FARMER BROS. CO. ANNUAL MEETING OF SHAREHOLDERS, NOVEMBER 27, 1995
This proxy is solicited on behalf of the Board of Directors
The undersigned hereby appoints ROY F. FARMER, GUENTER W. BERGER and
LEWIS A. COFFMAN, as Proxies, each with the power to appoint his substitute,
and hereby authorizes them to represent and to vote as designated below, all
the shares of common stock of Farmer Bros. Co. held of record by the
undersigned, at the annual meeting of shareholders to be held on
November 27, 1995, and any adjournments thereof.
PROPOSAL
1. ELECTION OF DIRECTORS FOR all nominees listed below WITHHOLD
AUTHORITY
(except as marked to the to vote for all nominees
contrary below) [ ] listed below [ ]
______________________________________________________________________________
ROY F. FARMER, ROY E. FARMER, GUENTER W. BERGER, LEWIS A. COFFMAN, CATHERINE
E. CROWE, JOHN M. ANGLIN (INSTRUCTION: To withhold authority to vote for any
individual nominee, write that nominee's name on the space provided above.)
2. PROPOSAL TO APPROVE THE APPOINTMENT OF COOPERS & LYBRAND L.L.P. as the
independent public accountants of the Company.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
(Please sign and date on the reverse side)
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS YOU HAVE INDICATED
ABOVE. IF NO INDICATION HAS BEEN MADE, THE SHARES REPRESENTED BY THIS PROXY
WILL BE VOTED IN FAVOR OF EACH OF THE ABOVE PERSONS AND PROPOSALS.
You are requested to date and sign this proxy and return it in the
enclosed envelope. This proxy will not be used if you attend the meeting and
vote in person.
DATED:
SIGNATURE:
SIGNATURE IF HELD JOINTLY
SHARES OF
COMMON STOCK
Note: Please date this
Proxy and sign it
exactly as your name
or names appear
hereon, and return
promptly in the
enclosed envelope.
Executors,
administrators,
trustees, etc., should
so indicate when
signing, If the
signature is for a
corporation, please
sign full corporate
name by authorized
officer. If shares are
registered in more
than one name, all
holders must sign.
I will [ ] I will not [ ] attend the shareholders annual meeting.
<PAGE>
Farmer Bros. Co.
20333 SOUTH NORMANDIE AVENUE
TORRANCE, CALIFORNIA 90502
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be Held November 27, 1995
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Farmer
Bros. Co. will be held at the main office of the Company located at 20333
South Normandie Ave., Torrance, California, on Monday, November 27, 1995, at
10:00 o'clock a.m., Los Angeles time, for considering and acting upon the
following:
1. The election of a board of six directors to serve until the next Annual
Meeting or until their successors are duly elected and qualify;
2. Approval of the appointment of Coopers & Lybrand L.L.P. as the
independent public accountants of Farmer Bros. Co. for the year ending
June 30, 1996; and
3. Any and all other matters that may properly come before the meeting or
any adjournment thereof.
Only holders of common stock of record at the close of business on October 20
1995, will be entitled to notice of and to vote at the meeting and any
adjournments thereof.
MANAGEMENT HOPES YOU WILL ATTEND THE MEETING, BUT IF YOU CANNOT BE
THERE, PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY.
DAVID W. UHLEY
Secretary
<PAGE>
Torrance, California
October 30, 1995
Farmer Bros. Co.
20333 SOUTH NORMANDIE AVENUE
TORRANCE, CALIFORNIA 90502
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation
by the Board of Directors of proxies from holders of common stock of Farmer
Bros. Co. (hereinafter called the "Company") for the Annual Meeting of
Shareholders of the Company to be held at 20333 South Normandie Avenue,
Torrance, California, on Monday, November 27, 1995, at 10:00 o'clock a.m.,
and for any adjournment thereof.
The cost of soliciting proxies by the Board of Directors will be borne
by the Company. Such solicitation will be made primarily by mail. In
addition, certain directors, officers or regular employees of the Company
may solicit proxies by telephone or other device or in person.
The mailing of proxy materials will commence on or about October 30,
1995. The Company will request known nominees to forward proxy materials to
the beneficial owners of the Company's shares.
On the October 20, 1995, record date, the Company had outstanding
1,926,414 shares of common stock. The Company has no other class of
securities outstanding. Only holders of shares of common stock of record at
the close of business on that date will be entitled to notice of and to vote
at the meeting or any adjournment thereof, and each such holder present or
represented at the meeting will be entitled to one vote for each share of
common stock held. In electing directors this year, a shareholder may not
cumulate his or her vote. Shareholders are entitled to only one vote per
share with the six nominees receiving the highest number of votes being
elected.
Shares of common stock represented by proxies received will be voted:
(1) unless authority is withheld, for the election of the nominees listed on
page 6 as directors; and (2) unless otherwise specified, for approval of the
appointment of Coopers & Lybrand L.L.P. as the Company's independent public
accountants for the ensuing year. In the event that one or more of said
nominees should become unavailable to serve as a director for any reason,
the proxy holders will vote the shares for such other person, if any, as
shall be designated by the Board of Directors.
Any proxy delivered in the form enclosed may be revoked by the person
executing it at any time prior to the voting thereof.
<PAGE>
OWNERSHIP OF COMMON STOCK
Principal Shareholders
The following are all persons known to management who own beneficially
more than 5% of the Company's common stock (as of October 20, 1995):
Amount and Nature Percent
Name and Address of of Beneficial of
Beneficial Owner Ownership (1) Class
Roy F. Farmer 834,854 shares (2) 43.34%
c/o Farmer Bros. Co.
20333 South Normandie Ave.
Torrance, California 90502
Catherine E. Crowe 203,430 shares (3)(4) 10.56%
c/o Farmer Bros. Co.
20333 South Normandie Ave.
Torrance, California 90502
According to a Schedule 13G filing with the Securities and Exchange
Commission dated October 16, 1995, filed by a group comprised of Quest
Advisory Corp., Quest Advisory Co. and Charles M. Royce, all of 1414 Avenue
of the Americas, New York, N.Y. 10019, Quest Advisory Corp. at that date
owned beneficially 162,225 shares (8.4%). Quest Advisory Corp. is reported to
have sole voting and investment power over these shares.
__________________________
(1) Sole voting and investment power.
(2) Includes 172,733 shares owned outright by Mr. Farmer and his wife as
trustees of a revocable living trust, 577,258 shares held by various
trusts of which Mr. Farmer is sole trustee and 84,863 shares previously
held in the estate Mrs. Elizabeth H. Farmer, of which Mr. Farmer was the
sole executor that were distributed during fiscal year 1995, to various
trusts, to which such shares Mr. Farmer disclaims beneficial ownership.
Excludes 1,794 shares owned by his wife in which Mr. Farmer disclaims
any beneficial interest, and excludes shares held by a family trust of
which Mr. Farmer formerly was trustee and which shares formerly were
reported by Mr. Farmer.
(3) Excludes 9,900 shares held by trusts for Mrs. Crowe's benefit. Mr.
Farmer is sole trustee of said trusts and said shares are included in
his reported holdings.
(4) During the Company's fiscal year 1995, a loan in the amount of $739,500
was made to Steven Crowe, son of Catherine Crowe, a director of the
Company. The loan was made for the purpose of enabling him to purchase a
residence. The loan is collateralized by a deed of trust against the
residence and a pledge of 2,400 shares of Farmer Bros. Co. stock held in
trust for Steven Crowe. The Company will receive interest at a
competitive rate of 8.75% per annum. As of October 20, 1995, a total of
$739,096 remains outstanding.
<PAGE>
Management Shareholdings
The following sets forth the beneficial ownership of the common stock of
the Company by each director and nominee, each executive officer named in the
Summary Compensation Table and all directors and executive officers as a
group:
Number of Shares Percent
and Nature of of
Name Beneficial Ownership (1) Class
Roy F. Farmer (See "Principal Shareholders," supra)
Guenter W. Berger 212 (2) *
Lewis A. Coffman 15 (3) *
Catherine E. Crowe (See "Principal Shareholders," supra)
Roy E. Farmer 34,919 (4) 1.8%
John M. Anglin None -
Kenneth R. Carson 89 *
John E. Simmons 118 *
All directors and executive
officers as a group (9 persons) 1,073,625 55.73%
___________________________
(1) Sole voting and investment power unless indicated otherwise in following
footnotes.
(2) Held in trust with voting and investment power shared by Mr. Berger and
his wife.
(3) Voting and investment power shared by Mr. Coffman and his wife.
(4) Includes 2,400 shares owned outright by Mr. Farmer and 32,519 shares
held by various trusts of which Mr. Farmer is sole trustee.
*less than 1%.
<PAGE>
PROPOSAL ONE:
ELECTION OF DIRECTORS
Six directors are to be elected at the meeting, each to serve for the
ensuing year and until his or her successor is elected and qualify. All of
the nominees are presently directors of the corporation. All of the present
directors were elected to their current term by the shareholders. All of the
nominees have consented to be named and have indicated their intent to serve
if elected. None of the nominees is a director of any other publicly-held
company. The names of the nominees for election as directors are set forth
below, and the following information is furnished with respect to them:
Served as a Director Principal
Name Age Continuously Since Occupation
Roy F. Farmer (1) 79 1951 Chairman and Chief
Executive Officer,
Farmer Bros. Co.
Roy E. Farmer (1) 43 1993 President and Chief
Operating Officer,
Farmer Bros. Co.
Guenter W. Berger 58 1980 Vice President -
Production Farmer
Bros. Co.
Lewis A. Coffman 76 1983 Retired (formerly Vice
President - Sales,
Farmer Bros. Co.)
Catherine E. Crowe(1) 77 1981 Private Investor
John M. Anglin(2) 48 1985 Partner in Law Firm of
Walker, Wright, Tyler
& Ward, Los Angeles
____________________________
(1) Roy F. Farmer is the father of Roy E. Farmer. Roy F. Farmer and
Catherine E. Crowe are siblings.
(2) Walker, Wright, Tyler & Ward provides legal services to the corporation.
<PAGE>
PROPOSAL TWO:
APPROVAL OF PUBLIC ACCOUNTANTS
Subject to the approval of the shareholders, the firm of Coopers & Lybrand
L.L.P. has been appointed by the Board as the Company's independent public
accountants for the year ending June 30, 1996, subject to the Board's right
to change firms should it deem such a change to be in the best interests of
the Company. Coopers & Lybrand L.L.P. has audited the accounts of the
Company since 1933. It has no direct financial interest or any material
indirect financial interest in the Company or its subsidiary. During the
past three years, it has had no connection with the Company or its subsidiary
in the capacity of promoter, underwriter, voting trustee, director, officer
or employee.
A representative of Coopers & Lybrand L.L.P. is expected to be present at
the Annual Meeting to answer appropriate questions and to make a statement if
he or she desires to do so.
Recommendation
The Board of Directors recommends a vote "FOR" approval of the appointment
of Coopers & Lybrand L.L.P.
OTHER MATTERS
Voting Requirements
Under the California General Corporation Law and the Company's Bylaws, the
nominees receiving the highest number of votes will be elected as directors
of the Company; and the approval of the public accountants requires the
affirmative vote of a majority of those shares represented at the meeting in
person or by proxy. A quorum consisting of a majority of the outstanding
shares of common stock must be present at the meeting in person or by proxy
to transact business. Votes will be counted by those persons appointed to
act as inspectors of the election. Abstentions and broker non-votes will not
be counted as voted either "for" or "against" any matter but will be counted
in determining whether a quorum exists.
Directors Meetings and Related Matters
The Board of Directors met four times during fiscal 1995. No director
receives fees or expense reimbursements for his or her attendance at the
meetings, except Mr. Anglin who was paid an hourly fee of $250 for each
meeting attended. The corporation has an Incentive Compensation Plan
Committee which is currently composed of Mrs. Crowe and Messrs. Berger and
Coffman. Its function is to administer the Company's Incentive Compensation
Plan. This committee did not meet in fiscal 1995.
Messrs. Anglin and Coffman and Mrs. Crowe constitute the Audit
Committee. This committee met once in fiscal 1995.
Summary Compensation Table
The following table sets forth all remuneration paid to the Chief
Executive Officer and the four other most highly compensated officers whose
total compensation during the last fiscal year exceeded $100,000, for
services in all capacities to the Company and its subsidiary.
Name and Principal Annual Compensation(1) All Other
Position Fiscal Year Salary Other Compensation (2)
ROY F. FARMER 1995 $ ------ $123,825(3) $2,960
President and C.E.O. 1994 $ ------ $124,895 $2,748
1993; Chairman 1993 $ ------ $115,788 $5,325
and C.E.O. 1994-1995
ROY E. FARMER 1995 $206,003 $ ------- $ 148
Vice President 1993; 1994 $200,000 $ ------- $ 138
President and C.O.O. 1993 $128,000 $ ------- $ 40
1994-1995
GUENTER W. BERGER 1995 $175,103 $ ------- $ 302
Vice President, 1994 $170,000 $ ------- $ 264
Production 1993 $142,000 N/A $ 236
KENNETH R. CARSON 1995 $154,500 $ ------- $ 221
Vice President, Sales 1994 $150,000 $ ------- $ 209
1993 $125,000 N/A $ 194
JOHN E. SIMMONS 1995 $139,055 $ ------ $ 108
Treasurer 1994 $135,000 $ ------ $ 98
1993 $105,600 N/A $ 90
______________________
(1) The Company has an Incentive Compensation Plan under which current or
deferred bonuses may be granted to key management employees. The size
of the award is keyed to profit levels and the amount of previous
awards. No awards have been made since 1987. The Company has no other
long term incentive compensation plan, no stock option plan and no stock
appreciation rights plan or similar plan.
(2) For all officers listed other than Roy F. Farmer, the amount shown
represents the amount paid by the Company in fiscal 1995 under the
Company's executive life insurance plan for the insurance benefit
accruing to the employee.
(3) Cash payment made to Mr. Farmer pursuant to his employment contract with
the Company. The $123,825 includes reimbursements to Mr. Farmer for
premiums paid for term life insurance coverage under the split-dollar
policies maintained by the Company under its employment contract with
Mr. Farmer. See "Employment Agreement," infra.
<PAGE>
Employment Agreement
Effective as of February 1, 1988, the Company and Roy F. Farmer,
Chairman and Chief Executive Officer of the Company, entered into a ten-year
employment contract. The benefits provided by the Company under the contract
are in lieu of both salary payments to Mr. Farmer and further awards to him
under the Incentive Compensation Plan. Pursuant to the terms of the
contract, as amended, the Company pays premiums on two split-dollar insurance
policies, one insuring the life of Mr. Farmer and the other insuring the
joint lives of Mr. Farmer and his wife. A trust created for the benefit of
Mr. Farmer's family is both the owner and the beneficiary of these policies,
subject to an assignment to the Company of a collateral interest in the
policies designed to refund to the Company the aggregate premiums paid by it
($618,096 paid in fiscal 1995). Because of the collateral assignment, no
part of the cash value of these policies has yet accrued to Mr. Farmer or his
trust. Under the terms of the employment contract, the Company also makes an
annual cash payment to Mr. Farmer see footnote (3) to Summary Compensation
Table) sufficient to reimburse him for his contribution to the insurance plan
and to enable him to pay his personal income taxes arising from the
employment contract benefits.
Retirement Plan
The following table shows estimated annual benefits payable under the
Retirement Plan upon retirement at age 62 to persons at various average
compensation levels and years of credited service based on a straight life
annuity. The Retirement Plan is a contributory defined benefit plan covering
all non-union Company employees. The following figures assume that employee
contributions (2% of annual gross earnings) are made throughout the
employees' first five years of service and are not withdrawn. After five
years of participation in the plan, employees make no further contributions.
Benefits under a predecessor plan are included in the following figures.
Maximum annual combined benefits under both plans generally cannot exceed the
lesser of $120,000 or the average of the employee's highest three years of
compensation.
Annualized Pension Compensation Credited Years of Service
for Highest 60 Consecutive Months
in Last Ten Years of Employment 15 20 25 30 35
$100,000 $22,500 $30,000 $37,500 $ 45,000 $ 52,500
125,000 $28,125 $37,500 $46,875 $ 56,250 $ 65,625
150,000 $33,750 $45,000 $56,250 $ 67,500 $ 78,750
175,000 $39,375 $52,500 $65,625 $ 78,750 $ 91,875
200,000 $45,000 $60,000 $75,000 $ 90,000 $105,000
225,000 $50,625 $67,500 $84,375 $101,250 $118,125
250,000 $56,250 $75,000 $93,750 $112,500 $120,000
Note: Table does not reflect Internal Revenue Code Section 401(a)(17)
restrictions that might limit benefits in the future.
The earnings of executive officers by which benefits in part are
measured consist of the amounts reportable under "Annual Compensation" in the
Summary Compensation Table less certain allowance items (none in 1995).
Credited years of service through December 31, 1994 were as follows:
Guenter W. Berger - 30 years; Roy E. Farmer - 18 years; Kenneth R. Carson -
29 years: John E. Simmons - 13 years. After 37 years of credited service,
Roy F. Farmer began receiving maximum benefits during fiscal 1988.
The above straight life annuity amounts are not subject to deductions
for Social Security or other offsets. Other payment options, one of which is
integrated with Social Security benefits, are available.
<PAGE>
Compensation Committee Interlocks and Insider Participation
The Company has no compensation committee. The Board of Directors
determines executive compensation. Roy F. Farmer and Guenter W. Berger,
executive officers and directors of the Company, and Lewis A. Coffman, a
director and retired executive officer of the Company, participate in the
Board's deliberations concerning executive compensation.
Report of Board of Directors on Executive Compensation
Compensation for all executive officers of the Company other than Roy F.
Farmer, Chairman and Chief Executive Officer of the Company, is determined
annually by the Board of Directors. Since 1988 Mr. Farmer's compensation has
been determined by the terms of his employment contract with the Company (see
"Employment Agreement," supra). Accordingly, there was no direct
relationship between Mr. Farmer's compensation and the Company's performance
in fiscal 1995. However, the Board believes that Mr. Farmer's substantial
shareholdings in the Company (see "Ownership of Common Stock," supra) provide
substantial incentive to Mr. Farmer with respect to his efforts as Chairman
and Chief Executive Officer.
In 1988 when the Company and Mr. Farmer entered into the employment
contract, the Board took into consideration, among other things, Mr. Farmer's
previous compensation history, the quality and extent of his prior services,
the success the Company had achieved under his leadership, the desirability
of retaining Mr. Farmer's services for an additional ten years, and the
amount of compensation being paid to chief executive officers of other
publicly-held companies of similar size. The Board also conferred with
independent consultants concerning the reasonableness and anticipated future
cost to the Company of Mr. Farmer's compensation package under the employment
contract.
With respect to the other executive officers of the Company,
compensation has been primarily in the form of annual salaries. The Company
has an Incentive Compensation Plan under which discretionary bonuses measured
in part by Company profitability can be made (see footnote (1) to Summary
Compensation Table), but awards are rarely made under this Plan (none in
fiscal 1995). The Board sets annual salaries by reference primarily to each
executive officer's job performance during the preceding year, the Company's
profitability and cost of living changes. The Board receives and considers
recommendations from the Company's operating officers. Under procedures
adopted in 1993, no director who is also an executive officer makes
recommendations or participates in the Board's deliberations with respect to
that officer's compensation.
The Board monitors the executive compensation paid by the Company's
publicly-held competitors. However, the Company to date has not found it
necessary to match the pay levels of these competitors, many of whom are
substantially larger than the Company.
(The foregoing report will not be deemed to be incorporated by reference
by any general statement incorporating this Proxy Statement into any filing
by the Company under the Securities Act of 1933 or under the Securities Act
of 1934 unless the Company specifically incorporates this report by
reference. This report shall not otherwise be deemed soliciting material or
be deemed filed under such Acts).
Roy F. Farmer
Roy E. Farmer
Guenter W. Berger
Lewis A. Coffman
Catherine E. Crowe
John M. Anglin
<PAGE>
Performance Graph
Comparison of Five-Year Cumulative Total Return*
FARMER BROS CO, Russell 2000 Index And Value Line Food Proc's:Sm.Cap Index
(Performance Results Through 6/30/95)
1990 1991 1992 1993 1994 1995
FARMER BROS CO $100.00 $111.36 $142.44 $188.09 $155.34 $163.96
Russell 2000 Index $100.00 $101.23 $115.95 $146.05 $152.48 $188.69
Food Proc's:. Sm Cap $100.00 $111.06 $103.99 $110.70 $112.81 $135.37
Assumes $100 invested at the close of trading 6/90 in FARMER
BROS CO common stock, Russell 2000 Index, and Food Proc's: Sm.Cap.
*Cumulative total return assumes reinvestment of dividends.
SOURCE: VALUE-LINE, INC.
<PAGE>
CLOSING DATE FOR PROPOSALS BY SHAREHOLDERS
Shareholders who wish to present proposals at the 1996 Annual Meeting must
submit those proposals in writing to the Secretary of the Company no later
than June 30, 1996.
Compliance with Section 16(a) of the Exchange Act
Based on a review of filing received by it and a representation from
Company officers and directors, the Company believes that all filing
requirements applicable to Company officers and directors were met for fiscal
1995.
Other Business
Management does not know of any other matters to be brought before the
meeting. However, if any other matters properly come before the meeting, the
persons named in the enclosed proxy will vote said proxy in accordance with
their judgment on such matters.
By Order of the Board of Directors
David W. Uhley
Secretary
October 30, 1995
