<PAGE> 1
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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<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 Rule 14a-11(c) or Rule 14a-12.
</TABLE>
BOB EVANS FARMS, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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(R)
3776 S. HIGH ST.
P.O. BOX 07863
COLUMBUS, OHIO 43207-0863
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Monday, Sept. 13, 1999
1:00 p.m.
Shelter House, Bob Evans Farm
Rio Grande, Ohio
Aug. 9, 1999
To our stockholders:
We are pleased to invite you to the annual meeting of stockholders of Bob Evans
Farms, Inc., on Monday, Sept. 13, 1999, at 1 p.m. at the Shelter House on the
Bob Evans Farm in Rio Grande, Ohio (approximately 12 miles north of Gallipolis,
Ohio, on State Route 588). Please note the time change from previous years -
this change was made to better accommodate stockholders who travel a long
distance to attend. Business for the meeting includes:
(1) To elect three directors to serve for terms of three years each.
(2) To consider and vote upon a stockholder proposal to declassify the company's
board of directors.
(3) To transact other business that may properly come before the meeting.
Lunch, featuring Bob Evans Sausage, will be available between 11 a.m. and 1 p.m.
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 16, 1999, will be
entitled to vote by proxy or in person at the annual meeting. I look forward to
seeing you at the meeting.
Sincerely,
/s/ Daniel E. Evans
----------------------------
Daniel E. Evans
Chairman of the Board and
Chief Executive Officer
<PAGE> 3
BOB EVANS FARMS, INC.
3776 S. HIGH ST.
P.O. BOX 07863
COLUMBUS, OHIO 43207-0863
INFORMATION ABOUT THE PROXY STATEMENT AND VOTING
The board of directors of Bob Evans Farms, Inc., is soliciting your proxy in
connection with our 1999 annual meeting of stockholders (or any adjournment(s)
of the meeting). This proxy statement summarizes information that you will need
in order to vote.
We began mailing this proxy statement and the enclosed proxy card on or about
Aug. 9, 1999, to the 43,750 Bob Evans stockholders of record at the close of
business on July 16, 1999. We are also sending the Bob Evans Farms, Inc., 1999
annual report, which includes financial statements for the year ended April 30,
1999.
Whether or not you plan to attend the annual meeting, we urge you to complete,
sign and date the enclosed proxy card and return it promptly in the envelope
provided. You should use your proxy if you are unable to attend the annual
meeting in person or wish to have your shares of common stock, par value $.01
per share, voted by proxy even if you attend the annual meeting.
You may revoke a proxy at any time before it is voted, by any of the following
ways:
- notifying in writing the secretary of the company at the
address on the cover page of this proxy statement;
- executing a later-dated proxy which is received by the company
prior to the annual meeting; or
- attending the annual meeting and giving notice of such
revocation in person. Simply attending the annual meeting will
not constitute revocation of a proxy.
PROXY SOLICITATION
The company will bear the solicitation costs. Officers and employees of the
company may solicit proxies by further mailings, by telephone or by personal
contact without receiving any additional compensation for such solicitations.
Also, Morrow & Co., Inc., an independent solicitation firm, may, if directed to
do so by the company, solicit proxies and will be compensated $7,500 for this
service. 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 proxy materials to the beneficial
owners of such common shares and collecting their proxies.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Only stockholders of record at the close of business on July 16, 1999, are
entitled to receive notice of, and to vote at, the annual meeting (or at any
adjournment(s) of the 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 to one vote per
each item to be voted upon by stockholders at the annual meeting.
Under the rules of the Securities and Exchange Commission (the SEC), boxes and a
designated blank space are provided on the form of proxy for stockholders to
mark if they wish either to abstain on a proposal presented for stockholder
approval or to withhold authority to vote for one or more nominees for election
as a director of the company. In accordance with Delaware law and the company's
bylaws, Bob Evans Farms, Inc., common shares as to which the authority to vote
is withheld will be counted for quorum purposes but will not be counted toward
the election of directors or toward the election of the individual nominees
specified on the form of proxy. Abstentions are counted as present for quorum
purposes; however, the effect of an abstention on any matter to be voted upon by
the stockholders of the company at the annual meeting will be the same as a "no"
vote.
The election of directors is considered a "discretionary" item upon which
brokerage firms may vote in their discretion on behalf of their clients if such
clients have not furnished voting instructions by the 10th day before the annual
meeting. However, the proposal to declassify the company's board of directors is
"non-discretionary," and brokers who have received no instructions from their
clients do not have discretion to vote on this item. Such "broker non-votes"
will not be considered as votes entitled to be cast in determining the outcome
of such proposals.
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<PAGE> 4
The following table shows the only holder known to the company to be the
beneficial owner of more than five percent (5%) of the outstanding common shares
of Bob Evans Farms, Inc.
<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. 4,350,620(2) 11%
307 N. Michigan Ave.
Chicago, Ill. 60601
</TABLE>
- ---------------------------------------
(1) The percent of class is based upon 39,644,627 common shares outstanding on
July 16, 1999.
(2) This number is based on information contained in a schedule 13G filing with
the SEC, dated March 31, 1999. Ariel Capital Management, Inc., is a registered
investment adviser and all of these shares are owned by its investment advisory
clients. John W. Rogers Jr., president and principal shareholder of Ariel, has
disclaimed beneficial ownership of the common shares held by Ariel.
The following table summarizes the company's common shares beneficially owned by
each director and each executive officer named in the summary compensation table
(page 10) and by all directors and executive officers of the company as a group,
as of July 16, 1999:
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP (1)
<TABLE>
<CAPTION>
COMMON SHARES
WHICH CAN BE ACQUIRED
UPON EXERCISE OF
NAME OF BENEFICIAL OWNER OR COMMON SHARES OPTIONS EXERCISABLE PERCENT OF
GROUP PRESENTLY HELD WITHIN 60 DAYS TOTAL TOTAL CLASS (2)
- ----------------------------- -------------------- --------------------------- ------------------ -------------------
<S> <C> <C> <C> <C>
Larry C. Corbin (3) 33,848 37,877 71,725 (4)
Daniel E. Evans (3) 428,670 (5) 132,920 561,590 1.4%
Daniel A. Fronk 23,381 (6) 4,107 27,488 (4)
Michael J. Gasser 2,172 3,081 5,253 (4)
E. W. (Bill) Ingram III 1,672 2,054 3,726 (4)
Cheryl L. Krueger-Horn 1,989 4,107 6,096 (4)
G. Robert Lucas 5,961 (7) 4,107 10,068 (4)
Stewart K. Owens (3) 212,124 14,151 226,275 (4)
Robert E.H. Rabold 2,685 4,107 6,792 (4)
Roger D. Williams (3) 30,470 11,051 41,521 (4)
Donald J. Radkoski (3) 9,283 (8) 9,150 18,433 (4)
All directors and executive
officers as a group
(13 persons) 790,149 (9) 244,509 1,034,658 2.6%
- ----------------------------- -------------------- --------------------------- ------------------ -------------------
</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 on the 39,644,627 common shares outstanding on
July 16, 1999, and includes the number of common shares that the named person
has the right to acquire beneficial ownership upon the exercise of stock options
exercisable within 60 days of July 16, 1999.
(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.
2
<PAGE> 5
(5) Includes 63,969 common shares held by the wife of Mr. Evans 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 for which
Mr. Fronk serves as trustee and exercises sole voting and investment power.
(7) Includes 3,456 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
for which Mr. Lucas serves as trustee and exercises sole voting and investment
power.
(8) 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.
(9) 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 (8).
ELECTION OF DIRECTORS
Directors of the company are elected at the annual meeting. There are currently
nine members of the board of directors. Based on the bylaws 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 2000, and class III directors
currently serve until the annual meeting in 2001. At the annual meeting, three
class I directors will be elected for three-year terms.
Based on the recommendation of the nominating committee, the board of directors
has designated the three nominees listed below for election as class I directors
of the company for terms expiring in 2002. The common shares represented by the
enclosed proxy will be voted as specified, or if no instructions are given, for
the board's nominees. If a nominee is unavailable for election, the persons
designated as management proxies will have complete discretion to vote for the
remaining nominees, as well as any substitute nominee(s) proposed by the board
of directors. However, 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 bylaws, the three nominees for election as
class I directors receiving the greatest number of votes will be elected as
class I directors.
The following table shows 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 information about each nominee and each director. Unless
otherwise indicated, each person has held his or her principal occupation for
more than five years. THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY
RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE ELECTION OF ALL NOMINEES LISTED
BELOW.
<TABLE>
<CAPTION>
NAME, AGE AND YEAR BECAME DIRECTOR; PRINCIPAL OCCUPATION FOR PAST
POSITION(S) WITH THE COMPANY FIVE YEARS AND OTHER INFORMATION
NOMINEES - TERMS TO EXPIRE IN 2002 (CLASS I)
<S> <C>
Daniel A. Fronk, age 63; Retired businessman since January 1998; Senior Executive
Director since 1981. Vice President and Board Member of The Ohio Company, an
investment banking firm, Columbus, Ohio, from 1988 to
December 1997.
</TABLE>
3
<PAGE> 6
<TABLE>
<S> <C>
Cheryl L. Krueger-Horn, age 47; President and Chief Executive Officer of Cheryl & Co., a
Director since 1993. manufacturer and retailer of gourmet foods and gifts,
Columbus, Ohio. (1)
G. Robert Lucas, age 55; Senior Vice President, General Counsel and Secretary, The
Director since 1986. Scotts Company, a manufacturer of lawn and garden
products, since May 1997; Partner in Vorys, Sater, Seymour
and Pease LLP, Attorneys at Law, Columbus, Ohio, from 1990
to April 1997.
</TABLE>
CONTINUING DIRECTORS - TERMS TO EXPIRE IN 2000 (CLASS II)
<TABLE>
<S> <C>
Larry C. Corbin, age 57; Executive Vice President of Restaurant Division since
Executive Vice President of Restaurant Division; 1995; Senior Group Vice President of Restaurant Operations
Director since 1981. from 1994 to 1995; in each case of the company.
Stewart K. Owens, age 44; President and Chief Operating Officer since 1995.
President and Chief Operating Officer Executive Vice President and Chief Operating Officer from
Director since 1987. 1994 to 1995; 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 60; Chairman, President and Chief Executive Officer of
Director since 1994. Motorists Mutual-American Hardware Insurance Group,
Columbus, Ohio, since 1993.
</TABLE>
CONTINUING DIRECTORS - TERMS TO EXPIRE IN 2001 (CLASS III)
<TABLE>
<S> <C>
Daniel E. Evans, age 62 Chairman of the Board, Chief Executive Officer and
Chairman of the Board, Secretary of the company since 1971.
Chief Executive Officer and Secretary;
Director since 1957.
Michael J. Gasser, age 48; Chairman of the Board and Chief Executive Officer of Greif
Director since 1997. Bros. Corporation, a manufacturer of shipping containers
and containerboard, Delaware, Ohio, since 1994; Vice
Chairman and Chief Operating Officer of Greif Bros.
Corporation in 1994. (2)
E. W. (Bill) Ingram III, age 48; President and Chief Executive Officer of White Castle
Director since 1998. System, Inc., a quick-service hamburger chain, Columbus,
Ohio, since 1979. (3)
</TABLE>
(1) Cheryl & Co. sold various food products to the company and is expected to
continue to do so.
(2) Greif Bros. Corporation manufactures containerboard and related products
purchased by the company and is expected to continue to do so.
(3) Mr. Ingram was appointed by the board of directors of the company on May 15,
1998, to fill the vacancy created by the retirement of Robert S. Wood.
4
<PAGE> 7
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.
COMMITTEES OF THE BOARD
The company's board of directors has standing audit, compensation and nominating
committees.
The audit committee consists of Daniel A. Fronk, Michael J. Gasser, E.W. (Bill)
Ingram III, G. Robert Lucas and Robert E.H. Rabold. 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 fiscal 1999.
The compensation committee, consisting of Daniel A. Fronk, Cheryl L.
Krueger-Horn, G. Robert Lucas and Robert E.H. Rabold, reviews and recommends to
the board of directors of the company the salaries, bonuses and other
compensation to be paid to executive officers of the company. This 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 compensation committee met two times during fiscal 1999.
The nominating committee, consisting of Daniel A. Fronk, Michael J. Gasser,
Cheryl L. Krueger-Horn and Stewart K. Owens, identifies and recommends to the
board of directors nominees for election or re-election to the board of
directors of the company. The nominating committee met two times during fiscal
1999.
The bylaws of the company set forth a procedure for the nomination of directors
by the stockholders of the company. Section 4 of article III of the bylaws of
the company provides that nominations of persons for election to the board of
directors may be made at a meeting of stockholders (a) by or at the direction of
the board of directors of the company or (b) by any stockholder of the company
who (i) is a stockholder of record as of the record date for the meeting of
stockholders, (ii) is entitled to vote for the election of directors at such
meeting and (iii) complies with the notice procedures set forth below.
Stockholder nominations must be made pursuant to timely notice in writing to the
secretary of the company. To be timely, a stockholder's notice must be delivered
to or mailed and received at the Bob Evans Farms, Inc., corporate office not
less than 60 nor more than 90 days prior to the applicable stockholders'
meeting; however, if less than 70 days' notice or prior public disclosure of the
date of the stockholders' meeting is given or made to stockholders, notice by
the stockholder must be received by the company not later than the close of
business on the 10th day following the day on which such notice of the date of
the stockholders' meeting or such public disclosure was made. A stockholder's
notice must set forth (a) as to each person whom the stockholder proposes to
nominate for election or re-election as a director all information relating to
such person that is required to be disclosed in solicitations of proxies for
election of directors, or is otherwise required, in each case pursuant to
Regulation 14A under the Exchange Act (including such person's written consent
to being named in the proxy statement as a nominee and to serving as a director
if elected); (b) the name and address, as they appear on the company's books, of
the stockholder giving the notice; and (c) the class and number of common shares
of the company which are beneficially owned by such stockholder. Any director
nomination by a stockholder of the company which does not meet the requirements
of section 4 of article III of the bylaws of the company will be invalid.
The board of directors of the company held a total of six meetings during the
1999 fiscal year. During this time, 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.
5
<PAGE> 8
REPORT OF THE COMPENSATION 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 14 shall not be
incorporated by reference into any such filings.
ADMINISTRATION
The compensation committee of the board of directors prepared this report on
compensation paid to executive officers in fiscal 1999. The compensation
committee is comprised entirely of outside directors. The compensation
committee's duties include recommending to the board of directors the salary and
bonuses of executive officers as well as administering the plans from which
longer term incentives such as stock options are granted to executive officers.
OVERALL PHILOSOPHY
The compensation policies administered by the compensation 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. In addition, the compensation committee believes that its policies
must bolster the company's ability to attract and retain outstanding executives
to lead the company in the competitive environment in which it operates. In
furtherance of these key objectives, 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 a performance-based bonus
and long-term incentive component of total compensation.
Consistent with the company's overall philosophy regarding executive
compensation, each year all management employees of the company (including the
five executive officers named in the summary compensation table) are placed in
one of 18 pay grades, each pay grade being commensurate with the duties
undertaken by each 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. 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.
BASE SALARY
In May 1998, the compensation committee met to review the base salaries of the
company's executive officers. As a result of this meeting, the compensation
committee recommended to the board of directors that the base salaries of the
five executive officers named in the summary compensation table, including
Daniel E. Evans, chairman of the board and chief executive officer of the
company, be increased. These recommendations were based upon the committee's
assessment of the individual performance of the respective executive officer,
the performance of the company and comparative data of peer companies relating
to executive compensation. During May of 1998, the recommendations of the
compensation committee to increase the base salaries of the company's executive
officers were adopted by the board of directors. The increases in the base
salaries of the five executive officers listed in the summary compensation table
included in this proxy statement are reflected in the summary compensation
table.
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<PAGE> 9
BONUSES
The company's overall philosophy with respect to the granting of bonus awards to
executive officers is that a significant portion of each executive officer's
total compensation should be based on (1) individual performance and (2) the
company's overall performance. In furtherance of this philosophy, at the
beginning of the 1999 fiscal year, individual performance goals were established
for each executive officer, including in some cases, but not limited to,
department budget goals, special project goals and personnel management goals.
In addition, goals relating to overall company performance, including sales, net
income, earnings per share and stock performance goals were also established. At
the end of the 1999 fiscal year, each executive officer was evaluated based upon
his or her individual performance goals for the year as well as the goals
relating to overall company performance. Based on these evaluations, initial
bonus levels were established for each executive officer and reviewed by the
chairman of the board and chief executive officer who has discretion to make
changes to the bonus levels. The chairman's recommendations were then reviewed
by the compensation committee, which made recommendations to the board of
directors.
The performance of Daniel E. Evans, the chairman of the board and chief
executive officer of the company, was evaluated on the same basis as the
performance of the other executive officers of the company. Mr. Evans'
performance, with respect to each of his individual performance goals, was
reviewed by the compensation committee. Mr. Evans' bonus for fiscal 1999 was
targeted at 84.3% of his salary. As a result, if he attained 100% of his goals
and no other subjective factors were considered his bonus would be 84.3% of his
salary for fiscal 1999. His ability to earn more or less than his targeted bonus
was based on exceeding performance goals and subjective factors applied by the
compensation committee.
At a meeting on June 14, 1999, the compensation committee reviewed Mr. Evans'
performance goals and the company's performance. The committee applied a
mathematical formula to the objective goals and also evaluated his performance
against various subjective criteria to determine his performance bonus. This
amount was recommended by the compensation committee and approved by the board
of directors.
Each of the other four executive officers listed in the summary compensation
table of this proxy statement was reviewed on the same basis as Mr. Evans and
the amounts of the bonuses paid to these executive officers were recommended by
the compensation committee and approved by the board of directors and are
reflected in the summary compensation table of this proxy statement.
STOCK OPTION PLANS
The company has from time to time implemented various stock option plans for the
purpose of providing employees and directors long-term incentive based
compensation. On Sept. 14, 1998, the company's stockholders adopted and approved
the Bob Evans Farms, Inc., 1998 Stock Option and Incentive Plan (the 1998 Stock
Option Plan). Under the 1998 Stock Option Plan, the compensation committee may
grant incentive stock options to employees (ISOs) 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
ISOs are valueless. Also under the 1998 Stock Option Plan, the compensation
committee may grant nonqualified stock options (NQSOs) to employees and
directors and the exercise price of NQSOs may be less than the market value of
the company's common shares.
On May 26, 1998, the compensation committee approved the grant of ISOs to
certain key employees, including the five executive officers named in the
summary compensation table. During the 1999 fiscal year, the company also
granted NQSOs to directors and to the five executive officers named in the
summary compensation table. The option grant table included in this proxy
statement provides information with respect to the options granted to the five
executive officers named in the summary compensation table.
7
<PAGE> 10
BOB EVANS FARMS, INC. 1998 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
The Bob Evans Farms, Inc., 1998 Supplemental Executive Retirement Plan (the
SERP) is a "top hat" plan under Title I of the Employee Retirement Income
Security Act of 1974, as amended (ERISA), and is not intended to qualify under
section 401(a) of the Internal Revenue Code of 1986, as amended (the Code). The
SERP is a defined contribution plan designed to supplement, through annual
company contributions, the retirement benefits of its participants. Employees of
the company and its subsidiaries are eligible to participate in the SERP only to
the extent, and for the period, that they are members of a select group of
management or highly compensated employees, as this group is described under
sections 201(2), 301(a)(3) and 401(a)(1) of ERISA. Participation in the SERP is
at the discretion of the compensation committee.
Under the SERP, an annual company contribution is determined, based upon an
actuarially determined "target" benefit for each participant. Generally, this
target benefit is equal to (a) 55 percent of a participant's average
compensation over the five-consecutive-year period (in the last 10 years of
employment prior to age 62) during which such compensation is the highest, less
(b) the participant's benefit under the company's qualified retirement plan
derived from company contributions, less (c) 50 percent of the participant's
projected Social Security benefit. Each year, upon determination of the
company's contribution, a participant in the SERP may elect to either have the
amount of such contribution allocated to an account, in his or her name, under
the SERP or the participant may elect to receive NQSOs equal in value to the
amount of such contribution. If the participant elects to have such contribution
credited to an account under the SERP, such account will be credited with
mutual-fund based earnings, each year, until distribution. If the participant
elects to receive NQSOs in lieu of an allocation to his or her account under the
SERP, no portion of such contribution shall be credited to any account, on
behalf of such participant, under the SERP. Generally, a participant in the SERP
is entitled to receive a distribution of his or her account upon early
retirement (age 55 and 10 or more years of service), normal retirement (age 62),
or total and permanent disability (as determined by the company). In addition,
in the event of a participant's death while employed by the company, the
participant's beneficiary will be entitled to a distribution of such account.
Upon a change in control (as defined in the SERP) of the company, a
participant's account under the SERP will immediately become fully vested and
non-forfeitable.
BOB EVANS FARMS, INC. AND AFFILIATES 401(k) RETIREMENT PLAN
Each of the company's executive officers participates in the Bob Evans Farms,
Inc., and Affiliates 401(k) Retirement Plan (the 401(k) plan). Following the
conclusion of calendar 1998, the board of directors voted to contribute
$3,775,075 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 6% of his or her compensation (up to a maximum
contribution of $9,600) 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).
BOB EVANS FARMS, INC. NONQUALIFIED SALARY DEFERRAL PLAN
The Bob Evans Farms, Inc. Nonqualified Salary Deferral Plan (the Nonqualified
Salary Deferral Plan), like the SERP, is a "top hat" plan under Title I of ERISA
and is not intended to qualify under section 401(a) of the Code. The
Nonqualified Salary Deferral Plan is a defined contribution plan designed to
allow its participants to defer a portion of their current compensation in
excess of the maximum amount permitted under the applicable provisions of the
Code with respect to the company's qualified retirement plan. Employees of the
company and its subsidiaries are eligible to participate in the Nonqualified
Salary Deferral Plan only to the extent, and for the period, that they are
members of a select group of management or highly compensated employees, as this
group is described under Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.
Participation in the Nonqualified Salary Deferral Plan is at the discretion of
the compensation committee.
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<PAGE> 11
Under the terms of the Nonqualified Salary Deferral Plan, a participant may
elect to defer up to 25 percent of his or her current compensation otherwise
payable during the year by the company. To the extent that a participant elects
to make such a deferral, an amount will be credited to an account established on
the participant's behalf under the Nonqualified Salary Deferral Plan. Each year,
such account will be credited with an earnings component to be determined by the
compensation committee. Generally, a participant will be eligible to receive a
distribution of his or her account under the Nonqualified Salary Deferral Plan
at his or her retirement, total and permanent disability or other termination of
employment with the company and its subsidiaries. In addition, in the event of a
participant's death while employed by the company, the participant's beneficiary
will be entitled to a distribution of such account.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) of the Code places certain restrictions on the amount of
compensation in excess of $1,000,000 which may be deducted for each executive
officer of the company. It is the compensation committee's policy to continually
review its compensation plans and to take steps to ensure that compensation paid
to its executive officers is deductible by the company.
CONCLUSION
The compensation committee believes that the compensation program outlined in
this report and the compensation paid to the executive officers is consistent
with the goals and objectives of the company.
Submitted By: Compensation Committee Members
Robert E.H. Rabold, chairman, Daniel A. Fronk, Cheryl L. Krueger-Horn and G.
Robert Lucas
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Compensation committee member Cheryl L. Krueger-Horn is president and chief
executive officer of Cheryl & Co. which sold various food products to the
company during the 1999 fiscal year and continues to do so.
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<PAGE> 12
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table summarizes, for the fiscal years ended April 30, 1999; April
24, 1998; and April 25, 1997, cash compensation paid by the company to, as well
as certain other compensation paid or earned for those years by, the company's
chief executive officer and the four other most highly compensated executive
officers of the company in all capacities in which they served.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------- --------------------------------------
NAME AND SECURITIES ALL OTHER
PRINCIPAL FISCAL SALARY BONUS UNDERLYING COMPENSATION
POSITION YEAR ($)(1) ($) OPTIONS (#) ($)(3)
- ----------------------------- -------------- --------------- ----------------- ------------------ -------------------
<S> <C> <C> <C> <C> <C>
Daniel E. Evans: 1999 $402,000 $407,586 28,200 (2) $140,956
Chairman of the 1998 $392,800 $408,672 28,200 $2,400
Board, Chief Executive 1997 $341,319 $245,952 0 $2,250
Officer and Secretary
Stewart K. Owens: 1999 $284,400 $300,708 14,150 (2) $20,662
President and 1998 $262,451 $262,449 14,150 $2,400
Chief Operating 1997 $223,706 $151,158 0 $2,250
Officer
Larry C. Corbin: 1999 $212,000 $233,706 $13,439 (2) $2,400
Executive Vice 1998 $202,800 $213,618 11,050 $2,400
President of 1997 $187,384 $132,370 0 $2,250
Restaurant Division
Roger D. Williams: 1999 $197,600 $244,382 11,050 (2) $15,826
Executive Vice 1998 $190,000 $198,168 11,050 $2,400
President of Food 1997 $175,384 $121,268 0 $2,250
Products Division
Donald J. Radkoski: 1999 $182,000 $175,674 9,150 (2) $17,501
Group Vice President 1998 $175,000 $153,661 9,150 $2,400
President of Finance, 1997 $144,200 $117,852 0 $2,250
Treasurer and Chief
Financial Officer
</TABLE>
(1) "Salary" includes directors' fees received by each of Messrs. Evans, Owens
and Corbin during the 1999, 1998 and 1997 fiscal years in the amounts of
$14,400, $12,800 and $12,000, respectively.
(2) See the table under "Grants of Options."
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<PAGE> 13
(3) Includes company contributions to the 401(k) plan for each of the officers
listed during the 1999, 1998 and 1997 fiscal years in the amounts of $2,400;
$2,400; and $2,250, respectively. Also, includes amounts allocated to an account
under the SERP for Messrs. Evans, Owens, Williams and Radkoski during the 1999
fiscal year of $138,556; $18,262; $13,426; and $15,101, respectively.
GRANTS OF OPTIONS
The following table sets forth information concerning individual grants of ISOs
and NQSOs made during the 1999 fiscal year to each of the named executive
officers.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS POTENTIAL
---------------------------------------------------- REALIZABLE VALUE AT
NUMBER OF % OF TOTAL ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE MARKET FOR OPTION TERM (1)
OPTIONS EMPLOYEES IN PRICE PRICE EXPIRATION -------------------------------
NAME GRANTED (2) FISCAL YEAR ($/SH) ($/SH) DATE 0% 5% 10%
- --------------------- -------------- -------------- ---------- ----------- ------------- -------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Daniel E. Evans 28,200 6.8% 21.375 21.375 6/5/08 -- 379,081 960,668
Stewart K. Owens 14,150 3.4% 21.375 21.375 6/5/08 -- 190,213 482,037
Larry C. Corbin 11,050 3.3% 21.375 21.375 6/5/08 -- 148,540 376,432
2,389 (3) (3) 9.9375 19.875 (3) 23,740 70,294 156,663
Roger D. Williams 11,050 2.7% 21.375 21.375 6/5/08 -- 148,540 376,432
Donald J. Radkoski 9,150 2.2% 21.375 21.375 6/5/08 -- 123,000 311,706
</TABLE>
(1) The amounts reflected in this table represent certain assumed rates of
appreciation only. Actual realized values, if any, on option exercises will be
dependent on the actual appreciation in the price of the common shares of the
company over the term of the options. There can be no assurances that the
potential realizable values reflected in this table will be achieved.
(2) The options reflected in the table above consist of both ISOs and NQSOs;
were granted on June 5, 1998, (unless otherwise indicated); and become
exercisable in 33 1/3 percent increments beginning one year from the date of
grant. Upon a change in control of the company or the retirement of an executive
officer, these ISOs and NQSOs will become fully exercisable as of the date of
the change in control or retirement. The ISOs and NQSOs are exercisable for a
period of not more than 10 years after the date of grant. In the event of the
termination of an executive officer for any reason other than disability, death,
retirement or for cause, the right of the executive officer to exercise the ISO
or the NQSO terminates upon the earlier to occur of the end of the original term
of the ISO or NQSO or 90 days after the date of such termination of employment.
If an executive officer is terminated for cause, the right of the executive
officer to exercise the ISO or the NQSO terminates immediately upon the
termination of employment. If an executive officer's employment is terminated as
a result of disability, the right of the executive officer to exercise an ISO or
NQSO terminates upon the earlier to occur of (i) the end of the original term of
the ISO or NQSO or (ii) one year after the date of termination of employment. If
an executive officer should die while employed, the right of the executive
officer's successor in interest to exercise an ISO or NQSO shall terminate upon
the earlier to occur of (i) the end of the original term of the ISO or NQSO or
(ii) one year after the executive officer's last date of employment. Upon
retirement of an executive officer, the right of the executive officer to
exercise (i) a NQSO terminates upon the end of the original term of the NQSO and
(ii) an ISO terminates upon the earlier of (a) 90 days after the date of such
retirement or (b) the end of the original term of the ISO; provided, however,
that if the executive officer does not exercise the ISO within 90 days after the
date of such retirement, the ISO shall automatically convert into a NQSO upon
the end of such 90-day period and the executive officer's right to exercise such
converted NQSO shall terminate at the end of the original term of the option.
11
<PAGE> 14
(3) These options are NQSOs granted to fund and settle benefits earned by Mr.
Corbin under the SERP. These options are vested due to the fact that Mr. Corbin
has surpassed early retirement age. If Mr. Corbin's employment with the company
is terminated for cause, his NQSOs will be forfeited. The NQSOs expire on the
date which is five years after the earlier of the date that Mr. Corbin attains
age 65 or the date of his death. The potential realizable values of the NQSOs
assume an expiration date of five years after Mr. Corbin attains age 65.
OPTION EXERCISES AND HOLDINGS
The following table outlines options exercised during the 1999 fiscal year by
each of the named executive officers and unexercised options held as of the end
of the 1999 fiscal year by such executive officers.
AGGREGATE OPTION EXERCISES IN 1999 FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
NUMBER OF SECURITIES UNDERLYING IN-THE-MONEY
SECURITIES UNEXERCISED OPTIONS AT OPTIONS AT FISCAL
UNDERLYING FISCAL YEAR-END (#) YEAR-END ($)(1)(2)
OPTIONS VALUE ------------------------------- -------------------------------
NAME EXERCISED (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------- ---------------- -------------- ------------- ----------------- ------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Daniel E. Evans 26,200 $141,122 114,120 18,800 $968,543 $56,409
Stewart K. Owens 8,800 $15,400 4,717 20,566 $14,153 $121,967
Larry C. Corbin 8,800 $17,600 30,510 7,366 $238,989 $22,102
Roger G. Williams 8,800 $8,800 3,684 21,287 $11,053 $140,751
Donald J. Radkoski 8,800 $17,600 3,050 12,600 $9,151 $70,800
</TABLE>
(1) All values are shown pretax and are rounded down to the nearest whole
dollar.
(2) Based on the 1999 fiscal year-end closing price of $18.313 per
common share.
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.
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
12
<PAGE> 15
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 30, 1999, the amount of the
lump-sum payment referred to above in item A to Messrs. Evans, Owens, Corbin,
Williams and Radkoski would have been approximately $2,068,700; $1,323,800;
$1,076,500; $1,070,300; and $901,700, 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 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.
COMPENSATION OF DIRECTORS
Under the 1998 Directors Compensation Plan, all directors who are employees of
the company receive a monthly director fee of $1,200 in cash. All nonemployee
directors receive a monthly director fee of $1,250 in cash. In addition, each
nonemployee director receives a fee of $750 for each committee meeting attended,
unless the nonemployee director is the chairman of the committee, in which case
the director receives a fee of $1,000 for each committee meeting attended.
Annually, each nonemployee director receives common shares of the company with a
value equal to $17,000. The number of common shares issued to the nonemployee
directors each year is based on the price of the company's common shares on the
third business day following the release of fiscal year-end earnings.
Under the 1998 Directors Compensation Plan, nonemployee directors are granted
NQSOs annually on the third business day following the release of fiscal
year-end earnings. The number of NQSOs granted to each nonemployee director is
based upon the amount of the nonemployee director's annual retainer (excluding
any fees received for attending committee meetings) and the application of the
Black-Scholes option pricing model. The Black-Scholes option pricing model is a
mathematical formula designed to price options "fairly" based upon certain
variables including: (i) the price of the underlying shares, (ii) the exercise
price of the option, (iii) the current risk-free interest rate, (iv) the time to
expiration of the option and (v) the volatility of the underlying shares. The
first four variables are readily obtainable, with volatility being the only
variable that has to be estimated. The company will estimate the volatility of
the underlying shares based upon the historical volatility of the company's
common shares.
The compensation committee, with the approval of the board of directors of the
company, may amend the 1998 Directors Compensation Plan from time to time or
terminate the 1998 Directors Compensation Plan at any time without the approval
of the stockholders of the company.
Pursuant to the terms of the 1998 Directors Compensation Plan, the company will
continue to maintain a life insurance policy with a death benefit of $50,000 on
behalf of each director of the company. In addition, group health care is
available to nonemployee directors at no cost.
13
<PAGE> 16
As a result of his appointment to the board of directors of the company on May
15, 1998, E.W. (Bill) Ingram III was granted 5,133 NQSOs under the provisions of
the Bob Evans Farms, Inc., 1989 Stock Option Plan for Nonemployee Directors.
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 the
cumulative amount of dividends for the measurement period, assuming dividend
reinvestment, and 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 30, 1999.
TOTAL CUMULATIVE SHAREHOLDER RETURN FOR
FIVE-YEAR PERIOD ENDING APRIL 30, 1999
[GRAPH]
<TABLE>
<CAPTION>
CUMULATIVE VALUE OF $100 INVESTMENT
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
NASDAQ Restaurant/ $100.00 $ 86.60 $110.30 $ 78.40 $ 90.60 $ 75.30
Food Mfg. Peer Group
S&P 500 $100.00 $117.60 $153.50 $192.30 $270.80 $331.00
Bob Evans Farms, Inc. $100.00 $ 97.80 $ 76.50 $ 65.80 $102.50 $ 92.20
</TABLE>
14
<PAGE> 17
PROXY STATEMENT STOCKHOLDER PROPOSALS
Each year the board of directors submits its nominations for election of
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 fiscal 2000 annual
meeting, presently scheduled for Sept. 11, 2000, must be received by the company
on or before April 11, 2000. If a stockholder intends to present a proposal at
the 2000 annual meeting, but has not sought the inclusion of such proposal in
the company's proxy materials, such proposal must be received by the company
prior to June 27, 2000, or the company's management proxies for the 2000 annual
meeting will be entitled to use their discretionary voting authority should such
proposal then be raised, without any discussion of the matter in the company's
proxy materials.
The following stockholder proposal has been submitted for inclusion in the 1999
proxy statement. The board of directors of the company recommends that
stockholders vote "against" the following stockholder proposal.
STOCKHOLDER PROPOSAL REGARDING ELIMINATION OF
CLASSIFIED BOARD OF DIRECTORS
Lawrence A. Wolf, 227 Elm Avenue, Wyoming, Ohio 45215-4347, claiming ownership
for more than 1 year of common shares of the company with a market value in
excess of $1,000 and that he will continue to hold the same through the date of
the annual meeting, has submitted the following resolution and supporting
statement for inclusion in this proxy statement and stated his intention to
present same at the annual meeting.
ELIMINATE CLASSIFIED BOARD OF DIRECTORS
Resolved, that the stockholders of Bob Evans Farms, Inc. request the board of
directors take the necessary steps, in accordance with state law to declassify
the board of directors so that all directors are elected annually, such
declassification to be effected in a manner that does not affect the unexpired
terms of directors previously elected.
SUPPORTING STATEMENT
Last year the shareholder resolution to declassify the board of directors
actually had more "YES" votes than "no" votes. The vote was 14,180,388 votes for
declassification and 14,110,130 against declassification. The shareholder
resolution would have passed had the company not counted the 880,843 votes to
"abstain" as votes against shareholder resolution. It is rare shareholder
resolutions receive so much grass roots support. This year we need to send
management a clear message we are not satisfied with the current direction of
the company. The shareholders of this company have completely missed the
greatest bull market in the history of the United States. The value of a share
of Bob Evans Farms, Inc., is the same today, in April of 1999, that it was seven
years ago, in 1992! It is time for every shareholder to carefully mark their
ballot in favor of eliminating the classified board of directors. Remember, your
"YES" vote sends the strong message we are not happy with the direction of the
company and especially the direction of the company stock. A "YES" vote means
the board of directors will face shareholder review annually. It is also
important to remember a vote to abstain is the same as voting "no" to declassify
the board of directors. Every vote is important.
I URGE YOUR SUPPORT FOR THIS RESOLUTION.
- -------------------------------------------------------------------------------
15
<PAGE> 18
RESPONSE OF THE BOB EVANS FARMS, INC. BOARD OF DIRECTORS
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE ABOVE PROPOSAL FOR THE
FOLLOWING REASONS:
In 1985, an overwhelming majority of the company's stockholders voted
to divide the company's board of directors into three classes. The
classification of the board of directors is a common practice that has been
adopted by numerous public companies. Your board of directors believes that a
classified board remains appropriate for the following reasons:
- - Classification of the board of directors promotes greater continuity
of experience among board members because approximately two-thirds of
the directors remain in office each year. Board members who have
experience and familiarity with the business affairs and operations of
the company are better suited to make long-term strategic decisions for
the company and the board believes that this will contribute to the
creation of long-term value for stockholders.
- - A classified board prevents the removal of the entire board in a
single election. As a result, hostile parties seeking control of the
company through coercive takeover tactics are encouraged to negotiate
with the board of directors. This protects stockholders in the event
that the company is involved in a transaction by increasing the
likelihood that (1) all of the company's stockholders will be treated
equally and (2) their respective financial interests in the company
will be safeguarded.
- - Each year at the company's annual meeting, one-third of the directors
of the company stand for election. This provides stockholders an
effective means to communicate their views on the performance of the
company and the performance of the directors. Moreover, currently six
of the nine members of the company's board of directors are outside
directors, and all of the members of the board's compensation committee
are outside directors, which provides the board a high degree of
independence from the company's management.
Even if this resolution is approved by the stockholders, it will not be
binding on the board of directors, and the board will still be required to
consider whether a change in the present system of electing directors is in the
best interests of the company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST THE
ADOPTION OF THIS STOCKHOLDER PROPOSAL. APPROVAL OF THIS STOCKHOLDER PROPOSAL
REQUIRES THE AFFIRMATIVE VOTE OF A MAJORITY OF THE OUTSTANDING SHARES OF COMMON
STOCK PRESENT IN PERSON OR BY PROXY AND ENTITLED TO VOTE AT THE ANNUAL MEETING.
UNLESS OTHERWISE DIRECTED, THE PERSONS NAMED IN THE ENCLOSED PROXY WILL VOTE THE
COMMON SHARES REPRESENTED BY ALL PROXIES RECEIVED PRIOR TO THE ANNUAL MEETING,
AND NOT PROPERLY REVOKED, EXCLUDING BROKER NON-VOTES, AGAINST THIS STOCKHOLDER
PROPOSAL.
INFORMATION CONCERNING INDEPENDENT AUDITORS
Ernst & Young LLP, which has served as independent auditors for the company
since 1980, has been selected by management to serve in that capacity for fiscal
2000. Representatives of Ernst & Young LLP 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.
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<PAGE> 19
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 30, 1999, containing financial statements for such
fiscal year and the signed report of Ernst & Young LLP, 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 or in person at
the annual meeting.
By Order of the Board of Directors,
/s/ Daniel E. Evans
Daniel E. Evans
Chairman of the Board and
Chief Executive Officer
17
<PAGE> 20
BOB EVANS
FARMS(R)
PROXY SERVICES
P.O. BOX 9079
FARMINGDALE, NY 11735
Aug. 9, 1999
Dear Stockholders:
What a great way to end the millennium - with a record-breaking year in sales
and profit on both sides of our business. We will be reviewing our success, as
well as sharing future plans, at the 1999 Bob Evans Farms annual meeting of
stockholders on Monday, Sept. 13, 1999, at the Bob Evans Farm in Rio Grande,
Ohio. The meeting begins at 1 p.m. this year to better accommodate stockholders
traveling a long distance to attend. Lunch, featuring Bob Evans Sausage, will be
available between 11 a.m. and 1 p.m. We are hoping you will take this
opportunity to become better acquainted with the officers and directors of your
company.
Someone you may want to talk with is Stewart Owens, our president and chief
operating officer. On August 5, 1999, I announced my plans to step down as chief
executive officer effective April 29, 2000. The board of directors presently
intends to elect Stewart to the CEO post on that same date. I will remain as
chairman of the board until April 2001 and, with your support, continue to serve
on the board of directors until I am 70. Stewart has detailed knowledge and
experience with both sides of our business and he is the best choice to lead our
company going forward.
Given our growth, financial success and forward planning, this is a very
exciting time at Bob Evans Farms. I hope to share our success with you on the
13th. In the meantime, please complete and return your proxy card in the
enclosed envelope as your vote is very important to us, or if you choose, see
the reverse side of this letter for alternate voting instructions.
Sincerely,
/s/ Daniel E Evans
Daniel E. Evans
Chairman of the Board
Chief Executive Officer
Below is your proxy card. Please read both sides, vote, sign, date and return it
in the enclosed postage-paid envelope.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
<TABLE>
<CAPTION>
BOBEVA KEEP THIS PORTION FOR YOUR RECORDS
- -----------------------------------------------------------------------------------------------------------------------------------
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY
- -----------------------------------------------------------------------------------------------------------------------------------
BOB EVANS FARMS, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
SEPT. 13, 1999
<S> <C> <C>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS To withhold authority to vote, mark
"For All Except" and write the
YOUR BOARD RECOMMENDS YOU VOTE "FOR" ALL NOMINEES. For Withhold For All nominee's number on the line below
All All Except
1. Election of these class I directors to serve for terms [ ] [ ] [ ] -----------------------------------
of three years each: 01) Daniel A. Frank,
02) Cheryl L. Krudeger-Horn and 03) G. Robert Lucas
YOUR BOARD RECOMMENDS YOU VOTE "AGAINST" THIS PROPOSAL. For Against Abstain
2. Adoption of the stockholder proposal to declassify the company's [ ] [ ] [ ]
board of directors.
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.
The undersigned hereby acknowledges receipt of the notice of the annual meeting of stockholders,
dated Aug. 9, 1999, the enclosed statement and the annual report of the company for the fiscal
year ended April 30, 1999.
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Signature (PLEASE SIGN WITHIN BOX) Date Signature (Joint Owner) Date
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[MAP]
The Bob Evans Farm is located on State Route 588 just off U.S. Route 35.
Directions: From U.S. Route 35, take the State Route 325 exit. Go south on State
Route 325 to State Route 588 and turn left. The Farm is less than one mile ahead
on State Route 588.
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VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions. Have your
proxy card in hand when you call. You will be prompted to enter your 12-digit
control number which is located on the reverse side and then follow the simple
instructions the Vote Voice provides you.
VOTE BY INTERNET - www.proxy.com
Use the internet to transmit your voting instructions. Have your proxy card in
hand when you access the Web site. You will be prompted to enter your 12-digit
control number which is located on the reverse side to obtain your records and
create an electronic proxy voting instruction form.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope
we've provided or return to Bob Evans Farms, Inc. c/o ADP, 51 Mercedes Way,
Edgewood, NY 11717
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BOBEVS
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The stockholder(s) of Bob Evans Farms, Inc. (the "company") identified on this
card appoints Daniel E. Evans and Donald J. Radkoski, and each of them, to
attend the annual meeting of stockholders of the company to be held at the
Shelter House on the Bob Evans Farm in Rio Grande, Ohio, on Monday, Sept. 13,
1999, at 1 p.m., Eastern Daylight Time to vote all of the shares of common stock
which the stockholder(s) is entitled to vote at the annual meeting or any
adjournment(s) thereof.
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF BOB EVANS FARMS,
INC.
Please indicate your vote, sign your name as it appears on this card and date on
the reverse side and return this proxy card in the enclosed envelope. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such. If a signer is a corporation, please sign the full corporate
name by authorized officer. Joint owners should both sign. Also, please note any
change of address on this proxy.
Votes will be counted as follows: Where a choice is indicated, the shares
represented by this proxy will be voted as specified. If a vote is not indicated
on the reverse side of this card, the shares represented by this proxy will be
voted (i) for the election of the nominees listed in Item No. 1 as directors of
the company and (ii) against the proposal to declassify the company's board of
directors. If prior proxies have been submitted for the same shares represented
by this card, this proxy will replace earlier proxies.
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