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SCHEDULE 14A INFORMATION
(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:
[ ] 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 Section 240.14a-11(c)
or Section 240.14a-12
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)(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.:
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(3) Filing Party:
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(4) Date Filed:
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[LOGO - BOB EVANS FARMS]
3776 S. HIGH ST.
COLUMBUS, OHIO 43207
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Monday, Sept. 11, 2000
1 p.m.
Shelter House, Bob Evans Farm
Rio Grande, Ohio
Aug. 7, 2000
To our stockholders:
We are pleased to invite you to the annual meeting of stockholders of Bob Evans
Farms, Inc. on Monday, Sept. 11, 2000, 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). 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 arrange for the prompt
sale of the company to the highest bidder.
(3) To consider and vote upon a stockholder proposal to eliminate stock
options, bonuses and restricted stock for top executives.
(4) To consider and vote upon a stockholder proposal to declassify the
company's board of directors.
(5) 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 14, 2000, will be
entitled to vote by proxy or in person at the annual meeting. We look forward to
seeing you at the meeting.
Sincerely,
/s/ Daniel E. Evans
Daniel E. Evans
Chairman of the Board
/s/ Stewart K. Owens
Stewart K. Owens
President and
Chief Executive Officer
<PAGE> 3
BOB EVANS FARMS, INC.
3776 S. HIGH ST.
COLUMBUS,OHIO 43207
INFORMATION ABOUT THE PROXY STATEMENT AND VOTING
The board of directors of Bob Evans Farms, Inc. is soliciting your proxy in
connection with our 2000 annual meeting of stockholders (or at 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. 7, 2000, to the 41,652 Bob Evans stockholders of record at the close of
business on July 14, 2000. We also are sending the Bob Evans Farms, Inc. 2000
annual report, which includes financial statements for the year ended April
28, 2000.
Whether or not you plan to attend the annual meeting, we urge you to vote in
advance by proxy. To do so, you may call (800) 690-6903; log onto
www.proxyvote.com; or complete, sign and date the enclosed proxy card and return
it promptly in the envelope provided. You should vote by 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 14, 2000,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. 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 proposals to arrange for the prompt sale of the
company, change compensation for top executives, and declassify the company's
board of directors are "non-discretionary" and brokers who have received no
instructions from their clients do not have discretion to vote on these items.
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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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.
NAME AND ADDRESS AMOUNT AND NATURE
OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP PERCENT OF CLASS(1)
----------------------------- ----------------------- -------------------
Ariel Capital Management, Inc. 7,373,655 (2) 20.9%
307 N. Michigan Ave.
Chicago, Ill. 60601
-----------------------------
(1) The percent of class is based upon 35,301,495 common shares outstanding on
July 14, 2000.
(2) This number is based on information contained in correspondence received by
the company from Ariel Capital Management, Inc. as of June 30, 2000. 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 9) and by all directors and executive officers of the company as a
group, as of July 14, 2000:
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP (1)
---------------------------------------------
COMMON SHARES WHICH
CAN BE ACQUIRED
UPON EXERCISE OF
NAME OF BENEFICIAL COMMON SHARES OPTIONS EXERCISABLE PERCENT OF
OWNER OR GROUP PRESENTLY HELD WITHIN 60 DAYS TOTAL CLASS(2)
--------------------------------------------------------------------------------
Larry C. Corbin(3) 33,298 64,102 97,400 (4)
Daniel E. Evans(3) 354,541(5) 183,593 538,134 1.5%
Daniel A. Fronk 24,558(6) 6,160 30,718 (4)
Michael J. Gasser 3,349 5,134 8,483 (4)
E.W. (Bill) Ingram III 5,849 4,108 9,957 (4)
Cheryl L. Krueger-Horn 3,166 6,160 9,326 (4)
G. Robert Lucas 7,267(7) 6,160 13,427 (4)
Stewart K. Owens(3) 212,124 49,943 262,067 (4)
Robert E. H. Rabold 3,862 6,160 10,022 (4)
Donald J. Radkoski(3) 9,283(8) 25,727 35,010 (4)
Roger D. Williams(3) 30,470 33,001 63,471 (4)
All directors and
executive officers
as a group
(13 persons) 725,467 426,055 1,151,522 3.3%
--------------------------------------------------------------------------------
(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 35,301,495 common shares outstanding on
July 14, 2000, 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 14, 2000.
(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.
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(5) Includes 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 3,536 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.
To the company's knowledge, based solely on a review of the copies of the
reports furnished to the company and written representations that no other
reports were required during the 2000 fiscal year, all filing requirements
applicable to officers, directors and owners of more than 10% of the outstanding
common shares of the company under Section 16(a) of the Securities Exchange Act
of 1934,as amended, were complied with,except that E.W. (Bill) Ingram III did
not file on a timely basis one Form 4 (Statement of Changes in Beneficial
Ownership) relating to his purchase of 3,000 common shares of the company on
Nov. 22, 1999.
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 2002, 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 II 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 II
directors of the company for terms expiring in 2003. 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 II directors receiving the greatest number of votes will be elected as
class II 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.
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 2003 (CLASS II)
Larry C. Corbin, age 58; Executive Vice President of Restaurant
Executive Vice President of Division since 1995.
Restaurant Division;
Director since 1981.
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<TABLE>
<S> <C>
Stewart K. Owens, age 45; President and Chief Executive Officer since 2000;
President and Chief Executive Officer; President and Chief Operating Officer from
Director since 1987. 1995 to 2000; in each case of the company.
Robert E.H. Rabold, age 61; Chairman and Chief Executive Officer since 2000;
Director since 1994. Chairman, President and Chief Executive Officer
from 1993 to 2000; in each case of Motorists
Mutual-American Hardware Insurance Group,
Columbus, Ohio.
CONTINUING DIRECTORS - TERMS TO EXPIRE IN 2002 (CLASS I)
Daniel A. Fronk, age 64; Treasurer of Dancor,Inc. since 2000; Senior Executive
Director since 1981. Vice President and Board Member of The Ohio Company,
an investment banking firm,Columbus,Ohio, from
1988 to 1997.
Cheryl L. Krueger-Horn, age 48; President and Chief Executive Officer of Cheryl & Co.,
Director since 1993. a manufacturer and retailer of gourmet foods and gifts,
Columbus, Ohio, since 1986.(1)
G. Robert Lucas, age 56; Executive Vice President, General Counsel and
Director since 1986. Secretary of The Scotts Company,a manufacturer of
lawn and garden products, since 1997; Partner in Vorys,
Sater, Seymour and Pease LLP, Attorneys at Law,
Columbus, Ohio, from 1990 to 1997.
CONTINUING DIRECTORS - TERMS TO EXPIRE IN 2001 (Class III)
Daniel E. Evans, age 63; Chairman of the Board since 2000; Chairman of the Board,
Chairman of the Board; Chief Executive Officer and Secretary from 1971 to
Director since 1957. 2000; in each case of the company.
Michael J. Gasser, age 49; Chairman of the Board and Chief Executive Officer
Director since 1997. since 1994 of Greif Bros. Corporation, a manufacturer of
shipping containers and containerboard,Delaware,
Ohio.(2)
E.W. (Bill) Ingram III,age 49; President and Chief Executive Officer of White Castle
Director since 1998. System,Inc., a quick-service hamburger chain, Columbus,
Ohio, since 1979.
</TABLE>
(1) Cheryl & Co. sells 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.
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.
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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 2000.
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 five times during fiscal 2000.
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 did not meet during fiscal
2000.
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 reelection 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 three meetings during the
2000 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.
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 13 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 for fiscal 2000. The compensation
committee is comprised entirely of outside directors. The compensation
committee's
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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 a 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 an independent consultant specializing in executive compensation.
BASE SALARY
In April 1999, an independent consultant prepared a compensation study which
reviewed the company's executive compensation and compared it to compensation
paid by peer group companies. In general, the study pointed out that base
salaries being paid to the company's executive officers lagged the company's
peer group amounts, but that overall cash compensation was competitive due to
the company's higher levels of bonus awards. The committee felt that to more
fairly mirror the competitive environment, the base salary portion of cash
compensation should be increased and the performance bonus portion decreased.
In June 1999,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, and Stewart
K. Owens, president and chief operating 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 group companies relating to executive
compensation.
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. Consistent with the recommendations of the April
1999 executive compensation study (as a result of which the base salary portion
of cash compensation was increased), the compensation committee reduced the
amounts available to executives in the form of bonuses. At the beginning of the
2000 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 fiscal 2000, 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 management.
Management's recommendations were then reviewed by the compensation committee,
which made recommendations to the board of directors.
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As a result of the company's earnings in fiscal 2000 compared to the company's
earnings goals for the fiscal year and a lower stock price at the end of fiscal
2000 as compared to the previous year, bonus awards were less than the target
bonus amounts and substantially less than amounts paid in fiscal 1999.
None of the five executive officers listed in the proxy statement received his
target bonus amounts for fiscal 2000. Mr. Evans' target bonus percentage was 50%
of his base salary (excluding directors' fees). However, the impact of an
earnings per share and stock price component on his individual bonus rating,as
well as other factors, lowered his bonus award to 15.6% of his base salary
(excluding directors' fees) of $495,334. Mr. Evans' total cash compensation
decreased to $586,991 compared to $809,586 last year. Mr. Owens' (who was named
chief executive officer,in addition to continuing as president, on April
29,2000) target bonus was 45% of his base salary (excluding directors' fees). As
with Mr. Evans, his individual performance goals included an earnings per share
and a comparative stock price component. As a result, his bonus amount was
reduced to 22.7% of his base salary (excluding directors' fees) of $374,825 and
his total cash compensation decreased to $474,472 compared to $585,108 last
year.
Each of the other executive officers was reviewed on the same basis as Mr. Evans
and Mr. Owens. Reflecting the individuals' goals and the company's
performance, bonus amounts paid were less than target bonus amounts and in all
cases total cash compensation paid in fiscal 2000 was less than fiscal 1999.
These amounts were approved by the compensation committee and board of directors
and are reflected in the summary compensation table in 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. Under the Bob Evans Farms, Inc. 1998 Stock Option and Incentive
Plan (the "1998 Stock Option Plan"), the compensation committee may grant
incentive stock options ("ISOs") to employees 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.
On June 14, 1999, 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 2000 fiscal year, the company also issued
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.
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
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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 year 1999, the board of directors voted to contribute
$3,527,390 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 4% of his or her compensation (up to a maximum
contribution of $6,400) to the 401(k) plan. In cases where participants made
voluntary contributions to the 401(k) plan,the company contributed $0.35 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.
Under the terms of the Nonqualified Salary Deferral Plan, a participant may
elect to defer up to 25 percent of his or her current salary and/or up to 100%
of his or her bonus 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
based on the Nonqualified Salary Deferral Plan guidelines. 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 $1,000,000 which may be deducted for each executive
officer of the company. It is the compensation committee's policy to continually
review its compensation plans and to take steps to ensure that compensation paid
to its executive officers is deductible by the company.
CONCLUSION
The compensation committee believes that the compensation program outlined in
this report and the compensation paid to the executive officers is consistent
with the goals and objectives of the company.
Submitted By: Compensation Committee Members
Robert E.H. Rabold, chairman, Daniel A. Fronk, Cheryl L. Krueger-Horn and G.
Robert Lucas
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<PAGE> 11
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Compensation committee member Cheryl L. Krueger-Horn is president and chief
executive officer of Cheryl & Co., which sold various food products to the
company during fiscal 2000 and continues to do so.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table summarizes,for the fiscal years ended April 28, 2000; April
30, 1999; and April 24, 1998, cash compensation paid by the company to,as well
as certain other compensation paid or earned for those years by, the company's
chief executive officer and the four other most highly compensated executive
officers of the company in all capacities in which they served.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION -------------------------
NAME AND ------------------- SECURITIES ALL OTHER
PRINCIPAL FISCAL SALARY BONUS UNDERLYING COMPENSATION
POSITION YEAR ($)(1) ($) OPTIONS(#) ($)(2)
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Daniel E. Evans: 2000 $509,734 $ 77,257 100,779(3) $312,770
Chairman of the 1999 $402,000 $407,586 28,200 $140,956
Board(4) 1998 $392,800 $408,672 28,200 $ 2,400
Stewart K. Owens: 2000 $389,225 $ 85,247 79,076(3) $ 47,627
President and 1999 $284,400 $300,708 14,150 $ 20,662
Chief Executive 1998 $262,451 $262,449 14,150 $ 2,400
Officer
Larry C. Corbin: 2000 $311,660 $113,488 56,576(3) $ 94,044
Executive Vice 1999 $212,000 $233,706 13,439 $ 2,400
President of 1998 $202,800 $213,618 11,050 $ 2,400
Restaurant
Division
Roger D. Williams: 2000 $284,131 $ 42,603 43,750(3) $ 40,913
Executive Vice 1999 $197,600 $244,382 11,050 $ 15,826
President of 1998 $190,000 $198,168 11,050 $ 2,400
Food Products
Division
Donald J. Radkoski: 2000 $257,143 $ 76,217 31,431(3) $ 15,103
Chief Financial Officer, 1999 $182,000 $175,674 9,150 $ 17,501
Treasurer and Secretary 1998 $175,000 $153,661 9,150 $ 2,400
</TABLE>
(1) "Salary" includes directors' fees received by each of Messrs. Evans,Owens
and Corbin during the 2000, 1999 and 1998 fiscal years in the amounts of
$14,400; $14,400; and $12,800, respectively.
(2) Includes company contributions to the 401(k) plan for each of the officers
listed during the 2000, 1999 and 1998 fiscal years in the amounts of $2,356;
$2,400; and $2,400, respectively. Also,includes amounts allocated to an account
under the SERP for Messrs. Evans, Owens, Corbin, Williams and Radkoski during
the 2000 fiscal year of $310,414; $45,271; $91,688; $38,557; and
$12,747, respectively, and during the 1999 fiscal year of $138,556; $18,262; $0;
$13,426; and $15,101, respectively.
(3) See the table under "Grants of Options."
(4) Daniel E. Evans also served as chief executive officer and secretary of the
company until April 28, 2000.
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<PAGE> 12
GRANTS OF OPTIONS
The following table sets forth information concerning individual grants of ISOs
and NQSOs made during the 2000 fiscal year to each of the named executive
officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL
--------------------------------------------- REALIZABLE VALUE AT
NUMBER OF % OF ASSUMED ANNUAL RATES OF
SECURITIES TOTAL OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM(1)
OPTIONS EMPLOYEES IN EXERCISE MARKET EXPIRATION --------------------------------
NAME GRANTED(2) FISCAL YEAR PRICE($/SH) PRICE($/SH) DATE 0% 5% 10%
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Daniel E. Evans 100,779 14.1% 19.375 19.375 6/9/09 -- $1,227,975 $3,111,930
Stewart K. Owens 79,076 11.1% 19.375 19.375 6/9/09 -- $ 963,528 $2,441,769
Larry C. Corbin 56,576 7.9% 19.375 19.375 6/9/09 -- $ 689,369 $1,746,997
Roger D. Williams 43,750 6.1% 19.375 19.375 6/9/09 -- $ 533,086 $1,350,946
Donald J. Radkoski 31,431 4.4% 19.375 19.375 6/9/09 -- $ 382,982 $ 970,550
</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 9, 1999, (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 ISOs
and NQSOs terminates upon the earlier to occur of the end of the original term
of the ISOs or NQSOs 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 ISOs or the NQSOs 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, he or she becomes fully
vested in any shares granted during June 1998 and thereafter, and 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.
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<PAGE> 13
OPTION EXERCISES AND HOLDINGS
The following table outlines options exercised during the 2000 fiscal year by
each of the named executive officers and unexercised options held as of the end
of the 2000 fiscal year by such executive officers.
AGGREGATE OPTION EXERCISES IN 2000 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>
Daniel E. Evans -- -- 132,920 128,979 $390,558 --
Stewart K. Owens -- -- 14,151 104,358 -- $ 35,215
Larry C. Corbin -- -- 37,877 67,625 $ 87,099 --
Roger D. Williams -- -- 11,051 68,720 -- $ 45,565
Donald J. Radkoski -- -- 9,150 47,081 -- $ 18,372
</TABLE>
(1) All values are shown pretax and are rounded to the nearest whole dollar.
(2) Based on the 2000 fiscal year-end closing price of $13.063 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
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
11
<PAGE> 14
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 28,2000, 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 $2,003,000; $1,363,700; $1,119,400; $1,060,000; and
$931,800,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
director who serves on the audit or compensation committees receives a fee of
$1,250 for each committee meeting attended unless the director is the chairman
of the committee, in which case the director receives a fee of $2,000 for each
committee meeting attended. Each director who serves on the nominating committee
receives a fee of $750 for each committee meeting attended, unless the 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 avail-
able to nonemployee directors.
12
<PAGE> 15
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) for the five-year period ended April 28,2000.
TOTAL CUMULATIVE SHAREHOLDER RETURN FOR
FIVE-YEAR PERIOD ENDING APRIL 28,2000
[GRAPH]
CUMULATIVE VALUE OF $100 INVESTMENT
1995 1996 1997 1998 1999 2000
NASDAQ Restaurant/
Food Mfg. Peer Group $100.00 $127.40 $ 90.50 $104.50 $ 86.70 $ 76.60
S&P 500 $100.00 $130.40 $163.20 $229.90 $281.10 $310.40
Bob Evans Farms,Inc $100.00 $ 78.20 $ 67.30 $104.80 $ 96.30 $ 70.20
13
<PAGE> 16
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 2001 annual
meeting, presently scheduled for Sept. 10, 2001, must be received by the company
on or before April 10, 2001. If a stockholder intends to present a proposal at
the 2001 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 26, 2001, or the company's management proxies for the 2001 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 proposals have been submitted for inclusion in the
2000 proxy statement. The board of directors of the company recommends that
stockholders vote "AGAINST" the following stockholder proposals.
STOCKHOLDER PROPOSAL REGARDING
SALE OR MERGER OF THE COMPANY
Deborrah A. Donskov,4569 Ravine Drive, Westerville, Ohio 43081, claiming
ownership for more than one (1) year of common shares of the company with a
market value in excess of $2,000 and that she 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 her
intention to present same at the annual meeting.
MAXIMIZE VALUE RESOLUTION
"Resolved" that the shareholders of Bob Evans Farms, Inc. urge the Board of
Directors to arrange for the prompt sale of Bob Evans Farms Inc. to the highest
bidder.
SUPPORTING STATEMENT
The purpose of the Maximize Value Resolution is to give all Bob Evans Farms Inc.
shareholders the opportunity to send a message to the Board of Directors that
they support the prompt sale of Bob Evans Farms Inc. to the highest bidder. A
strong or a majority vote by the shareholders would send a clear message to the
board,of the displeasure felt over many years with regard to the return on their
investment and the drastic action that needs to be taken. Even if approved by
the majority of the Bob Evans Farms Inc. shares represented and entitled to vote
at the annual meeting, the Maximize Value Resolution will not be binding on the
Board. The proponent however, believes that if this resolution receives
substantial support from the shareholders, the board may choose to carry out the
request set forth.
The prompt auction of Bob Evans Farms, Inc. should be accomplished by an
appropriate process that the board chooses to adopt,including the sale to the
highest bidder whether in cash, stock, or a combination of both. It is expected
that the board will uphold its fiduciary duties to the utmost during the
process.
The proponent further believes that the resolution if adopted, the management
and the board will interpret such adoption as a message from the company's
stockholders that it is no longer acceptable for the board to continue with its
current management plan and strategies.
I URGE YOUR SUPPORT, VOTE FOR THIS RESOLUTION
--------------------------------------------------------------------------------
14
<PAGE> 17
RESPONSE OF THE BOB EVANS FARMS, INC. BOARD OF DIRECTORS
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "AGAINST" THE ABOVE PRO-
POSAL FOR THE FOLLOWING REASONS:
Your board of directors strongly believes that implementation of the
resolution described above would not be in the best interests of stockholders of
the company and, contrary to the title of the resolution, would not maximize
value to the stockholders for the following reasons:
- The board believes that approval of this resolution would cause uncertainty
regarding the company's future, which would undermine confidence in the company
and adversely affect the company's relationships with employees, customers and
vendors. Such results could have an adverse impact on the company's ability to
effectively compete in the short and long run, leading to a potential decline in
revenues, profits and, in turn, stockholder value.
- The board of directors continually reviews and monitors the company's business
and progress, as well as developments in the company's industries.
Accordingly, the board is in the best and most informed position to evaluate and
consider all of the options that may be available to the company from time to
time including if, when and under what conditions the sale of the company should
be considered.
- Acting hastily to force a sale of Bob Evans Farms, Inc. at auction or
otherwise to the highest bidder would restrict the board's ability to examine
all strategic alternatives for increasing stockholder value.
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.
STOCKHOLDER PROPOSAL REGARDING ELIMINATION OF
STOCK OPTIONS, BONUSES AND RESTRICTED SHARES
E. Kay Mitchell,2855 Lander Road, Pepper Pike, Ohio 44124, claiming ownership
for more than one (1) year of common shares of the company with a market value
in excess of $2,000 and that she 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 her intention to
present same at the annual meeting.
STOCK OPTION - BONUS - RESTRICTED SHARE RESOLUTION
Resolved "that as soon as practicable, and in conformity with contractual
obligations, that the board of directors will take under consideration that all
members of top corporate management listed in the proxy Statement as the
companies chief executive officer and the other four most highly compensated are
executive officers no longer be remunerated with stock options, bonuses, or
restricted shares.
SUPPORTING STATEMENT
The major rationale for offering stock options and bonuses to management is that
they provide a major incentive for management to insure corporate profitability.
These forms of management compensation are designed as rewards for achievement
in corporate profitability and long term growth. I believe that in many
instances bonuses, options, and restricted shares are given for corporate
performances which range poor, to mediocre, to adequate profitability.
15
<PAGE> 18
However, the essential thrust of this resolution is that those members of
management that hold a significant share of company assets should not require
additional monetary incentives as motivators to insure corporate profitability.
Any reasonable individual would understand that growth and corporate
profitability would directly accrue to the shareholders including the
executives indicated in the resolution above. How many more motivators do they
require?
In my opinion these unnecessary incentives become a raid on corporate assets and
hardly meet the standards of reasonableness and fairness. I believe that
compensation of this type is hardly a rationale for inducing higher levels of
performance of management.
I believe those members of management who are supremely confident in their
abilities to expand corporate profitability and desire a greater share in its
success are always free to buy stock on the open market, taking the same risks
as the common shareholder.
--------------------------------------------------------------------------------
RESPONSE OF THE BOB EVANS FARMS, INC. BOARD OF DIRECTORS
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "AGAINST" THE ABOVE
PROPOSAL FOR THE FOLLOWING REASONS:
The board strongly believes that implementation of the proposal
described above would not be in the best interests of the stockholders of the
company for the following reasons:
- The company's executive compensation program must be competitive, allowing the
company to attract and retain talented, experienced executives to lead the
company in the competitive environment in which it operates. By eliminating
stock options and bonuses this goal would be jeopardized.
- Bonuses and long-term incentives such as stock options align the financial
interests of the company's executive officers with those of its stockholders
by tying the compensation received to the performance of the company and the
value of the company's common stock. Thus, with the typical stock option,for
instance, the share price of the company's common stock must increase for the
stock option to have any value at all.
- An alternative compensation program likely would result in a greater cost to
the company because it would require a higher level of cash compensation to
replace the current levels of performance-based incentive compensation.
In summary, the board of directors strongly believes that the company
and its stockholders are best served by an executive compensation program that
includes performance-based bonuses and long-term incentive compensation
components that are directly tied to the performance of the company and the
value of the company's common stock. Even if this resolution is approved by the
stockholders, as a matter of law 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 compensating executive officers is in the best interests
of the company.
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.
STOCKHOLDER PROPOSAL REGARDING ELIMINATION OF
CLASSIFIED BOARD OF DIRECTORS
Lawrence A. Wolf, 227 Elm Avenue, Wyoming, Ohio 45215-4347, claiming ownership
for more than one (1) year of common shares of the company with a market value
in excess of $2,000 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.
16
<PAGE> 19
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
Highlights of 1999 include Bob Evans Farms stock closing down over 40%. That
means every dollar you had invested in BOBE on Dec 31st, 1998 was worth less
than 60 cents on Dec 31st, 1999. The price of a share of your stock is worth the
same today as it was in October of 1987. That is 13 years of zero stock
appreciation. Another big highlight was Bob Evans Farms being included in the
California Public Employees Retirement System's Focus 2000 list. The Focus list
is an annual process in which the fund identifies 10 of the worst performing
companies in its portfolio based on shareprice performance, economic value added
and corporate governance. CALPERS is the largest public pension fund and manages
170 billion dollars.
The board of directors works for us, the shareholders. How can you be satisfied
with the job they are doing? How can you be satisfied with the return on your
investment? My resolution means each member of the board of directors has to
earn your vote every year. Your vote is an annual report card for the board of
directors.
It is time for every shareholder to carefully mark their ballot in favor of
eliminating the classified board of directors. Stop protecting the company, stop
protecting the board of directors, and start protecting the shareholders.
Remember, your "YES" vote sends the strong message we are not happy with the
downward 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 "YES" vote is important.
I URGE YOUR SUPPORT FOR THIS RESOLUTION
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RESPONSE OF THE BOB EVANS FARMS, INC. BOARD OF DIRECTORS
YOUR BOARD OF DIRECTORS UNANIMOUSLY 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:
- 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.
- 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 helps protect stockholders in the event that the company is
involved in a hostile takeover transaction by increasing the likelihood that
the parties seeking control of the company will negotiate with the company, thus
better safeguarding and maximizing the stockholders' financial interests in the
company.
17
<PAGE> 20
Even if this resolution is approved by the stockholders, as a matter of
law 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.
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
2001. 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.
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 28, 2000, 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 vote by either calling the toll-free number on the proxy
card; visiting the proxyvote.com Web site as indicated on the proxy card; or
signing and dating the enclosed proxy and mailing 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
/s/ Stewart K. Owens
Stewart K. Owens
President and Chief
Executive Officer
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<PAGE> 21
BOB EVANS
FARMS(R)
C/O PROXY SERVICES
P.O. BOX 9112
FARMINGDALE, NY 11735
Aug. 7, 2000
Dear Stockholders
We look forward to hosting you at the 2000 Bob Evans Farms annual meeting of
stockholders on Monday, Sept. 11, 2000, at the Bob Evans Farm in Rio Grande,
Ohio, at 1 p.m. 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.
At the meeting, we will review our fiscal 2000 results, but more importantly
will discuss our strategies going forward for long-term growth.
We hope you will be able to join us on the 11th. In the meantime, your proxy
vote is very important to us. On the reverse side of this card are instructions
to vote by phone or via the internet or if you prefer, you may complete and
return the proxy card below in the enclosed envelope.
Sincerely,
/s/ Daniel E. Evans
Daniel E. Evans
Chairman of the Board
/s/ Stewart K. Owens
Stewart K. Owens
President and Chief Executive Officer
<TABLE>
<CAPTION>
TO VOTE MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: BOBEVA KEEP THIS PORTION FOR YOUR RECORDS.
--------------------------------------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
<S> <C> <C>
BOB EVANS FARMS, INC.
Proxy for annual meeting of stockholders to be held on Sept. 11, 2000
This proxy is solicited on behalf of the board of directors
To withhold authority to vote, mark
YOUR BOARD RECOMMENDS YOU VOTE "FOR" ALL NOMINEES. For Withhold For All "For All Except" and write the
All All Except nominee's number on the line below.
DIRECTORS
1. Election of the class II directors to serve for [ ] [ ] [ ] -----------------------------------
terms of three years each: 1) Larry C. Corbin,
02) Stewart K. Owens, 03) Robert E.H. Rabold
YOUR BOARD OF DIRECTORS RECOMMENDS YOU VOTE "AGAINST" STOCKHOLDER
PROPOSAL 2, STOCKHOLDER PROPOSAL 3 AND STOCKHOLDER PROPOSAL 4 BELOW.
FOR AGAINST ABSTAIN
STOCKHOLDER PROPOSALS
2. Adoption of the stockholder proposal to arrange for the prompt sale of the
company to the highest bidder [ ] [ ] [ ]
3. Adoption of the stockholder proposal to eliminate stock options, bonuses
and restricted shares for top executives [ ] [ ] [ ]
4. Adoption of the stockholder proposal to declassify the board of directors [ ] [ ] [ ]
</TABLE>
The undersigned stockholder(s) authorize the proxies 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 in accordance
with the instructions of the company's directors.
The undersigned hereby acknowledges receipt of the notice of the annual meeting
of stockholders, dated Aug. 7, 2000; the enclosed proxy statement and the
annual report of the company for the fiscal year ended April 28, 2000.
_______________________________________ ___________________________________
_______________________________________ ___________________________________
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
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<PAGE> 22
[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.
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 Proxy Voting Service provides you.
VOTE BY INTERNET - www.proxyvote.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.
BOBEV2
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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, as the proxies of such
stockholder(s), with full power of substitution, 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. 11, 2000, at 1 p.m. Eastern Daylight
Time and to vote all of the shares of common stock which such stockholder(s) is
entitled to vote at the annual meeting or any adjournment(s) thereof.
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 the 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; (ii) against the proposal to arrange for the prompt sale of the
company to the highest bidder, (iii) against the proposal to eliminate stock
options, bonuses and restricted shares for top executives; (iv) 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.
