Exhibit 10.1


 


FORM OF
FISCAL 2008


AWARD LETTER

UNDER FARMER BROS. CO.

2005 INCENTIVE COMPENSATION PLAN


 


Dear                   :


 


The Compensation Committee (“Committee”)
chose you to be a participant in fiscal 2008 in the Farmer Bros. Co. 2005
Incentive Compensation Plan.  Your target
award for fiscal 2008 was $                          ,
which the Committee determined by taking into consideration past total annual
compensation, current base salary, job responsibilities and past and expected
job performance.


 


In general, your bonus for fiscal 2008 was
determined primarily by measuring the Company’s financial performance and your
achievement of individual goals which the Committee assigned to you.


 


The Company’s financial performance was
gauged by the level of achievement of operating cash flow and net sales as
defined, and as determined from the Company’s audited financial
statements.  A matrix is attached which
shows various percentages between 25% and 150% depending on the combined level
of achievement of these two criteria. 
For fiscal 2008, based on the Company’s fiscal 2008 audited consolidated
financial statements, the Company’s operating cash flow was approximately $                    
million, as adjusted by the Committee, and net sales were approximately $                      
million.  Based on the Company’s
achievement of these two criteria during fiscal 2008, the percentage derived
from the matrix for fiscal 2008 is                 %.


 


The Committee also assigned certain
individual goals to you for fiscal 2008 which were communicated to you by the
Committee last December.  The committee
has determined your level of achievement of each assigned goal within a range
of 60% to 120% and multiplied such percentage by the weight originally assigned
to each such goal.  Your weighted average
level of achievement of your assigned goals was               %.


 


That percentage was multiplied by                 %,
the financial performance percentage derived from the matrix as described
above.  The resulting product was then
multiplied by your fiscal 2008 target award to determine your preliminary bonus
award for fiscal 2008.  Based on the
foregoing, the Committee has determined your fiscal 2008 preliminary
bonus award is $                    .


 


Under the Plan, the preliminary award is subject to adjustment, upward
or downward, by the Committee in its discretion.  The committee also has the discretion to
alter the financial performance criteria and individual goals during the year
and to decline to award any bonus should the committee determine such actions
to be warranted by a change in circumstances. 
For fiscal 2008 the Committee has determined to exercise its discretion
to adjust your preliminary bonus award principally in light of your efforts on
strategic projects and to encourage a continuation of these efforts.  As a result, your fiscal 2008 final bonus award is $                  .


 

















 


You are advised that the Committee may or may not choose to exercise
its discretion with respect to awards in the future.  Further, you are reminded to promptly contact
the Committee in the event circumstances dictate reexamination of originally
assigned goals by the Committee.


 


The Committee has determined that the award will be paid on a current
basis under the Plan.  All awards are
governed by the Plan provisions which control any inconsistency with this
letter.


 


Please let me know if you have any questions.


 


	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Thomas A.
  Maloof

  
	
   

  	
  Compensation
  Committee Chairman

  
	
   

  	
   

  
	
  cc:

  	
  James
  McGarry

  
	
   

  	
  John Merrell

  
	
   

  	
  John Anglin, Secretary