SEC Acceptance of Management Argument to Block Vote on Shareholder Proposal Concerning Director Indemnification

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SEC Acceptance of Management Argument to Block Vote on Shareholder Proposal Concerning Director Indemnification

(November 28, 2003)

In a response dated November 28, 2003, the Securities and Exchange Commission ("SEC") accepted arguments presented on behalf of Farmer Bros. management to exclude a Franklin Mutual shareholder proposal concerning director indemnification from the company's proxy statement for voting at the annual meeting.

Specifically, the SEC staff refers to management's argument based on Rule 14a-8(i)(1), which permits excluding a shareholder proposal if it is "not a proper subject for action by shareholders under the laws of the jurisdiction of the company's organization." The SEC followed its usual practice in not explaining why it had accepted management's argument, which was based on its attorneys' opinion relating to state law.

A copy of the SEC letter can be downloaded from the link below. Links are also provided for the arguments presented to the SEC.

SEC decision:

Letter from Securities and Exchange Commission, dated November 28, 2003 (35 KB, in PDF format)

Arguments:

Management Argument to Exclude Shareholder Proposal for Determining Director Indemnification (September 12, 2003)
Franklin Mutual Reply to SEC Opposing Management's Exclusion of Shareholder Proposal (October 2, 2003)
Additional Arguments for SEC Consideration of Shareholder Right to Vote on Director Indemnification (October 15 and October 28, 2003)
Third Management Argument Against Shareholder Right to Vote on Director Indemnification (November 4 and November 10, 2003)

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