TORRANCE, Calif.--(BUSINESS WIRE)--March 18,
2005--Farmer Bros. Co. (Nasdaq:FARM) said its Board of Directors on
Thursday adopted a stockholder rights plan that is designed to enable all
stockholders to realize the full long-term value of their investment and
to provide for fair and equal treatment for all stockholders in the event
that an unsolicited attempt is made to acquire the Company.
The rights plan is intended to provide the
Board with the continued ability to negotiate with persons making
proposals to purchase a substantial number of shares of the Company and
without the threat of coerced or preemptory takeover tactics not invited
by the Board. It was not adopted in response to any specific effort to
acquire control of the Company and is similar to plans adopted by other
publicly-traded companies.
The plan authorizes the Board to distribute
a dividend of one right per beneficially owned share to stockholders of
record on March 28, 2005, other than an acquiring person or group, to
purchase one one-hundredth of a share of the Company's newly created
series of preferred stock for a purchase price of $112.50, distributable
as a non-taxable dividend. In addition, if a person or group acquires more
than the triggering percentage of the Company's common stock, or if the
Company were involved in a merger or other similar transaction other than
under terms approved by the Company's Board, each right would entitle the
holder (other than the acquiring person or group) to purchase shares of
the Company's common stock, or shares of common stock of the acquirer,
having a value at that time equal to two times the purchase price of a
right.
Generally, the rights become exercisable if
a person or group acquires beneficial ownership of 15 percent or more of
the Company's common stock or announces a tender or exchange offer for 15
percent or more of the Company's common stock. The plan makes certain
exceptions with respect to this threshold of 15 percent. With respect to
the Farmer family, which beneficially owns approximately 39.8 percent of
the Company's outstanding common stock, the rights will become exercisable
if such beneficial ownership collectively equals or exceeds 45 percent of
the Company's outstanding common stock. The rights will also not become
exercisable as a result of actions by the Employee Stock Ownership Plan
(ESOP), which controls approximately 18.6 percent of the stock
outstanding.
The Company's Board may redeem the rights
for $0.01 per right at any time until 10 days after the time when a person
acquires more than the triggering percentages. Unless the rights are
redeemed, exchanged or terminated earlier, they will expire on the tenth
anniversary of the record date.
Additional details regarding the rights
plan are contained in a Form 8-K being filed by the Company today with the
Securities and Exchange Commission and in a summary to be mailed to all
stockholders following the record date.
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 Brothers has paid a dividend for 51 consecutive
years, increased the dividend in each of the last seven consecutive years,
and its stock price has grown on a split-adjusted basis from $1.80 a share
in 1980.
Safe Harbor for Forward-Looking Statements
Certain statements contained in this news
release may contain "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements are
based on management's current expectations, assumptions, estimates and
observations of future events and include any statements that do not
directly relate to any historical or current fact. These forward-looking
statements can be identified by the use of words like "may," "will,"
"intends," and other words of similar meaning, and include, without
limitation, (i) statements concerning the actions by the Company's Board
of Directors if a potential transaction involving 15 percent or more of
the Company's common stock is proposed by a third party, (ii) statements
regarding the alternatives under the rights agreement that will be
available to the Company's shareholders in such event, and (iii)
statements regarding any possible or proposed takeover of the Company.
Owing to the uncertainties inherent in forward-looking statements, actual
results could differ materially from those set forth in forward-looking
statements. We intend these forward-looking statements to speak only at
the time of this report and do not undertake to update or revise these
statements as more information becomes available except as required under
federal securities laws and the rules and regulations of the SEC. Factors
that could cause actual results to differ materially from those in
forward-looking statements include, but are not limited to, actions by
stockholders or persons or groups that may indicate a desire to acquire
all or part of the Company, and special or unusual events, as well as
other risks described in this report and other factors described from time
to time in the Company's filings with the Securities and Exchange
Commission.
Contact:
The Abernathy MacGregor Group
Jim Lucas/Whitney Hays
213-630-6550
Source: Farmer Bros. Co.