Bob Evans Board Urges Stockholders to Support Boards Director Nominees

The letter said that, “Alternatively, you could hand control of your Board over to a slate of eight nominees proposed by Sandell Asset Management Corp., which has demanded, among other things, 1) the sale and leaseback of a significant portion of Bob Evans’ restaurants; 2) the sale or spinoff of Bob Evans Foods; and 3) the rapid repurchase of an additional $350 million or more of Bob Evans stock-actions which, in our view, would seriously jeopardize sustainable stockholder value.”

Messrs. Davis and Gasser stated that, “While we believe that Sandell Asset Management, which reportedly managed approximately $7.5 billion in assets at its peak but only approximately $1 billion as of 2013, may need to press Sandell’s agenda at Bob Evans to further its own business purposes, we do not believe this should come at the expense of the best interests of Bob Evans’ stockholders.”

They further stated that, “Your Board believes that Bob Evans Farms is well-positioned for strong profit growth and value creation and that it is critical to 1) maintain strategic control of the Company’s valuable real estate; 2) continue to realize the opportunities for growth, brand and operating synergies available to us with a combined Bob Evans Restaurants and Foods; and 3) continue the Company’s controlled and disciplined approach to return capital to stockholders, which has resulted in the return of more than $800 million to stockholders since 2007 in dividends and share repurchases.”

The letter also outlined Sandell’s repeated rejections of the Company’s settlement offers, but added that the Board remains open to a constructive solution.

Faced with a clear choice about the Company’s direction, the Board urged stockholders to vote the WHITE proxy card to elect the Board’s slate of director nominees at the Company’s Annual Meeting on August 20, 2014.

Complete text of letter follows:

July 16, 2014

Dear Fellow Stockholder,

At your Company’s 2014 Annual Meeting, you will have a clear choice about the future of Bob Evans: We urge you to elect the open-minded, highly-qualified and independent nominees recommended by your Board who will continue to 1) execute a growth strategy built on a recently completed two-year transformational investment program, 2) build on its track record of returning capital to stockholders and 3) consider other strategic opportunities to benefit stockholders.

Your Board believes that Bob Evans Farms is well positioned for strong profit growth and value creation and that it is critical to, 1) maintain strategic control of the Company’s valuable real estate; 2) continue to realize the opportunities for growth, brand and operating synergies available to us with a combined Bob Evans Restaurants and Foods; and 3) continue the Company’s controlled and disciplined approach to return capital to stockholders, which has resulted in the return of more than $800 million to stockholders since 2007 in dividends and share repurchases. We are convinced that this is the prudent approach for the sustainable growth and value of your Company.

With a revitalized and restructured asset base in each of our business segments, our goal is to deliver consistent sales growth and margin expansion. Pursuing Sandell’s plan, which we believe is designed to maximize quick returns at the expense of sustainable growth, would jeopardize the gains we expect from these investments.

Bob Evans Farms has invested over $120 million in the past two years remodeling virtually all of its restaurants. The positive impact of this program is borne out by research conducted by WD Partners and Nation’s Restaurant News in this year’s “Consumer Picks” survey, which shows Bob Evans advancing its ranking in the areas of food quality, value, service, menu variety, atmosphere, and cleanliness. The Company’s refreshed stores have consistently outperformed the non-refreshed stores over the last three years.

At Bob Evans Foods, we have reduced our manufacturing footprint from nine facilities to four and consolidated our transportation facilities into one central hub. With these investments behind us, we are poised to generate top-line growth as we continue to effectively manage cost drivers, including input and labor costs.

We consider good corporate governance essential to successful business outcomes. We believe our stockholder rights, Board structure, and compensation practices meet or exceed best practices. Consistent with this commitment to rigorous, independent oversight and dynamic, open-minded leadership, we have added four new independent directors to the Board over the last two years.

The Board composition we propose would be highly qualified, independent, and balanced:

In addition, your management and Board are well aligned with stockholders. Directors and officers collectively own – either beneficially or through deferred compensation plans – over 900,000 shares, putting them in the top 10 among Company stockholders.

Consistent with our fiduciary duties to you and with our high governance standards, your Board of Directors has tried to work constructively with Mr. Sandell for nearly twelve months, carefully considering his ideas and proposing ways to add new independent and highly-qualified individuals to the Board. We subject our financial and strategic plans to rigorous review on a regular basis – including in consultation with independent financial advisors – and we always welcome fresh thinking.

With that in mind, we have engaged repeatedly with Sandell since July 2013, including by arranging meetings and discussions between Mr. Sandell and our executive management, our Lead Independent Director and our independent financial advisor, in an effort to better understand and consider his proposals. As early as January, we offered Mr. Sandell the opportunity to consult with the Board in the addition of new independent directors to the Board. Sandell refused the offer.

The Board’s numerous further efforts to avoid the extraordinary time and cost demands of a proxy contest have also met with frustration, as detailed in the Company’s proxy statement previously sent to you. Our most recent settlement proposal would have resulted in Sandell’s nominees constituting a full quarter of the Board, while half the Board – including a majority of the independent directors – would have joined this year. Additionally, we proposed adding two Sandell nominees to the Finance Committee, resulting in a six-person Committee, half of which would have been new to the Board this year and charging the Committee with reviewing Sandell’s economic proposals and other opportunities to enhance stockholder value. The Committee also would have had the ability to retain an additional independent investment bank to assist with that review. Our proposal would have ensured another fresh and independent review of Sandell’s proposals. Sandell, however, spurned this offer as well.

Despite Sandell’s repeated rejections of our settlement offers, we remain open to a constructive solution as is clearly demonstrated by our decision to keep the Board size at 12 even with the retirement of two incumbent directors before the 2014 annual meeting. Since the Board has nominated a slate of 10 directors for these 12 positions, we expect that at least two of Sandell’s nominees will be elected even if our entire slate is elected.

While we are disappointed that Mr. Sandell has not responded in a manner that we consider constructive to the openness we have shown him over the past year, we are committed to continue working with our investors to ensure that we consider all options for enhancing stockholder value. We will continue to carefully and comprehensively review our plans and strategies – and to measure their success based on performance in the markets we serve – with the overriding objective of serving your best interests.

Thank you for your continued support.

Sincerely,

/s/ Michael A. Gasser

/s/ Steven A. Davis

Your Board has carefully evaluated the ideas presented by Sandell over the course of the past twelve months. It has concluded that:

Certain statements in this letter that are not historical facts are forward-looking statements. Forward-looking statements involve various important assumptions, risks and uncertainties. Actual results may differ materially from those predicted by the forward-looking statements because of various factors and possible events. We discuss these factors and events, along with certain other risks, uncertainties and assumptions, under the heading “Risk Factors” in Item1A of our Annual Report on Form 10-K for the fiscal year ended April25, 2014, and in our other filings with the Securities and Exchange Commission. We note these factors for investors as contemplated by the Private Securities Litigation Reform Act of 1995. Predicting or identifying all such risk factors is impossible. Consequently, investors should not consider any such list to be a complete set of all potential risks and uncertainties. Forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update any forward-looking statement to reflect circumstances or events that occur after the date of the statement to reflect unanticipated events. All subsequent written and oral forward-looking statements attributable to us or any person acting on behalf of the Company are qualified by the cautionary statements in this section.

Bob Evans Farms Inc. (the “Company”), its directors and certain of its executive officers are participants in the solicitation of proxies in connection with the Company’s 2014 Annual Meeting of Stockholders. The Company has filed a definitive proxy statement and form of WHITE proxy card with the U.S. Securities and Exchange Commission (the “SEC”) in connection with such solicitation of proxies from the Company’s stockholders. WE URGE INVESTORS TO READ THE DEFINITIVE PROXY STATEMENT (INCLUDING ANY AMENDMENTS AND SUPPLEMENTS THERETO) AND ACCOMPANYING WHITE PROXY CARD CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.

This document contains quotes and excerpts from certain previously published material. Consent of the author and publication has not been sought or obtained to use the material as proxy soliciting material.

Bob Evans Farms Inc. (the “Company”), its directors and certain of its executive officers are participants in the solicitation of proxies in connection with the Company’s 2014 Annual Meeting of Stockholders. The Company has filed a definitive proxy statement and form of WHITE proxy card with the U.S. Securities and Exchange Commission (the “SEC”) in connection with such solicitation of proxies from the Company’s stockholders. WE URGE INVESTORS TO READ THE DEFINITIVE PROXY STATEMENT (INCLUDING ANY AMENDMENTS AND SUPPLEMENTS THERETO) AND ACCOMPANYING WHITE PROXY CARD CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.

This document contains quotes and excerpts from certain previously published material. Consent of the author and publication has not been sought or obtained to use the material as proxy soliciting material.