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


----- Original Message -----
Sent: Tuesday, February 24, 2004 10:16 PM
Subject: Review of voting and other meeting information


Farmer Bros. Co. has filed an SEC Form 8K with specific voting results and other information about the annual meeting that the company had not included in its press release.  The new details strongly support yesterday’s Forum analysis of shareholder interests in a sale of the company.


The reported voting results show exceptionally high levels of dissatisfaction with the current management:


  • Less than 10% of publicly owned shares[1] were voted in favor of management’s reincorporation and takeover defense proposals.
  • Of the votes of public shareholders represented at the meeting, more than 60% were submitted with explicit instructions to “withhold” from each of the directors nominated for reelection.
  • Even the company’s employees voted 8% of the ESOP shares against the management proposals, in an extraordinarily brave expression of views after having been bluntly warned of the need to support their “supervisors.”[2]


The SEC filing also included the transcript of a speech delivered at the meeting by the company’s chief financial officer.  (It has been reported that no other executive or director addressed the meeting.)  Regarding the company’s coffee business, the speech blames the economy for its deterioration and presents a new – and surprisingly expensive – computer system as the salvation.  And on the subject of strategic alternatives, the section of the speech copied below makes it clear that management has no real intention of keeping last year’s promise to explore options “in the best interests of all shareholders.”


             - GL


Gary Lutin
Lutin & Company
575 Madison Avenue, 10th Floor
New York, New York 10022
Tel: 212/605-0335
Fax: 212/605-0325


[1] Public investors are assumed to own 647,566 shares, or 40.3% of the total 1,607,508 shares outstanding, based on the company’s report in its February 2, 2004 proxy statement that a total of 659,942 shares (41.1% of outstanding) were owned by officers and directors and that 300,000 shares (18.7% of outstanding) were owned by the company ESOP.

[2] See the February 12, 2004 “Internal Communication For Better Cooperation,” included in a February 13, 2004 filing of an SEC Form "DEFA14A" proxy solicitation report.


Investment Bank


Last summer we hired an investment bank to help us evaluate where we are and

where we might want to go.  Options under consideration include (but are not

limited to and are subject to market conditions and available opportunities)

the possibility of:

* Acquiring another Company;

* Making additional investments in production capabilities;

* Investing in expansions of our product lines;

* Making additional share repurchases; and

* The possibility of paying an extraordinary dividend.


While we will continue to seek out opportunities, for the immediate future and

in general:


* We have little interest in selling the Company;

* We have even less interest in taking the Company private;

* We have no interest in buying a Company that competes with our customers by

operating its own restaurants and retail outlets;

* We are reluctant to proceed with any business acquisition strategy until our

new information systems are in place and the organization is ready to

administer them and the acquisition.  Doing so before we are ready is too

great a risk for us.



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