1 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998 OR [ ] TRANSITION REPORT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____________ TO ___________ Commission file number 0-141090 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: DREYER'S GRAND ICE CREAM, INC. SAVINGS PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: DREYER'S GRAND ICE CREAM, INC. 5929 COLLEGE AVENUE OAKLAND, CA 94618 ================================================================================ 2 DREYER'S GRAND ICE CREAM, INC. SAVINGS PLAN INDEX TO FINANCIAL STATEMENTS AND ADDITIONAL INFORMATION - -------------------------------------------------------------------------------- PAGE ---- REPORT OF INDEPENDENT ACCOUNTANTS 1 FINANCIAL STATEMENTS: Statements of Net Assets Available for Benefits, with Fund Information, at December 31, 1998 and 1997 2 - 3 Statements of Changes in Net Assets Available for Benefits, with Fund Information, for the Years Ended December 31, 1998 and 1997 4 - 5 Notes to Financial Statements 6 - 10 ADDITIONAL INFORMATION: Schedule I - Assets Held for Investment Purposes at December 31, 1998 11 Schedule V - Reportable Transactions - Series of Transactions During the Year Ended December 31, 1998 in Excess of 5% of the Current Value of Plan Assets at December 31, 1997 12 Note: Schedules II, III and IV are not presented as they are not applicable. 3 REPORT OF INDEPENDENT ACCOUNTANTS To the Participants and Administrative Committee of the Dreyer's Grand Ice Cream, Inc. Savings Plan In our opinion, the accompanying statements of net assets available for benefits and the related statements of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of the Dreyer's Grand Ice Cream, Inc. Savings Plan (the Plan) at December 31, 1998 and 1997, and the changes in net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Plan's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of Assets Held for Investment Purposes (Schedule I - Item 27a) and Reportable Transactions (Schedule V - Item 27d) are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The fund information in the statements of net assets available for benefits and the statements of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for benefits of each fund. These supplemental schedules and fund information are the responsibility of the Plan's management. The supplemental schedules and fund information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. PRICEWATERHOUSECOOPERS LLP San Francisco, California June 4, 1999 4 DREYER'S GRAND ICE CREAM, INC. SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION, AT DECEMBER 31, 1998 - -------------------------------------------------------------------------------- SCHWAB LOOMIS JURIKA & STABLE SAYLES BOND VOYLES RAINIER CORE VALUE INSTITUTIONAL BALANCED EQUITY STOCK FUND FUND FUND FUND FUND ASSETS Investments at fair value: Collective investments trusts $ 4,323,213 $ -- $ -- $ -- $ -- Common stock -- -- -- -- 10,627,672 Interest in master trust -- 441,570 -- -- -- Interest in pooled funds -- -- 5,496,817 14,640,841 674 Participant loans -- -- -- -- -- Cash -- -- -- -- -- ----------- ----------- ----------- ----------- ----------- 4,323,213 441,570 5,496,817 14,640,841 10,628,346 Contributions receivable (payable): Employee 10,583 2,864 18,362 38,424 31,238 Employer (99,481) 23,311 141,634 331,097 308,492 Accrued dividends receivable -- -- 35,081 -- -- Other receivables 2 -- -- 43 12 ----------- ----------- ----------- ----------- ----------- Net assets available for benefits $ 4,234,317 $ 467,745 $ 5,691,894 $15,010,405 $10,968,088 =========== =========== =========== =========== =========== BT SCHWAB S & P INVESTMENT SELECT INTERNATIONAL SHARE LOAN FUND FUND FUND CASH TOTAL ASSETS Investments at fair value: Collective investments trusts $ -- $ -- $ -- $- $ 4,323,213 Common stock -- -- -- -- 10,627,672 Interest in master trust -- -- -- -- 441,570 Interest in pooled funds 617,594 24,761,882 -- -- 45,517,808 Participant loans -- -- 2,753,732 -- 2,753,732 Cash -- -- -- 2,838 2,838 ----------- ----------- ----------- ----------- ----------- 617,594 24,761,882 2,753,732 2,838 63,666,833 Contributions receivable (payable): Employee 3,782 62,837 -- -- 168,090 Employer 28,114 543,434 -- -- 1,276,601 Accrued dividends receivable -- -- -- -- 35,081 Other receivables 4 46 -- -- 107 ----------- ----------- ----------- ----------- ----------- Net assets available for benefits $ 649,494 $25,368,199 $ 2,753,732 $ 2,838 $65,146,712 =========== =========== =========== =========== =========== See accompanying notes to financial statements. -2- 5 DREYER'S GRAND ICE CREAM, INC. SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION, AT DECEMBER 31, 1997 - -------------------------------------------------------------------------------- Schwab Loomis Jurika & Rainier Stable Sayles Bond Voyles Core Value Institutional Balanced Equity Stock Fund Fund Fund Fund Fund Assets Investments at fair value: Collective investments trusts $ 3,634,354 $ -- $ -- $ -- $ -- Common stock -- -- -- -- 8,602,622 Interest in master trust 46,157 Interest in pooled funds -- 5,712,812 13,098,798 16,893 Participant loans -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ 3,634,354 46,157 5,712,812 13,098,798 8,619,515 Contributions receivable: Employee -- -- -- -- -- Employer 34,486 12,198 124,820 272,703 216,777 Accrued dividends receivable -- -- -- -- 2,281 Inter-fund transfers receivable(payable) (5,596) -- (6,824) -- -- ------------ ------------ ------------ ------------ ------------ Net assets available for benefits $ 3,663,244 $ 58,355 $ 5,830,808 $ 13,371,501 $ 8,838,573 ------------ ------------ ------------ ------------ ------------ BT Schwab S & P Investment Select International Share Loan Fund Fund Fund Cash Total Assets Investments at fair value: Collective investments trusts $ -- $ -- $ -- $ -- $ 3,634,354 Common stock -- -- -- -- 8,602,622 Interest in master trust 46,157 Interest in pooled funds 54,035 20,871,527 -- -- 39,754,065 Participant loans -- -- 1,699,800 -- 1,699,800 ------------ ------------ ------------ ------------ ------------ 54,035 20,871,527 1,699,800 -- 53,736,998 Contributions receivable: Employee -- -- -- -- -- Employer 14,162 435,599 -- -- 1,110,745 Accrued dividends receivable -- -- -- -- 2,281 Inter-fund transfers receivable(payable) -- (2,734) -- 15,154 -- ------------ ------------ ------------ ------------ ------------ Net assets available for benefits $ 68,197 $ 21,304,392 $ 1,699,800 $ 15,154 $ 54,850,024 ------------ ------------ ------------ ------------ ------------ See accompanying notes to financial statements. -3- 6 DREYER'S GRAND ICE CREAM, INC. SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION, FOR THE YEAR ENDED DECEMBER 31, 1998 - -------------------------------------------------------------------------------- SCHWAB LOOMIS JURIKA & STABLE SAYLES BOND VOYLES RAINIER CORE VALUE INSTITUTIONAL BALANCED EQUITY STOCK FUND FUND FUND FUND FUND ------------ ------------ ------------ ------------ ------------ Additions to net assets attributed to: Investment income: Interest $ 13,867 $ -- $ 23,367 $ 47,088 $ 45,619 Dividends -- -- 503,440 741,861 41,830 Realized and unrealized gains/(losses), net 216,331 -- (134,895) 1,756,771 (2,353,639) Beneficial interest in investment income of master trust -- 23,424 -- -- -- ------------ ------------ ------------ ------------ ------------ 230,198 23,424 391,912 2,545,720 (2,266,190) Contributions: Employee 315,748 83,267 691,395 1,504,079 1,213,296 Employer (9,175) 23,262 125,895 305,123 298,947 Employee rollovers from other qualified plans 25,123 4,874 70,448 143,629 167,931 ------------ ------------ ------------ ------------ ------------ Total additions 561,894 134,827 1,279,650 4,498,551 (586,016) ------------ ------------ ------------ ------------ ------------ DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: Benefit and loan payments 614,374 25,632 410,820 1,021,389 402,277 Administrative expenses 8,365 574 11,901 28,732 20,095 ------------ ------------ ------------ ------------ ------------ Total deductions 622,739 26,206 422,721 1,050,121 422,372 ------------ ------------ ------------ ------------ ------------ Net increase (decrease) (60,845) 108,621 856,929 3,448,430 (1,008,388) NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 3,663,244 58,355 5,830,808 13,371,501 8,838,573 Transfers 631,918 300,769 (995,843) (1,809,526) 3,137,903 ------------ ------------ ------------ ------------ ------------ End of year $ 4,234,317 $ 467,745 $ 5,691,894 $ 15,010,405 $ 10,968,088 ------------ ------------ ------------ ------------ ------------ BT SCHWAB S & P INVESTMENT SELECT INTERNATIONAL SHARE LOAN FUND FUND FUND CASH TOTAL ------------ ------------ ------------ ------------ ------------ Additions to net assets attributed to: Investment income: Interest $ 3,279 $ 75,613 $ -- $ -- $ 208,833 Dividends 1,613 228,277 -- -- 1,517,021 Realized and unrealized gains/(losses), net 14,754 5,223,386 -- -- 4,722,708 Beneficial interest in investment income of master trust -- -- -- -- 23,424 ------------ ------------ ------------ ------------ ------------ 19,646 5,527,276 -- -- 6,471,986 Contributions: Employee 111,466 2,458,061 -- -- 6,377,312 Employer 27,875 505,919 -- -- 1,277,846 Employee rollovers from other qualified plans 64,047 257,698 -- -- 733,750 ------------ ------------ ------------ ------------ ------------ Total additions 223,034 8,748,954 -- -- 14,860,894 ------------ ------------ ------------ ------------ ------------ DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: Benefit and loan payments 30,683 1,699,179 241,973 -- 4,446,327 Administrative expenses 917 47,295 -- -- 117,879 ------------ ------------ ------------ ------------ ------------ Total deductions 31,600 1,746,474 241,973 -- 4,564,206 ------------ ------------ ------------ ------------ ------------ Net increase (decrease) 191,434 7,002,480 (241,973) -- 10,296,688 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 68,197 21,304,392 1,699,800 15,154 54,850,024 Transfers 389,863 (2,938,673) 1,295,905 (12,316) -- ------------ ------------ ------------ ------------ ------------ End of year $ 649,494 $ 25,368,199 $ 2,753,732 $ 2,838 $ 65,146,712 ------------ ------------ ------------ ------------ ------------ See accompanying notes to financial statements. -4- 7 DREYER'S GRAND ICE CREAM, INC. SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION, FOR THE YEAR ENDED DECEMBER 31, 1997 - -------------------------------------------------------------------------------- SCHWAB LOOMIS JURIKA & STABLE SAYLES BOND VOYLES RAINIER CORE VALUE INSTITUTIONAL BALANCED EQUITY STOCK FUND FUND FUND FUND FUND Additions to net assets attributed to: Investment income: Interest $ 178,795 $ -- $ 181,625 $ 200,851 $ 35,229 Dividends -- -- 209,742 1,752,883 56,008 Realized and unrealized gains/(losses), net 51,385 -- 382,804 611,566 3,458,831 Beneficial interest in investment income of master trust -- 362 -- -- -- ------------ ------------ ------------ ------------ ------------ 230,180 362 774,171 2,565,300 3,550,068 Contributions: Employee 320,712 3,341 765,087 1,458,401 1,165,113 Employer 34,486 12,198 124,820 272,703 216,777 Employee rollovers from other qualified plans 4,379 -- 15,469 58,870 31,543 Transfer of assets from merged plan 793,881 -- 549,099 832,861 85,751 ------------ ------------ ------------ ------------ ------------ Total additions 1,383,638 15,901 2,228,646 5,188,135 5,049,252 ------------ ------------ ------------ ------------ ------------ DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: Benefit and loan payments 202,203 -- 271,087 507,414 250,790 Administrative expenses 15,024 18 34,255 69,090 33,881 ------------ ------------ ------------ ------------ ------------ Total deductions 217,227 18 305,342 576,504 284,671 ------------ ------------ ------------ ------------ ------------ Net increase 1,166,411 15,883 1,923,304 4,611,631 4,764,581 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 2,682,117 -- 4,802,705 9,133,237 5,383,781 Transfers (185,284) 42,472 (895,201) (373,367) (1,309,789) ------------ ------------ ------------ ------------ ------------ End of year $ 3,663,244 $ 58,355 $ 5,830,808 $ 13,371,501 $ 8,838,573 ------------ ------------ ------------ ------------ ------------ BT SCHWAB S & P INVESTMENT SELECT INTERNATIONAL SHARE LOAN FUND FUND FUND CASH TOTAL Additions to net assets attributed to: Investment income: Interest $ 175 $ 19,459 $ 120,123 $- $ 736,257 Dividends 66 316,328 -- -- 2,335,027 Realized and unrealized gains/(losses), net 824 3,546,472 -- -- 8,051,882 Beneficial interest in investment income of master trust -- -- -- -- 362 ------------ ------------ ------------ ------------ ------------ 1,065 3,882,259 120,123 -- 11,123,528 Contributions: Employee 5,036 2,074,639 -- -- 5,792,329 Employer 14,162 435,599 -- -- 1,110,745 Employee rollovers from other qualified plans -- 120,185 103,106 -- 333,552 Transfer of assets from merged plan -- 1,015,309 -- -- 3,276,901 ------------ ------------ ------------ ------------ ------------ Total additions 20,263 7,527,991 223,229 -- 21,637,055 ------------ ------------ ------------ ------------ ------------ DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: Benefit and loan payments -- 714,638 88,928 -- 2,035,060 Administrative expenses 9 55,623 -- -- 207,900 ------------ ------------ ------------ ------------ ------------ Total deductions 9 770,261 88,928 -- 2,242,960 ------------ ------------ ------------ ------------ ------------ Net increase 20,254 6,757,730 134,301 -- 19,394,095 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year -- 11,954,804 1,499,285 -- 35,455,929 Transfers 47,943 2,591,858 66,214 15,154 -- ------------ ------------ ------------ ------------ ------------ End of year $ 68,197 $ 21,304,392 $ 1,699,800 $ 15,154 $ 54,850,024 ------------ ------------ ------------ ------------ ------------ See accompanying notes to financial statements. -5- 8 DREYER'S GRAND ICE CREAM, INC. SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1. DESCRIPTION OF THE PLAN The following brief description of the Dreyer's Grand Ice Cream, Inc. Savings Plan (the Plan) is provided for general informational purposes only. Participants should refer to the Plan document for more complete information. GENERAL The Plan is a defined contribution profit sharing plan containing a cash or deferred arrangement described in Section 401(k) of the Internal Revenue Code. The Plan benefits participating employees of Dreyer's Grand Ice Cream, Inc. and its subsidiaries (the Company). Effective October 1, 1997, the Plan is administered by the Plan's Administrative Committee (the Committee) and all investments and cash are held by Charles Schwab Trust Company (the Trustee). Schwab Retirement Plan Services provides record keeping services for the Plan. Prior to October 1, 1997, all investments and cash were held by Imperial Trust Company, while Watson Wyatt provided record keeping and consultation services and an investment manager provided investment advisory services for certain of the funds. The Plan became effective January 1, 1983 and is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). ELIGIBILITY All full-time employees, other than individuals employed under a collective bargaining agreement which does not provide for participation in the Plan, are eligible to participate in the Plan on the next "entry date" coinciding with or following thirty days of employment. All part-time employees are eligible to participate in the Plan on the next "entry date" coinciding with or following twelve months of employment and at least 1,000 hours of service in the Plan year. The entry dates defined by the Plan are January 1, April 1, July 1 and October 1 of each calendar year. EMPLOYEE CONTRIBUTIONS In order to participate in the Plan, each participant is required to contribute at least 2% of the compensation received from the Company; however, any participant may elect to contribute an additional amount up to 10% of the participant's compensation within the maximum allowable amount permitted under the Internal Revenue Code. At all times, participants will be fully vested in their contributions adjusted for attributed income, gains, losses and expenses. EMPLOYER CONTRIBUTIONS The Plan provides that the Company may make discretionary employer matching contributions, subject to approval by the Company's Board of Directors. Discretionary employer matching contributions are made to participants' accounts equal to a percentage of each eligible participant's employee contribution. For eligible participants who have ten or more years of service as of the last day of the Plan year, the percentage of employee contributions matched is twice that of eligible participants with fewer than ten years of service. An eligible participant is defined as an eligible employee who has been employed by -6- 9 DREYER'S GRAND ICE CREAM, INC. SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- the Company for twelve months and has completed at least 1,000 hours of service in the Plan year or who retired, died or was disabled during the Plan year. During 1998 and 1997, $174,262 and $182,555, respectively, of employer matching contributions were forfeited by terminated employees before those amounts became vested. Such forfeited amounts were used to reduce employer matching contributions for the corresponding year and were allocated as of the last day of the year to the matching accounts of eligible participants. ROLLOVER CONTRIBUTIONS Subject to the terms of the Plan, the Committee may authorize the Trustee to accept from any participant a rollover contribution from another tax-qualified plan, provided the contribution is made within 60 days after receipt of the eligible rollover distribution by the participant from such other tax-qualified plan. Amounts consisting of after-tax employee contributions are not allowed as rollover contributions. The Plan will establish and maintain separate accounts for all rollover contributions. At all times, the participant will be fully vested in his rollover account, adjusted for attributed income, gains, losses and expenses. Cash benefits paid from rollover accounts will be paid in the same manner as other benefits under the Plan. TRANSFER OF ASSETS FROM MERGED PLAN During 1996, the Company acquired the remaining 50.3% of the outstanding common stock of M-K-D Distributors, Inc. (M-K-D). Effective April 1, 1997, the M-K-D 401(k) Profit Sharing Plan and Trust (M-K-D Plan) was merged with the Plan. In conjunction with this merger, $3,276,901 from the M-K-D Plan was transferred to the Plan on that date. PARTICIPANT ACCOUNT VALUATION Each participant's account is valued at the last quoted sales price of each business day, including the last business day of the Plan year. The valuation is based on all contributions, withdrawals, investment income, and realized and unrealized gains and losses since the previous business day. PLAN BENEFITS Upon retirement, death or permanent disability, participants are entitled to an amount equal to 100% of their salary deferral, rollover and Company accounts. In the event of termination prior to retirement, participants will receive the final balances in their salary deferral and rollover accounts plus the vested portion of the Company account to which they are entitled. A salary deferral account consists of the portion of a participant's account attributable to the participant's employee contributions and the related investment income; a rollover account consists of the portion of a participant's account attributable to the participant's rollover contributions and the related investment income; and a Company account consists of the portion of a participant's account attributable to Company contributions and the related investment income. -7- 10 DREYER'S GRAND ICE CREAM, INC. SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- The Plan has a flexible investment policy in which the participant can choose to invest his or her account balance in one or all of a variety of investment funds. The participant's accounts are credited for the return on his investment in proportion to his investment in the respective fund within the Plan. Investment options in the Plan include seven funds: a short-term investment fund, a bond fund, a balanced fund, an equity fund, an international equity fund, a stock fund (comprised of the Company's common stock) and an S&P 500 fund. VESTING After completion of two years of service, participants are entitled to twenty percent (20%) of the final balance of their Company account. For each full year of service thereafter, participants vest an additional fifteen percent (15%) of their Company account balance and are fully vested after seven years. A participant earns one year of service for each year commencing on or after January 1, 1976 in which the participant has worked at least 1,000 hours. If a participant's service is less than two years and ends before retirement, death, or permanent disability, the entire Company account will be forfeited. PARTICIPANT LOANS The Plan has a participant loan program as allowed by existing Plan provisions. Participants may borrow a portion of their vested accounts, subject to the terms set forth in the Plan and the limitations of the Internal Revenue Code. Participant loans, which bear interest at the prime rate plus 2%, are due within five years and are secured by the participant's interest in the balance of his or her account. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The accompanying financial statements have been prepared using the accrual method of accounting in accordance with generally accepted accounting principles. The preparation of financial statements in accordance with generally accepted accounting principles requires the use of management's estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. INVESTMENTS AND INVESTMENT INCOME The Plan's assets are valued at the last quoted sales price of each business day including the last business day of the Plan year. Realized gains or losses on investments sold are recorded as the difference between the proceeds received upon sale and the market value of the investments at the beginning of the year or cost if acquired during the year. In accordance with the Plan's policy of stating investments at market value, net unrealized gains or losses for the period are included in the statement of changes in net assets available for benefits, with fund information, in the period during which the market value change occurs. -8- 11 DREYER'S GRAND ICE CREAM, INC. SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- EXPENSES OF THE PLAN The expenses incurred in the administration of the Plan are charged to the Plan by the Trustee if they are not paid by the Company. BENEFIT PAYMENTS AND LOANS MADE Benefits to terminated participants and loan repayments for terminated participants are recorded as a deduction from net assets when paid in accordance with guidance issued for accounting and disclosure by employee benefit plans. Loans made and loan repayments for active participants are recorded as transfers in the statement of changes in net assets available for benefits, with fund information. During 1998 and 1997, loans made totaled $2,010,976 and $698,895, respectively. During 1998 and 1997, loan repayments totaled $957,044 and $528,638, respectively. 3. INVESTMENTS Investments representing 5% or more of net assets available for benefits were as follows: December 31, 1998 1997 Collective Investments Trusts Schwab Stable Value Fund $ 4,323,213 $ 3,634,354 Interest in Pooled Funds: Rainer Core Equity Fund 14,640,841 13,098,798 Jurika & Voyles Balanced Fund 5,496,817 5,712,812 Schwab S & P Select Share Fund 24,761,882 20,871,527 COMMON STOCK: Dreyer's Grand Ice Cream, Inc. 10,627,672 8,602,622 4. INVESTMENTS IN MASTER TRUST Certain assets of the Plan are held in the Dreyer's Grand Ice Cream, Inc. Master Trust (the "Master Trust"). The Master Trust is a pooling of the Plan's and the Dreyer's Grand Ice Cream, Inc. Money Purchase Pension Plan's investment in the Loomis Sayles Bond Institutional Fund. Investments in the Master Trust are valued at the last quoted sales price of each business day. The net assets, investment income and gains and losses are allocated based on the pro-rata portion of each plan's interest in the Master Trust. -9- 12 DREYER'S GRAND ICE CREAM, INC. SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- The Plan's percentage interest in the Master Trust at December 31, 1998 and 1997 was 2.3% and 0.3%, respectively. The changes in net assets of the Plan's interest in the Master Trust, and related amounts of investment income, for the years ended December 31, 1998 and 1997 were as follows: Years ended December 31, 1998 1997 Changes in net assets Increase in fair value of investments $ 395,413 $ 46,157 --------- --------- Investment income Interest $ 2,027 $ 256 Dividends 49,610 1,341 Realized and unrealized gains/(losses), net (28,213) (1,235) --------- --------- $ 23,424 $ 362 ========= ========= 5. PLAN TERMINATION Although it has not expressed any intention to do so, the Company has the right under the Plan to discontinue its contributions and to terminate the Plan. In the event the Plan is terminated, participants' accounts shall become nonforfeitable and the net assets shall be allocated to each participant to provide benefits in accordance with the provisions of Section 4044 of ERISA. 6. RECONCILIATION TO FORM 5500 Due to several minor differences arising during the conversion of record keepers (Note 1), net assets as presented in the Form 5500 were $6,639 greater at December 31, 1997 than net assets presented in the financial statements. The effects of correcting these insignificant differences were recorded in 1998. 7. TAX STATUS OF THE PLAN In January 1997, the Committee received a favorable determination letter from the Internal Revenue Service as to the qualified status of the Plan. Effective August 1, 1998, the Plan was amended to change the Plan's eligibility requirements, as defined in Note 1. The Committee is of the opinion that the Plan fulfills the requirements of a qualified Plan and that the trust which forms a part of the Plan is not subject to tax. Accordingly, no provision for federal or state income taxes has been provided. -10- 13 DREYER'S GRAND ICE CREAM, INC. SAVINGS PLAN ASSETS HELD FOR INVESTMENT PURPOSES AT DECEMBER 31, 1998 SCHEDULE I - -------------------------------------------------------------------------------- Number of Shares or Cost of Current Description of Investment Face Value Asset Value Interest in Pooled Funds Schwab Stable Value Fund 375,719 $ 4,103,764 $ 4,323,213 Jurika & Voyles Balanced Fund 379,877 5,901,652 5,496,817 Rainier Core Equity Fund 588,932 14,161,865 14,640,841 BT Investment International Fund 25,542 595,681 617,594 Schwab S&P Select Share Fund 1,303,943 19,997,975 24,761,882 Schwab Treasury U.S. Money Market Fund 674 674 674 COMMON STOCK Dreyer's Grand Ice Cream 702,656 10,513,548 10,627,672 OTHER INVESTMENTS Cash 2,838 2,838 LOANS TO PARTICIPANTS (maturing from 1/1/99 to 1/1/04; 7% to 11%) -- 2,753,732 ----------- ----------- $55,277,997 $63,225,263 ----------- ----------- -11- 14 DREYER'S GRAND ICE CREAM, INC. SAVINGS PLAN REPORTABLE TRANSACTIONS SERIES OF TRANSACTIONS DURING THE YEAR ENDED DECEMBER 31, 1998 IN EXCESS OF 5% OF THE CURRENT VALUE OF PLAN ASSETS AT DECEMBER 31, 1997 * SCHEDULE V - -------------------------------------------------------------------------------- Current Number Cost of Value on Party Description of of Purchase Selling Asset Transaction Realized Involved Asset Transactions Price Price Disposed Date Gain(Loss) Charles Schwab Dreyer's Common Stock 221 $ 7,353,647 $ - $ - $ 7,353,647 $ - Trust Co. Dreyer's Common Stock 222 - 2,974,653 2,964,268 2,974,653 10,385 Schwab Stable Value Fund 188 3,570,857 3,570,857 - Schwab Stable Value Fund 212 - 3,098,213 3,052,032 3,098,213 46,181 Rainier Core Equity Fund 171 3,966,498 3,966,498 - Rainier Core Equity Fund 224 - 4,181,236 4,376,898 4,181,236 (195,662) Schwab S&P Select Share Fund 188 5,992,722 - - 5,992,722 - Schwab S&P Select Share Fund 231 - 7,327,931 6,791,849 7,327,931 536,082 Schwab Treasury U.S. Money Market 224 7,305,856 - - 7,305,856 - Schwab Treasury U.S. Money Market 231 - 7,317,387 7,317,387 7,317,387 - BT Investment International Fund 141 1,678,740 - - 1,678,740 - BT Investment International Fund 115 - 1,129,949 1,136,284 1,129,949 (6,335) Jurika & Voyles Balanced Fund 138 1,877,797 - - 1,877,797 - Jurika & Voyles Balanced Fund 218 - 1,958,899 2,064,557 1,958,899 (105,658) Loan Fund 145 2,011,029 - - 2,011,029 - Loan Fund 106 - 957,097 957,097 957,097 - * Transactions or series of transactions in excess of five percent of the current value of the Plan's assets as of December 31, 1997 as defined in Section 2520.103-6 of the Department of Labor Rules and Regulations for Reporting and Disclosure under ERISA. -12- 15 SIGNATURES The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the Dreyer's Grand Ice Cream, Inc. Savings Plan Administrative Committee has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. DREYER'S GRAND ICE CREAM, INC. SAVINGS PLAN Date: June 25, 1999 By: /s/ WILLIAM C. COLLETT ------------------------------------ William C. Collett Member of Dreyer's Grand Ice Cream, Inc. Savings Plan Administrative Committee, as Plan Administrator By: /s/ JEFFREY R. SHIELDS ------------------------------------ Jeffrey R. Shields Member of Dreyer's Grand Ice Cream, Inc. Savings Plan Administrative Committee, as Plan Administrator