FORM 10-Q
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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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£
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FARMER BROS. CO.
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(exact name of registrant as specified in its charter)
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Delaware
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95-0725980
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(State of Incorporation)
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(I.R.S. Employer Identification No.)
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20333 South Normandie Avenue, Torrance, California 90502
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(address of principal executive offices, Zip code)
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Registrant’s telephone number, including area code:
(310) 787-5200
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Large accelerated filer
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£
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Accelerated filer
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ý
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Non-accelerated filer
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£
(Do not check if a smaller reporting company)
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Smaller reporting company
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£
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Page
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September 30, 2012
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June 30, 2012
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||||
ASSETS
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(Unaudited)
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Current assets:
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Cash and cash equivalents
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$
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2,545
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$
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3,906
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Short-term investments
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20,591
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21,021
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Accounts and notes receivable, net
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43,139
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40,736
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Inventories
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69,924
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65,981
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Income tax receivable
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388
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762
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Prepaid expenses
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3,091
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3,445
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Total current assets
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139,678
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135,851
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Property, plant and equipment, net
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103,315
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108,135
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Intangible assets, net
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7,272
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7,615
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Other assets
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3,138
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2,904
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Deferred income taxes
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854
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854
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Total assets
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$
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254,257
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$
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255,359
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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Accounts payable
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$
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29,201
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$
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27,676
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Accrued payroll expenses
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19,704
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20,494
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Short-term borrowings under revolving credit facility
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24,996
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29,126
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Short-term obligations under capital leases
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3,683
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3,737
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Deferred income taxes
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1,480
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1,480
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Other current liabilities
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10,148
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10,176
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Total current liabilities
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89,212
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92,689
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Accrued postretirement benefits
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34,970
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34,557
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Other long-term liabilities—capital leases
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11,368
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12,130
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Accrued pension liabilities
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41,539
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42,513
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Accrued workers’ compensation liabilities
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4,131
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4,131
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Deferred income taxes
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607
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607
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Total liabilities
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$
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181,827
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$
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186,627
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Commitments and contingencies
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Stockholders’ equity:
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Preferred stock, $1.00 par value, 500,000 shares authorized and none issued
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$
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—
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$
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—
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Common stock, $1.00 par value, 25,000,000 shares authorized; 16,314,154 and 16,308,859 issued and outstanding at September 30, 2012 and June 30, 2012, respectively
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16,314
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16,309
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Additional paid-in capital
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35,653
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34,834
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Retained earnings
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103,329
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100,455
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Unearned ESOP shares
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(25,637
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)
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(25,637
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)
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Less accumulated other comprehensive loss
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(57,229
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)
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(57,229
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)
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Total stockholders’ equity
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$
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72,430
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$
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68,732
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Total liabilities and stockholders’ equity
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$
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254,257
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$
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255,359
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Three Months Ended September 30,
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2012
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2011
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Net sales
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$
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119,153
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$
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121,197
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Cost of goods sold
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74,532
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81,512
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Gross profit
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44,621
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39,685
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Selling expenses
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37,271
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35,681
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General and administrative expenses
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8,893
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8,634
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Operating expenses
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46,164
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44,315
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Loss from operations
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(1,543
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)
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(4,630
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)
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Other income (expense):
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Dividend income
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259
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359
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Interest income
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92
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15
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Interest expense
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(457
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(575
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Other, net
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4,945
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(2,407
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Total other income (expense)
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4,839
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(2,608
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Income (loss) before taxes
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3,296
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(7,238
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)
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Income tax expense
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422
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346
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Net income (loss)
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$
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2,874
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$
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(7,584
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)
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Net income (loss) per common share—basic and diluted
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$
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0.19
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$
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(0.50
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Weighted average common shares outstanding—basic and diluted
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15,490,365
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15,182,147
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Cash dividends declared per common share
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$
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—
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$
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—
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Three Months Ended September 30,
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2012
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2011
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Net income (loss)
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$
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2,874
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$
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(7,584
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)
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Other comprehensive income (loss), net of tax:
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Retiree benefits, net of income taxes
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—
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—
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Total comprehensive income (loss)
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$
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2,874
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$
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(7,584
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)
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Three Months Ended September 30,
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2012
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2011
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Cash flows from operating activities:
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Net income (loss)
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$
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2,874
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$
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(7,584
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)
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Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
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Depreciation and amortization
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8,340
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7,923
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Provision for doubtful accounts
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(922
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590
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(Gain) loss on sales of assets
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(3,213
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)
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98
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ESOP and share-based compensation expense
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823
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790
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Net (gain) loss on investments
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(802
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2,621
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Change in operating assets and liabilities:
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Short-term investments
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1,232
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6,059
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Accounts and notes receivable
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(1,481
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)
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(1,643
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)
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Inventories
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(3,943
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)
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(3,192
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)
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Income tax receivable
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374
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287
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Prepaid expenses and other assets
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120
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543
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Accounts payable
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1,863
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(3,650
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)
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Accrued payroll, expenses and other liabilities
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(834
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(147
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)
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Accrued postretirement benefits
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412
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327
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Other long-term liabilities
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(1,191
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)
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(3,055
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)
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Net cash provided by (used in) operating activities
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$
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3,652
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$
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(33
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)
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Cash flows from investing activities:
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Purchases of property, plant and equipment
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(3,572
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(2,910
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)
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Proceeds from sales of property, plant and equipment
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3,786
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198
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Net cash provided by (used in) investing activities
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$
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214
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$
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(2,712
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)
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Cash flows from financing activities:
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Proceeds from revolving credit facility
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4,800
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8,400
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Repayments on revolving credit facility
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(9,250
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)
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(6,800
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)
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Payments of capital lease obligations
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(777
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)
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(384
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)
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Net cash (used in) provided by financing activities
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$
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(5,227
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)
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$
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1,216
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Net decrease in cash and cash equivalents
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$
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(1,361
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)
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$
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(1,529
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)
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Cash and cash equivalents at beginning of period
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3,906
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6,081
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Cash and cash equivalents at end of period
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$
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2,545
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$
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4,552
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•
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Level 1—Valuation is based upon quoted prices for identical instruments traded in active markets.
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•
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Level 2—Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.
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•
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Level 3—Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.
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As of September 30, 2012 (Unaudited)
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Total
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Level 1
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Level 2
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Level 3
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||||||||
Preferred stock(1)
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$
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20,214
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$
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14,856
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$
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5,358
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$
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—
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Futures, options and other derivative assets(1)
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$
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377
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$
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—
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$
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377
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$
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—
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Derivative liabilities
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$
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—
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$
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—
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|
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$
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—
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|
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$
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—
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As of June 30, 2012
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Total
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Level 1
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Level 2
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Level 3
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||||||||
Preferred stock(1)
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$
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19,395
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$
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14,078
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$
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5,317
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|
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$
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—
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Futures, options and other derivatives(1)
|
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$
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1,626
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$
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—
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|
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$
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1,626
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|
|
$
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—
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|
Derivative liabilities(2)
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|
$
|
410
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|
|
$
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—
|
|
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$
|
410
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|
|
$
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—
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|
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Three Months Ended
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||||||
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September 30,
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||||||
(In thousands)
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2012
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2011
|
||||
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(Unaudited)
|
||||||
Coffee-related derivatives:
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|
|
|
|
||||
Unrealized gains
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$
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1,157
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|
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$
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—
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Unrealized losses
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(10
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)
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|
(2,740
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)
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Realized gains
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381
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59
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Realized losses
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(825
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)
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(1,012
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)
|
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Net realized and unrealized gains (losses)
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703
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(3,693
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)
|
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Net gains (losses) from sales of assets
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3,213
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(98
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)
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Other gains, net
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1,029
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|
|
1,384
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|
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Other, net
|
|
$
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4,945
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|
|
$
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(2,407
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)
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September 30, 2012 (Unaudited)
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||||||||||||||
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Less than 12 Months
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Total
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||||||||||||
(In thousands)
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Fair Value
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Unrealized Loss
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Fair Value
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Unrealized Loss
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||||||||
Preferred stock
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$
|
445
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|
|
$
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(3
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)
|
|
$
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1,806
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|
|
$
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(46
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)
|
|
|
|
|
|
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June 30, 2012
|
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Less than 12 Months
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Total
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||||||||||||
(In thousands)
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Fair Value
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|
Unrealized Loss
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|
Fair Value
|
|
Unrealized Loss
|
||||||||
Preferred stock
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|
$
|
1,750
|
|
|
$
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(16
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)
|
|
$
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2,891
|
|
|
$
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(40
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)
|
|
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As of
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||||||
(In thousands)
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|
September 30, 2012
|
|
June 30, 2012
|
||||
|
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(Unaudited)
|
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|
||||
Trade receivables
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|
$
|
43,024
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|
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$
|
40,687
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|
Other receivables
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|
1,065
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|
|
1,921
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|
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Allowance for doubtful accounts
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(950
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)
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|
(1,872
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)
|
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Accounts and notes receivable, net
|
|
$
|
43,139
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|
|
$
|
40,736
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|
|
|
|
|
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Processed
|
|
Unprocessed
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|
Total
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||||||
September 30, 2012 (Unaudited)
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(In thousands)
|
||||||||||
Coffee
|
|
$
|
15,825
|
|
|
$
|
14,607
|
|
|
$
|
30,432
|
|
Tea and culinary products
|
|
24,621
|
|
|
4,580
|
|
|
29,201
|
|
|||
Coffee brewing equipment
|
|
5,066
|
|
|
5,225
|
|
|
10,291
|
|
|||
|
|
$
|
45,512
|
|
|
$
|
24,412
|
|
|
$
|
69,924
|
|
|
|
|
|
|
|
|
||||||
|
|
Processed
|
|
Unprocessed
|
|
Total
|
||||||
June 30, 2012
|
|
(In thousands)
|
||||||||||
Coffee
|
|
$
|
15,485
|
|
|
$
|
11,836
|
|
|
$
|
27,321
|
|
Tea and culinary products
|
|
24,502
|
|
|
4,817
|
|
|
29,319
|
|
|||
Coffee brewing equipment
|
|
3,977
|
|
|
5,364
|
|
|
9,341
|
|
|||
|
|
$
|
43,964
|
|
|
$
|
22,017
|
|
|
$
|
65,981
|
|
|
Three Months Ended
September 30, |
||||||
|
2012
|
|
2011
|
||||
(In thousands)
|
(Unaudited)
|
||||||
Service cost
|
$
|
119
|
|
|
$
|
124
|
|
Interest cost
|
1,449
|
|
|
1,525
|
|
||
Expected return on plan assets
|
(1,660
|
)
|
|
(1,703
|
)
|
||
Amortization of net (gain) loss*
|
387
|
|
|
342
|
|
||
Amortization of prior service cost (credit)*
|
5
|
|
|
5
|
|
||
Net periodic benefit cost
|
$
|
300
|
|
|
$
|
293
|
|
*
|
These amounts represent the estimated portion of the net (gain) loss and net prior service cost (credit) remaining in accumulated other comprehensive income that is expected to be recognized as a component of net periodic benefit cost over the current fiscal year.
|
|
Fiscal
|
||
|
2013
|
|
2012
|
Discount rate
|
4.55%
|
|
5.60%
|
Expected long-term rate of return
|
8.00%
|
|
8.25%
|
Rate of compensation increase *
|
—%
|
|
3.00%
|
|
|
Three Months Ended September 30,
|
||||||
(In thousands)
|
|
2012
|
|
2011
|
||||
Components of Net Periodic Postretirement Benefit Cost
|
|
(Unaudited)
|
||||||
Service cost
|
|
$
|
409
|
|
|
$
|
409
|
|
Interest cost
|
|
330
|
|
|
330
|
|
||
Expected return on plan assets
|
|
—
|
|
|
—
|
|
||
Amortization of net gain
|
|
(199
|
)
|
|
(199
|
)
|
||
Amortization of unrecognized transition (asset) obligation
|
|
—
|
|
|
—
|
|
||
Amortization of prior service cost (credit)
|
|
(58
|
)
|
|
(58
|
)
|
||
Net periodic postretirement benefit cost
|
|
$
|
482
|
|
|
$
|
482
|
|
|
Fiscal
|
||
|
2013
|
|
2012
|
Discount rate
|
5.46%
|
|
5.46%
|
Outstanding Stock Options
|
|
Number
of
Stock
Options
|
|
Weighted
Average
Exercise
Price ($)
|
|
Weighted
Average
Grant Date
Fair Value ($)
|
|
Weighted
Average
Remaining
Life
(Years)
|
|
Aggregate
Intrinsic
Value
(Dollars in thousands)
|
|
Outstanding at June 30, 2012
|
|
667,235
|
|
|
12.84
|
|
4.78
|
|
4.8
|
|
143
|
Granted
|
|
—
|
|
|
—
|
|
—
|
|
0
|
|
—
|
Cancelled/forfeited
|
|
(122,455
|
)
|
|
12.82
|
|
4.12
|
|
0
|
|
—
|
Outstanding at September 30, 2012
|
|
544,780
|
|
|
12.84
|
|
4.93
|
|
5.4
|
|
404
|
|
|
|
|
|
|
|
|
|
|
|
|
Vested and exercisable, September 30, 2012
|
|
206,600
|
|
|
16.28
|
|
6.14
|
|
4.5
|
|
—
|
Vested and expected to vest, September 30, 2012
|
|
524,744
|
|
|
12.84
|
|
4.96
|
|
5.4
|
|
367
|
Outstanding and Nonvested Restricted Stock Awards
|
|
Shares
Awarded
|
|
Weighted
Average
Grant Date
Fair Value
($)
|
|
Weighted
Average
Remaining
Life
(Years)
|
|
Aggregate
Intrinsic
Value
($ in thousands)
|
|||
Outstanding June 30, 2012
|
|
175,947
|
|
|
10.16
|
|
|
1.9
|
|
1,401
|
|
Granted
|
|
6,830
|
|
|
9.06
|
|
|
|
|
62
|
|
Vested
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
Cancelled/forfeited
|
|
(1,535
|
)
|
|
10.56
|
|
|
—
|
|
|
|
Outstanding at September 30, 2012
|
|
181,242
|
|
|
10.12
|
|
|
1.7
|
|
1,724
|
|
|
|
|
|
|
|
|
|
|
|||
Expected to vest, September 30, 2012
|
|
181,242
|
|
|
10.12
|
|
|
1.7
|
|
1,724
|
|
(In thousands)
|
|
Three Months Ended
|
||||||
|
|
September 30, 2012
|
|
|
September 30, 2011
|
|
||
|
|
(Unaudited)
|
||||||
Income (loss) before taxes
|
|
$
|
3,296
|
|
|
$
|
(7,238
|
)
|
Income tax expense (benefit) at statutory rate
|
|
$
|
1,121
|
|
|
$
|
(2,461
|
)
|
State income tax (net of federal tax benefit)
|
|
429
|
|
|
(280
|
)
|
||
Dividend income exclusion
|
|
—
|
|
|
(50
|
)
|
||
Valuation allowance
|
|
(1,235
|
)
|
|
3,082
|
|
||
Other permanent items
|
|
107
|
|
|
55
|
|
||
Income tax expense
|
|
$
|
422
|
|
|
$
|
346
|
|
|
|
As of
|
||||||
(In thousands)
|
|
September 30,
2012
|
|
June 30,
2012
|
||||
|
|
(Unaudited)
|
|
|
||||
Total unrecognized tax benefits*
|
|
$
|
3,211
|
|
|
$
|
3,211
|
|
Unrecognized benefits that, if recognized, would affect the Company's effective tax rate, subject to the valuation allowance*
|
|
$
|
3,064
|
|
|
$
|
3,064
|
|
(In thousands, except share and per share amounts)
|
|
Three Months Ended September 30,
|
||||||
|
2012
|
|
2011
|
|||||
|
|
(Unaudited)
|
||||||
Net income (loss) attributable to common stockholders—basic
|
|
$
|
2,841
|
|
|
$
|
(7,544
|
)
|
Net income (loss) attributable to nonvested restricted stockholders
|
|
33
|
|
|
(40
|
)
|
||
Total net income (loss)
|
|
$
|
2,874
|
|
|
$
|
(7,584
|
)
|
|
|
|
||||||
Weighted average shares outstanding—basic
|
|
15,490,365
|
|
|
15,182,147
|
|
||
Effect of dilutive securities:
|
|
|
|
|
||||
Shares issuable under stock options
|
|
—
|
|
|
—
|
|
||
Weighted average shares outstanding—diluted
|
|
15,490,365
|
|
|
15,182,147
|
|
||
Net income (loss) per common share—basic and diluted
|
|
$
|
0.19
|
|
|
$
|
(0.50
|
)
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
September 30, 2012
|
|
June 30, 2012
|
||||
(In thousands)
|
|
(Unaudited)
|
|
|
||||
Current assets
|
|
$
|
139,678
|
|
|
$
|
135,851
|
|
Current liabilities
|
|
89,212
|
|
|
92,689
|
|
||
Working capital
|
|
$
|
50,466
|
|
|
$
|
43,162
|
|
|
|
Three Months Ended September 30,
|
|||||||
(In thousands)
|
|
2012
|
|
2011
|
|
||||
|
|
(Unaudited)
|
|
||||||
|
|
|
|
||||||
Capital expenditures
|
|
$
|
3,572
|
|
|
$
|
2,910
|
|
|
|
|
Three Months Ended September 30,
|
||||||
(In thousands)
|
|
2012
|
|
2011
|
||||
|
|
(Unaudited)
|
||||||
Net income (loss), as reported(1)
|
|
$
|
2,874
|
|
|
$
|
(7,584
|
)
|
Income tax expense
|
|
422
|
|
|
346
|
|
||
Interest expense
|
|
457
|
|
|
575
|
|
||
Depreciation and amortization expense
|
|
8,340
|
|
|
7,923
|
|
||
ESOP and share-based compensation expense
|
|
823
|
|
|
790
|
|
||
Net (gain) loss on derivatives and investments
|
|
(802
|
)
|
|
2,621
|
|
||
EBITDAE(1)
|
|
$
|
12,114
|
|
|
$
|
4,671
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
(Unaudited)
|
|
Market Value of
Preferred
Securities at
September 30, 2012
|
|
Change in Market
Value
|
||||
Interest Rate Changes
|
|
(In thousands)
|
||||||
–150 basis points
|
|
$
|
20,997
|
|
|
$
|
783
|
|
–100 basis points
|
|
$
|
20,792
|
|
|
$
|
578
|
|
Unchanged
|
|
$
|
20,214
|
|
|
$
|
—
|
|
+100 basis points
|
|
$
|
19,444
|
|
|
$
|
(770
|
)
|
+150 basis points
|
|
$
|
19,081
|
|
|
$
|
(1,133
|
)
|
(Unaudited)
|
|
Interest Rate
|
|
Annual Interest Expense
|
|||
Interest Rate Changes
|
|
|
|
(In thousands)
|
|||
–150 basis points
|
|
1.23
|
%
|
|
$
|
310
|
|
–100 basis points
|
|
1.73
|
%
|
|
$
|
436
|
|
Unchanged
|
|
2.73
|
%
|
|
$
|
688
|
|
+100 basis points
|
|
3.73
|
%
|
|
$
|
939
|
|
+150 basis points
|
|
4.23
|
%
|
|
$
|
1,065
|
|
(Unaudited)
|
|
Market Value
|
|
(Decrease) Increase in Market Value
|
||||||||||||||||
|
|
Coffee
Inventory
|
|
Futures &
Options
|
|
Total
|
|
Derivatives
|
|
Inventory
|
||||||||||
Coffee Cost (Decrease) Increase
|
|
|
||||||||||||||||||
|
|
(In thousands)
|
||||||||||||||||||
– 10%
|
|
$
|
27,000
|
|
|
$
|
(40
|
)
|
|
$
|
26,960
|
|
|
$
|
(40
|
)
|
|
$
|
(3,432
|
)
|
Unchanged
|
|
$
|
30,432
|
|
|
$
|
377
|
|
|
$
|
30,809
|
|
|
$
|
—
|
|
|
$
|
—
|
|
+10%
|
|
$
|
33,000
|
|
|
$
|
40
|
|
|
$
|
33,040
|
|
|
$
|
40
|
|
|
$
|
2,568
|
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
•
|
increase our vulnerability to general adverse economic and industry conditions;
|
•
|
require us to dedicate a portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow for other purposes, including funding daily operations, investing in future business opportunities and capital expenditures;
|
•
|
limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate thereby placing us at a competitive disadvantage compared to our competitors that may have less debt or debt with less restrictive debt covenants;
|
•
|
limit, by the financial and other restrictive covenants in our loan agreement, our ability to borrow additional funds; and
|
•
|
have a material adverse effect on us if we fail to comply with the covenants in our loan agreement because such failure could result in an event of default which, if not cured or waived, could result in our indebtedness becoming immediately due and payable.
|
•
|
incur additional indebtedness;
|
•
|
pay dividends on or make distributions in respect of capital stock or make certain other restricted payments or investments;
|
•
|
sell assets;
|
•
|
create liens on certain assets to secure debt; and
|
•
|
consolidate, merge, sell or otherwise dispose of all or substantially all of our assets.
|
•
|
seek additional financing in the debt or equity markets;
|
•
|
refinance or restructure all or a portion of our indebtedness;
|
•
|
sell selected assets; or
|
•
|
reduce or delay planned capital or operating expenditures.
|
Item 6.
|
Exhibits
|
|
|
|
|
|
|
|
F
ARMER
B
ROS
. C
O
.
|
||||
|
|
|
|||
|
By:
|
|
/
S
/ MICHAEL H. KEOWN
|
||
|
|
|
Michael H. Keown
President and Chief Executive Officer (chief executive officer) Date: November 5, 2012 |
||
|
|
|
|||
|
By:
|
|
/S/ JEFFREY A. WAHBA
|
||
|
|
|
Jeffrey A. Wahba
Treasurer and Chief Financial Officer (principal financial and accounting officer) Date: November 5, 2012 |
||
|
|
|
|||
|
|
|
|
||
|
|
|
|
3.1
|
|
Certificate of Incorporation (filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009 filed with the SEC on May 11, 2009 and incorporated herein by reference).
|
|
|
|
3.2
|
|
Amended and Restated Bylaws (filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on April 25, 2011 and incorporated herein by reference).
|
|
|
|
4.1
|
|
Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock (filed as Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 filed with the SEC on May 10, 2010 and incorporated herein by reference).
|
|
|
|
4.2
|
|
Rights Agreement, dated March 17, 2005, by and between Farmer Bros. Co. and Wells Fargo Bank, N.A., as Rights Agent (filed as Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 filed with the SEC on May 10, 2010 and incorporated herein by reference).
|
|
|
|
4.3
|
|
Specimen Stock Certificate (filed as Exhibit 4.1 to the Company’s Form 8-A/A filed with the SEC on February 6, 2009 and incorporated herein by reference).
|
10.1
|
|
Amended and Restated Loan and Security Agreement, dated September 12, 2011, by and among Farmer Bros. Co. and Coffee Bean International, Inc., as Borrowers, Coffee Bean Holding Co., Inc. and FBC Finance Company, as Guarantors, the Lenders party thereto, and Wells Fargo Bank, National Association, as Agent (filed as Exhibit 10.12 to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2011 filed with the SEC on September 12, 2011 and incorporated herein by reference).
|
|
|
|
10.2
|
|
Amendment No. 1 to Amended and Restated Loan and Security Agreement, effective January 9, 2012, by and among Farmer Bros. Co. and Coffee Bean International, Inc., as Borrowers, Coffee Bean Holding Co., Inc. and FBC Finance Company, as Guarantors, the Lenders party thereto, and Wells Fargo Bank, National Association, as Agent (filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2011 filed with the SEC on February 8, 2012 and incorporated herein by reference).
|
|
|
|
10.3
|
|
Farmer Bros. Co. Pension Plan for Salaried Employees (filed herewith).*
|
|
|
|
10.4
|
|
Amendment No. 1 to Farmer Bros. Co. Retirement Plan effective June 30, 2011 (filed as Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2011 filed with the SEC on September 12, 2011 and incorporated herein by reference).*
|
|
|
|
10.5
|
|
Farmer Bros. Co. 2005 Incentive Compensation Plan (Amended and Restated as of December 31, 2008) (filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2008 filed with the SEC on February 10, 2009 and incorporated herein by reference).*
|
|
|
|
10.6
|
|
Farmer Bros. Co. Amended and Restated Employee Stock Ownership Plan, as adopted by the Board of Directors on December 9, 2010 and effective as of January 1, 2010 (filed as Exhibit 10.12 to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2010 filed with the SEC on February 9, 2011 and incorporated herein by reference).*
|
10.7
|
|
Action of the Administrative Committee of the Farmer Bros. Co. qualified Employee Retirement Plans amending the Farmer Bros. Co. Amended and Restated Employee Stock Ownership Plan, effective as of January 1, 2012 (filed herewith).
|
|
|
|
10.8
|
|
ESOP Loan Agreement including ESOP Pledge Agreement and Promissory Note, dated March 28, 2000, between Farmer Bros. Co. and Wells Fargo Bank, N.A., Trustee for the Farmer Bros Co. Employee Stock Ownership Plan (filed as Exhibit 10.13 to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2010 filed with the SEC on February 9, 2011 and incorporated herein by reference).
|
|
|
10.9
|
|
Amendment No. 1 to ESOP Loan Agreement, dated June 30, 2003, between Farmer Bros. Co. and Wells Fargo Bank, N.A., Trustee for the Farmer Bros Co. Employee Stock Ownership Plan (filed as Exhibit 10.14 to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2010 filed with the SEC on February 9, 2011 and incorporated herein by reference).
|
|
|
|
10.10
|
|
ESOP Loan Agreement No. 2 including ESOP Pledge Agreement and Promissory Note, dated July 21, 2003 between Farmer Bros. Co. and Wells Fargo Bank, N.A., Trustee for the Farmer Bros Co. Employee Stock Ownership Plan (filed as Exhibit 10.15 to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2010 filed with the SEC on February 9, 2011 and incorporated herein by reference).
|
|
|
|
10.11
|
|
Separation Agreement, dated as of April 1, 2011, by and between Farmer Bros. Co. and Roger M. Laverty III (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 6, 2011 and incorporated herein by reference).*
|
|
|
|
10.12
|
|
Employment Agreement, dated March 9, 2012, by and between Farmer Bros. Co. and Michael H. Keown (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 13, 2012 and incorporated herein by reference).*
|
|
|
|
10.13
|
|
Amended and Restated Employment Agreement, effective as of April 19, 2011, by and between Farmer Bros. Co. and Jeffrey A. Wahba (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 23, 2011 and incorporated herein by reference).*
|
|
|
|
10.14
|
|
Amendment No. 1 to Amended and Restated Employment Agreement, dated as of August 30, 2011, by and between Farmer Bros. Co. and Jeffrey A. Wahba (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 2, 2011 and incorporated herein by reference).*
|
|
|
|
10.15
|
|
Second Amended and Restated Employment Agreement, effective as of February 13, 2012, by and between
Farmer Bros. Co. and Jeffrey A. Wahba (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K
filed with the SEC on February 17, 2012 and incorporated herein by reference).*
|
|
|
|
10.16
|
|
Letter Agreement, effective as of April 19, 2011, by and between Farmer Bros. Co. and Mark A. Harding (filed
as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on May 23, 2011 and
incorporated herein by reference).*
|
|
|
|
10.17
|
|
Employment Agreement, dated as of April 4, 2012, by and between Farmer Bros. Co. and Thomas W.
Mortensen (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K/A filed with the SEC on April
10, 2012 and incorporated herein by reference).*
|
|
|
|
10.18
|
|
Employment Agreement, effective as of April 19, 2011, by and between Farmer Bros. Co. and Patrick G. Criteser (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on May 23, 2011 and incorporated herein by reference).*
|
|
|
|
10.19
|
|
Amended and Restated Employment Agreement, effective as of February 13, 2012, by and between Farmer
Bros. Co. and Patrick G. Criteser (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed
with the SEC on February 17, 2012 and incorporated herein by reference).*
|
|
|
|
10.20
|
|
Employment Agreement, dated as of December 1, 2010, by and between Farmer Bros. Co. and Larry B. Garrett (filed as Exhibit 10.29 to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2011 filed with the SEC on September 12, 2011 and incorporated herein by reference).*
|
|
|
|
10.21
|
|
Resignation Agreement, dated as of July 20, 2012, by and between Farmer Bros. Co. and Larry B. Garrett (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K/A filed with the SEC on July 24, 2012 and incorporated herein by reference).*
|
|
|
|
10.22
|
|
2007 Omnibus Plan (filed as Exhibit 10.22 to the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2012 filed with the SEC on September 10, 2012 and incorporated herein by reference).*
|
|
|
|
10.23
|
|
Form of 2007 Omnibus Plan Stock Option Grant Notice and Stock Option Agreement (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 26, 2008 and incorporated herein by reference).*
|
|
|
|
10.24
|
|
Form of 2007 Omnibus Plan Restricted Stock Award Grant Notice and Restricted Stock Award Agreement (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on February 26, 2008 and incorporated herein by reference).*
|
|
|
|
10.25
|
|
Stock Ownership Guidelines for Directors and Executive Officers (filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on February 26, 2008 and incorporated herein by reference).*
|
|
|
|
10.26
|
|
Form of Award Letter (Fiscal 2012) under Farmer Bros. Co. 2005 Incentive Compensation Plan (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on September 24, 2012 and incorporated herein by reference).*
|
|
|
|
10.27
|
|
Form of Target Award Notification Letter (Fiscal 2013) under Farmer Bros. Co. 2005 Incentive Compensation Plan (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on September 28, 2012 and incorporated herein by reference).*
|
|
|
|
10.28
|
|
Form of Target Award Notification Letter (Fiscal 2012) under Farmer Bros. Co. 2005 Incentive Compensation Plan (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on September 21, 2011 and incorporated herein by reference).*
|
|
|
|
10.29
|
|
Form of Change in Control Severance Agreement for Executive Officers of the Company (with schedule of executive officers attached) (filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K/A filed with the SEC on April 10, 2012 and incorporated herein by reference).*
|
|
|
|
10.30
|
|
Form of Indemnification Agreement for Directors and Officers of the Company, as adopted on May 18, 2006 and as amended on December 31, 2008 (with schedule of indemnitees attached) (filed as Exhibit 10.2 to the Company's Current Report on Form 8-K/A filed with the SEC on April 10, 2012 and incorporated herein by reference).*
|
|
|
|
31.1
|
|
Principal Executive Officer Certification Pursuant to Securities Exchange Act Rules 13a-14 and 15d-14 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
|
|
31.2
|
|
Principal Financial and Accounting Officer Certification Pursuant to Securities Exchange Act Rules 13a-14 and 15d-14 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
|
|
32.1
|
|
Principal Executive Officer Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
|
|
|
|
32.2
|
|
Principal Financial and Accounting Officer Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
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101
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The following financial statements from the Company's Quarterly Report on Form 10-Q for the three months ended September 30, 2012, formatted in eXtensible Business Reporting Language: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income (Loss), (iv) Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements (furnished herewith).
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*
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Management contract or compensatory plan or arrangement.
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Page
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Article 1. Definitions
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1.01
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Accrued Pension
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1.02
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Accrued Pension Derived from Employer Contributions
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1.03
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Accrued Pension Derived from Participant Contributions
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1.04
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Accumulated Contributions
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1.05
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Actuarial Equivalent
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1.06
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Administrative Committee
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1.07
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Affiliated Employer
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1.08
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Alternate Accrued Pension Derived from Participant Contributions
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1.09
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Annuity Starting Date
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1.10
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Beneficiary
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1.11
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Benefit Service
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1.12
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Board of Directors
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1.13
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Break in Service
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1.14
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Code
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1.15
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Company
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1.16
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Compensation
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1.17
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Determination Date
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1.18
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Disability or Disabled
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1.19
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Early Retirement Date
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1.20
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Effective Date
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1.21
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Eligible Employee
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1.22
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Employee
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1.23
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Employer
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1.24
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Enrollment Date
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1.25
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ERISA
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1.26
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Final Average Compensation
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1.27
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Highly Compensated Employee
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1.28
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Hour of Service
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1.29
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IRS Interest Rate
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1.30
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IRS Mortality Table
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1.31
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Investment Manager
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1.32
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Leased Employee
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1.33
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Leave of Absence
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1.34
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Maximum Compensation Limitation
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1.35
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Normal Retirement Age
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1.36
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Normal Retirement Date
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1.37
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Parental Leave
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1.38
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Participant
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1.39
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Participant Contributions
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1.40
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Pension
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1.41
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Plan
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1.42
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Plan Year
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1.43
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Postponed Retirement Date
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1.44
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Qualified Domestic Relations Order
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1.45
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Qualified Joint and Survivor Annuity
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1.46
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Residual Accrued Pension Derived from Participant Contributions
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1.47
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Retirement Date
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1.48
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Section 203(a)(3)(B) Service
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1.49
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Section 417 Interest Rate
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1.50
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Severance from Service Date
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1.51
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Spousal Consent
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1.52
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Spouse
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1.53
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Stability Period
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1.54
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Trust
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1.55
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Trustee
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1.56
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Year of Eligibility Service
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1.57
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Year of Vesting Service
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1.58
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Union Employee
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Article 2. Eligibility and Participation
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2.01
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Eligibility
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2.02
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Participation
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2.03
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Reemployment of Former Employees and Former Participants
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2.04
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Transferred Participants
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2.05
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Termination of Participation
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Article 3. Contributions
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3.01
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Participant Contributions
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3.02
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Suspension of Participation
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3.03
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In-Service Withdrawal of Accumulated Contributions
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3.04
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Employer Contributions
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3.05
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Plan-to-Plan Transfers / Rollover Contributions
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3.06
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Return of Contributions
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3.07
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Contributions during Period of Service in the Uniformed Services of the United States
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Article 4. Termination of Employment Prior to Retirement
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4.01
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Amount of Vested Interest
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4.02
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Distribution of Vested Interest
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4.03
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Repayment of Participant Contributions
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Article 5. Eligibility for and Amount of Pension Benefits
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5.01
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Normal Retirement
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5.02
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Postponed Retirement
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5.03
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Early Retirement
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5.04
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Disability Retirement
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5.05
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Termination With Vesting
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5.06
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Adjustments to Pensions in Pay Status
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5.07
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Suspension of Benefits
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5.08
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Nonduplication of Benefits
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Article 6. Restrictions on Benefits and Payments
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6.01
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Maximum Annual Benefit Limitation and Maximum Annual Additions Limitation
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6.02
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Top-Heavy Provisions
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6.03
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Limitation Concerning Highly Compensated Employees or Former Highly Compensated Employees
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Article 7. Form of Payment of Pension Benefits
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7.01
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Normal Form of Payment
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7.02
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Automatic Form of Payment
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7.03
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Optional Forms of Payment
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7.04
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Election of Options
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7.05
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Method of Payment for Eligible Rollover Distributions
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7.06
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Commencement of Payments
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Article 8. Death Benefits
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8.01
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Spouse’s Pension
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8.02
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Children’s Pension
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8.03
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Death Benefits Payable to Participant’s Estate
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8.04
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Accumulated Contributions
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Article 9. Administration of the Plan
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9.01
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Appointment of Administrative Committee
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9.02
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Duties of Administrative Committee
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9.03
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Meetings
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9.04
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Action of Majority
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9.05
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Compensation and Bonding
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9.06
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Establishment of Rules
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9.07
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Manner of Administering
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9.08
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Prudent Conduct
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9.09
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Service In More Than One Fiduciary Capacity
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9.10
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Limitation of Liability
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9.11
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Indemnification
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9.12
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Expenses of Administration
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9.13
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Claims and Review Procedures
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Article 10. Management of Funds
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10.01
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The Trustee
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10.02
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Exclusive Benefit Rule
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10.03
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Appointment of Investment Manager
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Article 11. Amendment, Merger and Termination
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11.01
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Amendment of the Plan
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11.02
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Merger or Consolidations
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11.03
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Additional Participating Employees
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11.04
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Termination of the Plan
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Article 12. General Provisions
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12.01
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Nonalienation; Qualified Domestic Relations Orders
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12.02
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Conditions of Employment Not Affected by Plan
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12.03
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Facility of Payment
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12.04
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Information
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12.05
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(Reserved)
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12.06
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Proof of Death and Right of Beneficiary or Other Person
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12.07
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Failure to Locate Recipient
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12.08
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Action by the Board of Directors
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12.09
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Coonstruction
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Execution of the Plan
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Appendix A. Maximum Annual Benefit Limitation and Maximum Annual Additions Limitation
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Appendix B. Top-Heavy Provisions
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Appendix C. Limitation Concerning Highly Compensated Employees or Former Highly Compensated Employees (Effective January 1, 1994)
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Appendix D. Limitation Concerning Highly Compensated Employees or Former Highly Compensated Employees (Effective January 1, 1989, Through December 31, 1993)
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(c)
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120% of the Federal mid-term rate (as in effect under Section 1274 of the Code for the first month of the applicable Plan Year) for the period beginning January 1, 1988, and ending on the Determination Date.
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(i)
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Until the later of the date the Participant (A) attains age 35, or (B) completes one Year of Eligibility Service;
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(ii)
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For any period credited for retirement benefits under any other pension plan to which the Employer contributes; and
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(iii)
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Unless the Participant elects to become a participant as of the date he is first eligible to do so.
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(
i)
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The Employee is credited with an Hour of Service on or after January 1, 1995, or is on an approved Leave of Absence as of January 1, 1995;
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(ii)
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The Employee makes Participant Contributions during the 60 months required by Section 3.01;
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(iii)
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The Employee does not terminate his employment with the Employer and all Affiliated Employers prior to the date the Employee reaches his earliest Early Retirement Date; and
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(iv)
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The Employee provides the Administrative Committee with the information it deems necessary to determine the amount of any pension payable to the Employee under the terms of a defined benefit pension plan to which the Employer contributes, directly or indirectly, to the extent that such pension is based on a period of employment with the Employer for which the Employee receives credit for Pension benefits under this Section 1.11(g); and
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(
1)
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received Section 414(s) Compensation of more than $80,000 (or such larger amount as may be modified for cost-of-living adjustments by the Commissioner of the IRS); and
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(2)
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if the Employer so elects, was a member of the top twenty percent (20%) of active Employees when ranked on the basis of Section 414(s) Compensation during the preceding Plan Year. Any election hereunder shall be made in accordance with regulations issued under section 414(q)(1) of the Code, as amended by section 1431(a) of the Small Business Job Protection Act of 1996. For purposes of determining the group with the highest twenty percent (20%) of Section 414(s) Compensation, employees described in Section 414(q)(8) of the Code and Q&A-9(b) of regulation section 1.414(q)-1T are excluded.
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(
i)
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The Employee has completed one Year of Eligibility Service; or
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(ii)
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The Employee was a participant under, and transferred from, another plan maintained by the Employer.
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(i)
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With respect to a Participant who is an Employee as of January 1, 1995, or who is on an approved Leave of Absence as of January 1, 1995, after the Participant has been credited with 60 months of Benefit Service (before Section 1.11(g) is applied); and
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(ii)
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With respect to a Participant who is not an Employee as of January 1, 1995, and who is not on an approved Leave of Absence as of January 1, 1995, after the Participant has been credited with 60 months of Benefit Service after January 1, 1995 (before Section 1.11(g) is applied).
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(
i)
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One and one-half percent (1.5%) of the Participant’s Final Average Compensation multiplied by his Benefit Service accrued after December 31, 1978.
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(ii)
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For a Participant who participated in the Plan prior to January 1, 1979, the greater of:
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(A)
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The additional Accrued Pension accrued by the Participant for each such Plan Year determined in accordance with Section 5.01(b) based on the Participant’s Compensation and Benefit Service earned in such Plan Year, or
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(B)
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The actuarial increase in the Accrued Pension accruedby the Participant as of the end of the Plan Year preceding the Plan Year in question to take into account the nonpayment of such benefits.
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(
i)
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$90,000 (adjusted in accordance with Appendix A); or
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(ii)
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The Participant’s average annual “Section 415 Compensation” (as defined in Appendix A) during three consecutive calendar years of his participation in the Plan affording the highest such average, or during all of the years in which he was a Participant in the Plan if less than three years.
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(i)
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If the Participant is not married on his Annuity Starting Date, the Qualified Joint and Survivor Annuity shall be equal to the normal form of payment described in Section 7.01; provided, however, that if the Participant is credited with an Hour of Service on or after January 1, 1995, or the Participant is on an approved Leave of Absence as of January 1, 1995, the Qualified Joint and Survivor Annuity shall be equal to the Five Year Certain and Life Annuity described in Section 7.03(a)(ii), but no actuarial adjustment shall be made to account for the five year certain period.
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(ii)
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If the Participant is married on his Annuity Starting Date, the Qualified Joint and Survivor Annuity shall be equal to the Actuarial Equivalent of the normal form of payment, which provides (A) for a reduced benefit payable to the Participant during his life, and (B) after the Participant’s death, a benefit at the rate of 75% of the benefit paid to the Participant, payable during the life of and to the Participant’s Spouse; provided, however, that if the Participant is credited with an Hour of Service on or after January 1, 1995, or the Participant is on an approved Leave of Absence as of January 1, 1995, the Qualified Joint and Survivor Annuity shall be equal to the 75% Joint and Survivor Annuity described in Section 7.03(a)(i), but no actuarial adjustment shall be made to account for the five year certain period.
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(i)
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Joint and Survivor Option — a reduced Pension payable to the Participant during his life and, after his death, payable to his designated Beneficiary for the remainder of her life, in an amount equal to 50%, 75% or 100% (according to the election of the Participant) of the Pension the Participant was receiving; provided, however, that if the Participant’s Beneficiary dies before the Participant, the Participant shall receive, commencing on the first day of the month after the Beneficiary dies, the benefit he would have received as of his Annuity Starting Date if he had elected the normal form of benefit described in Section 7.01(a) (referred to as the “Pop-Up Feature”); provided further that such Joint and Survivor Annuity shall be payable for a minimum of 60 months. If both the Participant and the Participant’s Beneficiary die during the first 60 months of payment, a lump sum payment equal to the Actuarial Equivalent of the remaining payments shall be paid to the estate of the Participant unless the Participant’s Beneficiary dies after the Participant, in which case, the lump sum payment shall be paid to the Beneficiary’s estate. This Option shall not be available to a Participant whose Beneficiary is more than 30 years younger than the Participant, unless the Beneficiary is the Participant’s Spouse.
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(ii)
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Five Year Certain and Life Option — a Pension payable to the Participant during his life; provided, however, that such annuity shall be payable for a minimum of 60 months. If the Participant dies during the first 60 months of payment, the Pension shall be payable for the balance of the 60 months to the Beneficiary designated by the Participant when he elected the option, or the Beneficiary may elect to receive a lump sum payment equal to the Actuarial Equivalent of the remaining payments. If both the Participant and the Participant’s Beneficiary die during the first 60 months of payment, a lump sum payment equal to the Actuarial Equivalent of the remaining payments shall be paid to the estate of the Participant unless the Participant’s Beneficiary dies after the Participant, in which case, the lump sum payment shall be paid to the Beneficiary’s estate.
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(iii)
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Ten Year Certain and Life Option — a Pension payable to the Participant during his life; provided, however, that such annuity shall be payable for a minimum of 120 months. If the Participant dies during the first 120 months of payment, the Pension shall be payable for the balance of the 120 months to the Beneficiary designated by the Participant when he elected the option, or the Beneficiary may elect to receive a lump sum payment equal to the Actuarial Equivalent of the remaining payments. If both the Participant and the Participant’s Beneficiary die during the first 120 months of payment, a lump sum payment equal to the Actuarial Equivalent of the remaining payments shall be paid to the estate of the Participant unless the Participant’s Beneficiary dies after the Participant, in which case, the lump sum payment shall be paid to the Beneficiary’s estate.
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(iv)
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Level Income Option — an increased Pension payable to the Participant before commencement of Social Security benefits and a correspondingly reduced Pension after commencement of Social Security benefits such that the total income (from the adjusted Pension payable pursuant to the Plan and the Social Security benefit to which the Participant is entitled) shall be as level as practicable both before and after commencement of Social Security benefits. Such Level Income Annuity shall be payable for a minimum of 60 months. If the Participant dies during the first 60 months of payment, the Pension (the amount of which is determined as if the Participant had lived for the 60 months) shall be payable for the balance of the 60 months to the Beneficiary designated by the Participant when he elected the option, or the Beneficiary may elect to receive a lump sum payment equal to the Actuarial Equivalent of the remaining payments. If both the Participant and the Participant’s Beneficiary die during the first 60 months of payment, a lump sum payment equal to the Actuarial Equivalent of the remaining payments shall be paid to the estate of the Participant unless the Participant’s Beneficiary dies after the Participant, in which case, the lump sum payment shall be paid to the Beneficiary’s estate. Effective January 1, 1995, this Option shall not be available to a Participant who retires on or after the date that the Participant attains age 62.
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(i)
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The option is the Actuarial Equivalent of the Qualified Joint and Survivor Annuity; and
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(ii)
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The option provides for monthly payments to the Participant’s Spouse for life after the Participant’s death in an amount equal to at least 50% but not more than 100% of the monthly amount payable to the Participant under the option.
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(ii)
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The Company notifies the Participant that he has the right to revoke his election to commence receiving his distribution during the period ending seven (7) days after the Participant receives the Written Explanation, or , if later, the Participant’s Annuity Starting Date;
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(iii)
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The Participant’s Annuity Starting Date is after the date the Written Explanation is provided to the Participant; provided, however, that the Participant’s Annuity Starting Date may be
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(iv)
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The actual distribution of benefits to the Participant does not commence before the expiration of the period described in Section 7.04(d)(ii).
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(i)
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All of the Eligible Rollover distribution shall be paid directly to the Distributee;
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(ii)
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All of the Eligible Rollover Distribution shall be paid as a Direct Rollover to the Eligible Retirement Plan designated by the Distributee; or
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(iii)
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The portion of the Eligible Rollover Distribution designated by the Participant, which portion shall be at least $500, shall be paid as a Direct Rollover to the Eligible Retirement Plan designated by the Distributee and the balance of the Eligible Rollover Distribution shall be paid directly to the Distributee.
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(i)
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If the Distributee is the Participant, the Actuarial Equivalent of the Participant’s vested Accrued Pension does not exceed $5,000 ($3,500 prior to August 5, 1997);
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(ii)
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If the Distributee is the Participant’s Spouse, the Actuarial Equivalent of the Spouse’s Pension does not exceed $5,000 ($3,500 prior to August 5, 1997);
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(iii)
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The Distributee is notified that he has the right to a period of at least 30 days after receipt of the material to consider whether or not to elect a distribution; and
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(iv)
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After receipt of such notification, he affirmatively elects to receive a distribu
tion.
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(ii)
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“Eligible Retirement Plan” means an individual retirement account described in Section 408(a) of the Code, an individual retirement annuity described in Section 408(b) of the Code, an annuity plan described in Section 403(a) of the Code, or a qualified trust described in Section 401(a) of the Code, that accepts the Distributee’s Eligible Rollover Distribution. However, in the case of an Eligible Rollover Distribution to the surviving Spouse, an Eligible Retirement Plan is an individual retirement account or individual retirement annuity.
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(iii)
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“Distributee” includes an Employee or former Employee. In addition, the Employee’s or former Employee’s surviving Spouse and the Employee’s or former Employee’s Spouse or former Spouse who is the “alternate payee,” as defined in Section 414(p)(8) of the Code, pursuant to a Qualified Domestic Relations Order are Distributees with regard to the interest of the Spouse or former Spouse.
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(iv)
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“Direct Rollover” means a payment by the Plan to the Eligible Retirement Plan specified by the Distributee.
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(i)
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His Accrued Benefit as of his actual retirement date; or
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(ii)
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His Accrued Benefit as of the April 1st that next follows the Plan Year in which he attains age 70.5 recomputed in accordance with regulations issued by the Secretary of the Treasury as of the first day of each subsequent Plan Year (and as of his actual retirement date), less the Actuarial Equivalent of any distribution he has received, if any, subsequent to the aforementioned April 1st.
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(ii)
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If the Participant dies before a date on which he could have retired, the Spouse’s Pension shall be an amount payable as if the following events had occurred: (A) the Participant separated from service on the date of his death or, if earlier, the date of his actual separation from service, (B) the Participant survived to the earliest date he could have retired, (C) the Participant retired and elected an immediate payment of the 75% Joint and Survivor Annuity described in Section 7.03(a)(i), and (D) the Participant died on the day after the earliest date he could have retired. Payment of the Spouse’s Pension shall commence on the first day of the calendar month following the earliest date the Participant could have retired, unless the Spouse makes a written election to defer commencement to a later date, which date shall not be later than the date the Participant would have attained age 65.
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(i)
|
If the Participant dies after a date on which he could have retired pursuant to Section 5.01, 5.02 or 5.03, whichever is applicable, the Pension payable as if the Participant had retired on the day before his death.
|
(ii)
|
If the Participant dies before a date on which he could have retired, the Actuarial Equivalent of the Pension payable as if the following events had occurred: (A) the Participant separated from service on the date of his death or, if earlier, the date of his actual separation from service, and (B) the Participant retired on the earliest date he could have retired.
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/s/ John E. Simmons
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(Signature)
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Treasurer
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(Title)
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/
S
/ MICHAEL H. KEOWN
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Michael H. Keown
President and Chief Executive Officer
(principal executive officer)
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/
S
/ J
EFFREY
A. W
AHBA
|
Jeffrey A. Wahba
Treasurer and Chief Financial Officer
(principal financial and accounting officer)
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/
S
/ MICHAEL H. KEOWN
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Michael H. Keown
President and Chief Executive Officer
(principal executive officer)
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/
S
/ JEFFREY A. WAHBA
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Jeffrey A. Wahba
Treasurer and Chief Financial Officer
(principal accounting and financial officer)
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