Among Participants in the itemsFarmer Bros. Co. 401(k) Plan should follow the instructions provided by the 401(k) trustee, Principal Financial Group.
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Christopher P. Mottern Chairman of the Board of Directors | ||||||||||||||
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FARM@morrowsodali.com
15, 2021
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materials.
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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE 2018 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON DECEMBER 6, 2018
This Notice of Annual Meeting of Stockholders, the accompanying Proxy Statement, the Company’s 2018 Annual Report, which includes its Annual Report on Form10-K for the fiscal year ended June 30, 2018, and form proxy card are available at:http://proxy.farmerbros.com.
Please submit a proxy as soon as possible so that your shares can be represented and voted at the Annual Meeting in accordance with your instructions. By submitting your proxy promptly, you will save the Company the expense of further proxy solicitation. For specific instructions on submitting a proxy to have your shares voted, please refer to the instructions on the proxy card or the information forwarded by your bank, broker or other nominee. Even if you have submitted a proxy, you may still vote in person if you attend the Annual Meeting. Please note, however, that if your shares are held of record by a bank, broker or other nominee and you wish to vote in person at the Annual Meeting, you must obtain a legal proxy issued in your name from such bank, broker or other nominee. If you are a beneficial holder of shares held in “street name,” you should follow the voting instructions provided by your bank, broker or other nominee to ensure that your shares are represented and voted at the Annual Meeting.
If you are a participant in the Farmer Bros. Co. Employee Stock Ownership Plan (the “ESOP”), you should follow the instructions provided by the ESOP trustee, GreatBanc Trust Company (the “ESOP Trustee”), with respect to having the shares allocated to you in the ESOP voted at the Annual Meeting. If you are an ESOP participant, although you may attend the Annual Meeting, you will not be able to cast a vote at the Annual Meeting with respect to any shares you hold through the ESOP.
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The accompanying Proxy Statement provides a detailed description of the business to be conducted at the Annual Meeting. We urge you to read the accompanying Proxy Statement carefully and in its entirety.
If you have any questions concerning the business to be conducted at the Annual Meeting, would like additional copies of the Proxy Statement or need help submitting a proxy for your shares, please contact the Company’s proxy solicitor:
470 West Avenue
Stamford, Connecticut 06902
Stockholders Call Toll Free: (800)[●], 2021
Banks and Brokers Call Collect: (203)
FARM@morrowsodali.com
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The enclosed proxy card is being delivered with this
What
Youbeing asked to review proxy materials online?
Who can vote at the Annual
The election of two Class III directors to serve on our Board for a three-year term of office expiring at the Company’s 2021 Annual Meeting of Stockholders and until their successors are elected and duly qualified;
The ratification of the selection of Deloitte & Touche LLP (“Deloitte”) as our independent registered public accounting firm for the fiscal year ending June 30, 2019;
The approval, on an advisory(non-binding) basis, of the compensation paid to the Company’s named executive officers; and
The approval of the Company’s forum selectionby-law to provide that the courts located within the State of Delaware will serve as the exclusive forum for the adjudication of certain legal disputes.
How does the Board recommend that I vote?
The Board recommends that you vote using the enclosed proxy card:
“FOR” the election of each of the two nominees named herein to serve on our Board as Class III directors for a three-year term of office expiring at the Company’s 2021 Annual Meeting of Stockholders and until their successors are elected and duly qualified;
“FOR” the ratification of the selection of Deloitte as our independent registered public accounting firm for the fiscal year ending June 30, 2019;
“FOR” the approval of, in an advisory(non-binding) vote, the compensation paid to our named executive officers; and
“FOR” the approval of the Company’s forum selectionby-law to provide that the courts located within the State of Delaware will serve as the exclusive forum for the adjudication of certain legal disputes.
Who can vote?
The Board has set October 23, 2018 as the record date (the “Record Date”) for the Annual Meeting. You are entitled to notice of and to vote at the Annual Meeting any shares of common stock, par value $1.00 per share, of the Company (“Common Stock”),Stock and any shares of Series A Convertible Participating Cumulative Perpetual Preferred Stock, par value $1.00 per share, of the Company (“Series A Preferred Stock”), on anas-converted basis, in each case, of which you are the holder of record as of the close of business on the Record Date. Each share of Series A Preferred Stock entitles the holder(s) thereof to vote on anas-converted basis together with the holders of Common Stock as a single class. Your shares may be voted at the Annual Meeting only if you are present in personvirtually or your shares are represented by a valid proxy.
What am I voting on?
list.
How can I vote my shares?
By mail. YouIf you received printed proxy materials, you may vote your shares by completing, signing and mailing the enclosed proxy card (or voting instruction form in the case of beneficial holders). Please refer to your proxy card or voting instruction form for instructions on either submitting your proxy or voting by mail.
Over the Internet. If you have access to the Internet, youYou may submit your proxyvote over the Internet by following the instructions included on the enclosedNotice of Internet Availability or proxy card (or voting instruction form in the case of beneficial holders for whom Internet voting is available)holders). Please refer to your proxy card or voting instruction form for instructions on either submitting a proxy or voting over the Internet.
By telephone. You may submit a proxy to have your shares votedvote by telephone by calling a toll-free telephone number listed on the enclosedNotice of Internet Availability or proxy card (or voting instruction form in the case of beneficial holders for whom telephone voting is available). Please refer to your proxy card or voting instruction form for instructions on submitting a proxy by phone.
In person atAt the Annual Meeting. StockholdersIf you are invited to attenda registered stockholder as of the Record Date, you may vote your shares during the Annual Meeting andby using electronic voting options included as part of the live webcast. Registered stockholders may vote in person atelectronically during the Annual Meeting.Meeting by visiting www.proxydocs.com/FARM, entering the control number found in your Notice of Internet Availability, and following the on-screen instructions. If you are a beneficial owner of shares you must obtain a legal proxy from the bank, broker or other nominee of your shares to be entitled to electronically vote those shares in person at the Annual Meeting. If you are a record holder, you are encouraged to complete, sign and date the enclosed proxy card andvote by mail, it in the enclosed postage-paid envelope regardless ofInternet or telephone whether or not you plan to attend the Annual Meeting. If you hold your shares in “street name,” you are encouraged to follow the voting instructions provided by your bank, broker or other nominee to ensure that your shares are represented and voted at the Annual Meeting.
Who can attend
Admissionright to direct the 401(k) Trustee on how to vote the shares of Common Stock held in his or her account under the 401(k). The 401(k) Trustee will vote all of the shares for which no voting directions are timely received by the 401(k) Trustee, in its independent fiduciary discretion. If you are a 401(k) participant and want to revoke any prior voting instructions you provided to the Annual Meeting is limited to stockholders and their duly-appointed proxy holders as401(k) Trustee in respect of the close of business on the Record Date with proof of ownership of the Company’s Common Stock or Series A Preferred Stock, as well as valid government-issued photo identification, such as a valid driver’s license or passport. If your shares are held in the name of a bank, broker or other nominee and you plan to attend the Annual Meeting, you must present proof of your ownership of Common Stock or Series A Preferred Stock, such as a bank or brokerage account statement, to be admitted tocontact the Annual Meeting. 401(k) Trustee.
We will be unablereliable Internet connection whenever they intend to admit anyone who does not present identification or refuses to comply with our security procedures. No cameras, recording equipment, electronic devices, large bags or packages will be permitted atparticipate in the Annual Meeting. You are encouraged to submit a proxy to have your shares voted regardless of whether or not you plan to attendParticipants in the Annual Meeting should allow time to log in and ensure that they can hear streaming audio prior to the start of the Meeting.
Your vote is very important. Please submit your proxy card even if We encourage you plan to attendaccess the Annual Meeting prior to the start time. A link on the Annual Meeting page will provide further assistance should you need it.
In the event of disorder, technical malfunction or other significant problem that disrupts the Annual Meeting, the chair of the Annual Meeting may adjourn, recess, or expedite the Annual Meeting, or take such other action as the chair determines is appropriate in light of the circumstances.
This means that the twofive individuals nominated for election to the Board at the Annual Meeting who receive the highest number of properly cast “FOR” votes (among votes properly cast in person (virtually) or by proxy) will be elected as directors. In director elections, stockholders may either vote “FOR” or withhold voting authority with respect to director nominees. Shares voting “withhold” are counted for purposes of determining a quorum. However, if you withhold authority to vote with respect to the election of eitherany or bothall of the nominees, your shares will not be voted with respect to those nominees indicated. Therefore, “withhold” votes will not affect the outcome of the election of directors. Brokernon-votes will also not affect the outcome of the election of directors.
Approval of Forum SelectionBy-Law. Although stockholder approval is not required to amend the Company’s Amended and RestatedBy-Laws(“By-Laws”), the Board of Directors believes this is an important issue and that it is in the best interests of the Company and its stockholders to seek a stockholder vote to approve the amendment to ourBy-Lawsproposal. approved by the Board to provide that the courts located within the State of Delaware will serve as the exclusive forum for the adjudication of certain legal disputes. The approval of the Company’s forum selectionby-law requires the affirmative vote of a majority of the shares of Common Stock and Series A Preferred Stock (on anas-converted basis voting together with the Common Stock as a single class) present or represented by proxy at the Annual Meeting and entitled to vote thereat. Abstentions will have the same effect as votes “against” the proposal. Brokernon-votes will not affect the outcome of this proposal because shares held by a bank, broker or other nominee who has not received instructions from the beneficial owner of the shares as to how the shares are to be voted on the proposal are not entitled to vote on such proposal at the Annual Meeting.
“FOR” the election of each of the twofive Board nominees named herein to serve on our Board as Class III directors for a three-yearone-year term of office expiring at the Company’s 20212022 Annual Meeting of Stockholders and until their successors are elected and duly qualified;
“FOR” the ratification of the selection of Deloitte as our independent registered public accounting firm for the fiscal year ending June 30, 2019;
“FOR” the approval of, in an advisory(non-binding) vote, the compensation paid to our named executive officers; and
“FOR” the approval of the Company’s forum selectionby-law to provide that the courts located within the State of Delaware will serve as the exclusive forum for the adjudication of certain legal disputes.
In their discretion, the proxy holders named in the enclosed proxy card are authorized to vote on any other matters that may properly come before the Annual Meeting and at any continuation, postponement or adjournment thereof.
On September 7, 2018, the Company received a stockholder notice from Jeanne Farmer Grossman informing the Company that she intended to nominate herself to stand for election to the Board at the Annual Meeting, however this notice was subsequently withdrawn on October 14, 2018. On October 8, 2018, the Company’s counsel began discussions with Dr. Richard F. Farmer, Ms. Grossman’s brother, and agreed to work constructively with Dr. Farmer to identify a mutually acceptable individual who could be appointed to the Board. Such individual would need to be independent and would be subject to the Nominating and Corporate Governance Committee’s vetting processes. If an individual is identified and agreed upon, the Board would expand the size of the Board to accommodate the individual’s appointment. Other than the notice from Ms. Grossman, no other stockholder proposal or nomination was received on a timely basis, so no such matters may be brought to a vote at the Annual Meeting.
401(k) participants must contact the 401(k) Trustee directly to revoke any prior voting instructions.
No
any substantial interest, direct or indirect, in any matter to be acted upon at the Annual Meeting other than Proposal No. 1—Election of Directors.
FARM@morrowsodali.com
ELECTION OF DIRECTORS
General
Under the Company’s Certificate of Incorporation, as amended (the “Certificate of Incorporation”), andBy-Laws, the Board of Directors is divided into three classes, each class consisting, as nearly as possible, of
The authorized number of directors is set forth in the Company’s Certificate of Incorporation and shall consist of not less than five nor more than nine members, the exact number of which shall be fixed from time to time by resolution of the Board. The authorized number of directors is currently seven. If the number of directors is changed, any increase or decrease will be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible. Any vacancy on the Board of Directors that results from an increase in the number of directors may be filled by a majority of the directors then in office, provided that a quorum is present, and any other vacancy occurring on the Board of Directors may be filled by a majority of the directors then in office, even if less than a quorum, or by the sole remaining director. Any director of any class elected to fill a vacancy resulting from an increase in the number of directors of such class will hold office for a term that will coincide with the remaining term of that class. Any director elected to fill a vacancy not resulting from an increase in the number of directors will have the same remaining term as that of his or her predecessor.
Based on the recommendation of the Nominating and Corporate Governance Committee, the Board has nominated Randy E. Clark and Stacy Loretz-Congdon for election to the Board as Class III directors. If elected at the Annual Meeting, each would serve until the 2021 Annual Meeting of Stockholders and until his or her successor is elected and duly qualified, subject, however, to prior death, resignation, retirement, disqualification or removal from office.
As part of the Company’s ongoing consideration of the appropriate mix of skills and expertise on the Board as well as Board refreshment, the Nominating and Corporate Governance Committee retained Spencer Stuart, a national search firm, to assist with identifying potential director nominees. The functions performed by Spencer Stuart included identifying qualified candidates, conducting interviews and background checks, and presenting qualified candidates to the Nominating and Corporate Governance Committee for consideration.
In connection with its engagement, Spencer Stuart identified Stacy Loretz-Congdon as a possible director nominee and brought Ms. Loretz-Congdon to the Nominating and Corporate Governance Committee’s attention in August 2017 and then again in June 2018. The Nominating and Corporate Governance Committee viewed Ms. Loretz-Congdon as an exceptional candidate. Ms. Loretz-Congdon recently retired after a
Mr. Clark currently serves as a director of the Company and Chairman of the Board. Ms. Loretz-Congdon has been nominated for election to the seat currently held by Jeanne Farmer Grossman. Each of Mr. Clark and
Ms. Loretz-Congdon has agreed to be named in this Proxy Statement and to serve on our Board of Directors if elected. We have no reason to believe that either such nominee will be unable to serve on our Board of Directors if elected.
All of the present directors were elected to their current terms by the stockholders. There are no family relationships among any directors, nominees for director or executive officers of the Company. Except as disclosed below, none of the continuing directors or nominees is a director of any other publicly held company.
Vote Required
Each share of Common Stock is entitled to one vote for each of the two director seats to be filled at the Annual Meeting. Each share of Series A Preferred Stock is entitled to vote on anas-converted basis together with the Common Stock as a single class for each of the two director seats to be filled at the Annual Meeting. Each stockholder will be given the option of voting “FOR” or withholding authority to vote for each nominee. Cumulative voting is not permitted. It is the intention of the proxy holders named in the enclosed proxy to vote the proxies received by them “FOR” the election of the two director nominees named herein unless the proxies direct otherwise. If either of the director nominees should be unable to serve or for good cause will not serve, your proxy will be voted for such substitute nominee(s) as the holders of your proxy, acting in their discretion, may determine.
Directors are elected by a plurality of the votes of the shares of Common Stock and Series A Preferred Stock (on anas-converted basis voting together with the Common Stock as a single class) present in person or represented by proxy at the Annual Meeting and entitled to vote on the election of directors. This means that the two individuals nominated for election to the Board at the Annual Meeting who receive the largest number of properly cast “FOR” votes (among votes properly cast in person or by proxy) will be elected as directors. In director elections, stockholders may either vote “FOR” or withhold voting authority with respect to director nominees. Shares voting “withhold” are counted for purposes of determining a quorum. However, if you withhold authority to vote with respect to the election of either or both of the two nominees, your shares will not be voted with respect to those nominees indicated. Therefore, “withhold” votes will not affect the outcome of the election of directors. Brokers do not have discretionary authority to vote on the election of directors. Brokernon-votes and abstentions will have no effect on the election of directors.
Nominees for Election as Directors
Set forth below is biographical information for each of the Board’s nominees for election as a Class III director at the Annual Meeting, including a summary of the specific experience, qualifications, attributes and skills which led our Board to conclude that the individual should serve on the Board at this time, in light of the Company’s business and structure.
Randy E. Clark, age 66, has served as a director of the Company since 2012. Mr. Clark has served as Chairman of the Board since December 2015, and currently serves as a member of the Audit Committee and Executive Committee, and as a member and Chair of the Compensation Committee. Mr. Clark is a retired foodservice executive. He has consulted for equity groups in the food industry since 2009 and has served on the Board of Trustees for Whitworth University since 2012. He served as President and Chief Executive Officer of Border Foods, Inc., the largest producer of green chile in the world and one of the largest producers of jalapeños in the United States, from 2008 to 2011. Mr. Clark’s earlier experience includes serving as Chief Executive Officer of Fruit Patch, Inc., one of the largest distributors of stone fruits in the United States; President and Chief Executive Officer of Mike Yurosek & Son, LLC, a produce grower and processor; and Vice President, Sales, Marketing and Production with William Bolthouse Farms, a produce grower and processor. Mr. Clark was a Professor of Accounting and Marketing at the Master’s College in Santa Clarita, California, from 1999 to 2003. Mr. Clark received his undergraduate degree from Cedarville College, an M.S. in Accounting from Kent State University, and a Doctorate in Organizational Leadership from Pepperdine University.
We believe Mr. Clark’s qualifications to serve on our Board include his leadership as a former CEO, extensive background and experience in the foodservice business, IT, manufacturing and supply chain experience, involvement in sustainability and corporate responsibility, executive compensation experience, and his accounting and financial expertise.
Stacy Loretz-Congdon, age 59, retired at the end of 2016 after 26 years of service at Core-Mark, one of the largest marketers of fresh and broad-line supply solutions to the convenience retail industry in North America, where she served in various capacities, including as Senior Vice President, Chief Financial Officer and Assistant Secretary from December 2006 to May 2016 and Executive Advisor from May 2016 through December 2016. From January 2003 to December 2006, Ms. Loretz-Congdon served as Core-Mark’s Vice President of Finance and Treasurer and from November 1999 to January 2003 served as Core-Mark’s Corporate Treasurer. Ms. Loretz-Congdon joined Core-Mark in 1990. Ms. Loretz-Congdon’s experience at Core-Mark included oversight of all finance functions, including all corporate finance disciplines, strategy execution, risk mitigation, investor relations, as well as involvement with benefits, executive compensation and technology initiatives. During her tenure as Senior Vice President and Chief Financial Officer, Ms. Loretz-Congdon served on the Information Technology Steering Committee and the Investment Committee at Core-Mark, as well as a board member of all Core-Mark subsidiaries. Core-Mark is a Fortune 500, publicly traded company listed on the NASDAQ Global Market. In 2015, Ms. Loretz-Congdon was named as one of the Top 50 female CFOs in the Fortune 500 by Business Insider and Woman of the Year by Convenience Store News. Prior to joining Core-Mark, Ms. Loretz-Congdon was an auditor for Coopers & Lybrand. Ms. Loretz-Congdon received her Bachelor of Science degree in Accounting from California State University, San Francisco. She is a certified public accountant (inactive) in the State of California. Ms. Loretz-Congdon is an NACD Governance Fellow and NACD Board Leadership Fellow demonstrating her commitment to boardroom excellence by completing NACD’s comprehensive corporate governance programs for directors.
We believe Ms. Loretz-Congdon’s qualifications to serve on our Board include her leadership as a former public company CFO, including accounting and financial expertise and regulatory compliance, as well as her financial planning and analysis, capital markets, corporate finance, M&A, IT, distribution and foodservice logistics, risk assessment, strategy formation and execution, compensation, and corporate governance experience, including her qualifications for service on the Company’s Audit Committee and Compensation Committee.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE “FOR”
EACH OF THE NOMINEES NAMED ABOVE.
Directors Continuing in Office
Set forth below is biographical information for each director continuing in office and a summary of the specific experience, qualifications, attributes and skills which led our Board to conclude that the individual should serve on the Board at this time, in light of the Company’s business and structure.
Name | Age | Director Since | Class | Term Expiration | Executive Committee | Audit Committee | Compensation Committee | Nominating and Corporate Governance Committee | ||||||||
Allison M. Boersma | 53 | 2017 | II | 2020 | X | X | ||||||||||
Michael H. Keown | 56 | 2012 | I | 2019 | ||||||||||||
Charles F. Marcy | 68 | 2013 | I | 2019 | X | X | Chair | |||||||||
Christopher P. Mottern | 74 | 2013 | I | 2019 | X | Chair | X | |||||||||
David W. Ritterbush | 52 | 2007 | II | 2020 | X | X |
Allison M. Boersma is currently the Chief Financial Officer and Chief Operating Officer of BRG Sports Inc., a corporate holding company of leading brands that design, develop and market innovative sports equipment, protective products, apparel and related accessories. The company’s core football brand, Riddell, is the industry leader in football helmet technology and innovation. Ms. Boersma has served as the finance and operations leader for BRG Sports since April 2016, responsible for financial oversight, including planning, treasury and risk management; leadership of global sourcing, manufacturing and distribution; human resources; strategic planning and acquisitions; and manufacturing strategy. Ms. Boersma has also served as Chief Financial Officer and Chief Operating Officer of Riddell Inc., since May 2014, and Senior Vice President Finance and Chief Financial Officer of Riddell, from February 2009 to May 2014. Previously, Ms. Boersma was a finance executive with Kraft Foods, a multinational confectionery, food and beverage conglomerate, for over 17 years, with various positions of increasing responsibility, including serving as Senior Director Finance, Global Procurement, from May 2007 to February 2009, with leadership and oversight of commodity hedging and risk management, including for coffee; execution of global strategies to improve supplier performance; commodity tracking and derivative accounting. Other positions with Kraft included Controller, Grocery Sector; Controller, Meals Division; Director, Sales Finance, Kraft Food Services Division; and Senior Manager, Corporate Financial Business Analysis. Ms. Boersma began her career as a Senior Auditor with Coopers & Lybrand. Ms. Boersma received her undergraduate degree in Accountancy from the University of Illinois Champaign-Urbana, and her Masters of Management, Marketing and Finance, from JL Kellogg Graduate School of Management.
We believe Ms. Boersma’s qualifications to serve on our Board include her CFO and COO leadership, coffee industry knowledge and foodservice experience, supply chain and manufacturing experience, accounting and financial expertise, as well as her experience in IT, risk assessment, strategy formation and execution, mergers and acquisitions, and global sourcing.
Michael H. Keownhas served as the Company’s President and Chief Executive Officer since March 2012. Prior to joining the Company, Mr. Keown served in various executive capacities at Dean Foods Company, a food and beverage company, from 2003 to March 2012. He was at WhiteWave Foods Company, a subsidiary of Dean Foods, from 2004 to March 2012, including as President, Indulgent Brands from 2006 to March 2012. He was also responsible for WhiteWave’s alternative channel business comprised largely of foodservice. Mr. Keown served as President of the Dean Branded Products Group of Dean Foods from 2003 to 2004. Mr. Keown joined Dean Foods from The Coca-Cola Company, where he served as Vice President and General Manager of the Shelf Stable Division of The Minute Maid Company. Mr. Keown has over 25 years of experience in the Consumer Goods business, having held various positions with E.&J. Gallo Winery and The Procter & Gamble Company. Mr. Keown has served as Vice Chairman of the Board of Directors of World Coffee Research, a collaborative,not-for-profit 501(c)(5) research organization created by the global coffee industry, since October 2016. In October 2018, Mr. Keown was nominated to stand for election as a director of Lancaster Colony Corporation, a manufacturer and marketer of specialty food products for the retail and foodservice channels and a publicly
traded company listed on the NASDAQ Global Select Market, at Lancaster Colony’s annual meeting of shareholders to be held on November 14, 2018. Mr. Keown received his undergraduate degree in Economics from Northwestern University.
We believe Mr. Keown’s qualifications to serve on our Board include hisin-depth knowledge of food manufacturing, food processing and the foodservice business, marketing and consumer branding experience, expertise in global sourcing, sustainability and corporate responsibility, and his ability to provide a critical link between management and the Board of Directors thereby enabling the Board to provide its oversight function with the benefit of management’s perspective of the business.
Charles F. Marcy is a food industry consultant. He served as Chief Executive Officer of Turtle Mountain, LLC, a privately held natural foods company, and the maker of the So Delicious brand of dairy free products from May 2013 until April 2015. Prior to this, he was a principal with Marcy & Partners, Inc., providing strategic planning and acquisition consulting to consumer products companies. Mr. Marcy served as President and Chief Executive Officer and a member of the Board of Directors of Healthy Food Holdings, a holding company for branded“better-for-you” foods and the maker of YoCrunch Yogurt and Van’s Frozen Waffles from 2005 through April 2010. Previously, Mr. Marcy served as President, Chief Executive Officer and a Director of Horizon Organic Holdings, then a publicly traded company listed on NASDAQ with a leading market position in the organic food business in the United States and the United Kingdom, from 1999 to 2005. Mr. Marcy also previously served as President and Chief Executive Officer and a member of the Board of Directors of the Sealright Corporation, a manufacturer of food and beverage packaging and packaging systems, from 1995 to 1998. From 1993 to 1995, Mr. Marcy was President of the Golden Grain Company, a subsidiary of Quaker Oats Company and maker of the Near East brand ofall-natural grain-based food products. From 1991 to 1993, Mr. Marcy was President of National Dairy Products Corp., the dairy division of Kraft General Foods. From 1974 to 1991, Mr. Marcy held various senior marketing and strategic planning roles with Sara Lee Corporation and Kraft General Foods. Mr. Marcy currently serves as First Vice Chair on the Board of Trustees of Washington and Jefferson College and has served on the Board of Directors of B&G, Foods, Inc. (“B&G”), a manufacturer and distributor of shelf-stable food and household products across the United States, Canada and Puerto Rico and a publicly traded company listed on the New York Stock Exchange, since 2010. Mr. Marcy served on the Strategy Committee and currently serves as a member and Chairman of the Audit Committee and a member of the Compensation Committee of the Board of Directors of B&G. Mr. Marcy received his undergraduate degree in Mathematics and Economics from Washington and Jefferson College, and his MBA from Harvard Business School. Mr. Marcy is an NACD Board Leadership Fellow and has demonstrated his commitment to boardroom excellence by completing NACD’s advanced corporate governance program for directors.
We believe Mr. Marcy’s qualifications to serve on our Board include his leadership as a former CEO, extensive experience in the food industry, including foodservice, manufacturing, supply chain, marketing and regulatory experience, as well as his corporate governance and public company board and executive compensation experience.
Christopher P. Motternis an independent business consultant. He served as President and Chief Executive Officer of Peet’s Coffee & Tea, Inc., a specialty coffee and tea company, from 1997 to 2002 and a director of Peet’s Coffee & Tea, Inc., from 1997 through 2004. From 1992 to 1996, Mr. Mottern served as President of The Heublein Wines Group, a manufacturer and marketer of wines, now part of Diageo plc, a multinational alcoholic beverage company. From 1986 through 1991, he served as President and Chief Executive Officer of Capri Sun, Inc., one of the largest single-service juice drink manufacturers in the United States. He has served as a director, including lead director, and member of the finance committee, of a number of private companies. Mr. Mottern received his undergraduate degree in Accounting from the University of Connecticut.
We believe Mr. Mottern’s qualifications to serve on our Board include his leadership as a former CEO, coffee industry, foodservice, manufacturing, supply chain and consumer branding experience, risk oversight experience, and financial and accounting expertise.
David W. Ritterbush is currently the Chief Executive Officer of Quest Nutrition, LLC, a manufacturer and retailer of protein and nutrition food products. He has served in this position since March 2017, with oversight of
the organization, including organizational structure, supply chain strategy, and product innovation. Prior to joining Quest Nutrition, Mr. Ritterbush served as Chief Executive Officer of Popchips (Sonora Mills, Inc.), a manufacturer of popped rice, corn, soy, and other grain-based snack food products, from August 2015 to February 2017. While at Popchips, Mr. Ritterbush’s responsibilities included organization leadership, restructuring, sales turnaround, refreshed branding and new product innovation, supply chain restructuring,co-manufacturing and global procurement. Previously, from April 2009 to March 2015, Mr. Ritterbush held leadership positions with Premier Nutrition Corporation, a manufacturer and retailer of beverage products, bars and shakes, including Chief Executive Officer, Post Active Nutrition from April 2014 to March 2015; Chief Executive Officer, Premier Nutrition from August 2010 to March 2014; and Chief Operating Officer from April 2009 to August 2010. While at Premier Nutrition, Mr. Ritterbush reorganized the organization, led a significant turnaround of the supply chain across facilities andco-manufacturers, restructured the sales organization, and actively participated in strategy formation and acquisitions. Prior to this, Mr. Ritterbush was Vice President/General Manager—West Business Unit, for Red Bull North America, from October 2007 to March 2009, with leadership for the West Business Unit including sales, marketing, supply chain, finance and accounting. Previously, Mr. Ritterbush was a sales and marketing executive with Dreyer’s Grand Ice Cream, Inc., for over 16 years, with various positions of increasing responsibility, including serving as Senior Vice President of Marketing—Packaged Products from October 2006 to October 2007, where he was responsible for product design, pricing, and consumer positioning. During this period, Mr. Ritterbush served as a member of Dreyer’s Operating Committee, Dreyer’s Graphics Development team, and a board member of the Starbuck’s Ice Cream partnership. Mr. Ritterbush received his undergraduate degree in Business Administration, Marketing from San Diego State University.
We believe Mr. Ritterbush’s qualifications to serve on our Board include his CEO leadership, as well as his experience in retail and national account foodservice, supply chain and manufacturing, marketing and consumer branding, millennial engagement,e-commerce, strategy formation and execution, turnaround experience, sustainability and corporate responsibility.
RATIFICATION OF SELECTION OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
General
The Audit Committee of the Board of Directors has selected Deloitte & Touche LLP (“Deloitte”) as the independent registered public accounting firm for the Company and its subsidiaries for the fiscal year ending June 30, 2019, and has further directed that management submit this selection for ratification by the stockholders at the Annual Meeting. Deloitte has served as the Company’s independent registered public accounting firm since fiscal 2014. A representative of Deloitte is expected to be present at the Annual Meeting, will have the opportunity to make a statement if they so desire, and will be available to respond to appropriate questions.
Stockholder ratification of the selection of Deloitte as the Company’s independent registered public accounting firm is not required by theBy-Laws or otherwise. However, the Board is submitting the selection of Deloitte to stockholders for ratification because the Company believes it is a matter of good corporate governance practice. If the Company’s stockholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain Deloitte but still may retain them. Even if the selection is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in our best interest and that of our stockholders.
Vote Required
The affirmative vote of a majority of the shares of Common Stock and Series A Preferred Stock (on anas-converted basis voting together with the Common Stock as a single class) present in person or represented by proxy at the Annual Meeting and entitled to vote thereat is required to ratify the selection of Deloitte. Abstentions will have the same effect as votes “against” the ratification. Because brokers have discretionary authority to vote on the ratification, we do not expect any brokernon-votes in connection with the ratification.
THE BOARD RECOMMENDS A VOTE “FOR” RATIFICATION OF
THE SELECTION OF DELOITTE & TOUCHE LLP AS THE COMPANY’S
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners
The following table sets forth certain information regarding the beneficial ownership of the Company’s voting securities as of October 10, 2018, by all persons (including any “group” as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) known by the Company to be the beneficial owner of more than 5% of any class of the Company’s voting securities as of such date, based on 16,977,701 shares of Common Stock and 14,700 shares of Series A Preferred Stock, representing 397,215 shares of Common Stock on anas-converted basis, outstanding as of October 10, 2018. Each share of Series A Preferred Stock entitles the holder(s) thereof to vote on anas-converted basis together with the holders of Common Stock as a single class. As of October 10, 2018, 100% of the shares of Series A Preferred Stock were owned by Boyd Coffee Company. For purposes of this table we have treated the Series A Preferred Stock as converted into Common Stock.
The amounts and percentages of shares beneficially owned are reported on the basis of SEC regulations governing the determination of beneficial ownership of securities. Under SEC rules, a person is deemed to be a “beneficial” owner of a security if that person has or shares voting power or investment power, which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Securities that can be so acquired are not deemed to be outstanding for purposes of computing any other person’s percentage. Under these rules, more than one person may be deemed to be a beneficial owner of securities as to which such person has no economic interest.
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class(1) | ||||||
Carol Farmer Waite(2) | 1,678,972 | 9.7 | % | |||||
Richard F. Farmer(3) | 1,357,184 | 7.8 | % | |||||
Jeanne Farmer Grossman(4) | 1,564,049 | 9.0 | % | |||||
Farmer Bros. Co. Employee Stock Ownership Plan(5) | 1,574,438 | 9.1 | % | |||||
Levin Capital Strategies, L.P. and affiliated entities(6) | 1,236,801 | 7.1 | % | |||||
Trigran Investments, Inc., Douglas Granat, Lawrence A. Oberman, Steven G. Simon, Bradley F. Simon, Steven R. Monieson(7) | 1,027,681 | 5.9 | % | |||||
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Security Ownership of Directors and Executive Officers
The following table sets forth certain information regarding the beneficial ownership of the Company’s voting securities as of October 10, 2018, by each of our current directors and director nominees, each of our executive officers required to be listed pursuant to Item 402 of RegulationS-K, and all of our current directors and executive officers as a group, based on 16,977,701 shares of Common Stock and 14,700 shares of Series A Preferred Stock, convertible into 397,215 shares of Common Stock, outstanding as of October 10, 2018. Each share of Series A Preferred Stock entitles the holder(s) thereof to vote on anas-converted basis together with the holders of Common Stock as a single class. For purposes of this table we have treated the Series A Preferred Stock as converted into Common Stock.
The amounts and percentages of shares beneficially owned are reported on the basis of SEC regulations governing the determination of beneficial ownership of securities. Under SEC rules, a person is deemed to be a “beneficial” owner of a security if that person has or shares voting power or investment power, which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Securities that can be so acquired are not deemed to be outstanding for purposes of computing any other person’s percentage. Under these rules, more than one person may be deemed to be a beneficial owner of securities as to which such person has no economic interest.
Except as otherwise indicated in these footnotes, each of the directors, director nominees and executive officers listed has, to our knowledge, sole voting and investment power with respect to the shares of Common Stock.
Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class(1) | ||||||
Non-Employee Directors and Nominees: | ||||||||
Allison M. Boersma(2) | 1,901 | * | ||||||
Randy E. Clark(3) | 16,217 | * | ||||||
Jeanne Farmer Grossman(4) | 1,564,049 | 9.0 | % | |||||
Stacy Loretz-Congdon(Nominee) | — | — | ||||||
Charles F. Marcy(5) | 13,478 | * | ||||||
Christopher P. Mottern(6) | 19,978 | * | ||||||
David W. Ritterbush(2) | 1,901 | * | ||||||
Named Executive Officers: | ||||||||
Michael H. Keown(7) | 222,765 | 1.3 | % | |||||
David G. Robson(8) | 7,357 | * | ||||||
Ellen D. Iobst(9) | 5,803 | * | ||||||
Scott A. Siers(10) | 34,189 | * | ||||||
Thomas J. Mattei, Jr.(11) | 30,510 | * | ||||||
All directors and executive officers as a group (11 individuals) | 1,918,148 | 10.9 | % | |||||
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At least annually and in connection with any individuals being nominated to serve on the Board, the Board reviews the independence of each director or nominee and affirmatively determines whether each director or nominee qualifies as independent. The Board believes that stockholder interests are best served by having a number of objective, independent representatives on the Board. For this purpose, a director or nominee will be considered to be “independent” only if the Board affirmatively determines that the director or nominee has no relationship with respect to the Company that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
In making its independence determinations, the Board reviewed transactions, relationships, behavior and arrangements between each director and nominee, or any member of his or her immediate family, and us or our subsidiaries based on information provided by the director or nominee, our records and publicly available information. The Board made the following independence determinations (the transactions, relationships and arrangements reviewed by the Board in making such determinations are set forth in the footnotes below):
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| Director | Status | |||||||
| Allison M. Boersma | Independent | |||||||
| Stacy Loretz-Congdon | Independent (1) | |||||||
| Charles F. Marcy | Independent | |||||||
| D. Deverl Maserang | Not Independent (2) | |||||||
| Christopher P. Mottern | Independent | |||||||
| Alfred Poe | Independent | |||||||
| John D. Robinson (director nominee) | Independent | |||||||
| Waheed Zaman | Independent | |||||||
In July 2020, the Board established the Director Search Committee (the "Search Committee").
management, including the Company’s cyber security risk. The Audit Committee is directly and solely responsible for the appointment, dismissal, compensation, retention and oversight of the work of any independent auditor engaged by the Company for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company. The independent auditor reports directly to the Audit Committee.
Compensation Consultant
The Compensation Committee has the authority to retain the services of outside consultants to assist it in performing its responsibilities. In fiscal 2018, the Compensation Committee engaged Meridian Compensation Partners, LLC (“Meridian”) for, (i) with respect to the Compensation Committee, advisory and consulting services relating to the Company’s executive officer and director compensation programs, consultation regarding short-term and long-term incentive plan design, consultation regarding CEO pay ratio disclosure, and consultation regarding corporate governance practices and general Compensation Committee matters and processes, and (ii) with respect to the Nominating and Corporate Governance Committee, consultation regarding performance assessment with respect to our President and Chief Executive Officer.
Meridian provided no other services to the Company or its affiliates during fiscal 2018 other than as described above. The Compensation Committee has determined that Meridian is “independent” according to the criteria required by the SEC in Rule10C-1 of the Exchange Act.
Management’s Role in Establishing Compensation
The compensation of the executive officers is determined by the Compensation Committee, taking into account the input and recommendations of our President and Chief Executive Officer regarding compensation for those executive officers reporting to him, and taking into account the input of the Nominating and Corporate Governance Committee regarding performance of our President and Chief Executive Officer. The Compensation Committee has sole authority for all final compensation determinations regarding our President and Chief Executive Officer. Our President and Chief Executive Officer, Chief Financial Officer, Chief Legal Officer, and SVP, Human Resources routinely attend the meetings of the Compensation Committee to provide input, as requested by the Compensation Committee and, in the case of the Chief Legal Officer, to act as secretary for the meeting; however, no executive officer has any role in approving his or her own compensation, and neither our President and Chief Executive Officer nor any other executive officer is present during the portion of the meeting at which the Compensation Committee considers the executive officer’s own compensation. The Compensation Committee regularly meets in executive session, without members of the management team present, when discussing and approving executive compensation.
Compensation Committee Interlocks and Insider Participation
Ms. Assadi,
2021.
Executive Committee
The Board maintains an Executive Committee in order to assist the Board in effectively handling responsibilities between regular Board meetings. As described in its charter, the Executive Committee is authorized to exercise all powers and authoritysole member of the Board in the management of the business and affairs of the
Company, subject to certain enumerated exceptions as set forth in its charter consistent with Delaware law. During fiscal 2018, the Executive Committee met four times. The current members of the Executive Committee are Randy E. Clark, Charles F. Marcy and Christopher P. Mottern.
The Board currently includes two female members and two members that are racially or ethnically diverse.
•The candidate’s experience in corporate management, such as serving as an officer or former officer of a publicly held company;
•The candidate’s experience as a board member of another publicly held company;
•The candidate’s professional and academic experience relevant to the Company’s industry;
•The strength of the candidate’s leadership skills;
•The candidate’s senior level experience in food manufacturing and distribution, with an emphasis on direct-store-delivery experience and expertise;
•The candidate’s experience in finance and accounting, technology and/or executive compensation practices; and
On October 14, 2018, the Board of Directors adopted an amendment to the Company’sBy-Laws to add a forum selectionby-law to provide that the courts located within the State of Delaware will serve as the exclusive forum for the adjudication of certain legal disputes. Thisby-law is intended to benefit the Company and its stockholders in significant part by directing litigation to a single Delaware court, which will apply its own state law with a well-established body of precedent, thereby reducing the risk and expense of concurrent, multi-jurisdictional litigation, saving Company resources (money and management attention) and leading to a single, more predictable outcome in litigation involving corporate governance and internal affairs. Adopting such an exclusive forum provision covering specified claims does not materially change the substantive legal claims available to stockholders. Additionally, the Company retains the ability to consent to an alternative forum in appropriate circumstances where the Company determines that its interests and those of its stockholders are best served by permitting a particular dispute to proceed in a forum other than Delaware.
Although stockholder approval is not required to amend theBy-Laws, the Board of Directors believes this is an important issue and that it is in the best interests of the Company and its stockholders to seek a stockholder vote to approve the Amendment as described in “Proposal No. 4—Approval of the Company’s Forum SelectionBy-Law.” If stockholder approval is not obtained, the Amendment will be made void and of no further force or effect.
Notwithstanding the current separation of Chairman of the Board and Chief Executive Officer, our Chairman of the Board is generally responsible for soliciting and collecting agenda items from other members of the Board and the Chief Executive Officer, and the Chief Executive Officer is generally responsible for leading discussions during Board meetings. This structure allows for effective and efficient Board meetings and information flow on important matters affecting the Company. OtherAs required under the Nasdaq Listing Rules, a majority of the members of a listed company’s board of directors must qualify as “independent,” as affirmatively determined by the board of directors. The Board has determined that, other than Mr. Keown and Ms. Grossman,Maserang, all members of the Board are independent and each of the Audit, Compensation, and Nominating and Corporate Governance Committees of the Board are composed solely of independent directors. Due principally to the limited size of the Board, the Board has not formally designated a lead independent director and believes that as a result thereof,non-employee director and executive sessions of the Board, which are attended solely bynon-employee directors or independent directors, as applicable, result in an open and free flow of discussion of any and all matters that any director may believe relevant to the Company and/or its management.
•A good balance of fixed andat-risk compensation, as well as an appropriate balance of cash and equity-based compensation.
•Management incentive programs are based on multiple metrics, including strategic, individual and operational measures.
•The Compensation Committee is directly involved in setting short- and long-term incentive performance targets and payout intervals, assessing performance against targets, and reviewing/approving the performance goals for the CEO and other executives.
•Executive annual short-term incentive awards are generally capped at 200% of the target opportunity and the performance-based restricted stock units in the long-term incentive plan are capped at 150%180% of target opportunity.
•Long-term equity awards are generally made on an annual basis which creates overlapping vesting periods and ensures that management remains exposed to the risks of their decision-making through their unvested equity-based awards for the period during which the business risks are likely to materialize.
•Long-term compensation for senior executives is comprised of restricted stock optionsunits that vest ratably over three years and performance-based restricted stock units that are earned based on three-year performance goals. Company shares are inherently subject to the risks of the business, and the combination of options and performance-based restricted stock units ensure that management participates in these risks.
•Performance-based restricted stock units are earned based on cumulative coffee pound sales and cumulative adjusted EBITDA performance goals overfor each year during a full three-year performance period. Using a sales metric coupled with an earnings metric helps minimize the potential for increasing sales in an unprofitable or value-destructive manner.
•The Company has significant share ownership requirements for executives and non-employee directors. Executive officers are required to hold share-based compensation awards until meeting their ownership requirements. Company shares held by management are inherently subject to the risks of the business.
•Executive compensation is benchmarked annually relative to pay levels and practices at peer companies.
•The Company has a clawback policy in place that allows for recovery of incentive compensation if there is a material restatement of financial results caused by the fraud or misconduct of an individual which resulted in an over payment of incentives.
•The Company prohibits employees and directors from hedging or pledging its securities.
•The Compensation Committee is composed solely of independent directors and retains an independent compensation consultant to provide a balanced perspective on compensation programs and practices. The Compensation Committee approves all pay decisions for executive officers.
the Board include, without limitation, customer complaints, solicitations, communications that do not relate directly or indirectly to the Company’s business, or communications that relate to improper or irrelevant topics.
Name | Age | Director Since | Term Expiration | Audit Committee | Compensation Committee | Nominating and Corporate Governance Committee | ||||||||||||||
| Charles F. Marcy | 71 | 2013 | 2022 | Chair | X | |||||||||||||||
| D. Deverl Maserang | 58 | 2019 | 2022 | |||||||||||||||||
| Christopher P. Mottern | 77 | 2013 | 2022 | |||||||||||||||||
| Form of Non-Employee Director Compensation | Director Compensation Program | ||||
| Annual Board Cash Retainer | $60,000 | ||||
| Committee Chair Cash Retainer | $10,000 for Compensation Committee and Nominating and Corporate Governance Committee $15,000 for Audit Committee | ||||
| Non-Chair Committee Cash Retainer | $7,500 for Compensation Committee and Nominating and Corporate Governance Committee $10,000 for Audit Committee | ||||
| Chairman of the Board Cash Retainer | $50,000, with no additional fees for committee service | ||||
| Meeting Fees | $2,000, only paid for Board or committee meetings in excess of seven in a fiscal year | ||||
| Annual Equity Award Value | $65,000 | ||||
| Expense Reimbursement | Payment or reimbursement of reasonable travel expenses from outside the greater Dallas-Fort Worth area, in accordance with Company policy, incurred in connection with attendance at Board and committee meetings, as well as payment or reimbursement of amounts incurred in connection with director continuing education | ||||
| Other | Ad hoc committee fees are determined from time to time by the Board, as needed. | ||||
| Director | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Total ($) | |||||||||||||||||
| Allison M. Boersma | 80,438 | 109,621 | 190,059 | |||||||||||||||||
| Randy E. Clark (2) | 33,250 | 37,495 | 70,745 | |||||||||||||||||
| Stacy Loretz-Congdon (3) | 96,813 | 104,370 | 201,183 | |||||||||||||||||
| Charles F. Marcy | 75,563 | 108,368 | 183,931 | |||||||||||||||||
| Christopher P. Mottern | 107,250 | 116,494 | 223,744 | |||||||||||||||||
| Alfred Poe (2) | 42,500 | 64,999 | 107,499 | |||||||||||||||||
| David W. Ritterbush (2) | 36,813 | 41,370 | 78,183 | |||||||||||||||||
Name | Age | Title | Executive Officer Since | |||||
Michael H. Keown | 56 | President and Chief Executive Officer | 2012 | |||||
David G. Robson | 52 | Treasurer and Chief Financial Officer | 2017 | |||||
Ellen D. Iobst | 59 | Chief Operations Officer | 2017 | |||||
Scott A. Siers | 55 | Senior Vice President and General Manager—Sales | 2017 | |||||
Thomas J. Mattei, Jr. | 48 | Chief Legal Officer and Secretary | 2015 | |||||
Michael H. Keownhas served
| Name(1) | Age | Title | Executive Officer Since | |||||||||||||||||
| D. Deverl Maserang II | 58 | President and Chief Executive Officer | 2019 | |||||||||||||||||
| Scott R. Drake | 52 | Chief Financial Officer | 2020 | |||||||||||||||||
| Jennifer H. Brown | 40 | Senior Vice President, General Counsel and Secretary | 2021 | |||||||||||||||||
| Ruben E. Inofuentes | 54 | Chief Supply Chain Officer | 2019 | |||||||||||||||||
| Maurice S.J. Moragne | 57 | Chief Sales Officer | 2020 | |||||||||||||||||
David G. Robsonthe University of Texas at Austin and her law degree from the University of Texas School of Law.
Ellen D. Iobstjoined the Company as Chief Operations Officer in February 2017. As Chief Operations Officer, Ms. Iobst’s current responsibilities include Green Coffee (procurement and R&D), Manufacturing, Quality & Regulatory, Engineering, Continuous Improvement, and Supply Chain (transportation, fleet, logistics,
planning, procurement and commercial beverage equipment). Prior to becoming an employee of the Company, Ms. Iobst served as an independent consultant to the Company, reporting directly to the CEO, from April 2016 until her hire in February 2017. During this consulting period, Ms. Iobst focused on strategic initiatives relating to coffee manufacturing and sourcing, coffee equipment, supply chain improvement, acquisitions, and project implementation. Ms. Iobst’s supply chain expertise includesstate-of-the art manufacturing, lean manufacturing, supply chain and logistics optimization, purchasing, engineering and technical services, with executive experience in acquisitions and divestitures, site start up and closures, sustainability, and risk management. Prior to becoming a consultant to the Company, Ms. Iobst was the SVP, Supply Chain and Chief Sustainability Officer at Sunny Delight Beverages Co., a producer, distributor, and marketer of juices, juice drinks, and flavored waters, from August 2004 to October 2015. As one of the founding managersmost demanding and difficult years in our history. In this competitive market for talent, we also believe equity is essential to align incentives with stockholders and to retain the talent needed to execute our strategy. As a result, at this Annual Meeting, we are asking stockholders to approve additional shares under the Amended and Restated 2017 Long-Term Incentive Plan to provide us with the necessary tools to attract and retain employees in this competitive and rapidly moving job market.
Scott A. Siershas served as a member of the Company’s executive management team since February 2017 after having served as the Company’s Senior Vice President, National Account Sales from February 2013 to February 2017. As Senior Vice President and General Manager—Sales, Mr. Siers’ current responsibilities include general management and leadership of the Company’s sales organization, including strategy, planning, organizational design and process improvement. Mr. Siers manages sales across all channels of trade and leads the Company’s corporate sustainability programs. Prior to joining the Company, Mr. Siers was Vice President, Business Development at McLane Company, a supply chain services company, from 2009 to September 2012, with responsibility for change management, new business sales and marketing. Mr. Siers’ other experience includes various roles with PepsiCo, including as Vice President, Industry Relations & Business Development, where he led strategy and execution of industry relations and business development for all PepsiCo brands within the foodservice industry, and Vice President, National Accounts & Chief Customer Officer, where he led the national sales organization, as well as experience with Tropicana Products, Inc., where he served as Vice President, General Manager—US Sales. Mr. Siers graduated with a B.S. in Marketing from Western Kentucky University.
Thomas J. Mattei, Jr.was promoted to Chief Legal Officer and Secretary in September 2018 after having served as General Counsel from December 2014 to September 2018, Assistant Secretary from August 2015 to September 2018, and Vice President and Corporate Counsel from January 2013 to December 2014. As Chief Legal Officer, Mr. Mattei’s current responsibilities include oversight of corporate, strategic, and tactical legal and risk-related initiatives, as well as matters of corporate governance. Prior to joining the Company, Mr. Mattei was in private practice with Weintraub Tobin Chediak Coleman Grodin Law Corporation and Weissmann Wolff Bergman Coleman Grodin & Evall LLP in Beverly Hills, CA, from July 2004 to December 2012, with primary responsibilities in corporate, finance and real estate transactional matters. From October 1999 to July 2004, Mr. Mattei was a Corporate Associate at Latham & Watkins LLP in Los Angeles, CA, with primary responsibilities in securities, mergers and acquisitions, and general corporate matters. Mr. Mattei received his undergraduate degree in Public Policy from Duke University and his Juris Doctor from the University of Virginia School of Law.
Chair, Compensation Committee
Name | Title (as of June 30, 2021) | |||||||
| President and Chief Executive Officer | |||||||
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| Senior Vice President, General Counsel and | |||||||
| Chief | |||||||
| Maurice S. J. Moragne | Chief Sales Officer | |||||||
| Ronald J. Friedman | Former Chief Human Resources Officer | |||||||
In fiscal 2018, the Company continued to refine its executive compensation program by making changes to the short- and long-term incentive programs. Fiscal 2018 short-term cash incentives were based on the Company’s achievement of adjusted EBITDA and free cash flow targets along with the relative achievement of individual executive officer objectives, as well as aone-time cash incentive program for our Named Executive Officers with a separate set of performance goals aimed at the successful and rapid integration of the acquired business of Boyd Coffee Company (the “Boyd Business”). For fiscal 2018 long-term incentives, the Company adopted a new performance share vehicle to more directly align long-term incentive awards with the Company’s strategy of incentivizing profitable growth. On a value basis, fiscal 2018 long-term incentive awards were awarded as 50% in performance-based restricted stock units (“PBRSUs”), based on cumulative coffee pound sales and cumulative adjusted EBITDA over a full three-year performance period, and 50% innon-qualified stock options.
In fiscal 2018, the Company’s3-year cumulative TSR performance was aligned with lower realized compensation amounts relative to target, reflecting strong alignment between pay and performance. While our Named Executive Officers received a cash payout for achievement of the integration-based performance goals relating to the Boyd Business, the Company’s Named Executive Officers did not receive any cash payout based on achievement of Company-wide performance.
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Compensation Policies and Practices—Good Governance
Consistent with our commitment to strong corporate governance, in fiscal 2018 our Board followed the compensation policies and practices described below to drive performance and serve our stockholders’ long-term interests:
What We Do
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What We Do Not Do
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Stockholder Advisory Vote on Executive Compensation and Key Compensation Program Enhancements
In December 2017, we held a stockholder advisory vote to approve the compensation of our named executive officers (the“say-on-pay proposal”). Our stockholders approved the compensation of our named executive officers, with approximately 78% of the shares present or represented by proxy at the 2017 Annual Meeting and entitled to vote thereat, casting votes in favor of thesay-on-pay proposal, an increase from an approval rate of approximately 67% in fiscal 2016.
The Compensation Committee reviews the results of the annual vote on thesay-on-pay proposal, and determines whether to make any adjustments to the Company’s executive compensation policies and practices. In light of the increase in stockholder support in fiscal 2017 compared to the prior year’s advisory vote results, the Compensation Committee determined that the enhancements to the Company’s executive compensation programs and practices in fiscal 2017 were viewed by stockholders as effective in further aligning the Company with stockholders in its executive compensation practices. In fiscal 2018, the Compensation Committee continued those enhancements and made the following additional enhancements to our compensation programs and practices:
limited base salary increases to a modest 2% or less for all Named Executive Officers with the exception of the CEO, who received a larger increase to address a market shortfall;
adopted a new performance share vehicle to more directly align long-term incentive awards with our strategy of incentivizing profitable growth, with fiscal 2018 long-term incentive awards awarded, on a value basis, as 50% in PBRSUs, based on cumulative coffee pound sales and cumulative adjusted EBITDA over a full three-year performance period, and 50% innon-qualified stock options;
established a performance funding structure for short-term cash incentive awards that established a maximum cash incentive opportunity for the program, generally, and for eacheconomic interests of our executive officers that participated in the program;
approved short-term cash incentive awards including annual performance awards based on the Company’s achievement of adjusted EBITDA and free cash flow targets along with the relative achievement of individual executive officer objectives, as well as aone-time cash incentive program with a separate set of performance goals aimed at the successful and rapid integration of the Boyd Business; and
continued review of potential modifications to our short- and long-term incentive plans and programs to further align our incentive programs with market-competitive practices and the Company’s strategic goals.
The Compensation Committee will continue to consider the outcome of oursay-on-pay votes when making future compensation decisions for the named executive officers. In addition, when determining how often to hold futuresay-on-pay votes to approve the compensationthose of our named executive officers, the Board took into account the strong preference for an annual vote expressed by our stockholders at our 2017 Annual Meeting. Accordingly, the Board determined that we will continue to holdstockholders;
Stockholder Engagement and Feedback
In fiscal 2018, following the outcome of the Stockholder Advisory Vote on Executive Compensation, the Compensation Committee reached out to stockholders representing in excess of 50% of common shares outstanding, offering to engage in a dialogue about the Company’s executive pay programs in order to gain feedback and insights from the Company’s stockholders. Conversations were held with any of the stockholders in that group that were interested in having a discussion regarding executive compensation. Key themes of feedback provided by stockholders include:
Overall, the Company’s executive pay programs appear to be working effectively, and stockholders were pleased with the strong alignment of pay with performance.
It is important that pay programs, generally, function correctly to attract and retain talent, and that incentive pay remains a motivating force.
The addition of the PBRSUs was a positive change for the long-term incentive program.
Stockholders discussed certain of the metrics that they use in their own analysis of the Company’s performance and discussed the appropriateness of these or other measures in the design of short- and long-term incentive compensation programs for executives.
The Compensation Committee is committed to continuing stockholder engagement efforts, and to discussing and considering feedback and learnings from these conversations.
Executive Compensation Philosophy and Objectives
Our Compensation Committee recognizes that effective compensation strategies are critical to retaining and incentivizing key employees who contribute to the Company’s long-term success and, as such, create long-term value for our stockholders. To that end, our executive compensation program is designed to achieve the following primary objectives:
attract, retain, and motivate talented executives;
motivate executive officers to achieve our short-term and long-term goals by providing “at risk” compensation, the value of which is ultimately based on our future performance, without creating undue risk-taking behavior nor unduly emphasizing short-term performance over long-term value creation;
andreward positive results for the Company and our stockholders; and
•maintain total compensation and relative amounts of base salary, annual, and long-term incentive compensation competitive with those amounts paid by peer companies selected byto remain competitive in the market for talent.
| What We Do | ||
 Our Compensation Committee is composed solely of independent directors, and regularly meets in executive session without members of management present. | ||
| Our Compensation Committee retains an independent compensation consultant to provide it with advice on matters related to executive compensation. | ||
| Our Compensation Committee regularly reviews and assesses the potential risks of our compensation policies and practices. | ||
| The structure of our executive compensation program includes a mix of cash and equity-based compensation, with an emphasis on performance-based compensation. | ||
| The competitiveness of our executive compensation program is assessed by comparison to the compensation programs of peer group companies that are similar to us in terms of industry, annual revenue, and/or other business characteristics. | ||
| Our claw-back policy requires the recoupment of certain incentive compensation from our executive officers in the event of a material restatement of the Company’s financial results due to fraud or misconduct. | ||
| We maintain meaningful stock ownership guidelines for directors and executive officers that promote a long-term stockholder perspective. | ||
| What We Do Not Do | ||
 We do not provide for excise tax gross-ups in connection with severance or other payments or benefits arising in connection with a change in control. | ||
| We do not provide for “single trigger” change in control payments or benefits. | ||
| We do not provide guaranteed base salary increases or guaranteed bonuses. | ||
| We do not provide supplemental pension benefits to our Named Executive Officers. | ||
| We do not provide excessive perquisites. | ||
| We do not permit (absent stockholder approval in the case of repricing/exchanging), and have not engaged in, the practice of backdating or re-pricing/exchanging stock options. | ||
| We do not allow directors or executive officers to hedge or short sell Company stock. | ||
| We do not allow directors or executive officers to pledge shares as collateral for a loan or in a margin account. | ||
Executive Officer and each of our other executive officers.Named Executive Officers. In exercising this authority, the Compensation Committee determines the forms and amount of executive compensation appropriate to achieve the Compensation Committee’s strategic objectives, including base salary, bonus, incentive or performance-based compensation, equity awards and other benefits.
Officer, as well as our other Named Executive Officers.
•individual performance;
•impact on long-term stockholder value creation;
•impact on development and execution of Company strategy;
•experience and tenure in role;
•internal alignment;
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| Lancaster Colony Corporation | |||||
| The Boston Beer Company, Inc. | Medifast, Inc. | |||||
| Bridgford Foods | MGP Ingredients Inc. | |||||
| Calavo Growers, Inc. |
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| Cal-Maine Foods, Inc. | Seneca Foods Corp. | |||||
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In 2021, for fiscal 2022 compensation, the Compensation Committee has decided to remove Primo Water Corporation from the peer group due to its acquisition, and to add Freshpet, Inc. and Utz Brands, Inc.
What We Pay | Why and How We Pay It | |||||||
| Base Salary | • Base salary comprises fixed cash compensation that is designed to provide a reasonable level of fixed income • Base salaries are reviewed annually and adjusted when appropriate (increases are neither fixed nor guaranteed). • Competitive base salaries are a key component of attracting and retaining executive talent. | |||||||
| Short-Term Cash Incentives | • Annual cash incentives constitute variable “at risk” compensation, payable in cash based on Company-wide and individual performance. These awards are designed to reward achievement of annual financial objectives as well as near-term strategic objectives that create momentum that is expected to foster the long-term success of the Company’s business. • Company-wide metrics and targets are derived from, and intended to promote, our near-term business strategy. | |||||||
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• Individual targets are consistent with our focus on both quantitative and qualitative priorities and thereby reward both attainment of objective metrics and individual contributions.
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| Long-Term Incentives | • Stock options,
• Performance-based award metrics and targets align with long-term business strategy as well as stock price | |||||||
| Severance Benefits | • Severance benefits provide income and health insurance protection to our Named Executive Officers in connection with certain involuntary terminations of employment. These severance benefits are designed to enable the Named Executive Officers to focus on the best interests of the Company and its stockholders, including in circumstances that may jeopardize the individual’s job security. • Enhanced severance benefits are available if the termination of employment occurs in connection with a change in control to ensure continued focus on the best alternatives for the Company and its stockholders, free from distractions caused by personal uncertainties associated with the heightened risk to job security that arises for senior executives in the transactional context. • Severance benefits are also key to attracting and retaining key talent. | |||||||
| Retirement and Welfare Benefits | • A standard complement of retirement, health, welfare and insurance benefits, offered to our Named Executive Officers on terms generally similar to those available to other employees, provides important protections and stability for our Named Executive Officers and their families that help enable our Named Executive Officers to remain focused on their work responsibilities. • These are generallylow-cost benefits with a higher perceived value that are intended to help keep our overall compensation package competitive. | |||||||
| Perquisites | • We provide limited perquisites • These are alsolow-cost benefits with a higher perceived value that are intended to help keep our overall compensation package competitive. | |||||||
Name | Fiscal 2018 Annual Base Salary(1) | Fiscal 2017 Annual Base Salary(1) | Annual Base Salary Percentage Change | |||||||
Michael H. Keown | $ | 570,000 | $ | 517,140 | 10% | |||||
David G. Robson | $ | 352,520 | $ | 350,000 | 1% | |||||
Ellen D. Iobst | $ | 338,618 | $ | 335,000 | 1% | |||||
Scott A. Siers | $ | 293,132 | $ | 290,000 | 1% | |||||
Thomas J. Mattei, Jr. | $ | 312,120 | $ | 306,000 | 2% | |||||
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Short-Term Cash Incentives
For fiscal 2018 short-term cash incentive awards underCOVID-19 pandemic on revenue, the 2017 Farmer Bros. Co. Long-Term Incentive Plan (the “2017 Plan”), we establishedCompany's Board had approved the implementation of a maximum annual cash incentive opportunitytemporary 15-percent salary reduction for all of the program, generally, and for each of our executive officers that participated in this program, based on a 1.9% of our fiscal 2018 gross profit as reported in our audited consolidated financial statements for the fiscal year ended June 30, 2018 included in our 2018 Form10-K. The Compensation Committee specified an allocation percentage for each of ourCompany's Named Executive Officers, subject to a maximumeffective April 1, 2020. On August 17, 2020, the Company reinstated five-percent of 250%the pre-reduction salary, with an additional five-percent being reinstated on each of December 7, 2020 and March 15, 2021. In fiscal 2021, the Named Executive Officer’sOfficers did not receive regular merit increases as the Company eliminated the annual merit increase pool for fiscal 2018 target bonus award, under the 2017 Plan. The 2017 Plan is an umbrella plan intended to satisfy the performance-based requirements of Section 162(m)2021 as part of the Internal Revenue CodeCOVID-19 response.
| Name | Fiscal 2021 Annual Base Salary(1)(2) | Fiscal 2020 Annual Base Salary(1)(2) | Annual Base Salary Percentage Change | |||||||||||||||||
| Named Executive Officers: | ||||||||||||||||||||
| D. Deverl Maserang II | $ | 660,000 | 660,000 | — | ||||||||||||||||
| Scott R. Drake | $ | 375,000 | 375,000 | — | ||||||||||||||||
| Jennifer H. Brown (3) | $ | 300,000 | 240,000 | 25% | ||||||||||||||||
| Ruben E. Inofuentes | $ | 340,000 | 340,000 | — | ||||||||||||||||
| Maurice S. J. Moragne | $ | 340,000 | 340,000 | — | ||||||||||||||||
| Ronald J. Friedman | $ | 324,450 | 324,450 | N/A | ||||||||||||||||
the Summary Compensation Table.
The Compensation Committee believes that the fiscal 2018 performance metrics represented challenging, yet achievable, goals that effectively incentivized the Named Executive Officers. Payouts were ultimately determined based on the performance goals described below, and any payouts earned based on achievement against these performance goals could not exceed the amount funded by the gross profit pool.
Performance Achievement Program for Fiscal 2018
Company-Wide Performance Goals
(weighted 90% of the Performance Achievement Program at target)
Company-wide financial results.
“adjustedpurpose, "adjusted EBITDA” was defined as net (loss) income excluding the impact of: (i) income taxes; (ii) interest expense; (iii) income from short-term investments; (iv) depreciation and amortization expense; (v) ESOP and share-based compensation expense;(vi) non-cash impairment losses;(vii) non-cash pension withdrawal expense; (viii) other similarnon-cash expenses; (ix) restructuring and other transition expenses;(x) non-recurring stockholder-related expenses; (xi) acquisition costs (and related revenues only during the same fiscal year); (xii) capital issuance expenses; (xiii) out of period external legal expenses; (xiv) business segment disposition expenses (and exclusion of related gain on sales); (xv) net gain or loss on sale of assets other than M&A or business segment disposition; and(xvi) non-recurring and/or extraordinary expenses; and
“free cash flow” was defined as adjusted EBITDA less maintenance capital expenditures;
in each case, excluding the impact of the acquired Boyd Business during the fiscal year.
In determiningperformance.
Metric | Weighting | Threshold Goal (80% of target performance) | Target Goal | Maximum Goal (140% of target performance) | Actual Achievement | Actual Achievement Compared to Target Performance | Earned Payout for Fiscal 2018 Company- wide Performance | |||||||||||||||||||
Adjusted EBITDA | 75% | $ | 41,748,000 | $ | 52,185,000 | $ | 73,059,000 | $ | 41,537,000 | 79.6% | — | |||||||||||||||
Free Cash Flow | 25% | $ | 24,000,000 | $ | 30,000,000 | $ | 42,000,000 | $ | 21,302,000 | 71.0% | — | |||||||||||||||
Weighted Company-wide Performance Goals | 77.4% | $ | 0 | |||||||||||||||||||||||
| Metric | AEBITDA Target | Threshold Goal (80% of Target Performance) | Actual Achievement | Actual Achievement Compared to Target Performance | Payout for Fiscal 2021 Company-wide Performance | ||||||||||||||||||||||||
| Adjusted EBITDA | $15.7M | $12.6M | $16.6M | 105.7% | 100% | ||||||||||||||||||||||||
Individual Performance Goals
(weighted 10% of the Performance Achievement Program at target)
As compared to recent years, in fiscal 2018, achievement of individual goals was not limited to 100% in the aggregate, and no Company target multiplier was applied to individual achievement. The significant accomplishments considered by our Compensation Committee in determining the individual performance component of our Named Executive Officers’ fiscal 2018 annual cash incentive awards under the 2017 Plan are summarized below:
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As a result of our failure to achieve a threshold level of adjusted EBITDA, as determined by the Compensation Committee, our Named Executive Officers did not receive any cash payout under the Performance Achievement Program in fiscal 2018.
Name | Fiscal 2018 Target Award | Fiscal 2018 Target Award as Percentage of Fiscal 2018 Base Salary | Payout as Percentage of Target Company- wide Performance (90% Weight) | Payout as Percentage of Target- Individual Performance (10% Weight) | Fiscal 2018 Payout | |||||||||
Michael H. Keown | $ | 570,000 | 100% | 0% | —(1) | $ | 0 | |||||||
David G. Robson | $ | 246,764 | 70% | 0% | 56% | $ | 0 | |||||||
Ellen D. Iobst | $ | 203,171 | 60% | 0% | 74% | $ | 0 | |||||||
Scott A. Siers | $ | 161,223 | 55% | 0% | 50% | $ | 0 | |||||||
Thomas J. Mattei, Jr. | $ | 171,666 | 55% | 0% | 87% | $ | 0 | |||||||
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Integration Achievement Program for Fiscal 2018
In addition to the Performance Achievement Program described above, in fiscal 2018 the Compensation Committee approved the Integration Achievement Program with a separate set of integration-based performance goals required to be achieved within 90 days following the closing of the Boyd Coffee acquisition, relating to the integration of the Boyd Business. The Compensation Committee believed that, given the magnitude of the Boyd Coffee acquisition and potential impact on Farmer Bros.’ growth and financial performance, it was important to establish aone-time cash incentive program to motivate the Named Executive Officers to expediently and successfully integrate the Boyd Business into Farmer Bros. This special Integration Achievement Program only applies for fiscal 2018 and will not recur in fiscal 2019.
The performance goals for the Integration Achievement Program required the following within 90 days following the closing date:
retention and transition of top five key customers (50% weight);
assumption of certain accounting functions (25% weight); and
successful qualification/test run of Boyd Coffee retail product at Company production facility (25% weight).
Each of these goals were indicative of the essential aspects of successful integration of the Boyd Business: revenue retention, swift assumption of business processes, and transfer of production.
Subject to continuing employment by the Company through the end of fiscal 2018, each Named Executive Officer was eligible to earn a cash incentive award under the Integration Achievement Program of up to an additional 50% of the Named Executive Officer’s target annual bonus under the Performance Achievement Program. Achievement or failure of the performance goals for the Integration Achievement Program was independent of any achievement under the Performance Achievement Program, with any cash incentive award earned under the Integration Achievement Program to be supplemental to any cash incentive award earned under the Performance Achievement Program.
In fiscal 2018, the Named Executive Officers earned the following awards under the Integration Achievement Program:
Name | Fiscal 2018 Target Award | Integration Achievement Target Award as Percentage of Fiscal 2018 Target Award | Integration Achievement Target Award | Fiscal 2018 Payout | ||||||||||
Michael H. Keown | $ | 570,000 | 50% | $ | 285,000 | $ | 285,000 | |||||||
David G. Robson | $ | 246,764 | 50% | $ | 123,382 | $ | 123,382 | |||||||
Ellen D. Iobst | $ | 203,171 | 50% | $ | 101,586 | $ | 101,586 | |||||||
Scott A. Siers | $ | 161,223 | 50% | $ | 80,612 | $ | 80,612 | |||||||
Thomas J. Mattei, Jr. | $ | 171,666 | 50% | $ | 85,833 | $ | 85,833 | |||||||
Key Fiscal 2019 Compensation Decisions
For fiscal 2019, annual short-term incentive compensation awards will be based on the Company’s achievement of targets for adjusted EBITDA and free cash flow (collectively weighted at 90%) along with the relative achievement by each executive officer of individual goals and objectives approved by the Compensation Committee (weighted at 10%). The Integration Achievement Program will not continue for fiscal 2019, and there are no other specifically-targeted or supplemental incentive opportunities for fiscal 2019. More details about our fiscal 2019 annual short-term incentive program will be provided in our fiscal 2019 proxy filing.
Long-Term Incentives
Awards
Fiscal 2018 long-term incentive awards were made under the 2017 Plan, which was approved by stockholders on June 20, 2017 (the “Effective Date”). The 2017 Plan succeeded the Company’s prior long-term incentive compensation plans, the Farmer Bros. Co. Amended and Restated 2007 Long-Term Incentive Plan (the “Amended Equity Plan”) and the Farmer Bros. Co. 2007 Omnibus Plan (collectively, the “Prior Plans”). On the Effective Date, the Company ceased granting awards under the Prior Plans; however, awards outstanding under the Prior Plans will remain subject to the terms of the applicable Prior Plan.
Prior toCompensation
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On a value basis, fiscal 2018 long-term incentive awards were awarded as 50% in PBRSUs based on aggregate coffee sales in pounds and aggregate adjusted EBITDA over a full three-year performance period, and 50% innon-qualified stock options. The changes in fiscal 20182021 long-term incentives were designed to be competitive with market and more directly align our incentives with our long-term business priorities and compensation outcomes to Company performance. The Compensation Committee believes that this equity award mix balances the emphasis on stock price and stockholder alignment with alignment on internal company performance and business strategy. On the whole, the fiscal 20182021 long-term incentive program facilitiesfacilitates strong
pay for performance alignment in that the stock optionsRSUs only realizeappreciate in value to the extent that the stock price appreciates, above the exercise price, and the PBRSUs only vest to the extent that the performance goals are achieved.
achieved, placing the emphasis on stock price and stockholder alignment on internal company performance and business strategy. The Compensation Committee also believes that long-term incentives serve as a retention tool for key executives, which is particularly important in this competitive market for talent.
equity plan, the Compensation Committee started utilizing RSUs instead of stock options.
(weighted approximately 50% of targeted grant date long-term incentive value)
Units
The following table sets forth the annual stock option awards granted to each of our Named Executive Officers under the 2017 Plan on November 10, 2017:
Name | Fiscal 2018 Annual Stock Option Grant (# of Shares of Common Stock Issuable Upon Exercise) | Grant Date Fair Value of Stock Option Awards ($) | ||||||
Michael H. Keown | 28,819 | 300,093 | ||||||
David G. Robson | 12,699 | 132,235 | ||||||
Ellen D. Iobst | 9,759 | 101,621 | ||||||
Scott A. Siers | 7,040 | 73,308 | ||||||
Thomas J. Mattei, Jr. | 8,995 | 93,665 | ||||||
employment.
(weighted approximately 50% of targeted grant date long-term incentive value)
period.
business. The Compensation Committee has historically established aggressive, yet achievable performance goals intended to motivate the Company’s executive officers to achieve internal goals and results that will benefit the Company’s stockholders, while maintaining strong alignment between pay and performance. For example, in fiscal 2018With the limited number of shares available for issuance under our Amended and Restated 2017 Plan, this annual as
The following table sets forth the target PBRSU awards granted to each of our Named Executive Officers under the 2017 Plan on November 10, 2017:
Name | Fiscal 2018 Target PBRSU Grant (# of Shares of Common Stock Issuable Upon Vesting) | Grant Date Fair Value of Target PBRSUs ($) | ||||||
Michael H. Keown | 9,464 | 300,009 | ||||||
David G. Robson | 4,171 | 132,221 | ||||||
Ellen D. Iobst | 3,205 | 101,599 | ||||||
Scott A. Siers | 2,312 | 73,290 | ||||||
Thomas J. Mattei, Jr. | 2,954 | 93,642 | ||||||
New Hire Restricted Stock Awards
In connection with commencement of their employment, pursuant to the terms of their respective employment agreements with the Company, in fiscal 2018 the Company granted the followingnon-qualified stock option awards and restricted stock awards to Mr. Robson and Ms. Iobst. The stock options have an exercise price of $31.70 per share, which was the closing price of our Common Stock as reported on the NASDAQ Global Select Market on the date of grant.One-third of the total number of shares subject to each such stock option vest ratably on each of the first three anniversaries of the grant date, contingent on continued employment, and subject to accelerated vesting in certain circumstances. The restricted stock has a grant date fair value of $31.70 and cliff vests on the third anniversary of the grant date, subject to continued service to the Company through the vesting date and the acceleration provisions of the 2017 Plan and restricted stock award agreement.
Name | Fiscal 2018 New Hire Stock Option Grant (# of Shares of Common Stock Issuable Upon Exercise) | Fiscal 2018 New Hire Restricted Stock Grant (#) | Grant Date Fair Value of New Hire Stock and Option Awards ($) | |||||||||
David G. Robson | 5,764 | 947 | 90,041 | |||||||||
Ellen D. Iobst | 4,611 | 757 | 72,012 | |||||||||
Key Fiscal 2019 Compensation Decisions
For fiscal 2019, the long-term incentive program will be substantially the same as fiscal 2018, with long-term incentives awarded 50% in PBRSUs and 50% in stock options, on a value basis. PBRSUs will be earned based on the achievement of cumulative coffee pound sales and cumulative adjusted EBITDA, both measured over a full three-year performance period. The stock options will vest over a three-year period based on continued employment over the period. The Compensation Committee believes this program design incentivizes value creation through profitable growth, directly aligning long-term incentive awards with the Company’s business strategy and stockholder interests. More details about our fiscal 2019 long-term incentive awards will be provided in our fiscal 2019 proxy filing.
Change in Control Severance Agreements; Employment Agreements
The Company has also entered into employment agreements with each of the Named Executive Officers. Pursuant to the terms of their employment agreements, the Named Executive Officers are entitled to receive certain benefits upon their termination of employment without cause or resignation for good reason in the absence of a change in control or threatened change in control. The Company believes such benefits were necessary to attract and retain the Named Executive Officers and to secure their services at agreed-upon terms. The termination-related payments and benefits under the Named Executive Officers’ change in control severance agreements would be in lieu of, and not in addition to, the termination-related payments and benefits under their employment agreements. A more detailed description of the benefits to which the Named Executive Officers are entitled under the terms of their employment agreements in connection with a termination of employment is set forth below under the heading “Named Executive Officer Compensation—Change in Control and Termination Arrangements.”
ESOP Allocation
Our Named Executive Officers participate in the Company’s ESOP in the same manner as all other eligible employees. ESOP Company contributions (which may be in the form of Common Stock or cash) are allocated in accordance with a formula based on participant compensation. A participant’s interest in the ESOP becomes 100% vested after five years of service to the Company, subject to accelerated vesting in certain limited circumstances.
During fiscal 2018, the Named Executive Officers received the following ESOP allocations in shares of Common Stock based on compensation earned during calendar year 2017:
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Subject to applicable plan provisions, upon certain events of retirement, Named Executive Officers are eligible to receive retiree medical insurance benefits on the same terms as other retiring Company employees.
employee.
The perquisites and other benefits available to Named Executive Officers consist of an automobile allowance or use of a Company car and fuel card, and relocation assistance payments and benefits and temporary living expenses.
stock units (whether or not the restrictions have lapsed); (iii) ESOP shares (with respect to executive officers only); (iv) shares of Common Stock held in trust for the benefit of the executive officer ornon-employee director or his or her family; and (v) shares of Common Stock issuable under vested options held by the executive officer ornon-employee director.
Position | Value of Shares Owned | |||||||
Chief Executive Officer | 3x base salary | |||||||
Other Executive Officers | 1x base salary | |||||||
Non-Employee Directors | ||||||||
Taxes and
Tax Deductibility Under Section 162(m) of the Internal Revenue Code
Certain of our incentive compensation programs are intended to provide for compensation that is tax deductible to us, however, the Compensation Committee believes that achieving the desired flexibility in the design and delivery of compensation, due to competitive or other factors, may result in compensation that in certain cases is not deductible for federal income tax purposes. At the time the Compensation Committee made its fiscal 2018 compensation decisions, Section 162(m) of the Internal Revenue Code disallowed a federal tax deduction to public companies for compensation greater than $1 million paid in any tax year to specified executive officers unless the compensation is “qualified performance-based compensation” under that section. Our fiscal 2018 executive compensation program was designed with the intent to provide cash and equity-based incentive compensation under the 2017 Plan as “qualified performance-based compensation” under Section 162(m).
The Section 162(m) exception was repealed as part of the Tax Cuts and Jobs Act enacted on December 22, 2017 for taxable years beginning after December 31, 2017. It is uncertain whether compensation that the Compensation Committee originally intended to structure as qualified performance-based compensation under Section 162(m) that is paid in calendar 2018 or subsequent years will be deductible under transition rules. The Compensation Committee will continue to focus on performance-based compensation, although certain of the requirements of Section 162(m) will no longer be relevant and will not be taken into account when making future compensation decisions.
Accounting Standards
Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718 requires us to recognize an expense for the fair value of share-based compensation awards. Grants of stock options, restricted stock and PBRSUs under the Company’s long-term incentive plans are accounted for under FASB ASC Topic 718. The Compensation Committee considers the accounting implications of significant compensation decisions, especially in connection with decisions that relate to our long-term incentive program. As accounting standards change, the Company may revise certain programs to appropriately align accounting expenses of our share-based compensation awards with our overall executive compensation philosophy and objectives.
10-K for the fiscal year ended June 30, 2021.
Randy E. Clark,
Charles F. Marcy
David W. Ritterbush
| A | B | C | D | E | F | G | H | I | ||||||||||||||||||||||||
Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($)(1) | Total ($) | ||||||||||||||||||||||||
Michael H. Keown | 2018 | 565,758 | — | 300,009 | 300,093 | 285,000 | 15,922 | 1,466,782 | ||||||||||||||||||||||||
President and CEO | 2017 | 534,690 | — | — | 472,000 | — | 16,541 | 1,023,231 | ||||||||||||||||||||||||
| 2016 | 507,000 | 659,100 | — | 799,503 | 677,109 | 25,391 | 2,668,103 | |||||||||||||||||||||||||
David G. Robson(2) | 2018 | 351,938 | — | 162,241 | 192,256 | 123,382 | 69,266 | 899,083 | ||||||||||||||||||||||||
Treasurer and CFO | 2017 | 121,154 | — | — | — | — | 74,184 | 195,338 | ||||||||||||||||||||||||
Ellen D. Iobst(3) | 2018 | 337,783 | — | 125,596 | 149,636 | 101,586 | 104,551 | 819,152 | ||||||||||||||||||||||||
Chief Operations Officer | 2017 | 115,962 | — | — | — | — | 372,891 | 488,853 | ||||||||||||||||||||||||
Scott A. Siers | 2018 | 292,409 | — | 73,290 | 73,308 | 80,612 | 7,822 | 527,441 | ||||||||||||||||||||||||
SVP, GM Sales | ||||||||||||||||||||||||||||||||
Thomas J. Mattei, Jr. | 2018 | 310,708 | — | 93,642 | 93,665 | 85,833 | 15,922 | 599,770 | ||||||||||||||||||||||||
Chief Legal Officer and Secretary | 2017 | 316,383 | — | — | 111,551 | — | 16,541 | 444,475 | ||||||||||||||||||||||||
| 2016 | 287,893 | 325,000 | — | 99,931 | 220,660 | 115,075 | 1,048,559 | |||||||||||||||||||||||||
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| A | B | C | D | E | F | G | H | I | ||||||||||||||||||||||||||||||||||||||||||
| Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total ($) | ||||||||||||||||||||||||||||||||||||||||||
| D. Deverl Maserang II (1) | 2021 | 615,574 | — | 1,899,995 | — | 660,000 | 11,114 | 3,186,683 | ||||||||||||||||||||||||||||||||||||||||||
| President and Chief Executive Officer | 2020 | 487,385 | — | 499,990 | 999,997 | — | 13,200 | 2,000,572 | ||||||||||||||||||||||||||||||||||||||||||
| Scott R. Drake (2) | 2021 | 349,758 | — | 344,989 | — | 281,250 | 14,226 | 990,223 | ||||||||||||||||||||||||||||||||||||||||||
| Chief Financial Officer | 2020 | 80,769 | — | — | 199,999 | — | — | 280,768 | ||||||||||||||||||||||||||||||||||||||||||
| Jennifer H. Brown (3) | 2021 | 269,736 | — | 149,996 | — | 165,000 | 10,576 | 595,308 | ||||||||||||||||||||||||||||||||||||||||||
| Senior Vice President and General Counsel | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Ruben E. Inofuentes (4) | 2021 | 317,114 | — | 359,992 | — | 204,000 | 11,248 | 892,354 | ||||||||||||||||||||||||||||||||||||||||||
| Chief Supply Chain Officer | 2020 | 192,231 | — | 125,000 | 124,999 | — | 96,368 | 538,598 | ||||||||||||||||||||||||||||||||||||||||||
| Maurice S. J. Moragne (5) | 2021 | 340,000 | — | 289,986 | 74,998 | 204,000 | 10,994 | 844,980 | ||||||||||||||||||||||||||||||||||||||||||
| Chief Sales Officer | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Ronald J. Friedman (6) | 2021 | 299,806 | — | 297,495 | — | — | 65,627 | 662,928 | ||||||||||||||||||||||||||||||||||||||||||
| Former Chief Human Resources Officer | 2020 | 192,231 | — | 74,998 | 74,995 | — | 23,102 | 365,326 | ||||||||||||||||||||||||||||||||||||||||||
from April 1, 2020 through March 15, 2021 as a result of the unprecedented impact of the COVID-19 pandemic on the food and beverage industry and our business, as described above.
respective employment agreements, in each case, computed in accordance with FASB ASC Topic 718.Brown. A discussion of the assumptions used in calculating the amounts in this column may be found in Note 1814 to our audited consolidated financial statements for the fiscal year ended June 30, 20182021 included in our 20182021 Form10-K, except that, as required by applicable SEC rules, we did not reduce the amounts in this column for any forfeitures relating to service-based (time-based) vesting conditions.
The amount reported in column F for fiscal 2016 for Mr. Keown includes the aggregate grant date fair value of stock option awards granted to Mr. Keown under the Amended Equity Plan on December 3, 2015 and the aggregate grant date fair value of stock option awards granted to Mr. Keown under the Amended Equity Plan on June 3, 2016. However, as discussed in Note 18 to our audited consolidated financial statements for the fiscal year ended June 30, 2018 included in our 2018 Form10-K, a portion of the December 3, 2015 stock option award was found to be invalid and was voided on June 3, 2016. The aggregate grant date fair value of the option awards granted to Mr. Keown in fiscal 2016, net of the portion of the option award that was voided, was $537,505.
In fiscal 2018, the amount of each Named Executive Officer’s award shownfollowing:
| Company Contributions to 401(k) Plan (2) | Relocation Expense (3) | Relocation Tax Gross-Up (3) | Automobile Allowance | Severance Payments (4) | ||||||||||||||||||||||||||||||||||
| ($) | ($) | ($) | ($) | ($) | ||||||||||||||||||||||||||||||||||
| D. Deverl Maserang II | 2021 | 11,114 | — | — | — | — | ||||||||||||||||||||||||||||||||
| 2020 | 13,200 | — | — | — | — | |||||||||||||||||||||||||||||||||
| Scott R. Drake | 2021 | 14,226 | — | — | — | — | ||||||||||||||||||||||||||||||||
| 2020 | — | — | — | — | — | |||||||||||||||||||||||||||||||||
| Jennifer H. Brown | 2021 | 10,576 | — | — | — | — | ||||||||||||||||||||||||||||||||
| Ruben E. Inofuentes | 2021 | 11,248 | — | — | — | — | ||||||||||||||||||||||||||||||||
| 2020 | 7,637 | 70,550 | 18,181 | — | — | |||||||||||||||||||||||||||||||||
| Maurice S.J. Moragne | 2021 | 10,994 | — | — | — | — | ||||||||||||||||||||||||||||||||
| Ronald J. Friedman | 2021 | 11,253 | — | — | 4,246 | 50,128 | ||||||||||||||||||||||||||||||||
| 2020 | 18,352 | — | — | 4,750 | — | |||||||||||||||||||||||||||||||||
discussed in this Proxy Statement under the heading “Compensation Discussion and Analysis—Short-Term Cash Incentives.” As a resultother personal benefits received by each of our failure to achieve a threshold level of adjusted EBITDA, as determined by the Compensation Committee, our Named Executive Officers did not receive any cash payoutexceed $10,000 in fiscal 2021 and has been excluded from the table.
All Other Compensation (Column H)
The amounts reported2020, Mr. Inofuentes received assistance for relocation expenses. A portion of this amount was grossed-up to offset the tax expense.
All Other Compensation
Name | Perquisites and Other Personal Benefits ($) | Tax Gross-Up Payments ($)(1) | ESOP Allocation(2)($) | Company Contributions to 401(k) Plan(3)($) | Total ($) | |||||||||||||||
Michael H. Keown | — | (4) | — | 7,822 | 8,100 | 15,922 | ||||||||||||||
David G. Robson | 49,178 | (5) | 4,166 | 7,822 | 8,100 | 69,266 | ||||||||||||||
Ellen D. Iobst | 77,588 | (6) | 11,041 | 7,822 | 8,100 | 104,551 | ||||||||||||||
Scott A. Siers | — | (7) | — | 7,822 | — | 7,822 | ||||||||||||||
Thomas J. Mattei, Jr. | — | (8) | — | 7,822 | 8,100 | 15,922 | ||||||||||||||
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Company.
Employment Agreements and Arrangements
Severance Agreements
The Company has entered into change in control severance agreements with each of the Named Executive Officers (the “Severance Agreements”), pursuant to which such Named Executive Officers are entitled to receive
severance benefits upon termination of employment other than for “Cause,” “Disability” or death, or termination due to resignation from employment for “Good Reason,” in each case, in connection with a “Change in Control” or “Threatened Change in Control” (as each such term is defined in the Severance Agreement). The Severance Agreements are structured so that payments and benefits are provided only if there is both a change in control or threatened change in control and a qualifying termination of employment (“double trigger”). A more detailed description of the severance benefits to which our Named Executive Officers are entitled in connection with a change in control or threatened change in control is set forth below under the heading “Change in Control and Termination Arrangements.”
Employment Agreements
The Company has also entered into employment agreements with each of the Named Executive Officers (the “Employment Agreements”). The Employment Agreements provide for an initial annual base salary which may be adjusted upward or downward by the Company from time to time, subject to a minimum annual base salary as specified in the employment agreement. The Employment Agreements further provide that the Named Executive Officer is entitled to participate in the Company’s short-term incentive plan, with a specified target award equal to a percentage of such Named Executive Officer’s annual base salary. Additionally, the Employment Agreements provide for grants under the Company’s long-term incentive plan as determined by the Compensation Committee, in some cases, upon the commencement of employment as an inducement to joining the Company. In certain cases, the Named Executive Officers have been entitled to specified relocation benefits. Each Named Executive Officer is entitled to all benefits and perquisites provided by the Company to its senior executives, including paid days off, group health insurance, life insurance, 401(k) plan, ESOP, cell phone, Company credit card, Company gas card, expense reimbursement and an automobile allowance. The Employment Agreements contain no specified term of employment, but rather the Named Executive Officer’s employment may be terminated by the Company at any time with or without “Cause” or upon the Named Executive Officer’s resignation with or without “Good Reason,” or due to death or “Permanent Incapacity” (as each such term is defined in the applicable Employment Agreement). Each of the Employment Agreements contains customary provisions protecting our confidential information and intellectual property. They also contain restrictions, for a period of two years following any termination of employment, on the Named Executive Officer’s ability to solicit any customer or prospective customer of the Company or any person employed by the Company to leave the Company. The Employment Agreements require that all disputes between the applicable Named Executive Officer and the Company arising under or in connection with their Employment Agreement will be subject to resolution through arbitration. Upon certain qualifying terminations of employment, the Named Executive Officers may be entitled to certain termination-related payments and benefits. A more detailed description of the termination-related payments and benefits to which our Named Executive Officers are entitled under their Employment Agreements is set forth below under the heading “Change in Control and Termination Arrangements.”
Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards(1) | ||||||||||||||||||||||||||||||||||
Name | Grant Date | Threshold ($)(3) | Target ($)(3) | Maximum ($)(3) | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/ Sh) | Grant Date Fair Value of Stock and Option Awards ($)(2) | ||||||||||||||||||||||||
| D. Deverl Maserang II | - | 330,000 | 660,000 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
| 7/16/20 | - | - | - | - | - | - | 157,545 | - | - | 949,996 | |||||||||||||||||||||||||
| 12/17/20 | - | - | - | 0 | 231,707 | 417,073 | - | - | - | 949,999 | |||||||||||||||||||||||||
| Scott R. Drake | 140,625 | 281,250 | - | ||||||||||||||||||||||||||||||||
| 7/16/20 | - | - | - | - | - | - | 28,606 | - | - | 172,494 | |||||||||||||||||||||||||
| 12/9/20 | - | - | - | - | - | - | 20,011 | - | - | 86,247 | |||||||||||||||||||||||||
| 12/17/20 | - | - | - | 0 | 21,036 | 37,865 | - | - | - | 86,248 | |||||||||||||||||||||||||
| Jennifer H. Brown | - | 82,500 | 165,000 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
| 12/9/20 | - | - | - | - | - | - | 17,401 | - | - | 74,998 | |||||||||||||||||||||||||
| 12/9/20 | - | - | - | - | - | - | 17,401 | - | - | 74998 | |||||||||||||||||||||||||
| Ruben E. Inofuentes | - | 102,000 | 204,000 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
| 7/16/20 | - | - | - | - | - | - | 29,850 | - | - | 179,996 | |||||||||||||||||||||||||
| 12/9/20 | - | - | - | - | - | - | 20,881 | - | - | 89,997 | |||||||||||||||||||||||||
| 12/17/20 | - | - | - | 0 | 21,951 | 39,512 | - | - | - | 89,999 | |||||||||||||||||||||||||
| Maurice S.J. Moragne | - | 102,000 | 204,000 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
| 7/1/20 | - | - | - | - | - | - | 10,373 | - | - | 74,997 | |||||||||||||||||||||||||
| 7/1/20 | - | - | - | - | - | - | - | 29,761 | 7.23 | 74,998 | |||||||||||||||||||||||||
| 7/16/20 | - | - | - | - | - | - | 17,827 | - | - | 107,497 | |||||||||||||||||||||||||
| 12/9/20 | - | - | - | - | - | - | 12,470 | - | - | 53,746 | |||||||||||||||||||||||||
| 12/17/20 | - | - | - | 0 | 13,109 | 23,596 | - | - | 53,747 | ||||||||||||||||||||||||||
| Ronald J. Friedman | - | 89,224 | 178,448 | 356,896 | - | - | - | - | - | - | - | ||||||||||||||||||||||||
| 7/16/20 | - | - | - | - | - | - | 24,461 | - | - | 147,500 | |||||||||||||||||||||||||
| 12/9/20 | - | - | - | - | - | - | 17,401 | - | - | 74,998 | |||||||||||||||||||||||||
| 12/17/20 | - | - | - | 0 | 18,292 | 32,926 | - | - | - | 74,997 | |||||||||||||||||||||||||
| Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards(1) | |||||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Date of Action | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/ Sh)(2) | Grant Date Fair Value of Stock and Option Awards ($)(3) | ||||||||||||||||||||||||||||||||||||
Michael H. Keown | — | — | 285,000 | (4) | 570,000 | (4) | 1,140,000 | (4) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
| — | — | 0 | 285,000 | (5) | 285,000 | (5) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| 11/10/17 | 09/29/17 | — | — | — | 0 | 9,464 | 14,196 | — | — | — | 300,009 | |||||||||||||||||||||||||||||||||||||
| 11/10/17 | 09/29/17 | — | — | — | — | — | — | — | 28,819 | (7) | 31.70 | 300,093 | ||||||||||||||||||||||||||||||||||||
David G. Robson | — | — | 123,382 | (4) | 246,764 | (4) | 493,528 | (4) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
| — | — | 0 | 123,382 | (5) | 123,382 | (5) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| 11/10/17 | 09/29/17 | — | — | — | 0 | 4,171 | 6,256 | — | — | — | 132,221 | |||||||||||||||||||||||||||||||||||||
| 11/10/17 | 09/29/17 | — | — | — | — | — | — | — | 12,699 | (7) | 31.70 | 132,235 | ||||||||||||||||||||||||||||||||||||
| 11/10/17 | 09/29/17 | — | — | — | — | — | — | 947 | (6) | — | — | 30,020 | ||||||||||||||||||||||||||||||||||||
| 11/10/17 | 09/29/17 | — | — | — | — | — | — | — | 5,764 | (8) | 31.70 | 60,021 | ||||||||||||||||||||||||||||||||||||
Ellen D. Iobst | — | — | 101,586 | (4) | 203,171 | (4) | 406,342 | (4) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
| — | — | 0 | 101,586 | (5) | 101,586 | (5) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| 11/10/17 | 09/29/17 | — | — | — | 0 | 3,205 | 4,807 | — | — | — | 101,599 | |||||||||||||||||||||||||||||||||||||
| 11/10/17 | 09/29/17 | — | — | — | — | — | — | — | 9,759 | (7) | 31.70 | 101,621 | ||||||||||||||||||||||||||||||||||||
| 11/10/17 | 09/29/17 | — | — | — | — | — | — | 757 | (6) | — | — | 23,997 | ||||||||||||||||||||||||||||||||||||
| 11/10/17 | 09/29/17 | — | — | — | — | — | — | — | 4,611 | (8) | 31.70 | 48,015 | ||||||||||||||||||||||||||||||||||||
Scott A. Siers | — | — | 80,612 | (4) | 161,223 | (4) | 322,446 | (4) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
| — | — | 0 | 80,612 | (5) | 80,612 | (5) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| 11/10/17 | 09/29/17 | — | — | — | 0 | 2,312 | 3,468 | — | — | — | 73,290 | |||||||||||||||||||||||||||||||||||||
| 11/10/17 | 09/29/17 | — | — | — | — | — | — | — | 7,040 | (7) | 31.70 | 73,308 | ||||||||||||||||||||||||||||||||||||
Thomas J. Mattei, Jr. | — | — | 85,833 | (4) | 171,666 | (4) | 343,332 | (4) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
| — | — | 0 | 85,833 | (5) | 85,833 | (5) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| 11/10/17 | 09/29/17 | — | — | — | 0 | 2,954 | 4,431 | — | — | — | 93,642 | |||||||||||||||||||||||||||||||||||||
| 11/10/17 | 09/29/17 | — | — | — | — | — | — | — | 8,995 | (7) | 31.70 | 93,665 | ||||||||||||||||||||||||||||||||||||
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| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |||||||||||||||||||||||||||
Michael H. Keown | — | — | — | — | ||||||||||||||||||||||||||||||||
| 23,334 | (1) | — | — | 11.81 | 12/07/19 | — | — | — | — | |||||||||||||||||||||||||||
| 45,470 | (2) | — | — | 21.33 | 12/12/20 | — | — | — | — | |||||||||||||||||||||||||||
| 49,902 | (3) | — | — | 23.44 | 02/09/22 | — | — | — | — | |||||||||||||||||||||||||||
| 16,732 | (4) | — | 8,366 | (4) | 29.48 | 12/03/22 | — | — | — | — | ||||||||||||||||||||||||||
| 15,241 | (5) | — | 7,621 | (5) | 29.48 | 12/03/22 | — | — | — | — | ||||||||||||||||||||||||||
| 11,022 | (6) | — | 22,044 | (6) | 32.85 | 11/10/23 | — | — | — | — | ||||||||||||||||||||||||||
| — | 28,819 | (1) | — | 31.70 | 11/10/24 | — | — | 9,464 | (9) | 289,125 | (10) | |||||||||||||||||||||||||
David G. Robson | — | 12,699 | (1) | — | 31.70 | 11/10/24 | — | — | 4,171 | (9) | 127,424 | (10) | ||||||||||||||||||||||||
| — | 5,764 | (1) | — | 31.70 | 11/10/24 | 947 | (7) | 28,931 | (8) | — | — | |||||||||||||||||||||||||
Ellen D. Iobst | — | 9,759 | (1) | — | 31.70 | 11/10/24 | — | — | 3,205 | (9) | 97,913 | (10) | ||||||||||||||||||||||||
| — | 4,611 | (1) | — | 31.70 | 11/10/24 | 757 | (7) | 23,126 | (8) | — | — | |||||||||||||||||||||||||
Scott A. Siers | 2,720 | (1) | — | — | 13.09 | 02/27/20 | — | — | — | — | ||||||||||||||||||||||||||
| 4,700 | (2) | — | — | 21.33 | 12/12/20 | — | — | — | — | |||||||||||||||||||||||||||
| 9,095 | (3) | — | — | 23.44 | 02/09/22 | — | — | — | — | |||||||||||||||||||||||||||
| 5,813 | (4) | — | 2,907 | (4) | 29.48 | 12/03/22 | — | — | — | — | ||||||||||||||||||||||||||
| 2,004 | (6) | — | 4,008 | (6) | 32.85 | 11/10/23 | — | — | — | — | ||||||||||||||||||||||||||
| — | 7,040 | (1) | — | 31.70 | 11/10/24 | — | — | 2,312 | (9) | 70,623 | (10) | |||||||||||||||||||||||||
Thomas J. Mattei, Jr. | 2,720 | (1) | — | — | 13.09 | 02/27/20 | — | — | — | — | ||||||||||||||||||||||||||
| 3,760 | (2) | — | — | 21.33 | 12/12/20 | — | — | — | — | |||||||||||||||||||||||||||
| 4,281 | (3) | — | — | 23.44 | 02/09/22 | — | — | — | — | |||||||||||||||||||||||||||
| 5,813 | (4) | — | 2,907 | (4) | 29.48 | 12/03/22 | — | — | — | — | ||||||||||||||||||||||||||
| 2,605 | (6) | — | 5,210 | (6) | 32.85 | 11/10/23 | — | — | — | — | ||||||||||||||||||||||||||
| — | 8,995 | (1) | — | 31.70 | 11/10/24 | — | — | 2,954 | (9) | 90,245 | (10) | |||||||||||||||||||||||||
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D. Deverl Maserang II 73,825 149,888 - 13.13 9/13/2026 - - - - - - - - - - - 38,080 483,235 - - - - - - - 231,707 2,940,362 - - - - - 157,545 1,999,246 - - Scott R. Drake 29,203 59,292 - 6.72 04/01/2027 - - - - - - - - - - - 21,036 266,947 - - - - - 20,011 253,940 - - - - - - - 28,606 363,010 - - Jennifer H. Brown 3,273 6,647 - 15.94 11/11/2026 - - - - 1,218 628 - 25.04 11/12/2025 - - - - 1,294 - - 31.70 11/10/2024 - - - - 501 - - 32.85 11/10/2023 - - - - - - - - - - - 573 7,271 - - - - - - - 3,137 39,809 - - - - - 9,227 117,091 - - - - - - - 17,401 220,819 - - Ruben E. Inofuentes 8,986 18,247 - 14.92 11/15/2026 - - - - - - - - - - - 8,378 106,317 - - - - - - - 21,951 278,558 - - - - - 29,850 378,797 - - - - - - - 20,881 264,980 - - Maurice S.J. Moragne 0 29,761 - 7.23 7/1/2027 - - - - - - - - - - - 13,109 166,353 - - - - - 10,373 131,633 - - - - - - - 17,827 226,225 - - - - - - - 12,470 158,244 - - Ronald J. Friedman 4,910 0 - 15.94 11/11/2026 - - - - 4,750 0 - 25.04 11/12/2025 - - - -
| Option Awards(1) | Stock Awards | |||||||||||||||
Name | Number of Securities Acquired on Exercise(#) | Value Realized on Exercise($) | Number of Shares Acquired on Vesting(#) | Value Realized on Vesting($) | ||||||||||||
Michael H. Keown | 68,666 | 1,432,801 | — | — | ||||||||||||
David G. Robson | — | — | — | — | ||||||||||||
Ellen D. Iobst | — | — | — | — | ||||||||||||
Scott A. Siers | — | — | — | — | ||||||||||||
Thomas J. Mattei, Jr. | — | — | — | — | ||||||||||||
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Name
Acquired onValue Realized on
Vesting($)Named Executive Officers: Jennifer H. Brown 4,737 39,284
The Company has entered into an
Michael H. Keown | Death | Disability | Retirement | Change in Control and Involuntarily Terminated or Resignation for Good Reason within 24 Months of Change in Control | Threatened Change in Control and Involuntarily Terminated or Resignation for Good Reason | Termination Without Cause or Resignation With Good Reason | ||||||||||||||||||
Base Salary Continuation | $ | — | $ | — | $ | — | $ | 1,140,000 | $ | 1,140,000 | $ | 570,000 | ||||||||||||
Annual Incentive Payments | $ | 570,000 | $ | 570,000 | $ | — | $ | 570,000 | $ | 570,000 | $ | 570,000 | ||||||||||||
Value of Accelerated Stock Options | $ | 13,294 | $ | 13,294 | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Value of Accelerated Restricted Stock | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Value of Accelerated PBRSUs | $ | 61,192 | $ | 61,192 | $ | — | $ | 289,125 | $ | — | $ | — | ||||||||||||
Vested ESOP Shares/Value of Continued ESOP Participation | $ | 82,791 | $ | 82,791 | $ | 82,791 | $ | 98,432 | $ | 98,432 | $ | 82,791 | ||||||||||||
Health and Dental Insurance | $ | — | $ | — | $ | — | $ | 23,672 | $ | 23,672 | $ | 11,836 | ||||||||||||
Outplacement Services | $ | — | $ | — | $ | — | $ | 25,000 | $ | 25,000 | $ | — | ||||||||||||
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TotalPre-Tax Benefit | $ | 727,276 | $ | 727,276 | $ | 82,791 | $ | 2,146,229 | $ | 1,857,104 | $ | 1,234,627 | ||||||||||||
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David G. Robson | Death | Disability | Retirement | Change in Control and Involuntarily Terminated or Resignation for Good Reason within 24 Months of Change in Control | Threatened Change in Control and Involuntarily Terminated or Resignation for Good Reason | Termination Without Cause or Resignation With Good Reason | ||||||||||||||||||
Base Salary Continuation | $ | — | $ | — | $ | — | $ | 705,040 | $ | 705,040 | $ | 352,520 | ||||||||||||
Annual Incentive Payments | $ | 246,764 | $ | 246,764 | $ | — | $ | 246,764 | $ | 246,764 | $ | 246,764 | ||||||||||||
Value of Accelerated Stock Options | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Value of Accelerated Restricted Stock | $ | 6,110 | $ | 6,110 | $ | — | $ | 28,931 | $ | — | $ | — | ||||||||||||
Value of Accelerated PBRSUs | $ | 26,976 | $ | 26,976 | $ | — | $ | 127,424 | $ | — | $ | — | ||||||||||||
Vested ESOP Shares/Value of Continued ESOP Participation | $ | 7,821 | $ | 7,821 | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Health and Dental Insurance | $ | — | $ | — | $ | — | $ | 23,210 | $ | 23,210 | $ | 11,605 | ||||||||||||
Outplacement Services | $ | — | $ | — | $ | — | $ | 25,000 | $ | 25,000 | $ | — | ||||||||||||
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TotalPre-Tax Benefit | $ | 287,671 | $ | 287,671 | $ | — | $ | 1,156,369 | $ | 1,000,014 | $ | 610,889 | ||||||||||||
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Ellen D. Iobst | Death | Disability | Retirement | Change in Control and Involuntarily Terminated or Resignation for Good Reason within 24 Months of Change in Control | Threatened Change in Control and Involuntarily Terminated or Resignation for Good Reason | Termination Without Cause or Resignation With Good Reason | ||||||||||||||||||
Base Salary Continuation | $ | — | $ | — | $ | — | $ | 677,236 | $ | 677,236 | $ | 338,618 | ||||||||||||
Annual Incentive Payments | $ | 203,171 | $ | 203,171 | $ | — | $ | 203,171 | $ | 203,171 | $ | 203,171 | ||||||||||||
Value of Accelerated Stock Options | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Value of Accelerated Restricted Stock | $ | 4,888 | $ | 4,888 | $ | — | $ | 23,126 | $ | — | $ | — | ||||||||||||
Value of Accelerated PBRSUs | $ | 20,713 | $ | 20,713 | $ | — | $ | 97,913 | $ | — | $ | — | ||||||||||||
Vested ESOP Shares/Value of Continued ESOP Participation | $ | 7,821 | $ | 7,821 | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Health and Dental Insurance | $ | — | $ | — | $ | — | $ | 23,210 | $ | 23,210 | $ | 11,605 | ||||||||||||
Outplacement Services | $ | — | $ | — | $ | — | $ | 25,000 | $ | 25,000 | $ | — | ||||||||||||
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TotalPre-Tax Benefit | $ | 236,593 | $ | 236,593 | $ | — | $ | 1,049,656 | $ | 928,617 | $ | 553,394 | ||||||||||||
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Scott A. Siers | Death | Disability | Retirement | Change in Control and Involuntarily Terminated or Resignation for Good Reason within 24 Months of Change in Control | Threatened Change in Control and Involuntarily Terminated or Resignation for Good Reason | Termination Without Cause or Resignation With Good Reason | |||||||||||||||||||||||||||||
D. Deverl Maserang II | D. Deverl Maserang II | Change in Control and Involuntarily Terminated or Resignation for Good Reason within 24 Months of Change in Control | Threatened Change in Control and Involuntarily Terminated or Resignation for Good Reason | Termination Without Cause or Resignation With Good Reason | |||||||||||||||||||||||||||||||
Base Salary Continuation | $ | — | $ | — | $ | — | $ | 586,264 | $ | 586,264 | $ | 293,132 | Base Salary Continuation | $1,320,000 | $660,000 | ||||||||||||||||||||
Annual Incentive Payments | $ | 161,223 | $ | 161,223 | $ | — | $ | 161,223 | $ | 161,223 | $ | 161,223 | Annual Incentive Payments | $660,000 | |||||||||||||||||||||
Value of Accelerated Stock Options | $ | 2,665 | $ | 2,665 | $ | — | $ | — | $ | — | $ | — | Value of Accelerated Stock Options | - | |||||||||||||||||||||
Value of Accelerated Restricted Stock | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | Value of Accelerated Restricted Stock | $1,999,246 | |||||||||||||||||||||
Value of Accelerated PBRSUs | $ | 14,939 | $ | 14,939 | $ | — | $ | 70,632 | $ | — | $ | — | Value of Accelerated PBRSUs | $3,423,597 | |||||||||||||||||||||
Vested ESOP Shares/Value of Continued ESOP Participation | $ | 66,355 | $ | 66,355 | $ | 66,355 | $ | 81,996 | $ | 81,996 | $ | 66,355 | |||||||||||||||||||||||
Health and Dental Insurance | $ | — | $ | — | $ | — | $ | 15,242 | $ | 15,242 | $ | 7,621 | Health and Dental Insurance | $23,170 | $11,585 | ||||||||||||||||||||
Outplacement Services | $ | — | $ | — | $ | — | $ | 25,000 | $ | 25,000 | $ | — | Outplacement Services | $25,000 | |||||||||||||||||||||
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TotalPre-Tax Benefit | $ | 245,182 | $ | 245,182 | $ | 66,355 | $ | 940,357 | $ | 869,725 | $ | 528,331 | Total Pre-Tax Benefit | $7,451,013 | $6,779,428 | ||||||||||||||||||||
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Thomas J. Mattei, Jr. | Death | Disability | Retirement | Change in Control and Involuntarily Terminated or Resignation for Good Reason within 24 Months of Change in Control | Threatened Change in Control and Involuntarily Terminated or Resignation for Good Reason | Termination Without Cause or Resignation With Good Reason | ||||||||||||||||||
Base Salary Continuation | $ | — | $ | — | $ | — | $ | 624,240 | $ | 624,240 | $ | 312,120 | ||||||||||||
Annual Incentive Payments | $ | 171,666 | $ | 171,666 | $ | — | $ | 171,666 | $ | 171,666 | $ | 171,666 | ||||||||||||
Value of Accelerated Stock Options | $ | 2,665 | $ | 2,665 | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Value of Accelerated Restricted Stock | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Value of Accelerated PBRSUs | $ | 19,094 | $ | 19,094 | $ | — | $ | 90,245 | $ | — | $ | — | ||||||||||||
Vested ESOP Shares/Value of Continued ESOP Participation | $ | 63,941 | $ | 63,941 | $ | 63,941 | $ | 79,583 | $ | 79,583 | $ | 63,941 | ||||||||||||
Dental Insurance | $ | — | $ | — | $ | — | $ | 1,088 | $ | 1,088 | $ | 544 | ||||||||||||
Outplacement Services | $ | — | $ | — | $ | — | $ | 25,000 | $ | 25,000 | $ | — | ||||||||||||
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TotalPre-Tax Benefit | $ | 257,366 | $ | 257,366 | $ | 63,941 | $ | 991,822 | $ | 901,577 | $ | 548,271 | ||||||||||||
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Scott R. Drake | Change in Control and Involuntarily Terminated or Resignation for Good Reason within 24 Months of Change in Control | Threatened Change in Control and Involuntarily Terminated or Resignation for Good Reason | Termination Without Cause or Resignation With Good Reason | ||||||||
| Base Salary Continuation | $750,000 | $750,000 | - | ||||||||
| Annual Incentive Payments | $281,250 | $281,250 | - | ||||||||
| Value of Accelerated Stock Options | - | - | - | ||||||||
| Value of Accelerated Restricted Stock | $616,950 | $616,950 | - | ||||||||
| Value of Accelerated PBRSUs | $266,947 | $266,947 | - | ||||||||
| Health and Dental Insurance | $35,054 | $35,054 | - | ||||||||
| Outplacement Services | $25,000 | $25,000 | - | ||||||||
| Total Pre-Tax Benefit | $1,975,201 | $1,975,201 | - | ||||||||
Jennifer H. Brown | Change in Control and Involuntarily Terminated or Resignation for Good Reason within 24 Months of Change in Control | Threatened Change in Control and Involuntarily Terminated or Resignation for Good Reason | Termination Without Cause or Resignation With Good Reason | ||||||||
| Base Salary Continuation | $300,000 | $300,000 | - | ||||||||
| Annual Incentive Payments | $165,000 | $165,000 | - | ||||||||
| Value of Accelerated Stock Options | - | - | - | ||||||||
| Value of Accelerated Restricted Stock (Included Cash-Based Restricted Stock Units) | $558,728 | $558,728 | - | ||||||||
| Value of Accelerated PBRSUs | $47,080 | $47,080 | - | ||||||||
| Health and Dental Insurance | $11,201 | $11,201 | - | ||||||||
| Outplacement Services | $15,000 | $15,000 | - | ||||||||
| Total Pre-Tax Benefit | $1,097,009 | $1,097,009 | - | ||||||||
Ruben E. Inofuentes | Change in Control and Involuntarily Terminated or Resignation for Good Reason within 24 Months of Change in Control | Threatened Change in Control and Involuntarily Terminated or Resignation for Good Reason | Termination Without Cause or Resignation With Good Reason | ||||||||
| Base Salary Continuation | $680,000 | $680,000 | - | ||||||||
| Annual Incentive Payments | $204,000 | $204,000 | - | ||||||||
| Value of Accelerated Stock Options | $177,673 | $177,673 | - | ||||||||
| Value of Accelerated Restricted Stock | $643,776 | $643,776 | - | ||||||||
| Value of Accelerated PBRSUs | $384,875 | $384,875 | - | ||||||||
| Health and Dental Insurance | $34,846 | $34,846 | - | ||||||||
| Outplacement Services | $25,000 | $25,000 | - | ||||||||
| Total Pre-Tax Benefit | $2,150,170 | $2,150,170 | - | ||||||||
Maurice S. J. Moragne | Change in Control and Involuntarily Terminated or Resignation for Good Reason within 24 Months of Change in Control | Threatened Change in Control and Involuntarily Terminated or Resignation for Good Reason | Termination Without Cause or Resignation With Good Reason | ||||||||
| Base Salary Continuation | $680,000 | $680,000 | - | ||||||||
| Annual Incentive Payments | $204,000 | $204,000 | - | ||||||||
| Value of Accelerated Stock Options | $162,495 | $162,495 | - | ||||||||
| Value of Accelerated Restricted Stock | $516,102 | $516,102 | - | ||||||||
| Value of Accelerated PBRSUs | $166,353 | $166,353 | - | ||||||||
| Health and Dental Insurance | $34,698 | $34,698 | - | ||||||||
| Outplacement Services | $25,000 | $25,000 | - | ||||||||
| Total Pre-Tax Benefit | $587,265 | $587,265 | - | ||||||||
Employment Agreements
Under the Employment Agreements, upon a termination of employment by the Company without Cause or resignation by the Named Executive Officer for Good Reason (a“Non-Change in Control Qualifying Termination”), the Named Executive Officer will continue to receive his or her base salary for a period of one year from the effective termination date, such payment to be made in installments in accordance with the Company’s standard payroll practices over such period.
Employment Agreements
Under the Employment Agreements, if a Named Executive Officer’s employment is terminated due to death or Permanent Incapacity, the Named Executive Officer, or his or her estate in the event of his or her death, will receive an amount equal to his or her target annual cash bonus for the fiscal year in which the termination is effective, prorated for the partial fiscal year ending on the effective termination date. Payment of such amount will be made in a lump sum within 30 days after any such death or termination.
Additionally, under the Employment Agreements, if aNon-Change in Control Qualifying Termination Occurs, the Named Executive Officer will receive a bonus for the fiscal year in which the date of termination is effected based on the amount of his or her target annual cash bonus award for such fiscal year and, in the case of all of the Named Executive Officers other than Mr. Keown, the degree of achievement of performance criteria under the plan, with individual performance criteria deemed to be achieved at 100%, prorated for the partial fiscal year ending on the effective termination date. Payment of such amount will be made in a lump sum at the same time as annual bonuses are paid to the Company’s senior executives under the plan for the fiscal year but in no event later than two andone-half(2-1/2) months following the end of the Company’s fiscal year in which the separation from service occurs.
Amounts shown in the tables above reflect fiscal 2018 target annual cash incentive awards under the 2017 Plan based on the Company’s achievement of adjusted EBITDA and free cash flow, and exclude theone-time Boyd Coffee Integration Incentive award under the 2017 Plan in fiscal 2018.
Value of Accelerated Vesting of Equity Awards
Stock Options and Restricted Stock
a pro rata portion of any unvested stock options granted under the Prior Plans will vest;
•100% of any unvested stock options granted under the 2017 Plan will vest;
•a pro rata portion of any unvested restricted stock granted under the 2017 Plan will vest; and
•outstanding PBRSUsPBRSU awards will remain outstanding and the participant will be eligible to earn apro-rata portion of the number of PBRSUsPBRSU awards that would have been earned based on actual performance through the end of the performance period (amounts shown in the tables above assume 100% of the target PBRSUsPBRSU awards were earned at the end of the performance period).
Under the 2017 Plan award agreements, if
•100% of any unvested stock options granted under the 2017 Plan will vest;
•100% of any unvested restricted stock granted under the 2017 Planor restricted stock units will vest; and
•the target number of PBRSUsPBRSU awards will be deemed to have immediately vested as of the date of termination of service.
The value of accelerated awards shown in the tables above was calculated using the closing price of our Common Stock on June 29, 201830, 2021 ($30.55).12.69), except for Mr. Friedman, which table does not show any value, since his employment was terminated prior to the end of the fiscal year at which time he forfeited all unvested awards. The value of accelerated stock options is based on the difference between the exercise price and such closing price for all accelerated stock options that werein-the-money as of such date.
Vested ESOP Shares/Value of Continued ESOP Participation
Under each Severance Agreement, if a Change in Control Qualifying Termination occurs, subject to eligibility provisions of the ESOP, the Named Executive Officer will continue to participate in the ESOP during the24-month period following the date of termination unless the Named Executive Officer commences other employment prior to the end of the24-month period, in which case, such participation will end on the date the Named Executive Officer commences new employment. In addition, upon termination of employment for any reason, including death, disability, retirement or other termination, the Named Executive Officer will be entitled to his or her vested benefits under the ESOP. Estimated ESOP benefits shown in the tables above reflect the value of vested allocated shares in the ESOP plus, in the case of a Change in Control Event, annual allocations of ESOP shares to qualified employees based on the 2017 allocation, assuming sufficient shares are available for allocation under the ESOP. The estimated value of the ESOP shares is based on $30.55 per share, the closing price of our Common Stock on June 29, 2018.
Participants become 100% vested under the ESOP upon death, disability and, subject to certain eligibility requirements, retirement.
Employment Agreements
Under the Employment Agreements, if aNon-Change in Control Qualifying Termination occurs, the Named Executive Officer will continue to receive partially Company-paid COBRA coverage under the Company’s health care plan for a period of one year after the effective termination date.
benefits, and group life insurance, if any, that would be paid and/or provided to each Named Executive Officer following termination of employment, because, in each case, these benefits are
2021.
Additionally,
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class(1) | ||||||
| Entities Affiliated with GAMCO Investors, Inc. | 1,123,607 | [●] | ||||||
| One Corporate Center | ||||||||
| Rye, New York 10580 | ||||||||
| Farmer Bros. Co. Employee Stock Ownership Plan(2) | [●] | [●] | ||||||
| c/o Farmer Bros. Co. | ||||||||
| 1912 Farmer Brothers Drive | ||||||||
| Northlake, Texas 76262 | ||||||||
Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class(1) | ||||||
| Non-Employee Directors: | ||||||||
| Allison M. Boersma (2) | [●] | * | ||||||
| Stacy Loretz-Congdon (2) | [●] | * | ||||||
| Charles F. Marcy (3) | [●] | * | ||||||
| Christopher P. Mottern (4) | [●] | * | ||||||
| Alfred Poe (2) | [●] | * | ||||||
| John Robinson (director nominee) | [●] | * | ||||||
| Waheed Zaman | [●] | * | ||||||
| Named Executive Officers: | ||||||||
| D. Deverl Maserang II (5) | [●] | * | ||||||
| Scott R. Drake (6) | [●] | * | ||||||
| Jennifer H. Brown (7) | [●] | * | ||||||
| Ruben E. Inofuentes (8) | [●] | * | ||||||
| Maurice S.J. Moragne (9) | [●] | * | ||||||
| Ronald J. Friedman (10) | [●] | * | ||||||
| All directors and executive officers as a group(11)(13 individuals) | [●] | [●] | ||||||
Total stock options outstanding(1)............................................................................................................. | [•] | ||||
| Weighted-average exercise price of stock options outstanding.............................................................. | [•] | ||||
| Weighted-average remaining duration of stock options outstanding...................................................... | [•] | ||||
Total full value awards outstanding(2)....................................................................................................... | [•] | ||||
Shares available for grant under the 2017 Plan(3)................................................................................... | [•] | ||||
| Shares available for grant under the 2020 Inducement Plan................................................................. | [•] | ||||
| Total shares of common stock outstanding as of the Record Date....................................................... | [•] | ||||
| Plan Category | Number of Shares to be Issued Upon Exercise / Vesting of Outstanding Options or Rights(2) | Weighted Average Exercise Price of Outstanding Options(3) | Number of Shares Remaining Available for Future Issuance(4) | |||||||||||||||||
| Equity compensation plans approved by stockholders(1) | [•] | [•] | [•] | |||||||||||||||||
| Equity compensation plans not approved by stockholders (5) | [•] | [•] | [•] | |||||||||||||||||
| Total | — | — | ||||||||||||||||||
| Shares of Common Stock Reserved for Issuance | |||||
| Shares Reserved for Future Issuance Under the Amended and Restated 2017 Plan | [●] | ||||
| Shares Reserved for Issuance Upon Conversion of Series A Preferred Stock | [●] | ||||
| Any other reserved shares | [●] | ||||
| TOTAL SHARES OF COMMON STOCK RESERVED FOR ISSUANCE AS OF OCTOBER 18, 2021 | [●] | ||||
PAID TO OUR NAMED EXECUTIVE OFFICERS
Statement and the related executive compensation tables for more information.
stockholders.
OF
On October 14, 2018, the Board of Directors adopted an amendment (the “Amendment”) to the Company’s
The Amendment provides that, unless the Company consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or stockholder of the Company to the Company or to the Company’s stockholders, (iii) any action arising pursuant to any provision of the Delaware General Corporation Law (“DGCL”) or the Company’s Certificate of Incorporation orBy-Laws (as either may be amended from time to time), (iv) any action asserting a claim against the Company governed by the internal affairs doctrine, or (v) any action asserting an “internal corporate claim” as the term is defined in Section 115 of the DGCL shall be the Court of Chancery (the “Chancery Court”) of the State of Delaware (or, in the event that the Chancery Court does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware). Under the Amendment, stockholders are deemed to have given consent to personal jurisdiction for such actions in such forum. The full text of the Amendment is attached as Appendix A to this Proxy Statement.
Although stockholder approval is not required to amend theBy-Laws, the Board of Directors believes this is an important issue and that it is in the best interests of the Company and its stockholders to seek a stockholder vote to approve the Amendment. When approving the Amendment, the Board of Directors made such approval subject to approval by the Company’s stockholders. If stockholder approval is not obtained, the Amendment will be made void and of no further force or effect.
Background and Reasons for Forum SelectionBy-Law
The Board believes that the Company and its stockholders will benefit from having intra-corporate disputes litigated in the State of Delaware, where the Company is incorporated and whose laws govern such disputes. Thisby-law is intended to benefit the Company and its stockholders in significant part by directing litigation to a single Delaware court, which will apply its own state law with a well-established body of precedent, thereby reducing the risk and expense of concurrent, multi-jurisdictional litigation, saving Company resources (money and management attention) and leading to a single, more predictable outcome in litigation involving corporate governance and internal affairs. The Board approved the Amendment as a good governance measure in light of the incidence of such suits and multi-forum litigation.
In adopting the Amendment and determining that doing so is in the best interests of the Company and its stockholders, the Board considered various factors, including, among others:
prevailing market practice and perspectives on such provisions;
the importance to the Company and its stockholders of reducing litigation costs and preventing corporate resources from being unnecessarily diverted to address duplicative, costly and wasteful multi-forum litigation;
the value of facilitating consistency and predictability in litigation outcomes for the benefit of the Company and its stockholders;
that the Company is incorporated under the laws of the State of Delaware;
that the Delaware courts have developed considerable expertise in dealing with corporate law issues, as well as a substantial and influential body of case law construing Delaware’s corporate law and long-standing precedent regarding corporate governance;
that the Amendment limits forum shopping by plaintiffs’ lawyers and may discourage illegitimate claims;
that adopting such an exclusive forum provision covering specified claims does not materially change the substantive legal claims available to stockholders;
that the Company will retain the ability to consent to an alternative forum in appropriate circumstances where the Company determines that its interests and those of its stockholders are best served by permitting a particular dispute to proceed in a forum other than Delaware;
new Section 115 of the Delaware General Corporation Law and case law developments upholding the authority of the board of directors to adopt such a provision and confirming its validity and enforceability;
case law developments outside of Delaware enforcing such provisions; and
the benefit of having the Board deliberate on whether to adopt such a provision when it is not being proposed in response to actual or threatened litigation.
The Board believes that it is in the best interest of stockholders to take preventive measures before the Company and its stockholders are harmed by such litigation. The Amendment was not adopted by the Board in reaction to any specific litigation confronting the Company, though the Company has had to deal with such claims and threatened claims in the past. Rather, this action was taken to prevent potential future harm to the Company and its stockholders.
This type of litigation has become more prevalent over time, and the cost of litigating and/or settling these cases is an unwelcome draw against Company resources. Similarly, these matters require the attention of senior management. Having to defend against these cases in varied jurisdictions can increase the challenge of managing and obtaining results that benefit the Company and its stockholders and, so, increase costs. Moreover, the complexity of these types of matters can make themill-suited for resolution in state courts that are not familiar with the issues and case law and that have to handle a docket that is much more diverse and less specialized in this area of the law. Recent trends and holdings exacerbate the situation. So called “event-driven” shareholder derivative suits have been on the rise. It is expected that the U. S. Supreme Court’s recent holding in theCyan, Inc. v. Beaver County Employees Retirement Fund matter will lead to more class actions under the Securities Act of 1933 in state courts because that holding made removal to federal courts more difficult. When there are ways to make it more efficient for the Company to address successfully these type of matters, in ways that reduce distraction and reduce the use of Company resources that could otherwise be devoted to endeavors that drive long-term growth, the Company believes that it is its duty to implement these measures in the interest of its stockholders and the long-term value of their investment in the Company.
The Board is committed to strong corporate governance practices, as evidenced by this proposal. A description of our key corporate governance practices appears under “Corporate Governance” above.
Vote Required
The affirmative vote of a majority of the shares of Common Stock and Series A Preferred Stock (on anas-converted basis voting together with the Common Stock as a single class) present in person or represented by proxy at the Annual Meeting and entitled to vote thereat is required to approve the Amendment. Abstentions will have the same effect as votes “against” the proposal. Brokernon-votes will not affect the outcome of this proposal because shares held by a bank, broker or other nominee who has not received instructions from the beneficial owner of the shares as to how the shares are to be voted on the proposal are not entitled to vote on such proposal at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”
APPROVAL OF THE COMPANY’S FORUM SELECTIONBY-LAW.
Non-Employee Director Compensation
The compensation program for ournon-employee directors is intended to fairly compensate ournon-employee directors for the time and effort required of a director given the size and complexity of the Company’s operations. Portions of the compensation program utilize our stock in order to further align the interests of the directors with all other stockholders of the Company and to motivate the directors to focus on the long-term financial interest of the Company. Directors who are Company employees are not paid any additional fees for serving on the Board or for attending Board meetings.
In fiscal 2018, Meridian assisted the Compensation Committee with matters related tonon-employee director compensation. Meridian provided a competitive market analysis using the same peer group as was used to benchmark executive compensation levels as listed in the Compensation Discussion and Analysis section of this Proxy Statement. As a result of the market analysis and Meridian recommendations, effective December 8, 2017, the Committee made changes to the Company’s fiscal 2018non-employee director compensation program to better align with market and assist in recruitment of Board members, and, in light of the increasing Board and committee meeting frequency over the past few years, in an effort to stabilize the compensation amounts that were increasing as a result of the meeting frequency.
The changes in the new fiscal 2018non-employee director compensation program are as follows:
Form of Non-Employee Director | Previous Non-Employee | New Fiscal 2018 | ||
Annual Board Cash Retainer | $37,000 | $60,000 | ||
Committee Chair Cash Retainer | $7,500 for Compensation Committee and Nominating and Corporate Governance Committee $15,000 for Audit Committee | $10,000 for Compensation Committee and Nominating and Corporate Governance Committee $15,000 for Audit Committee | ||
Non-Chair Committee Cash Retainer | — | $7,500 for Compensation Committee and Nominating and Corporate Governance Committee $10,000 for Audit Committee | ||
Chairman of the Board Cash Retainer |
$20,000, with additional fees paid for committee service | $50,000, with no additional fees for committee service | ||
Chairman Emeritus Cash Retainer | $10,000, with additional fees paid for committee service | — | ||
Meeting Fees | $2,000 for each Board or Executive Committee meeting, and $2,500 for each Compensation Committee, Audit Committee or Nominating and Corporate Governance Committee meeting, subject to maximum daily meeting fees of $4,500 | $2,000 only paid for Board or committee meetings in excess of seven in the fiscal year | ||
Annual Equity Award Value | $30,000 | $65,000 | ||
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The annual grant of restricted stock is generally made on the date on which the Company holds its annual meeting of stockholders or such other date as the Board may determine, in each case, subject to any blackout period under the Company’s insider trading policy. In fiscal 2018, the annual grant of restricted stock was made on December 8, 2017. Eachnon-employee director received a grant of 1,901 shares of restricted stock based on the closing price per share of our Common Stock on December 8, 2017 ($34.20). Such grants cliff vest on the earlier of theone-year anniversary of the grant date, or the date of the first annual meeting of the Company’s stockholders immediately following the grant date, subject to continued service to the Company through the vesting date and the acceleration provisions of the 2017 Plan and the restricted stock award agreement.
Stock Ownership Guidelines
Under the Company’s stock ownership guidelines, anon-employee director is expected to own and hold during his or her service as a Board member a number of shares of Common Stock with a value of at least $150,000, and is not permitted to sell any shares of Common Stock received as grants under the Company’s long-term incentive plans unless and until thenon-employee director achieves and maintains this threshold share ownership level.
Shares of Common Stock that count toward satisfaction of these guidelines include (to the extent applicable): (i) shares of Common Stock owned outright by thenon-employee director and his or her immediate family members who share the same household, whether held individually or jointly; (ii) restricted stock or restricted stock units (whether or not the restrictions have lapsed); (iii) shares of Common Stock held in trust for the benefit of thenon-employee director or his or her family; and (iv) shares of Common Stock issuable under vested options held by thenon-employee director.
Director Compensation Table
The following table shows fiscal 2018non-employee director compensation:
Director(1) | Fees Earned or Paid in Cash($) | Stock Awards($)(2) | Change in Pension Value ($)(3) | All Other Compensation ($)(4) | Total( $) | |||||||||||||||
Hamideh Assadi | 48,750 | — | — | 2,471 | 51,221 | |||||||||||||||
Guenter W. Berger | 44,500 | — | — | 17,777 | 62,277 | |||||||||||||||
Allison M. Boersma | 38,750 | 65,014 | — | — | 103,764 | |||||||||||||||
Randy E. Clark | 122,000 | 65,014 | — | — | 187,014 | |||||||||||||||
Jeanne Farmer Grossman | 58,500 | 65,014 | — | — | 123,514 | |||||||||||||||
Charles F. Marcy | 96,250 | 65,014 | — | — | 161,264 | |||||||||||||||
Christopher P. Mottern | 108,000 | 65,014 | — | — | 173,014 | |||||||||||||||
David W. Ritterbush | 37,500 | 65,014 | — | — | 102,514 | |||||||||||||||
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Director Indemnification
Under Farmer Bros.’ Certificate of Incorporation andBy-Laws, the current and former directors are entitled to indemnification and advancement of expenses from the Company to the fullest extent permitted by Delaware corporate law. The Board of Directors has approved a form of Indemnification Agreement (“Indemnification Agreement”) to be entered into between the Company and its directors and officers. The Company’s Board of Directors may from time to time authorize the Company to enter into additional indemnification agreements with future directors and officers of the Company.
The Indemnification Agreements provide, among other things, that the Company will, to the extent permitted by applicable law, indemnify and hold harmless each indemnitee if, by reason of his or her corporate status as a director, officer, trustee, general partner, managing member, fiduciary, employee or agent of the Company or of any other enterprise which such person is or was serving at the request of the Company, such indemnitee was, is or is threatened to be made, a party to or a participant (as a witness or otherwise) in any threatened, pending or completed proceeding, whether formal or informal, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative or investigative nature, against all expenses, judgments, fines, penalties and amounts paid in settlement actually and reasonably incurred by him or her or on his or her behalf in connection with such proceeding. In addition, the Indemnification Agreements provide for the payment, advancement or reimbursement of expenses incurred by the indemnitee in connection with any such proceeding to the fullest extent permitted by applicable law. The Indemnification Agreements also provide that, in the event of a Potential Change in Control (as defined in the Indemnification Agreements), the Company will, upon request by the indemnitee, create a trust for the benefit of the indemnitee and fund such trust in an amount sufficient to satisfy expenses reasonably anticipated to be incurred in connection with investigating, preparing for, participating in or defending any proceedings, and any judgments, fines, penalties and amounts paid in settlement in connection with any proceedings. The Indemnification Agreements do not exclude any other rights to indemnification or advancement of expenses to which the indemnitee may be entitled, including any rights arising under the Certificate of Incorporation orBy-Laws of the Company, or the Delaware General Corporation Law. The Company is also obligated to maintain directors’ and officers’ liability insurance coverage, including tail coverage under certain circumstances.
• The materiality of the related person’s interest, including the relationship of the related person to the Company, the nature and importance of the interest to the related person, the amount involved in the transaction, whether the transaction has the potential to present a conflict of interest, whether there are business reasons for the Company to enter the transaction, and whether the transaction would impair the independence of any independent director;
• Whether the terms of the transaction, in the aggregate, are comparable to those that would have been reached by unrelated parties in an arm’s length transaction;
• The availability of alternative transactions, including whether there is another person or entity that could accomplish the same purposes as the transaction and, if alternative transactions are available, there must be a clear and articulable reason for the transaction with the related person;
• Whether the transaction is proposed to be undertaken in the ordinary course of the Company’s business, on the same terms that the Company offers generally in transactions with persons who are not related persons; and
• Such additional factors as the Audit Committee determines relevant.
(ii) limitations on the amount involved in the transaction; (iii) limitations on the duration of the transaction or the Audit Committee’s approval of the transaction; and (iv) other conditions for the protection of the Company and to avoid conferring an improper benefit, or creating the appearance of a conflict of interest. Any member of the Audit Committee who has or whose immediate family member has an interest in the transaction under discussion will abstain from voting on the approval of the related person transaction, but may, if so requested by the Chair of the Audit Committee, participate in some or all of the Audit Committee’s discussions of the related person transaction.
Scott W. Bixby, former
Jonathan Michael Waite, the son of Carol Farmer Waite who is the beneficial owner of more than 5% of the Company’s voting securities, served as ayear 2021.
2021.
Christopher P. Mottern, Chair
Randy E. Clark
Chair
Type of Fees | Fiscal 2018 | Fiscal 2017 | ||||||
Audit Fees | $ | 1,203,000 | $ | 964,000 | ||||
Audit-Related Fees | — | — | ||||||
Tax Fees | 68,757 | 111,274 | ||||||
All Other Fees | 2,020 | 2,020 | ||||||
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Total Fees | $ | 1,273,777 | $ | 1,077,294 | ||||
| Type of Fees | Fiscal 2020 | Fiscal 2021 | ||||||||||||
| Audit Fees | $ | 1,129,472 | $ | 1,098,523 | ||||||||||
| Audit-Related Fees | — | — | ||||||||||||
| Tax Fees | 23,100 | — | ||||||||||||
| All Other Fees | — | — | ||||||||||||
| Total Fees | $ | 1,152,572 | $ | 1,098,523 | ||||||||||
standards. Audit fees for fiscal 2017 consisted of fees associated with the audit of the Company’s fiscal 2017 annual financial statements, the audit of internal control over financial reporting in fiscal 2017, the review of the Company’s quarterly reports on Form10-Q, and2021 also included services associated with an SEC registration statement.
for fiscal 2020 or fiscal 2021.
“All Other Fees” are fees for any services not included in the first three categories. All
fiscal 2020 or fiscal 2021.
The 20182021 Annual Report to Stockholders (which includes the Company’s 20182021 Form10-K) accompanies this Proxy Statement. The 20182021 Annual Report is neither incorporated by reference in this Proxy Statement nor part of the proxy soliciting material.Stockholders may obtain, without charge, a copy of the Company’s 20182021 Form10-K, filed with the SEC, including the financial statements included therein, without the accompanying exhibits, by writing to: Farmer Bros. Co., 1912 Farmer Brothers Drive, Northlake, Texas 76262, Attention: Chief Financial Officer. The Company’s 20182021 Form10-K is also available online at the Company’s website,www.farmerbros.com.A list of exhibits is included in the Company’s 20182021 Form10-K and exhibits are available from the Company upon the payment of the Company’s reasonable expenses in furnishing them.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company’s executive officers and directors, and persons who own more than 10% of a registered class of the Company’s equity securities (collectively, “Reporting Persons”), to file reports of ownership and changes in ownership with the SEC. Reporting Persons are required by SEC regulations to furnish the Company with copies of all forms they file pursuant to Section 16(a). To the Company’s knowledge, based solely on a review of the copies of such reports furnished to the Company and written representations from certain reporting persons that no other reports were required during the fiscal year ended June 30, 2018, its officers, directors and ten percent stockholders complied with all applicable Section 16(a) filing requirements, with the exception of Jeanne Farmer Grossman who filed one late Form 4 on March 16, 2018 to report the sale of 10,000 and 2,080 shares on March 12 and March 13, 2018, respectively.
notice of their intent to make nomination(s) to the Secretary of the Company within the timeframes described above. Each such notice must set forth (a) as to each person whom the stockholder proposes to nominate for election as a director (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class or series and number of shares of capital stock of the Company which are owned beneficially or of record by the person, and (iv) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder; and (b) as to the stockholder giving notice (i) the name and record address of such stockholder, (ii) the class or series and number of shares of capital stock of the Company which are owned beneficially or of record by such stockholder, (iii) a description of all arrangements or understandings between such stockholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder, (iv) a representation that such stockholder intends to appear in person (virtually) or by proxy at the meeting to nominate the persons named in its notice, and (v) any other information relating to such stockholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with the solicitation of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected.
currently receive multiple copies of the proxy statement and annual report at their address and would like to request “householding” of their communications should contact their bank or broker.
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FORUM SELECTION BYLAW
ARTICLE VII
GENERAL PROVISIONS
Section 7.5.Forum for Certain Actions. Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery (the “Chancery Court”) of the State of Delaware (or, in the event that the Chancery Court does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware) shall, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or stockholder of the Corporation to the Corporation or to the Corporation’s stockholders, (iii) any action arising pursuant to any provision of the DGCL or the Certificate of Incorporation or theseBy-Laws (as either may be amended from time to time), (iv) any action asserting a claim against the Corporation governed by the internal affairs doctrine, or (v) any action asserting an “internal corporate claim” as the term is defined in Section 115 of the DGCL. If any action the subject matter of which is within the scope of the preceding sentence is filed in a court other than a court located within the State of Delaware (a “Foreign Action”) in the name of any stockholder, such stockholder shall be deemed to have consented to (a) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce the preceding sentence and (b) having service of process made upon such stockholder in any such action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder.
Appendix A
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Address Change? Mark box, sign, and indicate changes below: ☐
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TO VOTE BY MAIL, AS THE BOARD OF DIRECTORS RECOMMENDS ON ALL ITEMS BELOW,
SIMPLY SIGN, DATE, AND RETURN THIS PROXY CARD.
The Board of Directors recommends that stockholders vote “FOR” the director nominees listed below.
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October [•], 2021 | JENNIFER H. BROWN | ||||||||
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73 Appendix A AMENDMENT TO FARMER BROS. CO. AMENDED AND RESTATED 2017 LONG-TERM INCENTIVE PLAN This Amendment (this “Amendment”) to the Farmer Bros. Co. Amended and Restated 2017 Long-Term Incentive Plan (the “Plan”), is made and adopted by the |
The Board of Directors recommends(the “Board”) of Farmer Bros. Co., a Delaware corporation (the “Company”), effective as of the Effective Date (as defined below). All capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Plan.
Certificate of Incorporation of Farmer Bros. Co.
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The shares represented by this proxy will be voted in the manner directed. In the absence of any direction, the shares will be voted “FOR” each nominee named in Proposal No. 1, and “FOR” Proposal Nos. 2, 3 and 4, and in accordance with the discretion of the persons appointed as proxies on such other matters as may properly come before the Annual Meeting, including any continuation, postponement or adjournment thereof, and any other matters incident to the conduct of the Annual Meeting.The Board of Directors knows of no other items of business that will be presented for consideration at the Annual Meeting other than those described in the accompanying Proxy Statement. If either of the director nominees should be unable to serve or for good cause will not serve, your proxy will be voted for such substitute nominee(s) as the holders of your proxy, acting in their discretion, may determine.
If you plan to attend the Annual Meeting in person, you can obtain directions to the Dallas/Fort Worth Marriott Solana, 1301 Solana Boulevard, Building 3, Westlake, Texas 76262 athttp//proxy.farmerbros.com.
Date
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| Jennifer H. Brown | ||||||||
FARMER BROS. CO.
ANNUAL MEETING OF STOCKHOLDERS
Thursday, December 6, 2018
10:00 a.m. Central Standard Time
Annual Meeting to be held at:
Dallas/Fort Worth Marriott Solana
1301 Solana Boulevard, Building 3
Westlake, Texas 76262
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE 2018 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON DECEMBER 6, 2018
The Notice of 2018 Annual Meeting of Stockholders, Proxy Statement, 2018 Annual Report on Form10-K
and form proxy card are available at:http://proxy.farmerbros.com.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING ON DECEMBER 6, 2018.
The undersigned stockholder of Farmer Bros. Co., a Delaware corporation (the “Company”), acknowledges receipt of the Notice of Annual Meeting of Stockholders and Proxy Statement, dated October 25, 2018, and hereby constitutes and appoints Michael H. Keown, David G. Robson, and Thomas J. Mattei, Jr. or any of them acting singly in the absence of the others, with full power of substitution andre-substitution in any of them, the proxies of the undersigned to vote with the same force and effect as the undersigned all shares of the Company’s Common Stock, par value $1.00 per share, and all shares of the Company’s Series A Convertible Participating Cumulative Perpetual Preferred Stock, par value $1.00 per share, on anas-converted basis voting together with the shares of Common Stock as a single class, in each case, held by the undersigned, at the Annual Meeting of Stockholders to be held at the Dallas/Fort Worth Marriott Solana, 1301 Solana Boulevard, Building 3, Westlake, Texas 76262, on December 6, 2018 at 10:00 a.m., Central Standard Time, and at any continuation, postponement or adjournment thereof, hereby revoking any proxy or proxies heretofore given, including any proxy previously given by telephone or Internet, and ratifying and confirming all that said proxies may do or cause to be done by virtue thereof with respect to the matters set forth on the reverse.
Vote by Internet, Telephone or Mail
24 Hours a Day, 7 Days a Week
Your telephone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned your proxy card.
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If you vote your proxy by Internet or by Telephone, you do NOT need to mail back your proxy card.
