The responses of Forum participants to an informal survey during the past week expressed remarkably consistent views of the importance and need to change Farmer’s management policies, especially relating to the use of surplus funds and the development of business opportunities.

A statistical summary of responses is copied below, followed by the June 10, 2002 survey questionnaire.  Here are highlights:

• Participants expressed very strong views about restoring cumulative voting rights, with 73% ranking it as a “High” importance level and with comments reflecting widespread resentment of the recent management action to eliminate this mechanism for minority shareholder representation.
• Establishing an independent board received the highest level of support for adopting a change, at 73% of responses.  Comments suggested that this was considered clearly desirable but uncontroversial, which was associated with a relatively lower importance ranking (64% ranking it high and 27% ranking it medium, compared with 73% and 9%, respectively, for cumulative voting).
• Although virtually all respondents expressed views of high importance and support of change relating to the company’s continuing accumulation of unutilized funds, which reached 69.52% of total assets in the last quarter, there was a wide variation in how this was expressed.  The importance ranking for studying strategic alternatives tied for first place with cumulative voting, at 73%, but many respondents expressed uncertainty about what should be demanded of the board, and many respondents also assigned a lower importance ranking to the associated issue of separating control of funds and business operations.  Comments reflected similarly wide ranging views, with suggestions of such different actions as liquidation plans, stock buybacks, going private transactions, sale of the company, acquisitions of other companies, and even capital restructurings with bonds to replace dividend distributions with tax-efficient interest payments.
• Establishing director qualifications to restrict conflicts of interest received the lowest importance ranking, with only 45% of respondents ranking it high, but with none of the respondents (literally zero) advocating continuation of current management policy.  Comments reflected widespread views that there should be no need for any shareholder proposal to clarify the existing fiduciary duties of directors relating to conflicting interests.

I thank all of the Forum participants who responded to the survey, especially on such short notice.  As hoped, your responses are very helpful in focusing priorities and in suggesting proposals to address them.  A few of these suggestions were impressively creative and practical, and all of your responses, individually and aggregately, will contribute to our efforts during the next few days to define two or three proposals which are responsive to shareholder interests.

      GL – 6/17/02

Questionnaire: Shareholder Priorities

For each of the five policies listed below, and for any you want to add, please fill in the letter indicating whether you think it's a high ("H"), medium ("M") or low ("L") priority for attention, and whether you are inclined to support a continuation of current management policies ("C"), the adoption of some alternative policy ("A"), or an examination of related issues to determine shareholder interests ("E").

Please also feel free to add comments.

Your response will be treated as a private communication according to standard Forum practice, and only statistical summaries of aggregated responses will be reported.  Respondents will not be identified, and no comments will be quoted without specific permission.

1.  Separation of fund management from coffee processing and food distribution operations

Importance             Response:

H = High

M = Medium

L = Low

Support                 Response:

C = Continue current policy

A = Adopt alternative policy

E = Examine issues

Comments (optional):

2.  Require majority of independent directors

Importance             Response:

H = High

M = Medium

L = Low

Support                 Response:

C = Continue current policy

A = Adopt alternative policy

E = Examine issues

Comments (optional):

3.  Establish qualifications for directors regarding conflicting fiduciary duties

Importance             Response:

H = High

M = Medium

L = Low

Support                 Response:

C = Continue current policy

A = Adopt alternative policy

E = Examine issues

Comments (optional):

4.  Establish (restore) cumulative voting for directors

Importance             Response:

H = High

M = Medium

L = Low

Support                 Response:

C = Continue current policy

A = Adopt alternative policy

E = Examine issues

Comments (optional):

5.  Request current board's study of strategic alternatives, such as capital restructuring, sale of company, etc.

Importance             Response:

H = High

M = Medium

L = Low

Support                 Response:

C = Continue current policy

A = Adopt alternative policy

E = Examine issues

Comments (optional):

6.  Other (describe):

Importance             Response:

H = High

M = Medium

L = Low

Support                 Response:

C = Continue current policy

A = Adopt alternative policy

E = Examine issues

Comments (optional):

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.

For additional information or to be included in an email distribution list, send an inquiry to farm@shareholderforum.com.