's 1998
Annual Meeting of Stockholders should be received by the President of the
Company at the above address no later than November 18, 1997, 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 13,925,670 shares outstanding on the record date, and Class B Common
Stock, $.01 par value ("Class B Common Stock"), of which there were 8,208,575
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 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 31, 1997, 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, directors and nominees, as a group, as of January 31, 1997, 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 Revocable Trust (1) 1,548,934 11.1% 1,631,850(1)(2) 19.9%
5353 Wayzata Blvd.
Minneapolis, MN 55416
C. David Luther 1,599,642(3) 11.5% 2,201,850(1)(3) 26.8%
7505 Metro Boulevard
Minneapolis, MN 55439
Nicholas Company, Inc. (4) 1,819,800 13.1% 779,000 9.5%
700 North Water Street
Milwaukee, WI 53202
Private Capital 1,132,180 8.2% None --
Management, Inc. (4)
3003 Tamiamini Trail N.
Suite 360
Naples, FL 34103
The Capital Group Companies, Inc. (4) 806,400 5.8% None --
333 South Hope Street
Los Angeles, CA 90071
John W. Mooty 550,849(5) 4.0% 824,049(2)(5) 10.0%
33 South Sixth Street
Suite 3400
Minneapolis, MN 55402
Gilbert Stein 114,880(6) * 845,760(6) 10.3%
4 Bay Ridge
Springfield, IL 62707
Luther Family Limited None -- 550,000(2) 6.7%
Partnership
7505 Metro Boulevard
Minneapolis, MN 55439
Jane N. Mooty 49,043(7) * 575,882(2)(7) 7.0%
7505 Metro Boulevard
Minneapolis, MN 55439
Ernest F. Dorn, Jr. 1,308 * None --
Richard I. Giertsen 38,302(8) * 118,126(8) 1.4%
Frank L. Heit 308 * 3,000 *
Thomas R. Stuart 308 * 1,000 *
Michael P. Sullivan 87,223(9) * 39,820(9) *
All officers and directors
as a group (22 persons) 2,977,053(10) 20.6% 4,177,567(10) 50.9%
</TABLE>
* Less than one percent
(1) Shares are held by the Rudy Luther Revocable Trust, the trustees of which
are Rudy Luther, C. David Luther and R. Dan Luther.
(2) During March 1994, members of the John W. Mooty and Jane N. Mooty families
granted certain rights to acquire their shares of the Company's Class B
Common Stock to the members of the Rudy Luther family and the members of
the Rudy Luther family granted reciprocal rights to their shares of Class
B Common Stock to the members of the John W. Mooty and Jane N. Mooty
families. Members of these families, in the aggregate, own approximately
54% of the Company's outstanding shares of Class B Common Stock and
approximately 18% of the Company's outstanding shares of Class A Common
Stock.
(3) Includes: 50,400 shares of Class A Common Stock owned by the Rudy Luther
Trust for Children; 1,548,934 shares of Class A and 1,631,850 shares of
Class B Common Stock owned by the Rudy Luther Revocable Trust and 550,000
shares of Class B Common Stock owned by the Luther Family Limited
Partnership. R. Dan Luther, the brother of C. David Luther, is also the
indirect owner of such shares. Separate information for R. Dan Luther is
not included in the table as it would be duplicative of information
already provided.
(4) The Nicholas Company, Inc., Private Capital Management, Inc. and The
Capital Group Companies, Inc. are investment advisors. Based on
information provided by these companies, affiliated companies, funds and
other client accounts managed by them hold sole voting power with respect
to the shares shown opposite their names.
(5) Does not include securities shown opposite Mrs. Mooty's name.
(6) Includes shares owned by Capitol Dairy Queen, Inc. and Illinois Dairy
Queen, Inc.
(7) Does not include securities shown opposite Mr. Mooty's name.
(8) Includes 23,998 shares of Class A Common Stock and 74,544 shares of Class
B Common Stock owned by trusts of which Mr. Giertsen is a trustee, 500
shares of Class A and 1060 shares of Class B Common Stock owned by Mr.
Giertsen's spouse and 2,260 shares of Class B Common Stock owned by one of
Mr. Giertsen's children.
(9) Does not include 100,800 shares of Class A Common Stock owned by the Rudy
Luther Trusts for Children, the trustee of which is Mr. Sullivan, and
550,000 shares of Class B Common Stock owned by the Luther Family Limited
Partnership of which Mr. Sullivan is a less than 1% limited partner and is
a minor shareholder of the corporate general partner of the Partnership.
Includes 9,927 shares of Class A and 5,000 shares of Class B Common Stock
owned by Mr. Sullivan's spouse, 270 shares of Class A Common Stock owned
by one of Mr. Sullivan's children and 63,687 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.
(10) Includes shares owned by the Rudy Luther Trusts for Children. Includes
501,299 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.
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 six 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 19,
1996 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 six Class B Nominees.
<TABLE>
<CAPTION>
NAME, AGE AND POSITIONS DIRECTOR PRINCIPAL OCCUPATION AND
WITH THE COMPANY SINCE BUSINESS EXPERIENCE
<S> <C> <C>
CLASS A NOMINEES:
*Michael P. Sullivan -- 62 1984 President of the Company since November 30, 1987. Mr.
President and Chief Executive Sullivan is a director of The Valspar Corporation.
Officer of the Company and a
Director
*Frank L. Heit -- 60 1992 Private Investor. Mr. Heit retired from his position
Director as 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 -- 74 1970 Member of the Minneapolis law firm of Gray, Plant,
Chairman of the Board of Mooty, Mooty & Bennett, P.A. for more than the last
Directors and Executive Committee five years.
Ernest F. Dorn, Jr. -- 64 1995 President of Community Credit Co., auto financing and
consumer loans, a subsidiary of Norwest Financial
Services, Inc., for more than the last five years.
Richard I. Giertsen -- 51 1993 President 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.
C. David Luther -- 40 1995 President of Motors Management Corporation, owner and
Director operator of an auto leasing company and a number of
auto dealerships, since June 1992. Mr. Luther has
served as a director of Motors Management Corporation
for more than the last five years.
Jane N. Mooty -- 75 1970 Private investor for more than the last five years.
Director
Thomas R. Stuart -- 52 1996 Chairman of the Board and Chief Executive Officer of
Director Bureau of Engraving, Inc., a company engaged in
offset printing, home study education and
manufacturer of printed circuit boards, for more than
five years.
</TABLE>
* Member of the Executive Committee of the Board of Directors.
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 and annually receive shares of the
Company's Class A Common Stock purchased by the Company in the open market
for $6,000 on the last business day of the fiscal year.
During fiscal 1996, the Board of Directors of the Company met six times and
the Executive Committee of the Board of Directors met two 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.
John W. Mooty, C. David Luther and Frank L. Heit serve on the Board of
Directors' Compensation Committee. The Compensation Committee met two times
during fiscal 1996.
Messrs. Giertsen, Heit and Dorn are members of the Board of Directors' Audit
Committee. This committee met three times during fiscal 1996 to review the
results of the 1995 audit and the plan for the 1996 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 three members of the Board of Directors, none 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,
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 1996 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 C. David Luther, Frank L. Heit and John W. Mooty, current
members of the Compensation Committee.
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 1996, all of whom were executive
officers at the end of the fiscal year (the "Named Executive Officers").
LONG-TERM
FISCAL ANNUAL COMPENSATION COMPENSATION
NAME/PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS (#)
Michael P. Sullivan 1996 $353,424 $ 95,000 14,000 shs.
President and Chief 1995 339,166 130,000 14,000 shs.
Executive Officer 1994 329,500 120,000 19,250 shs.
Edward A. Watson 1996 208,053 45,000 12,000 shs.
Executive Vice 1995 184,388 60,000 12,000 shs.
President -- Operations 1994 176,699 55,000 15,850 shs.
Charles W. Mooty 1996 162,811 35,000 12,000 shs.
Executive Vice 1995 124,583 14,458 10,000 shs.
President and 1994 114,660 11,080 10,325 shs.
Chief Financial Officer
Mark S. Broin 1996 166,642 10,700 7,800 shs.
Vice President 1995 157,048 12,500 8,000 shs.
Information Services 1994 151,287 12,565 10,625 shs.
Gary H. See 1996 165,219 10,952 10,000 shs.
Vice President 1995 155,500 15,500 10,000 shs.
Marketing and 1994 149,396 15,364 13,500 shs.
Consumer Research
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 1996 and the potential value of
these stock options determined pursuant to Securities and Exchange Commission
requirements.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS (1) POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED
TOTAL OPTIONS RATES OF STOCK
GRANTED TO EXERCISE OR PRICE APPRECIATION
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION FOR OPTION TERM (2)
NAME GRANTED FISCAL YEAR ($/SH) DATE 5%($) 10%($)
<S> <C> <C> <C> <C> <C> <C>
Michael P. Sullivan 14,000 5.2% $21.75 2/01/03 $123,962 $288,884
Edward A. Watson 12,000 4.4% 21.75 2/01/03 106,253 247,615
Charles W. Mooty 12,000 4.4% 21.75 2/01/03 106,253 247,615
Mark S. Broin 7,800 2.9% 21.75 2/01/03 69,065 160,950
Gary H. See 10,000 3.7% 21.75 2/01/03 88,544 206,346
</TABLE>
(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.
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 1996 and the number and
value of exercisable and unexercisable stock options held at November 30,
1996.
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
SHARES UNEXERCISED IN-THE-MONEY
ACQUIRED ON VALUE OPTIONS OPTIONS
EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
(#) $ UNEXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C>
Michael P. Sullivan None -- 54,975/37,625 $99,222/$57,750
Edward A. Watson None -- 31,475/31,925 44,025/ 48,525
Charles W. Mooty None -- 12,762/25,413 30,227/ 33,489
Mark S. Broin None -- 30,937/21,363 58,326/ 32,814
Gary H. See 7,000 $34,906 31,500/26,500 48,500/ 40,500
</TABLE>
CERTAIN TRANSACTIONS
During fiscal 1996, the Company leased cars from a company, the President of
which is C. David Luther, a director of the Company, and in connection
therewith paid to such company $961,109. During fiscal 1996, the Company
utilized the services of a travel agency affiliated with 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 1996, 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, $2,542,738
for legal services.
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, 1991
through November 30, 1996. The graph and table assume the investment of $100
on November 30, 1991 in each of the Company's Common Stock, the NASDAQ Total
Return Index and the Peer Group.
[GRAPH]
<TABLE>
<CAPTION>
11/91 11/92 11/93 11/94 11/95 11/96
<S> <C> <C> <C> <C> <C> <C> <C>
International Dairy Queen INDQA 100 100 94 96 125 107
PEER GROUP PPEER1 100 148 153 115 153 176
NASDAQ STOCK MARKET-US INAS 100 126 146 146 208 255
</TABLE>
(1) The Peer Group, each of which companies is engaged to varying degrees in
the franchising of restaurants, includes the following: CKE Restaurants,
Inc., Checkers Drive-In Restaurants, Rally's Hamburgers Inc., Sbarro Inc.,
Sonic Corp., TCBY Enterprises Inc. and Wendys International Inc.
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, 1996, 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 LLP as independent
auditors of the Company for the fiscal year ending November 30, 1997, 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, 1996, and for prior
years. Ernst & Young LLP 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 LLP, 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 LLP.
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 21, 1997
CLASS A COMMON STOCK
INTERNATIONAL DAIRY QUEEN, INC.
PROXY FOR CLASS A COMMON STOCK
SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS
MARCH 18, 1997
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 18, 1997, 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.
I. [ ] Grant authority to vote for the election of the following persons
[ ] Withhold to serve as directors (the Board recommends that you GRANT
this authority):
M. Sullivan F. Heit
YOU MAY WITHHOLD AUTHORITY TO VOTE FOR A NOMINEE BY LINING THROUGH THE NOMINEE'S
NAME OF THE ABOVE LIST
all as set out in the Notice of Annual Meeting of Stockholders and Proxy
Statement dated February 21, 1997, receipt of which is hereby acknowledged.
(CONTINUED, AND TO BE SIGNED, ON OTHER SIDE)
(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: _______________________, 1997.
_____________________________________
(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.
CLASS B COMMON STOCK
INTERNATIONAL DAIRY QUEEN, INC.
PROXY FOR CLASS B COMMON STOCK
SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS
MARCH 18, 1997
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 18, 1997, 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.
I. [ ] Grant authority to vote for the election of the following persons
[ ] Withhold to serve as directors (the Board recommends that you GRANT
this authority):
E. Dorn, Jr. C.D. Luther J.W. Mooty R. Giertsen
T. Stuart J.N. Mooty
YOU MAY WITHHOLD AUTHORITY TO VOTE FOR A NOMINEE BY LINING THROUGH THE NOMINEE'S
NAME ON THE ABOVE LIST
II. [ ] For approving the appointment of Ernst & Young LLP by the Board
[ ] Against of Directors as the independent auditors of the Company for
[ ] Abstain the fiscal year ending November 30, 1997 (the Board
recommends you vote FOR this proposal).
III. [ ] Grant authority to vote, in their discretion, upon such other
[ ] Withhold business as may properly come before the meeting (the
Board of Directors recommends that you GRANT this
authority).
(CONTINUED, AND TO BE SIGNED, ON OTHER SIDE)
(CONTINUED FROM OTHER SIDE)
all as set out in the Notice of Annual Meeting of Stockholders and Proxy
Statement dated February 21, 1997, 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 LLP
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: _______________________, 1997.
_____________________________________
(Signature)
_____________________________________
(Joint Owner's Signature)
When signing as attorney, guardian,
executor, administrator or trustee,
please give full 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.
