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[letterhead]
LUTIN & COMPANY
575 Madison Avenue
New York, New York 10022
Telephone (212) 605-0335
Facsimile (212) 605-0325
December
16, 2002
By telecopier:
310/320-2436
Messrs. John M. Anglin,
Guenter W. Berger,
Lewis A. Coffman,
Roy E. Farmer,
Roy F. Farmer, and
John H. Merrell
c/o Farmer Bros. Co.
20333 South Normandie Avenue
Torrance, California 90502
To the members of the board of directors
of Farmer Bros. Co.:
You should be aware of
certain concerns raised by a report about Farmer Bros. Co. issued last week
by Institutional Shareholder Services ("ISS"), a proxy advisory firm which
provides analyses and recommendations for shareholder voting decisions.
The ISS analyst who prepared
the report told me that he had relied not only on your company's SEC
filings, but also on discussions with company representatives for his
understanding of the matters to be presented for voting at your December
26th meeting. You may recall that Mr. Simmons stated in his December 6th
response to my December 4th letter that you had been advised by legal
counsel that making public statements about the shareholder proposal "would
likely constitute an unlawful proxy solicitation." If that is so, it would
be equally improper to make statements to someone who is expected to
distribute a report to some of your shareholders based on those statements.
It is hoped that you will resolve this apparent contradiction one way or
another, preferably by reporting directly to all of your shareholders,
publicly, anything management tried to transmit through ISS.
You will also observe that
some of the information and assumptions in the ISS report are inconsistent
with what appears in your SEC filings, and also with what is reported by a
not-for-profit proxy research firm. For example, the ISS report states
incorrectly that Mr. Anglin is an independent director, and that the
shareholder proposal would require making the entire corporation an
investment company without allowing the alternative of separating into
operating and investment affiliates. Whatever the source of this
potentially misleading confusion may have been, it is hoped that you will
assume responsibility for its correction.
Very truly
yours,
Gary Lutin
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