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PROXY STATEMENT PURSUANT TO SECTIONSCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) OF THE
SECURITIES EXCHANGE ACT OFof 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 useUse of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.Section 240.14a-11(c) or sec.Section 240.14a-12
Dreyer's Grand Ice Cream, Inc.DREYER'S GRAND ICE CREAM, INC.
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(Name of Registrant as Specified in itsIts Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2) or Item 22(a)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1)(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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filing fee is calculated and state how it was determined):
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[LOGO]LOGO
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Notice of Annual
Meeting of Stockholders
and Proxy Statement
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Meeting of May 10, 199514, 1997
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[LOGO]
To the Stockholders of Dreyer's Grand Ice Cream, Inc.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, 199514, 1997 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.
T. GARY ROGERS WILLIAM F. CRONK, III
Chairman of the Board and President
Chief Executive Officer
Oakland, California
April 5, 1995March 31, 1997
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[LOGO]LOGO
TABLE OF CONTENTS
PAGE
----
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
Changes in Board of Directors....................................................... 3
Nominees for Director............................................................... 3
Continuing Directors................................................................ 4
Committees of the Board............................................................. 5
Attendance at Board and Committee Meetings.......................................... 5
Remuneration of Directors........................................................... 6
Security Ownership of Certain Beneficial Owners and Management........................ 37
Security Ownership of Certain Beneficial Owners..................................... 37
Security Ownership of Management.................................................... 49
Section 16(a) Beneficial Ownership Reporting Compliance............................. 10
Executive Compensation................................................................ 611
Summary of Cash and Certain Other Compensation...................................... 611
Stock Options....................................................................... 712
Performance Graph................................................................... 914
Employment Contracts, Employment Termination and Change-In-ControlChange of Control Arrangements..... 9
Remuneration of Directors........................................................... 1014
Compensation Committee Report on Executive Compensation............................. 15
Compensation Committee Interlocks and Insider Participation......................... 10
Compensation Committee Report on Executive Compensation............................. 11
Board of Directors.................................................................... 14
Committees of the Board............................................................. 14
Board of Directors Attendance....................................................... 14
Compliance with Section 16(a) of the Securities Exchange Act of 1934................ 15
Certain Transactions................................................................ 1517
Other Relationships................................................................. 18
Matters Submitted to thea Vote of Stockholders......................................... 16Stockholders........................................... 18
Election of Directors............................................................... 16
Approval18
Ratification of Selection of Independent Public Accountants.......................................... 17Accountants......................... 19
Voting Information.................................................................... 1819
General Voting Information.......................................................... 1819
Votes Required for Approval......................................................... 1820
Proposals of Stockholders............................................................. 1820
Other Matters......................................................................... 1920
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[LOGO]LOGO
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 10, 199514, 1997
The Annual Meeting of Stockholders of DREYER'S GRAND ICE CREAM, INC. will
be held on Wednesday, May 10, 199514, 1997 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 IIII of the Board of Directors;
2. Approving the appointment of Price Waterhouse LLP as independent
public accountants for the fiscal year 19951997 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 adjournmentadjournments or postponementpostponements 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 ten10 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, 199528, 1997 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 5, 1995March 31, 1997
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.
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PROXY STATEMENT
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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, 199514, 1997 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,
1995.4,
1997.
ANNUAL REPORT
The Annual Report of the Company for the year ended December 31, 199428, 1996 is
furnished concurrently to all stockholders entitled to vote at the Annual
Meeting. The Annual Report is not to be regarded as proxy soliciting material or
as a communication by means of which any solicitation is to be made except to
the extent portions of the Annual Report are incorporated herein by reference.
SOLICITATION BY THE BOARD OF DIRECTORS; REVOCATION OF PROXIES
The proxy in the form enclosed is solicited by the Board of Directors. A
proxy may be revoked by the stockholder prior to exercise thereof by filing with
the Secretary of the Company a written revocation or a duly executed proxy
bearing a later date. The powers of the proxy holders will be suspended if the
person executing the proxy is present at the stockholders' meeting and elects to
vote in person.
COSTS OF SOLICITATION
The entire cost of soliciting these proxies will be borne by the Company.
The Company may make arrangements with brokerage houses, nominees, fiduciaries
and other custodians to send proxies and proxy materials to beneficial owners of
the Company's stock and may reimburse them for their expenses in so doing. The
Company has retained Skinner & Co. to assist in obtaining proxies from brokers
and nominees at an estimated cost of $3,500 plus out of pocket expenses.
Proxies may be solicited by directors, officers and regular employees of
the Company personally or by telephone, facsimile or mail. These services will
be provided without additional compensation.
VOTING OF BOARD OF DIRECTORS' PROXIES
The shares represented by the Board of Directors' proxies will be voted FOR
the election of the Board of Directors' nominees for Class IIII of the Board of
Directors, FOR the approval of Price Waterhouse 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 13,928,94713,400,607 shares of Common Stock ($1.00 par value) of the
Company, 1,007,522 shares of Series B Convertible Preferred Stock ($1.00 par
value) of the Company, no shares of Series A Convertible Preferred Stock ($1.00
par value) of the Company, and no shares of PreferredSeries A Participating Preference
Stock ($1.00 par value) of the Company outstanding at the close of business on
March 24, 1995.28, 1997. Each share of Common Stock is entitled to one vote at the
meeting. Each share of Series B Convertible Preferred Stock is entitled to vote
that number of votes which could be cast by a holder of the number of shares of
Common Stock into which such shares of Series B Convertible Preferred Stock is
convertible on the record date for the meeting. The outstanding shares of Series
B Convertible Preferred Stock are convertible into an aggregate of 2,900,000
shares of Common Stock on March 28, 1997. There are no cumulative voting rights.
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Pursuant to the By-Laws of the Company, the Board of Directors has fixed
the close of business on March 24, 199528, 1997 as the record date for the determination
of stockholders entitled to notice of and to vote at the meeting.
2BOARD OF DIRECTORS
CHANGES IN BOARD OF DIRECTORS
The Company has regretfully accepted the resignations of three Board
members who, for personal reasons, have recently resigned from the Company's
Board of Directors. Mr. Anthony J. Martino, who had served on the Company's
Board of Directors, Class III, since 1994, resigned from the Board effective
December 31, 1996. The vacancy created by his resignation was filled by Mr. M.
Steven Langman, an appointee named by Nestle Holdings, Inc. ("NHI") pursuant to
the terms of the Stock and Warrant Purchase Agreement dated June 14, 1994
between the Company and NHI (the "Nestle Agreement"). Mr. Martino had also been
appointed by NHI pursuant to the Nestle Agreement. The Nestle Agreement is
further described under the caption "Compensation Committee Interlocks and
Insider Participation" on page 17 herein. Mr. Merril M. Halpern, who had served
on the Company's Board of Directors, Class I, since 1977, resigned from the
Board effective February 28, 1997. Ms. Jan L. Booth was appointed by the
Company's Board of Directors to fill the vacancy created by Mr. Halpern's
resignation. Mr. Jerome L. Katz, who had served on the Company's Board of
Directors, Class II, since 1977, resigned from the Board effective March 3,
1997. Mr. Timothy P. Smucker was appointed by the Company's Board of Directors
to fill the vacancy created by Mr. Katz's resignation. All three newly appointed
directors were appointed on March 4, 1997, and Mr. Langman participated in the
March 4, 1997 meeting of the Board of Directors of the Company.
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 1997 Annual Meeting of Stockholders and will hold office until
the 2000 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:
NOMINEE
YEAR FIRST ELECTED A
DIRECTOR
AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
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T. Gary Rogers............. CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER, DREYER'S GRAND
1977 ICE CREAM, INC. Mr. Rogers has served as the Company's Chairman of
Age: 54 the Board and Chief Executive Officer since its incorporation in
February 1977.
William F. Cronk, III...... PRESIDENT, DREYER'S GRAND ICE CREAM, INC. Mr. Cronk has served on
1977 the Company's Board of Directors since its incorporation in 1977.
Age: 54 Since April 1981, he has served as the Company's President.
M. Steven Langman.......... PRESIDENT AND CHIEF EXECUTIVE OFFICER, UNION BANCAIRE PRIVEE
1997 INTERNATIONAL, INC. Mr. Langman joined the Company's Board of
Age: 35 Directors in 1997. Prior to joining Union Bancaire Privee 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.
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CONTINUING DIRECTORS
Directors John W. Larson, Jack O. Peiffer and Jan L. Booth ("Class I") will
hold office until the 1998 Annual Meeting of Stockholders. Directors Timm F.
Crull, Edmund R. Manwell and Timothy P. Smucker ("Class II") will hold office
until the 1999 Annual Meeting of Stockholders.
The following brief statements contain biographical information about each
continuing director and the year he or she first became a director:
NAME
YEAR FIRST ELECTED A
DIRECTOR
AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
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Jan L. Booth........... PRIVATE INVESTOR. Ms. Booth joined the Company's Board of Directors
1997 in 1997. From 1988 to 1990, Ms. Booth was self-employed as a
Age: 46 business consultant. Ms. Booth served as Vice President of Marketing
of the Company from 1981 to 1987. Before joining the Company, Ms.
Booth was employed by Crown Zellerbach's consumer products division.
Timm F. Crull.......... RETIRED CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF NESTLE USA, INC. Mr.
1995 Crull joined the Company's Board of Directors in 1995. Mr. Crull
Age: 66 became Chairman and Chief Executive Officer of Nestle USA, Inc. in
1991, after having served since 1985 as President and Chief
Executive Officer of Carnation Company, a Nestle subsidiary. He
retired from his positions with Nestle in 1994. Mr. Crull is also a
director of Smart & Final Inc., a warehouse store retail company,
and of BankAmerica Corporation, a bank holding company.
John W. Larson......... PRIVATE INVESTOR. Mr. Larson joined the Company's Board of Directors
1993 in 1993. From 1989 to early 1993, Mr. Larson served as Chief
Age: 59 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, GENERAL COUNSEL TO THE COMPANY. Mr.
1981 Manwell has served as Secretary of the Company since its
Age: 54 incorporation in 1977 and as a director of the Company since April
1981. Mr. Manwell is a partner in the law firm of Manwell & Milton,
general counsel to the Company. Mr. Manwell is also a director of
Hanover Direct, Inc., a direct marketing company.
Jack O. Peiffer........ RETIRED SENIOR VICE PRESIDENT -- CORPORATE HUMAN RESOURCES, GENERAL
1993 ELECTRIC COMPANY. Mr. Peiffer joined the Company's Board of
Age: 63 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 acting as Vice President and
General Manager of GE Supply Company from November 1983 to January
1985.
Timothy P. Smucker..... CHAIRMAN, THE J.M. SMUCKER COMPANY. Mr. Smucker joined the Company's
1997 Board of Directors in 1997. Mr. Smucker has served The J.M. Smucker
Age: 52 Company, a food products manufacturer, for over 28 years, and has
held a variety of positions prior to his appointment as Chairman.
Mr. Smucker is also a director of Huntington BancShares
Incorporated, a regional bank holding company, and the Kellogg
Company, a food products company.
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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. 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).
During fiscal 1996, Messrs. Crull, Halpern, Katz, Larson, Manwell, Martino
and Peiffer were members of the Compensation Committee. Commencing in March
1997, the Compensation Committee is comprised of Messrs. Crull, Langman, Larson,
Manwell, Peiffer and Smucker, and Ms. Booth.
Audit Committee
The Audit Committee composition in 1996 was, and as of March 1997 is,
identical to that of the Compensation Committee. The Committee meets on the call
of any member and, on at least one occasion each year, it meets with the
independent 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 the Stockholders; and (3) other matters
pertaining to the audit, including the Company's accounting policies and
internal controls. The Committee is also responsible for recommending for
appointment by the Board of Directors, subject to submission to the stockholders
for their approval, independent public accountants to audit the Company's
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, as well as to provide
the means for direct communication among the Company's Board of Directors, its
financial management and independent 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 contemplate providing to stockholders, or others,
special assurances regarding such matters. Moreover, the Committee's role does
not involve the professional evaluation of the quality of the audit conducted by
the independent 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 accountants with
respect to the accounting and control functions and financial statement
presentation.
The Company has no nominating committee or other committee performing the
functions of such a committee.
ATTENDANCE AT BOARD AND COMMITTEE MEETINGS
During fiscal 1996, there were four special meetings of the Board of
Directors and all directors attended each meeting occurring while such director
was a member of the Board of Directors except Mr. Katz who was absent from one
meeting. The Compensation Committee met one time and the Audit Committee met
twice. Except as set out hereinafter, all members of the committees attended
each of the meetings of the respective committee on which they sit occurring
while such person was a member of the committee in question:
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Messrs. Halpern and Katz were absent from one meeting and two meetings,
respectively, 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. 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 "NonEmployee Director") received an option to purchase 5,000
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 1,500 shares of the Company's Common Stock will be awarded to each Non-
Employee Director on each anniversary of the date the 1993 Plan was approved by
the Company's stockholders.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as of March 24, 19951997 concerning
the beneficial ownership of Common Stock of the Company by each person
(including any "group" as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934 (the "Exchange Act")) who is known to the
Company to be the beneficial owner of more than five percent of such class.class:
AMOUNT AND NATURE OF
BENEFICIAL PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP* CLASS*
- --------------------------------------------------------------- -------------------- ----------
Nestle Holdings, Inc.(1)....................................... 5,050,000 31.7%
Five High Ridge Park
Stamford, Connecticut 069055,056,008 32.8%
c/o Nestle USA, Inc.
800 North Brand Boulevard
Glendale, California 91203
Nestle S.A.(1)
Avenue Nestle 55
Vevey, Switzerland CH-1800
T. Gary Rogers(2)(3)........................................... 1,724,530 12.3%1,833,658 13.5%
5929 College Avenue
Oakland, California 94618
General Electric Capital Corporation(4)(5)..................... 1,450,000 9.4%9.8%
260 Long Ridge Road
Stamford, Connecticut 06927
Trustees of General Electric Pension Trust(4)(6)............... 1,450,000 9.4%9.8%
GE Investment Private Placement Partners I, Limited Partnership
P.O. Box 7900
3003 Summer Street
Stamford, Connecticut 06904
State of Wisconsin Investment Board(5)......................... 1,280,000 9.2%
P.O. Box 7842
Madison, Wisconsin 53707
William F. Cronk, III(2)(7).................................... 885,549 6.3%1,003,681 7.4%
5929 College Avenue
Oakland, California 94618
Robert E. Torray & Co., Inc.(8)................................ 809,000 6.0%
The Torray Corporation
Robert E. Torray
6610 Rockledge Drive, Suite 450
Bethesda, Maryland 20817-1869
Cortopassi Family Trust(9)..................................... 799,900 6.0%
Stanislaus Food Products Co.
San Tomo Partners
Sierra Quality Canners, Inc.
LICO Brands, Inc.
Trecento Investors, Inc.
DACCO, Inc.
Capecchio Foundation
Alpinello Investors, Inc.
VICOR, LLC
Wright Tract Partners, LP
11292 North Alpine Road
Stockton, California 95212
Wilke/Thompson Capital Management, Inc.(5)..................... 692,300 5.2%
3800 Norwest Center
90 S. 7th Street
Minneapolis, Minnesota 55402
- ---------------
* 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
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60 days through the exercise of a right such as the exercise of an option or
the conversion of a convertible security into common stock. Any securities
not outstanding which are subject to options or conversion privileges are
deemed outstanding for the purpose of computing the percentage of outstanding
securities of the class owned by the person who owns the option or conversion
privilege but are not deemed outstanding for the purpose of computing the
percentage of the class owned by any other person.
(1) Includes warrants to purchase 2,000,000 shares of Common Stock which are
currently exercisable by Nestle Holdings, Inc. ("NHI"). 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 68,520 shares of Common Stock under the
Company's Stock Option Plan (1992) exercisable within 60 days, and options
to purchase 85,200 shares of Common Stock under the Company's Stock Option
Plan (1993) exercisable within 60 days.
(3) 1,571,036 and 100,000 of these shares are held directly by the Rogers
Revocable Trust and the Four Rogers Trust, respectively, for which Mr.
Rogers and his wife serve as co-trustees. Mr. Rogers and his wife share the
voting and investment power with respect to such shares. Also includes 8,902
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.
(4) Assumes full conversion of the Series B 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 586,495 of these shares. GE
Investment Private Placement Partners I, Limited Partnership ("GEIPPP") has
sole voting power and sole investment power with respect to 863,505 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) 849,961 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
42,000 shares held in irrevocable trusts for the benefit of Mr. Cronk's
sons. Mr. Cronk does not have voting or investment power with respect to
these 42,000 shares and Mr. Cronk disclaims beneficial ownership of all of
the shares held in these irrevocable trusts.
(8) Robert E. Torray & Co., Inc. ("RETC") has shared voting and investment power
with respect to 739,000 of these shares. The Torray Corporation ("TTC") has
shared voting and investment power with respect to 70,000 of these shares.
Robert E. Torray, an individual, has shared voting and investment power with
respect to all of these shares, and has filed a joint statement on Schedule
13G as a "parent holding company" of RETC and TTC in reliance upon certain
Security & Exchange Commission No Action Letters. RETC and TTC are
registered investment advisors under Section 203 of the Investment Advisors
Act of 1940, and are deemed to have beneficial ownership of the shares
indicated above because they hold investment discretion with respect to the
accounts in which the shares are held.
(9) 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, 250,200 shares; Stanislaus Food Products
Co., 111,500 shares; San Tomo Partners, 116,000 shares; Sierra Quality
Canners, Inc., 150,000 shares; LICO Brands, Inc., 25,000 shares; Trecento
Investors, Inc., 45,000 shares; DACCO, Inc., 40,000 shares; Capecchio
Foundation, 25,000 shares; Alpinello Investors, Inc., 12,200 shares; VICOR,
LLC, 20,000 shares; Wright Tract Partners, LP, 5,000 shares. The listed
entities filed a joint statement on Schedule 13D as members of a group.
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SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information as of March 24, 1997 concerning
the beneficial ownership of Common Stock of the Company by each director and
nominee of the Company, the Chief Executive Officer and each of the four most
highly compensated executive officers of the Company (the "Named Executive
Officers") and all directors and executive officers of the Company as a group.
Except as otherwise noted, each person has sole voting and sole investment power
with respect to the shares shown:
AMOUNT OF
BENEFICIAL PERCENT OF
NAME OWNERSHIP(1) CLASS(1)
- --------------------------------------------------------------------- ------------ ----------
Jan L. Booth(2)...................................................... 4,100 *
William F. Cronk, III(3)(4).......................................... 1,003,681 7.4%
Timm F. Crull(5)..................................................... 12,000 *
Thomas M. Delaplane(6)............................................... 79,036 *
M. Steven Langman.................................................... -0- *
John W. Larson(5).................................................... 28,000 *
Edmund R. Manwell(5)................................................. 32,000 *
William R. Oldenburg(7).............................................. 77,702 *
Jack O. Peiffer(5)................................................... 8,000 *
T. Gary Rogers(3)(8)................................................. 1,833,658 13.5%
Timothy P. Smucker................................................... 1,000 *
Paul R. Woodland(9).................................................. 69,753 *
Directors and Executive Officers as a Group (13 persons)(10)......... 3,169,377 22.8%
- ---------------
* Less than one percent.
(1) The amounts and percentages indicated as beneficially owned were calculated
pursuant to Rule 13d-3(d)(1) under the Exchange Act which provides that
beneficial ownership of a security is acquired by a person if that person
has the right to acquire beneficial ownership of such security within 60
days through the exercise of a right such as the exercise of an option or
the conversion of a convertible security into common stock. Any securities
not outstanding which are subject to options or conversion privileges are
deemed outstanding for the purpose of computing the percentage of
outstanding securities of the class owned by the person who owns the option
or conversion privilege but are not deemed outstanding for the purpose of
computing the percentage of the class owned by any other person.
(1) Includes warrants to purchase 2,000,000 shares of Common Stock which may be
exercised by Nestle Holdings, Inc. ("NHI") within 60 days. NHI has sole
voting power and sole investment power over 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(2) 2,000 of these shares because NHIare 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 2,100 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 wholly-owned subsidiaryplan participant. Ms. Booth disclaims
beneficial ownership of Nestle.
(2)these shares except to the extent of her pecuniary
interest therein.
(3) Includes options to purchase 2,880 shares of Common Stock under the
Company's Incentive Stock Option Plan (1982) exercisable within 60 days,
options to purchase 13,30868,520 shares of Common Stock under the
Company's Stock Option Plan (1992) (the "1992 Plan") exercisable within 60
days, and options to purchase 19,40085,200 shares of Common Stock under the
Company's Stock Option Plan (1993) (the "1993 Plan") exercisable within 60
days.
3
8
(3) 1,588,942 and 100,000 of these shares are held directly by the Rogers
Revocable Trust and the Four Rogers Trust, respectively, for which Mr.
Rogers and his wife serve as co-trustees. Mr. Rogers and his wife share the
voting and investment power with respect to such shares.
(4) Assumes full conversion of the 6.25% convertible subordinated debentures due
June 30, 2001 (the "Notes") held by the named entity or entities into the
Company's Common Stock. These parties filed a Schedule 13D (reporting the
beneficial ownership described above) jointly with General Electric Capital
Services, Inc. (formerly known as General Electric Financial Services, Inc.)
and General Electric Company each of which disclaimed beneficial ownership
of all shares of the Company's Common Stock beneficially owned by General
Electric Capital Corporation, Trustees of General Electric Pension Trust and
GE Investment Private Placement Partners I, Limited Partnership.
(5) The holder has sole voting power and sole investment power over all of these
shares.
(6) Trustees of General Electric Pension Trust have sole voting power and sole
investment power over 586,495 of these shares. GE Investment Private
Placement Partners I, Limited Partnership has sole voting power and sole
investment power over 863,505 of these shares.
(7) 849,961 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
42,000 shares held in irrevocable trusts for the benefit of Mr. Cronk's
sons. Mr. Cronk does not have voting or investment power overwith respect to
these 42,000 shares and Mr. Cronk disclaims beneficial ownership of all of
the shares held in these irrevocable trusts.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information as of March 24, 1995 concerning
the beneficial ownership of Common Stock of the Company by each director and
nominee of the Company, the Chief Executive Officer and each of the four most
highly compensated executive officers of the Company (the "Named Executive
Officers") and all directors and executive officers of the Company as a group.
Except as otherwise noted, each person has sole voting and sole investment power
with respect to the shares shown.
AMOUNT OF
BENEFICIAL PERCENT OF
NAME OWNERSHIP CLASS
---- ---------- ----------
T. Gary Rogers(1)(2)................................................... 1,724,530 12.3%
William F. Cronk, III(1)(3)............................................ 885,549 6.3%
Timm F. Crull.......................................................... -0- *
Merril M. Halpern(4)................................................... 8,852 *
Jerome L. Katz(4)...................................................... 8,000 *
John W. Larson(4)...................................................... 19,000 *
Edmund R. Manwell(4)................................................... 29,000 *
Anthony J. Martino(4).................................................. 5,000 *
Jack O. Peiffer(4)..................................................... 5,000 *
Thomas M. Delaplane(5)................................................. 36,617 *
William R. Oldenburg(6)................................................ 42,990 *
Paul R. Woodland(7).................................................... 34,252 *
Directors and Executive Officers as a Group (13 persons)(8)............ 2,844,638 20.2%
- ---------------
* Less than one percent (1%).
(1)(5) Includes options to purchase 2,8808,000 shares of Common Stock under the 1993
Plan exercisable within 60 days.
9
14
(6) Includes options to purchase 7,384 shares of Common Stock under the
Company's Incentive Stock Option Plan (1982) (the "ISO Plan") exercisable
within 60 days, options to purchase 13,3089,120 shares of Common Stock under the
Company's Stock Option1992 Plan (1992) (the "1992 Plan") exercisable within 60 days, and options to purchase 19,40039,360 shares
of Common Stock under the Company's Stock Option1993 Plan (1993) (the "1993 Plan") exercisable within 60 days. 4
9
(2) 1,588,942Also
includes 5,840 shares held in Mr. Delaplane's account in the Dreyer's Grand
Ice Cream, Inc. Savings Plan (a 401(k) plan), based upon the most recent
available plan statement.
(7) Includes options to purchase 7,384 shares of Common Stock under the ISO
Plan exercisable within 60 days, options to purchase 9,120 shares of Common
Stock under the 1992 Plan exercisable within 60 days, and options to
purchase 38,160 shares of Common Stock under the 1993 Plan exercisable
within 60 days.
(8) 1,571,036 and 100,000 of these shares are held directly by the Rogers
Revocable Trust and the Four Rogers Trust, respectively, for which Mr.
Rogers and his wife serve as co-trustees. Mr. Rogers and his wife share the
voting and investment power with respect to such shares. (3) 849,961 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
42,000Also includes
8,902 shares held in irrevocable trusts forMr. Rogers account in the benefit of Mr. Cronk's
sons. Mr. Cronk does not have voting or investment power over these 42,000
shares and Mr. Cronk disclaims beneficial ownership of all ofDreyer's Grand Ice Cream,
Inc. Savings Plan (a 401(k) plan), based upon the shares
held in these irrevocable trusts.
(4)most recent available
plan statement.
(9) Includes options to purchase 5,000 shares of Common Stock under the 1993
Plan exercisable within 60 days.
(5) Includes options to purchase 11,252 shares of Common Stock under the ISO
Plan exercisable within 60 days and options to purchase 8,400 shares of
Common Stock under the 1993 Plan exercisable within 60 days.
(6) Includes options to purchase 11,252 shares of Common Stock under the ISO
Plan exercisable within 60 days and options to purchase 8,700 shares of
Common Stock under the 1993 Plan exercisable within 60 days.
(7) Includes options to purchase 11,252 shares of Common Stock under the ISO
Plan exercisable within 60 days and options to purchase 8,100 shares of
Common Stock under the 1993 Plan exercisable within 60 days.
(8) Includes options to purchase 59,3647,384 shares of Common Stock under the ISO
Plan exercisable within 60 days, options to purchase 26,6169,120 shares of Common
Stock under the 1992 Plan exercisable within 60 days, and options to
purchase 101,60036,860 shares of Common Stock under the 1993 Plan exercisable
within 60 days.
(THIS SPACE INTENTIONALLY LEFT BLANK)(10) Includes options to purchase 26,540 shares of Common Stock under the ISO
Plan exercisable within 60 days, options to purchase 165,180 shares of
Common Stock under the 1992 Plan exercisable within 60 days, and options to
purchase 327,920 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 10 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 10 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 1996 its officers, directors, and greater than 10 percent beneficial
owners complied with all applicable filing requirements, except that one Form 4
report timely filed by Jeffrey P. Porter was subsequently amended to include a
stock option exercise transaction that had been inadvertently omitted.
10
1015
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for the fiscal years ended December 31, 1994,28, 1996,
December 25, 199330, 1995 and December 26, 199231, 1994, 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
LONG-TERM
COMPENSATION
-----------------------------------
ANNUAL COMPENSATION AWARDS
------------------------------------ ------------------------- PAYOUTS------------------------------------------- ------------
OTHER ANNUAL SECURITIES ------- ALL OTHER
COMPEN- RESTRICTED UNDERLYING LTIP COMPEN-
SALARY($) BONUS($) SATION($) OPTIONS/SARS SATION($)
NAME AND PRINCIPAL SALARY($) BONUS($) SATION STOCK OPTIONS/SARS PAYOUTS SATION POSITION YEAR (1) (2) ($)(3)(4) AWARD(S)($) (#) ($)(5)
($)(6)
- ----------------------------------------------------------- ----- --------- -------- ------------ ------------ -----------
------------ ------- ---------
T. Gary Rogers.............. 1994 551,637 280,000 42,357 -0- 42,600(10) -0- 19,213Rogers................... 1996 $639,902 58,100(6) $16,806
Chairman of the Board and 1993 415,744(7) -0- 50,145 -0- 93,300(8) -0- 22,8081995 599,791 79,600(7) 17,038
Chief Executive Officer 1992 490,077 -0- 49,435 -0- 21,780 -0- 23,4831994 551,637 $280,000 42,600(8) 19,213
William F. Cronk, III.......III............ 1996 639,902 58,100(6) 16,200
President 1995 599,791 79,600(7) 16,044
1994 551,637 280,000 $ 50,914 -0- 42,600(10) -0-42,600(8) 17,892
William R. Oldenburg............. 1996 329,403 18,800(6) 16,200
Vice President 1993 415,744(7) -0- 60,156 -0- 93,300(8) -0- 21,006
1992 490,077 -0- 54,726 -0- 21,780 -0- 21,257-- Operations 1995 324,598 29,700(7) 13,272
1994 299,623 152,500 21,800(8) 14,196
Thomas M. Delaplane......... 1994 285,585 145,000 -0- 21,800(10) -0- 17,892Delaplane.............. 1996 309,402 18,800(6) 16,200
Vice President -- Sales 1993 265,640 -0- -0- 27,700(8) -0- 21,006
1992 244,884 43,750 -0- 8,520(9) -0- 21,257
William R. Oldenburg........1995 305,560 29,200(7) 16,044
1994 299,623 152,500 -0- 21,800(10) -0- 14,196
Vice President -- 1993 276,602 -0- -0- 28,000(8) -0- 19,207
Operations 1992 258,923 55,650 -0- 8,520(9) -0- 14,911285,585 145,000 21,800(8) 17,892
Paul R. Woodland............ 1994 275,585 140,000 -0- 21,800(10) -0- 17,892Woodland................. 1996 299,402 18,800(6) 16,200
Vice President -- Finance 1993 257,564 -0- -0- 27,400(8) -0- 21,0061995 295,560 29,000(7) 16,044
and Administration, 1992 244,884 43,750 -0- 8,520(9) -0- 21,2571994 275,585 140,000 21,800(8) 17,892
Chief Financial Officer
and Assistant Secretary
- ---------------
(1) Includes amounts contributed by the officers to the salary deferral portion
of the Company'sDreyer's Grand Ice Cream, Inc. Money Purchase Pension Plan (the "Pension
Plan") and the Dreyer's Grand Ice Cream, Inc. Savings Plan.Plan (the "Savings
Plan").
(2) Includes amounts accruedpaid under the Company's Incentive Bonus Plan.
(3) No disclosure for fiscal years 1994, 19931996, 1995 and 19921994 is made for Messrs.
Rogers, Oldenburg, Delaplane Oldenburg and Woodland under Other Annual Compensation,
and no disclosure is made for Mr. Cronk for fiscal years 1996 and 1995 under
Other Annual Compensation, as the aggregate incremental compensation
otherwise reportable in this column for these individuals does not require disclosure underis less than
$50,000 or 10% of the rules.respective officer's combined salary and bonus for
such fiscal years.
(4) The amountsamount reported for each of Messrs. Rogers andMr. Cronk include $25,000 for 1994 $30,250 for 1993 and $31,500 for 1992includes $25,000 paid to Price
Waterhouse LLP for tax and accounting services rendered on behalf of Messrs. Rogers
andMr.
Cronk respectively. The amounts reported also include $16,479 in 1994,
$15,583 in 1993 and $15,859 in 1992 for Mr. Rogers, and $22,671 in 1994,
$24,254 in 1993 and $16,363 in 1992 for Mr. Cronk in connection with each
of Mr. Rogers' and Mr. Cronk's use of a Company automobiles.automobile.
(5) LTIP is an acronym for "Long Term Incentive Plan" which term is defined in
Regulation S-K as any plan providing compensation intended to serve as
incentive for performance to occur over longer than one fiscal year other
than restricted stock, options and SARs. The Company currently does not
have a Long Term Incentive Plan.
(6) For each of Messrs. Rogers, Cronk, Delaplane and Woodland, the amounts
reported include contributions by the Company of $10,500 in 1994, $15,6101996, $10,500 in
19931995 and $16,020$10,500 in 19921994 to the Dreyer's Grand Ice Cream, Inc. Money Purchase
Pension Plan (the "Pension Plan")and $5,700 in 1996, $5,544 in
1995 and $7,392 in 1994 $5,396 in 1993 and
$5,237 in 1992 to the Dreyer's Grand Ice Cream, Inc. Savings Plan (the
"Savings Plan").Plan. For Mr. Oldenburg the amounts
reported include contributions by the Company of $10,500 in 1994, $16,5091996, $10,500 in
19931995 and $12,816$10,500 in 19921994 to the Pension Plan and $5,700 in 1996, $2,772 in
1995 and $3,696 in 1994 $2,698 in 1993 and $2,095 in 1992 to the Savings Plan. Additionally, this includes $1,321 in 1994, $1,802 in
1993 and $2,226 in 1992 for Mr. Rogers inthe Company paid
split-dollar life insurance premiums paid byof $606 in 1996, $994 in 1995 and
$1,321 in 1994 for the Company.
6
11
(7) After being offered the opportunity by the Compensation Committeebenefit of the
Board of Directors, Messrs. Rogers and Cronk each elected to receive stockMr. Rogers.
(6) Excludes options granted under the Company's Stock Option Plan (1992) (the "1992
Plan")in 1996 in lieu of $100,000 of salary, prior to earning such salary
compensation.a cash bonus for the Named
Executive Officer's performance in 1995. These electionsexcluded options were
made pursuant to the "Income Swap Plan"
of the Compensation Committee. The Income Swap Plan is describedincluded in the Compensation Committee's Report onnumber of options reported for the Named Executive Compensation on pages 11-13
herein.
(8) For Messrs. RogersOfficer
in 1995 and Cronk the amount listed includes options granted
under the 1992 Plan pursuant to the Income Swap Plan referencedare more fully described in footnote 7 above and described in the Compensation Committee's Report on Executive
Compensation on pages 11-13 herein. Additionally, eachbelow.
11
16
(7) Each of the Named Executive Officers earned a bonus for his performance in
1993.1995. Prior to earning such bonus each Named Executive Officer elected to
receive non-qualified stock options in lieu of a cash bonus pursuant to the
"Income Swap Plan" of the Compensation Committee. The Income Swap Plan (referenced in footnote 7 above andis
described in the Compensation Committee'sCommittee Report on Executive Compensation on
pages 11-13 herein).15-17 herein. In this regard, Messrs. Rogers and Cronk each received
an option to purchase 13,10014,000 shares of the Company's Common Stock, Mr.
Oldenburg received an option to purchase 7,500 shares of the Company's
Common Stock, Mr. Delaplane received an option to purchase 8,400
shares of the Company's Common Stock, Mr. Oldenburg received an option to
purchase 8,7007,000 shares of
the Company's Common Stock, and Mr. Woodland received an option to purchase
8,1006,800 shares of the Company's Common Stock. Messrs. Rogers and Cronk's options have an exercise price of $29.375.
Messrs. Delaplane, Oldenburg and Woodland's options have an exercise price
of $23.875 (the fair market value on the date of grant, March 7, 1994). All of these stock options were
granted on March 5, 1996 under the Company's Stock Option Plan (1993) and
vested on November 11, 1994.
(9) Includes options to purchase 3,390 shares granted under the Company's
Incentive Stock Option Plan (1982) which were later rescinded by the Board
of Directors on May 19, 1992.
(10)September 6, 1996.
(8) Excludes options granted in 1994 in lieu of salary and/or a cash bonus for
the Named Executive Officer's performance in 1993.
These excluded options
were included in the number of options reported for the Named Executive
Officer in 1993 and are more fully described in footnotes 7 and 8 above.
STOCK OPTIONS
The following table provides information concerning the grant of stock
options made during fiscal 19941996 to the Named Executive Officers:
OPTION GRANTS IN THE LAST FISCAL YEAR
INDIVIDUAL GRANTS
----------------------------------------------------------------------------------------------------------------------
PERCENT OF
NUMBER OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR GRANT DATE
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION PRESENT
NAME GRANTED FISCAL YEAR ($/SH) DATE VALUE($)(3)
----
- ------------------------------- ------------ ------------ ----------- ---------- ----------
T. Gary Rogers................. 42,600(1) 11.9% $23.87514,000(1) 3.2% $ 31.50 3/6/04 $566,154
19,400(2) 5.4 29.3754/06 $124,460(3)
58,100(2) 13.2 $ 31.50 3/6/04 237,2624/06 757,043(4)
William F. Cronk, III.......... 42,600(1) 11.9 23.87514,000(1) 3.2 $ 31.50 3/6/04 566,154
19,400(2) 5.4 29.3754/06 124,460(3)
58,100(2) 13.2 $ 31.50 3/6/04 237,2624/06 757,043(4)
William R. Oldenburg........... 7,500(1) 1.7 $ 31.50 3/4/06 66,675(3)
18,800(2) 4.3 $ 31.50 3/4/06 244,964(4)
Thomas M. Delaplane............ 21,800(1) 6.1 23.8757,000(1) 1.6 $ 31.50 3/6/04 289,722
8,400(2) 2.4 23.8754/06 62,230(3)
18,800(2) 4.3 $ 31.50 3/6/04 111,636
William R. Oldenburg........... 21,800(1) 6.1 23.875 3/6/04 289,722
8,700(2) 2.4 23.875 3/6/04 115,6234/06 244,964(4)
Paul R. Woodland............... 21,800(1) 6.1 23.8756,800(1) 1.5 $ 31.50 3/6/04 289,722
8,100(2) 2.3 23.8754/06 60,452(3)
18,800(2) 4.3 $ 31.50 3/6/04 107,6494/06 244,964(4)
- ---------------
(1) Options were granted pursuant toon March 5, 1996 under the Company's Stock Option Plan
(1993) (the "1993 Plan") in lieu of a cash bonus for the Named Executive
Officer's performance in fiscal 1995 pursuant to the Company's Income Swap
Plan (referenced in footnote 6 to the "Summary Compensation Table" on pages
11-12 herein and described in the Compensation Committee Report on Executive
Compensation on pages 15-17 herein). These options became exercisable on
September 6, 1996, six (6) months after the date of grant.
(2) Options were granted pursuant to the 1993 Plan and begin vesting two years
from the date of grant as follows: The options may be exercised only as to
40%40 percent of the optioned shares after two years from the date of grant and
as to an additional 20%20 percent after each of the succeeding three years. The
options granted under the 1993 Plan expire ten10 years from the date of grant,
7
12
terminate within various periods ranging from 3three 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 equalled the fair
market value, or equalled 123% ofequaled the fair
market value of the shares of the Company's Common Stock on the date of
grant. In the event of a change in
controlChange of Control of the Company, all then
outstanding options issued under the 1993 Plan shall vest and become
immediately exercisable. The term "change-in-control""Change of Control" as defined in the 1993
Plan is more completely described under the caption "Employment Contracts,
Employment Termination and Change-in-ControlChange of Control Arrangements" on pages 9-1014-15
herein.
(2) Options vested on November 11, 1994 and were granted under the 1993 Plan in
lieu of cash compensation for the Named Executive Officer's performance in
1993 pursuant to the Compensation Committee's Income Swap Plan. The award of
these options is more completely described in footnotes 7 and 8 to the table
titled "Summary Compensation Table" on page 6 herein. The Income Swap Plan
is more completely described in the Compensation Committee's Report on
Executive Compensation on pages 11-13 herein.12
17
(3) Present value was calculated using the Black-Scholes option pricing model
which involves an extrapolation to future price levels based solely on past
performance.model.
For the options granted, the following assumptions were used in the
Black-Scholes valuation calculation: dividend yield of 1.01%,0.76 percent,
risk-free rate of return of 6.60%, 105.49 percent, three year term and a volatility
coefficient of 0.3994.34.04 percent. The annual dividend yield equals the quotient
of the current annual dividend of $.24$0.24 divided by the stock price on the
date of grant. All volatility coefficients used were based on the dailymonthly
closing price of the Company's Common Stock over a two yearthree-year period. The
risk-free rate is the yield on a U.S. Government Zero Coupon Bond with a maturity equal
to the modified 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.
(4) 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 0.76 percent,
risk-free rate of return of 5.91 percent, six year term and a volatility
coefficient of 34.34 percent. The annual dividend yield equals the quotient
of the current annual dividend of $0.24 divided by the stock price on the
date of grant. All volatility coefficients used were based on the monthly
closing price of the Company's Common Stock over a six-year period. The
risk-free rate is the yield on a U.S. Treasury Zero Coupon Bond with a
maturity equal to the modified term of the grant. The approach used in
developing the assumptions upon which the Black-Scholes calculations were
based is consistent with the requirements of Statement of Financial
Accounting Standards No. 123 "Accounting for Stock-Based Compensation." The
value calculated by use of this model should not be viewed in any way as a
forecast of the future performance of the Company's Common Stock.
The following table provides information on option exercises in fiscal 19941996
by the Named Executive Officers and the value of such officers' unexercised
in-the-money options as of December 31, 1994:28, 1996:
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY
NUMBER UNEXERCISED OPTIONS/SARS IN-THE-MONEY OPTIONS/SARS
OF SHARES AT FY-END(1)FY-END AT FY-END($)(1)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE REALIZEDREALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----- --------------------------------------- ----------- -------- ----------- ------------- ----------- -------------
T. Gary Rogers............. 11,200 $135,184 13,448 164,892Rogers.............. 0 0 115,984 190,496 $ 102,916 $66,479316,447 $ 500,309
William F. Cronk, III...... 11,200 135,184 13,448 164,892 102,916 66,479III....... 0 0 115,984 190,496 316,447 500,309
William R. Oldenburg........ 0 0 43,304 62,826 178,828 195,313
Thomas M. Delaplane........ 12,226 246,885 21,172 47,958 150,337 44,005
William R. Oldenburg....... 10,000 157,500 21,472 47,958 150,562 44,005Delaplane......... 5,400 $97,200 42,504 62,826 177,103 106,513
Paul R. Woodland........... -0- -0- 18,312 47,958 115,712 44,005Woodland............ 0 0 42,004 62,826 175,378 195,313
- ---------------
(1) Those options described in footnote 8 to the table titled "Summary
Compensation Table" on page 6 herein, which were granted in 1994 in lieu of
a cash bonus for the Named Executive Officer's performance in 1993, are
included in this table as such options were granted to the recipient in
fiscal 1994.
813
1318
PERFORMANCE GRAPH
The following graph shows the Company's total return to stockholders
compared to the Standard & Poor's 500 Index and the Standard & Poor's Food
Products Index over the five year period from December 29, 198927, 1991 through December
31, 1994:28, 1996:
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG DREYER'S GRAND ICE CREAM, INC., THE S&P'S&P 500 INDEX
AND THE S&P'S&P FOOD PRODUCTS INDEX
MEASUREMENT PERIOD DREYER'S GRAND S&P FOOD
MEASUREMENT PERIOD GRAND(FISCAL YEAR COVERED) ICE CREAM, INC. S&P 500 INDEX PRODUCTS
(FISCAL YEAR COVERED) CREAM, INC. INDEX INDEX
19891991 100.00 100.00 100.00
1990 152.51 95.54 107.07
1991 266.50 122.17 148.85
1992 176.16 136.20 159.0766.10 111.49 104.34
1993 215.99 148.83 145.1381.05 121.82 95.18
1994 186.14 151.55 160.7069.85 124.05 105.39
1995 94.57 170.50 134.36
1996 83.85 212.99 161.36
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* Assumes $100 investment in each of Dreyer's Grand Ice Cream, Inc., the S&P 500
Index and the S&P Food Products Index, and the reinvestment of dividends.
EMPLOYMENT CONTRACTS, EMPLOYMENT TERMINATION AND CHANGE-IN-CONTROLCHANGE OF CONTROL ARRANGEMENTS
Currently, all options which 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-in-controlChange of Control of the Company. A
change-in-controlChange of Control is defined under the Plans to include (i) the acquisition by
any person of beneficial ownership of forty40 percent (40%) or more of the combined voting
power of the Company's outstanding securities immediately after such acquisition
(which forty40 percent (40%) shall be calculated after including the dilutive effect of the
conversion or exchange of any outstanding securities of the Company convertible
into or exchangeable for voting securities), or (ii) a change in the composition
of majority membership of the Board of Directors over any two-year period
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 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.
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Further, the acquisition by any person (or any group of which such a person is a
9
14
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 forty40 percent (40%) or more of the
combined voting power of the Company's outstanding securities immediately after
such acquisition (the calculation of such 40%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-in-controlChange of Control
arrangements.
REMUNERATION OF DIRECTORS
Directors' compensation consists of a meeting fee of $4,000 for each
meeting of the Board of Directors actually attended and an annual fee of $4,000
for each member of each committee. The Board of Directors generally meets four
times each year. Each committee meets at least annually and more frequently if
requested by any member. Employee directors receive no compensation as
directors. Members of the Board of Directors who were not employees of the
Company (each a "Non-Employee Director") received an option to purchase 5,000
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 1,500 shares of the Company's Common Stock will be awarded to each Non-
Employee Director on each anniversary of the date the 1993 Plan was approved by
the Company's stockholders.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee are Messrs. Crull, Halpern, Katz,
Larson, Manwell, Martino and Peiffer. Mr. Manwell was the Secretary of the
Company and a partner in the law firm of Manwell & Milton, general counsel to
the Company, during fiscal 1994. The Company paid Manwell & Milton $1,039,250 in
fees during fiscal 1994 for services rendered as general counsel to the Company.
Mr. Manwell is not separately compensated for his services as Secretary of the
Company although some of the fees received by Manwell & Milton may be for
services that, in other corporations, are performed by the corporate secretary.
On June 14, 1994 the Company completed a transaction with Nestle Holdings,
Inc. ("NHI") pursuant to a Stock and Warrant Purchase Agreement (the "Nestle
Agreement") whereby NHI purchased from the Company for an aggregate price of
$106,000,000 three million shares of Common Stock of the Company and warrants
for the purchase of two million shares of Common Stock of the Company. NHI
agreed that neither it nor its affiliates will acquire in the aggregate 35% 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.
Messrs. Martino and Crull were named to the Board of Directors of the
Company pursuant to the terms of the Nestle Agreement. Mr. Crull served as
Chairman of the Board and Chief Executive Officer of Nestle USA, Inc.
("Nestle"), Chairman of the Board of NHI and as director of Nestle Food Company
("NFC"), until his retirement or resignation from these positions in December of
1994. Mr. Martino served as Executive
10
15
Vice President, Chief Financial Officer of Nestle and as director of NFC until
his retirement in July of 1994 or resignation in January of 1994, respectively.
Nestle and NFC are affiliates of NHI.
In June 1993, the Company issued in a private placement to General Electric
Capital Corporation ("GECC"), 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% convertible subordinated debentures of the
Company due June 30, 2001. The debentures are convertible at an initial
conversion price of $34.74 into a total of 2,900,000 shares of common stock of
the Company. The GE Agreement provides that the Company will nominate and
recommend the election to the Board of Directors of a nominee selected by the
Holder designated in the GE Agreement. Mr. Peiffer was named to the Board of
Directors of the Company pursuant to this provision of the GE Agreement. Mr.
Peiffer served as Senior Vice President -- Corporate Human Resources of General
Electric Company ("GEC") until his retirement in February of 1993. GEC is an
affiliate of the Holders.
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 salary
specifically and total compensation generally, the Committee does consider two
principal factors which are evenly weighted in its deliberations: (1)
performance of the Company measured by the long-term growth of the Company's
income; and (2) the roles of the Chief Executive Officer and the President in
achieving the Company's performance. Although the Committee has not reviewed any
compensation surveys relating specifically to chief executive officer and
president salaries, the Committee believes that each of the Chief Executive
Officer's and the President's base salary appropriately reflects the
satisfactory long-term performance of the Company and each of their roles in the
Company's performance and is competitive with the salaries of their counterparts
at other companies of similar size and history (although such other companies
are not necessarily companies which are represented in the indexes described
under the caption "Performance Graph" on page 914 herein).
In 1994, the Company announced a new five-year plan (the "Strategic Plan").
The Board of Directors approved the Strategic Plan, which anticipated an initial
reduction in earnings and a subsequent increase in market share and future
earnings and share value
above the level whichthose levels that would be expectedattained in the absence of the
Strategic Plan. Because of the anticipated reduction in earnings, the Committee
determined that the prior method of calculatingused to calculate the bonus portion of the
compensation package for the Chief Executive Officer and President did not
accurately measure the performance of the Company during at least the initial period of the Strategic
Plan.Company. As a result, the Committee
determined it would base bonus compensation for 1994 and 1995 directly on
certain quantitative elements of the Company's performance as measured against
the Strategic Plan. The most important, in terms of relative weighting, of these
elements are: the effective price per gallon, the production andcost per gallon,
the distribution cost per gallon and the retail productsproducts' volume. For 1996 and
1997, the Committee determined that bonus compensation should be based one half
on such measurement of the quantitative elements of the Strategic Plan and one
half on the Company achieving its profit plan earnings per share (the "Profit
Plan"). Under the newthis policy, a bonus (equal to 25%12.5 percent of the officer's base
salary) is awarded if, based upon the quantitative elements, the Company has
achieved 80%80 percent of the anticipated results of the Strategic Plan. The
Strategic Plan based portion of the bonus award is increased (up to a maximum of
50%25 percent of base salary), calculated
15
20
by linear interpolation, if based upon the quantitative elements the Company has
11
16
achieved more than 80%80 percent and up to 100%100 percent of the anticipated results
of the Strategic Plan. IfAdditional bonus (equal to 12.5 percent of the Company achievesofficer's
base salary) is awarded if the Company's actual earnings per share for the
fiscal year has achieved 80 percent of the Profit Plan. The Profit Plan based
portion of the bonus award is increased (up to a maximum of 25 percent of the
officer's base salary), calculated pro-rata, based upon the Company's actual
earnings per share for the fiscal year having achieved more than 100%80 percent and
up to 100 percent of the anticipated
results of the Strategic Plan, theProfit Plan. A maximum potential bonus of 50%50 percent of
base salary wouldmay be awarded.awarded under the policy. The Committee believes that this new
policy for determining bonuses more accurately ties the Chief Executive
Officer's and the President's compensation to the performance of the Company by
acknowledging the effects of
the Strategic Plan upon the long-term earnings of the Company.Company of the
Strategic Plan and the Profit Plan.
In awarding options under the ISO Plan, the 1992 Plan and the 1993 Plan,
the Committee has adopted a policy pursuant to which each year (1) Messrs. Rogers and
Cronk will receive options to purchase 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,
and (3) approximately eighteen16 executive staff members will receive options to purchase
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 the Company's Common
Stock with a current market value equal to one half the average annual base
salary of management staff members. The option grant sizes 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 indexes described under the caption
"Performance Graph" on page 914 herein). The stock option grants in 19941996 are
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 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%40 percent of
the optioned shares after two years from the date of grant and as to an
additional 20%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 (See also footnote 2 to the table titled "Option Grants in the Last Fiscal
Year" on page 7 herein).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 additional shares 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.
In addition to receiving future options which may be granted, a new
executive staff member may be awarded extra option grants when he or she assumes
the new position. In making such an extra award, the Committee has, to date,
honored the employment arrangements negotiated by managementBeginning in hiring a new
executive staff member. All option grants are made at the fair market value or
higher1994, Section 162(m) of the Company's shares at the date of grant and are generally made
subject to a five-year vesting period. No stock options were granted in 1994
pursuant to this policy.
Pursuant to Internal Revenue Code (the "Code") Section 162(m), for tax
years beginning on or after January 1, 1994 publicly-held corporations, subject
to certain exceptions, may no longer deduct that amountlimits
deductibility of compensation paid to
an individual in excess of $1 million. The SEC requires a statementmillion 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 Compensation Committee's policy with respect to Code Section 162(m).limitation on deductibility. To date, no employee of the Company has
been paid compensation in excess of $1 million that would be subject to the Code
Section 162(m) limitation. Therefore,While the tax impact of any compensation arrangement
is one factor to be considered, such impact is evaluated in light of the
Committee's
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21
overall compensation philosophy. The Committee's general intention is to
establish executive officer compensation programs which will maximize the
Company's deduction if the Committee has not formulated a policydetermines that such actions are consistent
with respect to Code Section
12
17
162(m). The Committee will addressits philosophy and in the issues presented by Code Section 162(m)
at such time as an employee or employeesbest interests of the Company and its
stockholders. However, from time to time the Committee may award compensation
which is likely to be paid
compensationnot fully deductible if the Committee determines that such award is
consistent with its philosophy and in excess of $1 million that would be subject to the Code Section
162(m) limitation. The Committee notes that performance-based compensation in
excess of $1 million is one exception to the compensation deductibility rules.
The Committee has been advised that the termsbest interests of the Company's stock option
plans in conjunction with the manner in which it awards stock options under such
plans excepts such awards from the limitation on deductibility imposed by Code
Section 162(m).Company and its
stockholders.
The Committee notes that generally options granted to executive officers granted options
will only realize value to the extent the fair market value of the Company's
stock increases after the date of grant. The Committee believes that this
furthers the Committee's goal of aligning management's interests with those of
the Company's stockholders.
THE COMPENSATION COMMITTEE FOR FISCAL YEAR 1996
Timm F. Crull
John W. Larson
Edmund R. Manwell
Jack O. Peiffer
Messrs. Merril M. Halpern, Jerome L. Katz John W. Larson
Edmund R. Manwelland Anthony J. Martino Jack O. Peifferwere also
members of the Compensation Committee in fiscal 1996, but resigned from the
Board of Directors prior to preparation of this Report.
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.
(THIS SPACE INTENTIONALLY LEFT BLANK)
13
18
BOARD OF DIRECTORS
COMMITTEES OF THE BOARD
Committees of the Board of Directors are the following:
Compensation Committee
The Compensation Committee is composed of seven directors, six of whom are
not employees of the Company in any capacity and a seventh member,COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1996, Mr. Manwell who serves aswas the Secretary of the Company and a
partner in the law firm of Manwell & Milton, general counsel to the Company. The
Company paid Manwell & Milton $832,200 in fees during fiscal 1996 for services
rendered as general counsel to the Company. Mr. Manwell's relationship withManwell is not separately
compensated for his services as Secretary of the Company is further described underalthough some of the
caption "Compensation Committee
Interlocksfees received by Manwell & Milton may be for services that, in other
corporations, are performed by the corporate secretary.
On June 14, 1994 the Company completed a transaction with Nestle Holdings,
Inc. ("NHI") pursuant to a Stock and Insider Participation" on pages 10-11 herein.Warrant Purchase Agreement (the "Nestle
Agreement") whereby NHI purchased from the Company, for an aggregate price of
$106,000,000, three million shares of Common Stock of the Company and warrants
for the purchase of two million shares of Common Stock of the Company. 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 10 years. The
Committee makes
recommendationsNestle 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 with respectof the Company to cause the election to the salaries and
bonuses and other formsBoard of remuneration to be paidtwo nominees
selected by NHI. Thereafter, throughout the term of the Nestle Agreement, NHI
may nominate that number of nominees proportionate to the Chief Executive
Officeramount of Voting Stock
owned by NHI and the Presidentits affiliates. NHI and the terms and conditionsits affiliates have certain rights to
purchase additional shares of their employment. In
addition, the Committee is the Administrator of the Company's IncentiveCommon 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).
Audit Committee
The Audit Committee is identical in composition to that of the Compensation
Committee. The Committee meets on the call of any member and, on at least one
occasion each year, it meets with the independent auditors to discuss: (1) the
scope of the audit engagement; (2) the results of each annual audit and the
financial statements and notes includedopen market transactions in the
Company's Annual Reportevent their aggregate equity ownership in the Company is diluted to the
Stockholders;certain
levels.
Messrs. Martino and (3) other matters pertainingCrull were named 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 submissionof the
Company pursuant to the stockholders for their approval, independent public
accountants to auditterms of the Company's financial statements,Nestle Agreement. Mr. Crull served as
wellChairman of the Board and Chief Executive Officer of Nestle USA, Inc.
("Nestle"), Chairman of the Board of NHI and as advisingdirector of Nestle Food Company
("NFC"), until his retirement or resignation from these positions in December
1994. Mr. Martino served as Executive Vice President, Chief Financial Officer of
Nestle and as director of NFC until his retirement in July 1994 or
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22
resignation in January 1994, respectively. Nestle and NFC are affiliates of NHI.
Mr. Martino resigned his position on the Board of Directors with respect to the scope of the audit,Company
effective December 31, 1996, and Mr. M. Steven Langman was appointed by NHI to
replace him.
In June 1993, the Company's
accounting policiesCompany issued in a private placement to General Electric
Capital Corporation ("GECC"), Trustees of General Electric Pension Trust and internal controls.
The purpose and functionGE
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 Audit Committee is to review and monitorCompany due June 30, 2001. In August 1995, the Company's financial reports and accounting practices, as well as to provideCompany caused the
means for direct communication among the Company's Board of Directors, its
financial management and external auditors.
The Committee is concerned with the accuracy and completenessconversion of the Company's financial statements and matters that relate to them. However, the
Committee's role does not contemplate providing to stockholders, or others,
special assurances regarding such matters. Moreover, the Committee's role does
not involve the professional evaluationdebentures into Series B Convertible Preferred Stock ($1.00
par value) of the qualityCompany. The shares of Series B Convertible Preferred Stock
are convertible at an initial conversion price of $34.74 into a total of
2,900,000 shares of Common Stock of the audit conducted by
the independent auditors. While it is believed that the Committee's activities
are beneficial because they provide an ongoing oversight on behalf of the full
Board of Directors, they do not alter the traditional roles and responsibilities
of the Company's management and independent auditors with respectCompany, subject to the
accounting and control functions and financial statement presentation.
Messrs. Crull, Halpern, Katz, Larson, Manwell, Martino andadjustment. Mr.
Peiffer are
members of both the Compensation and Audit Committees.
The Company has no nominating committee.
BOARD OF DIRECTORS ATTENDANCE
During fiscal 1994, there were six special meetings ofwas named to the Board of Directors and all directors attended each meeting occurring while such director
wasof the Company pursuant to a
memberprovision of the GE Agreement that allows a designated Holder to select one
nominee to the Board of Directors exceptDirectors. Mr. Peiffer who was absent from
one meeting. The Compensation Committee met five times and the Audit Committee
met twice. Exceptserved as set out hereinafter, all membersSenior Vice
President -- Corporate Human Resources of General Electric Company ("GEC") until
his retirement in February 1993. GEC is an affiliate of the committees attended
each of the meetings of the respective committee on which they sit occurring
while such person was a member of the committee in
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19
question: Messrs. Larson and Peiffer were each absent from one meeting of the
Compensation Committee; and Messrs. Katz and Peiffer were each absent from one
meeting of the Audit Committee.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Officers, directors and greater than ten-percent stockholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 (required
by Section 16(a) in the event of failure to comply with certain filing
requirements) were required for those persons, the Company believes that during
fiscal 1994 its officers, directors, and greater than ten-percent beneficial
owners complied with all applicable filing requirements.
CERTAIN TRANSACTIONSHolders.
OTHER RELATIONSHIPS
On June 14, 1994, the Company entered into an agreement with Nestle Ice
Cream Company ("NICC"), an affiliate of Nestle Holding, 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 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 is currently negotiating an agreement with JMS to produce for the
Company a new product in accordance with specifications and quality control
provided by the Company. The Company is proposing to compensate JMS for such
manufacturing services at prices consistent with those offered by other
manufacturers who provide such services.
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 pages 7-10 herein are described under the caption
"Compensation Committee Interlocks and Insiders Participation" on pages 17-18
herein.
MATTERS SUBMITTED TO A VOTE OF STOCKHOLDERS
ELECTION OF DIRECTORS
The directors of Class III will be elected at the 1997 Annual Meeting of
Stockholders and will hold office until the 2000 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
pages 3-6 herein. No family relationship exists between any nominee and any of
the other directors. Any business relationshipsrelationship existing between any of the
nominees or continuing directors and the Company are described under the
Captioncaptions "Compensation Committee Interlocks and InsidersInsider Participation" and
"Other Relationships" on pages 10-1117-18 herein.
(THIS SPACE INTENTIONALLY LEFT BLANK)
15
20
MATTERS SUBMITTED TO THE VOTE OF STOCKHOLDERS
ELECTION OF DIRECTORS
General
Under the Company's By-Laws and Certificate of Incorporation, the Board of
Directors consists of nine (9) directors and is divided into three classes, with
each class having a term of three years. The directors of Class I will be
elected at the 1995 Annual Meeting of Stockholders and will hold office until
the 1998 Annual Meeting of Stockholders or until their successors are elected
and qualified.
Unless otherwise directed, the persons named in the enclosed form of proxy
will vote such proxy for the election of MerrilT. Gary Rogers, William F. Cronk, III
and M. Halpern, John W.
Larson and Jack O. Peiffer,Steven Langman, each of whom has consented to be named as sucha director of
the Company and to serve if elected. In case any of Messrs. Halpern, LarsonRogers, Cronk or
PeifferLangman becomes unavailable for election or declines to serve for any unforeseen
reason, an event
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23
management does not anticipate, the persons named in the proxy will have the
right to use their discretion to vote for a substitute.
The nominees
constitute Class I of the Board of Directors with each of their terms expiring
as of the date of this annual meeting. No family relationship exists between any
nominee and any of the other directors. Any business relationships existing
between any of the nominees or continuing directors and the Company are
described under the caption "Compensation Committee Interlocks and Insider
Participation" on pages 10-11 herein.
The following brief statements contain biographical information about the
nominees and the years they first became directors.
NOMINEE
YEAR FIRST ELECTED A DIRECTOR
AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ----------------------------- ------------------------------------------------------------------
Merril M. Halpern............ CHAIRMAN AND CO-CHIEF EXECUTIVE, CHARTERHOUSE GROUP INTERNATIONAL,
1977 INC. Mr. Halpern has served on the Company's Board of Directors
Age: 60 since its incorporation in 1977. Since October 1984, Mr. Halpern
has served as Chairman of the Board of Charterhouse Group
International, Inc. ("Charterhouse"), a privately-held company
which specializes in leveraged buyouts and turn-arounds. From
1973 to October 1984, he served as Charterhouse's President and
Chief Executive Officer. Mr. Halpern is also a director of
Charter Power Systems ("Charter Power"), a manufacturer of
battery power systems and their components, Del Monte
Corporation, a processed foods company, and of Insignia
Financial Group, Inc., a fully integrated real estate service
organization.
John W. Larson............... PRIVATE INVESTOR. Mr. Larson joined the Company's Board of
1993 Directors in 1993. From 1989 to early 1993, Mr. Larson served as
Age: 57 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.
Jack O. Peiffer.............. RETIRED SENIOR VICE PRESIDENT -- CORPORATE HUMAN RESOURCES,
1993 GENERAL ELECTRIC COMPANY. Mr. Peiffer joined the Company's Board
Age: 61 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, including acting as Vice President and General
Manager of GE Supply Company from November 1983 to January 1985.
Continuing Directors
Directors Timm F. Crull, Jerome L. Katz and Edmund R. Manwell ("Class II")
will hold office until the 1996 Annual Meeting of Stockholders. Directors T.
Gary Rogers, William F. Cronk, III and Anthony J. Martino ("Class III") will
hold office until the 1997 Annual Meeting of Stockholders.
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The following brief statements contain biographical information about each
continuing director and the year he first became a director.
NAME
YEAR FIRST ELECTED A DIRECTOR
AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ----------------------------- ------------------------------------------------------------------
T. Gary Rogers............... CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER, DREYER'S GRAND
1977 ICE CREAM, INC. Mr. Rogers has served as the Company's Chairman
Age: 52 of the Board and Chief Executive Officer since its incorporation
in February 1977.
William F. Cronk, III........ PRESIDENT, DREYER'S GRAND ICE CREAM, INC. Mr. Cronk has served on
1977 the Company's Board of Directors since its incorporation in
Age: 52 1977. Since April 1981, he has served as the Company's
President.
Timm F. Crull................ RETIRED CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF NESTLE USA, INC.
1995 Mr. Crull joined the Company's Board of Directors in 1995. Mr.
Age: 64 Crull became Chairman and Chief Executive Officer of Nestle USA,
Inc. in 1991, after having served since 1985 as President and
Chief Executive Officer of Carnation Company, a Nestle
subsidiary. He retired from his positions with Nestle in 1994.
Mr. Crull is also a director of Smart & Final Inc., a department
store chain, and of BankAmerica Corporation, a bank holding
company.
Jerome L. Katz............... PRESIDENT AND CO-CHIEF EXECUTIVE, CHARTERHOUSE GROUP
1977 INTERNATIONAL, INC. Mr. Katz has served on the Company's Board
Age: 61 of Directors since its incorporation in 1977 until April 1981
and was re-elected to the Board in June 1981. Since October
1984, he has served as President of Charterhouse. From 1973 to
1984 Mr. Katz served as Executive Vice President of
Charterhouse. Mr. Katz is also a director of Charter Power and
of Cryenco Sciences, Inc., a manufacturer of sophisticated
leak-tight containment systems.
Edmund R. Manwell............ PARTNER, MANWELL & MILTON, GENERAL COUNSEL TO THE COMPANY. Mr.
1981 Manwell has served as Secretary of the Company since its
Age: 52 incorporation in 1977 and as a director of the Company since
April 1981. Mr. Manwell is a partner in the law firm of Manwell
& Milton, general counsel to the Company. Mr. Manwell is also a
director of Hanover Direct, Inc., a direct marketing company.
Anthony J. Martino........... RETIRED EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER, NESTLE
1994 USA, INC. Mr. Martino joined the Company's Board of Directors in
Age: 59 1994. Mr. Martino retired from his position as Executive Vice
President, Chief Financial Officer of Nestle USA, Inc. after
having served Nestle in various positions for 21 years,
including acting as Senior Vice President, Finance of Nestle
Enterprises, Inc.
APPROVALRATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
Price Waterhouse LLP has been appointed to be the Company's independent
public accountants for the fiscal year ending December 30, 1995,27, 1997, and were the
independent public accountants for the Company during the fiscal year ended
December 31, 1994.28, 1996.
The appointment of independent public accountants is made annually by the
Board of Directors and is subsequently submitted by them to the stockholders for
approval. The decision of the Board of Directors is, in turn, based upon the
recommendation of the Audit Committee of the Board of Directors. In making its
recommendations, the Audit Committee reviews both the audit scope and estimated
audit fees for the coming year. In addition, the Audit Committee reviews the
types of professional services provided by Price Waterhouse LLP to determine
whether the rendering of such services would impair the independence of Price
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22
Waterhouse 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 Price Waterhouse 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 PRICE WATERHOUSE LLP AS
THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS FOR THE 19951997 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 nomineesnominee(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. Abstention from voting on a matter may have the legal
effect of a vote against such matter. Shares will be voted as instructed in the
accompanying proxy on each matter submitted to stockholders. If there are no
instructions from the stockholder on an executed proxy, the proxy will be voted
as recommended by the Board of Directors.
When aAbstentions and broker is not permitted to vote stock held in street name on certain
mattersnon-votes are each included in the absence of instructions from the beneficial ownerdetermination of
the stock
and so indicates that it isnumber of shares present for quorum purposes. Abstentions are counted in
tabulations of votes cast on proposals presented to stockholders. While not
voting certain stock on anycounted as votes for or all matters onagainst a proposal, abstentions have the proxy, the shares whichsame effect as
votes against a proposal. Broker non-votes are not being voted with respect to a particular
matter (the "non-voted shares") will be considered shares not present and
entitled to vote on such matter, although such shares may be considered present
and entitled to vote for other purposes and will countcounted for purposes of
determining the presence ofwhether a quorum. (Shares voted to abstain as to a
particular matter will not be considered non-voted shares.)proposal has been approved. Approval of each matter
specified in the Annual Meeting notice requires the affirmative vote of either a
majority or a plurality of the shares of Common Stock present in person or by
proxy at the meeting and entitled to vote on such matter. Accordingly,
non-votedmatter, including the shares
with respect to such matters will not affectof Common Stock into which the determinationoutstanding shares of whether such mattersSeries B Convertible
Preferred Stock are approved orconvertible on the outcomerecord date for the meeting that the
holders of the election of
directors.Series B Convertible Preferred Stock are entitled to vote.
19
24
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 B Convertible
Preferred Stock are convertible on the record date for the meeting.
Approval of Price Waterhouse 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 B Convertible Preferred Stock are convertible
on the record date for the meeting.
PROPOSALS OF STOCKHOLDERS
The 19961998 Annual Meeting of Stockholders will be held on or about May 8,
1996.13,
1998. Proposals of stockholders intended to be presented at the 19961998 Annual
Meeting must be received by the Secretary, Dreyer's Grand Ice Cream, Inc., 5929
College Avenue, Oakland, California 94618 no later than December 8, 1995.
18
231, 1997.
OTHER MATTERS
The management knows of no other business to be presented at the meeting.
If other matters do properly come before the meeting, it is intended that the
proxy holders will vote on them in accordance with their best judgment.
By Order of the Board of Directors,
EDMUND R. MANWELL
Secretary
DREYER'S GRAND ICE CREAM, INC.
Oakland, California
April 5, 1995
19March 31, 1997
20
2425
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
2526
PROXY
DREYER'S GRAND ICE CREAM, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE 19951997
ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints T. GARY ROGERS, WILLIAMGary Rogers, William F. CRONK,Cronk, III
and EDMUNDEdmund R. MANWELL,Manwell, or any one of them, each with power of substitution and
revocation, as the proxy or proxies of the undersigned to represent the
undersigned and vote all shares of Common Stock, $1.00 par value, of DREYER'S
GRAND ICE CREAM, INC., which the undersigned would be entitled to vote if
personally present at the Annual Meeting of Stockholders of DREYER'S GRAND ICE
CREAM, INC., to be held at the Claremont Resort Hotel, Oakland, California, at
2:00 p.m. on Wednesday, May 10, 1995,14, 1997, and at any postponements or adjournments
thereof, upon the following matters:
1. The election of 3 Class I directors.
FOR all the nominees FOR all nominees except WITHHOLD AUTHORITY(Continued, and to be signed, on reverse side)
FOLD AND DETACH HERE
27
PLEASE MARK [ X ]
YOUR VOTES AS
INDICATED IN
THIS EXAMPLE
1. The election of three Class III directors.
Instruction: to vote
listed below / / as crossed out below / / for the nominees listed below / /
Instruction: To withhold authority for any individual nominee, cross out
the nominee's name in the list below:
MerrilFOR ALL WITHHOLD
FOR ALL NOMINEES EXCEPT AUTHORITY TO
THE NOMINEES AS CROSSED VOTE FOR NOMINEES
LISTED BELOW OUT BELOW LISTED BELOW
[ ] [ ] [ ]
T. GARY ROGERS WILLIAM F. CRONK, III M. Halpern John W. Larson Jack O. PeifferSTEVEN LANGMAN
2. The approval of Price Waterhouse LLP as the Company's independent public
accountants for fiscal year 1995.1997.
FOR / / AGAINST / / ABSTAIN
/ /[ ] [ ] [ ]
3. With discretionary authority on such matters as may properly come before the
meeting.
THE SHARES COVERED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE CHOICES
MADE. WHEN NO CHOICE IS MADE, THIS PROXY WILL BE VOTED FOR THE LISTED NOMINEES
FOR DIRECTOR AND FOR PROPOSAL 2.
(Continued, and to be signed, on reverse side)
26
(Continued from other side)
The 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)
Please date and sign exactly as your name(s)
appears on your shares. If signing for estates,
trusts, or corporations, title or capacity
should be stated. If shares are held jointly,
each holder should sign.
-------------------------
-------------------------
Signature of
Stockholder(s)
Dated , 1995.Dated____________________________________, 1997
FOLD AND DETACH HERE