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Forum activities relating to Farmer Bros. Co. were suspended in 2007, following the second year of new management.

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IRRC Definition of Independent Director

Of the various definitions of an "independent director," the relatively rigorous version provided by the Investor Responsibility Research Center ("IRRC") is used by many professional investors and governance experts.  Following are IRRC's definitions of "independent director" and "affiliated director:"

Independent director:

A director elected by the shareholders who is not affiliated with the company.
Affiliated director:
A director who is linked to the company through certain relationships, and whose views may be affected because of such links.
IRRC determination of affiliated directors: IRRC generally considers any director affiliated who is a former employee; is an employee of or is a service provider, supplier, customer; is a recipient of charitable funds; is considered an interlocking or designated director; or is a family member of a director or executive.
More specifically, an affiliated director is:
bulletA former employee of the company or of a majority-owned subsidiary.
bulletA provider of professional services—such as legal, consulting or financial—to the company. The services may be provided either personally by the director or by the director’s employer.
bulletA customer of or supplier to the company, unless the transaction occurred in the normal course of business and was explicitly deemed "not material" by the company in proxy materials.
bulletAn employee of an affiliate of which the company owns less than 50 percent. (An employee of a subsidiary that is 50 percent or more owned by the company, is considered an employee director.)
bulletA designee under a documented agreement by a group (such as a union) or significant shareholder. Majority holders (or employees of majority holders) are assumed to be designated.
bulletA family member of an executive officer.
bulletA part of an interlocking directorship whereby a director and executive of the company sits on a board of another company that has an executive and director who also sit on the original company’s board.
bulletA recipient of the company’s charitable giving, if this is disclosed in the proxy statement.
bulletAny other type of affiliation that may compromise the ability or incentive of a director to perform oversight duties in the best interests of shareholders.

While IRRC considers any direct or indirect services or any transactions grounds for affiliation, it relies mainly on proxy disclosure to establish such conflicts. Since some companies provide information on all such transactions, regardless of their value, they may have more affiliated directors than companies which report only based on the technical threshold.

 

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.

There is no charge for participation.  Franklin Mutual Advisers, LLC, the manager of funds owning approximately 12.6% of Farmer Bros. shares, provided initial sponsorship for the Forum and arranged for it to be chaired by Gary Lutin.  Continuing support and guidance of the Forum is provided by an Advisory Panel of actively interested shareholders.

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