Farmer Bros. Co. Warns Stockholders that the Waite Group is Seeking Control of the Company
Electing the
The Waite Group Tries to Disguise its Focus on the Reinstatement of the Cash Dividend to Meet Personal Financial Needs at the Cost of Destroying Value for Other Stockholders
The Board Urges Stockholders to Protect Their Investment by Voting "FOR" Each of
Highlights from the letter include:
The Waite Group's attempt to control theFarmer Bros . Board and your Company places your investment at risk. The Board believes the election of theWaite Group's nominees, combined with Farmer family representatives already on the Board, would effectively lead to a change of control of the Board andFarmer Bros ., give theWaite Group the power to replace the Company's leadership and derail the Company's proven turnaround plan.- If the
Waite Group nominees are elected, the Company's leadership would revert back to a time whenFarmer Bros . was operated like a private company, rather than a public company focused on the best interest of all stockholders. Contrast that to the currentFarmer Bros . Board which takes seriously the fiduciary duties and standards of professionalism and oversight that are required of a board of directors of a public company. The Waite Group tries to disguise its focus on the reinstatement of the cash dividend to meet personal financial needs at the cost of destroying value for other stockholders, and fails to acknowledge that, under the oversight of the current Board and management team,Farmer Bros .' stock price has appreciated over 225% sinceMarch 2012 , representing strong value creation of over$400 million for stockholders.iThe Waite Group intentionally misleads stockholders by suggesting that, if elected, theWaite Group's nominees would cause the Company to explore all reasonable options to maximize stockholder value, whenCarol Farmer Waite has stated, under penalty of perjury in ongoing litigation, that she has no interest in selling her shares inFarmer Bros .- Unlike the current Board, including the Company's three nominees for reelection, the
Waite Group's hand-picked nominees lack the qualifications or experience necessary to leadFarmer Bros . and protect the interests of all stockholders. In addition, theWaite Group's hand-picked nominees have personal ties to theWaite Group and members of the Farmer family that would compromise the independence of the Board if elected.
The full text of the letter being mailed to stockholders follows:
VOTE THE ENCLOSED GOLD PROXY CARD TODAY
"FOR" ALL THREE OF FARMER BROS.' HIGHLY QUALIFIED DIRECTOR NOMINEES
Dear
The stockholder group led by
Surrendering control of the Board to the
Your Board – including its three nominees for reelection,
I urge you to protect your investment in
YOUR INDEPENDENT BOARD IS COMMITTED TO PROTECTING THE INTERESTS OF
ALL STOCKHOLDERS, WHILE THE WAITE GROUP WANTS TO
CONTROL THE COMPANY TO FOCUS ON ITS NARROW AGENDA
The current
Meanwhile, the
One of many stockholder lawsuits filed during the Farmer family reign was filed by Professor
"The claims pressed in the lawsuit are consistent with FMA's long-held belief that Farmer Brothers' board of directors and management have taken actions or acquiesced in activities which, in our opinion, do not serve the best interests of the shareholders of the company, but rather serve to entrench the interests of the company's current management and those members of the Farmer family who have long been the company's dominant shareholders."
At that time, a group of large stakeholders had been pushing
More recently, on
"The FARM of the last few years has become a very different company than the paternalistic, myopic business that was run by later members of the Farmer family and their handpicked successors…We now have a management team committed to running a profitable company that actually communicates to its shareholders and responds to the challenges of competing in a mature industry."
THE WAITE GROUP TRIES TO DISGUISE ITS FOCUS ON REINSTATEMENT
OF THE CASH DIVIDEND TO MEET PERSONAL FINANCIAL NEEDS
AT THE COST OF DESTROYING VALUE FOR OTHER STOCKHOLDERS
As Farmer Bros. notes in its Definitive Proxy Statement, the Board has formed a Strategy Committee, and the Board remains well advised and will continue to review all alternatives to enhance value for all stockholders with a focus on driving sustainable value. Moreover, the Waite Group dismisses the significant stockholder value creation that has occurred since March 13, 2012, when the Board appointed Mr. Keown as President and Chief Executive Officer of Farmer Bros. During this period, the Company's stock price has appreciated over 225%, representing strong value creation of over $400 million for all stockholders. In that timeframe, the Company's total stockholder return has outperformed the Russell 2000 Index as well as the Food Processing Index. Additionally, the Company's total stockholder return has consistently outperformed both the S&P 500 and its peer set over almost any timeframe since 2012.v |
THE WAITE GROUP CONTINUES TO MAKE FALSE AND MISLEADING STATEMENTS
IN AN ATTEMPT TO DISTRACT STOCKHOLDERS FROM ITS EFFORT TO
TAKE CONTROL OF THE
THE WAITE GROUP'S UNQUALIFIED, HAND-PICKED NOMINEES HAVE PERSONAL TIES THAT WOULD COMPROMISE THE INDEPENDENCE OF THE BOARD
Unlike the current Board, including the Company's three nominees for reelection, the
Jennifer Gonzalez-Yousef is a personal friend ofSuzanna Waite , wife ofJonathan Waite and daughter-in-law ofCarol Farmer Waite . She is not an executive officer in her current role atWNS (Holdings) Limited , has no other executive management experience and has never served on a public company board. She does not have any experience in finance or capital management and theWaite Group has not demonstrated that she has the ability to read audited financial statements at the level required of a public-company director. The Board believes Ms. Gonzalez-Yousef would bring no skills or expertise to the Board that are not already better represented by its current directors.Tom Mortensen has deep ties to members of the Farmer family, having spent his entire professional career atFarmer Bros . Despite his decades of employment atFarmer Bros ., Mr. Mortensen does not have any C-level executive experience, has never served on a public company board and does not hold either an undergraduate or advanced college degree. In addition, the performance of the Company's DSD division suffered under his leadership and theWaite Group has not demonstrated that Mr. Mortensen has the ability to read audited financial statements at the level required of a public-company director. Further, he would not be considered "independent" under NASDAQ standards and thus would be unable to serve on any of the Board's standing committees.John Samore, Jr. also has deep ties to theWaite Group and members of the Farmer family, having served on the Board from 2003 to 2007 when a Farmer family member led the business and overlapping withCarol Farmer Waite's own tenure on the Board for two years. Notably,Farmer Bros . experienced declines in both revenue and profitability as well as a 28% decline in its stock price during the time Mr. Samore served on the Board. Mr. Samore's only experience as a public company director is on theFarmer Bros . board during a period that saw numerous stockholder lawsuits, including Professor Rosenthal's lawsuit, the reincorporation of the Company inDelaware and adoption of a poison pill that the current board let lapse and the use of$111 million of the Company's assets to settle a dispute within the Farmer family.vii The only time Mr. Samore stood for reelection,Glass Lewis & Co. recommended a withhold vote.
Board with the Company's Nominees |
Board with the Waite Group Nominees |
|
|
THE ELECTION OF THE WAITE GROUP'S NOMINEES WILL GIVE EFFECTIVE CONTROL OF THE BOARD AND COMPANY TO THE WAITE GROUP
WITHOUT PAYING A CONTROL PREMIUM
The election of the
- The Farmer family is already represented on the board by
Jeanne Farmer Grossman , the sister ofCarol Farmer Waite . Guenter W. Berger , Chairman Emeritus, has served on the Board since 1980, when he was appointed by the controlling members of the Farmer family, and was an employee ofFarmer Bros . for more than 47 years.Hamideh Assadi , a former manager in the Company's tax department, was appointed to the Board in 2011 upon the recommendation of Dr. Farmer.
Election of the Waite Group nominees will also lead to the loss of additional highly qualified and experienced Farmer Bros. directors due to expected resignations of current directors if the Waite Group gains control of the Board. Importantly, prior to Mr. Samore's retirement from the Board in 2007, Ms. Assadi, then a manager in the Company's tax department and currently a Board member, wrote a letter to the Board to express her concerns regarding the difficulty of her interactions with Mr. Samore. Ms. Assadi has since informed the Board that she will resign if Mr. Samore is elected, putting an additional Board seat under control of the Waite Group and its hand-picked nominees. More recently, Randy C. Clark has indicated to the Board that he also would choose to resign rather than serve on a Board dominated by the Waite Group and focused on their narrow agenda and personal interests above the best interests of the Company and all stockholders. |
Should the
THE FUTURE OF FARMER BROS. DEPENDS ON YOUR VOTE
The future of
We encourage you to vote today by signing and dating the enclosed GOLD proxy card |
On behalf of your Board of Directors, we thank you for your continued support.
Sincerely,
Chairman of the Board
Your Vote Is Important, No Matter How Many or How Few Shares You Own |
About
Founded in 1912,
Headquartered in
Forward-looking Statements
Certain statements in this communication constitute "forward-looking statements." When used in this communication, the words "will," "expects," "anticipates," "estimates" and "believes," and similar expressions and statements that are made in the future tense or refer to future events or developments, are intended to identify such forward-looking statements. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements include, but are not limited to, statements regarding the expected cost savings relating to the Company's corporate relocation. 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; actual results may differ materially due in part to the risk factors set forth in our most recent annual, periodic and current reports filed with the
Undue reliance should not be placed on the forward-looking statements in this communication, which are based on information available to the Company on the date hereof, and the Company assumes no obligation to update such statements.
Important Additional Information and Where to Find It
THE COMPANY URGES ITS INVESTORS AND STOCKHOLDERS TO READ CAREFULLY AND IN THEIR ENTIRETY THE DEFINITIVE PROXY STATEMENT (INCLUDING ANY SUPPLEMENTS OR AMENDMENTS), THE ACCOMPANYING GOLD PROXY CARD AND ANY OTHER DOCUMENTS THAT THE COMPANY MAY FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Copies of the definitive proxy statement (including any supplements or amendments), the accompanying GOLD proxy card, and any other documents filed by the Company with the
Additional Information
INVESTOR CONTACT:
(682) 549-6663
Morrow Sodali
(203) 658-9400
MEDIA CONTACT:
(212) 355-4449
i Stock price appreciation, stockholder value and total stockholder return from
ii
iii
ivIn the Matter of Declaration of Trust, dated
v Stock price appreciation, stockholder value and total stockholder return from
vi Herman v.
vii The Company's Current Report on Form 8-K filed with the
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/farmer-bros-co-warns-stockholders-that-the-waite-group-is-seeking-control-of-the-company-300362363.html
SOURCE