<PAGE> 1
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SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
BOB EVANS FARMS, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
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<PAGE> 2
BOB EVANS FARMS, INC.
P.O. Box 07863
Columbus, Ohio 43207
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Columbus, Ohio
Aug. 1, 1997
To the Stockholders of
Bob Evans Farms, Inc.
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of Bob Evans
Farms, Inc. (the "company") will be held at The Shelter House, Bob Evans Farm,
Rio Grande, Ohio (approximately 12 miles north of Gallipolis, Ohio, on State
Route No. 588) on Monday, Sept. 8, 1997, at 4 p.m., Eastern Daylight Time, for
the following purposes:
(1) To elect three directors to serve for terms of three years each.
(2) To consider the reports to be laid before the annual meeting or any
adjournment(s) thereof.
(3) To transact such other business as may properly come before the annual
meeting or any adjournment(s) thereof.
There will be a social hour beginning at 3 p.m., Eastern Daylight Time, when
soft drinks and sandwiches will be served. We are hoping you will take this
opportunity to become acquainted with the officers and directors of your
company.
Stockholders of record at the close of business on July 11, 1997, will be
entitled to receive notice of and to vote at the annual meeting and any
adjournment(s) thereof.
By Order of the Board of Directors,
/s/ Daniel E. Evans
Daniel E. Evans
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
<PAGE> 3
BOB EVANS FARMS, INC.
P.O. Box 07863
Columbus, Ohio 43207
(614) 491-2225
Aug. 1, 1997
PROXY STATEMENT
This proxy statement and the accompanying proxy are being mailed on or about
Aug. 1, 1997, to all stockholders of Bob Evans Farms, Inc. (the "company") of
record at the close of business on July 11, 1997, in connection with the
solicitation of proxies by the board of directors of the company for use at the
annual meeting of stockholders scheduled to be held on Monday, Sept. 8, 1997, or
at any adjournment(s) thereof. The annual meeting will be held at 4 p.m.,
Eastern Daylight Time, at The Shelter House, Bob Evans Farm, Rio Grande, Ohio
(approximately 12 miles north of Gallipolis, Ohio, on State Route 588).
A proxy for use at the annual meeting accompanies this proxy statement and is
solicited by the board of directors of the company. Stockholders of the company
may use their proxies if they are unable to attend the annual meeting in person
or wish to have their shares of common stock, par value $.01 per share, voted by
proxy even if they do attend the annual meeting. Without affecting any vote
previously taken, any stockholder executing a proxy may revoke it at any time
before it is voted by filing with the secretary of the company, at the address
of the company set forth on the cover page of this proxy statement, written
notice of such revocation; by executing a later-dated proxy which is received by
the company prior to the annual meeting; or by attending the annual meeting and
giving notice of such revocation in person. ATTENDANCE AT THE ANNUAL MEETING
WILL NOT, IN AND OF ITSELF, CONSTITUTE REVOCATION OF A PROXY.
The company will bear the costs of preparing and mailing this proxy statement,
the accompanying proxy and any other related materials and all other costs
incurred in connection with the solicitation of proxies on behalf of the board
of directors. Officers and employees of the company may solicit proxies by
further mailing, by telephone or by personal contact without receiving any
additional compensation therefor. The company will also pay the standard charges
and expenses of brokerage houses, voting trustees, banks, associations and other
custodians, nominees and fiduciaries, who are record holders of common shares of
the company not beneficially owned by them, for forwarding such materials to,
and obtaining proxies from, the beneficial owners of such common shares.
The annual report of the company for the fiscal year ended April 25, 1997 (the
"1997 fiscal year"), including financial statements, is enclosed with this proxy
statement.
<PAGE> 4
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Only stockholders of record at the close of business on July 11, 1997, are
entitled to receive notice of, and to vote at, the annual meeting or any
adjournment(s) thereof. At July 11, 1997, the company had outstanding 41,579,041
common shares entitled to vote at the annual meeting. The holders of common
shares entitling them to exercise a majority of the voting power of the company
will constitute a quorum for the annual meeting. Each common share entitles the
holder thereof to one vote upon each matter to be voted upon by stockholders at
the annual meeting.
Common shares represented by signed proxies that are returned to the company
will be counted toward the quorum in all matters even though they are marked as
"withhold authority" with respect to the election of one or more nominees as
directors of the company or they are not marked at all. Broker/dealers who hold
their customers' common shares in street name may, under the applicable rules of
the self-regulatory organizations of which the broker/dealers are members, sign
and submit proxies for such common shares and may vote such common shares on
routine matters, which, under such rules, typically include the election of
directors, but broker/dealers may not vote such common shares on other matters,
which typically include amendments to the charter documents of a corporation and
the approval of stock compensation plans, without specific instructions from the
customer who owns such common shares. Proxies signed and submitted by
broker/dealers which have not been voted on certain matters as described in the
previous sentence are referred to as "broker non-votes." Since broker/dealers
have the discretion to vote with respect to the election of directors, there
will be no broker non-votes.
The following table sets forth certain information with respect to the only
holder known to the company to be the beneficial owner of more than five percent
(5%) of the outstanding common shares of the company.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE
OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP PERCENT OF CLASS (1)
- ------------------------------ ----------------------- --------------------
<S> <C> <C>
Ariel Capital Management, Inc. 2,165,006 (2) 5.21%
307 North Michigan Ave.
Chicago, Ill. 60601
- ------------------------------
</TABLE>
(1) The percent of class is based upon 41,579,041 common shares outstanding on
July 11, 1997.
(2) Based on information contained in a schedule 13G filing with the Securities
and Exchange Commission, dated April 10, 1997, Ariel Capital Management, Inc.
("Ariel"), a registered investment adviser, beneficially owns 2,165,006 common
shares (all of which are owned by its investment advisory clients). That filing
shows Ariel has sole voting power over 2,012,440 common shares, shared voting
power over 29,000 common shares and sole investment power over 2,165,006 common
shares. John W. Rogers Jr., president and principal shareholder of Ariel, has
disclaimed beneficial ownership of the common shares of the company held by
Ariel.
The following table on the top of page 3 sets forth certain information with
respect to the company's common shares beneficially owned by each of the
nominees for election as a director of the company, by each of the continuing
directors of the company, by each of the executive officers of the company named
in the summary compensation table (page 11) and by all directors and executive
officers of the company as a group, as of July 11, 1997:
2
<PAGE> 5
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP (1)
---------------------------------------------
COMMON SHARES WHICH
CAN BE ACQUIRED
NAME OF BENEFICIAL UPON EXERCISE OF
OWNER OR NUMBER OF COMMON SHARES OPTIONS EXERCISABLE PERCENT OF
PERSONS IN GROUP PRESENTLY HELD WITHIN 60 DAYS TOTAL CLASS (2)
- --------------------- -------------- ------------------- --------- ----------
<S> <C> <C> <C> <C>
Larry C. Corbin(3) 34,625 31,477 66,102 (4)
Daniel E. Evans(3) 561,683(5) 126,920 688,603 1.7%
Daniel A. Fronk 21,709(6) 2,054 23,763 (4)
Michael J. Gasser -0- -0- -0- (4)
G. Robert Lucas II 4,154(7) 2,054 6,208 (4)
Cheryl L. Krueger 317 7,187 7,504 (4)
Stewart K. Owens(3) 211,382 12,000 223,382 (4)
Robert E.H. Rabold 1,013 6,161 7,174 (4)
Robert S. Wood 305,407 2,054 307,461 (4)
Roger D. Williams(3) 31,610(8) 7,040 38,650 (4)
Donald J. Radkoski(3) 8,445(9) 7,040 15,485 (4)
All directors and
executive officers
as a group
(14 persons) 1,217,697(10) 243,655 1,461,352 3.5%
</TABLE>
- ----------------
(1) Unless otherwise indicated, the beneficial owner has sole voting and
investment power with respect to all of the common shares reflected in the
table. All fractional common shares have been rounded to the nearest whole
common share.
(2) The percent of class is based upon the sum of 41,579,041 common shares
outstanding on July 11, 1997, and includes the number of common shares as to
which the named person has the right to acquire beneficial ownership upon the
exercise of stock options exercisable within 60 days of July 11, 1997.
(3) Executive officer of the company named in the summary compensation table.
(4) Represents ownership of less than 1% of the outstanding common shares of the
company.
(5) Includes 48,969 common shares held by the wife of Mr. Evans; 3,796 common
shares held by the wife of Mr. Evans as custodian for their son; 300,000 common
shares held in the Daniel E. Evans Trust, whereby he serves as trustee and
exercises sole voting and investment power; and 37,226 common shares held by
Evans Enterprises, Inc. In his capacity as chairman, chief executive officer and
sole shareholder of Evans Enterprises, Inc., Mr. Evans may be deemed to have
sole voting and investment power with respect to the common shares held by that
corporation.
(6) Includes 5,133 common shares held in the Josephine A. Fronk Trust with
respect to which Mr. Fronk serves as trustee and exercises sole voting and
investment power.
(7) Includes 3,328 common shares held by Mr. Lucas in a KEOGH plan for the
benefit of Mr. Lucas and 400 common shares held in the William B. Lucas Trust
with respect to which Mr. Lucas serves as trustee and exercises sole voting and
investment power.
(8) Includes 340 common shares held by Mr. Williams as custodian for the benefit
of his son and 340 common shares held by Mr. Williams as custodian for the
benefit of his daughter.
(9) Includes 21 common shares held by Mr. Radkoski as custodian for the benefit
of his son and 14 common shares held by Mr. Radkoski as custodian for the
benefit of his daughter.
(10) Includes common shares held by the spouses of certain executive officers
and directors, common shares held by the custodians for the children of certain
executive officers and directors and common shares held by certain executive
officers and directors in their capacities as trustees of certain trusts. See
notes (5) through (9).
3
<PAGE> 6
ELECTION OF DIRECTORS
Directors of the company are elected at the annual meeting. There are currently
nine members of the board of directors. Pursuant to the by-laws of the company,
the directors have been divided into three classes of three directors each.
Class I directors currently serve until the annual meeting in 1999, class II
directors currently serve until the annual meeting in 1997, and class III
directors currently serve until the annual meeting in 1998. At the annual
meeting, three class II directors will be elected for three-year terms.
The board of directors has designated the three nominees listed below for
election as class II directors of the company for terms expiring in 2000. The
common shares represented by the enclosed proxy, if returned duly executed and
not properly revoked, will be voted as specified thereon, or if no instructions
are given, for the board's nominees; however, the persons designated as proxies
reserve full discretion to vote the common shares represented by the proxies for
the election of the remaining nominees and any substitute nominee(s) designated
by the board in the event the nominee who would otherwise receive the votes is
unavailable or unable to serve as a candidate for election as a director. The
board of directors has no reason to believe that any of the nominees will be
unavailable or unable to serve if elected to the board.
Under Delaware law and the company's by-laws, the three nominees for election as
class II directors receiving the greatest number of votes will be elected as
class II directors.
The following table sets forth the nominees for election to the board of
directors, the directors of the company whose terms in office will continue
after the annual meeting, and certain information with respect to each nominee
and each director. Unless otherwise indicated, each person has held his or her
principal occupation for more than five years.
<TABLE>
<CAPTION>
NAME, AGE AND YEAR BECAME DIRECTOR; PRINCIPAL OCCUPATION FOR PAST
POSITIONS AND OFFICES WITH THE COMPANY FIVE YEARS AND OTHER INFORMATION
-------------------------------------- --------------------------------
<S> <C>
NOMINEES - TERMS TO EXPIRE IN 2000 (CLASS II)
Larry C. Corbin, age 55; Executive Vice Executive Vice President - Restaurant Division
President - Restaurant Division of the company; since 1995; Senior Group Vice President -
Director since 1981. Restaurant Operations Group from 1994 to 1995;
Group Vice President - Business Development
from 1990 to 1993; Executive Vice President,
Operations and Development, Restaurant
Division, from 1988 to 1990; Senior Vice
President, Operations and Development,
Restaurant Division, from 1987 to 1988; and
Senior Vice President, Operations, Restaurant
Division, from 1974 to 1987, in each case of
the company.
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
NAME, AGE AND YEAR BECAME DIRECTOR; PRINCIPAL OCCUPATION FOR PAST
POSITIONS AND OFFICES WITH THE COMPANY FIVE YEARS AND OTHER INFORMATION
-------------------------------------- --------------------------------
<S> <C>
Stewart K. Owens, age 42; President and President and Chief Operating Officer of the
Chief Operating Officer of the company; company since 1995. Executive Vice President
Director since 1987. and Chief Operating Officer from 1994 to 1995;
and Group Vice President - Food Products Group
from 1990 to 1993, in each case of the
company. President and Chief Operating Officer
of Owens Country Sausage, Inc., a subsidiary
of the company, from 1984 to 1996.
Robert E.H. Rabold, age 58; Director since Chairman, President and Chief Executive
1994. Officer of Motorists Mutual-American Hardware
Insurance Group, Columbus, Ohio, since 1993.
CONTINUING DIRECTORS - TERMS TO EXPIRE IN 1998 (CLASS III)
Daniel E. Evans, age 60; Chairman of the Chairman of the Board, Chief Executive Officer
Board, Chief Executive Officer and Secretary and Secretary of the company, since 1971.
of the company; Director since 1957.
Robert S. Wood, age 69; Director since 1957. Director of the company. Vice Chairman from
1990 to 1992, and Executive Vice President and
Chief Operating Officer, Restaurant Division,
and Vice President, Sausage Division, from
1974 to 1990, in each case of the company.
Michael J. Gasser, age 46; Director since 1997. Chairman of the Board and Chief Executive
Officer of Greif Bros. Corporation, a
manufacturer of shipping containers and
containerboard, Delaware, Ohio, since 1994;
Vice Chairman and Chief Operating Officer in
1994; and Vice President from 1988 to 1994; in
each case of Greif Bros. Corporation. (1)
CONTINUING DIRECTORS - TERMS TO EXPIRE IN 1999 (CLASS I)
Daniel A. Fronk, age 61; Director since 1981. Senior Executive Vice President and Board
Member of The Ohio Company, an investment
banking firm, Columbus, Ohio. (2)
Cheryl L. Krueger, age 45; Director since 1993. President and Chief Executive Officer of
Cheryl & Co., a manufacturer and retailer of
gourmet foods and gifts, Columbus, Ohio.
G. Robert Lucas II, age 53; Director since 1986. Senior Vice President and General Counsel, The
Scotts Company, a manufacturer of lawn and
garden products since May 1997; Partner in
Vorys, Sater, Seymour and Pease, Attorneys at
Law, Columbus, Ohio, from 1990 to April 1997.
(3)
</TABLE>
(1) Mr. Gasser was appointed by the board of directors of the company on July 7,
1997, to fill the vacancy created by the retirement of J. Tim Evans.
(2) The Ohio Company has, from time to time, rendered various investment banking
and brokerage services to the company and is expected to continue to do so.
(3) Vorys, Sater, Seymour and Pease is general counsel to the company. It
rendered legal services to the company during the company's 1997 fiscal year,
and continues to do so.
5
<PAGE> 8
Daniel E. Evans, a director of The Sherwin-Williams Company and National City
Corporation, and Michael J. Gasser, a director of Greif Bros. Corporation, are
the only directors who are also directors of any other company with a class of
securities registered pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or which is otherwise subject to the reporting
requirements of the Exchange Act, or any company registered as an investment
company under the Investment Company Act of 1940.
The company's board of directors has standing audit and compensation/stock
option committees. There is no standing nominating committee or committee
performing similar functions.
The audit committee consists of Daniel A. Fronk, G. Robert Lucas II, Robert E.H.
Rabold and Robert S. Wood. The audit committee reviews the services performed
and to be performed by the company's principal accountant, the cost of such
services and the financial statements of the company. The audit committee met
three times during the 1997 fiscal year.
The compensation/stock option committee (the "committee"), consisting of Daniel
A. Fronk, Cheryl L. Krueger and G. Robert Lucas II, reviews and recommends to
the board of directors of the company the salaries, bonuses and other cash
compensation to be paid to executive officers of the company and the other
non-stock-based benefits to be received by such executive officers. The
committee also administers the company's stock option plans pursuant to which
employee stock options are granted, selects and nominates for selection those
eligible employees who may participate in each stock option plan (where
selection is required) and prescribes the terms of any stock options granted
under the stock option plans. The committee met four times during the 1997
fiscal year.
The board of directors of the company held a total of four meetings during the
1997 fiscal year. None of the directors attended fewer than 75% of the aggregate
of the total number of board meetings and the total number of meetings held by
the committees of the board on which he or she served during the period he or
she served.
6
<PAGE> 9
REPORT OF THE COMPENSATION/STOCK OPTION COMMITTEE OF
THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
PREVIOUS FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE EXCHANGE
ACT THAT MIGHT INCORPORATE FUTURE FILINGS, INCLUDING THIS PROXY STATEMENT, IN
WHOLE OR IN PART, THIS REPORT AND THE GRAPH SET FORTH ON PAGE 15 SHALL NOT BE
INCORPORATED BY REFERENCE INTO ANY SUCH FILINGS.
ADMINISTRATION
During the 1997 fiscal year, the company's compensation policies for its
executive officers were administered by the committee, all the members of which
are non-employee directors. The compensation policies administered by the
committee are intended to enhance the financial performance of the company by
aligning the financial interests of the company's executive officers with those
of its stockholders.
The primary components of executive compensation are base salary, cash bonus and
longer-term incentives such as stock option grants. The committee recommends to
the board of directors the salaries and bonuses of the executive officers and
administers the stock option plans pursuant to which employee stock options are
granted. In addition, the salary and bonus components of executive compensation
are reviewed for competitiveness in relation to a group of companies in the
restaurant and food products businesses by members of the human resources group
of the company and by independent consultants specializing in executive
compensation.
Section 162(m) of the Internal Revenue Code places certain restrictions on the
amount of compensation in excess of $1,000,000 which may be deducted for each
executive officer of the company. The company is reviewing its existing
compensation plans and intends to amend such plans at the appropriate time to
ensure that compensation paid to its executive officers is deductible by the
company.
OVERALL PHILOSOPHY
The company has adopted a total compensation system which is intended to provide
executive officers with a competitive salary, while at the same time emphasizing
the bonus and long-term components of total compensation. All management
employees of the company (including the five executive officers named in the
summary compensation table) have been placed in one of 18 pay grades, each pay
grade being commensurate with the duties undertaken by each such employee. Each
pay grade is assigned a minimum, midpoint and maximum salary range as well as a
minimum, midpoint and maximum total compensation range. The dollar amounts
comprising the minimum, midpoint and maximum ranges were derived by company
personnel, working with executive compensation consultants, from comparisons to
companies in similar lines of business with the company as published in
compensation surveys.
7
<PAGE> 10
BASE SALARY
A review of the salaries being paid to the executive officers of the company was
conducted at a meeting of the committee held in May 1996. At that meeting, it
was management's recommendation that a 3% increase in the salaries of each of
the executive officers, including Daniel E. Evans, chairman of the board and
chief executive officer, should be implemented. This recommendation, which was
premised on keeping the salaries of the company's executive officers competitive
with those of other companies in similar lines of business, was accepted by the
committee, retroactive to the beginning of the 1997 fiscal year, and adopted by
the board of directors. In addition, the salaries of three of the executive
officers named in the summary compensation table were further increased to
reflect their promotion during the course of the fiscal year.
BONUSES
At the beginning of the 1997 fiscal year, each executive officer agreed upon
written goals to be accomplished by him or her during the fiscal year. Different
goals were set for each executive officer - some involving overall company
performance (such as performance of the common shares, increase in net income,
increase in sales and cost savings) and some specific to the performance of the
particular executive officer (such as personnel management, financial
presentations and community service). Each goal was weighted (the total
weighting of all goals adding to 100%) and at the end of the fiscal year, each
executive officer was graded by one or more of his or her peers.
Based on these analyses and the grades received by each executive officer, an
initial bonus level was determined. After the initial bonus levels for the
executive officers were determined, they were reviewed a final time by the
chairman of the board and chief executive officer, who has discretion to
recommend additional bonus amounts for extraordinary performance or
contributions during the fiscal year. The chairman's recommendations were then
reviewed by the committee, which made its recommendations to the board of
directors.
During fiscal 1997, the company's earnings per share declined 15.7% (from $1.02
in fiscal 1996 before a $.33 charge resulting from the write-down of assets in
accordance with SFAS 121 to $.86 in fiscal 1997) and the price of the common
stock dropped 18.6% (from $16.125 on April 26, 1996, to $13.125 on April 25,
1997). As a result of this performance, management was of the opinion, and the
committee concurred, that the bonuses of the most highly compensated executive
officers of the company should reflect the performance of the company in these
two areas. As a result, the aggregate bonuses paid to the five most highly
compensated executive officers of the company declined from their fiscal 1996
levels by 15.3%.
8
<PAGE> 11
The performance of Daniel E. Evans was evaluated on the same basis as the
performance of the other executive officers of the company. That is, goals were
set at the beginning of the fiscal year and Mr. Evans was graded (by the
committee, rather than by his peers) with respect to each such goal. At the
beginning of the 1997 fiscal year, Mr. Evans' bonus for 1997 was targeted at
105% of his salary. As a result, if, in the judgment of the committee, he
attained 100% of his goals and no other subjective factors were considered, his
bonus would be 105% of his salary for the 1997 fiscal year. His ability to earn
more or less than his targeted bonus was predicated on various objective factors
(the performance goals previously referred to) and subjective factors (to be
applied by the committee in its discretion).
At its meeting on May 23, 1997, the committee reviewed the performance goals for
Mr. Evans, applied the mathematical formulae to those goals for which such
formulae were applicable and subjectively evaluated Mr. Evans' performance in
categories not subject to a mathematical formula. This combination of objective
and subjective analyses led to the bonus disclosed in the summary compensation
table, which was recommended by the committee and adopted by the board of
directors. Mr. Evans' bonus for fiscal 1997 declined by 17.5% over that paid to
him in fiscal 1996.
STOCK OPTION PLANS
In contrast to salary and bonuses, stock option grants are tied directly to
stock price performance. The committee grants incentive stock options ("ISOs")
under stockholder-approved stock option plans with an exercise price equal to
the market value of the company's common shares on the date of grant. If there
is no appreciation in the market value of the company's common shares, the
options are valueless. Grants of ISOs are normally made to eligible employees,
including executive officers, once every five years. Any grants made in
intervening years are made to recognize changes in responsibilities, to grant
ISOs to newly hired employees, and the like. No grants of ISOs were made to any
executive officer during the 1997 fiscal year.
In addition, grants of non-qualified stock options ("NQSOs") are made to provide
benefits under the company's supplemental executive retirement plan (the
"SERP"). The SERP is an unfunded plan; the purpose of which is to retain key
employees by providing retirement benefits in excess of benefits available under
tax-qualified retirement plans. While the exercise price of the NQSOs is less
than the market value of the company's common shares on the date of grant,
benefits under the SERP will not reach their actuarially assumed values if the
company's common shares do not appreciate at a predetermined assumed rate. No
future adjustments to or grants of NQSOs will be made to match actual values of
the NQSOs with the assumed value of such NQSOs at the date of grant.
At the 1992 annual meeting, the stockholders of the company approved the
company's nonqualified stock option plan (the "nonqualified plan"). The purpose
of the nonqualified plan is to use grants of NQSOs to fund benefits earned under
the SERP. At the conclusion of the 1997 fiscal year, the committee made grants
of NQSOs to certain executive officers in amounts determined to be necessary to
fund benefits accrued under the SERP during the 1997 fiscal year, given the
years of service and current compensation of each participant. It is anticipated
that the committee will make additional grants of NQSOs annually to meet the
funding requirements of the SERP.
9
<PAGE> 12
OTHER COMPENSATION
Each of the executive officers participates in the Bob Evans Farms, Inc. and
affiliates 401(k) retirement plan (the "401(k) plan"). Following the conclusion
of calendar 1996, the board of directors voted to contribute $2,340,746 to the
401(k) plan. Each participant in the 401(k) plan received a pro rata share of
this contribution and a pro rata share of forfeitures reallocated to
participants (such pro rata share, in each case, based upon such participant's
eligible compensation). In addition, each executive officer had the option of
contributing up to 7% of his or her compensation (up to a maximum contribution
of $9,500) to the 401(k) plan. In cases where participants made voluntary
contributions to the 401(k) plan, the company contributed $0.25 for each $1.00
of voluntary contributions (subject to a limitation of 6% of total compensation
of each participant making voluntary contributions).
SUBMITTED BY:
COMPENSATION/STOCK OPTION COMMITTEE MEMBERS
G. Robert Lucas II, Chairman
Daniel A. Fronk
Cheryl L. Krueger
10
<PAGE> 13
COMPENSATION/STOCK OPTION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION
G. Robert Lucas II, who, until April 30, 1997, was a partner in the law firm of
Vorys, Sater, Seymour and Pease, which rendered legal services to the company
during the company's 1997 fiscal year and continues to do so, serves as a member
of the compensation/stock option committee of the company's board of directors.
Daniel A. Fronk, who is senior executive vice president and a board member of
The Ohio Company, which has rendered various investment banking and brokerage
services to the company and is expected to continue to do so, also serves as a
member of the compensation/stock option committee.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table summarizes, for the fiscal years ended April 25, 1997, April
26, 1996, and April 28, 1995, cash compensation paid by the company to, as well
as certain other compensation paid or earned for those years by, the company's
chief executive officer and the four other most highly compensated executive
officers of the company in all capacities in which they served.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------- ------------
SECURITIES
NAME AND UNDERLYING ALL OTHER
PRINCIPAL FISCAL SALARY BONUS OPTIONS/ COMPENSATION
POSITION YEAR ($)(1) ($) SARS (#) ($)(2)
- ------------------------- ------ -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Daniel E. Evans: 1997 $341,319 $245,952 0 $2,250
Chairman of the 1996 $331,727 $298,000 4,770 $2,250
Board, Chief Executive 1995 $319,030 $375,000 12,221 $2,284
Officer and Secretary
Stewart K. Owens: 1997 $223,706 $151,158 0 $2,250
President and Chief 1996 $213,742 $173,000 2,330 $2,250
Operating Officer 1995 $194,974 $210,000 2,323 $2,284
Larry C. Corbin: 1997 $187,384 $132,370 0 $2,250
Executive Vice President 1996 $180,963 $149,500 1,948 $2,250
Restaurant Division 1995 $170,637 $180,000 4,436 $2,284
Roger D. Williams: 1997 $175,384 $121,268 0 $2,250
Executive Vice President 1996 $168,963 $150,000 2,041 $2,250
Food Products Division 1995 $159,037 $185,000 1,702 $2,284
Donald J. Radkoski: 1997 $144,200 $117,852 0 $2,250
Group Vice 1996 $140,000 $136,500 2,824 $2,250
President - Finance 1995 $103,022 $180,000 2,516 $2,284
Group,Treasurer and
Chief Financial Officer
</TABLE>
- ---------------
11
<PAGE> 14
(1) "Salary" includes directors' fees received by each of Messrs. Evans, Owens
and Corbin during the 1997, 1996 and 1995 fiscal years in the amounts of
$12,000, $12,000 and $11,600, respectively.
(2) Includes company contributions to the 401(k) plan during the 1997, 1996 and
1995 fiscal years.
GRANTS OF OPTIONS
There were no options granted during the 1997 fiscal year to any of the
executive officers of the company.
OPTION EXERCISES AND HOLDINGS
The following table sets forth certain information with respect to options
exercised during the 1997 fiscal year by each of the named executive officers
and unexercised options held as of the end of the 1997 fiscal year by such
executive officers.
<TABLE>
<CAPTION>
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
SECURITIES UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
UNDERLYING FISCAL YEAR-END (#) FISCAL YEAR-END ($)(1)(2)
OPTIONS VALUE --------------------------- --------------------------
NAME EXERCISED(#) REALIZED($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------ ------------ -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Daniel E. Evans -- -- 126,920 4,000 $330,548 --
Stewart K. Owens -- -- 12,000 14,133 -- $16,809
Larry C. Corbin -- -- 7,040 26,197 -- $70,806
Roger D. Williams -- -- 7,040 15,681 -- $36,088
Donald J. Radkoski -- -- 7,040 8,260 -- $8,435
</TABLE>
- -------------
(1) All values are shown pre-tax and are rounded to the nearest whole dollar.
(2) Based on the 1997 fiscal year-end closing price of $13.125 per common share.
COMPENSATION OF DIRECTORS
Each director who is not a salaried officer of the company receives a monthly
fee of $2,200 (and an additional $500 for each committee meeting attended), and
each director who is a salaried officer of the company receives a monthly fee of
$1,000. In addition, the chairmen of the audit committee and compensation/stock
option committee receive $200 extra per meeting. If a director does not attend a
scheduled meeting of the board of directors, he or she will have $500 deducted
from the amount of the monthly fee he or she would have received for the month
of such meeting. Each director is reimbursed for out-of-pocket expenses incurred
in attending meetings. The company maintains a life insurance policy with a
death benefit of $50,000 on behalf of each director of the company. Group
hospitalization is available to nonemployee directors.
12
<PAGE> 15
Directors of the company who are not employees of the company or of any of its
subsidiaries (the "nonemployee directors") also receive grants of NQSOs under
the Bob Evans Farms, Inc. 1989 stock option plan for nonemployee directors (the
"nonemployee directors plan"). The nonemployee directors plan provides that the
aggregate number of common shares for which options may be granted is 73,333.
The nonemployee directors plan provides for the automatic grants of NQSOs for
3,080 common shares effective June 16, 1989, NQSOs for 5,133 common shares
effective May 1, 1991, and NQSOs for 5,133 common shares effective on May 1,
1996, to each person who was a nonemployee director on the applicable date. Each
person who was not a member of the board on May 1, 1996, who is subsequently
elected to the board prior to May 1, 2001, and who is a nonemployee director
will automatically receive NQSOs to purchase 5,133 common shares effective on
the date of the first meeting of the board after his or her election. The
exercise price per share of each NQSO will be equal to the fair market value of
a common share on the date of grant and will automatically be adjusted to
reflect stock dividends and stock splits. NQSOs become exercisable over a period
of time and have terms of five years.
SEVERANCE ARRANGEMENTS
From February 1989 through September 1990, the company entered into agreements
with the five executive officers named in the summary compensation table. These
agreements, which are substantially identical, have one-year terms, which are
automatically extended for one-year periods unless either party gives notice not
to renew, and provide that in the event of the executive officer's termination
of employment under certain circumstances during the 36-month period following a
"change of control" of the company (the "effective period"), the executive
officer will be entitled to certain severance benefits. Prior to such change of
control, the executive officer will remain an employee at the will of the
company.
Each agreement will terminate automatically on the death or retirement of the
executive officer to whom it relates, and may be terminated at the option of the
company upon disability of the executive officer or for "cause" (as that term is
defined in the agreement) or, at the option of the executive officer, for other
than "good reason," in all of which cases no additional severance payments,
other than accrued compensation and benefits customarily paid to employees in
such circumstances, will be due the executive officer.
13
<PAGE> 16
If the executive officer terminates the agreement during the effective period
for "good reason," or, if the company terminates the agreement during such
period for any reason other than for "cause" (as that latter term is defined in
the agreement) or as a result of the executive officer's death, retirement or
disability, the company will be obligated to pay the executive officer his base
salary and prorated bonus through the date of the termination and (A) to make a
lump-sum payment to the executive officer equal to 2.99 times the average annual
compensation (including salary and bonus) which was payable to the executive
officer for the five taxable years ending prior to the date on which the change
of control occurred; (B) to continue health and life insurance and other
employee welfare benefit plans for the executive officer and his family for a
period of 36 months following the date of termination; (C) to allow the
executive officer to exercise in full any stock options held by the executive
officer which were not fully exercisable on the termination date; and (D) to pay
to the executive officer in one lump sum in cash, at the executive officer's
normal retirement age, an amount equal to the actuarial equivalent of the
retirement pension to which the executive officer would have been entitled under
such retirement plan had he accumulated 36 additional months of continuous
service after the termination date. As of April 25, 1997, the amount of the
lump-sum payment to Messrs. Evans, Owens, Corbin, Williams and Radkoski would
have been approximately $1,889,000; $1,054,000; $949,000; $930,000; and
$618,000, respectively.
If any portion of the payments and benefits provided for in an agreement would
be considered "parachute payments" within the meaning of Section 280G(b)(2) of
the Internal Revenue Code, so as to be nondeductible by the company, then the
aggregate present value of all of the amounts and benefits payable to the
executive officer to whom such agreement relates will be reduced at the election
of the executive officer to the maximum amount which would cause all of the
payments and benefits to be deductible by the company.
For purposes of each agreement, the executive officer to whom it relates may
terminate his employment for "good reason" during the effective period if his
title, duties, responsibilities, compensation or benefits are reduced, if he is
required to relocate or if the agreement is breached by the company. A "change
of control" is defined to include, among other events, the acquisition by any
individual, entity or group of stock entitling such individual, entity or group
to exercise 20% or more of the voting power of the company or a change in a
majority of the current directors of the company, unless the election or
nomination for election of the successor directors was approved by a vote of at
least three-quarters of the incumbent directors.
14
<PAGE> 17
PERFORMANCE GRAPH
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
The following line graph compares the yearly percentage change in the company's
cumulative total stockholder return (as measured by dividing (i) the sum of (A)
the cumulative amount of dividends for the measurement period, assuming dividend
reinvestment, and (B) the difference between the price of the company's common
shares at the end and the beginning of the measurement period; by (ii) the price
of the common shares at the beginning of the measurement period) against the
cumulative total return of the Standard & Poor's 500 Stock Index ("S&P 500") and
the weighted average of the NASDAQ Restaurants and Food Manufacturers Indices
(Restaurants are weighted 70% and Food Manufacturers 30% to reflect the
company's business mix) ("NASDAQ Restaurant/Food Mfg. Index") for the five-year
period ended April 25, 1997. Stock prices and dividends of the company have been
adjusted for stock splits and stock dividends.
COMPARISON OF FIVE-YEAR TOTAL RETURN
AMONG BOB EVANS FARMS, INC., S&P 500 AND
NASDAQ RESTAURANT/FOOD MFG. INDEX
<TABLE>
<CAPTION>
NASDAQ
S&P 500 RESTAURANT/FOOD
BOB EVANS MARKET INDEX MFG. PEER INDEX*
- -------------------------------------------------------------
<S> <C> <C> <C>
4/24/92 $100.00 $100.00 $100.00
4/30/93 $97.80 $109.20 $120.34
4/29/94 $118.70 $114.80 $120.35
4/28/95 $116.10 $135.00 $113.25
4/26/96 $90.80 $176.10 $137.22
4/25/97 $78.10 $220.70 $120.68
</TABLE>
*70% Restaurants & 30% Food Manufacturers
15
<PAGE> 18
PROXY STATEMENT PROPOSALS
Each year the board of directors submits its nominations for election as
directors at the annual meeting of stockholders. Other proposals may be
submitted by the board of directors or stockholders for inclusion in the proxy
statement for action at each year's annual meeting. Any proposal submitted by a
stockholder for inclusion in the proxy statement for the 1998 annual meeting,
presently scheduled for Sept. 14, 1998, must be received by the company on or
before April 3, 1998.
INFORMATION CONCERNING INDEPENDENT AUDITORS
Ernst & Young L.L.P., which has served as independent auditors for the company
since 1980, has been selected by management to serve in that capacity for the
1998 fiscal year. Representatives of Ernst & Young L.L.P. are expected to be
present at the annual meeting, will be given the opportunity to make a statement
if they desire to do so and will be available to respond to appropriate
questions.
REPORTS TO BE PRESENTED AT THE ANNUAL MEETING
There will be presented at the annual meeting the company's annual report for
the fiscal year ended April 25, 1997, containing financial statements for such
fiscal year and the signed report of Ernst & Young L.L.P., independent auditors,
with respect to such financial statements. The annual report is not to be
regarded as proxy soliciting material, and management of the company does not
intend to ask, suggest or solicit any action from the stockholders with respect
to such report.
OTHER MATTERS
As of the date of this proxy statement, the only business which management
intends to present at the annual meeting consists of the matters set forth in
this proxy statement. Management knows of no other matters to be brought before
the annual meeting by any other person or group. If any other matters should
properly come before the annual meeting, or any adjournment(s) thereof, the
proxy holders will vote thereon in their discretion, in accordance with their
best judgment in light of the conditions then prevailing. All proxies received
duly executed and not properly revoked will be voted.
You are requested to sign and date the enclosed proxy and mail it promptly in
the enclosed envelope. If you later desire to vote in person, you may revoke
your proxy, either by written notice delivered to the company before the proxy
is voted or in person at the annual meeting before the proxy is voted (without
affecting any vote previously taken).
By Order of the Board of Directors,
/s/ Daniel E. Evans
Daniel E. Evans
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
16
<PAGE> 19
BOB EVANS
FARMS(R)
Annual Meeting of Stockholders
To be held Sept. 8, 1997
Aug. 1, 1997
Dear Stockholders:
The 1997 Bob Evans Farms, Inc. ANNUAL MEETING OF STOCKHOLDERS will be held
MONDAY, SEPT. 8, 1997, AT THE BOB EVANS FARM IN RIO GRANDE, OHIO. I look forward
to sharing with you some of the strategies that we have put in place which have
resulted in positive trends during the second half of fiscal 1997 and thus far
during fiscal 1998.
The meeting begins at 4 P.M. You are also invited to a social hour,
beginning at 3 p.m., to enjoy some delicious Bob Evans products.
In addition, you may want to mark your calendars for Aug. 19, 1997, at
which time we plan to announce our first quarter results.
We hope to see many of you in person at the annual meeting, where you will
have the opportunity to become better acquainted with the officers and directors
of your company. Prior to the meeting, please complete, sign and return your
proxy in the enclosed postage-paid envelope. Your vote is important to us.
Sincerely,
[MAP] /s/ Daniel E. Evans
Daniel E. Evans
Chairman of the Board
Chief Executive Officer
FOLD AND DETACH HERE
- -------------------------------------------------------------------------------
Where a choice is indicated, the shares represented by this proxy, when
properly executed, will be voted or not voted as specified. IF NO CHOICE IS
INDICATED ON THE REVERSE SIDE, THE SHARES REPRESENTED BY THIS PROXY WILL BE
VOTED "FOR" THE ELECTION OF THE NOMINEES LISTED IN ITEM NO. 1 AS DIRECTORS OF
THE COMPANY. If any other matters are properly brought before the annual
meeting or any adjournment(s) thereof or if a nominee for election as a
director named in the proxy statement is unable to serve or for good cause will
not serve, the shares represented by this proxy will be voted in the discretion
of the proxies on such matters or for such substitute nominee(s) as the
directors may recommend.
The undersigned hereby acknowledges receipt of the notice of
the annual meeting of stockholders, dated Aug. 1, 1997, the
proxy statement furnished therewith, and the annual report
of the company for the fiscal year ended April 25, 1997. Any
proxy heretofore given to vote the shares of common stock
which the undersigned is entitled to vote at the annual
meeting of stockholders is hereby revoked.
DATE
----------------------------------------------------
--------------------------------------------------------
--------------------------------------------------------
STOCKHOLDER SIGN NAME EXACTLY AS IT IS STENCILED HEREON.
NOTE: Please fill in, sign and return this proxy in the enclosed envelope. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such. If signer is a corporation, please sign the full corporate
name by authorized officer. Joint owners should both sign. (Please note any
change of address on this proxy.)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
BOB EVANS FARMS, INC.
(PLEASE INDICATE YOUR VOTE ON THE REVERSE SIDE)
<PAGE> 20
BELOW IS YOUR PROXY CARD. PLEASE READ BOTH SIDES, VOTE, SIGN AND RETURN IT IN
THE ENCLOSED POSTAGE-PAID ENVELOPE
- -------------------------------------------------------------------------------
BOB EVANS FARMS, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON SEPT. 8, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The holder(s) of shares of common stock of Bob Evans Farms, Inc. (the
"company") identified on this card hereby appoints Daniel E. Evans and Donald
J. Radkoski, and each of them, the proxies of the such stockholders, with full
power of substitution, to attend the annual meeting of stockholders of the
company to be held at The Shelter House, Bob Evans Farm, at Rio Grande, Ohio,
on Monday, Sept. 8, 1997, at 4:00 p.m., Eastern Daylight Time, and any
adjournment(s) thereof, and to vote all of the shares of common stock which the
such stockholder(s), is entitled to vote at such annual meeting or at any
adjournment(s) thereof:
1. TO ELECT THREE CLASS II DIRECTORS TO SERVE FOR TERMS OF THREE YEARS EACH:
Larry C. Corbin, Stewart K. Owens, Robert E.H.Rabold
[ ] Vote for all [ ] Vote withheld for [ ] Vote for all
nominees all nominees nominees except
---------------------
2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
MATTERS (NONE KNOWN AT THE TIME OF SOLICITATION OF THIS PROXY) AS MAY PROPERLY
COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT(S) THEREOF.
(THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE)
