Forum for Shareholders of Farmer Bros. Co.

Forum Home Page

2007 Conclusion

Forum activities relating to Farmer Bros. Co. were suspended in 2007, following the second year of new management.

Farmer Bros. Home Page


Farmer Bros. Reference


Shareholder Proposal to Restore Cumulative Voting

(July 22, 2003)

Mitchell Partners, L.P., submitted a proposal and supporting statement to Farmer Bros. Co. on July 22, 2003, pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended, for inclusion in the company's proxy statement for the next meeting of stockholders.

If adopted by shareholder vote, the proposal would amend the company's Bylaws to provide for the restoration of cumulative voting for directors.  Reversing the company's 1994 elimination of those shareholder rights, the proposed amendment would also require a supermajority 75% of outstanding shares for any future elimination of shareholder rights to cumulate votes.

Mitchell Partners had submitted a proposal for the 2002 shareholder meeting which presented amendments including the restoration of cumulative voting among more extensive bylaw amendments to establish an independent board.  Although management obtained SEC concurrence to exclude that proposal from the company's proxy statement for the 2002 meeting, most of the blocked proposal's independence provisions -- other than cumulative voting rights -- will be effectively established by the Sarbanes-Oxley Act and by expected exchange listing requirements.






Resolved, that shareholders wish to restore their rights to cumulative voting for the election of directors, and that Paragraph 2, Section 8, Article II of the Company's Bylaws is therefore amended to read as follows:


"In electing directors of this corporation, the holders of shares shall be entitled to cumulate votes as permitted by the California Corporations Code.  Cumulative voting rights may be eliminated in the future only if the elimination is approved by at least 75% of outstanding shares."






During the past year investors have seen widespread evidence -- some of it, unfortunately, at Farmer Bros. Co. -- of the need for effective shareholder representative on corporate boards.


Restoring cumulative voting rights, which the Company had eliminated in 1994, will allow the Company's public shareholders to elect at least one or two members of the board of directors even if management controls over 50% of the voting stock.  It will not enable a change in control, but it will give minority shareholders the ability to select representatives on whom they can rely for oversight.


Having a real, practical ability to elect directors is the only way investors can promote good corporate governance.  If you want to be able to choose someone you believe will assure board consideration of public shareholder interests, or someone who will be responsive to investor information requirements, then you should vote for this proposal to restore your rights.




The Forum is open to all Farmer Bros. shareholders, whether institutional or individual, and to professionals concerned with their investment decisions.  Its purpose is to provide shareholders with access to information and a free exchange of views on issues relating to their evaluations of alternatives.  As stated in the Forum's Conditions of Participation, participants are expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants.  It is a Forum rule that participants will not be identified or quoted without their explicit permission.

There is no charge for participation.  Franklin Mutual Advisers, LLC, the manager of funds owning approximately 12.6% of Farmer Bros. shares, provided initial sponsorship for the Forum and arranged for it to be chaired by Gary Lutin.  Continuing support and guidance of the Forum is provided by an Advisory Panel of actively interested shareholders.

For additional information or to be included in an email distribution list, send an inquiry to