SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 7)
Farmer Brothers Co.
(Name of Issuer)
Common Stock, par value $1
(Title of Class of Securities)
307675108
(CUSIP Number)
David Winters
Franklin Mutual Advisers, LLC
51 John F. Kennedy Parkway
Short Hills, New Jersey 07078
973.912.2177
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
December 8, 2003
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-l(b)(3) or (4), check the following box [X].
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be
deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Franklin Mutual Advisers, LLC
2. CHECK THE APPROPRIATE BOX
IF A MEMBER OF A GROUP (a)[
] (b)[X]
3 SEC USE ONLY
4. SOURCE OF FUNDS
See Item 3
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7. SOLE VOTING POWER
184,688 (See Item 5)
8. SHARED VOTING POWER
9. SOLE DISPOSITIVE POWER
184,688 (See Item 5)
10. SHARED DISPOSITIVE POWER
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
184,688 (See Item 5)
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
9.6% (See Item 5)
14. TYPE OF REPORTING PERSON IA
This Amendment No. 7 (this "Amendment") amends and supplements the Schedule 13D
filed on November 21, 2000 of the Reporting Persons, as amended by Amendment No.
1 thereto, filed on April 18, 2002, Amendment No. 2 thereto, filed on June 27,
2002, Amendment No. 3 thereto, filed July 30, 2002, Amendment No. 4 thereto,
filed September 19, 2002, Amendment No. 5 thereto, filed April 29, 2003 and
Amendment No. 6 thereto, filed August 1, 2003 ("Amendment No. 6") with respect
to the common stock, par value $1.00 per share (the "Common Stock"), of Farmer
Brothers Co., a California corporation (the "Issuer"). All capitalized terms
used in this Amendment and not otherwise defined herein have the meanings
ascribed to such terms in the Schedule 13D.
Item 4 of the Schedule 13D is hereby amended and restated in its entirety as
follows:
Item 4. Purpose of Transaction
The securities covered by this Statement were acquired by FMA's advisory
clients for the purpose of investment. Neither FMA nor any executive officer or
director of FMA has any present plans or intentions to acquire or dispose of
any securities of the Issuer other than on behalf of FMA's clients for the
purpose of investment.
FMA may decide to purchase on behalf of its advisory clients additional shares
of the Common Stock or other securities of the Issuer. In addition, FMA may
cause its advisory clients to dispose of any or all securities of the Issuer in
any manner permitted by applicable securities laws.
FMA has been notified that the SEC staff has determined it will not recommend
enforcement action against the Company if the Company omits FMA's proposal
relating to the indemnification of directors from the Company's proxy statement
for the next annual meeting of stockholders.
According to a preliminary proxy statement filed on October 24, 2003 by the
Company, the Company's annual meeting of stockholders is to be held on January
5, 2004 and at the annual meeting, among other matters, the board of directors
of the Company will seek shareholder approval for the reincorporation of the
Company from California to Delaware (the "Reincorporation Proposal"). On
December 8, 2003, FMA issued a press release disclosing how FMA intends to vote
with respect to the Reincorporation Proposal and certain other matters and the
reasons therefor. A copy of the press release, dated December 8, 2003 is
attached as Exhibit H hereto and is incorporated herein.
Other than as described above, neither FMA nor any executive officer or
director of FMA, has any present plans or proposals which relate to or would
result in:
(i) an extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Issuer or any of its subsidiaries;
(ii) the sale or transfer of a material amount of assets of the Issuer or any
of
its subsidiaries;
(iii) any change in the present board of directors or management of the Issuer,
including any plans or proposals to change the number or term of directors or
to
fill any existing vacancies on the board;
(iv) any material change in the present capitalization or dividend policy of
the Issuer;
(v) any other material change in the Issuer's business or corporate structure;
(vi) changes in the Issuer's charter, bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of control of the
Issuer by any person;
(vii) causing a class of securities of the Issuer to be delisted from a
national
securities exchange or to cease to be authorized to be quoted in an
inter-dealer
quotation system of a registered national securities association;
(viii) a class of equity security of the Issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934; or
(ix) any action similar to any of those enumerated above.
Item 7 is amended by adding the following:
Item 7. Materials to be filed as Exhibits
Exhibit H: Press release of Franklin Mutual Advisers, LLC dated December 8,
2003
After reasonable inquiry, and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete, and correct.
December 8, 2003
Franklin Mutual Advisers, LLC
By: Franklin/Templeton Distributors, Inc.
Its Managing Member
/s/ Barbara J. Green
BARBARA J.GREEN
Secretary
EXHIBIT H
From: Franklin Mutual Advisers, LLC
Contact: Matt Walsh
Tel: (650) 312-2245
franklintempleton.com
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FOR IMMEDIATE RELEASE
Short Hills, NJ, December 8, 2003 Franklin Mutual Advisers, LLC, (FMA), the
largest institutional shareholder of Farmer Brothers Co. (NASDAQ: FARM), made
the following announcement today regarding how FMA intends to vote its shares
in
Farmer Brothers at the company's upcoming annual meeting of shareholders,
currently scheduled to be held on January 5, 2004.
As the holder, on behalf of our advisory clients, of 184,688 common shares of
Farmer Brothers, representing 9.6% of the outstanding shares, FMA is the
largest institutional shareholder of the company and the largest shareholder
not affiliated with the company's founding family. As a result, we feel it
incumbent upon us to disclose to the company's management, our fellow
shareholders, the investing public generally and other interested parties how
FMA intends to vote its Farmer Brothers shares at the company's upcoming annual
meeting, and the reasons for our vote.
We understand that the company's board of directors will be seeking shareholder
approval at the annual meeting for the reincorporation of the company from
California to Delaware. We intend to vote all of our Farmer Brothers shares
against the reincorporation proposal. We intend to do so for the following
reasons.
FMA's clients have been investors in Farmer Brothers for many years. We have
believed for many years that the company's board of directors, management and
controlling shareholders have paid little heed to the legitimate interests of
its public shareholders. In our opinion, they have consistently demonstrated an
attitude toward corporate governance inappropriate to a publicly held
corporation and this attitude has been reflected in the company's governance
practices and in the conduct of the company's affairs. It is our view that the
proposed reincorporation is the latest evidence of this attitude, with
potentially dire results for the company's public shareholders if it is adopted.
The proposed transformation of Farmer Brothers would result in a very
substantial curtailment of the rights of the company's public shareholders
which, in our opinion, would 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.
We note that the reincorporation as proposed by the Board would result, among
other changes, in the elimination of the right currently enjoyed by
shareholders to act by written consent, the elimination of the right currently
enjoyed by shareholders owning at least 10% of the company to call a special
meeting of shareholders, the creation of a "staggered" board of directors and
the elimination of the right currently enjoyed by shareholders to remove the
board of directors without cause, the imposition of advance notice procedures
for shareholder nominations and other proposals, the imposition of a
"supermajority" (80%) vote for shareholder amendments to the company's bylaws
and the elimination of the possibility of cumulative voting for directors.
In our view each of these changes is detrimental to the interests of public
shareholders.
We note that many of the changes eliminating or limiting shareholder rights
that would result from the proposed reincorporation (for example, the
"staggered" board) are not the automatic result of differences between Delaware
and California corporation law but reflect choices made by the company's Board
of Directors as to what provisions to include in the new company's charter and
bylaws.
We also note that the reincorporation proposal has been put forward by the Board
at a time when a pending lawsuit from a branch of the Farmer family challenges
the ultimate control of the company enjoyed by its current and past chief
executives and management as a result of their voting control over a narrow but
absolute majority of the company's shares. We believe this timing to be
significant.
In our opinion the reasons given by the Board of Directors in the company's
preliminary proxy statement in support of the reincorporation fail to address at
all the particular changes being proposed and are totally unconvincing. For all
of these reasons and others, FMA intends to vote all shares it beneficially
owns against the reincorporation proposal.
In addition to the reincorporation proposal, we understand that a shareholder
proposal to restore cumulative voting is to be presented at the annual meeting.
FMA believes that this proposal would, if adopted, increase the rights of the
company's public shareholders and the accountability of the company's
management to them. For this reason, FMA intends to vote all of its Farmer
Brothers shares in favor of the shareholder proposal.
Franklin Mutual Advisers, LLC is a subsidiary of Franklin Resources, Inc.
[NYSE:BEN], a global investment organization operating as Franklin Templeton
Investments. Franklin Templeton provides global and domestic investment
management services through its Franklin, Templeton, Mutual Series and Fiduciary
Trust subsidiaries. The San Mateo, CA-based company has over 50 years of
investment experience and more than $314 billion in assets under management as
of October 31, 2003. For more information, please call 1-800/DIAL BEN or visit
franklintempleton.com.