Jeanne Farmer Grossman (individually and as the sole trustee
of certain trusts), Thomas William Mortensen, and Jonathan Michael
Waite (collectively, the “Concerned Stockholders”), who together
beneficially own approximately 4.9% of the outstanding common stock
of Farmer Bros. Co. (“Farmer Bros.” or the “Company”), today
announced they have filed definitive proxy materials, including a
definitive proxy statement and proxy card, with the U.S. Securities
and Exchange Commission in connection with the upcoming 2019 Annual
Meeting of Stockholders of the Company (the “Annual
Meeting”). The Annual Meeting has been set for 10:00 a.m.
Central Standard Time, on Tuesday, December 10, 2019, with a record
date of October 18, 2019.
In conjunction with the definitive proxy
filing, the Concerned Stockholders issued an open letter to their
fellow stockholders. The full text follows.
November 5, 2019
Dear Fellow Farmer Bros. Stockholder:
YOUR VOTE CAN MAKE A DIFFERENCE – SIGN,
DATE AND RETURN THE GOLD PROXY CARD TODAY
On behalf of a group of concerned stockholders
of Farmer Bros. Co. (the “Company” or “Farmer Bros.”), who together
beneficially own approximately 4.9% of the Company’s common stock,
have long histories with the Company and deeply care about its
future success, I am deeply concerned by the tremendous decline and
value destruction at Farmer Bros. under the current Board of
Directors (the “Board”). For that reason, I am asking for
your support to elect two new highly qualified directors to the
Board at the upcoming 2019 Annual Meeting of Stockholders of the
Company (the “Annual Meeting”). Our nominees, Tom Mortensen
and Jonathan Waite, bring the experience, foresight and trust of
employees that the current Board lacks, but are necessary to turn
this business around.
WE HAVE LOST CONFIDENCE IN THE COMPANY’S
CURRENT BOARD
While I served on the Company’s Board from
December 2009 until December 2018, I witnessed firsthand the
current Board abandon the values and dedication to customers and
employees that once made the Company great. Instead, the
Board has pursued short-sighted tactics and financial engineering,
seemingly designed to boost quarterly results (albeit
unsuccessfully) and to enrich management and insiders at the
expense of stockholders and employees.
The consequences of this lack of vision and strategy have been
devastating to the Company. Over the past 12 months, the
stock price has collapsed and the Company has experienced
relentless turnover in leadership – seeing three different CEOs in
the past year and the resignations of its Senior Vice President and
General Manager, its Chief Legal Counsel and its Chief Operating
Officer since just May of this year.i The financial results
are even worse over the past three years. Despite (or we
believe, as a result of) substantial employee layoffs (often
without regard to talent or dedication) and moving the Company’s
headquarters from California to Texas, net income per share has
swung from a profit of $4.35 per share in fiscal 2016 to a loss of
$(4.36) per share in fiscal 2019.ii The Company’s shares have
lost 59% of their value during that period, compared to a 45% rise
in the S&P 500.iii
TO SUCCEED AGAIN, FARMER BROS. MUST
RETURN TO ITS ROOTS
The reason the current Board is unable to turn
around the Company and stop these sad results is apparent to anyone
on the outside: they do not understand Farmer Bros.’ unique
business model, customer focus and approach to high-quality
service. They all share similar professional backgrounds and
seem to share perspectives that prevent them from entertaining
alternative solutions that could be beneficial to the
Company. Despite mounting financial evidence that many
mistakes have been made, they evidently do not understand what it
actually takes to turn the now-flailing Company around to
profitability.
At the upcoming Annual Meeting, the Company has
nominated the new CEO, D. Deverl Maserang, and renominated two
current directors, Christopher P. Mottern and Charles Marcy, for
election to the Board. We support Mr. Maserang and are
hopeful that he can return Farmer Bros. to its core values,
customer focus and winning strategy. But to succeed, he needs
an active, experienced and committed Board.
As such, we cannot support Mr. Mottern and Mr.
Marcy, who we believe are emblematic of the problems at our
Company. As the longest current serving Board members (both
appointed in December 2013) and despite their extensive resumes,
they have overseen a steady erosion of the Company and a 35% net
decline in the share price.iv In fact, during his just-ended
four-month tenure as interim CEO, Mr. Mottern led the Company’s
share price to a 41% decline.v
OUR NOMINEES BRING EXPERIENCE AND VALUES
THAT THE CURRENT BOARD LACKS
As a result of the current situation and as
concerned Farmer Bros. stockholders acting on behalf of all
stockholders, we have nominated Thomas William
Mortensen and Jonathan Michael Waite, two
new director candidates who are deeply familiar with Farmer Bros.,
its core values and its business. They have seen the Company
succeed in the past and can effectively oversee and support our new
CEO as he executes a turn-around plan.
Tom Mortensen contributed 37
years of service to Farmer Bros., where he worked from 1978 to
2015. During his tenure at the Company, Tom occupied several
positions including branch manager, sales promotion, division
manager, regional sales manager, national sales manager, vice
president (western region) and senior vice president of route
sales. We believe that Tom’s extensive knowledge of coffee, tea and
culinary product sales and distribution, long-term interest in the
success of the Company, exemplary leadership and employee
relationship skills, and process improvement would make him a
valuable addition to the Board.
Jonathan Waite spent 13 years
with Farmer Bros., where he worked from 2004 to 2017. During his
time at Farmer Bros., Jonathan held various positions including
special projects manager, director of green coffee operations, vice
president of coffee and vice president of construction development.
In 2005, after the loss of the Company’s then CEO, Jonathan was
solely responsible for building the Company’s green coffee
division. We believe that Jonathan’s extensive knowledge of the
Company’s products, operations, quality assurance, vendors and
customers and long-term interest in the success of the Company
would make him a valuable addition to the Board.
After the failures of a previous management
team, both Tom Mortensen and Jonathan Waite were instrumental in
helping turn the Company around under the direction of two former
CEOs, Jeffrey Wahba and Patrick Critzer. They helped make
changes in policies, programs, pricing, product and personnel that
brought the Company back to a profitable and growing
position. Just as important, Tom and Jonathan have the trust,
support and loyalty of Farmer Bros. employees. We are confident
that giving them a seat on the Board will promote rapid
improvements and the reemergence of a strong culture and pride at
Farmer Bros.
The need for change at Farmer Bros. has never
been more acute in our 107-year history. For our new CEO to
be successful, the Company also needs change in the composition of
its Board. Long-tenured directors cannot be allowed to
continuously make mistakes and neglect their oversight duties at
the expense of the Company’s stockholders and other
stakeholders.
We urge you to vote today to bring relevant
knowledge, experience and the Company’s core values back to the
boardroom.
VOTE FOR OUR KNOWLEDGEABLE, EXPERIENCED
AND HIGHLY QUALIFIED DIRECTORS TO TURN-AROUND AND CREATE VALUE AT
FARMER BROS. CO.
PLEASE SIGN, DATE AND MAIL THE ENCLOSED
GOLD PROXY CARD TODAY
Thank you to all stockholders who support
positive change,
Jeanne Farmer Grossman
IMPORTANT
If your shares are held in street name, your
bank or broker can vote your shares only upon receipt of your
specific instructions. Please contact the person responsible
for your account and instruct them that you only wish to vote the
GOLD proxy card.
If you have any questions or need further
assistance, please contact Okapi Partners at (877) 274-8654 or by
e-mail at info@okapipartners.com.
MEDIA CONTACT:
Dan Gagnier / Jeffrey MathewsGagnier
Communications+1 646-569-5897farmerbros@gagnierfc.com
CERTAIN INFORMATION CONCERNING THE
PARTICIPANTS
The Concerned Stockholders have filed a
definitive proxy statement and an accompanying
GOLD proxy card with the Securities and Exchange
Commission (the “SEC”) to be used to solicit votes for the election
of its nominees at the 2019 Annual Meeting of Stockholders of
Farmer Bros. Co.
THE CONCERNED STOCKHOLDERS STRONGLY ADVISE ALL
STOCKHOLDERS OF THE COMPANY TO READ THEIR PROXY STATEMENT AND OTHER
PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO
CHARGE ON THE SEC'S WEB SITE AT WWW.SEC.GOV. IN ADDITION, THE
CONCERNED STOCKHOLDERS WILL PROVIDE COPIES OF THEIR PROXY STATEMENT
WITHOUT CHARGE UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED
TO THE CONCERNED STOCKHOLDERS' PROXY SOLICITOR, OKAPI PARTNERS, AT
ITS TOLL-FREE NUMBER: (877) 274-8654 OR AT
INFO@OKAPIPARTNERS.COM.
The participants in the proxy solicitation are:
Jeanne Farmer Grossman, the Jeanne Grossman Living Trust, the 1964
Jeanne Ann Farmer Grossman Trust, the 1969 Jeanne Ann Farmer
Grossman Trust, the 1972 Jeanne Ann Farmer Grossman Trust, the 1987
Roy F Farmer Trust II, the 1988 Roy F Farmer Trust II, the 1988 Roy
F Farmer Trust III, the 1990 Brynn Elizabeth Grossman Trust, and
the 1992 Brynn Elizabeth Grossman Trust, Thomas William Mortensen,
and Jonathan Michael Waite.
i See the Company’s Current Reports on Form 8-K
filed with the U.S. Securities and Exchange Commission on
May 8, 2019, May 21, 2019, July 27, 2019 (as amended
on August 2, 2019), August 21, 2019, September 10, 2019,
and October 29, 2019.ii See Part II, Item 6 of the Company’s
Annual Report on Form 10-K filed with the U.S. Securities and
Exchange Commission on September 11, 2019.iii Based on closing
prices of the Company’s stock and the S&P 500 between November
1, 2016, and November 1, 2019.iv Based on closing prices of the
Company’s stock between December 5, 2013, and November 1, 2019.v
Based on closing prices of the Company’s stock between May 7, 2019,
and September 12, 2019.
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