Shareholder Motion Deflected, Farmer Bros. Board Still
in Flux
In normal times, Farmer Bros. ignores its shareholders. But
in today’s corporate environment the company has found itself fighting them
off.
Torrance-based Farmer has successfully deflected a proposal that would make
it easier for minority shareholders to elect their own board
representatives. But it will likely have to make changes to its board to
comply with the recently passed Sarbanes-Oxley Act and newly proposed Nasdaq
listing requirements.
The Securities and Exchange Commission has told Farmer Bros. it can exclude
a proposal from Mitchell Partners LP that would have required the company to
have a majority of independent directors and given shareholders cumulative
voting rights. Farmer asked the SEC for permission to remove the proposal,
which was to be voted on at the company’s annual meeting, set for December.
But the victory is obscured by government and stock exchange standards that
aim to tighten independence requirements for company directors. On the
subject of director independence, John Simmons, Farmer Bros.’ treasurer,
said, “When the time comes for us to address that we will.”
At present, Farmer’s six-member board has one director that would generally
be considered independent.
“I consider it inappropriate for Farmer Bros. to withhold the proposal from
shareholder voting regardless of the SEC posture about taking enforcement
action,” said Gary Lutin, a New York investment banker chairing an online
forum for Farmer shareholders.
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.
