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Commitment of Corporate Funds to Purchase
Stock for Employees
(July 23, 2003)
The press release copied below was issued by Farmer Bros. Co.
on the evening of July 23, 2003. Its text was filed the following day,
July 24, 2003, in an
SEC Form 8-K report.
In announcing the board's authorization of additional
corporate funding of stock purchases for employees, the company reported that
the amount of company stock acquired for the Employee Stock Ownership Plan
("ESOP") had recently been increased to 170,425 shares, or 8.85% of the total
outstanding. This was an increase of 30,629 shares from the number
last disclosed in the company's quarterly
Form 10Q for the period ended March 31, 2003, which reported the ESOP
holdings of 139,796 shares (7.26% of outstanding) with a loan balance of
$33,539,000.
If the new purchases are completed as authorized, the ESOP
would control 15.6% of the company's voting stock
The amount of the new loan authorized by the board was not
stated, but the announcement indicated that the intent was to fund purchases of
an additional 129,575 shares for the ESOP. At recent trading prices, the
total cost of such purchases would be in excess of $40 million. Assuming
that cost range, the total amount of corporate loans to fund ESOP purchases of
stock for employees would be in excess of $80 million.
| Press Release |
Source: Farmer
Bros. Co. |
Farmer
Bros. Board Authorizes Loan to ESOP for the Purchase of Additional Shares of
Company's Stock
Wednesday July 23, 8:00 pm
ET
TORRANCE, Calif.--(BUSINESS WIRE)--July 23,
2003--Farmer Bros. Co. (Nasdaq:FARM) today said its Board of Directors has
authorized a loan to the Company's Employee Stock Ownership Plan (ESOP)
for the purchase of 129,575 additional shares of the Company's common
stock.
Farmer Brothers created the ESOP in 2000 as
a way to better align the long-term interests of its employees and
shareholders. During that fiscal year the Company's Board of Directors
authorized a loan of up to $50 million to the ESOP for the purchase of up
to 300,000 shares. As of July 21, 2003, the ESOP has purchased 170,425 of
the Company's shares at a cost of $39.58 million. The new loan will enable
the ESOP to achieve the previously stated intention of purchasing up to
300,000 shares.
Farmer Bros. Co. is an institutional coffee
roaster that sells a variety of coffee and allied products to the food
service industry. The Company's signature trucks and vans bearing the
"Consistently Good" logo are seen throughout Farmer Brothers' 28-state
service area. Farmer Bros. has paid a dividend for 50 consecutive years,
increased the dividend in each of the last seven consecutive years, and
its stock price has risen from $18 in 1980 to over $300 a share today.
Contact:
Farmer Bros. Co.
John Simmons, 310-787-5200
Source: Farmer Bros. Co.
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