UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 8-K
CURRENT REPORT
_____________________
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 17, 2005
Farmer Bros. Co.
(Exact Name of Registrant as Specified in its Charter)
Delaware 0-1375 95-0725980
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
20333 South Normandie Avenue, Torrance, California 90502
(Address of principal executive offices) (Zip Code)
(310) 787-5200
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
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Effective as of March 17, 2005, the Board of Directors of Farmer Bros. Co.
(the "Company") approved a stockholder rights plan (the "Rights Plan"),
pursuant to which the Company entered into a Rights Agreement dated March 17,
2005 (the "Rights Agreement") with Wells Fargo Bank, N.A., as Rights Agent,
and the Board declared a dividend of one preferred share purchase right (a
"Right") for each outstanding share of the Company's Common Stock, $1.00 par
value per share (the "Common Stock"), to stockholders of record at the close
of business on March 28, 2005 (the "Record Date"). Each Right, when
exercisable, will entitle the registered holder to purchase from the Company
one one-hundredth of a share of Series A Junior Participating Preferred Stock,
$1.00 par value per share (the "Preferred Stock"), at a purchase price of
$112.50 (the "Purchase Price"), subject to adjustment.
Initially, ownership of the Rights will be evidenced by the certificates
representing outstanding shares of Common Stock, and no separate Rights
Certificates will be distributed. The Rights will separate from the Common
Stock on the Distribution Date, which will occur upon the earlier of (i) 10
business days following the first date of a public announcement that a person
or group of affiliated or associated persons (other than certain exempted
persons (the "Farmer Exempted Persons") as described below, or employee
benefit plans of the Company including the Company's Employee Stock Ownership
Plan) (an "Acquiring Person") has acquired, or obtained the right to acquire,
beneficial ownership of 15% or more of the outstanding shares of Common Stock
(the "Stock Acquisition Date"), or (ii) 10 business days following the
commencement of a tender offer or exchange offer (other than a Permitted
Offer, as defined in the Rights Agreement) that would result in a person or
group beneficially owning 15% or more (or, in the case of the Farmer Exempted
Persons, 45% or more) of the outstanding shares of Common Stock. The Farmer
Exempted Persons consist of Roy F. Farmer, deceased, his widow Emily Farmer
and their descendants (collectively "Farmer Family members"), the estates of
Farmer Family members and the personal representatives thereof and trusts
created by or for the benefit of Farmer Family members and the trustees of
such trusts until such persons, estates and trusts beneficially own in the
aggregate more than 45% of the Company's outstanding Common Stock. As of the
date of the Rights Agreement, the Farmer Exempted Persons beneficially owned
approximately 39.8% of the Company's outstanding Common Stock.
Until the Distribution Date, which the Board of Directors may defer in certain
circumstances, or earlier redemption or expiration of the Rights, (i) the
Rights will be evidenced by the Common Stock certificates outstanding on the
Record Date or by new Common Stock certificates issued after the Record Date
which will contain a legend incorporating the Rights Agreement by reference;
(ii) the Rights will be transferred with and only with such Common Stock
certificates; and (iii) the surrender for transfer of any certificates for
Common Stock outstanding (with or without such legend) will also constitute
the transfer of the Rights associated with the Common Stock represented by
such certificates.
The Rights are not exercisable until the Distribution Date and will expire on
March 28, 2015 (the "Final Expiration Date") unless earlier redeemed,
exchanged or terminated as described below, or unless a "Section 13(d) Event"
as defined in Section 13(d) of the Rights Agreement, has occurred. As soon as
practicable after the Distribution Date, separate Rights Certificates will be
mailed to holders of record of the Common Stock as of the close of business on
the Distribution Date and, thereafter, the separate Rights Certificates alone
will represent the Rights. Except as otherwise determined by the Board of
Directors, and except for shares of Common Stock issued upon exercise,
conversion or exchange of then outstanding options, convertible or
exchangeable securities or other contingent obligations to issue shares or
pursuant to any employee benefit plan or arrangement, only shares of Common
Stock issued prior to the Distribution Date will be issued with Rights.
In the event that any Person becomes an Acquiring Person, unless the event
causing the ownership threshold to be crossed is a Permitted Offer (as defined
in the Rights Agreement), then, promptly following the first occurrence of
such event, each holder of a Right (except for the Acquiring Person, whose
Rights will be null and void upon such event) shall thereafter have the right
to receive, upon exercise, that number of shares of Common Stock of the
Company (or, in certain circumstances, cash, property or other securities of
the Company) which equals the exercise price of the Right divided by 50% of
the current market price (as defined in the Rights Agreement) per share of
Common Stock at the date of the occurrence of such event. However, the Rights
are not exercisable following such event until such time as the Rights are no
longer redeemable by the Company as described below. In lieu of requiring
payment of the Purchase Price upon exercise of the Rights following any such
event, the Company may permit or require the holders to surrender the Rights,
in which event they will be entitled to receive shares of Common Stock (and
other property, as the case may be) with a value of 50% of what could be
purchased by payment of the full Purchase Price. The event summarized in this
paragraph is referred to as a "Section 11(a)(ii) Event."
The following example illustrates the foregoing: At a Purchase Price of
$112.50 per Right, each Right not owned by an Acquiring Person (or by certain
related parties) following a Section 11(a)(ii) Event would entitle its holder
to purchase $225.00 worth of Common Stock (or other consideration, as noted
above) for $112.50. Assuming that the Common Stock had a market price of
$45.00 per share at such time, the holder of each valid Right would be
entitled to purchase five shares of Common Stock, having a market value of 5 x
$45.00, or $225.00, for $112.50. No fractional shares of Common Stock will be
issued upon exercise of the Rights and, in lieu thereof, an adjustment in cash
will be made based on the market price of the Common Stock on the last trading
date prior to the date of exercise.
In the event that, at any time after any Person becomes an Acquiring Person,
(i) the Company is consolidated with, or merged with and into, another entity
and the Company is not the surviving entity of such consolidation or merger
(other than a consolidation or merger which follows a Permitted Offer) or if
the Company is the surviving entity, but shares of its outstanding Common
Stock are changed or exchanged for stock or securities (of any other person)
or cash or any other property, or (ii) more than 50% of the Company's assets
or earning power is sold or transferred, each holder of a Right (except Rights
in the hands of the Acquiring Person, which have been voided) shall thereafter
have the right to receive, upon exercise, common stock of the acquiring
company having a value equal to approximately two times the exercise price of
the Right. Again, provision may be made to permit or require surrender of the
Rights in exchange for one-half of value otherwise purchasable. The events
summarized in this paragraph are referred to as "Section 13 Events."
At any time after the occurrence of a Section 11(a)(ii) Event, when no person
owns a majority of the Common Stock, the Board of Directors may exchange the
Rights (other than Rights owned by such Acquiring Person which have become
null and void), in whole or in part, for shares of Common Stock at an exchange
ratio of one share of Common Stock, or one one-hundredth of a share of
Preferred Stock (or of a share of a class or series of the Company's preferred
stock having equivalent rights, preferences and privileges), per Right
(subject to adjustment).
The Purchase Price payable and the number of units of Preferred Stock or other
securities or property issuable upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution under circumstances described
in the Rights Agreement. The number of Rights associated with each share of
Common Stock is also subject to adjustment in the event of a stock split of
the Common Stock or a stock dividend on the Common Stock payable in Common
Stock or subdivisions, consolidations or combinations of the Common Stock
occurring, in any such case, prior to the Distribution Date.
No fractional shares of Preferred Stock (other than fractions which are
integral multiples of one one-thousandth of a share of Preferred Stock) will
be issued and, in lieu thereof, an adjustment in cash will be made based on
the market price of the Preferred Stock on the last trading date prior to the
date of exercise.
Preferred Stock purchasable upon exercise of the Rights will not be
redeemable. Each share of Preferred Stock will be entitled to receive, when,
as and if declared by the Board of Directors, a minimum preferential quarterly
dividend payment of $1.00 per share or, if greater, an aggregate dividend of
100 times the dividend declared per share of Common Stock. In the event of
liquidation, the holders of the Preferred Stock will be entitled to a payment
equal to the greater of a preferential liquidation payment of $100.00 per
share, plus an amount equal to accrued and unpaid dividends, or 100 times the
aggregate amount to be distributed per share to holders of Common Stock. Each
share of Preferred Stock will have 100 votes, voting together with the Common
Stock. In the event of any merger, consolidation or other transaction in which
Common Stock is changed or exchanged, each share of Preferred Stock will be
entitled to receive 100 times the amount received per share of Common Stock.
These rights are protected by customary antidilution provisions. Because of
the nature of the Preferred Stock's dividend, liquidation and voting rights,
the value of one one-hundredth of a share of Preferred Stock purchasable upon
exercise of each Right should approximate the value of one share of Common
Stock. Until a Right is exercised, the holder of a Right, as such, will have
no rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
At any time prior to the earlier of the tenth Business Day (or such later date
as may be determined by the Board of Directors pursuant to the Rights
Agreement) following the Stock Acquisition Date or the Final Expiration Date,
the Company may redeem the Rights in whole, but not in part, at a price of
$0.01 per Right (the "Redemption Price"). Immediately upon the redemption of
the Rights or such earlier time as established by the Board in the resolution
ordering the redemption of the Rights, the Rights will terminate and the only
right of the holders of Rights will be to receive the Redemption Price. The
Rights may also be redeemable following certain other circumstances specified
in the Rights Agreement.
Any provision of the Rights Agreement, other than the Redemption Price, may be
amended by the Board of Directors prior to such time as the Rights are no
longer redeemable. Once the Rights are no longer redeemable, the Board's
authority to amend the Rights is limited to correcting ambiguities or
defective or inconsistent provisions in a manner that does not adversely
affect the interest of holders of Rights (excluding the interests of an
Acquiring Person).
Although the distribution of the Rights should not be taxable to stockholders
or to the Company, stockholders may, depending upon the circumstances,
recognize taxable income in the event that the Rights become exercisable for
Common Stock (or other consideration) of the Company or for common stock of
the acquiring company as set forth above.
The Rights are intended to protect the stockholders of the Company in the
event of an unfair or coercive offer to acquire the Company and to provide the
Board of Directors with adequate time to evaluate unsolicited offers. The
Rights may have anti-takeover effects. The Rights will cause substantial
dilution to a person or group that attempts to acquire the Company without
conditioning the offer on a substantial number of Rights being acquired. The
Rights, however, should not affect any prospective offeror willing to make an
offer at a fair price and otherwise in the best interests of the Company and
its stockholders, as determined by the Board of Directors. The Rights should
also not interfere with any merger or other business combination approved by
the Board of Directors. The Rights are not being distributed in response to
any specific effort to acquire control of the Company.
This summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement (including the
exhibits thereto), which is attached as Exhibit 4.1 to this Current Report on
Form 8-K and is incorporated herein by reference.
Item 3.03 Material Modification to Rights of Security Holders
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See the disclosure set forth under "Item 1.01 Entry into a Material Definitive
Agreement," which is incorporated into this Item 3.03 by reference
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in
Fiscal Year
On March 18, 2005, the Company filed a Certificate of Designations of Series A
Junior Participating Preferred Stock with the Secretary of State of the State
of Delaware setting forth the terms of the Series A Junior Participating
Preferred Stock issuable upon exercise of the Rights (if the Rights become
exercisable) as disclosed under "Item 1.01 Entry into a Material Definitive
Agreement." A copy of the Certificate of Designations is attached as Exhibit
3.1 to this Current Report on Form 8-K and is incorporated herein by
reference.
Item 8.01 Other Events
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On March 18, 2005, the Company issued a press release announcing the
declaration of the Rights and the adoption of the Rights Plan. A copy of the
press release is attached as Exhibit 99.1 to this Current Report on Form 8-K
and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
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Exhibits.
3.1 Certificate of Designations of Series A Junior Participating
Preferred Stock.
4.1 Rights Agreement, dated March 17, 2005 by and between Farmer Bros.
Co. and Wells Fargo Bank, N.A., as Rights Agent.
99.1 Press release dated March 18, 2005.
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: March 18, 2005
FARMER BROS. CO.
By: /s/ John E. Simmons
-----------------------------
Name: John E. Simmons
Title: Treasurer
EXHIBIT INDEX
Exhibit No. Description
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3.1 Certificate of Designations of Series A Junior Participating
Preferred Stock.
4.1 Rights Agreement, dated March 17, 2005 by and between Farmer
Bros. Co. and Fargo Bank, N.A., as Rights Agent.
99.1 Press release dated March 18, 2005.