Exhibit 10.2
Incentive Stock Option Notice and Agreement

              Bob Evans Farms, Inc.   Optionee:   Option Number:
ID: 31-4421866
3776 South High Street
Columbus, OH 43207
      Plan:   First Amended
and Restated 1998
Stock Option and
Incentive Plan
 
      ID:    

Effective [___], you have been granted an incentive stock option to buy «SHARES»
shares of common stock, par value $0.01 per share, of Bob Evans Farms, Inc. (the
“Company”) at an exercise price of «PRICE» for each share.
The total exercise price for the shares subject to this Incentive Stock Option
is «VALUE».
This incentive stock option will vest and become exercisable over a period of
three years according to the following schedule:

      Vesting Date   Number of Shares
 
   
 
   
 
   

              BOB EVANS FARMS, INC.

 
  By:    
 
      [Name]
[Title]
Date: [___]

This Incentive Stock Option Notice and Agreement is not a stock certificate or a
negotiable instrument. The stock option represented by this Incentive Stock
Option Notice and Agreement is non-transferable.
By your receipt of this Incentive Stock Option Notice and Agreement, you and the
Company agree that this incentive stock option is granted under and governed by
the terms and conditions of the Bob Evans Farms, Inc. First Amended and Restated
1998 Stock Option and Incentive Plan, including the terms and conditions set
forth on the reverse side of this Incentive Stock Option Notice and Agreement.
Section 409A of the Internal Revenue Code (“Section 409A”) imposes substantial
penalties on persons who receive some forms of deferred compensation. Your
incentive stock option has been designed to avoid these penalties. However,
because the Internal Revenue Service has not yet issued rules fully defining the
effect of Section 409A, it may be necessary to revise your Incentive Stock
Option Notice and Agreement if you are to avoid these penalties. By accepting
this incentive stock option, you agree to accept those revisions, without any
further consideration, even if those revisions change the terms of your
incentive stock option and reduce its value or potential value.

 

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Bob Evans Farms, Inc.
First Amended and Restated
1998 Stock Option and Incentive Plan
Incentive Stock Option Notice and Agreement
We are pleased to inform you that you have been granted an incentive stock
option (“Option”) to purchase shares of common stock, par value $0.01, of Bob
Evans Farms, Inc (“Shares”), (the “Company”). Your Option has been awarded under
the Bob Evans Farms, Inc. First Amended and Restated 1998 Stock Option and
Incentive Plan (the “Plan”), which, together with this Incentive Stock Option
Notice and Agreement (“Agreement”), sets forth the terms and conditions of this
Option and is incorporated by reference into this Agreement. A prospectus
describing the Plan in more detail has been delivered to you. Copies of the Plan
and the prospectus are also available at our Compensation Department. The Plan
and the prospectus contain important information and we urge you to review them
carefully.

     
Option Information:
   
Optionee:
   
Grant Date:
   
Shares Subject to the Option:
   
Exercise Price:
   
Last Exercise Date:
   

Vesting: You may not exercise this Option until the Option has vested. The
Option will vest and become exercisable according to the following schedule with
respect to each installment of Shares:

     
Vesting Date
  Number of Shares
 
   
 
   
 
   

This vesting schedule may be affected if (1) you die, (2) you retire, (3) your
employment with the Company is terminated or (4) there is a change in control of
the Company, as explained later in this Agreement.
Option Term: You must exercise this Option before the Last Exercise Date, or an
earlier date if you die or retire, if your employment with the Company is
terminated, or if there is a change in control of the Company (as explained
later this Agreement). After that time, this Option will become null and void.
Exercise: Exercising this Option means that you exchange this Option for a
number of Shares by purchasing each Share that you wish to buy at the Exercise
Price. You can only buy the number of Shares as to which the Option has vested
on the exercise date. For example, if you receive an option to buy 200 Shares
that vests in two annual installments of 100 Shares, you can buy up to 100
Shares on or after the first vesting date. You cannot buy the remaining 100
Shares until the second vesting date. The number of Shares you may purchase on
any date cannot exceed the total number of Shares as to which the Option is
vested by that date, less any Shares you previously acquired by exercising this
Option.
To exercise this Option, you must deliver to the Company (1) a written notice
that states the number of Shares you wish to buy and (2) the Purchase Price. The
“Purchase Price” is the Exercise Price multiplied by the number of Shares you
are buying. You may pay the Purchase Price in one of the following ways:
(1) Cash: Deliver cash, a cashier’s check or a personal check to the Company in
the amount of the Purchase Price.
(2) Swap/Stock-for-Stock Exercise: Deliver to the Company Shares that you
already own which have a Fair Market Value equal to the Purchase Price. The
“Fair Market Value” of the Company’s Shares, on any given date, is the last
reported sale price of the Shares on NASDAQ.
(3) Broker Assisted Exercise: Authorize a broker to sell some or all of the
Shares to be acquired through the exercise of the Option and instruct the broker
to pay the Company the portion of the sale proceeds equal to the Purchase Price
(and any tax withholding) and to pay you any sale proceeds remaining after
paying the Purchase Price and the broker’s fee.
Tax Withholding: In the event that the Company determines that any federal,
state or local tax or withholding payment is required in connection with the
exercise of this Option or sale of the Shares you acquire through this Option,
the Company has the right to require these payments from you. The Company
permits you to make these payments (1) in cash (including cash resulting from a
broker assisted exercise), (2) by having the Company withhold from the Shares
you are to receive upon exercise the number of Shares having a Fair Market Value
equal to the payment due, or (3) delivering to the Company Shares that you
already own which have a Fair Market Value equal to the payment due.
Exercise Following Retirement, Death, Disability, Termination of Employment or a
Change in Control of the Company:
Retirement (as defined in the Plan): If you retire, this Option will vest
immediately and become fully exercisable. You must exercise this Option by the
Last Exercise Date or within 90 days after retirement, whichever is earlier.
After 90 days, this Option will be converted into a non-qualified stock option
and will expire on the Last Exercise Date.
Death: If you die while employed by the Company, this Option will vest
immediately and become fully exercisable. The legal representative of your
estate must exercise this Option by the Last Exercise Date or within one year of
the date of your death, whichever is earlier.
Disability: If your employment with the Company is terminated because you become
disabled, this Option will vest immediately and become fully exercisable. You
must exercise this Option by the Last Exercise Date or within one year of the
date of your termination of employment, whichever is earlier.
Termination of Employment: If you voluntarily terminate your employment with the
Company, the unvested portion of this Option will be cancelled. You must
exercise the vested portion of this Option by the Last Exercise Date or within
90 days following the date you notify the Company of your intention to terminate
your employment, whichever is earlier. If your employment with the Company is
terminated by the Company for “cause” (as defined in the Plan), this Option will
be cancelled immediately (both the vested and unvested portion).
Change in Control of the Company: This Option will vest immediately and become
fully exercisable if, within 36 months after a change in control of the Company,
the Plan is terminated and not replaced simultaneously with a similar program
providing comparable benefits. A “change in control” is defined in the Plan.
Restrictions on Transfer of Option: You may not assign, alienate, pledge, sell
or otherwise transfer this Option, and any purported transfer will be void and
unenforceable against the Company. Notwithstanding this prohibition, this Option
may be transferred by will or by the laws of descent and distribution. During
your lifetime, this Option may be exercised only by you or your guardian or
legal representative.
Tax Consequences: This Option is intended to qualify as an “incentive stock
option” under Section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”). This brief discussion of the federal tax rules that affect this Option
is provided as general information (not as personal tax advice) and is based on
the Company’s understanding of federal tax laws and regulations in effect as of
the Grant Date. You should consult with a tax or financial adviser to ensure you
fully understand the tax ramifications of your Option.
You will not be required to pay ordinary income taxes on the value of this
Option when it is issued, when it becomes exercisable or when you buy Shares by
exercising this Option. Also, if you comply with certain rules (discussed
below), you will not have ordinary income when you sell the Shares you purchased
through this Option. Instead, capital gains taxes will apply, but only when you
sell the Shares you bought by exercising this Option. Also, these taxes will be
applied only to the difference between the price you paid for the Shares (i.e.,
the Exercise Price) and the amount you receive when you sell the Shares. Because
capital gains tax rates normally are lower than ordinary income tax rates, this
should minimize your total tax liability. However, this favorable capital gains
tax treatment is available only if you do not sell the Shares earlier than two
years after the Grant Date and one year after you exercise this Option. You may
incur a tax liability when you exercise this Option if you pay the Purchase
Price by delivering already owned Shares or using a broker assisted exercise.
If you do not comply with the rule just described, you must pay income tax, at
ordinary income tax rates, on the difference between the Exercise Price and the
fair market value of the Shares on the exercise date. Any additional gain (i.e.,
the difference between the fair market value of the Shares on the exercise date
and the amount you receive when you sell the Shares) would be taxed at capital
gains rates.
You also should know that this option is subject to an “alternative minimum
tax,” which is a special tax rate imposed on tax preference items. Generally,
the alternative minimum tax structure requires that you calculate your taxes, at
a special rate, by including all items of tax preference, including the
difference between the Exercise Price and the value of the Shares you purchase
when you exercise this Option. This is done for the year in which you exercise
this Option. Then, you compare the tax calculated under the alternative minimum
tax rates with the tax you owe under the ordinary method of calculating your
taxes for that year and pay the higher of the two tax amounts. You may avoid
application of the “alternative minimum tax” by making a special election (known
as a Code §83(b) election) within 30 days of the Grant Date. However, there are
important tax and investment issues that you must consider before making a Code
§83(b) election that you should discuss with your personal tax adviser.
Plan Controls: The Company has developed the Plan to encourage your continued
effort and commitment to the Company. The terms contained in the Plan are
incorporated into and made a part of this Agreement and this Agreement shall be
governed by and construed in accordance with the terms of the Plan. In the event
of any actual or alleged conflict between the terms of the Plan and terms of
this Agreement, the terms of the Plan shall be controlling and determinative.
Options are an Investment: Deciding whether and when to exercise this Option is
an important investment decision. If the value of the Shares subject to this
Option rises, you may realize a gain. However, there is no guarantee that the
value of the Shares will rise. If the value does not rise or declines, you may
lose all or some of your investment.
No Rights as a Stockholder: You shall not have any rights as a stockholder of
the Company with respect to any of the Shares subject to this Option until you
exercise the Option and the Company issues a certificate to you evidencing such
Shares.
Section 16 Officers: If you are an executive officer of the Company subject to
the requirements of Section 16 of the Securities Exchange Act of 1934, as
amended, you are responsible for ensuring that all the requirements of
Section 16 are met, including filing notices with the Securities and Exchange
Commission. Additionally, the methods by which you may exercise this Option and
your ability to sell the underlying shares may be subject to additional
restrictions under the federal securities laws, including Rule 144 under the
Securities Act of 1933, as amended.
IRS CIRCULAR 230 DISCLOSURE: In order to ensure compliance with requirements
imposed by the U.S. Internal Revenue Service, we inform you that any federal tax
advice contained in this communication (including any attachments) is not
intended or written to be used, and it cannot be used, by any taxpayer for the
purpose of (i) avoiding penalties that may be imposed under the U.S. Internal
Revenue Code or (ii) promoting, marketing, or recommending to another person,
any transaction or other matter addressed herein.