FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

               [X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

                       THE SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 25, 1999

              [ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

           For the transition period from ____________ to ____________

                         Commission File Number 0-13544

                          BEN & JERRY'S HOMEMADE, INC.

             (Exact name of registrant as specified in its charter)

Vermont                                      03-0267543
(State of incorporation)                    (I.R.S. Employer Identification No.)

30 Community Drive
South Burlington, Vermont                   05403-6828
(Address of principal executive offices)    (Zip Code)

        Registrant's telephone number, including area code: 802/846-1500

       Securities registered pursuant to Section 12 (b) of the Act: None

          Securities registered pursuant to Section 12 (g) of the Act:

                 Class A Common Stock, $.033 par value per share

                 Class B Common Stock, $.033 par value per share

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the  Securities  Exchange Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                                 Yes X No _____

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of  Regulation  S-K  (225.405)  is not  contained  herein,  and  will not be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information  statements  incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.

                                  [X]

The  aggregate  market value of the  Company's  Class A and Class B Common Stock
held  by   non-affiliates   was   approximately   $150,370,950   and  $5,061,769
respectively, at February 25, 2000.

At February 25, 2000, 6,121,493 shares of the Company's Class A Common Stock and
794,539 shares of the Company's Class B Common Stock were outstanding.

             Page 1 of 70 pages. Exhibit Index appears on page 33.

<PAGE>

                          BEN & JERRY'S HOMEMADE, INC.

                          1999 FORM 10-K ANNUAL REPORT

<TABLE>
<CAPTION>
                                Table of Contents
                                                                                             Page
<S>             <C>                                                                           <C>

Item 1.       Business.........................................................................1

Item 2.       Properties......................................................................13

Item 3.       Legal Proceedings...............................................................13

Item 4.       Submission of Matters to Vote of Security Holders...............................13

Item 5.       Market for Registrant's Common Equity and Related Stockholder Matters...........14

Item 6.       Selected Financial Data.........................................................15

Item 7.       Management's Discussion and Analysis of Financial Condition
              and Results of Operations.......................................................16

Item 7A.      Market Risk.....................................................................24

Item 8.       Financial Statements and Supplementary Data.....................................24

Item 9.       Changes in and Disagreements with Accountants on Accounting and Financial
              Disclosure......................................................................25

Item 10.      Directors and Executive Officers of the Company.................................25

Item 11.      Executive Compensation..........................................................27

Item 12.      Security Ownership of Certain Beneficial Owners and Management..................28

Item 13.      Certain Relationships and Related Transactions..................................30

Item 14.      Exhibits, Financial Statements, Financial Statement Schedules, and
              Reports on Form 8-K.............................................................33

</TABLE>

<PAGE>

ITEM 1.       BUSINESS

Introduction

Ben & Jerry's  Homemade,  Inc.  ("Ben & Jerry's" or the  "Company") is a leading
manufacturer of super premium ice cream,  frozen yogurt and sorbet in unique and
regular flavors.  The Company also manufactures ice cream novelty products.  The
Company is committed to using milk and cream that have not been treated with the
synthetic hormone,  rBGH. The Company uses natural  ingredients in its products.
The Company  embraces a philosophy  that manifests  itself in these  attributes:
being  real  and  "down  to  earth,"  being   humorous  and  having  fun,  being
non-traditional   and  alternative   and,  at  times,   being  activists  around
progressive values.

The Company's  products are currently  distributed  throughout the United States
primarily through  independent  distributors.  However,  the Company's marketing
resources are  concentrated on certain "target  markets"  including New England,
New York, the Mid-Atlantic region,  Florida,  Texas, the West Coast and selected
other major markets, including the Midwest (defined for this purpose as Chicago,
Illinois,  Minnesota,  Wisconsin  and  Michigan)  and  Denver  areas.  In  1999,
approximately 77% of the sales of the Company's packaged pints were attributable
to these target  markets.  The Company's  products are also available in certain
"non-target" markets in the United States, the United Kingdom,  France,  Israel,
Canada,  The  Netherlands,  Belgium,  Japan,  Singapore,  Peru and Lebanon.  The
Company currently markets flavors of its ice cream,  frozen yogurt and sorbet in
packaged  pints,  for sale  primarily in  supermarkets,  other  grocery  stores,
convenience  stores and other  retail  food  outlets and in bulk,  primarily  to
restaurants and Ben & Jerry's company-owned franchised "scoop shops."

The Company began active operations in May 1978, when Jerry Greenfield,  now the
Company's Chairperson, and Ben Cohen, now the Company's Vice Chairperson, opened
a retail store in a renovated gas station in  Burlington,  Vermont.  The Company
believes  that it has  maintained a  reputation  for  producing  gourmet-quality
natural  ice  cream  and  frozen  desserts,   and  for  sponsoring  or  creating
light-hearted  promotions  that  foster  an  image  as an  independent  socially
conscious Vermont company.

The Board of  Directors  of the  Company  has since  1988  formalized  its basic
business  philosophy  by adopting a  three-part  "mission  statement"  for Ben &
Jerry's.  The statement includes a "product  mission," "to make,  distribute and
sell the finest  quality  all natural ice cream";  an  "economic  mission,"  "to
operate  the  Company  on a sound  financial  basis...increasing  value  for our
shareholders  and creating career  opportunities  and financial  rewards for our
employees";  and a "social  mission,"  "to  operate  the  Company  in a way that
actively  recognizes  the central role that  business  plays in the structure of
society by initiating  innovative ways to improve the quality of life of a broad
community:  local,  national and international." This statement has been further
simplified by the Company's statement of "Leading with Progressive Values Across
our Business."  "Underlying the mission of Ben & Jerry's is the determination to
seek new and creative ways of addressing  all three parts,  while holding a deep
respect for  individuals  inside and outside the Company and for the communities
of  which  they  are a  part."  Since  1988,  the  Company's  Annual  Report  to
Stockholders has contained a "social report" on the Company's performance during
the  year.  The  Company's  social  mission  has  always  been  about  more than
philanthropy,  product  donations  and  community  relations.  Ben & Jerry's has
strived to integrate  into its day-to-day  business  decisions a concern for the
community and to seek ways to lead with its progressive values.

<PAGE>

The  Company  makes cash  contributions  equal to 7.5% of its pretax  profits to
philanthropy through The Ben & Jerry's Foundation (the "Foundation"),  Community
Action Teams, which are employee led groups from each of its five Vermont sites,
and through corporate grants.  Excluded from the 7.5% are contributions out of a
portion of the proceeds of incidental operations, not directly relating to Ben &
Jerry's core business of the  manufacturing  and selling of Ben & Jerry's frozen
desserts, such as a portion of the admission fees for plant tours. Also excluded
from the 7.5% are corporate  sponsorships that have as one of their purposes the
furtherance  of Ben & Jerry's  marketing  goals.  For 1999, the 7.5% amounted to
approximately  $1,120,000.  The amount of the  Company's  cash  contribution  is
subject  to review by the Board of  Directors  from time to time in light of the
Company's cash needs, its operating results, existing conditions in the industry
and  other  factors  deemed  relevant  by the  Board.  See  "The  Ben &  Jerry's
Foundation."

In some  instances  where the Company pays  royalties  for the licensed use of a
flavor  name,  the  licensor  donates  all or a portion  of these  royalties  to
charitable  organizations.  For example,  in 1997,  the Company  launched  Phish
Food(TM) ice cream and during 1999 paid the Vermont-based band Phish $244,918 in
royalties.  The band  established  the Water  Wheel  Foundation  to support  the
protection and preservation of Lake Champlain.

Ben & Jerry's  maintains a special tie to the Vermont  community in which it has
its  origins.  The  Company  donates  product  to public  events  and  community
celebrations  in the Vermont area. As already noted,  Community  Action Teams at
each site  make  grants  in  Vermont.  Also,  the  Company,  acting as an agent,
transfers funds to charitable  organizations throughout Vermont derived from the
sale of product to participating Vermont retail grocers.

Ben & Jerry's has,  through the years,  taken actions intended to strengthen the
Company's  ability to remain an  independent  Vermont-based  company  focused on
carrying out its three-part  corporate  mission.  Ben & Jerry's  believes  these
actions  have  been in the best  interests  of the  Company,  its  stockholders,
employees,  suppliers,  customers and the Vermont community.  See "Anti-Takeover
Effects of Class B Common Stock,  Class A Preferred  Stock,  Classified Board of
Directors, Vermont Legislation and Shareholders' Rights Plans."

In 1991,  the Company  decided to pay not less than a certain  minimum price for
its dairy  ingredients  other than yogurt cultures,  to bring the price up to an
amount based upon the average price for dairy products in certain prior periods.
This  commitment  is part of an effort to foster  the  supply of  Vermont  dairy
products  and  thereby  also seek to maintain  the  long-term  viability  of the
Company's source of dairy ingredients,  against the marketplace  background of a
continuing trend of decreasing family dairy farms in Vermont.

In early 1994, the Company's agreement with the St. Albans Cooperative  Creamery
was amended to include,  as a condition for payment of the premium, an assurance
from the St. Albans  Cooperative  Creamery that the milk and cream  purchased by
the  Company  will not come from cows that have been  treated  with  recombinant
Bovine Growth Hormone ("rBGH"), a synthetic growth hormone approved by the FDA.

In December  1997,  the St.  Albans  Cooperative  Creamery's  board of directors
approved  a motion to allow for  controlled  use of rBGH by a limited  number of
member farms  beginning July 1, 1998. The Co-op assures that it will continue to
provide Ben & Jerry's with rBGH-free dairy supply. The Company pays a premium to
the Co-op for member farms that do not use rBGH.

<PAGE>

In 1992, the Company became a signatory to the CERES  Principles  adopted by the
Community  for  Environmentally  Responsible  Economies.  The  CERES  Principles
established an  environmental  ethic with criteria by which investors and others
can assess the environmental  performance of companies.  Ben & Jerry's is also a
member of Business for Social  Responsibility,  Inc. ("BSR"), an organization in
San Francisco,  California,  which promotes a concept of business  profitability
that includes  environmental  responsibility and social equity. Ben & Jerry's is
also a member of the Social  Venture  Network and Vermont  Businesses for Social
Responsibility.

The Super Premium Ice Cream, Frozen Yogurt and Sorbet Market

The packaged ice cream industry includes economy, regular, premium, premium plus
and super premium products.  Super premium ice cream is generally  characterized
by a greater  richness  and density  than other kinds of ice cream.  This higher
quality ice cream generally costs more than other kinds and is usually  marketed
by emphasizing quality,  flavor selection,  texture and brand image. Other types
of ice cream are largely marketed on the basis of price.

Super Premium Ice Cream,  Super Premium Frozen Yogurt And, More Recently,  super
premium sorbet have become an important part of the frozen dessert industry.  In
response to the demand for lower fat, lower  cholesterol  products,  the Company
introduced  its own super  premium  low fat frozen  yogurt in 1992.  In February
1996, the Company introduced lactose-free and cholesterol-free  sorbet. In 1997,
Ben & Jerry's  introduced  a new line of low fat ice cream.  In 1999 the Company
introduced 14 new flavors and 3 new novelty products.

Based on  information  provided by Information  Resources,  Inc., a software and
marketing  information services company ("IRI"), the Company believes that total
annual U.S. sales in  supermarkets  at retail prices  (defined as grocery stores
with annual  revenues of at least $2 million) of super  premium and premium plus
ice cream,  frozen  yogurt and sorbet were  approximately  $572  million in 1999
compared  with  about  $518  million  in 1998.  All of the  information  in this
paragraph is taken from IRI data.

Ben & Jerry's Super Premium Ice Cream, Frozen Yogurt and Sorbet

Ben &  Jerry's  ice  cream has a high  level of  butterfat  and low level of air
incorporation  ("overrun")  during the freezing  process.  The  approximate  fat
content is 15%  (excluding  add-ins).  The  approximate  overrun  is 20%.  These
physical  attributes give the ice cream the rich taste and dense, creamy texture
that characterizes super premium ice creams. The fat content of the ice cream is
derived  primarily  from the butterfat in the cream,  and  secondarily  from egg
yolks. The ice cream mix consists of cream, beet sugar, non-fat milk solids, egg
yolks and natural stabilizers.

Ben & Jerry's frozen yogurt is a high quality  frozen yogurt with  approximately
2% fat (excluding  add-ins) and  approximately  30% overrun.  The fat content of
frozen  yogurt comes from the cream used in the base mix. All our frozen  yogurt
products are sweetened with beet sugar and corn syrup. The Company uses cultured
yogurt in the  manufacturing  of our frozen yogurt dessert  products,  purchased
from yogurt manufacturers who use Vermont dairy ingredients.

Ben & Jerry's  fruit  sorbets  are fat free frozen  desserts  with an overrun of
approximately  20%. The chocolate sorbet is a low fat product with approximately
2% fat (from cocoa and chocolate  liquor).  All sorbets are sweetened  with beet
sugar and corn syrup.  The water used to manufacture  sorbet is Vermont Pure(TM)
Spring Water.

<PAGE>

In 1997 and 1998, Ben & Jerry's  introduced a line of low fat ice cream flavors.
These low fat ice creams offer high quality,  all natural  ingredients with less
than three grams of fat and 40% overrun. The product line offers exciting flavor
combinations,  chunks of candy,  and  swirls of  variegates  with  extraordinary
flavor.

All Ben & Jerry's frozen  desserts are made of the finest  quality  ingredients.
Its ingredients  contain no preservatives or artificial  components  (except the
flavoring component in one of the candies that the Company purchases).  To date,
the Company has not  experienced  any difficulty in obtaining the dairy products
used to make its frozen desserts. The various flavorings, add-ins and variegates
are readily available from multiple suppliers throughout the country.

All the Company's  plants include  mix-batching  facilities,  which allows Ben &
Jerry's  to  manufacture  its own  dessert  mixes.  Ben & Jerry's  designed  and
modified special machinery to mix large chunks of cookies,  candies,  fruits and
nuts  into our  frozen  desserts.  The  Company  has also  designed  proprietary
processes for swirling variegates (dessert sauces) into its finished products.

The Company also makes ice cream  novelty  products,  including a variety of ice
cream bars such as Cherry Garcia(R),  Cookie Dough,  Phish Stick(TM),  Dilbert's
World(TM)-Totally Nuts(TM) and S'mores(TM) Bars.

Ben & Jerry's other license agreements include licenses from the estate of Jerry
Garcia,  formerly of the Grateful Dead rock group, with respect to the Company's
Cherry Garcia(R) flavor;  political  cartoonist Garry Trudeau and Andrews McMeel
Universal with respect to the Company's Doonesberry(R) flavor of the sorbet line
of  products;  Wavy Gravy for the flavor Wavy Gravy;  with Phish  Merchandising,
Inc. with respect to Phish Food(TM) and Phish  Stick(TM),  a flavor  launched in
February  of 1997;  and  from  United  Feature  Syndicate,  Inc.  for use of the
trademark Dilbert for the flavor Dilbert's World(TM)-Totally Nuts(TM) introduced
in 1998.

Manufacturing

The Company manufactures Ben & Jerry's super premium ice cream and frozen yogurt
pints at its Waterbury,  Vermont,  plant.  The Company's  Springfield,  Vermont,
plant is used for the  production  of ice cream  novelties,  ice  cream,  frozen
yogurt,  low fat ice cream and sorbet packaged in bulk,  pints,  quarts and half
gallons.  The Company manufactures Ben & Jerry's super premium ice cream, frozen
yogurt,  frozen  smoothies and sorbet in packaged pints, 12 oz. and single serve
containers at its St. Albans,  Vermont plant. The Company generally operates its
plants two  shifts a day,  five to seven days per week,  depending  upon  demand
requirements.

On October 19, 1999, the Company announced a plan to shift  manufacturing of its
frozen  novelty  line of business  from a  company-owned  plant in  Springfield,
Vermont,  to  third  party  co-packers  to  improve  the  Company's  competitive
position, gross margins and profitability. This action resulted in the write-off
of assets  associated  with the ice cream  novelty  business,  asset  impairment
charges of other  manufacturing  assets and costs  associated with severance for
those  employees  who do not  accept  the  Company's  offer of  relocation.  The
implementation of this manufacturing restructuring program resulted in a pre-tax
special charge to earnings of  approximately  $8.6 million in the fourth quarter
of 1999 that was primarily non-cash.  This plan will be executed during 2000 and
is expected to result in improving the Company's  profitability  during the year
2000.  Outsourcing  its novelty  business will enable the Company to introduce a
wider range of novelty products in future periods.

<PAGE>

Markets and Customers

The Company markets packaged pints, quarts, 1/2 gallons, single-serve containers
and novelty  products  primarily  through  supermarkets,  other grocery  stores,
convenience stores and other retail food outlets. The Company markets ice cream,
frozen  yogurt and sorbet in 2  1/2-gallon  bulk  containers  primarily  through
franchised (and  Company-owned) Ben & Jerry's scoop shops,  through  restaurants
and food service accounts (i.e. stadiums, airports, cafeterias, hotels, etc.).

Ben  &  Jerry's   products  are  distributed   through   independent  ice  cream
distributors;  with some exceptions,  only one distributor is appointed for each
territory  for  supermarkets.  In  most  areas,  sub-distributors  are  used  to
distribute  to  the  smaller   classes  of  trade.   Company  trucks  and  other
distributors distribute products that are sold in Vermont and upstate New York.

In late August 1998 - January 1999, Ben & Jerry's  redesigned  its  distribution
network to create more  Company  control over sales and more  efficiency  in the
distribution of its products. Under the redesign, Ben & Jerry's increased direct
sales  calls  by its  own  sales  force  (as  distinguished  from  calls  by the
distributors'  sales forces) to all grocery and chain convenience stores and has
a  network  where  no  distributor  of Ben &  Jerry's  products  has a  majority
percentage  of  the  Company's  distribution.  Under  the  distribution  network
redesign which commenced in April-May 1999 and was fully effective  September 1,
1999, Ice Cream  Partners,  a joint venture of the U.S. ice cream  operations of
Nestle  and  The  Pillsbury  Company  ("Pillsbury")  distributes  Ben &  Jerry's
products  in  specified  territories;  the balance of  domestic  deliveries  are
distributed  primarily  by Dreyer's  Grand Ice Cream,  Inc.  ("Dreyer's"),  with
Dreyer's  handling a smaller volume (than before) of Ben & Jerry's  distribution
in  other  specified  territories,  and in part by  other  independent  regional
distributors, most of whom are already acting as distributors for Ben & Jerry's.
Under the redesign,  no single distributor is expected to handle over 40% of Ben
& Jerry's  distribution,  as  compared  with  Dreyer's  distribution  activities
accounting for approximately 57% of the Company's net sales in 1998 and 1997.

Pursuant to the  distribution  network  redesign, Ben & Jerry's  entered into an
agreement  with  Pillsbury  which,  as  amended in January  1999,  provides  for
distribution of Ben & Jerry's products on a non-exclusive basis in various areas
of  the  United  States  beginning  September  1,  1999,  and in  certain  areas
commencing  April - May 1999.  This agreement was assigned to Ice Cream Partners
(a joint venture  between  Pillsbury and Nestle formed in October 1999),  by the
Company and was amended in December  1999. The agreement with Ice Cream Partners
may not be terminated  (except for cause) by Ice Cream Partners or Ben & Jerry's
until an effective  date in the year 2003. The agreement  further  provides that
Ben & Jerry's may earlier  terminate  without cause by making certain  specified
payments   (except  that  such  payments  are  not  required   under   specified
circumstances) and it contains additional provisions relating to any termination
upon a change in control of either  party.  The use of  sub-distributors  by Ice
Cream Partners is limited under the Agreement.

In January 1999, the Company concluded a new distribution  agreement,  also on a
non-exclusive  basis, with Dreyer's,  effective for distribution which commenced
September 1, 1999. This agreement pertains to a smaller geographic

<PAGE>

area than that which was covered under the prior  distribution  agreement and is
on terms and conditions  different in some respects from those  applicable under
the prior  distribution  agreement.  The terms as to the prices  received by the
Company from Dreyer's  purchases of the Company's ice cream products are in line
with the new Agreement the Company  entered into with  Pillsbury and assigned to
Ice Cream Partners, and are more favorable to the Company than in the past.

The new  agreement  with  Dreyer's may be terminated by either party on not less
than six  months'  notice  except  that no such  notice may be given  during the
months of October - March in any year.  The prior  agreement had given  Dreyer's
certain  territorial  exclusivity,  limited the sale by Dreyer's of  competitive
products  (Dreyer's  brands and certain brands of other ice cream  competitors),
and had contained provisions for payment by the terminated party in the event of
a change in control of the terminated party.

While the Company  believes that its  relationships  with Dreyer's and its other
distributors  generally have been satisfactory and that these relationships have
been  instrumental  in  the  Company's  growth,   the  Company  has,  at  times,
experienced difficulties in maintaining these relationships to its satisfaction.
The Company  believes that the  distribution  network  redesign in August 1998 -
1999 gave it more control over the Company's  distribution.  However, due to the
consolidations  in the  distribution  arena,  including the  combination  of the
Nestle and  Pillsbury  domestic ice cream  operations  into Ice Cream  Partners,
available distribution  alternatives are limited.  Accordingly,  there can be no
assurance  that such  difficulties  with  distributors,  which may be related to
actions by the  Company's  distributors  (which  include,  as the  Company's two
principal distributors,  its two principal competitors in the marketplace,  will
not have a material  adverse  effect on the Company's  business.  Loss of one or
more of the Company's  principal  distributors  or termination of one or more of
the   related    distribution    agreements    or   certain    action   by   the
production/marketing  units of these two  principal  distributors  could  have a
material adverse effect on the Company's business.

Marketing

Ben  &  Jerry's  marketing  is  characterized  by a  strategic  discipline  that
continues to build brand equity,  a solid  reputation for the Company  and, most
importantly, profitable customer relationships.

Ben  &  Jerry's  marketing  strategies  remain  consistent  with  the  Company's
three-part   mission.   Building  on  Ben  &  Jerry's   significant  brand  name
recognition,  the Company  continues  to  emphasize  the high  quality,  natural
ingredients in its products while  highlighting  its commitment to social change
through  innovative  promotional  and  advertising  campaigns.   Ben  &  Jerry's
continues to facilitate  brand  awareness by focusing its  marketing  efforts on
communicating  the Company's  unique  business  approaches via Public  Relations
campaigns  designed to generate unpaid  newspaper,  magazine,  radio and TV news
coverage.  Company  founders  Ben Cohen and Jerry  Greenfield  continue  to make
personal appearances on TV and radio.

A 1999  Harris  Interactive  Poll  regarding  public  perceptions  of  corporate
reputability  ranked  Ben & Jerry's  fifth  overall,  and  first in the  "social
responsibility" category. The survey, the results of which were published in the
Wall Street Journal,  used an assessment tool developed at New York University's
Stern School of Business to measure a company's  reputation,  based upon several
key areas - social responsibility, emotional appeal, products and services.

In 1999,  Ben & Jerry's  became  the first U.S.  ice cream  company to convert a
significant  portion of its pint  containers to a more  environmentally-friendly
unbleached  paperboard.  The debut of the Company's "Eco-Pint" made headlines in
consumer and financial press nationwide.

<PAGE>

Additional  media  opportunities  in 1999  included  placement of the  Company's
products in popular  sitcoms and movies.  Scenes from an upcoming  feature  film
starring  Jim Carrey  were  filmed at the  Company's  Waterbury  factory.  Ben &
Jerry's  conducts  guided  tours  of  its  facility  in  Waterbury,  Vermont  to
approximately  300,000  visitors  annually,  making it the single  most  popular
tourist attraction in the state.

Ben & Jerry's  increased  internet  presence  was  driven by  several  web-based
promotions,  including a Halloween  promotion in which consumers were invited to
trick or treat  online,  and a Yahoo!(R)  Careers  promotion in which  consumers
could win a day as a Ben & Jerry's flavor developer.

Ben & Jerry's  scoop  shops,  substantially  all of which are  franchised,  also
contributed  significantly  to the growth of the brand. In April,  Ben & Jerry's
marked its 21st  Anniversary  with a  record-breaking  Free Cone Day  covered by
local and national  media.  Almost 200 Ben & Jerry's  scoop shops served up more
than a half  million  free  cones as a "thank  you" to their  customers  in this
coast-to-coast event.

Franchise Program

As of December 25, 1999,  there were 164 North American  Franchise and Satellite
scoop  shops  compared  to 147 as of  December  26,  1998.  In  addition  to our
traditional Franchise and Satellite locations,  the Company has 8 PartnerShop(R)
Franchises, 19 Featuring Franchises and 12 Scoop Station Franchises.

Ben & Jerry's Franchise Scoop Shops sell Ben & Jerry's ice cream, frozen yogurt,
sorbet,  private label hot fudge, baked goods and toppings.  The menu items also
include coffee, beverages,  fruit smoothies, ice cream cakes, novelties and gift
items.

A  PartnerShop(R)  Franchise is a scoop shop that is awarded to a not-for-profit
organization.   PartnerShop(R)   franchises   are   arrangements   that   permit
not-for-profit  organizations  to own  franchised  scoop  shops that serve as an
employment  resource and potentially a source of revenue for the  not-for-profit
groups. The Company waives the normal franchisee fee of $30,000. In addition the
Company provides expertise in the start-up and operation of the PartnerShop(R).

A Featuring  Franchise is a business  that has a scoop shop within its location,
much like a store  within a store.  Featuring  Franchises  are often  located in
airports, stadiums, college campuses and similar venues.

In the beginning of 1999, the Company began offering another franchise  concept,
a Scoop Station franchise.  As of December 25, 1999, there were 12 Scoop Station
franchises. These franchises are located within businesses;  generally a smaller
product line is served from a pre-fabricated unit.

At year-end,  there were nine company-owned scoop shops: four in Vermont, two in
Las Vegas, Nevada and three locations in Paris, France.  Internationally,  there
are nine Ben & Jerry's franchised scoop shops in Israel;  four in Canada,  three
in the Netherlands, one in Lebanon and one in Peru.

New scoop shops are opened under existing  Development  Agreements and under new
Single Store Agreements.  Development Agreements require a franchisee to develop
a particular number of units annually according to the terms of their Agreement.
The Company has assorted franchise concepts that include  traditional shops in a
variety of settings, five PartnerShop(R)  Featuring Franchises and Scoop Station
Franchises.  Franchise  Agreements  generally  have initial terms of five to ten
years and renewal terms.  The Scoop Station is a limited  concept with a smaller
menu offering; the initial term is generally two years.

<PAGE>

International

The Company  regularly  investigates the  possibilities of entering new markets.
Ben & Jerry's ice cream  products  are now  distributed  internationally  in the
United Kingdom and Israel and are available in parts of Japan, Ireland,  France,
Canada, the Netherlands, Belgium, Singapore, Peru and Lebanon.

In May  1998,  the  Company  signed a  non-exclusive  licensing  agreement  with
Delicious Alternative Desserts,  LTD, to manufacture,  sell and distribute Ben &
Jerry's  products  through  the  wholesale  distribution  channels in Canada for
royalty payments based upon a percentage of the licensee's sales. This agreement
is for a  five-year  period  with a  renewal  option.  In  connection  with this
agreement, the Company received 4,000,000 Common Shares of Delicious Alternative
Desserts,  LTD which represents less than 5% of total issued  outstanding common
shares on a fully diluted basis, and the right to designate one director.

In 1987, the Company granted an exclusive  license to manufacture and sell Ben &
Jerry's ice cream in Israel. Effective February 26, 1999, the Company acquired a
60% ownership  interest in its Israeli  licensee,  The American  Company for Ice
Cream Manufacturing E.I. Ltd, for $1 million.  The acquisition was accounted for
using the  purchase  method of  accounting  and,  accordingly,  the costs of the
acquisition  have  been  allocated  to  assets  acquired.   The  excess  of  the
acquisition  costs  over the  fair  values  of the net  assets  and  liabilities
acquired  was $1.7  million and has been  recorded as  goodwill,  which is being
amortized on a straight-line basis over 15 years.

In 1997, the Company signed an Importation  and Marketing  Agreement with one of
the largest food retailers in Japan for sale through  Japanese  retail stores of
Ben & Jerry's  products  manufactured in Vermont in a special size.  Following a
test  market,  the product  was  launched  in 1998.  In March 1999,  the Company
established  a  wholly-owned  subsidiary  in Japan for  purposes  of  importing,
marketing  and selling its  products in Japan.  Beginning in January  2000,  the
Company  imports all products into the Japan market  through an agreement with a
Japanese trading company.

Competition

The super  premium  ice  cream,  frozen  yogurt and  sorbet  business  is highly
competitive,  with the  distinction  between the super premium  category and the
"adjoining"  premium and premium plus  categories  less marked than in the past.
The Company's two principal  competitors  are The  Haagen-Dazs  operation of Ice
Cream  Partners and  Dreyer's/Edys,  which  introduced  its  Dreamery(TM)  super
premium line in the fall of 1999. Other significant  frozen dessert  competitors
are Columbo, Healthy Choice and Starbucks (distributed by Dreyer's). Haagen-Dazs
has a  significant  share of the markets  that the Company has entered in recent
years.  Haagen-Dazs has also entered substantially more foreign markets than the
Company (including  certain markets in Europe and the Pacific Rim).  Haagen-Dazs
and certain other  competitors  also market  flavors using pieces of cookies and
candies as ingredients.  As part of Ben & Jerry's distribution network redesign,
the  Pillsbury  U.S. ice cream  operations  (now part of the Ice Cream  Partners
Joint Venture) became a principal distributor for the Company's products.

In January and September 1999,  Dreyer's launched two lines of super-premium ice
cream,  Godiva and Dreamery(TM),  with significant  marketing programs including
radio, outdoor and television  advertising as well as heavy price discounting to
gain trial.  The Godiva and  Dreamery(TM)  products  are  marketed  primarily in
pints.  Additional  super premium  products may be introduced by other ice cream
competition.

<PAGE>

In the ice cream novelty segment,  the Company competes with several  well-known
brands, including Haagen-Dazs and Dove Bars, manufactured by a division of Mars,
Inc.,  Good Humor (owned by  Unilever),  Nestle  products and many private label
brands. All of these other brands have achieved far larger shares of the novelty
market than the Company.

During  1999,  the premium  category  again  experienced  increased  promotional
activity driven by the national  competition  between  Dreyer's Grand Ice Cream,
Inc., a principal  distributor for the Company, and Breyer's Ice Cream (owned by
Unilever,  a large  international  food  company).  In accordance  with Dreyer's
strategic  plan to  accelerate  the  sales of  their  branded  premium  products
Dreyer's has increased its consumer marketing efforts and continued expansion of
its  distribution  system into  additional U.S.  markets.  There are a number of
other super premium brands, including some regional ice cream companies and some
new entries.  Increased  competition  and the  increased  consumer  demand for a
variety of frozen  dessert  products,  combined  with limited shelf space within
supermarkets,  may have made market  entry  harder and has  already  forced some
brands out of some markets. The ability to introduce innovative new flavors on a
periodic basis is also a significant  competitive  factor.  The Company  expects
strong  competition to increase,  including  price/promotional  competition  and
competition for adequate  distribution and limited shelf space within the frozen
dessert category in supermarkets and other food retail outlets.

Seasonality

The ice cream,  frozen yogurt and frozen dessert industry generally  experiences
the highest  volume during the spring and summer months and the lowest volume in
the winter months.

Regulation

The Company is subject to regulation by various governmental agencies, including
the United  States Food and Drug  Administration  and the Vermont  Department of
Agriculture.  It must also  obtain  licenses  from  certain  states  where Ben &
Jerry's products are sold. The criteria for labeling low fat/low cholesterol and
other  health-oriented  foods was revised in 1994 and in some  respects was made
more  stringent  by the FDA.  The  Company,  like  other  companies  in the food
industry,  made changes in its labeling in response to these  regulations and is
in compliance. The Company cannot predict the impact of possible further changes
that it may be required to make in response to  legislation,  rules or inquiries
made from time to time by governmental agencies. FDA regulations may, in certain
instances,  affect the ability of the  Company,  as well as others in the frozen
desserts industry, to develop and market new products. Nevertheless, the Company
does not believe these legislative and administrative rules and regulations will
have a significant impact on its operations.

In connection with the operation of all its plants, the Company must comply with
the Federal  and  Vermont  environmental  laws and  regulations  relating to air
quality,  waste  management  and other  related  land use  matters.  The Company
maintains wastewater  discharge permits for all of its manufacturing  locations.
All the plants pre-treat production effluent prior to discharge to the municipal
treatment  facility.  The Company  believes that it is in compliance with all of
the required operational permits relating to environmental regulations.

Trademarks

The marks Ben & Jerry's,  Ben & Jerry's  Portrait,  Ben & Jerry's Ice Cream on A
First Name Basis, Chubby Hubby,  Chunky Monkey,  Coffee,  Coffee  BuzzBuzzBuzz!,
Cool Britannia,  Dastardly Mash, Hunka Hunka Burnin' Fudge,  Lids for Kids, More
Chunks Less Bunk, New York Super Fudge Chunk, One World One Heart,  PartnerShop,

<PAGE>

Peace Pop,  Rainforest Chunk,  Today's Euphoric Flavors,  Totally Nuts,  Vanilla
Like It Oughta' Be, Vermont's Finest and World's Best are registered  trademarks
of the Company.

Cherry Garcia(R), Phish Food(R), Phish Stick(R), Wavy Gravy(TM), Doonesberry(R),
Heath(R) and Dilbert's  World(R) are Ben & Jerry's  proprietary flavor names and
are licensed to the Company.

Employees

At December 25, 1999,  Ben & Jerry's  employed 841 people  including  full-time,
part-time and temporary  employees.  This represents a 12% increase from the 751
people employed by the Company at December 26, 1998.

During 1998, a union  organizing  effort took place at the Company's St. Albans,
Vermont,  plant  within  the  Maintenance  Department.  By a  majority  vote all
full-time and regular part-time maintenance team members employed by the Company
agreed to be represented by the International  Brotherhood of Electrical Workers
(IBEW).  The Company signed an agreement in November 1999, with the Union. As of
December 25, 1999, 16 employees were members of IBEW.

The Ben & Jerry's Foundation

In 1985,  Ben Cohen,  co-founder  of the Company,  contributed  a portion of the
equity of the Company which he then owned to The Ben & Jerry's Foundation, Inc.,
a charitable  organization under Section 501(c)(3) of the Internal Revenue Code,
in order to enable the Foundation to sell such equity in 1985 and invest the net
proceeds  (approximately  $598,000) in  income-producing  securities to generate
funds for  future  charitable  grants.  The  Foundation,  with its  employee-led
grant-making committee under supervision of the Foundation's directors, provides
the principal means for carrying out the Company's charitable cash giving policy
across  the  nation.  The  Foundation  continues  to target  its grants to small
grassroots social change organizations.

In October 1985,  pursuant to stockholder  authorization,  the Company issued to
the Foundation all of the 900 authorized  shares of Class A Preferred Stock. The
Class A Preferred Stock gives the Foundation a special class voting right to act
with respect to certain mergers and other Business  Combinations  (as defined in
the  Company's  charter).  The  issuance  of  Preferred  Stock was  designed  to
perpetuate the relationship between the Foundation and the Company and to assist
the Company in its determination to remain an independent business headquartered
in Vermont.

Anti-Takeover  Effects  of  Class  B  Common  Stock,  Class A  Preferred  Stock,
Classified Board of Directors, Vermont Legislation and Shareholder Rights Plans.

The holders of Class A Common Stock are entitled to one vote for each share held
on all matters  voted on by  stockholders,  including the election of directors.
The  holders of Class B Common  Stock are  entitled  to ten votes for each share
held in the election of directors and on all other  matters.  The Class B Common
Stock is generally  nontransferable  as such, and there is no trading market for
the Class B Common Stock.  The Class B Common Stock is freely  convertible  into
Class A Common Stock on a share-for-share basis and transferable  thereafter.  A
stockholder  who does not wish to  complete  the prior  conversion  process  may
effect a sale by simply  delivering the  certificate  for such shares of Class B
Common  Stock to a broker,  properly  endorsed.  The broker may then present the
certificate to the Company's  transfer agent which, if the transfer is otherwise
in good  order,  will issue to the  purchaser  a  certificate  for the number of
shares of Class A Common Stock thereby sold.

The  Company has been  advised  that Mr.  Jerry  Greenfield  (Chairperson  and a
director of the Company), Mr. Ben Cohen  (Vice-Chairperson and a director of the
Company)  and Mr. Jeff  Furman (a  director  and  formerly a  consultant  to the

<PAGE>

Company) (collectively, the "Principal Stockholders") presently intend to retain
substantial  numbers  of  shares  of  Class  B  Common  Stock.  As a  result  of
conversions by "public" stockholders of Class B Common Stock, in order to enable
their  sales  of  such  securities,  the  Class  B  Common  Stock  is  now  held
disproportionately   by  Company  insiders,   including  the  above-named  three
directors who are  Principal  Stockholders.  See "Security  Ownership of Certain
Beneficial  Owners  and  Management."  As of  February  25,  2000,  these  three
principal individual  stockholders held shares representing 47% of the aggregate
voting power in elections of directors  and various other matters and 17% of the
aggregate common equity  outstanding,  permitting  them, as a practical  matter,
generally to decide elections of directors and various other questions submitted
to a vote of the Company's  stockholders even though they might sell substantial
portions of their Class A Common Stock.

The  Board  of  Directors,  without  further  stockholder  approval,  may  issue
additional  authorized but unissued shares of Class B Common Stock in the future
and sell shares of Class B Common Stock held in the Company's treasury. In 1985,
Ben Cohen, one of the Company's co-founders, contributed a portion of the equity
in the Company,  which he then owned, to the Ben & Jerry's Foundation,  Inc. Two
of the three current directors of the Foundation, Messrs. Greenfield and Furman,
are also  directors  of the  Company.  The  Class A  Preferred  Stock  gives the
Foundation  a class  voting  right  to act  with  respect  to  certain  Business
Combinations  (as defined in the  Company's  charter).  The 1985 issuance of the
Class A Preferred Stock to the Foundation  effectively  limits the voting rights
that holders of the Class A Common Stock and Class B Common Stock, the owners of
virtually all of the equity in the Company, would otherwise have with respect to
Business  Combinations  (as defined).  This may have the effect of limiting such
common stockholders participation in certain transactions such as mergers, other
Business  Combinations  (as  defined)  and  tender  offers,  whether or not such
transactions might be favored by such common stockholders.

At the 1997 Annual Meeting the shareholders approved amendments to the Company's
Articles of Association to (a) classify the Board into three classes,  as nearly
equal as possible,  so that each  director  (after a  transitional  period) will
serve for three years,  with one class of directors being elected each year; (b)
provide that directors may be removed only for cause and with the approval of at
least  two-thirds  of the votes  cast on the  matter  by all of the  outstanding
shares  of  capital  stock of the  Company  entitled  to vote  generally  in the
election of  directors;  (c)  provide  that any  vacancy  resulting  from such a
removal may be filled by  two-thirds of the  directors  then in office;  and (d)
increase the  stockholder  vote  required to alter,  amend,  repeal or adopt any
provision inconsistent with these amendments approved by stockholders in 1997 to
at least  two-thirds  of the votes cast on the matter by all of the  outstanding
shares  of  capital  stock of the  Company  entitled  to vote  generally  in the
elections of directors, voting together.

Also, in April 1998, the Legislature of the State of Vermont amended a provision
of the Vermont  Business  Corporation  Act to provide  that the  directors  of a
Vermont  corporation  may also consider,  in determining  whether an acquisition
offer or other matter is in the best interests of the corporation, the interests
of the corporation's employees,  suppliers, creditors and customers, the economy
of the state in which the  corporation is located and including the  possibility
that the best  interests  of the  corporation  may be  served  by the  continued
independence of the corporation. Also, in August 1998, following approval by its
Board of Directors,  the Company put in place two Shareholder  Rights Plans, one
pertaining to the Class A Common Stock and one  pertaining to the Class B Common
Stock.  These Plans are intended to protect  stockholders by compelling  someone
seeking  to  acquire  the  Company  to  negotiate  with the  Company's  Board of
Directors in order to protect  stockholders  from unfair takeover tactics and to
assist in the maximization of stockholder  value.  These Rights Plans, which are
common for public companies in the United States, may also be deemed to be

<PAGE>

"anti-takeover"  provisions  in that the Board of Directors  believes that these
Plans will make it difficult for a third party to acquire control of the Company
on terms which are unfair or unfavorable to the stockholders.

The Class B Common Stock,  which may be converted  into shares of Class A Common
Stock by a specified vote of the Board, the Class A Preferred  Stock,  which may
be redeemed by a specified vote of the Board,  the Classified Board of Directors
and the Shareholder Rights Plans may be deemed to be "anti-takeover"  provisions
in that the Board of Directors  believes the existence of these  securities  and
the 1997 amendments to the Articles of Association  will make it difficult for a
third party to acquire control of the Company on terms opposed by the holders of
the Class B Common Stock, including primarily the Principal Stockholders and the
Foundation,  or for  incumbent  management  and the  Board  of  Directors  to be
removed. See also "Risk Factors" in Item 7 of this Report.

The Company believes that these  provisions of the Articles of Association,  the
amendment to the Vermont  Business  Corporation Act and the  Shareholder  Rights
Plans,  reduce  the  possibility  that a third  party  could  effect  a  change,
including a tender offer or a sudden or surprise  change in the  composition  of
the  Company's  Board of Directors,  without the support of the incumbent  Board
and,accordingly, that adoption of these items strengthened Ben & Jerry's ability
to remain an  independent,  Vermont-based  company  focused on carrying  out its
three-part  corporate  mission,  which  Ben &  Jerry's  believes  is in the best
interest of the Company, its stockholders,  employees,  suppliers, customers and
the Vermont community.

Indications of Interest to Acquire the Company; Alternative Transactions

The Company  announced on December 2, 1999 that it had received  Indications  of
Interest to acquire the Company at prices  significantly above the closing price
on NASDAQ on the day before the December 2, 1999 press release  ($21.00).  These
Indications of Interest are subject to conditions and, together with Alternative
Transactions  under which the Company would remain an independent  company,  are
being considered by the Board of Directors.

The Company's policy, as regularly  disclosed in its filings with the Securities
and Exchange Commission, has been to remain an independent Vermont-based company
focused  on its  three-part  corporate  mission,  emphasizing  product  quality,
economic  reward and a commitment to the  community,  contributing 7 1/2% of its
profit  before  tax to  charities,  including  donations  to The  Ben &  Jerry's
Foundation, Inc.

No decision has been made by the Board with respect to any of these  indications
of interest or as to any sale of the Company or Alternative  Transactions  under
which the Company would remain  independent  ("Alternative  Transactions")  (See
"Risk  Factors  Indications  of Interest:  to Acquire the  Company;  Alternative
Transactions"),  and no implications should be drawn from this Report as to what
definitive  decision  will be reached by the Board  after it has  concluded  its
deliberations or as to the timing of any decision.

<PAGE>

ITEM 2.    PROPERTIES

The Company  owns three  production  facilities.  Ben & Jerry's owns a 42.5 acre
site in  Waterbury,  Vermont  on which it  operates a 46,000  square-foot  plant
producing  ice cream and frozen  yogurt in packaged  pints.  The Company  owns a
12-acre site in Springfield,  Vermont on which it operates a 48,000  square-foot
production  facility.  The  Springfield  plant is used for the production of ice
cream novelties,  bulk ice cream and frozen yogurt,  and at times packaged pints
and  quarts.  Novelty  production  will be phased out and moved to a third party
co-packer in 2000.

The  Company's  property,  plant and equipment at its  production  facilities in
Waterbury  are  subject to  various  liens  securing a portion of the  Company's
long-term debt.

The Company owns a 42-acre site in St. Albans,  Vermont,  on which it operates a
92,000 square-foot manufacturing facility.

In 1991,  the Company  entered into a  twenty-five  year lease with an option to
purchase  17.1  acres  of land in  Rockingham,  Vermont, on  which  the  Company
constructed and operates a 45,000 square-foot central distribution facility.

In  February  1996,  the Company  entered  into a ten year lease  agreement  for
approximately  69,000  square-feet  of  office  and  warehousing  space in South
Burlington,  Vermont,  where the Company's  executive offices and administrative
departments are located. In 1999 the Company expanded the office space to 97,780
square feet.

The Company  also leases space for its retail ice cream  parlors in  Burlington,
Montpelier and Middlebury, Vermont, Las Vegas, Nevada and Paris, France, and its
corporate  offices in the United  Kingdom,  France and Japan.  The Company  owns
three  single-family  houses,  which  are  situated  on  land  adjacent  to  its
manufacturing facility in Waterbury.

The Company  believes that all of its facilities are well maintained and in good
repair.

ITEM 3.  LEGAL PROCEEDINGS

The Company is subject to certain  litigation and claims in the ordinary  course
of  business  which  management  believes  are  not  material  to the  Company's
business.

ITEM 4.  SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

No matters were  submitted to a vote of security  holders of the Company  during
the fourth quarter of 1999.

<PAGE>

ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The  Company's  Class A Common  Stock is traded on the  NASDAQ  National  Market
System under the symbol  BJICA.  The  following  table sets forth for the period
December 28, 1997 through  February  25,  2000,  the high and low closing  sales
prices of the Company's Class A Common Stock for the periods indicated.

                                                     High          Low
                                                     ----          ---
   1998
   ----
          First Quarter                            $  19         $  14
          Second Quarter                              21 1/8        17
          Third Quarter                               19 7/8        13 1/16
          Fourth Quarter                              23 7/8        14 7/8
   1999
   ----
          First Quarter                            $  27         $  21 3/8
          Second Quarter                              30            24 3/8
          Third Quarter                               29            17 7/8
          Fourth Quarter                              28 1/4        15 13/16
   2000
   ----
          First Quarter through February 25, 2000  $  29 1/4     $  21 1/4

The Class B Common Stock is generally  non-transferable  and there is no trading
market for the Class B Common Stock. However, the Class B Common Stock is freely
convertible  into  Class  A  Common  Stock  on  a  share-for-share   basis,  and
transferable  thereafter.  A stockholder who does not wish to complete the prior
conversion  process may effect a sale by simply  delivering the  certificate for
such shares of Class B Stock to a broker, properly endorsed. The broker may then
present the  certificate to the Company's  transfer agent which, if the transfer
is otherwise in good order,  will issue to the purchaser a  certificate  for the
number of shares of Class A Common Stock thereby sold.

     As of February 25, 2000 there were 9,979 holders of record of the Company's
Class A Common Stock and 1,922 holders of record of the Company's Class B Common
Stock.

<PAGE>

ITEM 6.       SELECTED FINANCIAL DATA

The following table contains  selected  financial  information for the Company's
fiscal years 1995 through 1999.

Summary of Operations (In thousands except per share data)
<TABLE>
<CAPTION>
<S>                                                    <C>            <C>             <C>            <C>             <C>
                                                                                    Fiscal Year
                                                                                    -----------
                                                         1999           1998            1997           1996            1995
                                                         ----           ----            ----           ----            ----
Net sales                                              $237,043       $209,203        $174,206       $167,155        $155,333
Cost of sales                                           145,291        136,225         114,284        115,212         109,125
                                                       --------       --------        --------       --------        --------
Gross profit                                             91,752         72,978          59,922         51,943          46,208
Selling, general & administrative expenses
                                                         78,623         63,895          53,520         45,531          36,362
Special charge1                                           8,602             --              --             --              --
Other income (expense) - net                                681            693            (118)           (77)           (441)
                                                       --------       ---------       --------       --------        --------
Income before income taxes                                5,208          9,776           6,284          6,335           9,405
Income taxes                                              1,823          3,534           2,388          2,409           3,457
                                                       --------       --------        --------       --------        --------
Net income                                             $  3,385       $  6,242        $  3,896       $  3,926        $  5,948
                                                       ========       ========        ========       ========        ========
Net income per share - diluted                            $0.46          $0.84           $0.53          $0.54           $0.82
Shares outstanding - diluted                              7,405          7,463           7,334          7,230           7,222

Balance Sheet Data:
                                                                                    Fiscal Year
                                                                                    -----------
                                                         1999            1998           1997            1996           1995
                                                         ----            ----           ----            ----           ----
Working capital                                        $ 42,805       $ 48,381       $  51,412      $  50,055       $  51,023
Total assets                                            150,602        149,501         146,471        136,665         131,074
Long-term debt and capital lease obligations
                                                         16,669         20,491          25,676         31,087          31,977
Stockholders' equity2                                    89,391         90,908          86,919         82,685          78,531

</TABLE>

     1. In 1999  the  Company  finalized  a plan to shift  manufacturing  of its
frozen  novelty  line of business  from a  Company-owned  plant in  Springfield,
Vermont to third party co-packers to improve the Company's competitive position,
gross  margin and  profitability.  This action  resulted in fourth  quarter 1999
write-off  of  assets   associated   with  the  ice  cream   novelty  and  other
manufacturing assets and costs associated with severance for those employees who
do not accept the Company's offer of relocation.

     2. No cash  dividends  have been  declared  or paid by the  Company  on its
capital stock since the Company's organization.  The Company intends to reinvest
earnings for use in its business and to finance future growth. Accordingly,  the
Board of  Directors  does not  anticipate  declaring  any cash  dividends in the
foreseeable future.

<PAGE>

ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

Results of Operations

The following table shows certain items as a percentage of net sales,  which are
included in the Company's Statement of Income.
<TABLE>
<CAPTION>
<S>                             <C>            <C>           <C>          <C>             <C>             <C>
                                                                               Annual Increase (Decrease)
                                      Percentage of Net Sales              1999           1998            1997
                                            Fiscal Year                  Compared       Compared        Compared
                                1999           1998          1997        To 1998         To 1997        To 1996
                                ----           ----          ----        -------         -------        -------
Net sales                       100.0%         100.0%        100.0%        13.3%           20.1%           4.2%
Cost of sales                    61.3           65.1          65.6          6.7            19.2           (0.8)
                                -----          -----         -----        -----           -----          -----
Gross profit                     38.7           34.9          34.4         25.7            21.8           15.4
Selling, general and
administrative expense           33.2           30.5          30.7         23.0            19.4           17.5
Special charge                    3.6             --            --           --              --             --
Other income (expense)            0.3            0.3          (0.1)         0.2           687.3           53.2
                                -----          -----         -----        -----           -----          -----
Income before income taxes
                                  2.2            4.7           3.6        (46.7)           55.6           (0.8)
Income taxes                      0.8            1.7           1.4        (48.4)            8.0           (0.9)
                                -----          -----         -----        -----           -----          -----
Net income                        1.4%           3.0%          2.2%       (45.8)%          60.2%          (0.8)%
                                =====          =====         =====        =====           =====          =====
</TABLE>

Net Sales

Net sales in 1999  increased  13.3% to $237  million  from $209  million in 1998
primarily due to growth in the U.S.  marketplace as well as the United  Kingdom.
Total worldwide pint volume increased 8.9% compared to 1998, which was primarily
attributable  to the Company's  original line of products.  This volume increase
was combined  with a price  increase of 3.3% on pints sold to U.S.  distributors
that went into effect in July 1998.  Total worldwide unit volume of 2 1/2 gallon
bulk container products increased 16.7% compared to the same period in 1998.

Packaged sales (primarily pints) represented 83% of total net sales in 1999, 81%
of total net  sales in 1998 and 84% of total  net sales in 1997.  Net sales of 2
1/2 gallon bulk containers  represented  approximately  9% of total net sales in
1999 and 8% of total net sales in 1998 and 1997.  Net sales of novelty  products
(including single servings) accounted for approximately 6% of total net sales in
1999,  9% of total net  sales in 1998 and 6% of total  net  sales in 1997.  This
decrease is due to a decline in sales of single serve containers to the Japanese
market in  comparison  to the prior year.  Net sales from the  Company's  retail
stores represented 2% of total net sales in 1999, 1998 and 1997.

International  sales were $25.3, $17.4, and $7.6 million in 1999, 1998 and 1997,
respectively, which represents 11% of total net sales in 1999, 8% in 1998 and 4%
in 1997. The increase in 1999 was primarily due to increased sales in the United
Kingdom partially offset by a decrease in net sales to the Japanese market.

Net sales in 1998  increased  20.1% to $209  million  from $174 million in 1997.
Total  worldwide pint volume  increased 10% compared to 1997 which was primarily
attributable  to the Company's  original line of products.  This volume increase
was combined with a price increase of 3% on pints sold to distributors that went
into  effect in July 1998.  Total  worldwide  unit  volume of 2 1/2 gallon  bulk
container products increased 17% compared to the same period in 1997.

<PAGE>

Cost of Sales

Cost of sales in 1999 increased  approximately  $9 million or 6.7% over the same
period in 1998 and overall gross profit as a percentage  of net sales  increased
from 34.9% in 1998 to 38.7% in 1999.  The higher gross profit as a percentage of
net sales  resulted from decreased  dairy  commodity  costs, a 3.3%  distributor
price increase  effective in July 1998 and a price  increase in connection  with
the Company's  distribution  redesign in 1999,  better plant  utilization due to
higher production volumes and improved efficiencies in the plants.

Cost of sales in 1998 increased  approximately  $22 million or 19% over the same
period in 1997 and overall gross profit as a percentage  of net sales  increased
from  34.4% in 1997 to 34.9% in 1998.  The  slightly  higher  gross  profit as a
percentage of net sales resulted from  increases in selling prices  effective in
January 1998 and July 1998,  better plant  utilization due to higher  production
volumes and a decrease in reserves for potential product obsolescence, partially
offset by substantial  increases in dairy commodity costs. In response to higher
dairy costs the Company  instituted a 3% price  increase  effective in July 1998
for its packaged pint  products and a combined 10% price  increase for its 2 1/2
gallon bulk  containers  effective in January 1998 and July 1998 to offset these
increased costs. See Risk Factors, "Volatile Cost of Raw Materials."

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased 23.0% to $78.6 million in
1999 from $63.9  million in 1998 and  increased as a percentage  of net sales to
33.2% in 1999 from 30.5% in 1998.  The $14.7 million dollar  increase  primarily
reflects   increased   selling  expenses   related  to  the  Company's   earlier
restructuring  of  its  distribution   system  and  increased   advertising  and
promotions  expenses.  In addition the Company is investing  more heavily in its
international  operations,  most notably in the United Kingdom, Japan and Israel
in order to  capitalize  on further  opportunities  to grow its ice cream  sales
outside the United States.  Selling,  general and  administrative  expenses also
reflect increased salaries, recruiting and training expenses related to building
more  infrastructure  to manage its business,  and in the fourth quarter of 1999
higher expenses for  professional  advisors,  including its investment  bankers,
consultants and legal counsel, related to the Company's review and consideration
of  the   Indications  of  Interest  to  Acquire  the  Company  and  Alternative
Transactions.

Selling,  general and  administrative  expenses  increased 19% to $64 million in
1998 from $54  million in 1997 and  decreased  slightly as a  percentage  of net
sales to 30.5% in 1998 from 30.7% in 1997. The $10 million  increase in expenses
is attributable to increased sales and marketing  expenses to support the launch
of a new line of premium  plus ice cream under the name of Newman's  Own(TM) All
Natural  Ice  Cream,   increased   international   costs,   increases  in  radio
advertising, in-store programs to drive product trial and brand awareness, scoop
truck marketing and the rollout of the new pint package design.

Special Charge

Following a comprehensive  review of its manufacturing  operations,  the Company
finalized a plan to shift  manufacturing  of its frozen novelty line of business
from a company-owned plant in Springfield,  Vermont to third party co-packers to
improve the Company's competitive position, gross margin and profitability. This
action  resulted in a fourth quarter 1999  non-recurring  pre-tax charge of $8.6
million ($.78 per common share, after  tax)consisting of the write-off of assets
associated with the ice cream novelty and other  manufacturing  assets and costs
associated  with  severance for those  employees who do not accept the Company's
offer of relocation.  This plan to shift novelty  manufacturing will be executed
during

<PAGE>

2000. The outsourcing of its ice cream novelty  business will enable the Company
to  introduce a wider range of novelty  products in the future and  increase its
flexibility.

Other Income (Expense)

Interest  income  decreased to $1.9 million in 1999  compared to $2.2 million in
1998.  This  decrease in  interest  income was due to a lower  average  invested
balance  throughout the period.  Interest expense decreased $254,000 compared to
1998. This decrease is due to the $5 million Senior Notes principal payment made
in  September  1999  partially  offset by  increased  interest  expense for debt
acquired through the Company's 60% ownership interest in its Israeli licensee.

Interest income increased from $1.9 million in 1997 to $2.2 million in 1998. The
increase  in  interest  income  was  due  to  higher  average  invested  balance
throughout 1998. Interest expense in 1998 decreased $104,000 in 1998 as compared
to 1997 due to the $5 million Senior Notes principal installment payment.  Other
income  (expense)  increased  in 1998 from other  expense of $118,000 in 1997 to
other  income of $693,000 in 1998.  This is primarily  due to  increased  losses
associated with foreign currency  exchange in comparison to 1997,  combined with
income received from the Company's cost basis investment.

Income Taxes

The  Company's  effective  income tax rate in 1999  decreased to 35% from 36% in
1998 and 38% in 1997.  The decrease  was a result of lower state  income  taxes,
more tax-exempt  interest  income,  and the overall  geographic mix of earnings.
Management  expects 2000's  effective income tax rate to remain at approximately
35% based upon the expected geographic mix of earnings.

Net Income

Net income for 1999, excluding the non-recurring special charge discussed above,
increased  to $9.0  million  from $6.2  million in 1998.  Diluted net income per
share excluding the  non-recurring  special charge was $1.21 in 1999 compared to
$0.84 in 1998.  Net income after  reflecting the special charge was $3.4 million
in 1999.  Net  income  as a  percentage  of net sales  was 3.8%  (excluding  the
non-recurring  special charge) and 1.4% (after reflecting the special charge) in
1999 as compared to 3.0% in 1998 and 2.2% in 1997.

During the fourth quarter of 1999 and continuing into the first quarter of 2000,
the Company  incurred  significant  expenditures  (classified  within S,G&A) for
services of its investment  banker,  consultants  and legal  counsel,  including
separate  legal  counsel  for  various   directors,   in  connection   with  the
investigations  and  deliberations  of the Board  with  respect  to the  various
Indications  of Interest to acquire  the  Company and  Alternative  Transactions
under  consideration by the Board.  These  expenditures are expected to continue
until the Board makes a definitive decision on this subject.

The Company  expects to face  increased  domestic  competition in the Year 2000,
which will require increased selling and marketing expenditures,  and may result
in a slower  rate of growth in net sales and may well have an adverse  effect on
future  results,  as compared with results for the Year 1999. See "Risk Factors"
generally.

Seasonality

The Company typically experiences more demand for its products during the summer
than during the winter.

<PAGE>

Inflation

Inflation has not had a material effect on the Company's  business to date, with
the exception of dairy raw material commodity costs. See the Risk Factors below.
Management  believes  that the effects of  inflation  and  changing  prices were
successfully  managed in 1999,  with both margins and earnings  being  protected
through  a  combination  of  pricing  adjustments,  cost  control  programs  and
productivity gains.

Liquidity and Capital Resources

As of December 25, 1999 the Company had $46.6 million of cash, cash  equivalents
and short term investments ($25.3 million of cash and cash equivalents and $21.3
million of marketable securities),  a $638,000 decrease since December 26, 1998.
Net cash provided by operations in 1999 was $20.3 million. Uses of cash included
increases in accounts  receivable  and  inventories of $7.5 million and $405,000
respectively,  $5.3  million  to pay down debt and  capital  lease  obligations,
repurchase of company stock of $7.2  million,  and additions to property,  plant
and equipment,  primarily for equipment upgrades at the Company's  manufacturing
facilities,  of $8.8  million.  The increase in accounts  receivable is due to a
contractual change in the Company's  distribution  agreement with Dreyer's Grand
Ice Cream effective in January 1999,  which altered the payment terms from 14 to
28 days.  Partially  offsetting  these uses of cash was an  increase in accounts
payable and accrued expenses of $7 million. The increase in accounts payable and
accrued expenses reflects  additional  liabilities  related to both the Japanese
and Israeli operations.

In addition the Company  acquired a 60% interest in its Israeli  licensee for $1
million in February,  1999. Cash acquired in the  transaction  was $858,000.  In
June 1999,  the Company  acquired  the assets of one of its  franchisees,  which
included  Las  Vegas,   Nevada   territory  rights  and  two  scoop  shops,  for
approximately $870,000 net of cash acquired.

In September  1999, the Company  completed its previously  announced  repurchase
program  commenced in September 1998,  which  authorized the Company to purchase
shares  of the  Company's  Class A Common  Stock up to an  aggregate  cost of $5
million for use for general corporate  purposes.  In September 1999 the Board of
Directors approved an additional $3 million for stock repurchases of its Class A
common shares. During the year ended December 25, 1999 the Company repurchased a
total of 364,100 shares of the Company's Class A Common Stock for  approximately
$7.2 million.

The Company's short and long-term debt at December 25, 1999 includes $20 million
aggregate  principal  amount of Senior Notes issued in 1993 and 1994. The second
principal  payment of $5 million was paid in October  1999 and the  remainder of
principal is payable in annual installments through 2003.

The Company  anticipates  capital  expenditures  in 2000 of  approximately  $9.0
million.  Most of these  projected  capital  expenditures  relate  to  equipment
upgrades  and   enhancements   at  the   Company's   manufacturing   facilities,
computer-related expenditures and build out of Company-owned scoop shops.

The Company has  available two  $10,000,000  unsecured  working  capital line of
credit agreements with two banks. Interest on borrowings under the agreements is
set at the banks' base rate or at LIBOR plus a margin based on a  pre-determined
formula.  No amounts were  borrowed  under these or any bank  agreements  during
1999. The working capital line of credit agreements expire December 23, 2001.

<PAGE>

Management believes that internally  generated funds, cash, cash equivalents and
marketable  securities and equipment lease financing and/or borrowings under the
Company's  two  unsecured  bank  lines  of  credit  will  be  adequate  to  meet
anticipated operating and capital requirements.

Impact of Year 2000

The  Company   experienced  no  significant   disruptions  in  mission  critical
information technology and non-information technology systems and believes those
systems  successfully  responded  to the Year  2000  date  change.  The  Company
expensed  approximately  $620,000 during 1999 in connection with remediating its
systems.  The Company is not aware of any material problems  resulting from Year
2000 issues, either with its products, its internal systems, or the products and
services  of third  parties.  The Company  will  continue to monitor its mission
critical computer applications and those of its suppliers and vendors throughout
the year 2000 to ensure  that any latent  Year 2000  matters  that may arise are
addressed promptly.

Euro Conversion

On January 1, 1999 certain member  countries of the European  union  established
fixed  conversion  rates  between  their  existing  currencies  and the European
Union's common currency ("the euro"). The former currencies of the participating
countries  are  scheduled to remain legal  tender as  denominations  of the euro
until January 1, 2002 when the euro will be adopted as the sole legal currency.

The Company has  evaluated the  potential  impact on its business, including the
ability of its information systems to handle  euro-denominated  transactions and
the impact on exchange costs and currency exchange rate risks. The conversion to
the euro is not expected to have a material  impact on the Company's  operations
or financial position.

Forward-Looking Statements

This  section,  as well as other  portions of this  document,  includes  certain
forward-looking  statements about the Company's business,  new products,  sales,
dairy ingredient commodity costs, other expenditures and cost savings, effective
tax rate, operating and capital requirements and financing.  Any such statements
are  subject  to risks  that  could  cause the  actual  results or needs to vary
materially  and are also  subject to changes in  connection  with any  potential
Indications  of Interest to acquire  the  Company or  Alternative  Transactions.
These risks are discussed below.

In addition, forward-looking statements may be included in various other Company
documents to be issued in the future and in various oral  statements  by Company
representatives to security analysts and investors from time to time.

Risk Factors

Dependence on Independent Ice Cream Distributors.  Historically, the Company has
been dependent on maintaining satisfactory relationships with Dreyer's Grand Ice
Cream, Inc.  ("Dreyer's") and the other independent ice cream  distributors that
have acted as the Company's  exclusive or master  distributor  in their assigned
territories. In 1998, Dreyer's distributed significantly more than a majority of
the  sales  of  Ben  &  Jerry's   products.   While  the  Company  believes  its
relationships  with  Dreyer's  and its other  distributors  generally  have been
satisfactory and have been instrumental in the Company's growth, the Company has
at  times  experienced  difficulty  in  maintaining  such  relationships  to its
satisfaction.  In  August  1998 -  January  1999,  the  Company  redesigned  its
distribution network,  entering into a distribution agreement with The Pillsbury
Company ("Pillsbury") and a new agreement with Dreyer's. These arrangements took

<PAGE>

effect in September 1999, except for certain territories which were effective in
April - May 1999. The Company believes the terms of the new arrangements will be
more favorable to the Company and expects that, under the  distribution  network
redesign, no one distributor will account for more than 40% of the Company's net
sales.  The October 1999 transfer of the Haagen-Dazs unit to the recently formed
Pillsbury/Nestle    ice   cream   joint    venture   has    presented    certain
opportunities/difficulties for the Company, which entered into an amendment with
the Ice Cream Partners  joint venture in December  1999, in connection  with the
assignment of that agreement from Pillsbury to the joint venture.

However,  both the  recently  formed  Pillsbury/Nestle  ice cream joint  venture
(through its  Haagen-Dazs  super premium ice cream unit),  and Dreyer's with its
fall 1999 super  premium ice cream  market entry are direct  competitors  of the
Company.

Since  available  distribution  alternatives  are  limited  and  continue  to be
adversely  impacted by consolidation in the industry,  there can be no assurance
that  difficulties  in  maintaining  satisfactory  relationships  with  its  two
principal distributors (who are competitors) and its other distributors, some of
which are also  competitors  of the  Company,  will not have a material  adverse
effect on the Company's business (See "Business - Markets and Customers").

Growth in Sales and Earnings.  In 1999, net sales of the Company increased 13.3%
to $237 million from $209 million in 1998. Total worldwide pint volume increased
8.9% compared to 1998. Based on information  provided by Information  Resources,
Inc., a software and marketing information services company ("IRI"), the Company
believes that the U.S.  super premium and premium plus ice cream,  frozen yogurt
and sorbet industry category sales increased 10% in 1999 compared to 1998. Given
these  overall   domestic  super  premium   industry   trends,   the  successful
introduction of innovative  flavors on a periodic basis has become  increasingly
important  to sales  growth by the Company.  Accordingly,  the future  degree of
market  acceptance  of  any  of  the  Company's  new  products,  which  will  be
accompanied  by  significant  promotional  expenditures,  is  likely  to have an
important  impact on the Company's 2000 and future financial  results.  However,
the Company expects that, due to increased domestic competition, it will need to
increase its selling and  marketing  expenses and that its rate of growth in net
sales may be slower in the current Year 2000, which may be expected to adversely
affect  earnings  (See  "Management's   Discussion  and  Analysis  of  Financial
Conditions and Results of Operations").

Competitive  Environment.  The super  premium  frozen  dessert  market is highly
competitive,  with the  distinctions  between the super premium category and the
"adjoining" premium and premium plus categories less marked than in the past. As
noted  above,  the ability to  successfully  introduce  innovative  flavors on a
periodic basis that are accepted by the marketplace is a significant competitive
factor.  In addition,  the  Company's  principal  competitors,  two of which are
distributors for the Company,  are large companies with resources  significantly
greater than the Company's.  In January and September 1999 Dreyer's launched two
lines of super  premium ice cream,  Godiva and  Dreamery(TM),  with  significant
marketing programs including radio,  outdoor and television  advertising as well
as heavy price  discounting to gain trial. The Godiva and Dreamery(TM)  products
are  marketed  primarily  in pints.  Additional  super  premium  products may be
introduced by other ice cream  competitors.  In October 1999, the U.S. ice cream
operations of Pillsbury  (Haagen-Dazs) and Nestle were consolidated into a joint
venture, Ice Cream Partners. See "Business Competition" and "Business: The Super
Premium  Frozen  Dessert  Market." The Company  expects  strong  competition  to
continue and increase, including competition for the limited shelf space for the
frozen  dessert  category in  supermarkets  and other retail food  outlets,  the
impact of  consolidation  in the retail food outlets and  increased  competition
from the Company's two principal distributors.

<PAGE>

Volatile Cost of Raw  Materials.  Management  believes that the general trend of
volatility  in dairy  ingredient  commodity  costs  may  continue.  While  dairy
commodity costs for 1999, and especially for the second half of 1999, were lower
than in 1998,  it is possible  that at some  future date both gross  margins and
earnings may not be adequately  protected by pricing  adjustments,  cost control
programs and productivity gains.

Reliance  on a Limited  Number of Key  Personnel.  The success of the Company is
significantly  dependent  on the  services  of Perry Odak,  the Chief  Executive
Officer,  and a limited number of executive  managers working under Mr. Odak, as
well as certain continued  services of Jerry Greenfield,  the Chairperson of the
Board and  co-founder  of the  Company,  and Ben  Cohen,  Vice  Chairperson  and
co-founder  of the Company.  Loss of the services of any of these  persons could
have a material  adverse  effect on the Company's  business.  See "Directors and
Executive Officers of the Company."

The  Company's  Social  Mission.  The  Company's  basic  business  philosophy is
embodied in a three-part "mission  statement," which includes a "social mission"
to "operate the Company in a way that actively  recognizes the central role that
business  plays in the  structure of society by  initiating  innovative  ways to
improve  the  quality  of  life  of  a  broad  community:  local,  national  and
international.  Underlying the mission of Ben & Jerry's is the  determination to
seek new and creative ways of addressing  all three parts,  while holding a deep
respect for  individuals  inside and outside the Company and for the communities
of which they are a part."  The  Company  believes  that  implementation  of its
social  mission,  which is  integrated  into the  Company's  business,  has been
beneficial  to the  Company's  overall  financial  performance.  However,  it is
possible  that at some  future  date the amount of the  Company's  energies  and
resources  devoted  to its  social  mission  could  have some  material  adverse
financial effect. See "Business-Introduction" and "Business-Marketing."

International.  Total  international net sales represented  approximately 11% of
total consolidated net sales in 1999. The Company's  principal  competitors have
substantial  market  shares in various  countries  outside  the  United  States,
principally  Europe and Japan.  The Company sells product in the United  Kingdom
and France,  through license arrangements in the Netherlands and Belgium.  Sales
were also made in Japan andSingapore and the Company started selling in Peru and
Lebanon in 1999 under  license  arrangements.  In 1987,  the Company  granted an
exclusive  license to manufacture and sell Ben & Jerry's products in Israel.  In
1999,  the Company  made an  investment  of $1 million in its Israeli  licensee,
which gave the Company a 60% ownership interest. In May 1998, the Company signed
a Licensing Agreement with Delicious Alternative  Desserts,  LTD to manufacture,
sell and distribute Ben & Jerry's  products  through the wholesale  distribution
channels in Canada.  The Company is  investigating  the  possibility  of further
international  expansion.  However,  there can be no assurance  that the Company
will be  successful in all of its present  international  markets or in entering
(directly,  or indirectly  through  licensing) on a long-term  profitable basis,
such additional international markets as it selects.

Control of the Company.  The Company has two classes of common stock - the Class
A Common  Stock,  entitled to one vote per share,  and the Class B Common  Stock
(authorized in 1987), entitled,  except to the extent otherwise provided by law,
to ten  votes  per  share.  Ben  Cohen,  Jerry  Greenfield  and  Jeffrey  Furman
(collectively the "Principal  Stockholders") hold shares representing 47% of the
aggregate  voting  power  in  elections  for  directors,  permitting  them  as a
practical  matter to elect all  members of the Board of  Directors  and  thereby

<PAGE>

effectively  control the  business,  policies  and  management  of the  Company.
Because of their  significant  holdings of Class B Common  Stock,  the Principal
Stockholders may continue to exercise this control even if they sell substantial
portions of their  Class A Common  Stock.  See  "Security  Ownership  of Certain
Beneficial Owners and Management."

In addition, the Company issued all of the authorized Class A Preferred Stock to
the Foundation in 1985. The Class A Preferred Stock gives the Foundation a class
voting right to act with respect to certain Business Combinations (as defined in
the Company's  charter) and significantly  limits the voting rights that holders
of the Class A Common  Stock and Class B Common  Stock,  the owners of virtually
all of the equity in the  Company,  would  otherwise  have with  respect to such
Business Combinations. See "Business The Ben & Jerry's Foundation."

Also, in April 1998, the Legislature of the State of Vermont amended a provision
of the Vermont  Business  Corporation  Act to provide  that the  directors  of a
Vermont  corporation  may also consider,  in determining  whether an acquisition
offer or other matter is in the best interests of the corporation, the interests
of the corporation's employees,  suppliers, creditors and customers, the economy
of the state in which the  corporation is located and including the  possibility
that the best  interests  of the  corporation  may be  served  by the  continued
independence of the corporation. Also, in August 1998, following approval by its
Board of Directors,  the Company put in place two Shareholder  Rights Plans, one
pertaining to the Class A Common Stock and one  pertaining to the Class B Common
Stock.  These Plans are intended to protect  stockholders by compelling  someone
seeking  to  acquire  the  Company  to  negotiate  with the  Company's  Board of
Directors in order to protect  stockholders  from unfair takeover tactics and to
assist in the maximization of stockholder  value.  These Rights Plans, which are
common  for public  companies  in the  United  States,  may also be deemed to be
"anti-takeover"  provisions  in that the Board of Directors  believes that these
Plans will make it difficult for a third party to acquire control of the Company
on terms which are unfair or unfavorable to the stockholders.

While  the Board of  Directors  believes  that the Class B Common  Stock and the
Class A  Preferred  Stock are  important  elements  in keeping  Ben & Jerry's an
independent, Vermont-based business focused on its three-part corporate mission,
the Class B Common Stock and the Class A Preferred Stock (which may be converted
into  Class A Common  Stock or  redeemed  in the case of the  Class A  Preferred
Stock, as the case may be, by the specified votes of the Board of Directors) may
be  deemed  to be  "anti-takeover"  provisions  in that the  Board of  Directors
believes the  existence of these  securities  will make it difficult for a third
party to acquire  control of the Company on terms  opposed by the holders of the
Class B Common Stock,  including  primarily the Principal  Stockholders,  or The
Foundation,  or for  incumbent  management  and the  Board  of  Directors  to be
removed.

In addition,  the 1997  amendments to the Company's  Articles of  Association to
classify the Board of Directors and to add certain other related  provisions and
the April 1998 Vermont Legislative Amendment of the Vermont Business Corporation
Act and  the  Shareholder  Rights  Plans  put in  place  in  August,  1998  (see
"Anti-Takeover  Effects of Class B Common Stock,  Class A Common Stock,  Class A
Preferred  Stock,  Classified  Board  of  Directors,   Vermont  Legislation  and
Shareholder  Rights  Plans"  in  Item  1) may be  deemed  to be  "anti-takeover"

<PAGE>

provisions  in that the Board of Directors  believes that these  amendments  and
legislation  will make it difficult for a third party to acquire  control of the
Company on terms opposed by the holders of the Class B Common  Stock,  including
primarily  the  Principal  Stockholders  and the  Foundation,  or for  incumbent
management and the Board of Directors to be removed.

Indications of Interest to Acquire the Company;  Alternative  Transactions.  The
Company  announced  on  December  2, 1999 that it had  received  indications  of
interest  to acquire the Company  and  Alternative  Transactions  to acquire the
Company at prices  significantly  above the  closing  price on NASDAQ on the day
before the  December  2, 1999  press  release  ($21.00).  These  Indications  of
Interest are subject to conditions and,  together with Alternative  Transactions
under  which  the  Company  would  remain  an  independent  company,  are  being
considered by the Board of Directors.

The Company's policy, as regularly  disclosed in its filings with the Securities
and Exchange  Commission,  has been to be an  independent  Vermont-based company
focused  on its  three-part  corporate  mission,  emphasizing  product  quality,
economic  reward and a commitment to the  community,  contributing 7 1/2% of its
profit  before  tax to  charities,  including  donations  to The  Ben &  Jerry's
Foundation, Inc.

No decision has been made by the Board with respect to any of these  Indications
of  Interest  or as to  any  sale  of  the  Company  or  as to  any  Alternative
Transaction under which the Company would remain an independent  company, and no
implications  should be drawn from this  Report as to what  definitive  decision
will be reached by the Board after it has concluded its  deliberations  or as to
the timing of any decision. As noted under "Management's Discussion and Analysis
of Financial Condition and Results of Operations,"  the Board has been receiving
advice from its investment  banker,  consultants  hired in connection  with this
matter and  counsel,  including  separate  counsel  hired by various  individual
directors.  The matters  relating to the  Indications of Interest or Alternative
Transactions  present a different set of risks and opportunities for the Company
and its  continued  independence,  which  could  materially  affect  the  future
operations and results of the Company.

ITEM 7A. MARKET RISK

The  Company  is  exposed to a variety  of market  risks,  including  changes in
interest  rates  affecting the return on its  investments  and foreign  currency
fluctuations.  The  Company's  exposure  to market risk for a change in interest
rates relates primarily to the Company's investment  portfolio.  The Company has
classified  all of its  short-term  and long-term  investments as "available for
sale" except for certificates of deposits which are held to maturity. Unrealized
gains and losses for  available for sale  securities  are excluded from earnings
and are reported as a separate component of stockholder's equity until realized.
The majority of these investments are municipal bonds and fixed income preferred
stock. At December 25, 1999, unrealized losses amounted to $324,000. The Company
does not intend to hold such  investments  to maturity if there is an underlying
change in interest rates or the Company's cash flow  requirements.  Certificates
of deposits do not expose the  consolidated  statement of  operations or balance
sheets to fluctuations in interest rates. The Company's  exposure to market risk
for  fluctuations in foreign  currency relate  primarily to the amounts due from
subsidiaries. Exchange gains and losses related to amounts due from subsidiaries
have not been material for each of the years presented.

ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The response to this is in Item 14(a) of this Report.


<PAGE>

ITEM 9. CHANGES IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Not applicable.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

Directors and Executive Officers

The directors and executive officers of the Company are as follows:

     Name                Age             Office
-----------------       -----  -----------------------------------------------
Jerry Greenfield         48    Chairperson and Director
Ben Cohen                48    Vice Chairperson and Director
Perry Odak               54    Chief Executive Officer, President and Director
Pierre Ferrari           49    Director
Jeffrey Furman           56    Director
Jennifer Henderson       46    Director
Frederick A. Miller      53    Director
Henry Morgan             74    Director
Bruce Bowman             47    Senior Director of Operations
Charles Green            45    Senior Director Sales and Distribution
Frances Rathke           39    Chief Financial Officer and Secretary
Michael Sands            35    Chief Marketing Officer


The Board of Directors has an Audit Committee on which Directors Ferrari, Furman
and Morgan  (Chairperson)  serve;  a Compensation  Committee on which  Directors
Miller, Morgan and Henderson,  (Chairperson) serve; a Social Mission/Workculture
Committee on which Directors Furman,  Henderson and Miller  (Chairperson) serve;
an Executive  Committee  on which  Directors  Cohen,  Miller,  Morgan,  Odak and
Ferrari  serve;   and  a  Nominating   Committee  on  which  Directors   Ferrari
(Chairperson), Greenfield, Henderson, Odak and Cohen serve. In December 1999 the
Board appointed a Special Committee consisting of two directors, Messrs. Ferrari
and Furman,  to explore certain specific matters related to alternatives for the
Company's future, in light of the Indications of Interest to acquire the Company
and Alternative  Transactions.  This Committee concluded its work on January 27,
2000.  In December  1999 the Board also  appointed a Special  Committee  of four
directors -- namely Messrs. Furman,  Greenfield,  Morgan and Odak, to coordinate
generally for the Board its review of the Indications of Interest to acquire the
Company and Alternative Transactions and variations of the foregoing, subject to
the final determination by the Board of Directors.

Ben  Cohen,  a founder of the  Company,  served as  Chairperson  of the Board of
Directors from February 1989 through  November 1998. Mr. Cohen currently  serves
as Vice  Chairperson  of the Board of  Directors.  From  January 1, 1991 through
January 29, 1995 he was the Chief  Executive  Officer of the Company.  Mr. Cohen
has been a director of the Company since 1977.  Mr. Cohen has been  President of
Business Leaders for Sensible Priorities, a nonprofit organization,  since 1998.
Mr. Cohen is a director of Blue Fish Clothing,  Inc. and Social Venture Network.
In 1997,  Community Products Inc., of which Mr. Cohen was a director,  filed for
protection  under Chapter 11 and then Chapter 7 of the United States  Bankruptcy
Code, and was liquidated in 1999.

<PAGE>

Pierre  Ferrari  has  served as a  director  of the  Company  since  June  1997.
Currently,  Mr. Ferrari is a self-employed  consultant.  From 1997 through 1999,
Mr. Ferrari was President of Lang  International,  a marketing  consulting firm.
From 1995 to 1997 Mr. Ferrari was the Special Assistant to the President and CEO
of Care, the world's  largest private relief and  development  agency.  Prior to
1994, Mr. Ferrari held various senior level marketing positions at the Coca-Cola
Company.

Jeffrey Furman has served as a director of the Company since 1982. Mr. Furman is
Treasurer  and director of The Ben & Jerry's  Foundation,  Inc.  Currently,  Mr.
Furman is a self-employed consultant. From March 1991 through December 1996, Mr.
Furman was a consultant to the Company.

Jerry  Greenfield,  a  founder  of the  Company,  served  as  director  and Vice
Chairperson  of the Board of Directors from 1990 to November 1998, at which time
he was elected  Chairperson  of the Board of Directors.  Mr.  Greenfield is also
President and a director of The Ben & Jerry's Foundation, Inc.

Jennifer  Henderson has served as a director of the Company since June 1996. Ms.
Henderson  is  President of  Strategic  Interventions,  Inc.,  a leadership  and
management consulting firm.

Frederick  A. Miller has served as a director of the Company  since 1992.  Since
1985 Mr. Miller has served as President of the Kaleel Jamison  Consulting Group,
Inc., a strategic culture change and management consulting firm.

Henry Morgan has served as a director of the Company  since 1987.  Mr. Morgan is
retired Dean  Emeritus of Boston  University  School of  Management.  Mr. Morgan
serves  on  the  Board  of  Directors  of  Cambridge  Bancorporation,   Southern
Development Bancorporation and Cleveland Development Bancorporation.

Perry D.  Odak has  served  as Chief  Executive  Officer  of the  Company  since
December 31, 1996, as director of the Company  since January 1997,  and as Chief
Executive Officer and President since June 1997. From 1990 to 1996, Mr. Odak was
a principal in Odak, Pezzani & Company,  a private  management  consulting firm.
From 1994 to 1995, Mr. Odak was Chief Executive Officer of Graham Packaging.

Bruce  Bowman has served as Senior  Director of  Operations  since  August 1995.
Prior to joining the Company Mr. Bowman was Senior Vice  President of Operations
at Tom's Foods, Inc., a food manufacturing  company (April 1991 to August 1995).
Mr.  Bowman serves on the Board of Governors of Bryce  Corporation,  a privately
held  packaging  company and was a director of Delicious  Alternative  Desserts,
LTD. (March 1999 to July 1999).

Charles  Green has served as Senior  Director  of Sales and  Distribution  since
October 1996. From 1993 to 1996 Mr. Green was General Manager of Dari-Farms, the
distributor  of Ben & Jerry's  products  in the  Massachusetts  and  Connecticut
areas. From 1991 to 1993, Mr. Green was Vice President of Sales for HP Hood.

Frances Rathke has served as Chief Financial  Officer,  Chief Accounting Officer
and Secretary of the Company since April 1990.

Michael Sands joined the Company in July 1999 as Chief Marketing  Officer.  From
1997 to July 1999, Mr. Sands was Vice President of Marketing for Triarc Company,
Inc., the company that acquired Snapple Natural Beverage Company.  From November
1992 to June 1997,  Mr. Sands was Director of  Marketing  for Mexican  Specialty
Brands and managed five Mexican Brands  positioned  throughout the imported beer
category with Labatt USA.

<PAGE>

Other Key Executives

Elizabeth  Bankowski  has served as the Director of Social  Mission  Development
since December 1991. Ms. Bankowski is also Secretary and a director of The Ben &
Jerry's Foundation,  Inc. Ms. Bankowski served as a director of the Company from
1990 to June 1999.

Richard Doran joined the Company in 1997 as Senior Director of Human  Resources.
From 1987 until  joining the Company Mr. Doran was a management  consultant  and
Vice President for the Kaleel  Jamison  Consulting  Group,  a strategic  culture
change and management consulting firm.

Douglas  Fisher  joined the  Company in  September  1998 as  Director  of Retail
Operations.  From 1994 until  joining the  Company,  Mr.  Fisher was Director of
Franchising   for  Allied  Domecq   Retailing   USA,  owner  of  Dunkin  Donuts,
Baskin-Robbins and Togos.

ITEM 11. EXECUTIVE COMPENSATION

Summary Compensation Table

The  following  table sets forth the cash  compensation  paid by the  Company in
Fiscal Years 1997 - 1999 as well as certain other  compensation paid, awarded or
accrued for those years to the Company's Chief  Executive  Officer and the other
four  highest-paid  executive  officers during the 1999 fiscal year.  Perry Odak
became the Chief Executive Officer on January 1, 1996.

<TABLE>
<CAPTION>
<S>                          <C>     <C>          <C>                                    <C>                        <C>
                                            Annual Compensation            Awards          Long-Term Compensation Pay-outs

                                                             Other                    Securities
                                                             Annual    Restricted     Underlying                   All Other
    Name and                                        Bonus    Compen-     Stock         Options/       LTIP        Compensation
Principal Position           Year      Salary        (1)     sation      Awards          SARS       Pay-outs          (2)
------------------           ----    ---------    --------   ------    ----------     ----------    --------      -------------
 Perry D. Odak               1999    $314,711    $176,800                               67,000                      $12,588
 CEO, President and          1998    $305,769    $150,000                                   --                      $ 7,750
 Director                    1997    $300,000    $100,000                              360,000                      $25,000

 Bruce Bowman                1999    $219,923    $ 90,000                               25,000                      $ 8,797
 Senior Director of          1998    $211,692    $ 75,000                                   --                      $ 6,964
 Operations                  1997    $200,000    $ 50,000                               27,000                      $ 4,131

 Charles Green               1999    $204,231    $ 90,000                               25,000                      $ 8,169
 Senior Director of          1998    $182,885    $ 75,000                                   --                      $ 5,755
 Sales & Distribution        1997    $162,596    $ 40,000                               45,000                      $    --

 Frances Rathke              1999    $183,339    $ 70,000                               15,000                      $ 7,334
 Chief Financial Officer     1998    $178,406    $ 50,000                                   --                      $ 5,461
                             1997    $162,603    $ 45,000                               30,000                      $ 3,229

 Jerry Greenfield            1999    $230,000          --                                   --                      $ 9,200
 Chairperson and Director    1998    $237,179          --                                   --                      $ 5,853
                             1997    $183,333          --                                   --                      $ 3,000

(1) "Bonus" includes discretionary  distributions under the Company's Management Incentive Program.

(2) "All Other Compensation"  includes Company contributions to 401(k) plans and relocation fees.
</TABLE>


<PAGE>


Option/SAR Grants in Fiscal 1999

<TABLE>
<CAPTION>
<S>                         <C>                  <C>            <C>           <C>        <C>      <C>


                                      Percentage                                 Potential Realizable Value
                                       of Total                                   at Assumed Annual Rates
                                     Options/SARS      Exercise or                of Stock Price Appreciation
                   Options/SARS       Granted to       Base Price    Expiration          for Option Term
    Name             Granted      Employees in 1999   (per share)       Date           5%                 10%
-------------      ------------   -----------------   -----------    ----------    ----------        ----------
Perry D. Odak        67,000            10.87%           $24.625       3/24/09      $1,037,598        $2,629,476
Bruce Bowman         25,000             4.06%           $21.000       7/29/09      $  330,055        $  836,359
Charles Green        25,000             4.06%           $21.000       7/29/09      $  330,055        $  836,359
Frances Rathke       15,000             2.43%           $21.000       7/29/09      $  198,033        $  501,816
Jerry Greenfield          0                0                  0             0               0                 0
</TABLE>

Aggregated Option/SAR Exercises in 1999 and 1999 Year-End Option/SAR Values
<TABLE>
<CAPTION>
<S>                       <C>               <C>           <C>               <C>           <C>             <C>
                                                             Value of Unexercised          Value of Unexercised
                                                             Number of Unexercised       In-the-money Options/SARS
                                                            Options/SARS at 12/25/99          at 12/25/99

                         Shares
                      Acquired on
    Name             Exercise (#)    Value Realized    Exercisable    Unexercisable     Exercisable     Unexercisable

Perry D. Odak             0                 0             343,875           83,125        $4,812,531      $   242,419
Bruce Bowman              0                 0              37,871           49,129       $   348,423      $   316,872
Charles Green             0                 0              15,935           44,065       $   180,708      $   308,192
Frances Rathke            0                 0              39,934           36,251       $   449,936      $   290,467
Jerry Greenfield          0                 0                   0                0                 0                0
</TABLE>

Effective  January  1,  1998,  Directors  who are  not  employees  or  full-time
consultants  of the  Company  receive  an annual  retainer  fee of  $20,000,  in
addition to a $1,000 per board  meeting  attendance  fee, and  reimbursement  of
reasonable out-of-pocket expenses.

The Company  adopted the 1995  Non-Employee  Directors Plan for Stock in Lieu of
Directors Cash Retainer  under which  directors may elect to be paid, in lieu of
the annual cash retainer,  shares of common stock having a fair market value (as
of the date of  payment)  equal to the  amount  of such  annual  retainer.  Four
non-employee  directors each made an election under the Plan; three received 744
shares of stock and one received 614 shares of stock for the period July 1, 1999
through June of 2000 under the Plan.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain  information as of February 25, 2000 with
respect to the beneficial  ownership of the outstanding shares of Class A Common
Stock,  Class B Common  Stock and  Class A  Preferred  Stock by (i) all  persons
owning of record,  or  beneficially  to the knowledge of the Company,  more than
five  percent of the  outstanding  shares of any class,  (ii) each  director and
executive officer of the Company individually,  (iii) all directors and officers
of the  Company  as a group,  and (iv) The Ben & Jerry's  Foundation,  Inc.  The
mailing  address of each of the persons shown and of the Foundation is c/o Ben &
Jerry's  Homemade,   Inc.,  30  Community  Drive,   South  Burlington,   Vermont
05403-6828.

<PAGE>
<TABLE>
<CAPTION>

<S>            <C>                <C>                                  <C>               <C>
                                                                 Amount of Beneficial Ownership
                                     Class A Common Stock              Class B Common Stock               Preferred Stock
                                     --------------------              --------------------               ---------------
                                                 % Outstanding                     % Outstanding                    % Outstanding
    Name                         # Shares           shares (1)       # Shares           Shares        # Shares           Shares
----------------------------     --------        -------------       --------      -------------      --------       ------------
Ben Cohen (3)                    413,173               6.7%           488,486           61.5%               -                -
Jeffrey Furman (4)(5)             17,000               *               30,300            3.8%               -                -
Jerry Greenfield (4)             130,000               2.1%            90,000           11.3%               -                -
Perry Odak (6)                   368,521               6.0%                 -            -                  -                -
Pierre Ferrari                     8,121               *                    -            -                  -                -
Jennifer Henderson                 1,138               *                    -            -                  -                -
Frederick A. Miller                4,345               *                    -            -                  -                -
Henry Morgan                       5,845               *                    -            -                  -                -
Bruce Bowman                      46,064               *                    -            -                  -                -
Charles Green                     17,809               *                    -            -                  -                -
Frances Rathke                    51,459               *                    -            -                  -                -
Credit Suisse Asset
Management, LLC
153 East 53rd St
New York, NY 10022               860,500              14.06%
Dimensional Fund
Advisors, Inc.
1299 Ocean Ave, 11th floor
Santa Monica, CA 09401           359,000               5.9%
All Officers and Directors     1,115,554              18.2%
  as a group of 15                                                     608,786           76.6%               -                -
persons
The Ben & Jerry's
   Foundation, Inc. (4)                -               -                    -            -                900              100%
</TABLE>

*    Less than 1%

(1)  Based on the  number of shares of Class A Common  Stock  outstanding  as of
     February 25, 2000.  Each share of Class A Common Stock  entitles the holder
     to one vote per share.
(2)  Based on the  number of shares of Class B Common  Stock  outstanding  as of
     February 25, 2000.  Each share of Class B Common Stock  entitles the holder
     to ten votes.
(3)  Under the  regulations and  interpretations  of the Securities and Exchange
     Commission, Mr. Cohen may be deemed to be a parent of the Company.
(4)  By virtue of their positions as directors of The Foundation,  which has the
     power to vote or dispose of the Class A  Preferred  Stock,  each of Messrs.
     Greenfield,  a co-founder,  Director and  Chairperson  of the Company,  and
     Furman,  a Director of and  formerly a consultant  to the Company,  and Ms.
     Bankowski,  an Officer and Director of the Company, may be deemed under the
     regulations and interpretations of the Securities and Exchange  Commission,
     to own beneficially the Class A Preferred Stock.
(5)  Does not include 210 shares of Class A Common Stock and 105 Shares of Class
     B  Common  Stock  owned by Mr.  Furman's  wife,  as to  which he  disclaims
     beneficial  ownership under the securities laws. Includes 7,000 shares held
     by Mr. Furman as trustee for others, which are deemed beneficially owned by
     Mr.  Furman  under rules and  regulations  of the  Securities  and Exchange
     Commission.
(6)  Does not include 15,080 shares of Class A Common Stock  beneficially  owned
     by Mr. Odak's wife under the rules and  regulations  of the  Securities and
     Exchange Commission, as to which he disclaims beneficial ownership.

<PAGE>

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Mr.  Cohen,  a co-founder of the Company,  Vice-Chairperson  and Director of the
Company,  has  entered  into an  Employment  Agreement  with the  Company for an
employment  term  expiring  on  December  31,  1999   (renewable   automatically
thereafter in successive one year periods unless either Mr. Cohen or the Company
gives notice to the other of  non-renewal).  The  Agreement  provides for a base
salary of $200,000 per annum, subject to increases and bonuses at the discretion
of the Board.  The Agreement  provides for a covenant not to compete  during the
employment  term of the Agreement  and for a three-year  period  thereafter,  in
consideration  of payment by the Company  (except as  otherwise  provided in the
Agreement)  of  severance  equal to the  then-current  base  salary  during  the
three-year  period.  The Agreement then provides for annual  payments of $75,000
(adjusted for changes in the Consumer Price Index) for life, commencing with the
end of the three-year severance period, and for specified insurance benefits and
contains a  provision  for  contemplated  services to be provided to the Company
after the end of the term of employment and severance period.

Mr. Greenfield,  a co-founder of the Company,  Chairperson,  and Director of the
Company,  has entered into an Employment  Agreement  with the Company for a term
expiring on December 31, 1999 (renewable  automatically thereafter in successive
one year periods unless either Mr. Greenfield or the Company gives notice to the
other of non-renewal).  The Agreement provides for a base salary of $200,000 per
annum,  subject to increases  and bonuses at the  discretion  of the Board.  The
Agreement also provides for a covenant not to compete during the employment term
of the Agreement and for a three-year  period  thereafter,  in  consideration of
payment by the  company  (except as  otherwise  provided  in the  Agreement)  of
severance equal to the  then-current  base salary during the three-year  period.
The Agreement then provides for annual payments of $75,000 (adjusted for changes
in the Consumer Price Index) for life, commencing with the end of the three-year
severance period, for specified  insurance benefits and contains a provision for
certain services contemplated to be provided to the Company after the end of the
term of employment and severance period.

Mr. Odak, Chief Executive Officer,  signed a new restated  Employment  Agreement
for a  term  of 27  months  with  the  Company  effective  March  31,  1999.  In
conjunction  with this  agreement,  Mr.  Odak was  granted  non-incentive  stock
options to purchase an aggregate of 67,000 shares of Class A Common Stock of the
Company  exercisable at $24.625 per share,  the fair market value on the date of
grant.  Under the terms of the Agreement,  Mr. Odak is entitled to a base salary
of $315,000 per annum,  subject to  increases  from time to time by the Board of
Directors,  in its sole  discretion  ($315,000  has been set by the Board as the
2000 base  salary).  In December  1996,  Mr. Odak received  non-incentive  stock
options to purchase an  aggregate  of 360,000  shares of Class A Common Stock of
the Company  exercisable at $10.88 per share, the fair market value on the dates
of grant by the Compensation  Committee of the Board of Directors under the 1995
Equity  Incentive  Plan.  These  options  become  exercisable  at various  dates
specified in the Employment Agreement,  subject to acceleration of vesting as to
specified amounts in the event that certain financial goals are achieved and the
Compensation  Committee  makes  certain  findings  with  respect  to Mr.  Odak's
performance  in the applicable  prior period,  all as specified in detail in the
Employment Agreement.

The Employment Agreement may be terminated at any time by the Company for cause,
as  defined.  If  terminated  for  cause,  the  Company  shall  have no  further
obligation  to Mr.  Odak,  other  than  for  base  salary  through  the  date of
termination,  and any options that are vested shall  continue to be  exercisable
for 30 days (unless terminated by the vote of the Compensation  Committee).  All
other options terminate.

<PAGE>

The Company may also terminate the Employment Agreement other than for cause, in
which  event the Company has a  continuing  obligation  to pay Mr. Odak his base
amount at the rate in effect on the date of termination  for the monthly periods
specified  in  the  Agreement,  which  are  dependent  upon  the  date  of  such
termination.  Additionally,  the Company will  continue to  contribute,  for the
period  during  which  the base  amount  is  continued,  the cost of Mr.  Odak's
participation  (including  his  family)  in  the  Company's  group  medical  and
hospitalization  insurance  plans  and  group  life  insurance  plan.  Upon such
termination, unvested options shall become exercisable to the extent so provided
by the Agreement.

Mr. Odak may  terminate  his  employment  with the Company for good  reason,  as
defined  (in the  absence  of  cause).  In the event of such  termination,  base
amount, benefits and options (including  acceleration,  period of exercisability
and  termination  of  options)  shall be paid or provided in the same manner and
extent as for a termination by the Company other than for cause.

Mr. Odak agrees not to compete with the Company  during his period of employment
and, after  termination,  for the greater of one year or the period during which
severance payments are made.

Michael Sands, Chief Marketing Officer,  has an employment  agreement dated June
25, 1999,  expiring  June 30, 2002.  The  agreement  provides for an annual base
salary of $205,000 per annum,  subject to increases from time to time by the CEO
with approval by the Board of  Directors.  He is eligible for an annual bonus as
determined by the CEO and approved by the Board of Directors. Mr. Sands received
non-incentive stock options to purchase an aggregate of 35,000 shares of Class A
common  stock of the Company  exercisable  at $24.25 per share,  the fair market
value  on the  date of  grant  by the  Compensation  Committee  of the  Board of
Directors.  These  options  become  exercisable  over a four  year  period  with
one-fourth  being  exercisable on June 25, 2000 and up to an additional  1/48 of
the  shares  covered  by this  option on the last day of each  month in the next
three years  commencing with the month of July 2000. The agreement also provides
for medical, life insurance, 401(k) plan and other employee benefits, a covenant
not to  compete  during  the term of the  Agreement  and for a  one-year  period
thereafter.

The  Agreement  may be  terminated  at any time by the  Company  for  cause,  as
defined.  The Company may also terminate the Agreement  other than for cause, in
which event the Company has a  continuing  obligation  to pay Mr. Sands his base
salary for six  months.  Additionally,  the  Company's  group  medical  and life
insurance plans during the same period as his base salary is continued.

Severance Agreements

The  Company  entered  into  Severance  Agreements  dated July 30, 1999 with the
following members of the Office of the CEO (OCEO),  Elizabeth  Bankowski,  Bruce
Bowman, Richard Doran, Charles Green and Frances Rathke. In addition, in January
2000 the  Company  entered  into  similar  Severance  Agreements  with its other
members of the OCEO,  Douglas Fisher and Michael Sands. Under the terms of these
Severance  Agreements,  the  above-mentioned  Officers are entitled to severance
payments  on  termination  by  the  Company  other  than  for  cause,  death  or
disability;  or after a change in  control  of the  Company  (as  defined).  The
severance payments include an obligation to pay the Officer his/her then current
base salary payable for six months,  plus a second period of up to an additional
six  months in the  event  that the  employee  has not  found  other  comparable
employment;  continuation of health,  life and other welfare insurance benefits;
outplacement services; and payment of the appropriate pro rata percentage of the
next annual cash bonus.  For officers with three or more years of service at the
date of  termination,  unvested  options that would have vested in the first six
month period after date of termination  shall accelerate and become vested,  and

<PAGE>

then all vested options may continue to be exercised for six months  thereafter.
For all other  officers,  all  vested  options  at the date of  termination  may
continue to be exercised for six months thereafter.

In the event of a  termination  by the  Company  other than for cause,  death or
disability  within the first two years after a change of control (as defined) or
termination  by the officer within the first two years after a change of control
for good  reason (as  defined),  severance  shall be payable or  provided to the
officer as follows: (i) a single lump sum equal to the sum of (a) one and a half
times annual base salary for the officer in effect immediately prior to the date
of the  change  of  control  or  immediately  prior to the  date of  termination
(whichever  is greater) and (b) an amount equal to one and a half times the last
year's  annual  cash  bonus paid to the  officer;  (ii)  health,  life and other
welfare  benefits  shall  continue  for one year on the same terms  available to
employees generally;  and (iii) the Company's contribution to the 401(k) account
of the officer  shall  continue for one year at the same rate as  applicable  to
employees  generally.  All unvested options held by the officer shall accelerate
and  become  vested  immediately  prior to the  change of  control  and shall be
exercisable for six months. The officer(s) agree not to compete with the Company
during his/her employment and, after termination, for the greater of one year or
the period during which severance payments are made.

Mr.  Furman,  a director of the Company since 1982 and Treasurer and Director of
the Ben &  Jerry's  Foundation  entered  into a  Severance  and  Non-competition
Agreement  with the Company dated  December 31, 1990. As part of this  agreement
the Company provided, at no cost to Mr. Furman, family health insurance coverage
under the Company's  regular  employee  health  insurance  plan. This obligation
terminated March 2, 1999.

Related Party Transactions

During the year ended December 27, 1997, the Company purchased Rainforest Crunch
cashew-brazilnut  butter crunch candy to be included in Ben & Jerry's Rainforest
Crunch(R)  flavor ice cream for an  aggregate  purchase  price of  approximately
$800,000 from  Community  Products,  Inc., a company of which Messrs.  Cohen and
Furman were the principal  stockholders  and directors.  The candy was purchased
from Community  Products,  Inc. at competitive  prices and on standard terms and
conditions.  Community  Products,  Inc. filed for protection under Chapter 11 of
the U.S.  Bankruptcy  Code in early 1997,  its  business was sold and the matter
(and  related  litigation)  has been  settled in U.S.  Bankruptcy  Court.  Ben &
Jerry's located an alternative supplier for  cashew-brazilnut  butter crunch and
no purchases were made in 1998 from Community Products,  Inc. The termination of
Ben & Jerry's relationship with Community Products,  Inc. had no material effect
on the Company's business.

In 1997, the Company paid a $60,000 fee to the Kaleel Jamison  Consulting Group,
Inc. for its role in the Company's hiring of Mr. Richard Doran,  Senior Director
of Human  Resources.  Mr.  Frederick  A.  Miller,  a Director  of the Company is
President of Kaleel Jamison Consulting Group, Inc. Prior to joining the Company,
Mr. Doran was an employee of Kaleel Jamison Consulting Group, Inc.

In 1999,  the Company paid $92,000 to Ms.  Jennifer  Henderson for services as a
consultant in connection with service as a member of the Board of Directors.

<PAGE>

ITEM 14.  EXHIBITS,  FINANCIAL  STATEMENTS,  FINANCIAL  STATEMENT  SCHEDULE  AND
REPORTS ON FORM 8-K
<TABLE>
<CAPTION>

A.   List of financial statements and financial statement schedule:

                                                                                    Form 10-K
                                                                                   Page Number
<S>                                                                                -----------
1. The following consolidated financial statements are included in Item 8:            <C>

   Consolidated Balance Sheets as of December 25, 1999 and December 26, 1998           F-2

   Consolidated Statements of Income for the years ended
   December 25, 1999, December 26, 1998 and December 27, 1997                          F-3

   Consolidated Statements of Stockholders' Equity for the years ended
   December 25, 1999, December 26, 1998 and December 27, 1997                          F-4

   Consolidated Statements of Cash Flows for the years ended
   December 25, 1999, December 26, 1998 and December 27, 1997                          F-5

   Notes to Consolidated Financial Statements                                       F-6 - F-21

2. The following financial statement schedule is included in Item 14(d)

   Schedule II - Valuation and Qualifying Accounts                                     F-22

   All other  schedules  for  which  provision  is made in the  applicable
   accounting  regulations of the  Securities and Exchange  Commission are
   not required under the related  instructions or are  inapplicable,  and
   therefore have been omitted.

3. The following designated exhibits are, as indicated below, either filed
   herewith or have heretofore been filed with the Securities and Exchange
   Commission under the Securities Act of 1933 or the Securities  Exchange
   Act of 1934 and are referred to and incorporated herein by reference to
   such filings.
</TABLE>

<PAGE>

Exhibit No.

3.1      Articles of  Association,  as amended,  of the Company  [filed with the
         Securities  and  Commission  as Exhibit 3.1 and 3.1.1 to the  Company's
         Registration  Statement  on Form-1 (File No.  33-284) and  incorporated
         herein by reference].

3.1.1    Amendment to Articles of Association on June 27, 1987 (filed as Exhibit
         1 to the Company's  Quarterly  Report on Form 10-Q for the period ended
         June 30, 1987 and incorporated herein by reference).

3.1.2    Amendment  to Articles of  Association  on  September 7, 1993 (filed as
         Exhibit 1 to the Company's Quarterly Report on Form 10-Q for the period
         ended June 26, 1993 and incorporated herein by reference).

3.1.3    Amendment  to  Articles  of  Association  on August  4, 1995  (filed as
         Exhibit  3.1.3 to the Company's  Quarterly  Report on Form 10-Q for the
         period ended July 1, 1995 and incorporated herein by reference).

3.1.4    Amendment to Articles of  Association  approved June 28, 1997 (filed as
         Exhibit  3.1.4 to the  Company's  Annual  Report  on Form  10-K for the
         period ended December 27, 1997 and incorporated herein by reference).

3.2      By-laws as amended through November 10, 1995 (filed as Exhibit 3.2.2 to
         the  Company's  Report on Form 10-Q for the period ended  September 30,
         1995 and incorporated herein by reference).

3.2.1    Section 2 of Article 5 of the  By-laws as amended on January  18,  1996
         (filed as Exhibit 3.2.1 to the  company's  Form 10-K for the year ended
         December 30, 1995, and incorporated herein by reference).

3.2.2    Amendment to By-laws dated March 31, 1998 (filed as Exhibits 1 and 2 to
         the Company's Form 8-K dated April 1, 1998 and  incorporated  herein by
         reference).

3.2.3    Amendment  to By-laws  dated June 26,  1998  (filed as Exhibit A to the
         Company's  Form 8-K  dated  July 30,  1998 and  incorporated  herein by
         reference).

4.1      See Exhibit 3.1.

4.2      See Exhibit 3.2.

4.3      Mortgage  and  Security  Agreement  between the State of  Vermont,  the
         Company  and  the  Howard  Bank,  N.A.  [filed  as  Exhibit  4.1 to the
         Company's  Registration  Statement  on Form S-1 (file no.  33-284)  and
         incorporated herein by reference].

4.4      Guaranty by the Company accepted by the Howard Bank, N.A., Trustee, and
         Marine Midland Bank,  N.A., as amended [filed as Exhibits 4.2 and 4.2.1
         to the Company's  Registration  Statement on Form S-1 (file no. 33-284)
         and  incorporated  herein by reference],  as amended  November 20, 1987
         [filed as Exhibit 4.4 to the Company's  Registration  Statement on Form
         S-1 (file no.  33-17516) and  incorporated  by  reference],  as amended
         January 31 and March 10, 1989  (filed as Exhibit  4.4 to the  Company's
         Annual  Report on Form 10-K for the year ended  December  31,  1988 and
         incorporated herein by reference).

<PAGE>

4.4.1    Amendment  to item 4.4 dated  July 28,  1992  [filed as  Exhibit to the
         Company's  Registration  Statement on Form S-3 (file no.  33-51550) and
         incorporated herein by reference].

4.5      Loan Agreement and Amendment between the Village of Waterbury,  Vermont
         and the  Company  [filed as Exhibit 4.4 to the  Company's  Registration
         Statement  on Form S-1 (file no.  33-284)  and  incorporated  herein by
         reference].

4.6      Second Mortgage and Security Agreement dated December 11, 1984, between
         the Company and the Village of Waterbury, Vermont [filed as Exhibit 4.5
         to the Company's  Registration  Statement on Form S-1 (file no. 33-284)
         and incorporated herein by reference].

4.7      Grant Agreement  between the Secretary of Housing and Urban Development
         and the Village of Waterbury,  Vermont, dated September 15, 1984 [filed
         as Exhibit  4.6 to the  Company's  Registration  Statement  on Form S-1
         (file no. 33-284) and incorporated herein by reference].

4.8      Form of Class A Common Stock  Certificate  [filed as Exhibit 4.8 to the
         Company's  Registration  Statement on Form S-1 (file no.  33-17516) and
         incorporated herein by reference].

4.9      Form of Class B Common Stock  Certificate  [filed as Exhibit 4.9 to the
         Company's  Registration  Statement on Form S-1 (file no.  33-17516) and
         incorporated herein by reference].

4.11     Senior  Note  Agreement  dated as of October  13,  1993  between  Ben &
         Jerry's  Homemade,   Inc.  and  The  Travelers  Insurance  Company  and
         Principal  Mutual  Life  Insurance  Company  (filed as Exhibit 1 to the
         Company's  Quarterly Report on Form 10-Q for the period ended September
         25, 1993 and incorporated herein by reference).

         The registrant  agrees to furnish a copy to the Commission upon request
         of any other instrument with respect to long-term debt (not filed as an
         exhibit) none of which relates to securities exceeding 10% of the total
         assets of the registrants.

4.12     Class A Common Stock  Stockholder  Rights Agreement between the Company
         and American  Stock  Transfer & Trust Company dated as of July 30, 1998
         (filed as Exhibit 1 to the Report on Form 8-K, dated August 13,1998 and
         hereby incorporated by reference).

4.13     Class B Common Stock  Stockholder  Rights Agreement dated July 30, 1998
         (filed as Exhibit 4 to the Report on Form 8-K,  dated  August 13,  1998
         and hereby incorporated by reference).

10.1*    Employment  Agreement  dated as of January 29, 1998 between  Bennett R.
         Cohen and the Company  (filed as Exhibit 10.1 to the  Company's  Annual
         Report on Form 10-K for the period  ended  December 26, 1997 and hereby
         incorporated by reference).

*        Indicates   management  contract  or  compensatory  plan,  contract  or
         arrangement.

10.4*    Employment  Agreement  dated  as of  January  29,  1998  between  Jerry
         Greenfield  and the  Company  (filed as Exhibit  10.1 to the  Company's
         Annual  Report on Form 10-K for the period ended  December 26, 1997 and
         hereby incorporated by reference).

<PAGE>

10.5     Settlement  Agreement  dated  March 29,  1985  between  the Company and
         Haagen-Dazs,  Inc. [filed as Exhibit 10.8 to the Company's Registration
         Statement  on Form S-1 (file no.  33-284)  and  incorporated  herein by
         reference].

10.8     Distribution  Agreement  between  the Company  and  Dreyer's  Grand Ice
         Cream,  Inc.,  dated  January 6, 1987  (filed as  Exhibit  10.13 to the
         Company's  Annual  Report on Form 10-K for the year ended  December 31,
         1986 and  incorporated  herein by reference),  as amended as of January
         30, 1989 (filed as Exhibit 10.14 to the Company's Annual Report on Form
         10-K for the year ended  December 31, 1988 and  incorporated  herein by
         reference).

10.8.1   Amendment  to Item 10.8 dated August 31, 1992 [filed as Exhibit 28.1 to
         the Company's  Registration  Statement on Form S-3 (file no.  33-51550)
         and incorporated herein by reference].

10.8.2   Amendment  to Item 10.8 dated April 18, 1994 (filed as Exhibit 2 to the
         Company's  Quarterly  Report on Form  10-Q  dated  March  26,  1994 and
         incorporated herein by reference).

10.8.3** Amendment  to Item 10.8 dated as of January  11, 1999 (filed as Exhibit
         10.8.3 to the  Company's  Annual Report on Form 10-K for the year ended
         December 26, 1998 and incorporated herein by reference).

10.9     License  Agreement  between the Company and Jerry  Garcia and  Grateful
         Dead  Productions,  Inc. dated July 26, 1987 [filed as Exhibit 10.15 to
         the Company's  Registration  Statement on Form S-1 (file no.  33-17516)
         and incorporated herein by reference].

10.10**  New Distribution Agreement with Dreyer's Grand Ice Cream, Inc. dated as
         of January  11, 1999 (filed as Exhibit  10.10 to the  Company's  Annual
         Report  on  Form  10-K  for  the  year  ended  December  26,  1998  and
         incorporated herein by reference).

10.10.1**Addendum  to Item  10.10  (filed as Exhibit  10.10.1  to the  Company's
         Annual  Report on Form 10-K for the year ended  December  26,  1998 and
         incorporated herein by reference.).

10.11**  Agreement with the Pillsbury Company dated as of August 26, 1998 (filed
         as Exhibit  10.11 to the  Company's  Annual Report on Form 10-K for the
         year ended December 26, 1998 and incorporated herein by reference).

*        Indicates   management  contract  or  compensatory  plan,  contract  or
         arrangement.

**       Confidential  treatment  granted  as  to  certain  portions.  The  term
         "confidential  treatment"  and  the  mark  "*" as used  throughout  the
         indicated  Exhibits means that material has been omitted and separately
         filed with the Commission.

<PAGE>

10.11.1  Amendment  to Item  10.11  (filed as Exhibit  10.11.1 to the  Company's
         Annual  Report on Form 10-K for the year ended  December  26,  1998 and
         incorporated herein by reference).

10.11.2***Amendment to Item 10.11 dated December 2, 1999 (filed herewith).

10.15    Franchise  Agreement  between  the  Company  and BJ O/R,  a  California
         limited  partnership,  dated  June 9, 1993  (filed as  Exhibit 2 to the
         Company's  Quarterly  Report on Form 10-Q for the period ended June 26,
         1993 and incorporated herein by reference).

10.19*   1986  Restricted  Stock Plan (filed as Exhibit  10.19 to the  Company's
         Annual  Report on Form 10-K for the year ended  December  30,  1989 and
         incorporated herein by reference).

10.20    1986 Employee  Stock Purchase Plan [filed as Exhibit 4 to the Company's
         Registration  Statements  on Form S-8 (file nos.  33-9420 and 33-17594)
         and incorporated herein by reference].

10.20.1  Amendment to Employee  Stock  Purchase Plan dated August 4, 1995 (filed
         as Exhibit  10.20.1 on Form 10-Q for the period  ended July 1, 1995 and
         incorporated herein by reference).

10.21*   1985 Stock Option Plan (filed as Exhibit 10.21 to the Company's  Annual
         Report  on  Form  10-K  for  the  year  ended  December  30,  1989  and
         incorporated herein by reference).

10.21.1* 1994 Amendment to 1985 Stock Option Plan (filed as Exhibit 10.21 to the
         Company's  Annual  Report on Form 10-K for the year ended  December 30,
         1994 and incorporated herein by reference).

10.22    Ben & Jerry's  Homemade,  Inc.  Employees'  Retirement  Plan as amended
         (filed as Exhibit 10.22 to the Company's Annual Report on Form 10-K for
         the year ended December 30, 1989 and incorporated herein by reference).

10.22.1  Amendment to Item 10.22 dated January 1, 1990 (filed as Exhibit 10.22.1
         to the  Company's  Report on Form 10-K for the year ended  December 29,
         1991 and incorporated herein by reference).

10.22.2  Amendment to Item 10.22 dated June 28, 1990 (filed as Exhibit  10.22 to
         the Company's  Report on Form 10-K for the year ended December 25, 1993
         and incorporated herein by reference).

10.22.3  Amendment to Item 10.22 dated January 1, 1991 (filed as Exhibit 10.22.3
         to the  Company's  Report on Form 10-K for the year ended  December 25,
         1993 and incorporated herein by reference).

*        Indicates   management  contract  or  compensatory  plan,  contract  or
         arrangement.

***      Confidential  treatment  requested  as to  certain  portions.  The term
         "confidential  treatment"  and  the  mark  "*" as used  throughout  the
         indicated  Exhibits means that material has been omitted and separately
         filed with the Commission.
<PAGE>

10.22.4  Amendment to Item 10.22 dated January 1, 1998 (filed as Exhibit 10.22.4
         to the Company's Annual Report on Form 10-K for the year ended December
         26, 1998 and incorporated herein by reference).

10.23*   1991  Restricted  Stock Plan (filed as Exhibit  10.23 to the  Company's
         Report  on  Form  10-K  for  the  year  ended  December  25,  1993  and
         incorporated herein by reference).

10.24    Severance/Non-Competition  Agreement  dated  as of  December  31,  1990
         between  Jeffrey  Furman and the Company (filed as Exhibit 10.24 to the
         Company's  Report on Form 10-K for the year ended December 25, 1993 and
         incorporated herein by reference).

10.25    1999 Equity  Incentive  Plan (filed as Exhibit  10.25 to the  Company's
         Annual  Report on Form 10-K for the year ended  December  26,  1998 and
         incorporated herein by reference).

10.27    1992  Non-Employee  Directors'  Restricted Stock Plan (filed as Exhibit
         10.27 to the Company's  Report on Form 10-K for the year ended December
         25, 1993 and incorporated herein by reference).

10.29*   1995 Equity  Incentive  Plan (filed as Exhibit  10.29 to the  Company's
         Quarterly  Report on Form 10-Q for the  period  ended  July 1, 1995 and
         incorporated herein by reference).

10.29.1* Amendment  to Item  10.29  (filed  as  Exhibit  10.29 to the  Company's
         Quarterly  Report on Form 10-Q for the period  ended July 1, 1995,  and
         incorporated herein by reference).

10.29.2* Amendment to Item 10.29 (filed as Exhibit 10.29.2 to the Company's Form
         10-K for the year ended December 25, 1998, and  incorporated  herein by
         reference).

10.30    Non-Employee  Directors'  Plan  for  Stock in Lieu of  Directors'  Cash
         Retainer  dated August 4, 1995 (filed as Exhibit 10.30 to the Company's
         Quarterly  Report on Form 10-Q for the  period  ended  July 1, 1995 and
         incorporated herein by reference).

10.31*   Employment  Agreement  dated  August 21,  1995  between the Company and
         Bruce Bowman (filed as Exhibit 10.31 to the Company's Form 10-K for the
         year ended December 30, 1995 and incorporated herein by reference).

10.32    Lease dated  February 1, 1996 between the Company and  Technology  Park
         Associates, Inc. (filed as Exhibit 10.31 to the Company's Form 10-K for
         the year ended December 30, 1995 and incorporated herein by reference).

*        Indicates   management  contract  or  compensatory  plan,  contract  or
         arrangement.

<PAGE>

10.33*   Employment  Agreement  dated  December 31, 1996 between the Company and
         Perry D. Odak (filed as Exhibit  10.33 to the  Company's  Form 10-K for
         the year ended December 28, 1996 and incorporated herein by reference).

10.33.1* Amendment dated as of February 28, 1999 to Item 10.33 (filed as Exhibit
         10.33.1 to the Company's Form 10-K for the year ended December 26, 1998
         and incorporated herein by reference).

10.33.2  Employment Agreement dated March 31, 1999 between the Company and Perry
         D. Odak (filed as Exhibit 10.33.2 to the Company's  Quarterly Report on
         Form 10-Q for the period ended June 26, 1999 and incorporated herein by
         reference).

10.34*   Employment  Agreement  dated  January 1, 1998  between  the Company and
         Angelo M. Pezzani  (filed as Exhibit 10.34 to the  Company's  Form 10-K
         for the year  ended  December  27,  1997  and  incorporated  herein  by
         reference).

10.35*   Employment  Agreement  dated  October 20, 1997  between the Company and
         Lawrence Benders (filed as Exhibit 10.34 to the Company's Form 10-K for
         the year ended December 27, 1997 and incorporated herein by reference).

10.36    Importation and Marketing  Agreement between the Company,  Seven-Eleven
         Japan Co., Ltd., Tower  Enterprise  Corporation and ATF Co., Ltd. dated
         December 19, 1997 (filed as Exhibit  10.34 to the  Company's  Form 10-K
         for the year  ended  December  27,  1997  and  incorporated  herein  by
         reference).

10.37    Stock  Option  Contract  dated June 25,  1999  between  the Company and
         Michael Sands (filed as Exhibit  10.37 to the  Company's  Form 10-Q for
         the  period  ended  September  25,  1999,  and  incorporated  herein by
         reference).

10.38    Severance  Agreement  dated  July 30,  1999  between  the  Company  and
         Elizabeth  Bankowski (filed as Exhibit 10.38 to the Company's Form 10-Q
         for the period ended  September 25, 1999,  and  incorporated  herein by
         reference).

10.39    Severance  Agreement  dated July 30, 1999 between the Company and Bruce
         Bowman  (filed  as  Exhibit  10.38 to the  Company's  Form 10-Q for the
         period ended September 25, 1999, and incorporated herein by reference).

10.40    Severance  Agreement  dated  November  15, 1999 between the Company and
         Richard Doran (filed as Exhibit  10.38 to the  Company's  Form 10-Q for
         the  period  ended  September  25,  1999,  and  incorporated  herein by
         reference).

10.41    Severance Agreement dated July 30, 1999 between the Company and Charles
         Green (filed as Exhibit 10.38 to the Company's Form 10-Q for the period
         ended September 25, 1999, and incorporated herein by reference).

10.42    Severance Agreement dated July 30, 1999 between the Company and Frances
         Rathke  (filed  as  Exhibit  10.38 to the  Company's  Form 10-Q for the
         period ended September 25, 1999, and incorporated herein by reference).

10.43    Employment  Agreement  dated June 25,  1999  between  the  Company  and
         Michael Sands (filed as Exhibit  10.43 to the  Company's  Form 10-Q for
         the  period  ended  September  25,  1999  and  incorporated  herein  by
         reference).

*        Indicates   management  contract  or  compensatory  plan,  contract  or
         arrangement.

<PAGE>

10.43.1  Amendment  to  Employment  Agreement  dated June 25,  1999  between the
         Company and Michael Sands (filed herewith).

10.45    Severance  Agreement  dated  January 19,  2000  between the Company and
         Douglas Fisher (filed herewith).

11.0     The computation of Per Share Earnings is incorporated by reference from
         Note  11 of the  Company's  consolidated  financial  statements  (filed
         herewith).

21.1     Subsidiaries   of  the  registrant  as  of  December  25,  1999  (filed
         herewith).

23.0     Consent of Ernst & Young LLP (filed herewith).

27.0     Financial data schedule  (filed  herewith).  (b) No current  reports on
         Form 8-K were filed during the fourth quarter of 1999.

<PAGE>

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the Company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

                                              BEN & JERRY'S HOMEMADE, INC.


Dated: March 22, 2000                         By: /s/ Frances Rathke
                                              ---------------------------------
                                                      Frances Rathke
                                                      Chief Financial Officer


<PAGE>

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the  following  persons on behalf of the Company and in
the capacities and on the date indicated.


March 22, 2000   /s/ Bennett R. Cohen
                 ---------------------------------------------------------
                 Bennett R. Cohen
                 Director and Vice-Chairperson

March 22, 2000   /s/ Pierre Ferrari
                 ---------------------------------------------------------
                 Pierre Ferrari
                 Director

March 22, 2000   /s/ Jeffrey Furman
                 ---------------------------------------------------------
                 Jeffrey Furman
                 Director

March 22, 2000   /s/ Jerry Greenfield
                 ---------------------------------------------------------
                 Jerry Greenfield
                 Director and Chairperson

March 22, 2000   /s/ Jennifer Henderson
                 ---------------------------------------------------------
                 Jennifer Henderson
                 Director

March 22, 2000   /s/ Frederick A. Miller
                 ---------------------------------------------------------
                 Frederick A. Miller
                 Director

March 22, 2000   /s/ Henry Morgan
                 ---------------------------------------------------------
                 Henry Morgan
                 Director

March 22, 2000   /s/ Perry Odak
                 ---------------------------------------------------------
                 Perry Odak
                 Director, Principal Executive Officer
                 and President

March 22, 2000   /s/ Frances Rathke
                 ---------------------------------------------------------
                 Frances Rathke
                 Chief Financial Officer and
                 Principal Accounting Officer

<PAGE>
                           ANNUAL REPORT ON FORM 10-K

                  ITEM 8, ITEM 14 (a) (1) AND (2), (c) and (d)

                   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                          LIST OF FINANCIAL STATEMENTS

                                       AND

                          FINANCIAL STATEMENT SCHEDULE

                          YEAR ENDED DECEMBER 25, 1999

                          BEN & JERRY'S HOMEMADE, INC.

                            SOUTH BURLINGTON, VERMONT


<PAGE>



                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                                       AND
                          FINANCIAL STATEMENT SCHEDULE


Report of Ernst & Young LLP Independent Auditors........................... F-1

Consolidated Balance Sheets as of December 25, 1999 and December 26, 1998. .F-2

Consolidated Statements of Income for the years ended December 25, 1999,
December 26, 1998 and December 27, 1997.....................................F-3

Consolidated Statements of Stockholders' Equity for the years ended
December 25, 1999, December 26, 1998 and December 27, 1997..................F-4

Consolidated Statements of Cash Flows for the years ended
December 25, 1999, December 26, 1998 and December 27, 1997..................F-5

Notes to Consolidated Financial Statements................................. F-6

Financial Statement Schedule:

SCHEDULE II - Valuation and Qualifying Accounts.............................F-23



<PAGE>




                           REPORT OF ERNST & YOUNG LLP
                              INDEPENDENT AUDITORS



The Board of Directors and Stockholders
Ben & Jerry's Homemade, Inc.

We have audited the  accompanying  consolidated  balance sheets of Ben & Jerry's
Homemade,  Inc. as of December 25, 1999 and  December 26, 1998,  and the related
consolidated statements of income, stockholders' equity, and cash flows for each
of the three  years in the period  ended  December  25,  1999.  Our audits  also
included the financial  statement schedule listed in the Index at Item 14(a)(2).
These financial  statements and schedule are the responsibility of the Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements and schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
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.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the consolidated  financial position of Ben &
Jerry's  Homemade,  Inc. at  December  25,  1999 and  December  26, 1998 and the
consolidated  results of its operations and its cash flows for each of the three
years in the period ended  December  25, 1999,  in  conformity  with  accounting
principles  generally accepted in the United States.  Also, in our opinion,  the
related financial statement  schedule,  when considered in relation to the basic
financial statements taken as a whole,  presents fairly in all material respects
the information set forth therein.


                                                            /s/ERNST & YOUNG LLP

Boston, Massachusetts
January 21, 2000




<PAGE>
<TABLE>
<CAPTION>


                          BEN & JERRY'S HOMEMADE, INC.
                           CONSOLIDATED BALANCE SHEETS
                     (In thousands except per share amounts)




                                                                        December 25,          December 26,
                                                                            1999                  1998
                                                                     -------------------   -------------------
<S>                                                                       <C>                   <C>
ASSETS
Current assets:
 Cash and cash equivalents                                                $ 25,260              $ 25,111
 Short-term investments                                                     21,331                22,118
 Trade accounts receivable
    (less allowance of $966 in 1999
     and $979 in 1998 for doubtful accounts)                                18,833                11,338
 Inventories                                                                13,937                13,090
 Deferred income taxes                                                       5,609                 7,547
 Prepaid expenses and other current assets                                   2,377                 3,105
                                                                     -------------------   -------------------
 Total current assets                                                       87,347                82,309

Property, plant and equipment, net                                          56,557                63,451
Investments                                                                    200                   303
Deferred income taxes                                                          656
Other assets                                                                 5,842                 3,438
                                                                     -------------------   -------------------
                                                                         $ 150,602             $ 149,501
                                                                     ===================   ===================



LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
 Accounts payable and accrued expenses                                    $ 38,915              $ 28,662
 Current portion of long-term debt and
    obligations under capital leases                                         5,627                 5,266
                                                                     -------------------   -------------------
 Total current liabilities                                                  44,542                33,928

Long-term debt and obligations under capital leases                         16,669                20,491

Deferred income taxes                                                                              4,174

Stockholders' equity:
 $1.20  noncumulative  Class A preferred stock - par value
   $1.00 per share, redeemable  at $12.00 per  share;
   900 shares authorized, issued and outstanding;
   aggregated preference on liquidation - $9,000                                 1                     1
 Class A common stock - $.033 par value; authorized
    20,000,000 shares; issued: 6,759,276 at December 25,
    1999 and 6,592,392 at December 26, 1998                                    223                   218
 Class B common stock - $.033 par value; authorized
    3,000,000 shares; issued: 801,813 at December 25, 1999
    and 824,480 at December 26, 1998                                            27                    27
 Additional paid-in-capital                                                 52,961                50,556
 Retained earnings                                                          48,713                45,328
 Accumulated other comprehensive loss                                         (460)                 (151)
 Treasury stock, at cost: 644,606 Class A and 1,092 Class B
    shares at December 25, 1999 and  291,032 Class A
    and 1,092 Class B shares at December 26, 1998                          (12,074)               (5,071)
                                                                     -------------------   -------------------
    Total stockholders' equity                                              89,391                90,908
                                                                     -------------------   -------------------
                                                                         $ 150,602             $ 149,501
                                                                     ===================   ===================

</TABLE>





           See notes to consolidated financial statements.


<PAGE>



<TABLE>
<CAPTION>


                          BEN & JERRY'S HOMEMADE, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                     (In thousands except per share amounts)




                                                                                                   Fiscal Year Ended
                                                                     ---------------------------------------------------------------
                                                                        December 25,          December 26,          December 27,
                                                                            1999                  1998                  1997
                                                                     -------------------   -------------------   -------------------
<S>                                                                      <C>                   <C>                   <C>
Net sales                                                                $ 237,043             $ 209,203             $ 174,206

Cost of sales                                                              145,291               136,225               114,284
                                                                     -------------------   -------------------   -------------------

Gross profit                                                                91,752                72,978                59,922

Selling, general and
      administrative expenses                                               78,623                63,895                53,520

Special charge                                                               8,602

Other income (expense):
  Interest income                                                            1,924                 2,248                 1,938
  Interest expense                                                          (1,634)               (1,888)               (1,992)
  Other income (expense), net                                                  391                   333                   (64)
                                                                     -------------------   -------------------   -------------------
                                                                               681                   693                  (118)
                                                                     -------------------   -------------------   -------------------

Income before income taxes                                                   5,208                 9,776                 6,284

Income taxes                                                                 1,823                 3,534                 2,388
                                                                     -------------------   -------------------   -------------------

Net income                                                                 $ 3,385               $ 6,242               $ 3,896
                                                                     ===================   ===================   ===================

Shares used to compute net income per common share

      Basic                                                                  7,077                 7,197                 7,247
      Diluted                                                                7,405                 7,463                 7,334

Net income per common share

      Basic                                                                 $ 0.48                $ 0.87                $ 0.54
      Diluted                                                               $ 0.46                $ 0.84                $ 0.53

</TABLE>

See notes to consolidated financial statements.





<PAGE>

<TABLE>
<CAPTION>


                             Consolidated Statements of Stockholders' Equity
                                     (In thousands except share data)


                                                               Common Stock                                    Accumulated
                                               Preferred   ---------------------   Additional                     Other
                                                 Stock     Class A    Class B       Paid-in     Retained     Comprehensive
                                               Par Value   Par Value  Par Value     Capital      Earnings         Loss
                                               ---------   ---------  ---------     -------      --------         ----

<S>                                                <C>        <C>         <C>        <C>          <C>             <C>
Balance at December 28, 1996                      $1         $210        $29        $48,753      $35,190         $(118)
Net income                                                                                         3,896
Common stock issued under stock
purchase plan (15,406 Class A shares)                           1                       148
Conversion of Class B shares to Class A
   shares (31,451 shares)                                       1
Common stock issued under stock and
   option plans (83,267 Class A shares)                         2                       907
Repurchase of common stock (77,500
   Class A shares)
Issuance of treasury stock for
   compensation (20,000 Class A shares)                                                (127)
Foreign currency translation adjustment                                                                            (11)

Net comprehensive income
                                              ------------ ---------- ---------- -------------- ----------- ----------------
Balance at December 27, 1997                       1          214         29         49,681       39,086          (129)
Net income                                                                                         6,242
Common stock issued under stock
purchase plan (14,277 Class A shares)                                                   179
Conversion of Class B shares to Class A
   shares (41,755 shares)                                       2         (2)
Common stock issued under stock and option
plans    (41,525 Class A shares)                                2                       696
Repurchase of Treasury Stock (166,500
   Class A shares)
Foreign currency translation adjustment                                                                            (22)

Net comprehensive income
                                              ------------ ---------- ---------- -------------- ----------- ----------------
Balance at December 26, 1998                       1          218         27         50,556       45,328          (151)
Net Income                                                                                         3,385
Common stock issued under stock purchase
  plan (9,995 Class A shares)                                                           175
Conversion of Class B shares to Class A
  shares (22,667 shares)
Common stock issued under stock and
  option plans (134,222 Class A shares)                         5                     2,164
Repurchase of common stock (364,100 Class A
  shares)
Issuance of treasury stock contributed to
  401(K) Savings Plan (10,526 Class A Shares)                                            66
Foreign currency translation adjustment                                                                             15
Unrealized losses on available for sale                                                                           (324)
securities

Net comprehensive income
                                              ------------ ---------- ---------- -------------- ----------- ----------------
Balance at December 25, 1999                      $1         $223        $27        $52,961      $48,713         $(460)
                                              ============ ========== ========== ============== =========== ================


<PAGE>


                                                   Treasury Stock
                                                 -------------------        Total
                                                  Class A    Class B    Stockholders'   Comprehensive
                                                   Cost       Cost         Equity          Income
                                                   ----       ----         ------          ------

<S>                                               <C>           <C>         <C>             <C>
Balance at December 28, 1996                     $(1,375)      $(5)        $82,685
Net income                                                                   3,896          $3,896
Common stock issued under stock
purchase plan (15,406 Class A shares)                                          149
Conversion of Class B shares to Class A
   shares (31,451 shares)                                                        1
Common stock issued under stock and
   option plans (83,267 Class A shares)                                        909
Repurchase of common stock (77,500
   Class A shares)                                  (988)                     (988)
Issuance of treasury stock for
   compensation (20,000 Class A shares)              405                       278
Foreign currency translation adjustment                                        (11)            (11)

Net comprehensive income                                                                    $3,885
                                                 ---------- ---------- ---------------      ======
Balance at December 27, 1997                      (1,958)       (5)         86,919
Net income                                                                   6,242          $6,242
Common stock issued under stock
purchase plan (14,277 Class A shares)                                          179
Conversion of Class B shares to Class A
   shares (41,755 shares)
Common stock issued under stock and option
plans    (41,525 Class A shares)                                               698
Repurchase of Treasury Stock (166,500
   Class A shares)                                (3,108)                   (3,108)
Foreign currency translation adjustment                                        (22)            (22)

Net comprehensive income                                                                    $6,220
                                                 ---------- ---------- ---------------      ======
Balance at December 26, 1998                      (5,066)       (5)         90,908
Net Income                                                                   3,385          $3,385
Common stock issued under stock purchase
  plan (9,995 Class A shares)                                                  175
Conversion of Class B shares to Class A
  shares (22,667 shares)
Common stock issued under stock and
  option plans (134,222 Class A shares)                                      2,169
Repurchase of common stock (364,100 Class
  shares)                                         (7,187)                   (7,187)
Issuance of treasury stock contributed to
  401(K) Savings Plan(10,526 Class A shares)         184                       250
Foreign currency translation adjustment                                         15              15
Unrealized losses on available for sale
securities                                                                    (324)           (324)
                                                                                             -----
Net comprehensive income                                                                    $3,076
                                               ---------- ---------- ---------------        ======
Balance at December 25, 1999                    $(12,069)      $(5)        $89,391
                                               ========== ========== ===============

</TABLE>




                             See notes to consolidated financial statements.


<PAGE>

<TABLE>
<CAPTION>


                                          BEN & JERRY'S HOMEMADE, INC.
                                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                  (In thousands)


                                                                                            Fiscal Year Ended
                                                         ---------------------------------------------------------------
                                                            December 25,          December 26,          December 27,
                                                                1999                  1998                  1997
                                                         -------------------   -------------------   -------------------
<S>                                                            <C>                   <C>                   <C>
Cash flows from operating activities:
Net income                                                     $ 3,385               $ 6,242               $ 3,896
Adjustments to reconcile net income to net
  cash provided by operating activities:
      Depreciation and amortization                              9,202                 8,181                 7,711
      Provision for bad debts                                      349                    50                   630
      Deferred income taxes                                     (2,674)               (2,510)               (1,599)
      Stock compensation                                           250                                         405
      Special charge                                             8,602
      Loss on disposition of assets                                 76                   112                   124
Changes in operating assets and liabilities:
Accounts receivable                                             (7,926)                1,460                (5,318)
Inventories                                                       (405)               (1,968)                4,243
Prepaid expenses                                                  (121)                 (501)                  (64)
Accounts payable and accrued expenses                            6,810                 5,385                 5,868
Income taxes payable(receivable)                                 2,756                  (364)                1,743
                                                         -------------------   -------------------   -------------------
Net cash provided by operating activities                       20,304                16,087                17,639

Cash flows from investing activities:
Additions to property, plant and equipment                      (8,825)               (8,770)               (5,236)
Proceeds from sale of assets                                        48                                          48
Changes in other assets                                           (764)               (1,082)                 (425)
Decrease (increase) in investments                                 566               (20,879)                  (76)
Acquisitions, net of cash acquired                              (1,012)
                                                         -------------------   -------------------   -------------------
Net cash used for investing activities                          (9,987)              (30,731)               (5,689)

Cash flows from financing activities:
Repayments of long-term debt and capital leases                 (5,328)               (5,321)                 (669)
Repurchase of common stock                                      (7,187)               (3,108)                 (988)
Proceeds from issuance of common stock                           2,343                   877                   932
                                                         -------------------   -------------------   -------------------

Net cash used for financing activities                         (10,172)               (7,552)                 (725)

Effect of exchange rate changes on cash                              4                   (11)                  (11)
                                                         -------------------   -------------------  --------------------
Increase (decrease) in cash and cash equivalents                   149               (22,207)               11,214

Cash and cash equivalents at beginning of year                  25,111                47,318                36,104
                                                         -------------------   -------------------   -------------------

Cash and cash equivalents at end of year                      $ 25,260              $ 25,111              $ 47,318
                                                         ===================   ===================   ===================
</TABLE>

See notes to consolidated financial statements.


<PAGE>


Notes to Consolidated Financial Statements
Dollars in tables in thousands except share data

1.   SIGNIFICANT ACCOUNTING POLICIES

Business

Ben & Jerry's  Homemade,  Inc. (the "Company") makes and sells super premium ice
cream and other frozen dessert  products  through  distributors  and directly to
retail  outlets  primarily  located in the United  States and  selected  foreign
countries, including Company-owned and franchised ice cream parlors.

Principles of Consolidation

The consolidated  financial  statements  include the accounts of the Company and
all its majority owned subsidiaries. Intercompany accounts and transactions have
been eliminated.

Fiscal Year

The  Company's  fiscal year is the 52 or 53 weeks ending on the last Saturday in
December.  Fiscal  years  1999,  1998 and 1997  consisted  of the 52 weeks ended
December 25, 1999, December 26, 1998 and December 27, 1997, respectively.

Use of Estimates

The  preparation  of the  financial  statements in  accordance  with  accounting
principles  generally accepted in the United States requires  management to make
estimates  and  assumptions  that affect the amounts  reported in the  financial
statements  and  accompanying  notes.  Actual  results  could  differ from those
estimates.

Inventories

Inventories are stated at the lower of cost or market. Cost is determined by the
first-in, first-out method.

Cash Equivalents

Cash equivalents  represent  highly liquid  investments with maturities of three
months or less at date of purchase.

Investments

Management determines the appropriate  classification of investments at the time
of purchase and reevaluates  such  designation as of each balance sheet date. At
December  25,  1999  and  December  26,  1998,  the  Company  considers  all its
investments,  except  for  certificates  of  deposit,  as  available  for  sale.
Available-for-sale  securities  are carried at fair value,  with the  unrealized
gains and losses  reported  as a separate  component  of  stockholders'  equity.
Held-to-maturity   securities  are  stated  at  amortized  cost,   adjusted  for
amortization   of  premium  and   accretion  of  discounts  to  maturity.   Such
amortization  is  included  in interest  income.  Realized  gains and losses and
declines  in  value  judged  to be  other-than-temporary  on  available-for-sale
securities are included in income.  The cost of securities  sold is based on the
specific  identification  method.  Interest  and  dividends on  investments  are
included in interest income.



<PAGE>



Notes to Consolidated Financial Statements
Dollars in tables in thousands except share data

Concentration of Credit Risk

Financial  instruments,  which  potentially  subject the Company to  significant
concentration of credit risk, consist of cash and cash equivalents,  investments
and trade  accounts  receivable.  The Company  places its  investments in highly
rated financial  institutions,  obligations of the United States  Government and
investment  grade  short-term  instruments.  No  more  than  20%  of  the  total
investment  portfolio  is  invested  in any one issuer or  guarantor  other than
United States Government instruments which limits the amount of credit exposure.

The Company  sells its products  primarily to  well-established  frozen  dessert
distribution or retailing companies  throughout the United States and in certain
foreign  countries.  The Company  performs  ongoing  credit  evaluations  of its
customers and maintains reserves for potential credit losses. Historically,  the
Company has not experienced  significant  losses related to investments or trade
receivables.

Property, Plant and Equipment

Property,  plant and  equipment  are  carried at cost.  Depreciation,  including
amortization  of leasehold  improvements,  is computed  using the  straight-line
method over the estimated  useful lives of the related  assets.  Amortization of
assets under  capital  leases is computed on the  straight-line  method over the
lease term and is included in depreciation expense.

Other Assets

Other assets include intangible and other noncurrent  assets.  Intangible assets
are reviewed for  impairment  based on an  assessment  of future  operations  to
ensure that they are appropriately valued.  Intangible assets are amortized on a
straight-line basis over their estimated economic lives.

Translation of Foreign Currencies

Assets and liabilities of the Company's  foreign  operations are translated into
United  States  dollars at exchange  rates in effect on the balance  sheet date.
Income and expense items are  translated at average  exchange  rates  prevailing
during the year.  Translation  adjustments  are  included in  accumulated  other
comprehensive income. Transaction gains or losses are recognized as other income
or expense in the period incurred.  Translation and transaction  gains or losses
have been immaterial for all periods presented.

Foreign Currency Hedging

The Company hedges  foreign  currency risk by entering into future options based
on projected  forecasts of a portion of the  Company's  foreign  operations.  In
addition,  from time to time, the Company enters into forward contracts to hedge
foreign currency  denominated sales.  Realized and unrealized gains or losses on
contracts  or  options  that hedge  anticipated  cash  flows are  determined  by
comparison  of contract or option value upon  execution  (realized)  and at each
balance sheet for open  contracts or options  (unrealized).  Realized  gains and
losses are  recognized  at the balance sheet date as other income or expense for
the period.  In the case of options  entered into based on projected  forecasts,
unrealized  gains  and  losses  are  recognized  upon  the  determination   that
circumstances  have changed which cause the hedged  instrument to be speculative
in nature.



<PAGE>



Notes to Consolidated Financial Statements
Dollars in tables in thousands except share data

Transaction gains or losses have been immaterial for all periods presented.

Revenue Recognition

The Company  recognizes  revenue and the related  costs when product is shipped.
The  Company  recognizes  franchise  fees as income for  individual  stores when
services required by the franchise  agreement have been substantially  performed
and the store opens for  business.  Franchise  fees  relating to area  franchise
agreements  are  recognized  in proportion to the number of stores for which the
required services have been substantially  performed.  Franchise fees recognized
as income and included in net sales were  approximately  $520,000,  $708,000 and
$553,000 in 1999, 1998 and 1997, respectively.

Advertising

Advertising  costs are  expensed as  incurred.  Advertising  expense  (excluding
cooperative  advertising with distribution  companies) amounted to approximately
$17.5  million,  $10.6  million  and  $6.7  million  in  1999,  1998  and  1997,
respectively.

Income Taxes

The Company  accounts for income  taxes under the  liability  method.  Under the
liability method, deferred tax liabilities and assets are recognized for the tax
consequences of temporary  differences  between the financial  reporting and tax
bases of assets and liabilities.

Stock Based Compensation

The  Company's  stock option plans  provide for the grant of options to purchase
shares of the  Company's  common stock to both  employees and  consultants.  The
Company  has  elected to follow  Accounting  Principles  Board  Opinion  No. 25,
Accounting  for Stock Issued to Employees  (APB 25) and related  interpretations
and provides pro forma disclosures of the compensation  expense determined under
the fair value provisions of Finanical  Accounting Standards Board Statement No.
123 (FAS 123),  Accounting for Stock-Based  Compensation.  In accounting for its
employee  stock options  under APB 25, when the exercise  price of the Company's
employee stock options  equals the market price of the  underlying  stock on the
date of grant, no compensation  expense is recognized.  No compensation  expense
was recognized for any of the years presented.  The Company has followed FAS 123
for stock options granted to non-employees as required.

Earnings Per Share

Effective December 28, 1997, the Company adopted Statement No. 128, Earnings per
Share. Basic earnings per share have been computed based on the weighted-average
number of common  shares  outstanding  during the period.  Diluted  earnings per
share have been computed based upon the weighted-average number of common shares
outstanding during the year, adjusted for the dilutive effect of shares issuable
upon the  exercise  of stock  options  and  warrants  determined  based upon the
average market price for the period.

Comprehensive Income

As of December  28,  1997,  the Company  adopted  Statement  No. 130,  Reporting
Comprehensive  Income (FAS 130). FAS 130 establishes new rules for the reporting
and display of comprehensive income and its components; however, the adoption of
this  statement  had no  impact on the  Company's  net  income or  shareholders'
equity.  Statement  130  requires  unrealized  gains or losses on the  Company's
available-for-sale securities and foreign currency translation adjustments to be
included in other comprehensive income.

<PAGE>

Notes to Consolidated Financial Statements
Dollars in tables in thousands except share data

Segment Information

As of December 28, 1997,  the Company  adopted  Statement  No. 131,  Disclosures
about  Segments of an  Enterprise  and Related  Information  (FAS 131).  FAS 131
superseded  Statement  No. 14,  Financial  Reporting  for Segments of a Business
Enterprise.  FAS 131  establishes  standards  for the way that  public  business
enterprises  report  information  about operating  segments in annual  financial
statements and requires that those enterprises report selected information about
operating  segments  in  interim  financial  reports.  FAS 131 also  establishes
standards for related disclosures about products and services,  geographic areas
and  major  customers.  The  adoption  of FAS  131  did not  affect  results  of
operations  or  financial  position,  but did affect the  disclosure  of segment
information. See Note 17.

Impact of Recently Issued Accounting Standards

In June 1998,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial Accounting  Standards No. 133, "Accounting for Derivative  Instruments
and Hedging  Activities" ("FAS 133").  Statement 133 will require the Company to
record all derivatives on the balance sheet at fair value.  For derivatives that
are hedges,  changes in the fair value of derivatives  will be offset by changes
in the underlying  hedged item in earnings in the same period. In June 1999, the
Financial  Accounting  Standards  Board delayed the effective date of FAS 133 to
the first  quarter of fiscal years  beginning  after June 15, 2000.  The Company
expects to adopt FAS 133 in the First quarter of fiscal year 2001.

2.  BUSINESS ACQUISITIONS

Effective  February 26, 1999, the Company acquired a 60% interest in its Israeli
licensee for $1 million.  The  acquisition  was accounted for under the purchase
method,  and the  results  of  operations  of the  acquired  business  have been
included in the consolidated financial statements since the date of acquisition.
The purchase  price was allocated  based on estimated fair values at the date of
acquisition. The excess of the acquisition costs over the fair values of the net
assets and  liabilities  acquired  was $1.7  million  and has been  recorded  as
goodwill, which is being amortized on a straight-line basis over 15 years.

Effective  June  16,  1999,  the  Company  purchased  the  assets  of one of its
franchisees for approximately  $875,000. The acquisition was accounted for using
the purchase  method of  accounting.  The  acquisition  included two scoop shops
located  in  Las  Vegas,  Nevada,  and  territory  rights.  The  excess  of  the
acquisition  costs  over the  fair  values  of the net  assets  and  liabilities
acquired  was  $266,000  and has  been  recorded  as  goodwill,  which  is being
amortized on a straight-line basis over ten years.

The assets  acquired  and  liabilities  assumed from the  acquisitions  included
property,  plant and equipment of approximately  $1.2 million and long-term debt
of  approximately  $1.9 million.  These  amounts,  as well as current assets and
liabilities of the acquired  companies as of the  acquisition  dates,  have been
excluded from the consolidated statements of cash flows as non-cash items.

3.   SPECIAL CHARGE

In the fourth  quarter of 1999,  the Company  recorded a special  charge of $8.6
million  dollars  ($5.6  million  after  tax,  or $0.78  per  diluted  share) in
connection with the Company's plan to shift  manufacturing of its frozen novelty
line of business  from a Company  owned plant in  Springfield,  Vermont to third
party co-packers to improve the Company's competitive position, gross margin and
profitability.  This action  resulted in the fourth  quarter  1999  write-off of
assets associated with the ice cream novelty and other manufacturing  assets and
costs  associated  with  severance  for those  employees  who do not  accept the
Company's offer of relocation.  This plan to shift novelty manufacturing will be
executed during 2000. The outsourcing of its ice cream novelty business will

<PAGE>


Notes to Consolidated Financial Statements
Dollars in tables in thousands except share data

enable the Company to introduce a wider range of novelty  products in the future
and increase its flexibility.  The charge consists of certain one-time expenses,
substantially  all of which are  non-cash.  The special  charge of $8.6  million
consisted  of $8.0  million for the write off or write down of fixed assets with
the balance for employee severance.


4.   CASH AND INVESTMENTS

The  following is a summary of cash,  cash  equivalents  and  investments  as of
December 25, 1999 and December 26, 1998:

                                              December 25, 1999
                              Cash and Cash      Short-Term
                              Equivalents        Investments      Investments
                              -----------        -----------      -----------
Cash                           $10,762
Commercial paper                   198
Tax exempt floating
 rate notes                        900
Municipal bonds                 13,400            $11,474
Preferred stock                                     9,094
                              -----------        -----------
                                25,260             20,568
Certificates of deposit                               763                $200
                              -----------        -----------      -----------
                               $25,260            $21,331                $200
                              ===========        ===========      ===========


                                              December 26, 1998
                              Cash and Cash      Short-Term
                              Equivalents        Investments      Investments
                              -----------        -----------      -----------
Cash                           $ 7,834
Commercial paper                 3,277
Tax exempt floating
 rate notes                        800
Municipal bonds                 13,200            $14,926
Convertible bonds                                     955
Preferred Stock                                     5,649
                              -----------        -----------
                                25,111             21,530
Certificates of deposit                               588                $303
                              -----------        -----------      -----------
                               $25,111            $22,118                $303
                              ===========        ===========      ===========

The  Company  considers  all of its  investments,  except  for  certificates  of
deposit,  as available for sale.  Certificates  of deposit are held to maturity.
Municipal bonds included in cash and cash equivalents  mature at par in 30 to 45
days, at which time the interest rate is reset to the then market rate,  and the
Company may convert the  investment  to cash.  Municipal  bonds and  convertible
bonds  recorded as short-term  investments  have varying  maturities in 2000 and
beyond,  however,  the  Company  does not  intend  to hold such  investments  to
maturity.  During 1999 and 1998,  the  Company  also  invested  in fixed  income
preferred stock of primarily financial institutions.



<PAGE>




Notes to Consolidated Financial Statements
Dollars in tables in thousands except share data

The Company  determines  the fair value of its short-term  investments  based on
quoted  market  prices.  Unrealized  gains  and  losses  on  available  for sale
securities  are excluded from earnings and are reported as a separate  component
of stockholders' equity until realized.  At December 25, 1999, unrealized losses
amounted to  $324,000.  At December  26,  1998,  unrealized  gains and losses on
short-term investments were not significant.

Gross  purchases and  maturities  aggregated  $74.4 million and $77.9 million in
1999,  $221.6  million and $228.4  million in 1998,  and $43.1 million and $25.4
million in 1997.  Realized  gains and losses were not  material  for all periods
presented.

5.   INVENTORIES

Inventories consist of the following:

                                               December 25,        December 26,
                                                      1999                1998
                                                      ----                ----
 Ice cream and ingredients                         $12,245             $12,025
 Paper goods                                           659                 524
 Food, beverages and gift items                      1,033                 541
                                                   -------             -------
                                                   $13,937             $13,090
                                                   =======             =======

6.   PROPERTY, PLANT AND EQUIPMENT

<TABLE>
<CAPTION>

                                               December 25,        December 26,        Estimated Useful
                                                      1999                1998         Lives/Lease Term
                                                      ----                ----         ----------------
<S>                                               <C>                <C>               <C>
Land and improvements                             $  3,622           $   4,520         15-25 years
Buildings                                           33,376              37,940         25 years
Equipment and furniture                             48,517              52,047         3-20 years
Leasehold improvements                               4,180               3,727         3-10 years
Construction in progress                             4,265               2,058
                                                    ------             -------
                                                    93,960             100,292
Less accumulated depreciation                       37,403              36,841
                                                  --------           ---------
                                                  $ 56,557           $  63,451
                                                  ========           =========
</TABLE>

Depreciation  expense for the years ended  December 25, 1999,  December 26, 1998
and  December  27,  1997 was  $8.8  million,  $7.9  million  and  $7.4  million,
respectively.



<PAGE>



Notes to Consolidated Financial Statements
Dollars in tables in thousands except share data

7.   ACCOUNTS PAYABLE AND ACCRUED EXPENSES

                                               December 25,        December 26,
                                                      1999                1998
                                                      ----                ----
Trade accounts payable                             $10,079            $  4,623
Accrued expenses                                    13,838              12,157
Accrued payroll and related costs                    3,392               3,272
Accrued promotional costs                            5,467               4,297
Accrued marketing costs                              1,322               2,837
Accrued insurance expense                              537               1,081
Income taxes payable                                 1,215                 -
Deferred revenue                                     3,065                 395
                                                   -------             -------
                                                   $38,915             $28,662
                                                   =======             =======

8.   LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS

                                               December 25,        December 26,
                                                      1999                1998
                                                      ----                ----
Senior Notes - Series A payable
  in annual  Installments  beginning
  in 1998 through 2003 with interest
  payable semiannually at 5.9%                     $13,357             $16,680
Senior Notes - Series B payable
  in annual installments beginning
  in 1998 through 2003 with interest
  payable semiannually at 5.73%                      6,667               8,333
Other long-term obligations                          2,272                 744
                                                   -------             -------
                                                    22,296              25,757
Less current portion                                 5,627               5,266
                                                   -------             -------
                                                   $16,669             $20,491
                                                   =======             =======

Property,  plant and equipment  having a net book value of  approximately  $11.2
million at December 25, 1999 are pledged as collateral  under certain  long-term
debt arrangements.

Long-term  debt and capital lease  obligations  at December 25, 1999 maturing in
each of the next five years and thereafter are as follows:

                                             Capital Lease             Long-term
                                               Obligations                  Debt
                                               -----------                  ----
      2000                                            $ 89              $  5,561
      2001                                              73                 5,190
      2002                                              21                 6,047
      2003                                              19                 5,156
      2004                                              16                    62
      Thereafter                                       184                    --
                                                      ----                ------
      Total minimum payments                           402                22,016
      Less amounts representing interest               122                    --
                                                      ----               -------
                                                      $280               $22,016
                                                      ====               =======




<PAGE>



Notes to Consolidated Financial Statements
Dollars in tables in thousands except share data


The  Company  capitalized  no  interest  in 1999,  1998 or 1997.  Interest  paid
amounted  to  $1,698,000  $1,832,000  and  $1,975,000  for 1999,  1998 and 1997,
respectively.

The Company has  available two  $10,000,000  unsecured  working  capital line of
credit agreements with two banks. Interest on borrowings under the agreements is
set at the banks' base rate or at LIBOR plus a margin based on a  pre-determined
formula.  No amounts were borrowed under these or any bank agreements during any
of the years  presented.  The working capital line of credit  agreements  expire
December 23, 2001.

Certain  of  the  debt  agreements  contain   restrictive   covenants  requiring
maintenance  of  minimum  levels  of  working  capital,   net  worth,   debt  to
capitalization  ratios and earnings before  interest,  taxes,  depreciation  and
amortization (EBITDA). Furthermore, distributions are limited to an amount of $5
million  plus  75% of  earnings  and 100% of net  losses  since  June 30,  1993;
approximately  $23.2  million of  retained  earnings  at  December  25, 1999 was
available  for  payment of  dividends.  As of  December  25,  1999,  the Company
received a waiver of compliance related to its working capital requirements.

As of December 25, 1999,  the  carrying  amount and fair value of the  Company's
long-term  debt were $22.3 million and $21.3  million,  respectively,  and as of
December 26, 1998, they were $25.8 million and $24.4 million, respectively.

9.   STOCKHOLDERS' EQUITY

Preferred and Common Stock

The Class A Preferred Stock has one vote per share on all matters on which it is
entitled to vote and is entitled to vote as a separate class in certain business
combinations, such that approval of two-thirds of the class is required for such
business combinations. The Class A Preferred Stock is redeemable by the Company,
by the specified vote of the Continuing Directors (as defined in the Articles of
Association).  The Class A Common Stock has one vote per share on all matters on
which it is entitled to vote. In June 1987, the Company's  shareholders  adopted
an amendment to the Company's  Articles of Association that authorized 3 million
shares of a new Class B Common Stock and  redesignated  the  Company's  existing
Common Stock as Class A Common Stock. The Class B Common Stock has ten votes per
share on all matters on which it is entitled to vote, except as may be otherwise
provided by law,  may be  converted  into shares of Class A Common  Stock by the
specified vote of the continuing Directors is generally non-transferable as such
and is  convertible  upon transfer  into Class A Common Stock,  on a one-for-one
basis. A stockholder who does not wish to complete the prior conversion  process
may effect a sale by simply  delivering the certificate for such shares of Class
B Stock  to a  broker,  properly  endorsed.  The  broker  may then  present  the
certificate to the Company's Transfer Agent, which, if the transfer is otherwise
in good  order,  will issue to the  purchaser  a  certificate  for the number of
shares of Class A Common Stock thereby sold.

Accumulated Other Comprehensive Income (Loss)

Total comprehensive  income amounted to $3.1 million for the year ended December
25, 1999 and $6.2 million and $3.9 million for the years ended December 26, 1998
and December 27, 1997,  respectively.  Other  comprehensive  income consisted of
adjustments for net foreign currency  translation  gains (losses) in the amounts
of $15,000,  ($22,000) and ($11,000) for 1999, 1998 and 1997,  respectively  and
unrealized losses on available for sale securities in the amount of $324,000



<PAGE>



Notes to Consolidated Financial Statements
Dollars in tables in thousands except share data

beginning in 1999. The accumulated balance for foreign currency translation were
$136,000,   $151,000  and  $129,000  for  1999,  1998  and  1997,  respectively.
Accumulated  balances for unrealized losses on available for sale securities was
$324,000 for the year ended December 25, 1999.

10.  Shareholder Rights Plan

In August 1998, following approval by its Board of Directors, the Company put in
place two Shareholder  Rights Plans,  one pertaining to the Class A Common Stock
and one  pertaining  to the Class B Common  Stock.  These Plans are  intended to
protect  stockholders  by compelling  someone  seeking to acquire the Company to
negotiate with the Company's Board of Directors in order to protect stockholders
from unfair  takeover  tactics and to assist in the  maximization of stockholder
value.  These Rights Plans,  which are common for public companies in the United
States, may also be deemed to be "anti-takeover" provisions in that the Board of
Directors  believes that these Plans will make it difficult for a third party to
acquire  control of the Company on terms which are unfair or  unfavorable to the
stockholders.  Also,  in April  1998,  the  Legislature  of the State of Vermont
amended a provision of the Vermont Business  Corporation Act to provide that the
directors of a Vermont corporation may also consider,  in determining whether an
acquisition  offer or other matter is in the best interests of the  corporation,
the  interests  of  the  corporation's  employees,   suppliers,   creditors  and
customers,  the  economy of the state in which the  corporation  is located  and
including the  possibility  that the best  interests of the  corporation  may be
served by the continued independence of the corporation.

11.  STOCK BASED COMPENSATION PLANS

The Company has various stock option plans:

The 1995 and 1999 Equity  Incentive Plans were  established to provide grants to
employees,  and other key persons or entities,  including non-employee directors
who are in the position, in the opinion of the Compensation Committee, to make a
significant  contribution  to the  success  of the  Company,  of  incentive  and
non-incentive  stock  options,  stock  appreciation  rights,  restricted  stock,
unrestricted  stock awards,  deferred  stock awards,  cash or stock  performance
awards, loans or supplemental grants, or combinations thereof. While the Company
grants  options  which  may  become  exercisable  at  different  times or within
different periods,  the Company has generally granted options to employees which
vest over a period of four,  five,  or six years,  and in some cases  subject to
acceleration of vesting upon specified  events including a change in control (as
defined). The exercise period cannot exceed ten years from the date of grant.

At December 25, 1999,  15,401 shares of Class A Common Stock were  available for
grant under the 1995 Equity  Incentive  Plan and 10,084 shares of Class A Common
Stock were available for grant under the 1999 Equity Incentive Plan.

In addition,  during 1999, the Company granted a total of 250,000 options to key
employees under  individual stock option  agreements.  The terms of these grants
are  similar to the terms of options  granted  under the 1995  Equity  Incentive
Plan.

The 1985 Option Plan provides for the grant of incentive and non-incentive stock
options to employees or consultants.  The 1985 Option Plan provides that options
are granted with an exercise  price equal to the market  price of the  Company's
common stock on the date of grant.  The 1985 Option Plan expired in August 1995,
however, some options granted under this plan are outstanding as of December 25,

<PAGE>


Notes  to consolidated Financial Statements
Dollars in tables in thousands except share data


1999. While the Company grants options which may become exercisable at different
times or within different periods,  the Company has generally granted options to
employees  which vest over a period of four,  five, or eight years,  and in some
cases with provisions for acceleration of vesting upon the occurrence of certain
events. The exercise period cannot exceed ten years from the date of grant.

A summary of the Company's stock option  activity  and related  information for
the years ended  December  25,  1999,  December  26, 1998 and  December 27, 1997
follows:
<TABLE>
<CAPTION>

                                               1999                         1998                         1997
                                    ------------------------       ----------------------       ----------------------
                                                    Weighted                     Weighted                     Weighted
                                                     Average                      Average                      Average
                                                    Exercise                     Exercise                     Exercise
                                    Options            Price       Options          Price       Options          Price
                                    -------            -----       -------          -----       -------          -----

<S>                                 <C>                <C>           <C>            <C>         <C>              <C>
Outstanding at
   beginning of year                910,301           $12.97        910,811        $12.90       335,118         $14.49
Granted                             616,396            22.60         42,500         17.79       694,000          12.04
Exercised                          (131,376)           14.73        (36,629)        16.55       (80,000)         10.81
Forfeited                           (91,771)           15.43         (6,381)        14.76       (38,307)         15.42
                                  ---------                         -------                     -------
Outstanding at end
   of year                        1,303,550           $17.18        910,301        $12.97       910,811         $12.90
                                  =========                         =======                     =======
Exercisable at end
   of year                          561,243                         382,021                     203,552
                                    =======                         =======                     =======
Available for
   future grants                     25,485                         284,220                     345,893
                                     ======                         =======                     =======
</TABLE>

The following table presents  weighted-average  price and life information about
significant option groups outstanding at December 25, 1999:
<TABLE>
<CAPTION>

                                     Options Outstanding                        Options Exercisable
                        --------------------------------------------      ----------------------------------
                                           Weighted
                                            Average         Weighted
                                           Remaining        Average                              Weighted
Range of Exercise           Number        Contractual       Exercise          Number              Average
    Prices               Outstanding         Life            Price        Exercisable         Exercise Price
-----------------        -----------     -------------      --------      -----------         --------------
<S>                         <C>               <C>            <C>             <C>                  <C>
 $10.63 -$10.88             370,000           6.96           $10.87          353,875              $10.87
  12.38 - 16.75             302,834           6.77            13.92          191,837               14.29
  19.00 - 19.25              26,500           5.82            19.01           15,531               19.01
  21.00 - 28.06             604,216           9.39            22.60                0                0.00
                          ---------                                          -------

 $10.63 -$28.06           1,303,550           8.02           $17.18          561,243              $12.26
                          =========                                          =======
</TABLE>

The Company  maintains an Employee  Stock Purchase  Plan,  which  authorizes the
issuance of up to 300,000 shares of common stock.  All employees with six months
of continuous service are eligible to participate in this plan.  Participants in
the  plan  are  entitled  to  purchase  Class A Common  Stock  during  specified
semi-annual periods through the accumulation of payroll deductions, at the lower
of 85% of market  value of the  stock at the  beginning  or end of the  offering
period. At December 25, 1999,  152,016 shares had been issued under the plan and
147,984 were available for future issuance.



<PAGE>



Notes to Consolidated Financial Statements
Dollars in tables in thousands except share data

The Company has a  Restricted  Stock Plan (the 1992 Plan)  which  provides  that
non-employee  directors,  on becoming eligible, may be awarded shares of Class A
Common Stock by the  Compensation  Committee of the Board of  Directors.  Shares
issued  under the plan  become  vested  over  periods of up to five  years.  The
Company  has also  adopted  the 1995  Plan,  which  provides  that  non-employee
directors  can  elect to  receive  stock  in lieu of a  Director's  annual  cash
retainer.  In 1999,  2,846 shares were issued to non-employee  directors.  These
shares vest immediately.  At December 25, 1999 a total of 15,105 shares had been
awarded  under these plans,  all of which were fully  vested,  and 19,895 shares
were available for future awards.  Unearned  compensation  on unvested shares is
recorded as of the award date and is amortized over the vesting period.

As of December 25, 1999, a total of 193,364 shares are reserved for future grant
or issue under all of the Company's stock plans.

Pro forma information regarding net income and earnings per share is required by
FAS 123,  which also  requires  that the  information  be  determined  as if the
Company has  accounted  for its employee  stock  options  granted  subsequent to
December 31, 1994 under the fair value method of that Statement.  The fair value
for these  options  was  estimated  at the date of grant  using a  Black-Scholes
option-pricing model with the following assumptions:

                                              1999        1998        1997
                                              -----       -----       ----
Risk-free interest rates                       6.67%       5.10%       5.53%
Dividend yield                                 0.00%       0.00%       0.00%
Volatility factor                              0.50        0.32        0.34
Weighted average expected lives (in years)     4.4         2.4         3.6

For purposes of pro forma  disclosures,  the estimated fair value of the options
is  amortized to expense over the  options'  vesting  period.  The impact on pro
forma net income may not be  representative  of  compensation  expense in future
years when the effect of the  amortization of multiple awards would be reflected
in the pro forma  disclosures.  The Company's pro forma information  follows (in
thousands except for earnings per share information):

                                              1999        1998        1997
                                              -----       -----       ----
Pro forma net income                          $1,113      $5,935     $3,600
Pro forma earnings per share - diluted        $ 0.15      $ 0.80     $ 0.49
Weighted average fair value of options
 at the date of grant                         $11.03      $ 4.22     $ 4.16





<PAGE>



Notes to Consolidated Financial Statements
Dollars in tables in thousands except share data


12.  INCOME TAXES

The provision for income taxes consists of the following:

Federal                              1999             1998             1997
-------                             -----            -----             ----
Current                             $4,082           $5,041         $  3,300
Deferred                            (2,443)          (2,093)          (1,388
                                    ------           ------           ------
                                     1,639            2,948            1,912
                                    ------           ------           ------
State
-----
Current                                391            1,003              686
Deferred                              (305)            (417)            (210)
                                    ------           ------           ------
                                        86              586              476
                                    ------           ------           ------
Foreign
-------
Current                                 24                -                -
Deferred                                74                -                -
                                    ------           ------           ------
                                        98                -                -
                                    ------           ------           ------
                                    $1,823           $3,534           $2,388
                                    ======           ======           ======

Income taxes computed at the federal statutory rate differ from amounts provided
as follows:

                                     1999             1998             1997
                                    -----            -----            -----
Tax at statutory rate               34.0 %           34.0 %           34.0 %
State tax, less federal tax effect   1.1             4.0              5.0
Income tax credits                   0.0             (1.0)            (1.0)
Tax exempt interest                 (8.7)            (3.0)            (2.9)
Valuation allowance                 13.6              0.0              0.0
Foreign sales corporation           (8.3)            (1.0)             0.0
Other, net                           3.3              3.1              2.9
                                    -----            -----             -----
Provision for income taxes          35.0 %           36.1 %           38.0 %
                                    ======           ======           ======





<PAGE>



Notes to Consolidated Financial Statements
Dollars in tables in thousands except share data


Deferred  income  taxes  reflect  the net tax effects of  temporary  differences
between the carrying amount of assets and  liabilities  for financial  reporting
purposes and the amounts used for income tax  purposes and are  attributable  to
the following:

                                                         1999              1998
                                                        -----              ----
Deferred tax assets:
  Accrued liabilities                                  $4,383            $6,425
  Inventories                                           1,651             1,413
  Accounts receivable                                     434               430
  Accrued special charge                                1,779                 -
  Net operating losses                                    707                 -
  Other                                                     -               475
                                                       ------            ------
                                                        8,954             8,743
  Valuation allowance                                    (707)                -
                                                       ------            ------
  Total deferred tax assets                             8,247             8,743

Deferred tax liabilities:
  Depreciation/property, plant and equipment            1,849             5,231
  Other                                                   351               139
                                                       ------            ------
  Total deferred tax liabilities                        2,200             5,370
                                                       ------            ------
      Net deferred tax assets                          $6,047            $3,373
                                                       ======            ======

The Company  established a valuation  allowance  related to net  operating  loss
carryforwards  in certain foreign  jurisdictions.  Income taxes paid amounted to
$2.2  million,  $6.2  million  and $2.2  million  during  1999,  1998 and  1997,
respectively.

13.  EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per
share:
<TABLE>
<CAPTION>

                                                                  1999         1998         1997
                                                                  ----         ----         ----

<S>                                                             <C>          <C>           <C>
Numerator:
  Net income                                                    $3,385       $6,242        $3,896
                                                                ------       ------        ------
Denominator:
  Denominator for basic earnings per share -
      weighted-average shares                                    7,077        7,197         7,247

  Dilutive stock options and warrants                              328          266            87
                                                                ------       ------        ------
  Denominator for diluted earnings per share -
      adjusted weighted-average shares and
      assumed conversions                                        7,405        7,463         7,334
                                                                ======        =====        ======
  Net income per common share
      Basic                                                     $ 0.48       $ 0.87        $ 0.54
                                                                ======       ======        ======
      Diluted                                                   $ 0.46       $ 0.84        $ 0.53
                                                                ======       ======        ======
</TABLE>

Options to purchase 254,247 shares of common stock at prices ranging from $23.63
to $28.06 were outstanding  during 1999 but were not included in the computation
of diluted earnings per share because the options'  exercise prices were greater
than the average  market price of the common shares and,  therefore,  the effect
would be  antidilutive.  Options to purchase  32,500  shares of common  stock at
$19.25,  and 146,811  shares of common  stock at prices  ranging  from $16.75 to

<PAGE>

Notes to Consolidated Financial Statements
Dollars in tables in thousands except share data

$19.00 were outstanding in 1998 and 1997, respectively, but were not included in
the  computation  of diluted  earnings per share  because the options'  exercise
prices were  greater  than the average  market  price of the common  shares and,
therefore, the effect would be antidilutive.

Included  in the  computation  of diluted  earnings  per share are  warrants  to
acquire  125,000  shares,  which  are  part  of an  agreement  with  an  outside
consultant.  Under this agreement,  when the average of the closing market value
of the stock exceeds $22.00 per share over a 90 day period, the consultant would
be entitled to purchase  125,000 shares of common stock at $14.00 per share. The
125,000 additional warrants became exercisable in March, 1999 and expire on July
1, 2004.

14. THE BEN & JERRY'S FOUNDATION, INC.

In October 1985, the Company issued 900 shares of Class A Preferred Stock to the
Ben & Jerry's Foundation,  Inc. (the Foundation),  a not-for-profit  corporation
qualified  under Section 501 (c)(3) of the Internal  Revenue  Code.  The primary
purpose of the Foundation is to be the principal recipient of cash contributions
from the Company which are then donated to various  community  organizations and
other charitable  institutions.  Contributions to the Foundation and directly to
other  charitable  organizations,  at the rate of  approximately  7.5% of income
before income taxes and special charges  amounted to  approximately  $1,100,000,
$793,000 and $510,000 for 1999, 1998 and 1997 respectively.

The Class A Preferred  Stock is entitled to vote as a separate  class in certain
business combinations, such that approval of two-thirds of the class is required
for such business combination. The three directors of the Foundation,  including
one of the founders of the Company, are members of the Board of Directors of the
Company.

15.  EMPLOYEE BENEFIT PLANS

The  Company  maintains  profit  sharing  and  savings  plans  for all  eligible
employees.  The Company has also  implemented  a management  incentive  program,
which provides for  discretionary  bonuses for management.  Contributions to the
profit  sharing  plan are  allocated  among all  current  full-time  and regular
part-time  employees  (other than the co-founders,  Chief Executive  Officer and
Officers that are Senior Directors of functions) and are allocated fifty percent
based upon length of service and fifty percent split evenly among all employees.
The profit  sharing  plan and the  management  incentive  plan are  informal and
discretionary.  Recipients who participate in the management  incentive  program
are not eligible to  participate in the profit sharing plan. The savings plan is
maintained in accordance  with the  provisions of Section 401(k) of the Internal
Revenue Code and allows all employees  with at least twelve months of service to
make annual tax-deferred voluntary  contributions up to fifteen percent of their
salary. The Company  contributes one percent of eligible employees' gross annual
salary and may match the  contribution up to an additional  three percent of the
employee's gross annual salary.  Effective  January 1, 1998, the Company amended
its employees' retirement plan to permit contributions of shares of its stock to
the plan  from  time to time.  In 1998,  the  Board of  Directors  approved  the
contribution of $250,000 worth of Class A Common Stock to be allocated among all
eligible employees'  accounts.  Total contributions by the Company to the profit
sharing,  management incentive program and savings plans were approximately $3.2
million, $2.7 million and $1.2 million for 1999, 1998 and 1997, respectively.



<PAGE>



Notes to Consolidated Financial Statements
Dollars in tables in thousands except share data

16.  COMMITMENTS

The Company  leases  certain  property and  equipment  under  operating  leases.
Minimum payments for operating leases having initial or remaining noncancellable
terms in excess of one year are as follows:

2000                       $1,402
2001                        1,153
2002                          940
2003                          758
2004                          417
Thereafter                    383

Rent expense for operating leases amounted to approximately  $1.6 million,  $1.5
million and $1.2 million in 1999, 1998 and 1997, respectively.

17.  SEGMENT INFORMATION

Ben & Jerry's Homemade, Inc. has one reportable segment: ice cream manufacturing
and  distribution.  The Company  manufactures  super  premium ice cream,  frozen
yogurt,  sorbet and various  ice cream  novelty  products.  These  products  are
distributed   throughout  the  United  States  primarily   through   independent
distributors and in certain foreign countries.

During 1999,  1998 and 1997 the Company's most  significant  customer,  Dreyer's
Grand Ice Cream, Inc. accounted for net sales of 40% in 1999 and 57% in 1998 and
1997.  Sales and cash  receipts  are  recorded  and  received  primarily in U.S.
dollars.  Foreign currency  exchange  variations have little or no effect on the
Company at this time.  During  1999,  the  Company  began  doing  business  with
Haagen-Dazs under a new distribution  arrangement which accounted for 11% of net
sales during the year.

<PAGE>

Notes to Consolidated Financial Statements
Dollars in tables in thousands except share data

Information concerning operations by geographic area are as follows:

<TABLE>
<CAPTION>

                                                    December 25,   December 26,    December 27,
                                                          1999            1998            1997
                                                          ----            ----            ----
<S>                                                    <C>            <C>              <C>
Sales to Unaffiliated Customers
United States                                          $211,509       $191,777         $166,592
Foreign                                                  25,534         17,426            7,614
                                                       --------       --------         --------
                                                       $237,043       $209,203         $174,206
                                                       ========       ========         ========
Net Income (Loss)
United States                                          $  4,094       $  6,444         $  4,136
Foreign                                                    (709)          (202)            (240)
                                                       --------       --------         --------
                                                       $  3,385       $  6,242         $  3,896
                                                       ========       ========         ========
Long-Lived Assets
United States                                          $ 58,147       $ 64,722         $ 66,128
Foreign                                                   5,108          2,470              263
                                                       --------       --------        --------
                                                       $ 63,255       $ 67,192         $ 66,391
                                                       ========       ========         ========

</TABLE>


Note:  Foreign  operations  include  the United  Kingdom,  France,  Canada,  The
Netherlands, Belgium, Israel and Japan.



<PAGE>



Notes to Consolidated Financial Statements
Dollars in tables in thousands except share data

18.  SELECTED QUARTERLY FINANCIAL INFORMATION (Unaudited)
<TABLE>
<CAPTION>

                                                   First Quarter1   Second Quarter1   Third Quarter1   Fourth Quarter1
                                                   --------------   ---------------   --------------   ---------------
<S>                                                     <C>              <C>               <C>              <C>
1999
Net sales                                               $50,066          $68,172           $67,129          $51,676
Gross profit                                             18,089           27,617            27,814           18,232
Net income (loss)                                         1,197            3,214             3,535           (4,561)2
Net income (loss) per common share
  Basic                                                    .17              .45               .50             (.66)
  Diluted                                                  .16              .42               .47             (.66)

1998
Net sales                                               $41,556          $58,749           $64,566          $44,332
Gross profit                                             13,964           21,153            24,227           13,634
Net income                                                  380            2,130             2,892              840
Net income per common share
  Basic                                                    .05              .29               .40              .12
  Diluted                                                  .05              .28               .39              .11

</TABLE>
1        Each  quarter  represents  a  thirteen  week  period  for  all  periods
         presented.

2        Fourth  quarter  reflects a  non-recurring  pre-tax  special  charge of
         $8,602 ($5.6 million after tax or $0.78 per diluted share). Net income,
         excluding the special  charge was $1 million and diluted net income per
         common share was $0.14.

<PAGE>

<TABLE>
<CAPTION>

                                       BEN & JERRY'S HOMEMADE, INC.
                             SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
             Years ended December 25, 1999, December 26, 1998 and December 27, 1997 (In 000's)
<S>                                              <C>               <C>                <C>             <C>            <C>
                                                 Balance at      Charged to     Charged to
                                                 beginning       costs and        other       Deductions     Balance at end
                                                  of year         expenses       accounts         (1)            of year
                                                 ----------      ----------     ----------    ----------     ---------------
Year ended  December 25, 1999                      $  979           $349           $ -           $362            $  966
    Allowance for doubtful accounts
   (deducted from accounts receivable)
Year ended  December  26, 1998                     $1,066           $ 50           $ -           $137            $  979
   Allowance for doubtful accounts
   (deducted from accounts receivable)
Year ended  December  27, 1997                     $  695           $630           $ -           $259            $1,066
   Allowance for doubtful accounts
   (deducted from accounts receivable)

</TABLE>

(1)      Accounts deemed to be uncollectible.