Company Name: Farmer Bros. Co. (Recon.)
Public Availability Date: December 10, 2003Document Sections: INQUIRY LETTER 1
INQUIRY LETTER 2
INQUIRY LETTER 3
STAFF REPLY LETTER [INQUIRY LETTER 1]
From: Gary Lutin [gary.lutin@worldnet.att.net] Sent: Friday, December 05, 2003 6:17 AM To: Grace K. Lee Cc: James E. Mitchell; Joseph J. Giunta Subject: Reconsideration request concerning Farmer Bros Dear Ms. Lee, Confirming yesterday's telephone conversations, your reconsideration of your
November 28, 2003 letter concerning the Mitchell Partners proposal for Farmer
Bros. Co. will be appreciated. It has been requested that you consider modifying your response to require
Mitchell Partners' revision of only the part of the proposal to which Farmer
Bros. had objected, concerning supermajority voting requirements. As discussed,
Mitchell Partners had responded to the Farmer Bros. objections initially by
offering to simply drop that portion of the proposal dealing with supermajority
voting, as indicated in their October 3, 2003 letter. The practicality of this
resolution of the issue, and the presumed concurrence of Farmer Bros., is
illustrated on page of the preliminary proxy statement filed by Farmer Bros. on
October 24, 2003, where the Company presents the Mitchell Partners proposal with
brackets showing the single sentence that would be deleted if the SEC were to
support the Company's objection. Alternatively, according to your suggestion, I understand that you may require a
revision to make the supermajority voting provision precatory rather than part
of the bylaw amendment. Thank you, again, for your long hours of attention to the interests of Farmer
Bros. shareholders. - GL Gary Lutin Lutin & Company 575 Madison Avenue, 10th Floor New York, New York 10022 Tel: 212/605-0335 Fax: 212/605-0325 Email: gl@shareholderforum.com [INQUIRY LETTER 2]
December 8, 2003 VIA FACSIMILE AND EMAIL Grace K. Lee, Esq. Office of Chief Counsel Division of Corporation Finance Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Re: Farmer Bros. Co. Shareholder Proposal of Mitchell Partners, L.P. Relating to
Cumulative Voting (the "Proposal") Dear Ms. Lee: This letter confirms our discussion earlier this morning. Farmer Bros. Co.
agrees to accept the Proposal as amended by deleting the second sentence
relating to a supermajority provision. Farmer Bros. Co. continues to reserve its
right to object to the supporting statement related to the Proposal and expects
to receive a revised supporting statement no later than tomorrow so that it can
finalize its Proxy Statement in a timely manner. If you have any questions, please do not hesitate to contact Joseph Giunta by
telephone at 213-687-5040 or by email at jgiunta@skadden.com. Yours sincerely, /s/ Garrison G. DeLee cc: John Simmons Joseph G. Giunta, Esq. [INQUIRY LETTER 3]
From: Gary Lutin [gary.lutin@worldnet.att.net] Sent: Wednesday, December 10, 2003 8:37 To: Grace K. Lee Cc: James E. Mitchell; Joseph J. Giunta Subject: Clarification of request for reconsideration Dear Ms. Lee, The reason for requesting your reconsideration of the Mitchell Partners proposal
for Farmer Bros. Co., as discussed on December 4th and summarized in my December
5th note copied below, was that the company had objected only to the portion of
the proposal concerning "supermajority" voting requirements and not to the
entire proposal. The company had not objected to the primary element of the
proposal concerning the establishment of cumulative voting rights. Referring to the question that was raised about the rights of shareholders to
amend the company's bylaws, the company itself has acknowledged this right. They
address it repeatedly in their October 24, 2003 preliminary proxy statement,
which includes a management proposal to reincorporate with provisions that
would, among other things, effectively eliminate the current shareholder rights
to amend bylaws. In its introductory summary of the proposed governance changes
on page 10 of the preliminary proxy statement, for example, the company states
that the reincorporation would include provisions "requiring a vote of at least
eighty percent (80%) of the outstanding shares to amend the bylaws by
shareholder action instead of a majority of the outstanding shares." On page 12,
the company specifically acknowledges the current right of shareholders to act
on the Mitchell Partners proposal to amend the bylaws in statements asserting
that the proposed bylaw amendment would have no effect if management's proposal
is passed to reincorporate in a new state and thus make the California bylaws
inapplicable. And on page 15 the company acknowledges that the currently
applicable "California law permits a corporation's bylaws to be amended by the
board of directors or by the holders of a majority of the outstanding shares."
(The company explains in the same paragraph that amendments to the articles of
incorporation in California require action by both the board and the
shareholders, as distinguished from action by either the board or shareholders
to amend bylaws.) The right of shareholders to amend the bylaws for cumulative voting is also
specifically addressed by Professor Lucian A. Bebchuk, the Director of the
Program on Corporate Governance at Harvard Law School, in a declaration filed on
December 2, 2003 in a legal proceeding relating to Farmer Bros. In paragraph 22
of his declaration, Professor Bebchuk states "Whereas Farmer's current bylaws
prohibit cumulative voting, the shareholders presently have the power to amend
these bylaws to introduce such voting." A copy of Professor Bebchuk's
declaration can be obtained from a link on the following web site: http://www.shareholderforum.com/FARM/Process/20031114_petitions.htm Please let me know if you require any further clarification of the request for
reconsideration. I thank you, again, for your efforts to address the interests
of Farmer Bros.' public investors. - GL Gary Lutin Lutin & Company 575 Madison Avenue, 10th Floor New York, New York 10022 Tel: 212/605-0335 Fax: 212/605-0325 Email: gl@shareholderforum.com
[STAFF REPLY LETTER]
December 10, 2003 Gary Lutin Lutin & Company 575 Madison Avenue, 10th Floor New York, NY 10022 Re: Farmer Bros. Co. Reconsideration request dated December 5, 2003 Dear Mr. Lutin: This is in response to your letters dated December 5, 2003 and December 10, 2003
concerning the shareholder proposal submitted to Farmer Bros. by Mitchell
Partners, L.P. We also have received a letter on behalf of the company dated
December 8, 2003. On November 28, 2003, we issued our response expressing our
informal view that Farmer Bros. could not exclude the proposal from its proxy
materials for its upcoming annual meeting if the proponent made certain changes
to the proposal. You have asked us to reconsider our position under rule
14a-8(i)(1). The Division grants the reconsideration request, as there now appears to be some
basis for your view that the revised proposal is not an improper subject under
rule 14a-8(i)(1). Accordingly, we do not believe that Farmer Bros. may omit the
proposal from its proxy materials in reliance on rule 14a-8(i)(1). Sincerely, /s/ Martin P. Dunn Deputy Director Enclosures cc: Joseph J. Giunta Skadden, Arps, Slate, Meagher & Flom LLP 300 South Grand Avenue Los Angeles, CA 90071-3144 James E. Mitchell General Partner Mitchell Partners, L.P. 3187-D Airway Avenue Costa Mesa, CA 92626
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