Wednesday 29 May 2024
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Farmer Bros. enters Cooperation Agreement with Stockholders JCP Investment and 22NW

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NORTHLAKE, Texas, USA – Farmer Bros. Co. has entered into a cooperation agreement (the “Cooperation Agreement”) with JCP Investment Management, LLC (collectively with its affiliates, “JCP”) and 22NW, LP (collectively with its affiliates, “22NW”), which together own approximately 15.7% of the Company’s outstanding common stock. Under the Cooperation Agreement, the Company has agreed to promptly appoint Bradley L. Radoff as an independent member of the Board of Directors (the “Board”).

The Company will also include Mr. Radoff and an additional independent nominee from JCP’s nomination notice (the “Second New Director”) on its slate of candidates standing for election at the 2022 Annual Meeting of Stockholders (the “2022 Annual Meeting”).

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Upon election to the Board, the Second New Director will fill a vacancy created by the retirement of Charles F. Marcy from the Board at the 2022 Annual Meeting. Following the 2022 Annual Meeting, Christopher P. Mottern will retire from the Board, effective as of June 30, 2023. The size of the Board will not exceed eight after Mr. Mottern’s retirement.

Farmer Bros. Co. also agreed to form a new committee of the Board tasked with reviewing strategic alternatives and capital allocation initiatives promptly following the 2022 Annual Meeting. Both Mr. Radoff and the Second New Director will serve on the newly formed committee as well as the Nominating and Corporate Governance Committee.

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Additionally, JCP has agreed to withdraw its notice of intent to nominate director candidates for election at the 2022 Annual Meeting and both JCP and 22NW have agreed to cease all solicitation and other activities in connection with the 2022 Annual Meeting. During the term of the Cooperation Agreement, JCP and 22NW have also agreed to customary standstill provisions and voting commitments.

“Chris and Chuck have provided thoughtful leadership, perspective and guidance to the Board during their tenures. We are grateful for their contributions and wish them the best,” said D. Deverl Maserang II, President and Chief Executive Officer of the Company.

“The Company would also like to welcome Brad to the Board. He brings extensive financial and investment knowledge, a track record of value creation and significant experience serving on the board of directors of public companies. We also look forward to continuing to work with our stockholders, JCP and 22NW, going forward.”

“We appreciate the collaborative and constructive approach taken by the Board in reaching this agreement. The Board’s addition of two new independent directors and its commitment to maximizing stockholder value excite us about the Company’s future,” said James C. Pappas of JCP. “We look forward to continued collaboration with the Company to unlock value,” commented Aron English of 22NW.

The complete Cooperation Agreement will be filed by the Company with the U.S. Securities and Exchange Commission (the “SEC”) as an exhibit to a Current Report on Form 8-K.

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