Company Name: Bob Evans Farms, Inc.
Public Availability Date: June 26, 2006
Document Sections:
INQUIRY LETTER
APPENDIX
STAFF REPLY LETTER
[INQUIRY LETTER]
May 12, 2006
VIA HAND DELIVERY
U.S. Securities and Exchange Commission
Office of Chief Counsel
Division of Corporation Finance
450 Fifth St., N.W.
Washington, D.C. 20549
Re: Bob Evans Farms, Inc. - Stockholder Proposal Submitted by Lawrence Wolf
Ladies and Gentlemen:
We are writing on behalf of our client, Bob Evans Farms, Inc., a Delaware
corporation (the "Company"), regarding a stockholder proposal (the "Proposal")
submitted to the Company by Lawrence A. Wolf for inclusion in the Company's
proxy statement and form of proxy (the "Proxy Materials") for its 2006 Annual
Meeting of Stockholders.
On behalf of the Company, we hereby notify the Securities and Exchange
Commission (the "Commission") that the Company intends to omit a portion of the
statement supporting the Proposal (the "Supporting Statement") from its proxy
statement pursuant to Rule 14a-8 promulgated by the Commission under the
Securities Exchange Act of 1934, as amended. We respectfully request, on behalf
of the Company, that the staff of the Division of Corporation Finance (the
"Staff") confirm that it will not recommend enforcement action to the Commission
if the Company omits a portion of the Supporting Statement for the reasons set
forth below. To the extent that the Company's arguments for omitting the portion
of the Supporting Statement are based on matters of law, this letter constitutes
an opinion of counsel in accordance with Rule 14a-8(j).
I. The Proposal and the Supporting Statement
A copy of the Proposal submitted to the Company on March 21, 2006 is attached as
Exhibit A. The Proposal calls for the declassification of the Company's board of
directors. The Proposal and the Supporting Statement are substantially similar
to a proposal Mr. Wolf has submitted to the Company in the past and which was
last included in the Company's 2001 Proxy Materials.
The fifth paragraph of the Supporting Statement of the Proposal reads as follows
(please note that we have not corrected typographical errors included in the
Supporting Statement):
"My resolution to declassify the board of directors has received tremendous
shareholder support. If John W. Rogers the head of Ariel Capital Management, and
Bob Evans largest shareholder can be convinced to support the declassified board
of directors the resolution should pass. This year every shareholder needs to
personally call Ariel Capital management at 1-800-292-7435 and speak with John
W. Rogers. Ask Mr. Rogers to support good corporate governance. Ask Mr. Rogers
to hold the board accountable for the meager returns the shareholders have seen
in the last 14 years. Your phone calls are very important. Mr. Rogers needs to
hear from every one of us."
We contacted Mr. Wolf to express our concern regarding the fifth paragraph of
the Supporting Statement and asked him to consider removing this language from
the Supporting Statement. In response, Mr. Wolf submitted a revised draft of the
Proposal to the Company today. A complete copy of the revised Proposal is
attached as Exhibit B. The fifth paragraph of the revised Proposal reads as
follows:
"My resolution to declassify the board of directors has received tremendous
shareholder support. Below are the 5 largest shareholders of Bob Evans. |[NCCDEF]
|[UCA1] |[TDC4,MP1] |[TCC4,M'SHARES HELD',QC,VU]
|[TCC4,M'%OWNED',C4,B'00.00%',L$B,H%B] |[TCC4,M'DEC-00-00',QL,VU] |[XT]
|[ST]|[LC10]|[RS4]|[TX]HOLDER OF STOCK |[TA]SHARES HELD|[QC] |[TA]%OWNED|[QC] |[TA]AS
OF|[QC] |[ST]|[LC7]ARIEL CAPITAL MANAGEMENT, INC. |[TA]7,269,173 |[TA]20.27%
|[TA]31-Dec-05 |[ST]|[LC3]1-800-292-7435 |[ST]|[LC5]DIMENSIONAL FUND ADVISORS
INC |[TA]2,111,537 |[TA]5.89% |[TA]31-Dec-05 |[ST]|[LC3]1-310-395-8005
|[ST]|[LC5]ADVISORY RESEARCH, INC. |[TA]1,733,935 |[TA]4.84% |[TA]31-Dec-05
|[ST]|[LC3]1-312-565-1414 |[ST]|[LC5]Allianz Global Investors of America L.P.
|[TA]1,610,776 |[TA]4.49% |[TA]31-Dec-05 |[ST]|[LC3]1-800-426-0107
|[ST]|[LC5]Barclays Global Investors UK Holdings Ltd |[TA]1,500,031 |[TA]4.18%
|[TA]31-Dec-05 |[ST]|[LC3]1-800 777 8389 (Option 3)'' |[ET]
II. Grounds for Omission
The Company believes that all but the first sentence of the fifth paragraph of
the Supporting Statement (both as drafted in the original Proposal and as
modified in the revised Proposal) may be omitted from the Proxy Materials
pursuant to Rule 14a-8(i)(3). This Rule permits a company to omit from its proxy
materials a shareholder proposal and any statement in support thereof "if the
proposal or supporting statement is contrary to any of the Commission's proxy
rules, including Rule 14a-9, which prohibits materially false or misleading
statements in proxy soliciting materials."
This portion of the Supporting Statement is unrelated and irrelevant to the
Proposal to declassify the Company's board of directors. The Commission has
explained that the purpose of permitting a proponent to include a supporting
statement is that it "can provide shareholders with background information that
may be helpful in considering the proposal." Release No. 34-20091 (August 16,
1983). This portion of the Supporting Statement fails to discuss the merits of
declassifying the Company's board of directors and does not provide the
Company's stockholders with any information that would aid them in deciding
whether or not to vote in favor of the Proposal. Rather, as originally drafted,
the fifth paragraph of the Supporting Statement is simply a call to action to
the over 40,000 stockholders of the Company designed to harass Ariel Capital
Management and John W. Rogers, Jr. for failing to support Mr. Wolf's previous
proposal and to intimidate Ariel Capital Management and Mr. Rogers into voting
in favor of the Proposal this year.
We do not believe that Mr. Wolf's revision of the Fifth Paragraph rectifies this
issue. In fact, as revised, the fifth paragraph of the Supporting Statement is
very misleading. By stating that the proposal to declassify the board has
received "tremendous shareholder support" and then immediately listing the names
and phone numbers of the Company's five largest stockholders, the Supporting
Statement indicates that those five stockholders support Mr. Wolf's Proposal.
Neither the Company nor Mr. Wolf knows how these stockholders intend to vote on
the Proposal. The Company is very concerned that stockholders reading the
Supporting Statement will mistakenly believe that the Company's five largest
stockholders support Mr. Wolf's Proposal.
We also note that the fifth paragraph of the original version of the Supporting
Statement is substantially similar to the fourth paragraph of the statement
supporting the declassification proposal Mr. Wolf submitted to the Company in
2001. In that case, the Staff concurred with the Company's view that the
language regarding Ariel Capital Management and Mr. Rogers could be materially
false or misleading under Rule 14a-9 and, therefore, could be excluded from the
Company's proxy statement. Bob Evans Farms, Inc. (June 6, 2001) (copy enclosed).
As explained above, we believe the revised version of the Supporting Statement
is false and misleading in that it indicates that the Company's five largest
stockholders support Mr. Wolf's Proposal. The Staff has consistently recognized
that portions of supporting statements that are unrelated or irrelevant to the
subject matter of the proposal may be confusing and misleading to shareholders
in violation of Rule 14a-9 and are excludable pursuant to Rule 14a-8(i)(3) or
its predecessor, Rule 14a-8(c)(3). See e.g., Bob Evans Farms, Inc. (June 6,
2001); Freeport-McMoRan Copper & Gold Inc. (February 22, 1999) (portions of
supporting statement related to the Foreign Corrupt Practices Act, political
instability in Indonesia and director use of hovercraft omitted as unrelated to
proposal to declassify the board of directors); Knight-Ridder, Inc. (December
28, 1995) (portions of supporting statement describing the company's position on
a strike and questioning an employee's continued employment omitted as unrelated
to a proposal requiring shareholder approval of any shareholder rights plan);
Unocal Corp. (March 7, 1996) (portion of supporting statement related to Myanmar
omitted as unrelated to proposal calling for the adoption of a bylaw requiring
the chairman to be an independent director). See also, Rockefeller Center
Properties, Inc. (March 30, 1993); Cigna Corp. (February 16, 1988); CBT Corp.
(March 4, 1983).
Moreover, the inflammatory tone of the original version of the fifth paragraph
of the Supporting Statement violates Rule 14a-9 by indirectly impugning the
character, integrity and personal reputation of Ariel Capital Management and Mr.
Rogers. It suggests that Ariel Capital Management's prior vote on Mr. Wolf's
declassification proposal was wrong and that Mr. Rogers does not "support good
corporate governance." It also violates Rule 14a-9 by indirectly charging
improper conduct without factual foundation by insinuating that Ariel Capital
Management acted improperly in voting against Mr. Wolf's previous proposal to
declassify the board and providing no real factual foundation as to why such a
vote is improper. Therefore, this portion of the Supporting Statement violates
Rule 14a-9 and is excludable pursuant to Rule 14a-8(i)(3). See Boise Cascade
Corp. (January 23, 2001) (portions of supporting statement containing
information irrelevant to the subject matter of the proposal, impugning the
character of the company and making charges concerning improper conduct without
factual foundation omitted pursuant to Rule 14a-8(i)(3)).
III. Conclusion
Based on the foregoing, we respectfully request that the Staff confirm that it
will not recommend enforcement action to the Commission if the Company omits all
but the first sentence of the fifth paragraph of the Supporting Statement (both
as originally drafted and as revised) from its Proxy Materials.
The Company anticipates that its 2006 Annual Meeting of Stockholders will be
held on September 11, 2006, and that definitive copies of the Proxy Materials
will be filed with the Commission on or about August 1, 2006. Accordingly, we
would greatly appreciate the Staff's timely response to this request.
If the Staff disagrees with the Company's position, we would appreciate the
opportunity to confer with the Staff prior to the issuance of its formal
response. If you have any questions or need additional information, please call
the undersigned at (614) 464-6349.
On behalf of the Company, we hereby file, pursuant to Rule 14a-8(j), six copies
of this letter and the attachments. We are simultaneously mailing a copy of this
submission to Mr. Wolf to advise him of the Company's intent to exclude portions
of the Supporting Statement from the Proxy Materials.
Finally, please acknowledge receipt of this letter by date-stamping the enclosed
additional copy of this letter and returning it to me in the enclosed
pre-addressed, stamped envelope.
Very truly yours,
/s/
Mary L. Garceau
Enclosure
cc: Mr. Lawrence Wolf
[APPENDIX]
EXHIBIT B
STOCKHOLDER PROPOSAL REGARDING ELIMINATION OF CLASSIFIED BOARD OF DIRECTORS
Larry Wolf, 227 Elm Avenue, Wyoming, Ohio 45215-4347, claiming ownership for
more than one(1) year of common shares of the company with a market value in
excess of $1,000 and that he will continue to hold the same through the date of
the annual meeting, has submitted the following resolution and supporting
statement for inclusion in this proxy statement and stated his intention to
present same at the annual meeting.
"ELIMINATE CLASSIFIED BOARD OF DIREC TORS
Resolved, the stockholders of Bob Evans Farms, inc. request the board of
director lake the necessary steps, in accordance with state law to declassify
the board of directors so all directors are elected annually, such
declassification to be affected in a manner that does not affect the current
terms of directors previously elected.
SUPPORTING STATEMENT
I apologize to all shareholders for not fighting to declassify the board of
directors for the last three years. I mistakenly thought the company was back on
track. I will be unrelenting now and in the future in trying to achieve
shareholder rights and maximize shareholder value.
The stock is down almost 20% from it price of May of 2004, just 2 years ago. The
stock has showed zero share price appreciation since January of 2002. Since 1992
the price of a share of Bob Evans has appreciated about 3% per year.
Of the 9 Directors listed in the 2005 proxy, at least 7 were present or past
employees of Bob Evans or did business with Bob Evans. Hardly an independent
board of directors that will fight for the shareholders. The current members of
the board of directors own less than 1% of the shares of Bob Evans. They do not
eat the same cooking we shareholders eat.
Declassifying the board of directors means each member of the board faces annual
review by you, the shareholders and owners of the company. A declassified board
represents good corporate governance. A declassified board increases the
accountability of the board of directors to the shareholders.
My resolution to declassify the board of directors has received tremendous
shareholder support. If John W. Rogers the head of Ariel Capital Management, and
Bob Evans largest shareholder can be convinced to support the declassified board
of directors the resolution should pass. This year every shareholder needs to
personally call Ariel Capital management at 1-800-292-7435 and speak with Johr
W. Rogers. Ask Mr. Rogers to support good corporate governance. Ask Mr. Rogers
to hold the board accountable for the meager returns the shareholders have seen
In the last 14 years. Your phone calls a every important. Mr. Rogers needs to
hear from every one of us.
This is the year to declassify the board of directors. Your votes and phone
calls are critical. A "YES" vote is a vote for strong corporate governance and
accountability. A "YES" vote send a message shareholders are not happy with Bob
Evans Farms long-term and short-term performance. Remember a vote to "abstain"
is the same as voting "no" to declassify the board of directors. Every "YES"
vote is important.
I URGE YOUR SUPPORT FOR THIS RESOLUTION
STOCKHOLDER PROPOSAL REGARDING ELIMINATION OF CLASSIFIED BOARD OF DIRECTORS
Larry Wolf, 227 Elm Avenue, Wyoming, Ohio 45215-4347, claiming ownership for
more than one(1) year of common shares of the company with a market value in
excess of $2,000 and that he will continue to hold the same through the date of
the annual meeting, has submitted the following resolution and supporting
statement for inclusion in this proxy statement and stated his intention to
present same at the annual meeting.
"ELIMINATE CLASSIFIED BOARD OF DIRECTORS
Resolved, the stockholders of Bob Evans Farms, inc. request the board of
directors take the necessary steps, in accordance with state law to declassify
the board of directors so all directors are elected annually, such
declassification to be affected in a manner that does not affect the current
terms of directors previously elected.
SUPPORTING STATEMENT
I apologize to all shareholders for not fighting to declassify the board of
directors for the last three years. I mistakenly thought the company was back on
track. I will be unrelenting now and in the future in trying to achieve
shareholder rights and maximize shareholder value.
The stock is down almost 20% from it price of May of 2004, just 2 years ago. The
stock has showed zero share price appreciation since January of 2002. Since 1992
the price of a share of Bob Evans has appreciated about 3% per year.
Of the 9 Directors listed in the 2005 proxy, at least 7 were present or past
employees of Bob Evans or did business with Bob Evans. Hardly an independent
board of directors that will fight for the shareholders. The current members of
the board of directors own less than 1% of the shares of Bob Evans. They do not
eat the same cooking we shareholders eat.
Declassifying the board of directors means each member of the board faces annual
review by you, the shareholders and owners of the company. A declassified board
represents good corporate governance. A declassified board increases the
accountability of the board of directors to the shareholders.
My resolution to declassify the board of directors has received tremendous
shareholder support. Below are the 5 largest shareholders of Bob Evans. |[NCCDEF]
|[UCA1] |[TDC4,MP1] |[TCC4,M'SHARES HELD',QC,VU]
|[TCC4,M'%OWNED',C4,B'00.00%',L$B,H%B] |[TCC4,M'DEC-00-00',QL,VU] |[XT]
|[ST]|[LC10]|[RS4]|[TX]HOLDER OF STOCK |[TA]SHARES HELD|[QC] |[TA]%OWNED|[QC] |[TA]AS
OF|[QC] |[ST]|[LC7]ARIEL CAPITAL MANAGEMENT, INC. |[TA]7,269,173 |[TA]20.27%
|[TA]31-Dec-05 |[ST]|[LC3]1-800-292-7435 |[ST]|[LC5]DIMENSIONAL FUND ADVISORS
INC |[TA]2,111,537 |[TA]5.89% |[TA]31-Dec-05 |[ST]|[LC3]1-310-395-8005
|[ST]|[LC5]ADVISORY RESEARCH, INC. |[TA]1,733,935 |[TA]4.84% |[TA]31-Dec-05
|[ST]|[LC3]1-312-565-1414 |[ST]|[LC5]Allianz Global Investors of America L.P.
|[TA]1,610,776 |[TA]4.49% |[TA]31-Dec-05 |[ST]|[LC3]1-800-426-0107
|[ST]|[LC5]Barclays Global Investors UK Holdings Ltd |[TA]1,500,031 |[TA]4.18%
|[TA]31-Dec-05 |[ST]|[LC3]1-800 777 8389 (Option 3) |[ET]
This is the year to declassify the board of directors. Your votes and phone
calls are critical. A "YES" vote is a vote for strong corporate governance and
accountability. A "YES" vote sends a message shareholders are not happy with Bob
Evans Farms long-term and short-term performance. Remember a vote to "abstain"
is the same as voting "no" to declassify the board of directors. Every "YES"
vote is important.
I URGE YOUR SUPPORT FOR THIS RESOLUTION
[STAFF REPLY LETTER]
June 26, 2006
Response of the Office of Chief Counsel Division of Corporation Finance
Re: Bob Evans Farms, Inc. Incoming letter dated May 12, 2006
The proposal requests that the board of directors take the necessary steps to
declassify the board.
There appears to be some basis for your view that a portion of the supporting
statement may be materially false or misleading under rule 14a-9. In our view,
the fifth paragraph of the supporting statement must be revised to delete all
sentences but for the sentence beginning "My resolution to declassify..."
Accordingly, we will not recommend enforcement action to the Commission if Bob
Evans Farms omits only this portion of the supporting statement from its proxy
materials in reliance on rule 14a-8(i)(3).
Sincerely,
/s/
Ted Yu
Special Counsel
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