Securities Exchange Act of 1934
(Amendment No. )
| ☐ | Preliminary Proxy Statement |
| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| ☒ | Definitive Proxy Statement |
| ☐ | Definitive |
| ☐ | ||
| Soliciting Material Pursuant to | ||
| ☒ | No fee required. | |||
| ☐ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
| (1) | Title of each class of securities to which transaction applies: |
| (2) | Aggregate number of securities to which transaction applies: |
| (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
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| (2) | Form, Schedule or Registration Statement No.: |
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| (4) | Date Filed: |
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| D. Deverl Maserang II President and Chief Executive Officer |
Christopher P. Mottern Chairman of the Board of Directors | |||
*
FARM@morrowsodali.com
9, 2020
| 1. | To elect two |
| 2. | To ratify the selection of Deloitte & Touche LLP ("Deloitte") as the Company’s independent registered public accounting firm for the fiscal year ending June 30, |
| 3. | To hold an advisory(non-binding) vote to approve the compensation paid to the Company’s |
| 4. | To approve the |
| 5. | To transact such other business as may properly come before the Annual Meeting or any continuation, postponement or adjournment thereof. |
9, 2020
www.proxydocs.com/FARM.
| By Order of the Board of Directors |
|
[●], 2018
PRELIMINARY PROXY STATEMENT
SUBJECT TO COMPLETION, DATED OCTOBER 15, 2018
Proposal No. 1: The election of two Class III directors to serve on our Board for a three-yearone-year term of office expiring at the Company’s 2021 Annual Meeting of Stockholders and until their successors are elected and duly qualified;
Proposal No. 2: 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;
Proposal No. 3: The approval, on an advisory(non-binding) basis, of the compensation paid to the Company’s named executive officers;Named Executive Officers; and
Proposal No. 4: The approval of the Company’s forum selectionby-law to provide thatAmended and Restated 2017 Plan, which includes an increase in the courts located withinnumber of shares of stock authorized for issuance under the State of Delaware will serve as the exclusive forum for the adjudication ofplan and certain legal disputes.
“FOR” the election of each of the two 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 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;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.
more details.
By mail. You may vote your shares by completing, signing and mailing the enclosed proxy card included with these proxy materials (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, you may submit your proxy over the Internet by following the instructions included on the enclosed proxy card (or voting instruction form in the case of beneficial holders for whom Internet voting is available). 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 voted by calling a toll-free telephone number listed on the enclosed 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 virtual Annual Meeting. Stockholders are invited to attend the virtual Annual Meeting and vote in person at the virtual Annual Meeting. 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 vote those shares in person at the virtual Annual Meeting. If you are a record holder, you are encouraged to complete, sign and date the enclosed proxy card and mail it in the enclosed postage-paid envelope regardless of whether or not you plan to attend the virtual 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.
We If you are a participant in the 401(k), although you may attend the virtual Annual Meeting if you can provide proof that you are a 401(k) participant, you will not be unableable 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 permittedcast a vote at the Annual Meeting. You are encouragedmeeting with respect to submitany shares you hold through the 401(k). Any holder of a proxy to have your shares voted regardlessfrom a stockholder must present the proxy card, properly executed, and a copy of whether or not you plan to attend the Annual Meeting.
proof of ownership.
This means that the two 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.
this proposal.
“FOR” the election of each of the two 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 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;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.
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.
any substantial interest, direct or indirect, in any matter to be acted upon at the Annual Meeting other than Proposal No. 1—Election1-Election of Directors.
Under
the term for which their class was originally elected.
In connection with its engagement, Spencer Stuart
Mr. Clark currently serves as a director of the Company and Chairman of the Board. Ms. Loretz-CongdonPoe has been nominated for election to the seat currently held by Jeanne Farmer Grossman.David W. Ritterbush whose term expires at the Annual Meeting and who is not standing for re-election.
Ms. Loretz-CongdonPoe 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.
Randy E. Clark
We believe Mr. Clark’sPoe’s qualifications to serve on our Board include his leadershipmany years of experience as a former CEO, extensive backgroundchief executive officer and experiencesenior executive officer in the foodservice business, IT, manufacturingpackaged foods and supply chainfood service industries. He has also served on the boards of directors of
structure.
Name | Age | Director Since | Term Expiration | Audit Committee | Compensation Committee | Nominating and Corporate Governance Committee |
| Stacy Loretz-Congdon | 61 | 2018 | 2021 | X | X | |
| Charles F. Marcy | 70 | 2013 | 2022 | Chair | X | |
| D. Deverl Maserang | 57 | 2019 | 2022 | |||
| Christopher P. Mottern | 76 | 2013 | 2022 | X | ||
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,age 70, 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” “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
Mr. Marcy has served on the Company's Board of Directors since 2014 and is currently a member of the Nominating and Corporate Governance Committee and Chair of the Compensation Committee.
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.
REGISTERED PUBLIC ACCOUNTING FIRM
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 | % | |||||
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class(1) | |
| Russell Investments Group, Ltd.(2) | 2,639,756 | 15.0 | |
| Trigran Investments, Inc., Douglas Granat, Lawrence A. Oberman, Steven G. Simon, Bradley F. Simon, Steven R. Monieson(3) | 2,237,553 | 12.5 | |
| Richard F. Farmer(4) | 1,169,891 | 6.5 | |
| Farmer Bros. Co. Employee Stock Ownership Plan(5) | 1,156,283 | 6.4 | |
| Dimensional Fund Advisors LP(6) | 901,427 | 5.0 | |
| (1) | Percent of class is calculated based on total outstanding voting securities of |
| (2) |
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This information is based on a Schedule 13G/A filed with the SEC on |
| (3) | This information is based on a Schedule 13G filed with the SEC on June 1, 2020 (the “Trigran Schedule |
| (4) | This information is based on a Schedule 13D/A filed with the SEC on February 10, 2020 (the “Farmer Schedule 13D/A”). The Farmer Schedule 13D/A reported that Richard F. Farmer is the beneficial owner, with sole voting and dispositive power, of 1,169,891 shares of Common Stock through certain trusts. As stated in the Farmer Schedule 13D/A, the address for Richard F. Farmer is P.O. Box 50725, Eugene, Oregon 97405. |
| (5) | This information is based on the Company’s records and includes 1,156,283 shares of Common Stock that are held in the ESOP and allocated to a participant’s account (“allocated shares”) as of October 13, 2020. The ESOP Trustee votes allocated shares as directed by such participant or beneficiary of the ESOP. The present members of the Administrative Committee of the Farmer Bros. Co. Qualified Employee Retirement Plans (the “Management Administrative Committee”), which administers the ESOP, are Ronald J. Friedman, Jennifer H. Brown, Scott R. Lyon and Ronald Lynch. Each member of the Management Administrative Committee disclaims beneficial ownership of the securities held by the ESOP except for those, if any, that have been allocated |
| (6) | This information is based on a Schedule 13G/A filed with the SEC on February 12, 2020 (the “Dimensional Schedule 13G/A”) by Dimensional Fund Advisors LP ("Dimensional Advisors"). The Dimensional Schedule 13G/A reports that Dimensional Advisors has sole voting power over 849,616 shares of Common Stock and sole dispositive power over 901,427 shares of Common Stock. Dimensional Advisors is an investment adviser registered under Section 203 of the Investment Advisors Act of 1940, and furnishes investment advice to four investment companies registered under the Investment Company Act of 1940, and serves as investment manager or sub-adviser to certain other commingled funds, group trusts and separate accounts (such investment companies, trusts and accounts, collectively referred to as the “Funds”). In certain cases, subsidiaries of Dimensional Advisors may act as an adviser or sub-adviser to certain Funds. In its role as investment advisor, sub-adviser and/or manager, Dimensional Advisors or its subsidiaries may possess voting and/or investment power over the securities of the Issuer that are owned by the Funds, and may be deemed to be the beneficial owner of the shares of the Issuer held by the Funds. However, all securities reported in the Dimensional Schedule 13G/A are owned by the Funds. Dimensional Advisors disclaims beneficial ownership of such securities. As indicated in the Dimensional Schedule 13G/A, the address of Dimensional Advisors is Building One, 6300 Bee Cave Road, Austin, Texas 78746. |
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 | % | |||||
Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class(1) | |
| Non-Employee Directors: | |||
| Allison M. Boersma (2) | 16,149 | * | |
| Stacy Loretz-Congdon (3) | 15,877 | * | |
| Charles F. Marcy (4) | 28,519 | * | |
| Alfred Poe (director nominee) | — | * | |
| Named Executive Officers: | |||
| D. Deverl Maserang II (5) | 87,571 | * | |
| Christopher P. Mottern (6) | 72,115 | * | |
| Scott R. Drake (7) | 440 | * | |
| David Robson | — | * | |
| Scott R. Lyon (8) | 3,578 | * | |
| Ronald J. Friedman (9) | 10,994 | * | |
| Ruben E. Inofuentes (10) | 9,526 | * | |
| J. Michael Walsh (11) | 15,854 | * | |
| All directors and executive officers as a group(12)(13 individuals) | 261,223 | 1.4 | |
| * | Less than 1% |
| (1) | Percent of class is calculated based on total outstanding voting securities of |
| (2) |
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Includes |
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| (3) | Includes 10,666 unvested shares of |
| (4) | Includes |
| (5) | Includes |
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| (6) | Includes |
| (7) | Consists of 440 shares of Common Stock beneficially owned by Mr. Drake through the Company's 401(k) plan, rounded to the nearest whole share. |
| (8) | Consists of 2,455 shares of Common Stock issuable upon exercise of options which will become exercisable within 60 days |
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| (9) | Consists of 9,660 shares of Common Stock issuable upon exercise of options which |
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| (10) | Consists of 8,986 shares of Common Stock issuable upon exercise of options which |
| (11) | Consists of 13,772 shares of Common Stock issuable upon exercise of options which will become exercisable within 60 days, 550 shares of Common Stock beneficially owned by Mr. Walsh through the ESOP, rounded to the nearest whole share and 1,532 shares of Common Stock beneficially owned by Mr. Walsh through the Company's 401(k) plan, rounded to the nearest whole share. |
| (12) | Includes 108,698 shares of Common Stock issuable upon exercise of options which will become exercisable within 60 days, 746 shares of Common Stock beneficially owned through the ESOP, rounded to the nearest whole share and 6,119 shares of Common Stock beneficially owned through the Company's 401(k) plan, rounded to the nearest whole share. |
Director | Status | |
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| Independent | |
| Independent | |
| D. Deverl Maserang | Not Independent(2) | |
| Independent(3) | |
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| (2) | Mr. |
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| (3) | Core-Mark was a customer of the Company in fiscal |
| owns less than 1% of the outstanding publicly traded stock of Core-Mark. The Board has determined that these relationships do not create a conflict of interest under the Company’s Code of Conduct and Ethics, do not require disclosure under Item 404(a) of RegulationS-K, and do not interfere with Ms. Loretz-Congdon’s exercise of independent judgment in carrying out the responsibilities of a director of the Company. |
. In July 2020, the Board established the Director Search Committee.(4) Mr. Mottern is currently Chairman of the Board. He served as interim President and Chief Executive Officer from May 5, 2019 through October 31, 2019 during which time he was determined to be not independent. After his interim role, the Board determined that Mr. Mottern was independent. (5) Mr. Ritterbush’s term expires at the Annual Meeting and he is not standing for re-election. (6) Mr. Poe is a nominee for election to the Board at the Annual Meeting. sevennineteen meetings during fiscal 2018,2020, including fourthree regular meetings and threesixteen special meetings. During fiscal 2018,2020, each director attended at least 75% of the total number of meetings of the Board of Directors (held during the period for which he or she served as a director) and committees of the Board on which he or she served (during the periods that he or she served). The independent directors generally meet in executive session in connection with each regularly scheduled Board meeting. Under the Company’s Corporate Governance Guidelines, continuing directors are expected to attend the Company’s annual meeting of stockholders absent a valid reason. All directors who were then serving were present at the 20172019 Annual Meeting of Stockholders held on December 7, 201710, 2019 (the “2017“2019 Annual Meeting”) with the exception of Hamideh Assadi and Guenter W. Berger who stepped down as Class II directors at the 2017 Annual Meeting at the end of their terms.www.farmerbros.comwww.farmerbros.com. Information contained on the website is not incorporated by reference in, or considered part of, this Proxy Statement.In addition, the Board maintains an Executive Committee to assist the Board in discharging its oversight responsibilities between regular Board meetings. Summary information about each of these committees is set forth below.There were no suchad hoc committees in fiscal 2018.
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.
Audit Committee from January 2020 through October 2020. Christopher P. Mottern who previously served as a member of the Audit Committee rejoined the Audit Committee upon Mr. Clark's resignation from the Board and Audit Committee in October 2020.
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,
2020.
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 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 and/or executive compensation practices; and
Whether the candidate has the time required for preparation, participation and attendance at Board meetings and committee meetings, if applicable.
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.
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 capped at 200% of the target opportunity and the performance-based restricted stock units in the long-term incentive plan are capped at 150% of target opportunity.
Long-term compensation for senior executives is comprised of stock options 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 over 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 | 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 | 57 | President and Chief Executive Officer | 2019 | |||
| Scott R. Drake | 51 | Chief Financial Officer | 2020 | |||
| Ronald J. Friedman | 50 | Chief Human Resources Officer | 2019 | |||
| Ruben E. Inofuentes | 53 | Chief Supply Chain Officer | 2019 | |||
| Maurice S.J. Moragne | 56 | Chief Sales Officer | 2020 | |||
| J. Michael Walsh | 54 | Senior Vice President and General Manager - DSD | 2019 | |||
David G. Robson joined the Company as Treasurer and Chief Financial Officer in February 2017. As Treasurer and Chief Financial Officer, Mr. Robson’s current responsibilities include overseeing Finance, Information Technology and M&A. Prior to joining the Company, Mr. Robson served as the Chief Financial Officer of PIRCH, a curator and retailer of kitchen, bath and outdoor home brands, from September 2014 to September 2016. While at PIRCH, Mr. Robson oversaw all aspects of accounting, financial planning and analysis, treasury, merchandise planning and legal, with responsibility for developing strategies, processes and operating priorities to upscale a high growth retailer while building strong finance and merchandising teams. From January 2012 to September 2014, Mr. Robson was the Chief Financial Officer of U.S. AutoParts, an online provider of auto parts and accessories, where he was responsible for managing accounting, financial planning and analysis, treasury and investment decisions, acquisition activities, public reporting, investor relations, and merchandise planning and procurement. Prior to that, Mr. Robson served as the Executive Vice President and Chief Financial Officer of Mervyns LLC, a former discount department store chain, from 2007 to 2011. From 2001 to 2007, Mr. Robson served as the Senior Vice President of Finance and Principal Accounting Officer for Guitar Center, Inc. Mr. Robson began his career in public accounting with the accounting firm Deloitte & Touche LLP. Mr. Robson graduated with a B.S. degree in Business Administration: Accounting and Finance from the University of Southern California and is a certified public accountant (inactive) in the State of California.
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 managers of Sunny Delight, she created and led a team of 600 people including manufacturing (5 plants), contract manufacturing, supply chain/logistics, purchasing/risk management, engineering/capital management and technical services, and provided leadership for the company’s sustainability program. Ms. Iobst’s other experience includes over 20 years with Procter & Gamble, a multinational consumer goods company, serving in a variety of roles relating to supply chain operations, plant management and human resources. Ms. Iobst graduated with a B.S. in Chemical Engineering from Lehigh University.
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.January 2019. As Senior Vice President and General Manager—Sales,Manager, Mr. Siers’Walsh's current responsibilities include general managementleading the Commercial Operations team for the company. He brings over 25 years of experience with leading CPG 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.DSD companies. Prior to joining the Company, from July 2012 to October 2015, Mr. SiersWalsh was Vice President, Business Development at McLane Company,an executive with Aramark, a food and beverage supply chain services company, from 2009 to September 2012, with responsibility for change management, new businessmost recently as President of its Refreshment Services division, which focused on office coffee 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.service across North America. Prior to joining the Company,Aramark, 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,Walsh held progressive sales leadership and general corporate matters.management roles at Dean Foods, Pepsi Bottling Group and Nestle Food Company. Mr. MatteiWalsh received his undergraduateBachelor of Arts degree in Public Policy from Duke University and his Juris DoctorEconomics from the University of Virginia School of Law.
Name | Title (as of June 30, 2020) | |
| President and Chief Executive Officer | |
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| Scott R. Drake | Chief Financial Officer | |
| Former Interim Principal Financial and Accounting Officer | |
| David G. Robson | Former Chief Financial Officer | |
| Ronald J. Friedman | Chief | |
| Chief Supply Chain Officer | |
| J. Michael Walsh | Senior Vice President and General | |
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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 each 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 compensation 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 holdsay-on-pay votes to approve the compensation of our named executive officers every year.
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 selectedto remain competitive in the market for talent.
| * | The Russell 2000 index median TSR is based on the 2019 constituent companies. |
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 periodically 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 Board to recoup certain incentive compensation 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. 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.
individual performance;
impact on long-term stockholder value creation;
impact on development and execution of Company strategy;
experience and tenure in role;
scope of responsibility.
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| Lancaster Colony Corporation | |
| Calavo Growers, Inc. | Medifast, Inc. | |
| Cal-Maine Foods, Inc. | MGP Ingredients Inc. | |
| Craft Brew Alliance |
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| The Chef’s Warehouse Inc. | Seneca Foods Corp. | |
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| SunOpta Inc. | |
In 2020, for fiscal 2021 compensation, the Compensation Committee has decided to remove Craft Brew Alliance from the peer group due to its pending acquisition, and to add Beyond Meat, Inc., Bridgford Foods Corporation and New Age Beverage Corporation.
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 subject to time-based vesting conditions are designed to create direct alignment with stockholder objectives and retain critical talent over extended timeframes. • Stock options and • Performance-based award metrics and targets align with long-term business strategy as well as stock price appreciation. | |
| 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 such as an automobile allowance or use of a Company car and fuel card, as well as relocation assistance, each intended to facilitate the operation of the Company’s business and to assist the Company in recruiting and retaining key executives. • 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% | |||||
| Name | Original Fiscal 2020 Annual Base Salary(1) | Fiscal 2020 Reduced Annual Base Salary(2) | Fiscal 2019 Annual Base Salary | Annual Base Salary Percentage Change (3) | ||||||||||
| Named Executive Officers: | ||||||||||||||
| D. Deverl Maserang II | $ | 660,000 | $ | 561,000 | — | N/A | ||||||||
| Christopher P. Mottern (4) | $ | 400,000 | $ | 0 | — | N/A | ||||||||
| Scott R. Drake | $ | 375,000 | $ | 318,750 | — | N/A | ||||||||
| Scott R. Lyon (5) | $ | 225,000 | $ | 191,250 | $ | 185,000 | 21.6% | |||||||
| David G. Robson | — | — | $ | 359,570 | N/A | |||||||||
| Ronald J. Friedman | $ | 324,450 | $ | 275,782 | $ | 315,000 | 3% | |||||||
| Ruben E. Inofuentes | $ | 340,000 | $ | 289,000 | — | N/A | ||||||||
| J. Michael Walsh (6) | $ | 315,000 | $ | 267,750 | $ | 280,000 | 12.5% | |||||||
| (1) | Annual base salary as of the end of the applicable fiscal year. |
| (2) | The Fiscal 2020 Reduced Annual Salary reflects the temporary 15% reduction in base salary taken by the Named Executive Officers effective April 1, 2020. |
| (3) | The base salary percentage change was calculated using the fiscal 2020 annual base salary and the fiscal 2019 annual base salary, disregarding the fiscal 2020 temporary salary reduction. |
| (4) | In connection with his agreement to serve as the Interim CEO, the Compensation Committee entered into an agreement with Mr. Mottern which included a monthly base salary of $33,333 (or $400,000 annualized). Mr. Mottern’s base salary was paid in the form of monthly restricted stock unit grants with a grant date value equal to his monthly salary with such grants being made on the last business day of each month and pro-rated any partial months. |
| (5) | Mr. Lyon's salary increase was associated with his promotion to Vice President, Controller and Treasurer and his interim role as Principal Financial and Accounting Officer. |
| (6) | Mr. Walsh's salary increase was associated with the expansion of his role due to changes in the Company's senior leadership. |
For fiscal 2018 short-term cash incentive awards under the 2017 Farmer Bros. Co. Long-Term Incentive Plan (the “2017 Plan”), we established a maximum annual cash incentive opportunity for 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 our Named Executive Officers, subject to a maximum of 250% of the Named Executive Officer’s 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) of the Internal Revenue Code as in effect in 2017.
Fiscal 20182020
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 AchievementShort-Term Cash Incentive Program at target)
“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)
“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 determining the achievement of Company-wide performance goalsnot payout for fiscal 2018, the Compensation Committee exercised negative discretion to reduce actual achievement of adjusted EBITDA and free cash flow by the amount of the net benefit resulting from certain changes in accounting principles and the reclassification and capitalization of allied freight and certain overhead and purchase price variances that occurred during fiscal 2018, as described in the 2018 Form10-K. The following table shows such achievement compared to Company-wide performance goals for fiscal 2018, after the exercise of negative discretion by the Compensation Committee.
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 | |||||||||||||||||||||||
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 and free cash flow, as determined by the Compensation Committee, our Named Executive Officers did not receive any cash payout under the Performance AchievementShort-Term Cash Incentive 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 addition2020 with respect to the Performance Achievement Program described above, in fiscal 2018 the Compensation Committee approved the Integration Achievement Program with a separate set of integration-basedCompany-wide performance goals requiredgoals.
TheCompany-wide 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
| Metric | Weighting | Threshold Goal (80% of Target Performance) | Target Goal | Maximum Goal (120% of Target Performance) | Actual Achievement | Actual Achievement Compared to Target Performance | Earned Payout for Fiscal 2019 Company-wide Performance | |||||||||||||||
| Adjusted EBITDA | 75% | $ | 22,389,600 | $ | 27,987,000 | $ | 33,584,400 | $11,531,000 | 41.2% | $ | 0 | |||||||||||
| Free Cash Flow | 25% | $ | 8,714,400 | $ | 10,893,000 | $ | 13,071,600 | $ (314,000) | (2.9)% | $ | 0 | |||||||||||
successful qualification/test run of Boyd Coffee retail product at Company production facility (25% weight).
Each of these goals were indicative
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 theShort-Term Cash Incentive Plan, individual 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 approvedis used by the Compensation Committee (weightedto reward individual goals achieved. For fiscal year 2020, the individual performance component consisted of certain strategic initiatives in each Named Executive Officer's area of responsibility. These goals are rigorous, but attainable, thereby incentivizing performance. Payout for this component relied on the company achieving the minimum payout threshold on 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 termsleast one of the applicable Prior Plan.
Prior to fiscal 2018,two company financial metrics (adjusted EBITDA or free cash flow). Since the minimum threshold on each of these metrics was not attained, there was no payout on the strategic initiatives component.
| Each Named Executive Officer's objectives were discussed with the Chief Executive Officer based on the strategy and priorities established for their respective function. |
| – | Mr. Maserang presented a summary document to the Compensation Committee for review and alignment |
| – | Each Named Executive Officer's objectives, as set forth below, were finalized and metrics for each were established. |
| D. Deverl Maserang II | |
| • Improve capital structure • Evaluate and hire key leaders • Develop purpose, vision, mission and values • Develop strategic growth plan • Design and execute long-term supply chain strategy |
| |
| • Mr. Drake joined the Company in March 2020, as a result he did not have established goals | |
| |
• Restructure Finance organization • Improve capital structure • Improve financial flexibility | |
| FY2020 Performance Results | • Execute successful labor strategy and negotiations • Improve team member experience • Reduce recruitment costs • Launch new human resource systems on-time and on-budget |
| Ruben E. Inofuentes | |
| FY2020 Performance Results | • Process mapping • Establish new key performance indicators • Build organization to |
| J. Michael Walsh | |
| FY2020 Performance Results | • Implement monthly sales training • Improve customer retention • Achieve incremental sales target • Improve profitability • Reduce idle equipment |
On a value basis,
pay for performance alignment in that the stock options only realize 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 with alignment on internal company performance and business strategy.
Fiscal 2018 Awards
Stock Options
(and two-thirds in non-qualified stock options. Mr. Maserang’s equity award was weighted approximatelymore towards stock options than PBRSUs in order to induce Mr. Maserang to join the Company and to place strong emphasis on stock price growth. At his request, and in order to to place strong emphasis on stock price growth, Mr. Drake's award took the form of only stock options. In subsequent years, both Messrs. Maserang and Drake are expected to receive the same mix of long-term incentive awards as other officers.
as a three-year vesting cash award (the "Cash Award") which was consistent with awards given to employees at his level prior to his taking on his interim role. Also, following the end of his interim position, and consistent with other employees at his level, in May 2020, Mr. Lyon received an award of restricted stock units which vest over three-years as a retention inducement.
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 ($) | ||||||
Michael H. Keown | 28,819 | 300,093 | ||||||
David G. Robson | 12,699 | 132,235 | ||||||
Ellen D. Iobst | 9,759 | 101,621 | ||||||
Scott A. Siers | 7,040 | 73,308 | ||||||
Thomas J. Mattei, Jr. | 8,995 | 93,665 | ||||||
(weighted approximately 50% of targeted grant date long-term incentive value)
25% toward free cash flow.
business. The Compensation Committee has historically established aggressive, yet achievable performance goals intended to motivate the Company’s executive officers to achieve internal goals and results that will benefit the Company’s stockholders, while maintaining strong alignment between pay and performance. For example, in fiscal 2018 and 2017, the Company failed to achieve threshold levels of performance, resulting in the absence of any payout for short-term incentives based on Company performance, and, in fiscal 2017, the Company’s failure to achieve performance targets resulted in the forfeiture of 20% of the shares subject to fiscal 2017 stock option awards. Actual achievement of the three-year performance goals for the fiscal 20182020 PBRSU awards will be reflected in our proxy statement that reports the payouts at the end of the three-year performance period.
The following table sets forth
Name | Fiscal 2018 Target PBRSU Grant (# of Shares of Common Stock Issuable Upon Vesting) | Grant Date Fair Value of Target PBRSUs ($) | ||||||
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 and Stock Option Awards
In connection with commencement of their employment, pursuant toCompany. Under the terms of their respective employment agreementsthat agreement Mr. Maserang, is entitled to an annual base salary of $660,000 and a bonus opportunity of 100% of his base salary, with payout ranging from 50% to 200% of target based on satisfaction of performance goals set by the Company, in fiscal 2018 the Company granted the followingnon-qualified stock option awards and restricted stock awards toCompensation Committee. Mr. Robson and Ms. Iobst. TheMaserang also received non-qualified 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 subjectwith a Black-Scholes value equal to each such stock option vest ratably on each of the first three anniversaries of the grant date, contingent on continued employment,$1,000,000 and subject to accelerated vesting in certain circumstances. The restricted stock hasPBRSU having 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$500,000 based on the achievement of cumulative coffee pound sales and cumulative adjusted EBITDA, both measured over a full three-year performance period. Theclosing stock options will vest over a three-year period basedprice on continued employment overSeptember 13, 2019, each with terms similar to those described above for the period. The Compensation Committee believes this program design incentivizes value creation through profitable growth, directly aligningCompany’s annual 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 entered into change in control severance agreements with each of the Named Executive Officers, pursuant to which they areUnder his employment agreement, Mr. Maserang is entitled to receive severancetermination benefits upon the occurrencein case of a termination in certain qualifying terminations of employmentsituations not in connection with a change in control, or threatenedif such termination is in connection with a change in control. control the benefits provided under a Severance Agreement similar to that provided to other Named Executive Officers. A detailed description of the all severance benefits Mr. Maserang is due to receive is included under the heading “Change in Control and Termination Arrangements.”
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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employee.
Perquisites
We limit However, we have announced that the perquisites available to our Named Executive Officers; however weretiree medical plan will terminate as of December 31, 2020.
The perquisites and other benefits available to
to newly hired Named Executive Officers.
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 $1 million paid in any tax year to specified executive officers unless the compensation is “qualified performance-based compensation” under that section. Our fiscal 2018 executive compensation program was designed with the intent to provide cash and equity-based incentive compensation under the 2017 Plan as “qualified performance-based compensation” under Section 162(m).
The Section 162(m) exception was repealed as part of the Tax Cuts and Jobs Act enacted on December 22, 2017 for taxable years beginning after December 31, 2017. It is uncertain whether compensation that the Compensation Committee originally intended to structure as qualified performance-based compensation under Section 162(m) that is paid in calendar 2018 or subsequent years will be deductible under transition rules. The Compensation Committee will continue to focus on performance-based compensation, although certain of the requirements of Section 162(m) will no longer be relevant and will not be taken into account when making future compensation decisions.
Accounting Standards
Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718 requires us to recognize an expense for the fair value of share-based compensation awards. Grants of stock options, restricted stock and PBRSUs under the Company’s long-term incentive plans are accounted for under FASB ASC Topic 718. The Compensation Committee considers the accounting implications of significant compensation decisions, especially in connection with decisions that relate to our long-term incentive program. As accounting standards change, the Company may revise certain programs to appropriately align accounting expenses of our share-based compensation awards with our overall executive compensation philosophy and objectives.
Randy E. Clark,
Charles F. Marcy
| A | B | C | D | E | F | G | H | I | ||||||||||||||||||||||||
Name and Principal Position | Fiscal Year | Salary ($) | 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 | |||||||||||||||||||||||||
| 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 ($) | |||||||||||||
| D. Deverl Maserang II (2) | 2020 | 487,385 | — | 499,990 | 999,997 | 13,200 | 2,000,572 | ||||||||||||||
| President and Chief Executive Officer | |||||||||||||||||||||
| Christopher P. Mottern (3) | 2020 | 133,301 | — | 214,982 | — | — | 30,000 | 378,283 | |||||||||||||
| Former Interim President and CEO | 2019 | 62,311 | — | 215,002 | — | — | 88,750 | 366,063 | |||||||||||||
| Scott R. Drake (4) | 2020 | 80,769 | — | — | 199,999 | — | — | 280,768 | |||||||||||||
| Chief Financial Officer | |||||||||||||||||||||
| David G. Robson (5) | 2020 | 165,788 | — | — | — | — | 246,366 | 412,154 | |||||||||||||
| Former Chief Financial Officer and Treasurer | 2019 | 372,033 | — | 134,839 | 134,839 | — | 23,060 | 664,771 | |||||||||||||
| 2018 | 351,938 | — | 162,241 | 192,256 | 123,382 | 69,266 | 899,083 | ||||||||||||||
| Scott R. Lyon | 2020 | 202,288 | — | 74,996 | 37,498 | 9,288 | 11,115 | 335,185 | |||||||||||||
| Vice President, Controller and Treasurer (Former Interim Principal Financial and Accounting Officer) | |||||||||||||||||||||
| Ronald J. Friedman | 2020 | 310,717 | — | 74,998 | 74,995 | — | 18,352 | 479,062 | |||||||||||||
| Chief Human Resources Officer | |||||||||||||||||||||
| Ruben E. Inofuentes (6) | 2020 | 192,231 | — | 125,000 | 124,999 | — | 96,368 | 538,598 | |||||||||||||
| Chief Supply Chain Officer | |||||||||||||||||||||
| J. Michael Walsh | 2020 | 314,014 | — | 100,008 | 99,999 | — | 22,974 | 536,995 | |||||||||||||
| Senior Vice President, GM - DVD | |||||||||||||||||||||
| (1) | For a detailed summary of the amounts shown in this column see discussion under the heading “All Other Compensation (Column H),” below. For Mr. Mottern, this amount reflects the amount paid in cash retainers in connection with his service on the Board of Directors and its committees, after his tenure as Interim President and Chief Executive Officer ended. |
| (2) | Mr. |
| (3) |
|
| (4) | Mr. Drake joined the Company |
| (5) | Mr. Robson separated from employment with the |
reduction in response to the potential effect of the COVID-19 pandemic for amounts paid during the fourth quarter.(6) Mr. Inofuentes joined the Company as Chief Supply Chain Officer effective November 15, 2019.. year.year or the dates of resignation or termination. The amounts shown include amounts contributed by the employee to the Company’s 401(k) plan. Fiscal 2017 baseplan and reflects the temporary 15-percent salary included one extra pay period.in fiscal 2018 and under the Farmer Bros. Co. 2005 Incentive Compensation Plan, as amended (the “STIP”) in fiscal 2017 and 2016 is shown in column G. The amounts reported in column D for fiscal 2016 represent discretionary bonuses awarded to the indicated Named Executive Officer during fiscal 2016, which were awarded by the Board in order to promote continued engagement and orderly transition of processes and duties in connection with the Company’s relocation of its headquarters from Torrance, California to Northlake, Texas.Officers, and restricted stock awards received by Mr. Robson and Ms. Iobst in connection with commencement of their employment under the terms of their
respective employment agreements, in each case, computed in accordance with FASB ASC Topic 718.Officers. A discussion of the assumptions used in calculating the amounts in this column may be found in Note 1816 to our audited consolidated financial statements for the fiscal year ended June 30, 20182020 included in our 20182020 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 $537,505.
In fiscal 2018, the amount of each Named Executive Officer’s award shown in the table above includesOfficer and Mr. Robson who earned awards under the Performance Achievement Program and the Integration Achievement Program as
discussed in this Proxy Statement under the heading “Compensation Discussion and Analysis—Short-Term Cash Incentives.” As a result of our failure to achieve a threshold level of adjusted EBITDA, as determined by the Compensation Committee, our Named Executive Officers did not receive any cash payout under the Performance Achievement Programbonus in fiscal 2018.
year 2018 related to the acquisition and integration of Boyd Coffee Company.
Name | Perquisites and Other Personal Benefits ($) | 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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(1)
Company Contributions to 401(k) Plan (2) | Relocation Expense (3) | Relocation Tax Gross-Up (3) | Automobile Allowance | Director Fees (4) | ||||||
| ($) | ($) | ($) | ($) | |||||||
| D. Deverl Maserang II | 13,200 | — | — | — | — | |||||
| Christopher P. Mottern | — | — | — | — | 30,000 | |||||
| Scott R. Drake | — | — | — | — | — | |||||
| David G. Robson | 9,517 | — | — | — | — | |||||
| Scott R. Lyon | 11,115 | — | — | — | — | |||||
| Ronald J. Friedman | 18,352 | — | — | 4,750 | — | |||||
| Ruben E. Inofuentes | 7,637 | 70,550 | 18,181 | — | — | |||||
| J. Michael Walsh | 18,174 | — | — | 4,800 | — | |||||
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 | 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 | ||||||||||||||||||||||||||||||||||||
Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards(1) | ||||||||||
Name | Grant Date | Threshold ($)(4) | Target ($)(4) | Maximum ($)(4) | Threshold (#)(5) | Target (#)(5) | Maximum (#)(5) | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#)(5) | Exercise or Base Price of Option Awards ($/ Sh)(2) | Grant Date Fair Value of Stock and Option Awards ($)(3) |
| D. Deverl Maserang II | - | 330,000 | 660,000 | 1,320,000 | - | - | - | - | - | - | - |
| 9/13/19 | - | - | - | 0 | 38,080 | 57,120 | - | - | - | 499,990 | |
| 9/13/19 | - | - | - | - | - | - | - | 223,713 | 13.13 | 999,997 | |
| Christopher P. Mottern | 7/31/19 (6) | - | - | - | - | - | - | 2,052 | - | - | 33,325 |
| 8/30/19 (6) | - | - | - | - | - | - | 2,745 | - | - | 33,324 | |
| 9/30/19 (6) | - | - | - | - | - | - | 2,573 | - | - | 33,320 | |
| 10/31/19 (6) | - | - | - | - | - | - | 2,598 | - | - | 33,332 | |
| 11/12/19 (7) | - | - | - | - | - | - | 6,485 | - | - | 99,999 | |
| 11/12/19 (7) | - | - | - | - | - | - | 3,242 | - | - | 49,992 | |
| 12/10/19 (8) | - | - | - | - | - | - | 4,137 | - | - | 64,992 | |
| . | |||||||||||
| Scott R. Drake | 4/1/20 | - | - | - | - | - | - | - | 88,495 | 6.72 | 199,999 |
| Scott R. Lyon | - | 39,375 | 78,750 | 157,500 | - | - | - | - | - | - | - |
| 11/11/19 | 18,750 | 37,500 | 75,000 | - | - | - | - | - | - | - | |
| 11/11/19 | - | - | - | - | - | - | - | 7,440 | 15.94 | 37,498 | |
| David G. Robson | - | 127,500 | 255,000 | 510,000 | - | - | - | - | - | - | - |
| Ronald J. Friedman | - | 89,224 | 178,448 | 356,896 | - | - | - | - | - | - | - |
| 11/11/19 | - | - | - | 0 | 4,705 | 7,058 | - | - | - | 74,998 | |
| 11/11/19 | - | - | - | - | - | - | - | 14,880 | 15.94 | 74,995 | |
| Ruben E. Inofuentes | - | 102,000 | 204,000 | 408,000 | - | - | - | - | - | - | - |
| 11/11/19 | - | - | - | 0 | 8,378 | 12,567 | - | - | - | 125,000 | |
| 11/11/19 | - | - | - | - | - | - | - | 27,233 | 14.92 | 124,999 | |
| J. Michael Walsh | - | 86,625 | 173,250 | 346,500 | - | - | - | - | - | - | - |
| 11/11/19 | - | - | - | 0 | 6,274 | 9,411 | - | - | - | 100,008 | |
| 11/11/19 | - | - | - | - | - | - | - | 19,841 | 15.94 | 99,999 | |
| (1) | Represents PBRSU awards granted to our Named Executive Officers in fiscal |
| (2) | Exercise price of stock option awards is equal to the closing price of the Company’s Common Stock as reported on the NASDAQ Global Select Market on the date of grant. |
| (3) | Reflects the grant date fair value of stock options, restricted stock and PBRSU awards computed in accordance with FASB ASC Topic 718. A discussion of the assumptions used in calculating the amounts in this column may be found in Note |
| (4) | Represents annual cash incentive opportunities under the |
| (5) |
|
Represents |
|
| (6) | Represents |
| (7) | Represents restricted stock granted to Mr. Mottern in |
| (8) | Represents restricted stock granted to Mr. Mottern in fiscal 2020 under the 2017 Plan in connection with his continued service as a director of the Company. |
| 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) | |||||||||||||||||||||||||
Option Awards | Stock Awards | ||||||||
Name | Number of Securities Underlying Unexercised Options Exercisable (#)(1) | Number of Securities Underlying Unexercised Options Unexercisable (#)(1) | 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 (#) (2) | Market Value of Shares or Units of Stock That Have Not Vested ($) (3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(4) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) |
| D. Deverl Maserang II | - | 227,713 | - | 13.13 | 9/13/2026 | - | - | - | - |
| - | - | - | - | - | - | - | 38,080 | 279,507 | |
| Christopher P. Mottern | - | - | - | - | - | 4,137 | 30,366 | - | - |
| - | - | - | - | - | 2,052 | 15,062 | - | - | |
| - | - | - | - | - | 2,745 | 20,148 | - | - | |
| - | - | - | - | - | 3,242 | 23,796 | - | - | |
| - | - | - | - | - | 6,485 | 47,600 | - | - | |
| - | - | - | - | - | 2,598 | 19,069 | - | - | |
| - | - | - | - | - | 2,573 | 18,886 | - | - | |
| Scott R. Drake | - | 88,495 | - | 6.72 | 04/01/2027 | - | - | - | - |
| Scott R. Lyon | - | 7,440 | - | 15.94 | 11/11/2026 | - | - | - | - |
| - | - | - | - | - | - | - | 8,650 (5) | 63,491 | |
| Ronald J. Friedman | - | 14,880 | - | 15.94 | 11/11/2026 | - | - | - | - |
| 2,375 | 4,823 | - | 25.04 | 11/12/2025 | - | - | - | - | |
| - | - | - | - | - | - | - | 2,236 | 16,412 | |
| - | - | - | - | - | - | - | 4,705 | 34,535 | |
| Ruben E. Inofuentes | - | 27,233 | - | 14.92 | 11/15/2026 | - | - | - | - |
| - | - | - | - | - | - | - | 8,378 | 61,495 | |
| J. Michael Walsh | - | 19,841 | - | 15.94 | 11/11/2026 | - | - | - | |
| 1,710 | 3,472 | - | 25.04 | 11/12/2025 | - | - | - | - | |
| 2,511 | 1,294 | - | 31.70 | 11/10/2024 | - | - | - | - | |
| - | - | - | - | - | - | - | 6,274 | 46,051 | |
| - | - | - | - | - | - | - | 1,610 | 11,817 | |
| - | - | - | - | - | - | - | 1,250 | 9,175 | |
| (1) | Stock options vest in equal ratable installments on each of the first three anniversaries of the date of grant, contingent on continued employment through the applicable vesting date, and subject to accelerated vesting in certain circumstances. |
| (2) |
|
|
|
|
|
|
The market value was calculated by multiplying the closing price of our Common Stock on June |
| (4) | PBRSU awards cliff vest following the expiration of the three-year performance period upon the certification by the Compensation Committee of the Company’s achievement of |
| |
| (5) | Restricted stock units vest in equal ratable installments on each of the |
Name Michael H. Keown David G. Robson Ellen D. Iobst Scott A. Siers Thomas J. Mattei, Jr.2018. Option Awards(1) Stock Awards Number of Securities
Acquired
on Exercise(#) Value Realized on
Exercise($) Number of Shares
Acquired on Vesting(#) Value Realized on
Vesting($) 68,666 1,432,801 — — — — — — — — — — — — — — — — — —
2020.(1)If a Named Executive Officer used share withholding to pay the exercise price of stock options or to satisfy the tax obligations with respect to the vesting of restricted stock, the number of shares actually acquired was less than the amounts shown.
Stock Awards | |||||
| Name | Number of Shares Acquired on Vesting(#) | Value Realized on Vesting($) | |||
| Named Executive Officers: | |||||
| D. Deverl Maserang II | — | — | |||
| Christopher P. Mottern | 14,765 | 141,820 | |||
| Scott R. Drake | — | — | |||
| Scott R. Lyon | — | — | |||
| David G. Robson | — | — | |||
| Ronald J. Friedman | — | — | |||
| Ruben E. Inofuentes | — | — | |||
| J. Michael Walsh | — | — | |||
The Company has entered into an
However, Mr. Robson's payment listed in the table below shows the total severance amount that has been paid or will be paid to him in connection with his termination from the Company on November 4, 2019.
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 | $ | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
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 | $ | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
TotalPre-Tax Benefit | $ | 287,671 | $ | 287,671 | $ | — | $ | 1,156,369 | $ | 1,000,014 | $ | 610,889 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
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 | $ | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
TotalPre-Tax Benefit | $ | 236,593 | $ | 236,593 | $ | — | $ | 1,049,656 | $ | 928,617 | $ | 553,394 | ||||||||||||
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|
|
|
|
|
|
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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 | ||||||||||||||||||
Base Salary Continuation | $ | — | $ | — | $ | — | $ | 586,264 | $ | 586,264 | $ | 293,132 | ||||||||||||
Annual Incentive Payments | $ | 161,223 | $ | 161,223 | $ | — | $ | 161,223 | $ | 161,223 | $ | 161,223 | ||||||||||||
Value of Accelerated Stock Options | $ | 2,665 | $ | 2,665 | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Value of Accelerated Restricted Stock | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Value of Accelerated PBRSUs | $ | 14,939 | $ | 14,939 | $ | — | $ | 70,632 | $ | — | $ | — | ||||||||||||
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 | ||||||||||||
Outplacement Services | $ | — | $ | — | $ | — | $ | 25,000 | $ | 25,000 | $ | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
TotalPre-Tax Benefit | $ | 245,182 | $ | 245,182 | $ | 66,355 | $ | 940,357 | $ | 869,725 | $ | 528,331 | ||||||||||||
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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 | $ | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
TotalPre-Tax Benefit | $ | 257,366 | $ | 257,366 | $ | 63,941 | $ | 991,822 | $ | 901,577 | $ | 548,271 | ||||||||||||
|
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| |||||||||||||
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 | $1,320,000 | $1,320,000 | $660,000 |
| Annual Incentive Payments | $660,000 | $660,000 | $660,000 |
| Value of Accelerated Stock Options | - | - | - |
| Value of Accelerated Restricted Stock | - | - | - |
| Value of Accelerated PBRSUs | $279,507 | $279,507 | $279,507 |
| Health and Dental Insurance | $23,858 | $23,858 | $11,929 |
| Outplacement Services | $25,000 | $25,000 | $25,000 |
| Total Pre-Tax Benefit | $2,308,365 | $2,308,365 | $1,636,436 |
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 | $54,867 | $54,867 | - |
| Value of Accelerated Restricted Stock | - | - | - |
| Value of Accelerated PBRSUs | - | - | - |
| Health and Dental Insurance | $34,088 | $34,088 | - |
| Outplacement Services | $25,000 | $25,000 | - |
| Total Pre-Tax Benefit | $1,145,205 | $1,145,205 | - |
Scott R. Lyon | 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 | $112,500 | $112,500 | - |
| Annual Incentive Payments | $78,750 | $78,750 | - |
| Value of Accelerated Stock Options | - | - | - |
| Value of Accelerated Restricted Stock | $63,491 | $63,491 | - |
| Value of Accelerated PBRSUs | - | - | - |
| Health and Dental Insurance | $8,404 | $8,404 | - |
| Outplacement Services | - | - | - |
| Total Pre-Tax Benefit | $263,145 | $263,145 | - |
David G. Robson | 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 | - | - | $304,252 |
| Annual Incentive Payments | - | - | $21,205 |
| Value of Accelerated Stock Options | - | - | - |
| Value of Accelerated Restricted Stock | - | - | - |
| Value of Accelerated PBRSUs | - | - | - |
| Health and Dental Insurance | - | - | $11,499 |
| Outplacement Services | - | - | - |
| Total Pre-Tax Benefit | - | - | $336,956 |
Ronald J. Friedman | 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 | $324,450 | $324,450 | - |
| Annual Incentive Payments | $178,448 | $178,448 | - |
| Value of Accelerated Stock Options | - | - | - |
| Value of Accelerated Restricted Stock | - | - | - |
| Value of Accelerated PBRSUs | $50,947 | $50,947 | - |
| Health and Dental Insurance | $16,983 | $16,983 | - |
| Outplacement Services | $15,000 | $15,000 | - |
| Total Pre-Tax Benefit | $585,828 | $585,828 | - |
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 | - | - | - |
| Value of Accelerated Restricted Stock | - | - | - |
| Value of Accelerated PBRSUs | $61,495 | $61,495 | - |
| Health and Dental Insurance | $34,004 | $34,004 | - |
| Outplacement Services | $25,000 | $25,000 | - |
| Total Pre-Tax Benefit | $1,004,499 | $1,004,499 | - |
J. Michael Walsh | 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 | $315,000 | $315,000 | - |
| Annual Incentive Payments | $173,250 | $173,250 | - |
| Value of Accelerated Stock Options | - | - | - |
| Value of Accelerated Restricted Stock | - | - | - |
| Value of Accelerated PBRSUs | $67,044 | $67,044 | - |
| Health and Dental Insurance | $16,971 | $16,971 | - |
| Outplacement Services | $15,000 | $15,000 | - |
| 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, 2020 ($30.55).7.34), except for Mr. Robson, 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 generally available to all regular Company employees similarly situated in age, years of service and date of hire and do not discriminate in favor of the Named Executive Officers.
of $15,000 or $25,000, respectively.
Note that the ratio for 2020 is higher than previous years due to the size of Mr. Maserang’s initial long-term incentive award which was made in connection with his hiring, which accounts for $1,499,897 of the $2,378,855 used for our CEO’s annual total compensation calculation.
2020.
Additionally, due to our emphasis onpay-for-performance and the structure of our performance-based compensation for our CEO, his total direct compensation can be highly variable. Consequently, in years during which we exceed target objectives for our performance-based compensation programs and experience an increased stock price, the ratio of our CEO’s pay to our median employee is likely to be higher than in other periods.
PAID TO OUR NAMED EXECUTIVE OFFICERS
Statement and the related executive compensation tables for more information.
stockholders.
OF
AMENDED AND RESTATED 2017 PLAN
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 behalfform 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 ChanceryFarmer Bros. Co. Amended and Restated 2017 Long-Term Incentive Plan (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“Amended 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 approvalRestated 2017 Plan”), subject to approval by the Company’s stockholders. If stockholder approval is not obtained,stockholders at the Amendment will be made voidAnnual Meeting.
BackgroundRestated 2017 Plan to ensure that we are able to continue granting equity and Reasons for Forum SelectionBy-Law
Theequity-linked long-term incentive compensation awards to our key employees and directors. Our Board believes that the Companyeffective use of equity and itsequity-linked long-term incentive compensation awards is vital to our ability to attract, retain, reward, and motivate our key employees and directors. Our Board believes that this, in turn, may help us achieve our growth objectives and enhance stockholder value. Stockholder approval of the Amended and Restated 2017 Plan will allow us to continue to provide these incentives.
In adopting the Amendmentfact that our ability to continue to grant equity and determining that doing soequity-based compensation is vital to our ability to continue to attract and retain key personnel in the best interestslabor markets in which we compete, the Board has determined that the size of the Companyshare reserve increase under the Amended and its stockholders, the Board considered various factors, including, among others:
prevailing market practiceRestated 2017 Plan is reasonable 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
thatRestated 2017 Plan is necessary in order for us to (1) meet the Company is incorporated under the lawsstockholder approval requirements of the State of Delaware;
that the Delaware courts have developed considerable expertise in dealing with corporate law issues, as well as a substantialNASDAQ, 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(2) retain the ability to consentgrant incentive stock options (“ISOs”) beyond June 20, 2027 when the 2017 Plan would otherwise expire. If the Amended and Restated 2017 Plan is not approved, then the 2017 Plan will continue on its current terms until June 20, 2027 or, if earlier, when all shares previously approved for issuance under such plan are exhausted.
new Section 115settlement of the Delaware General Corporation Law and case law developments upholding the authoritySAR on exercise of the boardSAR with respect to such shares; and
case law developments outside of Delaware enforcing such provisions; and
the benefit of having the Board deliberate on whether(ii) made to adopt such a provision when it isindividuals who were not being proposed in response to actualemployed by 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 harmproviding services to the Company or its subsidiaries immediately prior to such transaction. Notwithstanding the foregoing, shares acquired by the exercise of substitute ISOs will count against the shares available for issuance, pursuant to the exercise of ISOs under the Amended and Restated 2017 Plan.
Thisduties and responsibilities to committees of our directors and/or officers (our Board and such committees, the “plan administrator”), subject to certain limitations that may be imposed under Section 16 of the Exchange Act, and/or stock exchange rules, as applicable. The plan administrator will have the authority to take all actions and make all determinations under the Amended and Restated 2017 Plan, to interpret the Amended and Restated 2017 Plan and to adopt, amend and repeal administrative rules, guidelines and practices as it deems advisable. The Board may correct defects and ambiguities, supply omissions and reconcile inconsistencies in the Amended and Restated 2017 Plan or any award granted thereunder. The Board’s determinations under the Amended and Restated 2017 Plan are in its sole discretion and will be final and binding on all persons having or claiming any interest in the Amended and Restated 2017 Plan or any award granted thereunder.
| 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) | 535,430 | $13.56 | 458,947 | |||
| Equity compensation plans not approved by stockholders (5) | 88,495 | $6.72 | 211,505 | |||
| Total | 623,925 | 670,452 | ||||
| (1) | Includes shares issued under the Prior Plans and the 2017 Plan. The 2017 Plan succeeded the Prior Plans. On the Effective Date of the 2017 Plan, 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. |
| (2) | Includes shares that may be issued upon the achievement of certain financial and other performance criteria as a condition to vesting in addition to time-based vesting pursuant to PBRSUs granted under the 2017 Plan. The PBRSUs included in the table include the maximum number of shares that may be issued under the awards. Under the terms of the awards, the recipient may earn between 0% and 150% of the target number of PBRSUs depending on the extent to which the Company meets or exceeds the achievement of the applicable financial performance goals. |
| (3) | Does not include outstanding PBRSUs. |
| (4) | The 2017 Plan authorizes the issuance of (i) 900,000 shares of common stock plus (ii) the number of shares of common stock subject to awards under the Company’s Prior Plans that are outstanding as of the Effective Date and that expire or are forfeited, cancelled or similarly lapse following the Effective Date. Subject to certain limitations, shares of common stock covered by awards granted under the 2017 Plan that are forfeited, expire or lapse, or are repurchased for or paid in cash, may be used again for new grants under the 2017 Plan. Shares of common stock granted under the 2017 Plan may be authorized but unissued shares, shares purchased on the open market or treasury shares. In no event will more than 900,000 shares of common stock be issuable pursuant to the exercise of incentive stock options under the 2017 Plan. The 2017 Plan provides for the grant of stock options (including incentive stock options and non-qualified stock options), stock appreciation rights, restricted stock, restricted stock units, dividend equivalents, performance shares and other stock- or cash-based awards to eligible participants. Non-employee directors of the Company and employees of the Company or any of its subsidiaries are eligible to receive awards under the 2017 Plan. |
| (5) | Consists of grants made under the Farmer Bros. Co. 2020 Inducement Incentive Award Plan (the “Inducement Award Plan”), which in accordance with Rule 5635(c |
The Board is committed to strong corporate governance practices, as evidenced by this proposal. A descriptionpresence of our key corporate governance practices appears under “Corporate Governance” above.
Vote Required
Thea quorum, 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 thereatat the Annual Meeting is required to approve the Amendment.Amended and Restated 2017 Plan. 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 votedhave no effect on the proposal are not entitledvote outcome.
limited share reserve remaining under the 2017 Plan. The Board believes that the effective use of equity-based long-term incentive compensation will be integral to the Company’s success in the past, and that a continued link between participants’ pay and stockholder returns will be vital to its future performance.
APPROVAL OF THE COMPANY’S FORUM SELECTIONBY-LAW.
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In
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 | ||
Form of Non-Employee Director |
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| $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 | |||
| Annual Equity Award Value | $65,000 | |||
| Expense Reimbursement | Payment or reimbursement of reasonable travel expenses from outside the greater Dallas-Fort Worth area, in accordance with Company policy, incurred in connection with attendance at Board and committee meetings, as well as payment or reimbursement of amounts incurred in connection with director continuing education | |||
| Other | ||||
| ||||
Director Compensation Table
Director(1) | Fees Earned or Paid in Cash($) | Stock Awards($)(2) | Change in Pension Value ($)(3) | All Other Compensation ($)(4) | Total( $) | |||||||||||||||
Hamideh Assadi | 48,750 | — | — | 2,471 | 51,221 | |||||||||||||||
Guenter W. Berger | 44,500 | — | — | 17,777 | 62,277 | |||||||||||||||
Allison M. Boersma | 38,750 | 65,014 | — | — | 103,764 | |||||||||||||||
Randy E. Clark | 122,000 | 65,014 | — | — | 187,014 | |||||||||||||||
Jeanne Farmer Grossman | 58,500 | 65,014 | — | — | 123,514 | |||||||||||||||
Charles F. Marcy | 96,250 | 65,014 | — | — | 161,264 | |||||||||||||||
Christopher P. Mottern | 108,000 | 65,014 | — | — | 173,014 | |||||||||||||||
David W. Ritterbush | 37,500 | 65,014 | — | — | 102,514 | |||||||||||||||
| Director | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Change in Pension Value ($)(2) | All Other Compensation ($)(3) | Total ($) | |||||
| Hamideh Assadi | 35,000 | — | 2,075 | 2,457 | 39,532 | |||||
| Allison M. Boersma | 61,875 | 64,992 | — | — | 126,867 | |||||
| Randy E. Clark | 82,500 | 64,992 | — | — | 147,492 | |||||
| Stacy Loretz-Congdon | 73,125 | 64,992 | — | — | 138,117 | |||||
| Charles F. Marcy | 63,125 | 64,992 | — | — | 128,117 | |||||
| David W. Ritterbush | 56,250 | 64,992 | — | — | 121,242 | |||||
| (1) |
|
Represents the full grant date fair value of restricted stock granted to eachnon-employee director in fiscal |
| (2) | Represents the aggregate change in the actuarial present value of the accumulated benefit under all defined benefit and actuarial pension plans from the pension plan measurement date used for financial statement reporting purposes with respect to the Company’s audited consolidated financial statements for the fiscal year ended June 30, |
| (3) | All Other Compensation for Ms. Assadi includes life insurance premiums paid by the Company under the Company’s postretirement death benefit plan ($2,030) and the economic benefit of the associated life insurance policy ($ |
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 anon-executive employee of the Company in the position of Vice President, Construction Management through January 31, 2017, when his position was eliminated. Pursuant to a confidential general release and separation agreement entered into in fiscal 2017 between the Company and Mr. Waite, in fiscal 2018 the Company paid Mr. Waite an aggregate of $214,802, less required taxes and withholdings, consisting of: (i) severance benefits of $181,784; (ii) a prorated bonus award under the Company’s short-term incentive plan fornon-executive employees of $32,403 (paid in fiscal 2018 for fiscal 2017 performance); and (iii) $615 representing the Company’s 401(k) match for fiscal 2017 service. Receipt of severance and the foregoing benefits was conditioned upon, among other things, Mr. Waite having executed a general release of claims in favor of the Company.
2020.
Allison M. Boersma
Randy E. Clark
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 2019 | ||||||
| Audit Fees | $ | 1,129,472 | $ | 1,154,000 | ||||
| Audit-Related Fees | — | — | ||||||
| Tax Fees | 23,100 | 55,093 | ||||||
| All Other Fees | — | 2,051 | ||||||
| Total Fees | $ | 1,152,572 | $ | 1,211,144 | ||||
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, and services associated with an SEC registration statement.
Audit-Related Fees
tool.
The 20182020 Annual Report to Stockholders (which includes the Company’s 20182020 Form10-K) accompanies this Proxy Statement. The 20182020 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 20182020 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 20182020 Form10-K is also available online at the Company’s website,www.farmerbros.com.A list of exhibits is included in the Company’s 20182020 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.
| By Order of the Board of Directors | |
| October 27, 2020 | ||
| ||
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
PRELIMINARY PROXY MATERIAL SUBJECT TO COMPLETION
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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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The Board of Directors recommends that stockholders vote “FOR” Proposal Nos. 2, 3 and 4 listed below.
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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.
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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 [●], 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.
