Form DEF 14A BOB EVANS FARMS INC For: Aug 24

YOUR VOTE IS IMPORTANT

Please mark, sign and date your proxy card and return it promptly in the enclosed envelope, whether or not you plan to attend the meeting. If you own shares in a brokerage account, your broker may not be able to vote your shares on the election of directors and other important matters unless you provide voting instructions to your broker. THEREFORE, IT IS VERY IMPORTANT THAT YOU EXERCISE YOUR RIGHT AS A STOCKHOLDER AND VOTE ON ALL PROPOSALS.

When and where will the Annual Meeting be held? The Annual Meeting will be held on Wednesday, August 24, 2016 at 8:00 a.m. Eastern Time, at The Dan Evans Training Center, 8111 Smith’s Mill Road, New Albany, Ohio 43054. Doors open at 7:30 a.m.

Why did I receive these proxy materials? You have received these proxy materials because the Board of Directors is soliciting a proxy to vote your shares at the Annual Meeting. This proxy statement contains information that we are required to provide to you under the rules of the Securities and Exchange Commission (the “SEC”) and is intended to assist you in making an informed vote. This proxy statement and accompanying materials are being mailed on or about July 11, 2016.

What is the notice I received in the mail regarding the Internet availability of proxy materials? Pursuant to rules adopted by the SEC, the Company uses the Internet as the primary means of furnishing proxy materials to stockholders. Accordingly, the Company sends a Notice of Internet Availability of Proxy Materials (the “Notice”) to the Company’s stockholders. All shareholders will have the ability to access the proxy materials on the website referred to in the Notice or request a printed set of the complete proxy materials. The Company’s proxy materials are also available at: http://investors.bobevans.com/index.cfm.

What proposals will be voted on at the Annual Meeting? There are three proposals currently scheduled to be voted on at the Annual Meeting:

Proposal 1 – Election of 11 directors to the Company’s Board, each to hold office until

our 2017 Annual Meeting and a successor is elected;

Proposal 2 – Approval, on an advisory basis, of the compensation of the Company’s named executive officers; and

Proposal 3 – Ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm.

Who may vote at the Annual Meeting? The record date for the Annual Meeting is June 30, 2016. Only stockholders of record at the close of business on June 30, 2016 are entitled to attend and vote at the Annual Meeting. At the close of business on June 30, 2016, there were 19,765,718 shares of our common stock outstanding.

If you are a stockholder of record at close of business on June 30, 2016, you can vote in person at the Annual Meeting or by proxy. Each share of common stock entitles the holder to one vote.

What is the difference between holding shares as a “stockholder of record” and in “street name?” If your shares are registered directly in your name with the Company’s transfer agent, you are considered the “stockholder of record” of those shares. Alternatively, if your shares are held in an account at a broker, bank or other similar organization, which is sometimes called “street name,” then you are the “beneficial owner” of those shares. That organization is the “stockholder of record, not you.

We sent these proxy materials directly to all stockholders of record. As a stockholder of record, you have the right to grant your voting

proxy directly to the Company or to vote in person at the Annual Meeting. The Company has enclosed a proxy card for you to use. You may also submit voting instructions via the Internet or by telephone by following the instructions on the proxy card, as described under “How can I vote my shares without attending the Annual Meeting?”

If your shares are held by your broker and are in “street name,” you have the right to direct your broker on how it should vote your shares. Your broker will send you materials and instructions on how to vote your shares.

Your broker, bank or other organization may not be able to vote your shares on the election of directors and other important matters at the Annual Meeting unless you direct them how to vote. Your broker, bank or other such organization has enclosed a voting instruction form for you to use to direct the organization holding your shares regarding how to vote your shares. Please provide instructions how to vote your shares using the voting instruction form you received from them.

Who can attend the Annual Meeting? Only stockholders who owned shares as of the Record Date are permitted to attend the Annual Meeting. If you hold your shares through a broker, bank or other record owner, you may attend the Annual Meeting only if you bring a legal proxy or a copy of a statement (such as a brokerage statement) from your broker, bank or other record owner reflecting your stock ownership as of the Record Date. Additionally, in order to be admitted to the Annual Meeting, all stockholders must bring a government-issued picture identification to verify their identities.

How can I vote my shares in person at the Annual Meeting? Shares held directly in your name as the stockholder of record may be voted in person at the Annual Meeting. If you choose to vote in person, please bring proof of identification and you will be provided with a ballot at the meeting.

How can I vote my shares without attending the Annual Meeting? Whether you hold shares directly as the stockholder of record or beneficially in street name, you may vote by proxy or submit a voting instruction form without attending the Annual Meeting. If you hold your shares directly as the stockholder of record, there are three ways to vote by proxy:

If you hold your shares in street name through an organization such as a broker, you should follow the voting instructions provided to you by that organization.

How many votes do I have? Each stockholder has one vote for every share of the Company’s common stock owned of record or beneficially.

Can I cumulate my votes? Under our By-laws, cumulative voting is not allowed.

How will my shares be voted? If you vote by mail, through the Internet, by telephone or in person, your shares will be voted as you direct.

If you submit a valid signed proxy card prior to the Annual Meeting, but do not complete the voting instructions on that card, your shares will be voted “FOR” the election of all of the Company’s director nominees, “FOR” Proposal 2 (approval, on an advisory basis, of the compensation of the Company’s named executive officers) and “FOR” Proposal 3 (ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm).

As of the date of this proxy statement, your Board knows of no business other than that set forth herein to be transacted at the Annual Meeting. If other matters requiring a vote do

arise, it is the intention of the persons named in the proxy card to whom you are granting your proxy, to vote in accordance with their best judgment on such matters.

What does it mean if I receive more than one proxy statement or proxy card? If you receive multiple proxy statements or proxy cards, it may mean that you have more than one account with brokers or our transfer agent. Please vote all of your shares.

How does the Bob Evans Board recommend I vote? Your Board unanimously recommends you vote using the proxy card,

May I revoke or change my vote? Yes. If you are a stockholder of record, you may revoke your proxy given pursuant to this solicitation or change your vote in any of the following ways:

If your shares are held in street name by an organization such as a broker and you wish to revoke your proxy, you should follow the

instructions provided to you by that organization.

Who will count the votes cast at the Annual Meeting? The Company will appoint an inspector of election to serve at the Annual Meeting. The inspector of election for the Annual Meeting will determine the number of votes cast by holders of common stock for all matters. Preliminary voting results will be announced at the Annual Meeting, if practicable, and final results will be announced when certified by the inspector of election.

How can I find the voting results of the Annual Meeting? We will include the voting results in a Current Report on Form 8-K, that we will file with the SEC no later than four business days following the completion of the Annual Meeting. We will amend this filing to include final results if the independent inspector of election has not certified the results by the time the original Current Report on Form 8-K is filed.

Who pays the cost of proxy solicitation?

We will pay for the entire cost of soliciting proxies on behalf of the Company, including the costs of preparing, assembling, printing, mailing and distributing these proxy materials and accompanying proxy cards. We will also reimburse brokerage firms, banks and other agents for the costs of forwarding the Company’s proxy materials to beneficial owners. In addition, our directors and employees may solicit proxies in person, by mail, by telephone, via the Internet, press releases or advertisements. Directors and employees will not be paid any additional compensation for soliciting proxies. Innisfree M&A Incorporated (“Innisfree”), our proxy solicitor, will be paid a fee of approximately $15,000, for rendering solicitation services. In addition, we have agreed to reimburse Innisfree for its expenses, and to indemnify it against certain liabilities relating to or arising out of their engagement.

What is a “broker non-vote” and how will my shares held in street name be voted if I do not provide my proxy? A “broker non-vote” occurs when a beneficial owner holds shares in “street name” through a broker, bank or similar organization, and the beneficial owner does not provide the broker with instructions on how to vote the shares on “non-routine” matters. Brokers cannot vote your shares on non-routine matters, such as the election of our directors, or approval, on an advisory basis of the compensation of the Company’s named executive officers, unless they receive instructions on how to vote from the beneficial owner at least ten days before the Annual Meeting.

What if my shares are held through our 401K Plan? If you participate in our 401K Plan and have money invested in the Bob Evans Farms, Inc. common stock fund, you will receive a proxy card for you to use to instruct the trustee of our 401K Plan how to vote your shares. If you do not instruct the trustee how to vote, then the shares you hold through the 401K Plan will not be voted.

What constitutes a quorum? We must have a quorum at the Annual Meeting to take any action at the Annual Meeting. Under our By-laws, a quorum is the presence at the Annual Meeting, in person or by proxy, of a majority of the outstanding shares of common stock entitled to vote at the Annual Meeting. Abstentions and “broker non-votes” are counted for purposes of determining a quorum.

What are the voting requirements for the proposals discussed in the proxy statement?

Proposal 1 – Election of 11 directors to the Bob Evans Board of Directors, each to hold office until our 2017 Annual Meeting of Stockholders and a successor is elected. Under our By-laws the 11 candidates receiving the highest number of “FOR” votes cast by holders of shares represented in person or by proxy at the Annual Meeting will be elected. This number is called a plurality. A properly executed proxy card marked “ABSTAIN” with respect to the election

of a director nominee will be counted for purposes of determining if there is a quorum at the Annual Meeting, but will not be considered to have been voted for the director nominee. Similarly, any broker non-votes will be counted for purposes of determining if there is a quorum, but will not be considered to have been voted for the director nominee.

Proposal 2 – Approval, on an advisory basis, of the compensation of the Company’s named executive officers. Under our By-laws, the approval of the advisory resolution on executive compensation requires the affirmative vote of the holders of a majority of votes represented in person or by proxy at the Annual Meeting. Abstentions with respect to this proposal will be counted as votes “AGAINST” the proposal. Any broker non-votes will not be treated as shares represented in person or by proxy at the Annual Meeting with respect to this proposal, and will not be considered to have been voted “FOR” or “AGAINST” this proposal. This advisory vote is non-binding but your Board and the Compensation Committee will give careful consideration to the results of voting on this proposal.

Proposal 3 – Ratification of the Selection of Independent Registered Public Accounting Firm. Under our By-laws, the ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm requires the affirmative vote of the holders of a majority of votes represented in person or by proxy at the Annual Meeting. Abstentions with respect to this proposal will be counted as votes “AGAINST” the proposal. Broker non-votes, if any, will not be treated as shares represented in person or by proxy at the Annual Meeting with respect to this proposal, and will not be considered to have been voted “FOR” or “AGAINST” this proposal.

We are proud of the quality, experience, independence and diversity of your Board. In addition to independence, our directors possess a diverse range of experience and skills in restaurant, food products, hospitality, and consumer marketing fields; and leadership experience as current and former executive officers, directors and committee members of other publicly traded companies. Their combined experiences and skills bring to the Board and our Company strong capabilities in the areas of strategy, leadership, finance, operating performance, information technology, and corporate governance.

Our By-laws state that the number of directors is determined by the Board, within a range of nine to twelve directors. Effective January 1, 2016, the Board set the number of directors at 11 when Mr. Mohseni joined the Board.

The names and biographies of each of the nominees for the Board are set forth below. All of the current members of the Board are nominees for reelection.

THE BOARD UNANIMOUSLY RECOMMENDS YOU VOTE “FOR ALL” OF THE BOARD’S 11 NOMINEES FOR DIRECTOR LISTED BELOW, ON THE ENCLOSED PROXY CARD.

Background to the Board’s Recommendation

Your Board’s multi-year succession planning process has resulted in a number of significant changes to the composition of the Board. With the assistance of third party search firms, the Board evaluation and succession planning process resulted in the addition of several highly qualified independent directors who have brought valuable experience and leadership in the restaurant, food service, packaged foods, hospitality, information technology, branding and consumer marketing fields. In addition, four of your directors were elected two years ago as part of a proxy contest, which provided the board with additional highly qualified directors who have brought valuable experience and leadership in the restaurant, food service, and packaged foods industries. As a result, the average years of service on the Board for a director is 2.5 years, with nine of the directors being fully independent, and none of the directors that your Board has nominated for election having more than nine years of service on the Board.

In addition to the fresh and diverse perspectives that this significant succession planning brings to your Board, we believe these directors also provide your Board with the necessary skill sets and expertise that are critical to driving our transformational growth initiatives.

In carrying out its responsibilities to identify, evaluate and recommend director nominees, the Nominating & Corporate Governance Committee (“NCG Committee”) considers factors it deems appropriate when evaluating candidates for the Board, including, without limitation: judgment, skill, diversity, independence, accountability, strength of character, experience with businesses and organizations of comparable size, experience with publicly traded companies, professional accomplishments, education, experience and skill relative to other Board members, desirability of the candidate’s membership on the Board and any committees of the Board, demonstrated leadership ability, existing relationships with Bob Evans and potential conflicts of interest, as well as the ability to represent all of our stockholders versus any special interest group.

While the Board does not have a formal policy on diversity, the NCG Committee takes into account the existing diversity reflected in the members of the Board, including their professional experience, skills, backgrounds and viewpoints, as well as in gender, ethnicity and national origin.

Depending on the current needs of the Board, certain factors may be weighed more or less heavily by the NCG Committee. In considering candidates for the Board, the NCG Committee will evaluate the entirety of each candidate’s credentials. There are no specific minimum qualifications that must be met by a NCG Committee-recommended nominee. Nevertheless, the NCG Committee does believe that all members of the Board should have the highest character and integrity, business experience, a reputation for working

constructively with others, sufficient time to devote to Board matters, and no conflict of interest that would interfere with their performance as directors or service on Board Committees.

The NCG Committee and the Board believe that each of our 11 nominees has professional experience in areas that are highly relevant to our strategy and operations and offers valuable leadership skills and diverse insight at a critical time for the Company. Among the range of experiences, our nominees’ backgrounds reflect, among others, the following experiences:

We also believe that our 11 nominees have other attributes necessary to create an effective board: strong personal and professional ethics, integrity and values; keen vision and long-term strategic perspective; diversity; practical judgment and proven decision-making skills; the ability to devote significant time to serve on your Board and its committees and to work in a collaborative manner with other board members; and an unwavering commitment to representing the long-term interests of all our stockholders.

Based on the foregoing, the NCG Committee and the Board have concluded that it is in the best interests of the Company and its stockholders for each of the proposed nominees listed above to continue to serve as a director of Bob Evans.

Under our By-laws, and because our Board size will be 11 persons, this means that the 11 nominated candidates receiving the highest number of “FOR” votes cast by holders of shares represented in person or by proxy at the Annual Meeting will be elected, subject to meeting the Majority Voting Policy (as described below). This number is called a plurality. A properly executed proxy card marked “ABSTAIN” with respect to the election of a director nominee will be counted for purposes of determining if there is a quorum at the Annual Meeting, but will not be considered to have been voted for the director nominee. Similarly, broker non-votes, if any, will be counted for purposes of determining if there is a quorum, but will not be considered to have been voted for the director nominee.

Your Board of Directors strongly urges you to vote “FOR ALL” 11 of the nominees recommended by your Board of Directors.

Director Compensation

Effective March 1, 2015, the NCG Committee, with the assistance of its independent compensation consultant, determined to revise the Director Compensation Program and adopt an annual retainer versus a per meeting

compensation system. Each non-employee director continues to receive an annual grant of restricted common stock or stock units with a grant date value of approximately $100,000. Grants are made the day after the Annual Stockholders meeting. The restricted stock award vests in one year. All non-employee directors also receive an annual retainer of $75,000 that is paid monthly. The LID receives an additional $40,000 annual retainer, $15,000 in cash that is paid in monthly installments and a grant of RSU’s with a value of $25,000 that vests in one year. The non-employee directors who serve as the chair of a Board committee are paid an annual retainer fee that is paid monthly. The chair of each committee receives the following annual amounts: Audit, $12,500; Compensation, $10,000; and NCG, $10,000. The chair of the Finance Committee, as an officer of the Company, does not receive compensation for acting as chair. During part of fiscal 2016, members of the Transition Committee were paid $10,000 monthly during the period that they served, but the CEO Search Committee members did not receive additional compensation over the annual retainer. Both of these Committees were dissolved at the time the new CEO was retained.

Non-employee Directors are also reimbursed for out-of-pocket expenses for travel to and from Board and committee meetings. We stopped offering group health insurance to future non-employee directors in 2011. Of the directors grandfathered as of that time, Ms. Mallesch is the only active director who has elected to participate in our group health

insurance plan. She is (and any other directors who were grandfathered that elect to participate in the future would be) provided this benefit on the same terms as our employees, i.e., we pay the employer portion of their health insurance premiums and the participating directors pay the employee portion of the health insurance premiums. Upon retirement, a director who was eligible to participate in our group health insurance plan, whether or not elected during their term, may continue the coverage but must pay all health insurance premiums, including the employer portion that we pay prior to retirement. At this time, Mr. Williams is the only remaining directors who is not participating, but could make this election in the future.

In May 2010, we adopted the Bob Evans Farms, Inc. 2010 Director Deferral Program (“Director Deferral Program”). It is a nonqualified plan designed to provide our non-employee directors with the opportunity to defer compensation and receipt of RSU’s on a pre-tax basis. The right of participants to receive their distributions from the Director Deferral Program is not secured or guaranteed, are subject to a substantial risk of forfeiture and remain as part of our general liabilities. Compensation deferred pursuant to the Director Deferral Program, including shares of our common stock, is distributed to the deferring director upon death, disability or other termination of service. In fiscal 2016, Messrs. Benham, Elson, Sheehan, Williams and Weinstein, and Mmes. Haben and Mallesch participated in the deferral plan.

Voting Standards for Director Elections. Our By-laws provide that, in uncontested elections (i.e., elections where the number of nominees is the same as the number of Board seats available), directors are elected by a majority of the votes cast (i.e., “Majority Voting Policy”). This means that more than 50 percent of the shares voted at the Annual Meeting must be cast in favor of the election of that director. Abstentions and broker non-votes are not counted as votes “FOR” or “AGAINST” the election of the director.

Our By-laws provide that before any incumbent director may be nominated for re-election by the Board in an uncontested election, he or she must submit an irrevocable letter of

resignation, which would become effective if the director does not receive more than 50 percent of the votes cast at the Annual Meeting, and the Board accepts the resignation in accordance with policies and procedures adopted by the Board for such purposes.

If an incumbent director does not receive a majority of the votes cast, the NCG Committee and the Board considers whether to accept the director’s resignation in light of the best interests of our Company and our stockholders. When making this decision, the NCG Committee and the Board may consider any factors they determine to be appropriate and relevant, including any stated reasons why stockholders voted against the incumbent director (and any

alternatives for addressing those reasons) and whether the loss of the director would:

An unsuccessful incumbent would be expected not to participate in any meetings of the NCG Committee and the Board regarding his or her resignation. The Board must decide whether to accept or reject the director’s resignation within 90 days after receipt of the certified final stockholder vote for the election of directors. Within four business days following acceptance

or rejection of the resignation, the Company would file a report with the SEC on Form 8-K discussing the Board’s decision and rationale.

In a contested election (i.e., elections where the number of nominees exceeds the number of Board seats available), our By-laws provide that the candidates receiving the highest number of “FOR” votes cast by holders of shares represented in person or by proxy at the Annual Meeting will be elected to the Board seats available. This number is called a plurality. A properly executed proxy card marked “ABSTAIN” with respect to the election of a director nominee will be counted for purposes of determining if there is a quorum at the Annual Meeting, but will not be considered to have been voted for the director nominee. Similarly, broker non-votes, if any, will be counted for purposes of determining if there is a quorum, but will not be considered to have been voted for the director nominee.

The Compensation Committee believes that our executive compensation program implements and achieves the goals of our compensation philosophy. That philosophy, which is set by the Compensation Committee, is to align each executive’s compensation with our short-term and long-term performance and to provide the compensation and incentives needed to attract, motivate and retain key executives who are crucial to our long-term success. A significant portion of the total compensation opportunity for each of our executive officers is directly related to our stock price performance and to other performance factors that measure our progress against the goals of our strategic and operating plans.

We believe that we maintain “best practices” in our executive compensation programs. These practices include the following:

At our Annual Stockholders Meetings in 2015, the stockholders overwhelmingly approved the “say on pay” advisory vote to approve our executive compensation with a “FOR” vote in excess of 90 percent of the votes cast.

The Compensation Committee reviewed the result of the stockholders’ advisory vote on executive compensation and in light of the overwhelming approval by our stockholders, determined that major changes to our executive compensation programs were not required. The Compensation Committee did however adopt for fiscal years 2016 and 2017 a new short-term and long-term incentive plan to better align the executive compensation with the interests of the stockholders.

As described below in the “Compensation Discussion and Analysis” section of this proxy statement, our compensation programs are designed to support the Company’s business goals and promote short- and long-term profitable growth of the Company. Our equity plans are intended to align compensation with the long-term interests of our stockholders.

We urge stockholders to read the “Compensation Discussion and Analysis” section of this proxy statement, which describes in more detail how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the Summary Compensation table and other related compensation tables and narratives, which

provide detailed information on the compensation of our listed officers. The Board and the Compensation Committee believe that the policies and procedures articulated in “Compensation Discussion and Analysis” section of this proxy statement are effective in achieving our goals and that the compensation of our listed officers reported in this proxy statement has supported and will contribute to the Company’s long-term success.

Under our By-laws, the approval of the advisory resolution on executive compensation requires the affirmative vote of the holders of a majority of votes represented in person or by proxy at the Annual Meeting. Abstentions with respect to this proposal will be counted as votes “AGAINST” the proposal. Any broker non-votes will not be treated as shares represented in person or by proxy at the Annual Meeting with

respect to this proposal, and will not be considered to have been voted “FOR” or “AGAINST” this proposal.

This advisory vote is non-binding but the Board and the Compensation Committee will give careful consideration to the results of voting on this proposal.

Unless the Board modifies its policy on the frequency of holding “say on pay” advisory votes, the next “say on pay” advisory vote will occur at the Annual Stockholders meeting in 2017.

THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL OF THE ADVISORY RESOLUTION ON EXECUTIVE COMPENSATION.

The Audit Committee is responsible for the appointment, compensation, retention and oversight of the independent auditors retained to audit our consolidated financial statements. The Audit Committee has selected Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending April 29, 2016. Before selecting Ernst & Young LLP, the Audit Committee carefully considered, among other things, that firm’s qualifications as our independent registered public accounting firm and the audit scope. Although not required under Delaware law or our governing documents, as a matter of good corporate governance, the Audit Committee has determined to submit its selection to our stockholders for ratification. In the event that this selection of the independent registered public accounting firm is not ratified by our stockholders at the Annual Meeting, the Audit Committee will review its selection of Ernst & Young LLP.

Under our By-laws, the ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm requires the affirmative vote of the holders of a majority of votes represented in person or by proxy at the Annual Meeting. Abstentions with respect to this proposal will be counted as votes “AGAINST” the proposal. Any broker non-votes will not be treated as shares represented in person or by proxy at the Annual Meeting with respect to this proposal, and will not be considered to have been voted “FOR” or “AGAINST” this proposal. Ernst & Young LLP will attend the Annual Meeting and will have an opportunity to make a statement.

THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION OF ERNST & YOUNG LLP AS OUR

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.

Preapproval of Services Performed by the Independent Registered Public Accounting Firm.  Under applicable SEC rules, the Audit Committee is required to preapprove the audit services and permitted non-audit services performed by the independent registered public accounting firm in order to ensure that they do not impair our auditors’ independence from us. SEC rules specify the types of non-audit services that an independent registered public accounting firm may not provide to its audit client and establish the Audit Committee’s responsibility for administration of the engagement of the independent registered public accounting firm.

Consistent with the SEC’s rules, the Audit Committee has adopted a policy which requires the Audit Committee to pre-approve all audit services and permitted non-audit services provided by the independent registered public accounting firm to us or any of our subsidiaries. The policy contains a list of specific audit services, audit-related services and tax services that have been approved by the Audit Committee up to certain cost levels. This list is reviewed and approved by the Audit Committee at least annually. The preapproval of the services set forth in the list is merely an authorization for management to potentially use the independent registered public accounting firm for such services. The Audit Committee, with input from management, has the responsibility to set the terms of the engagement and negotiate the fees. The Audit Committee must specifically pre-approve any proposed services that are not included in the list or that will exceed the cost levels set forth on the list. The Audit Committee may delegate preapproval authority to its Chair or another member of the Audit Committee and, if it does, the decisions of that member must be presented to the full Audit Committee at its next scheduled meeting. In no event does the

Audit Committee delegate to management its responsibility to pre-approve services to be performed by the independent registered public accounting firm.

All requests or applications for services to be provided by the independent registered public accounting firm that do not require specific preapproval by the Audit Committee must be submitted to our Controller and must include a detailed description of the services to be rendered. Our Controller will determine whether such services fall within the list of services that have been preapproved by the Audit Committee. The Audit Committee will be informed on a timely basis of any such services rendered by the independent registered public accounting firm.

All requests or applications for services to be provided by the independent registered public accounting firm that require specific preapproval by the Audit Committee must be submitted to the Audit Committee by both the independent registered public accounting firm and our Controller and must include a joint statement as to whether, in their views, the request or application is consistent with the SEC’s rules on auditor independence.

Fees of the Independent Registered Public Accounting Firm.  The following table shows the fees that we paid or accrued for the audit and other services provided by Ernst & Young LLP for fiscal years 2016, 2015, and 2014. The Audit Committee pre-approved all of the services described below.

Audit Fees:  This category includes the audit of our annual financial statements, the audit of internal control over financial reporting, review of financial statements included in our quarterly

reports on Form 10-Q and services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements for those fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements and the preparation of an annual “management letter” on internal control matters.

Audit-Related Fees:  This category consists of assurance and related services by Ernst & Young LLP that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under “Audit Fees.” The services for the fees disclosed under this category include benefit plan audits and accounting consultations.

Tax Fees:  This category consists of professional services rendered by Ernst & Young LLP for tax compliance, tax advice and tax planning. The services for the fees disclosed under this category include tax return preparation and technical tax advice.

All Other Fees:  None.

REPORT OF THE AUDIT COMMITTEE

The Audit Committee represents and assists the Board in fulfilling its oversight responsibilities for the accounting, financial reporting and internal control functions of the Company and its consolidated subsidiaries. The Committee has the sole authority and responsibility to select, appoint, compensate, evaluate and, if necessary, replace the Company’s independent registered accounting firm. The Audit Committee also oversees the performance of the internal audit function and the portions of the Company’s compliance program with respect to legal and regulatory requirements and risk management. Each member of the Committee is financially literate and independent as determined by the Board of Directors, based upon applicable SEC laws and regulations, NASDAQ listing standards, and Company policies. The Board of Directors also determined that the chair of the Audit Committee satisfy the attributes of an audit committee financial expert, as defined by SEC regulations.

In fulfilling its oversight responsibilities with respect to the Company’s financial statements, the Audit Committee reviews and discusses with both management and the Company’s independent registered accounting firm all annual and quarterly financial statements (including any required management certifications), and the Company’s quarterly earnings announcements, prior to issuance.

Management has the primary responsibility for preparing the financial statements and complying with the reporting process, including the systems of internal controls.

The independent registered accounting firm is responsible for expressing an opinion on the conformity of the audited financial statements with United States generally accepted accounting principles and for providing their judgments as to the quality, not just the acceptability, of the Company’s accounting principles, and to express an opinion on the Company’s internal control over financial reporting based on their audit.

During fiscal 2016, among other matters, the Audit Committee:

During fiscal 2016, management advised the Audit Committee that each set of financial statements reviewed had been prepared in accordance with generally accepted accounting principles, and reviewed significant accounting and disclosure matters with the Audit Committee. The Audit Committee discussed with Ernst & Young LLP, the Company’s independent registered accounting firm (‘‘Ernst & Young’’), the matters required to be discussed by Auditing Standard No. 16, ‘‘Communications with Audit Committees’’ issued by the Public Company Accounting Oversight Board. The Audit Committee also discussed with Ernst & Young matters relating to Ernst & Young’s independence from management and the Company, including the written disclosures and the letter from Ernst & Young required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditors’ communications with the Committee concerning independence, and has discussed with the independent auditors their independence, including the impact of fees paid for non-audit services. The Audit Committee is responsible for approving the services provided by the independent auditor and the associated fees. The Audit Committee concluded that

Ernst & Young is independent from management and the Company.

The Audit Committee discussed with Ernst & Young and the Company’s internal audit management the overall scope and plans for their audits. The Audit Committee regularly monitors the Company’s compliance with Section 404 of the Sarbanes-Oxley Act. The Company uses the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) framework to evaluate the effectiveness of internal control over financial reporting. The Audit Committee periodically reviews the suitability of this framework with management. The Audit Committee and management believe that the COSO 2013 framework is a suitable framework for its evaluation of internal control over financial reporting because it is free from bias, permits reasonably qualitative and quantitative measurements of internal controls, is sufficiently complete so that those relevant factors that would alter a conclusion about the effectiveness of our internal controls are not omitted and is relevant to an evaluation of internal control over financial reporting.

The Audit Committee meets with both Ernst & Young and the Company’s internal audit personnel to discuss the results of their examinations and their evaluations of the Company’s internal controls. The Audit Committee also meets in separate private sessions periodically with Ernst & Young, internal audit, chief executive officer, chief financial officer, chief accounting officer, general counsel, and other members of management as needed. The Audit Committee also meets in executive session without management after most Audit Committee meetings.

In reliance upon the reviews and discussions referred to above, the Audit Committee recommended to the Board the inclusion of the Company’s audited consolidated financial statements in the Annual Report on Form 10-K for the fiscal year ended April 29, 2016.

The Audit Committee and the Board of Directors have also recommended the selection of Ernst & Young as the Company’s independent auditors for the fiscal year ending April 28, 2017.

AUDIT COMMITTEE

Eileen A. Mallesch, Chair

Kathleen S. Lane

Larry S. McWilliams

Kevin M. Sheehan

This report shall not be deemed to be incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, and shall not otherwise be deemed filed under such acts

CORPORATE GOVERNANCE

Board Responsibilities

The Board oversees, counsels and directs management in the long-term interests of our Company and our stockholders. The primary responsibilities of the Board and its committees include:

The independent directors meet in executive sessions, without management, at the start or conclusion of most Board meetings and at other times they deem necessary or appropriate. The

Lead Independent Director of the Board presides at these sessions.

Director Independence

Your Board follows NASDAQ rules in determining whether our directors are “independent.” The NASDAQ rules contain both bright-line, objective tests and a subjective test for determining who is an independent director. The objective tests provide specific situations where a director will not be considered independent. For example, a director is not independent if he or she is employed by us or is a partner in or executive officer of an entity to which we create, or from which we received, payments in the current or any of the past three fiscal years that exceed five percent of the recipient’s consolidated gross revenues for that year. The Board, through its Audit Committee, also reviews any related party transactions pursuant to Auditing Standard No. 18. The subjective test states that an independent director must be a person who lacks a relationship that, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Your Board annually reviews the independence of each director and has determined that all of our non-employee directors qualify as independent under the objective and subjective tests.

In evaluating independence under the subjective test, the Board reviewed and discussed all relevant facts and circumstances, including information provided by the directors and management regarding each non-employee director’s business and personal activities as they relate to us. The Board considered transactions between us and entities associated with the non-employee directors or members of their immediate family. These transactions were reviewed in the context of the NASDAQ objective tests, the special standards established by the SEC for members of audit committees, and the special standards established by the SEC and the Internal

Revenue Service for compensation committee members, as well as pursuant to Auditing Standard No. 18. In fiscal year 2016 there were no related party transactions between the Company and any of the directors or executive officers.

Board Leadership Structure

At the start of fiscal 2016, the leadership structure of the Board and Company was one with an independent chair of the Board of Directors, being Ms. Haben, and with an interim office of the chief executive officer, with Messrs. Hood and Townsley serving in that capacity.

In August 2015 the Board determined to change the leadership structure of the Board and Company partly in response to the need to provide a more focused management structure than the one in place, and provide an additional period of time for the continuing efforts to find a qualified chief executive officer for the Company. The revised leadership structure was recommended by the NCG Committee and approved by the Board of Directors. To implement these changes the Board took the following actions:

As such, the Board is comprised on nine independent directors, and two non-independent directors (due to their status as executive officers).

The current leadership structure of the Board is as follows:

Our Board believes this structure is the most appropriate leadership structure for us at this time. While the Board Chair is not independent due to his executive officer position, we have

These Board members oversee our accounting and financial reporting, operations, risk management, performance, corporate governance, compliance, financing, executive and director compensation, as well as business strategy.

Our Board believes this structure demonstrates to all of our stakeholders, including our stockholders, that your Board is committed to stockholder value creation, as well as engaged independent leadership in the performance of its responsibilities.

The Board had established two special temporary committees: the CEO Search Committee and the Transition Committee. Each of these committees had a separate independent chair, and was composed solely of independent directors. These Committee’s dissolved in November 2015 at the time that the new chief executive officer was retained.

Board Committees and Charters

The Board appoints the members of its committees and delegates various responsibilities and authority to each committee. The Board currently has standing Audit, Compensation, Finance, and NCG Committees. Each of these committees has a chairperson, and except for the Finance Committee (whose chair is not independent), is composed solely of independent directors. Each standing Board committee has a written charter approved by the Board. Copies of each charter

are posted on our website, www.bobevans.com, in the “Investors” section under “Corporate Governance.” As described below, the Board had also created two temporary committees, the CEO Search Committee and the Transition Committee, each of which had a chairperson, and was composed solely of independent directors. These two committees were dissolved in November 2015. Each committee has the power to, as it deems necessary, engage outside experts, advisers and counsel to assist in its work.

Audit Committee.  The Audit Committee was established by the Board in accordance with Section 3(a)(58)(A) of the Exchange Act. The Audit Committee’s primary responsibilities include:

The Audit Committee also reviews and pre-approves all audit services and permitted non-audit services provided by our independent registered public accounting firm to us or any of our subsidiaries and confirm that we do not engage our independent registered public accounting firm to perform any services prohibited by any applicable law, rule or regulation.

The Board has determined that each member of the Audit Committee is independent, including under the special standards established by the SEC for members of audit committees. Each member of the Audit Committee is able to read and understand fundamental financial statements, including our balance sheets, income statements and cash flow statements. The Board has also determined that Ms. Mallesch qualifies as an “audit committee financial expert” under SEC rules.

The Audit Committee’s responsibilities and activities are also described in detail in the Audit Committee’s charter, available on the Company’s website, and under the section

“—Audit Committee Report” below.

Compensation Committee.  The purpose of the Compensation Committee is to discharge the Board’s responsibilities relating to compensation of our executive officers. The Compensation Committee’s primary responsibilities include:

The Board has determined that each member of the Compensation Committee is independent, is a “non-employee director” under SEC rules, and is an “outside director” under applicable tax laws and regulations.

For more information on the responsibilities and activities of the Compensation Committee, including its process for determining executive compensation and the role of our executive officers in that process, see the sections titled “—Compensation Discussion and Analysis,” “—Compensation Committee Report” and “—Executive Compensation” below, as well as the Compensation Committee’s charter available on the Company’s website.

The Compensation Committee had retained the services of Towers Watson & Co. (“Towers Watson”), an executive compensation consulting firm, to assist the Compensation Committee with its responsibilities. Towers Watson reported directly to the Compensation Committee with respect to executive compensation consulting services. Before retaining Towers Watson the Compensation Committee determined that Towers Watson was fully independent. In January 2016 Towers Watson and Willis Group Holdings merged creating a potential independence issue since the Company used an affiliate of Willis Group Holdings for consulting services. The Compensation Committee

conducted a request for proposals from four executive compensation-consulting firms, and determined to retain Pearl Meyer on an interim basis for the work associated with the proxy statement. Before retaining Pearl Meyer the Compensation Committee determined that Pearl Meyer was fully independent. In June 2016 the Compensation Committee completed its assessment, and determined to retain Pearl Meyer for executive compensation consulting for the fiscal 2017 year. Pearl Meyer reports directly to the Compensation Committee with respect to executive compensation consulting services. For more information regarding the role of the compensation consultant, see the “—Compensation Discussion and Analysis” contained in this proxy statement.

Finance Committee. The Finance Committee reviews and recommends matters related to our capital structure, including the issuance of debt and equity securities; banking arrangements, including the investment of corporate cash; and management of the corporate debt structure. In addition, the Finance Committee reviews and approves material finance and other cash management transactions. The Finance Committee is also responsible for overseeing and advising the Board on:

The Board has determined, with the exception of Mr. Benham, that each member of the Finance Committee is independent.

Nominating and Corporate Governance Committee. The purpose of the NCG Committee is to identify and recommend to the Board qualified individuals for nomination, election or appointment as directors and executive officers, succession planning for the Board and for our executive officers, and compensation policies for the Board, such as:

The NCG Committee has retained the services of Pearl Meyer, a compensation-consulting firm, to assist the Committee with its responsibilities related to board compensation. Pearl Meyer reports directly to the NCG Committee with respect to board compensation consulting services. Before retaining Pearl Meyer, the NCG Committee determined that Pearl Meyer was fully independent.

The NCG Committee is also responsible for overseeing and advising the Board on corporate governance matters and practices, including:

The NCG Committee’s charter, available on the Company’s website, describes its responsibilities and activities in more detail. In carrying out its responsibilities to identify, evaluate and recommend director nominees, the NCG Committee considers factors it deems appropriate, including, without limitation: judgment, skill, diversity, independence, accountability, strength of character, experience with businesses and organizations of comparable size, experience with a publicly traded company, professional accomplishments, education, experience and skills relative to other Board members, desirability of the candidate’s membership on the Board and any committees of the Board, demonstrated leadership ability, existing relationships with us and potential conflicts of interest, and the ability to represent all of our stockholders. While the Board does not have a formal policy on diversity, the NCG Committee takes into account the existing diversity reflected in the members of the Board, including their professional experience, skills, backgrounds and viewpoints, as well as in gender, ethnicity and national origin. Depending on the current needs of the Board, the NCG Committee may weigh certain factors more or less heavily. In considering candidates for the Board, the NCG Committee will evaluate the entirety of each candidate’s credentials. However, there are no specific minimum qualifications that must be met by a NCG

Committee-recommended nominee. Nevertheless, the NCG Committee does believe that all members of the Board should have the highest character and integrity, business experience, a reputation for working constructively with others, sufficient time to devote to Board matters and no conflict of interest that would interfere with their performance as directors or service on Board committees.

The NCG Committee considers candidates recommended by our stockholders and evaluates them using the same criteria as for other candidates. The NCG Committee also has used, and may in the future use, third party search firms to identify potential director candidates.

A stockholder who wants to recommend a prospective nominee for consideration by the NCG Committee should submit the candidate’s name, address and qualifications to Corporate Secretary at Bob Evans Farms, Inc., 8111 Smith’s Mill Road, New Albany, Ohio 43054, as described below under the section titled “Stockholder Proposals for the 2017 Annual Meeting”.

CEO Search Committee.  The purpose of the CEO Search Committee was to organize and implement the search for a new chief executive officer.

Transition Committee.  The purpose of the Transition Committee was to assist the interim members of the office of chief executive, as well as other executive officers, with questions regarding the operations of the Company during the period prior to the appointment of a new chief executive officer.

Board Meetings and Attendance at Annual Meetings of Stockholders.  The Board and its committees meet throughout the year on a set schedule, also hold special meetings, and act by consent from time to time as appropriate. The Board held 23 Meetings during the fiscal year ending April 29, 2016. Each director is expected to attend each meeting of the Board and the

committees on which he or she serves. In fiscal year ending April 29, 2016, every director attended at least 75 percent of the meetings of the Board and the committees on which he or she served. According to our Corporate Governance Principles, each director is expected to attend each Annual Meeting of our stockholders. All of our incumbent directors attended our last Annual Meeting of stockholders held in August 2015.

Resignation, Retirement and Term Limits for Directors.  When a director’s principal occupation or business association changes substantially from the position he or she held when originally invited to join the Board, the director must tender a letter of conditional resignation to the Board and the NCG Committee. The NCG Committee will consider whether the director’s new occupation or retirement is consistent with the rationale for originally selecting that individual, the guidelines for Board membership (e.g., independence) and the current needs of the Board. The NCG Committee will recommend action to be taken by the Board regarding the resignation based on the circumstances of retirement, if that is the case, or in the case of a new position, the responsibility, type of position and industry involved.

Pursuant to our Corporate Governance Principles, a director may not stand for re-election to the Board after having served on the Board for a period of 15-years. None of our nominees have tenures exceeding 15-years, and as such, are not subject to this restriction.

Stockholder Engagement Program.  We understand the importance of a robust stockholder engagement program. To that end, our executives and management routinely attend in-person stockholder meetings and investor conferences, as well as regular meetings with institutional stockholders. Our meetings and interactions with stockholders are designed to better understand how our stockholders perceive our Company and to provide our stockholders an opportunity to discuss matters that they believe deserve

attention. We believe our engagement has been productive and provides an open exchange of ideas and perspectives for both our stockholders and us.

Stockholder Communications with the Board.  

The Board believes it is important for stockholders to have a process to communicate with the Board, committees of the Board and individual directors. Any stockholder may contact the Board or any member or committee of the Board by writing to them at Bob Evans Farms, Inc., Attention Corporate Secretary, 8111 Smith’s Mill Road, New Albany, Ohio 43054. E-mails may also be sent to the Audit Committee at: [email protected].

Stockholders should note that:

Typically, communications unrelated to the duties and responsibilities of the Board are not forwarded to the directors, such as product complaints and inquiries, new product and location suggestions, résumés and other forms of job inquiries, opinion surveys and polls, business solicitations or advertisements, junk mail and mass mailings.

Board Role in Risk Oversight.  Your Board has overall responsibility for risk oversight with a focus on the most significant risks facing our

Company. Not all risks can be dealt with in the same way. Some risks may be easily perceived and controllable, and other risks are unknown. Some risks can be avoided or mitigated by particular behavior, and some risks are unavoidable as a practical matter. For some risks, the potential adverse impact would be minor, and, as a matter of business judgment, it may not be appropriate to allocate significant resources to avoid the adverse impact. In other cases, the adverse impact could be significant, and it is prudent to expend resources to avoid or mitigate the potential adverse impact. Sometimes a higher degree of risk may be acceptable because of a greater perceived potential for a return on our investment.

Management is responsible for:

The Board implements its risk oversight responsibilities by having management provide periodic reports on the significant risks that we face and how we control or mitigate risk, if and when appropriate. In some cases, risk oversight is addressed as part of the full Board’s engagement with the chief executive officer and management. In other cases, a Board committee is responsible for oversight of specific risk topics. For example,

Presentations and other information provided to the Board and its committees generally identify and discuss relevant risks and risk control. The Board assesses and oversees risks as a part of its review of our related business, financial or other activities.

We have a formal enterprise risk management program that is managed by our chief financial officer and internal audit personnel, and is overseen by our Audit Committee. Management, through its enterprise risk management steering committee, completes a comprehensive enterprise risk management (“ERM”) review of the Company, in which the identification of enterprise level risks and mitigation processes were the primary topics. Formal policies and processes were established as part of the review for ongoing risk assessment. This continuous review is overseen by the Audit Committee with the exception of the risks related to executive compensation programs, which is overseen by the Compensation Committee. Management continues to evaluate and assess risks to the Company under the ERM program, and provides the Audit Committee and Board with updates, and the Compensation Committee and the Audit Committee continue to jointly participate in an annual executive compensation risk assessment.

Risk Assessment of Compensation Programs.  

The Compensation Committee, with the assistance of its independent compensation consultant, management and the Audit Committee, at least annually assess the risks associated with the Company’s executive compensation programs. This assessment is

conducted by the Compensation Committee, in consultation with its independent compensation consultant and management, and is then reviewed in a joint session with the Audit Committee. Based upon the review conducted in June 2016, the Compensation Committee concluded that there are no material risks arising from the Company’s executive compensation policies and practices that are reasonably likely to have a material adverse effect on the Company. In particular, in reaching its conclusion, the Compensation Committee reviewed, among other matters, the compensation system in light of the following areas of risk, where:

The Compensation Committee does not believe that any of these compensation risk factors applies to the Company’s compensation policies and practices in any meaningful manner.

Code of Conduct.  The Board has adopted a Code of Conduct that sets forth standards regarding honest and ethical conduct, full and timely disclosure and compliance with the law. The Code of Conduct embodies our expectations for ethical behavior and is built around our corporate values. The Code of Conduct applies to all of our employees, officers and directors, including our principal executive officer, principal financial officer and principal accounting officer and controller. Your Board has also adopted a Code of Ethics for Financial Personnel that sets forth standards regarding honest and ethical conduct related to the preparation of our financial statements. A copy of the Code of Conduct and the Code of Ethics for Financial Personnel are available on our web

site, www.bobevans.com, in the “Investors” section under “Corporate Governance.” Amendments to the Code of Conduct or waivers of the Code of Conduct granted to executive officers and directors will be disclosed on our web site within five days following the date of the amendment or waiver.

Transactions With Related Persons.  Your Board has adopted a Related Person Transaction Policy (the “Policy”) that is administered by the NCG Committee in conjunction with the Audit Committee. The Audit Committee has adopted procedures under Audit Standard 18 whereby a survey is completed by all officers and directors of the Company to identify any related persons transactions including any such transactions with affiliates of the officers and directors, regardless of the value of the transaction.

The Policy applies to any transaction or series of transactions in which we participate, the amount involved exceeds $100,000, and a “related person” has a direct or indirect material interest. According to SEC rules, a “related person” is a director, officer, nominee for director, or five percent stockholder of our Company since the beginning of the last fiscal year and their immediate family members. Related person transactions do not include: (1) interests arising solely from ownership of our stock if all stockholders receive the same benefit; (2) compensation to our executive officers if approved by our Compensation Committee; and (3) compensation to our directors if the compensation is disclosed in our proxy statement.

Under the Policy, all related person transactions will be referred to the NCG Committee for approval, ratification, revision or termination. No director may participate in the consideration of a related person transaction in which he or she or an immediate family member is involved. The NCG Committee can approve and ratify only those transactions that it finds to be in our best interests. In making this determination, the NCG Committee will review and consider all relevant information available to it, including:

The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis contained in this proxy statement. Based on this review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement and be incorporated by reference into Bob Evans’

Annual Report on Form 10-K for the fiscal year ended April 29, 2016.

Submitted by the Compensation Committee:

Paul S. Williams, Chair

Charles M. Elson

Mary Kay Haben

David W. Head

Michael F. Weinstein

Who are our “named executive officers?”

Under the SEC rules, our named executive officers in any fiscal year consist of our:

For the upcoming 2017 fiscal year, based on the compensation information from our 2016 fiscal year, our named executive officers for fiscal 2017 are:

What information does this section contain? Our Compensation Discussion and Analysis offers stockholders detailed information regarding the compensation awarded, earned by or paid to each of our “named executive officers,” as defined under SEC rules. We provide both the historic information for our just completed fiscal year ended April 29, 2016, including the performance metrics that were in effect and how our named executive officers and the Company performed against those metrics, as well as the performance metrics established by the Compensation Committee for the upcoming fiscal year ending April 28, 2017.

What are the objectives of Bob Evans’ executive compensation program? The overall goal of our executive compensation program is the same as our goal for operating our Company – to maximize value for our stockholders over time by aligning the financial interests of our executive officers and our stockholders. We seek to achieve this goal by establishing compensation programs that pay for performance. We use the following objectives to guide our overall approach for determining pay for our executive officers and to monitor and manage compensation:

What is the executive compensation program designed to reward? Our executive compensation program is designed to reward performance, including total company, business unit and individual performance. More than half of each executive officer’s potential total annual compensation is comprised of an annual

cash performance bonus and stock-based incentive compensation, each of which we describe in more detail below. We base all annual cash performance bonuses and most stock-based incentive compensation solely upon the achievement of performance goals derived from key business metrics associated with our annual operating plan. The performance goals and related awards are designed to motivate our executive officers to accomplish financial and strategic business objectives and to perform at their highest level. Our executive compensation program is also designed to attract and retain key executives by paying salaries and benefits that are competitive in the restaurant and food products industries.

Does Bob Evans review the compensation of its executive officers relative to the compensation paid by other companies?

Yes. When the Compensation Committee makes compensation decisions, it reviews the compensation of our executive officers and the compensation of similarly positioned executives in market survey data to gain a general understanding of current market compensation practices for these positions. Our Compensation Committee generally targets each element of our executive officers’ compensation to be within 10 to 20 percent of the market median (50th percentile) of the restaurant and food products industries for comparable positions. The Compensation Committee uses market compensation information only as a reference point to review whether our compensation practices are consistent with the market so we can retain and attract executive talent.

Market compensation is not the only factor considered in setting compensation. Our Compensation Committee believes that each executive officer’s compensation can be set at a level above or below the market median of the restaurant and food products industries depending on several factors, such as our Company’s performance, the individual’s performance, the individual’s current and potential future role with us, and whether the individual’s compensation is fair and equitable

as compared to our other executive officers’ compensation. Based on market data, we believe that compensation within the restaurant and food products industries tends to be somewhat lower than the broader general industry segment. As a result, when we need to hire a new executive or retain an executive whose position is not specifically tied to the restaurant or food products industry, we may need to pay that executive more than the market median for that position within the restaurant industry and review the compensation for that position in the overall market. We strongly believe that target compensation under our incentive plans should allow for above-median compensation for exceptional performance, as well as below-median compensation when performance falls below our expectations.

Historically our Compensation Committee’s executive compensation consultant (the “compensation consultant”), annually provided the Compensation Committee with a report that reviews each element of our executive officers’ compensation (i.e., base salary, target cash bonus and target stock-based compensation) based on survey information. In August 2015, however, the Compensation Committee adopted a policy to review executive compensation every year, but that a full review utilizing the independent compensation consultant and doing a comparison analysis, would be done on an every other year basis to save the cost of an annual review and to promote efficiency in the process. Historically the compensation consultant would review market base salary data from three surveys, one being restaurant focused and two being general industry focused. The surveys were Aon Hewitt’s Chain Restaurant Total Rewards Association Executive and Management Compensation Survey, as well as two general industry compensation surveys – the Towers Watson Executive Compensation Database and Mercer’s US Executive Benchmark Database Survey Report. Our Compensation Committee does not know the names of the individual companies included in

the surveys nor does it consider that information to be material. The information from these surveys has only been used to provide the Compensation Committee with a general understanding of current compensation practices for our executive officer positions.

The Compensation Committee historically has also annually reviewed the compensation of our chief executive officer and chief financial officer as compared to the compensation paid to officers holding these positions at a specific group of peer companies established by the Compensation Committee. The Compensation Committee, with the assistance of its compensation consultant, reviewed the companies included in this peer group periodically to ensure that they are still relevant for comparative purposes.

In May 2016 the Compensation Committee, based upon the consultation with their executive compensation consultant, Pearl Meyer, determined to use as part of the determination of executive compensation for fiscal year 2017 and future years, a published group of peer companies, which is the same peer group used in prior years as a comparative group. This peer group consists of the following 23 companies:*

* Diamond Foods, Inc., which had been in the list in fiscal year 2015, was acquired by Snyder’s-Lance, Inc. and as such is no longer in the group.

In establishing a peer group, a company’s market capitalization, core business, operations, range of products, as well as other factors, were taken into consideration because we intend to use such factors in setting future target levels of compensation and determining the value or level of awards granted.

How is executive compensation determined?

Under its written charter, our Compensation Committee has the sole authority to determine all elements of our executive officers’ compensation. We refer to the executive officers listed in the Summary Compensation Table as our “named executive officers” or our “named executives.” Additionally, the Compensation Committee is responsible for administering our equity and cash incentive plan (the “Equity and Cash Incentive Plan”) which is the Company’s primary vehicle for issuing the equity and cash bonuses.

The chief executive officer, and representatives from our human resources and legal departments, and a representative of the Compensation Committee’s compensation consultant, regularly attend Compensation Committee meetings. They work closely with the Compensation Committee Chair in establishing and prioritizing projects and, along with the Board Chair, setting meeting agendas and the action register. At the request of the Compensation Committee, the compensation consultant and management prepare reports and other materials for each Compensation Committee meeting.

In setting executive compensation, the Compensation Committee holds discussions

with our chief executive officer, a representative of human resources, and the Compensation Committee’s compensation consultant. Management makes recommendations regarding annual performance goals and targets for the Compensation Committee’s consideration and approval. Our chief executive officer, with the assistance of business segment leaders and representatives of our Human Resources department, provides the Compensation Committee with a performance assessment of all executives and makes specific recommendations to the Compensation Committee regarding their compensation. None of our employees is present during the Compensation Committee’s deliberations or decisions regarding their compensation.

Historically the Compensation Committee used a formal performance planning and evaluation process for our chief executive officer’s compensation. At the start of each fiscal year, the chief executive officer would create objectives and development goals for himself and would submit them to the Compensation Committee Chair, the Board Chair, and the LID. The Compensation Committee Chair, with input from the other independent directors of the Compensation Committee, would then prepare final objectives and development goals, which would be submitted to the Compensation Committee for its approval.

Throughout the fiscal year the Compensation Committee Chair, the Board Chair and the LID would have discussions with the chief executive officer regarding his performance. At the end of the fiscal year, the chief executive officer would provide the Committee with a written self-assessment of his performance. Additionally, each independent director would complete a written evaluation of the chief executive officer’s performance using an evaluation form adopted by the Compensation Committee. The evaluation form would rate the chief executive officer’s performance based on:

The Compensation Committee Chair, Board Chair and the LID would then prepare a formal evaluation of the chief executive officer’s performance using the self-assessment and the evaluation forms completed by the independent directors. The Compensation Committee would consider this information in setting the chief executive officer’s compensation and performance goals for the next fiscal year. In August 2015, the Compensation Committee determined to adopt a policy to review executive compensation every year, but that a full review utilizing the independent compensation consultant and doing a comparison analysis, would be done on an every other year basis to save the cost of an annual review and to promote efficiency in the process. As such, and because of the terms of the chief executive officer’s employment agreement relating to compensation, a review was completed but no changes were made to his compensation for fiscal year 2016 or 2017.

What is the role of the independent compensation consultant? The role of an independent compensation consultant is to assist the Compensation Committee in the case of employee compensation, and to assist the NCG Committee in the case of director compensation, by providing objective information and expertise necessary for the Committees to make informed decisions that are in the best interests of our business and stockholders. The compensation consultants also keep the Committees informed as to compensation trends and developments affecting public companies in general and our industries in particular.

The Compensation and NCG Committee charters provide that the Committees have sole authority to retain and terminate a compensation-consulting firm and to approve the terms and fees of any such firm for services provided to the Committees. In addition, the Charters state that the Committees have to

approve any engagement of a compensation-consulting firm by the Company to avoid any conflicts or independence issues. Each Committee charter provides that before engaging a compensation adviser (other than in-house legal counsel), the Committee shall consider all factors as could affect the independence of such consultant, counsel or advisor. These factors include those enumerated from time to time in the rules and regulations of the SEC and the listing standards of NASDAQ relevant to that adviser’s independence from management, including the six factors currently enumerated under Exchange Act Rule 10C-1 and the NASDAQ listing standards.

For the fiscal year 2016, as discussed above, the Compensation Committee originally engaged Towers Watson to provide executive compensation consulting services but later changed consultants to Pearl Meyer. The NCG Committee engaged Pearl Meyer for fiscal year 2016 director compensation-consulting services. Prior to determining to retain either consultant, as required in each Committee’s Charter, the Committee considered all factors that could affect the independence of the consultant, including the six factors currently enumerated under Exchange Act Rule 10C-1 and the NASDAQ listing standards. Each Committee also considered the quality of the services provided and the ability of the consultant’s personnel to provide objective assistance and advice to the Committee. The Committees also considered that no business or personal relationships exist between any members of the consultant’s team advising the Company, on the one hand, and the Company, any member of either Committee or any of our executive officers, on the other hand, other than in connection with the services provided. In addition, the total fees paid by the Company to the consultant for all services during fiscal year 2016 were far less than one percent of each consultant’s total revenue for the applicable fiscal year.

In addition to the two consultants, the Committees have also relied upon in-house counsel to provide legal advice to each

Committee regarding its role, responsibilities, and legal developments that may relate to compensation issues, and to assist the Committees regarding the structuring and implementation of its decisions and strategies from a legal perspective. Our in-house counsel typically attends the meetings of the Committees. Our in-house counsel has on occasion sought the advice of outside counsel in the formulation of in-house counsel’s advice to the Committees.

How does the Compensation Committee keep track of how much Bob Evans’ executive officers are paid? When making compensation decisions, the Compensation Committee reviews tally sheets and wealth accumulation information prepared for each of our executive officers by its compensation consultant. The purpose of the tally sheets and wealth accumulation information is to bring together, in one place, all of the elements of compensation for our executive officers. Each summary contains the annual dollar value of each component of the executive’s compensation, including base salary, annual cash performance bonus, stock-based compensation, perquisites (as defined by SEC regulations) and retirement benefits. This information is provided for at least the last two fiscal years so the Compensation Committee can compare the year-over-year differences in each component of compensation.

What are the elements of Bob Evans’ executive compensation program? Our executive compensation program consists of the following elements:

We believe that each element of our executive compensation program is essential to meeting the program’s overall objectives. We have not adopted a formula to allocate total

compensation among these elements. However, the program’s focus on Company, business unit and individual performance, emphasizes a strong “pay for performance” culture.

Why does Bob Evans pay base salaries, annual cash performance bonuses and stock-based incentive compensation and how is the amount of each of these elements determined?

Annual Base Salaries. Base salaries are primarily used to attract and retain our executives. When determining the base salaries of our executive officers, the Compensation Committee considers the:

The Compensation Committee has not assigned any specific weighting to these factors, and the relevance of each factor varies from individual to individual.

Annual Cash Performance Bonuses. The annual cash performance bonus is an “at-risk” bonus designed to motivate our executive officers to achieve performance goals derived from our strategic plan. These performance goals consist of goals tied to objective Company and business unit performance measures.

Within the first 90-days of each fiscal year, the Compensation Committee establishes a set of performance goals and a target cash bonus for each executive officer. Each target cash bonus is

set as a percentage of the executive officer’s base salary. The Compensation Committee sets cash bonus targets based on the recommendation of the compensation consultant, the chief executive officer, the executive chair, and a representative of human resources, in line with each executive officer’s job function and performance. The Compensation Committee also considers the market practices for annual cash bonuses for executives in similar positions in the restaurant industry (except for executive officers with positions that are not specific to the restaurant industry, for which the market median bonus opportunity for the broader general industry segment is also considered).

The amount of the cash bonus ultimately paid depends on the extent to which the performance goals are achieved as compared with the established threshold, target and maximum performance targets. Our named executive officers can receive anywhere from 0 to 200 percent of their target cash bonuses (i.e., a sliding scale is used with 0 percent payout for performance at or below threshold, 100 percent payout for performance at target, and 200 percent payout for performance at or above the maximum). The Compensation Committee maintains negative discretion regarding bonuses and may reduce a bonus depending upon factors it deems relevant.

Stock-Based Incentive Compensation. The Compensation Committee believes that stock-based incentive compensation represents a very effective method to link management objectives and stockholders’ interests because it focuses our executive officers on creating long-term stockholder value.

Our stock-based incentive compensation program has two primary goals:

Each fiscal year, the amount of stock-based incentive compensation that each of our named executive officers can receive is equal to a percentage of the named executive’s base salary. The Compensation Committee determines each executive officer’s target stock-based incentive compensation, but it takes into consideration the recommendation of the compensation consultant, and the views of the chief executive officer, the executive chair, and a representative of human resources. The target amount is made in light of each executive’s job function, performance and future potential, as well as the market median stock-based compensation opportunity for executives in similar positions in the restaurant industry. For executive officers with positions are not specific to the restaurant industry, a market median stock-based compensation opportunity for the broader general industry segment is also considered.

The program is composed of and broken down into two components; time-based, and performance based, grants:

The chief executive officer however only receives three-year performance based awards.

The executive chair, per his employment agreement, received a grant of 21,000 shares in September 2015, which vest over two years, with 9,500 to vest on August 24, 2016, and 11,500 to vest on August 24, 2017, assuming he is still in the position.

The annual time-based stock awards are made with RSU’s, while the annual three-year performance awards are made with performance stock units PSU’s. Both grants have related dividend equivalent rights which are paid if and when the award vests.

The three-year time based grants vest ratably over three years, but only if the participant is an employee at the time of vesting (and subject to certain other conditions).

The three-year performance-based grant is structured to vest after the end of a three-year period, but only if the performance metrics and certain other conditions are met. For fiscal year 2016 and 2017, the performance metric used by the Compensation Committee is the relative total shareholder return compared to the component companies in the S&P 600 Small Cap Index at the start of the period.

The amount of performance-based equity compensation that vests depends on the extent to which the performance goals are achieved because the Compensation Committee has established threshold, target and maximum performance targets at the time of the grant. Our executive officers can receive anywhere from 0 to 150 percent of the performance-based grants. The sliding scale is set-up so there is no award for performance below the threshold, an award pf 50 percent at threshold, 100 percent award for performance at target, and 150 percent award for performance at or above the maximum.

If an executive officer’s employment with us terminates before a time based or a performance award vests, he will generally forfeit the award. In the case of performance based awards, if the termination of employment is due to death, retirement, disability or termination without cause, and the executive has been employed during the 18-month period following the start of the performance period, the stock may still vest if the performance metrics are met at the end of three years, but will be proportioned for the period when the person was employed.

Does Bob Evans have a policy for granting equity awards? We have a formal “Equity Award Granting Policy.” Among other things, the policy states:

Historically, we have granted equity awards to our employees at a fixed time every year; at the regularly scheduled Compensation Committee meeting in June. The June meeting occurs after we release our fiscal year-end financial results with sufficient time to pass for the public to absorb our financial results.

From time to time, the Compensation Committee will award an equity grant at a time other than at the annual June grant. These grants are generally made as part of the hiring process for new key employees, where a current employee has been promoted and takes on additional responsibilities, or as recognition of action by the employee that resulted in an extraordinary benefit to the Company outside their normal responsibilities.

We also make an annual equity award to members of our Board under a formulae plan in accordance with our Director Compensation Program. These awards are issued on the date directors are elected at our annual meeting of stockholders typically held in August.

What retirement benefits does Bob Evans provide to its executives? Our Compensation Committee and management believe that it is important to provide an opportunity for post-retirement benefits to employees once they reach retirement. We maintain a qualified 401(k) retirement savings plan. Employees who have completed at least 30-days of service are eligible to participate as of the first day of the following month. Our executive officers may also participate in the 401K Plan on the same terms as any other employee. Our 401K Plan operates on a calendar year basis. Any company match on employee contributions is in the discretion of the Board. For calendar year 2015, the Board approved a matching contribution of $.25 on the dollar for the first six percent of eligible compensation, and starting May 1,

2016, a matching contribution of $.50 on the dollar for the first six percent of eligible compensation. Employee contributions to the 401K Plan vest immediately as required by regulations, while our matching contributions vest ratably with 100 percent vesting after five years of service.

The Internal Revenue Service requires certain nondiscrimination testing that may place limits on amounts that Highly Compensated Employees (“HCE”) may contribute to our 401K Plan. For calendar years 2015 and 2016, the plan limited the contributions of HCE’s to no more than three percent of their compensation or $7,950, whichever is less. However, an employee who qualifies (i.e., age 50 and up) may also make a catch-up contribution of $6,000 for 2015 and 2106. Our matching contributions to HCE’s accounts are then limited. Our matching contributions to the 401K Plan for our named executive officers are included in the “All Other Compensation” column of the “Summary Compensation Table.”

We maintain an executive deferral plan, which is a nonqualified deferred compensation plan. Our deferral plan allows certain management employees to defer a portion of their base salaries and up to 100 percent of their cash bonus and stock awards into the plan before most taxes are withheld. For calendar year 2015 (which includes part of our 2015 and 2016 fiscal years), the Board approved a matching contribution for the deferral plan at the same level as the 401K Plan. We believe the executive deferral plan promotes personal savings and facilitates tax deferral, as well as compensates for deferral limits under our 401K Plan. The primary benefit to participants of this plan is that most taxes are deferred until the money is distributed from the plan, so savings accumulate on a pre-tax basis. We believe we need to offer this type of plan to compete effectively for executive talent because many other companies offer this type of plan. The deferral plan also reduces the Company’s current cash obligations. For information regarding contributions to the deferral plan,

please refer to the “Nonqualified Deferred Compensation” table.

We maintained a supplemental executive retirement plan or “SERP” for a limited number of management employees, including one of our named executive officers. In June 2009, our Board amended the SERP to preclude the addition of new participants. In June 2015, our Board amended the SERP to limit any future contributions to participants to a nominal level of $1 per year.

Does Bob Evans provide any of its executive officers with severance or change in control benefits? Our Change in Control and Severance Program (the “CIC/Severance Program”), provides payments and benefits under certain circumstances, including a termination of employment in connection with a change in control. These arrangements are described in detail under “—Change in Control and Severance Program,” in this proxy statement. A table showing the incremental compensation that would have been payable to our named executive officers at the end of fiscal year 2016 under various termination of employment scenarios is located under the heading “—Potential Payouts upon Termination or Change-in-Control” in this proxy statement.

The change in control benefit provided to certain officers in the CIC/Severance Program is designed to retain key executives during the period in which a transaction involving a change in control is being negotiated or during a period in which a takeover of the Company is being attempted. We believe that our operations and the overall value of our Company could be adversely affected if the officers who have change in control benefits left us during or immediately after our acquisition by another company.

Does Bob Evans provide its executives with perquisites? We generally do not provide our named executive officers with perquisites. All of our executive officers are eligible to participate in our employee benefit programs, including

life, health and dental insurance plans, on the same terms as all other full time employees. The value and type of “perquisites” provided to our named executive officers in fiscal year 2016 are included in the “All Other Compensation” column of the “Summary Compensation Table,” and in the “All Other Compensation” table.

Does Bob Evans have stock ownership and retention requirements? Yes, we implemented stock ownership guidelines and retention requirements for our directors and officers in 2005, and the guidelines were updated in 2015 to allow officers to meet the guidelines based not only a fixed number of shares (which share requirement did not change) but in addition, by a multiple of their base salary. Each of our officers and directors are expected to meet 50 percent of the applicable stock ownership and retention guideline within three years, and 100 percent of the stock ownership and retention guideline within five years from the later of (1) the implementation of revised stock ownership guidelines; (2) their election as an officer or director; or (3) their promotion to a position with a higher stock ownership guideline.

Officers are required to retain stock granted to them under awards (with the exception of stock used to pay withholding taxes), until they meet, and they must retain the shares, to maintain their compliance with the guidelines.

We count towards these requirements any shares directly and beneficially owned, shares held beneficially through our 401K Plan, employee stock ownership plan and dividend reinvestment plan, unvested equity grants and stock options that will vest in the next 60-days, and phantom stock held under our deferred compensation programs. We believe the guidelines further align the motivations and interests of our directors and officers with the interests of our stockholders. The guidelines ensure that the individuals responsible for our stewardship and growth have a significant personal stake in our performance and progress.

The ownership guidelines for our officers vary based on the officer’s position. The following table shows our current stock ownership guidelines:

All of our Directors and named executive officers are in compliance with the requirements.

What is the potential impact of executive misconduct on compensation? The Compensation Committee has adopted an Executive Compensation Recoupment Plan (the “Recoupment Plan”). Each executive officer is a participant in the Recoupment Plan and all bonus and equity awards are subject to the Recoupment Plan. Under the Recoupment Plan, our Board may recoup annual cash bonuses, stock-based awards, performance-based compensation, and any other forms of cash or equity compensation (other than salary) paid to our executive officers under certain circumstances. The Recoupment Plan will apply in the event of a restatement of our previously issued financial statements as a result of error, omission, fraud or noncompliance with financial reporting requirements. The Compensation Committee will review the facts and circumstances underlying any restatement (including any potential wrongdoing and whether the restatement was the result of negligence or intentional or gross misconduct) and will seek to recover all or a portion of the compensation paid to an executive officer (other than salary) with respect to any fiscal year in which our financial results are negatively

affected by the restatement. Recoupment may include, but is not limited to, reimbursement by the executive officer of the amount of cash bonuses received, cancellation or forfeiture of outstanding stock-based compensation and the payment to us of stock sale proceeds. In any instance in which the Compensation Committee concludes that an executive officer engaged in an act of fraud or misconduct that contributed to the need for a financial restatement, the Compensation Committee may, in its discretion, recover, and the executive officer will forfeit or repay, all of the executive officer’s compensation (other than salary) for the relevant period, plus a reasonable rate of interest.

Additionally, if the Board were to determine that an executive officer harmed us through fraud or intentional misconduct, the Board would take action to remedy the misconduct, prevent its occurrence in the future and impose appropriate discipline, which might include termination of employment or suing the executive officer for breach of fiduciary duty. Our Equity and Cash Incentive Plan provides that all unvested awards under the Equity and Cash Incentive Plan will be forfeited if an employee’s service is terminated for cause. If our chief executive officer or chief financial officer were to engage in misconduct that resulted in a financial restatement for material non-compliance with securities laws, they would be required by law to reimburse us for bonuses, other incentive compensation, and profits from sales of our stock.

Does Bob Evans consider tax and accounting implications when making compensation decisions? Yes, the Compensation Committee considers the financial reporting and tax consequences of compensation paid to our executive officers when it determines the overall level of compensation, and mix of compensation components. The Compensation Committee generally seeks to balance the goal of providing our executive officers with appropriate compensation with the need to maximize the deductibility of compensation.

Section 162(m) of the Internal Revenue Code (“Code”) prohibits us from claiming a deduction on our federal income taxes for compensation in excess of $1,000,000 per taxable year paid to our chief executive officer and our three other most highly compensated executive officers (but excluding our chief financial officer) who are employed at the end of the fiscal year. There is an exception to this rule for compensation that qualifies as “performance-based,” which means that the compensation is only paid if the executive officer’s performance meets pre-established objective goals based on performance criteria approved by our stockholders.

We do not have a policy requiring all compensation to be deductible under Code Section 162(m) because the Compensation Committee believes there may be circumstances under which it is appropriate to forgo deductibility. However, we designed the cash performance bonus and stock-based compensation components of our executive compensation program so that most grants qualify as performance-based compensation. This is accomplished by setting goals that are based on the performance criteria approved by our stockholders as part of our Equity and Cash Incentive Plan. In fiscal year 2016 and 2017, we have granted time based equity grants that will not qualify as performance based grants. In our review of the tax consequences of these time-based grants, it does not appear that we will have a Section 162(m) limit on deductions due to the amounts involved and because certain of the grants have been deferred into the Deferral Plan. We were able to deduct all of the compensation we paid in fiscal year 2016.

Our compensation plans comply with Section 409A of the Code. Section 409A is intended to eliminate perceived abuses related

to the timing of elections and distributions, as well as the acceleration of payments, under nonqualified retirement plans and other nonqualified deferred compensation arrangements.

What significant actions has the Compensation Committee taken since the end of fiscal year 2016? Our Compensation Committee has reviewed the performance of our Company and our executive officers for fiscal year 2016, including the extent to which the performance goals set in June 2015 were met. Based on this review, the Compensation Committee approved the annual cash bonuses and made the long-term incentive awards detailed in the tables in this “Compensation Discussion and Analysis” section, as well as certifying compliance with the Code Section 162(m) requirements.

The Compensation Committee also established for the executive officers and other plan participants the fiscal year 2017: base salaries; annual short-term cash incentive compensation and related performance goals; and target stock-based compensation and related three year performance goals.

The Compensation Committee, in consultation with the independent executive compensation consultant and upon the request and recommendation of the chief executive officer, determined to award to the executives directly reporting to the chief executive officer, a one-time grant of time-based RSU’s. The grant was equal to four percent of each officer’s current base salary and was made on June 23, 2016, at the same time as the normal annual grants to employees. These grants vest ratably over three years on the anniversary date of the grant. Of the named executive officers, Messrs. Hood, Townsley and Daly received the grants.

In August 2015, the Compensation Committee determined to adopt a policy to review executive compensation every year, but that a full review utilizing the independent compensation consultant and doing a comparison analysis, would be done on an every other year basis to save the cost of an annual review and to promote efficiency in the process. So while the base salaries of the named executive officers were reviewed, they did not undergo the normal extensive review and comparison that will be conducted in fiscal year 2017 with the assistance of the

independent compensation consultants, nor did any of the base salaries change. The Compensation Committee did however award the officers who report directly to the chief executive officer, a grant of RSU’s equal to four percent of their Base Salary that vest over three years, in lieu of an increase of the Base Salary. The Compensation Committee also reviewed with management the target level base salary increase for all of our corporate office employees in good standing, which averaged at approximately two percent.