Document:

Exhibit 10.2

 

FARMER
BROS. CO.

 

FORM OF

2007
OMNIBUS PLAN

RESTRICTED
STOCK AWARD GRANT NOTICE AND

RESTRICTED
STOCK AWARD AGREEMENT

 

Farmer Bros. Co., a Delaware corporation (the “Company”), pursuant
to its 2007 Omnibus Plan (the “Plan”), hereby grants to the individual listed below (“Participant”), the
number of shares of Restricted Stock set forth below (the “Shares”). This Award
is subject to all of the terms and conditions as set forth herein and in the
Restricted Stock Award Agreement attached hereto as Exhibit A (the “Restricted Stock Agreement”)
(including without limitation the Restrictions on the Shares set forth in the
Restricted Stock Agreement) and the Plan, each of which are incorporated herein
by reference. Unless otherwise defined herein, the terms defined in the Plan
shall have the same defined meanings in this Grant Notice and the Restricted
Stock Agreement.

 

	
  Participant:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Grant Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Vesting
  Commencement Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total
  Number of Shares of Restricted Stock:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Vesting
  Schedule:

  	
   

  	
  [To be specified in
  individual agreements], subject to the acceleration provisions set forth in
  the Restricted Stock Agreement.

  

 

By his or her signature below, Participant agrees to
be bound by the terms and conditions of the Plan, the Restricted Stock
Agreement and this Grant Notice. Participant has reviewed the Restricted Stock
Agreement, the Plan and this Grant Notice in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Grant
Notice and fully understands all provisions of this Grant Notice, the
Restricted Stock Agreement and the Plan. Participant hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator of the Plan upon any questions arising under the Plan, this Grant
Notice or the Restricted Stock Agreement. Participant further agrees to notify
the Company upon any change in the residence address indicated below.

 

	
  FARMER BROS. CO.

  	
   

  	
  PARTICIPANT

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Print
  Name:

  	
   

  	
   

  	
   

  	
  Print
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
  20333
  South Normandie Avenue

  Torrance,
  California 90502

  	
   

  	
  Address:

  	
   

  	
   

  	
   

  

 

 

 

EXHIBIT A

TO
RESTRICTED STOCK AWARD GRANT NOTICE

 

FARMER
BROS. CO. RESTRICTED STOCK AWARD AGREEMENT

 

Pursuant to the Restricted Stock Award Grant Notice
(the “Grant Notice”)
to which this Restricted Stock Award Agreement (this “Agreement”) is
attached, Farmer Bros. Co., a Delaware corporation (the “Company”) has granted
to Participant the number of shares of Restricted Stock under the 2007 Omnibus
Plan, as amended from time to time (the “Plan”), as set forth in the Grant Notice.

 

ARTICLE I

GENERAL

 

1.1                Definitions.
All capitalized terms used in this Agreement without definition shall have the
meanings ascribed in the Plan and the Grant Notice.

 

1.2                Incorporation
of Terms of Plan. The Award (as defined below) is subject to the terms and
conditions of the Plan which are incorporated herein by reference. In the event
of any inconsistency between the Plan and this Agreement, the terms of the Plan
shall control.

 

ARTICLE II

AWARD OF
RESTRICTED STOCK

 

2.1                Award
of Restricted Stock

 

                                (a)           Award. In consideration of
Participant’s agreement to remain in the service or employ of the Company or
one of its Parents or Subsidiaries, and for other good and valuable
consideration which the Administrator has determined exceeds the aggregate par
value of the Shares subject to the Award (as defined below), as of the Grant
Date, the Company issues to Participant the Award described in this Agreement
(the “Award”). The number of shares
of Restricted Stock (the “Shares”)
subject to the Award is set forth in the Grant Notice. The Participant is an
Employee, member of the Board, or Consultant.

 

                                (b)           Book Entry Form. The Shares
will be issued in uncertificated form. Notwithstanding anything to the contrary
in the foregoing, at the sole discretion of the Administrator, the Shares will be
issued in either (i) uncertificated form, with the Shares recorded in the
name of Participant in the books and records of the Company’s transfer agent
with appropriate notations regarding the restrictions on transfer imposed
pursuant to this Agreement, and upon vesting and the satisfaction of all
conditions set forth in Section 2.2(c), the Company shall cause
certificates representing the Shares to be issued to Participant; or (ii) certificate
form pursuant to the terms of Sections 2.1(c) and (d).

 

                                (c)           Legend. Certificates
representing Shares issued pursuant to this Agreement shall, until all
Restrictions imposed pursuant to this Agreement lapse or shall have been
removed and new certificates are issued, bear the following legend (or such
other legend as shall be determined by the Administrator):

 

“THE SECURITIES REPRESENTED
BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN VESTING REQUIREMENTS AND MAY BE
SUBJECT TO FORFEITURE UNDER THE TERMS OF THAT CERTAIN RESTRICTED STOCK AWARD
AGREEMENT, DATED
[                        
    , 20      ], BY AND
BETWEEN FARMER BROS. CO. AND THE REGISTERED OWNER OF SUCH SHARES, AND SUCH
SHARES MAY NOT BE, DIRECTLY OR INDIRECTLY, OFFERED, 

 

 

A-1

 

 

TRANSFERRED, SOLD, ASSIGNED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNDER ANY CIRCUMSTANCES, EXCEPT
PURSUANT TO THE PROVISIONS OF SUCH AGREEMENT.”

 

                                (d)           Escrow. The Secretary of the
Company, or such other escrow holder as the Administrator may appoint, may
retain physical custody of the certificates representing the Shares until all
of the restrictions on transfer imposed pursuant to this Agreement lapse or
shall have been removed; in such event Participant shall not retain physical
custody of any certificates representing unvested Shares issued to him or her.

 

2.2                Restrictions

 

                                (a)           Forfeiture. Any Award which is
not vested as of the date Participant ceases to be an Employee or other
Eligible Individual shall thereupon be forfeited immediately and without any
further action by the Company. For purposes of this Agreement, “Restrictions” shall mean the
restrictions on sale or other transfer set forth in Section 3.2 and the
exposure to forfeiture set forth in this Section 2.2(a).

 

                                (b)           Vesting and Lapse of Restrictions.
Subject to Sections 2.2(a) and 2.3 hereof, the Award shall vest and
the Restrictions shall lapse in accordance with the vesting schedule set forth
on the Grant Notice.

 

                                (c)           Tax Withholding; Conditions to
Issuance of Certificates. Notwithstanding any other provision of this
Agreement (including without limitation Section 2.1(b)):

 

                                                (i)            No new certificate shall be
delivered to Participant or his or her legal representative unless and until
Participant or his or her legal representative shall have paid to the Company
the full amount of all federal and state withholding or other taxes applicable
to the taxable income of Participant resulting from the grant of Shares or the
lapse or removal of the Restrictions, which payment shall be in the form of (1) cash,
(2) check, or (3) upon the request of Participant and with the
consent of the Administrator, withholding by the Company, on the date that the
Restrictions on all or a portion of the Award shall lapse pursuant to Section 2.2(b),
of a number of whole Shares for which the Restrictions would have otherwise
lapsed on such date, having a Fair Market Value, determined as of such date,
not in excess of the minimum tax required to be withheld by law (the “Share Withholding Procedure”). Any
adverse consequences to Participant arising in connection with the Share
Withholding Procedure shall be the sole responsibility of Participant.

 

                                                (ii)           The Company shall not be required to
issue or deliver any certificate or certificates for any Shares prior to the
fulfillment of all of the following conditions: (A) the admission of the
Shares to listing on all stock exchanges on which such Stock is then listed, (B) the
completion of any registration or other qualification of the Shares under any
state or federal law or under rulings or regulations of the Securities and
Exchange Commission or other governmental regulatory body, which the
Administrator shall, in its sole and absolute discretion, deem necessary and
advisable, (C) the obtaining of any approval or other clearance from any
state or federal governmental agency that the Administrator shall, in its
absolute discretion, determine to be necessary or advisable and (D) the
lapse of any such reasonable period of time following the date the Restrictions
lapse as the Administrator may from time to time establish for reasons of
administrative convenience.

 

 

A-2

 

 2.3               Acceleration
of Vesting

 

                                (a)           Acceleration
of Vesting Upon Death or Disability or Termination. In the event of
Participant’s Termination of Employment, Termination of Directorship or
Termination of Consultancy by reason of Participant’s death or Disability,  the following pro rata portion of the Shares
will be deemed to have vested immediately prior to the termination event and
shall no longer be subject to forfeiture (up to a maximum of 100% of the
Shares):

 

(Actual Number of Service
Days During Vesting Period)

(Total Number of Days
During Vesting Period)                              X             (No. of Shares) = (Vested
Shares)

 

                                (b)           Other Events.  The Administrator retains the discretion to
determine whether an acceleration of vesting will occur upon the occurrence of
certain other events, including Termination of Consultancy, Termination of
Directorship, and Termination of Employment other than by reason of death or Disability,
and an impending Change in Control.

 

ARTICLE III

OTHER PROVISIONS

 

                3.1           Administration. The Administrator shall have the
power to interpret the Plan and this Agreement and to adopt such rules for
the administration, interpretation and application of the Plan as are
consistent therewith and to interpret, amend or revoke any such rules. All
actions taken and all interpretations and determinations made by the
Administrator in good faith shall be final and binding upon Participant, the
Company and all other interested persons. No member of the Administrator shall
be personally liable for any action, determination or interpretation made in
good faith with respect to the Plan, this Agreement or the Option. In its
absolute discretion, the Board may at any time and from time to time exercise
any and all rights and duties of the Administrator under the Plan and this
Agreement.

 

                3.2           Restricted
Stock Not Transferable. Prior to the lapsing of the Restrictions pursuant
to Section 2.2(b), no Shares or any interest or right therein or part
thereof shall be liable for the debts, contracts or engagements of Participant
or his or her successors in interest or shall be subject to disposition by
transfer, alienation, anticipation, pledge, encumbrance, assignment or any
other means whether such disposition be voluntary or involuntary or by
operation of law by judgment, levy, attachment, garnishment or any other legal
or equitable proceedings (including bankruptcy), and any attempted disposition
thereof shall be null and void and of no effect; provided, however, that this Section 3.2
notwithstanding, with the consent of the Administrator, the Shares may be
transferred to certain persons or entities related to Participant, including
but not limited to members of Participant’s family, charitable institutions or
trusts or other entities whose beneficiaries or beneficial owners are members
of Participant’s family or to such other persons or entities as may be
expressly approved by the Administrator, pursuant to any such conditions and
procedures the Administrator may require. Upon the lapsing of the Restrictions
pursuant to Section 2.2(b), the Shares shall no longer be Restricted Stock
but shall be Stock held by Participant, and Participant shall have all the
rights of a stockholder with respect to such Stock.

 

                3.3           Rights as Stockholder. Except as otherwise provided
herein, upon the Grant Date Participant shall have all the rights of a
stockholder with respect to the Shares, subject to the Restrictions herein,
including the right to vote the Shares and the right to receive any cash or
stock dividends paid to or made with respect to the Shares.

 

 

A-3

 

                3.4           Not a Contract of Employment. Nothing in this
Agreement or in the Plan shall confer upon Participant any right to continue to
serve as an Employee, member of the Board, Consultant, or other service
provider of the Company or any of its Subsidiaries.

 

                3.5           Notices. Any notice to be given under the terms of
this Agreement to the Company shall be addressed to the Company in care of the
Secretary of the Company at the address given beneath the signature of the
Company’s authorized officer on the Grant Notice, and any notice to be given to
Participant shall be addressed to Participant at the address given beneath
Participant’s signature on the Grant Notice. By a notice given pursuant to this
Section 3.5, either party may hereafter designate a different address for
notices to be given to that party. Any notice shall be deemed duly given when
sent via email or when sent by certified mail (return receipt requested) and
deposited (with postage prepaid) in a post office or branch post office
regularly maintained by the United States Postal Service.

 

                3.6           Titles. Titles are provided herein for convenience
only and are not to serve as a basis for interpretation or construction of this
Agreement.

 

                3.7           Governing Law; Severability. This Agreement shall
be administered, interpreted and enforced under the laws of the State of
Delaware, without regard to the conflicts of law principles thereof. Should any
provision of this Agreement be determined by a court of law to be illegal or
unenforceable, the other provisions shall nevertheless remain effective and
shall remain enforceable.

 

                3.8           Conformity to Securities Laws. Participant
acknowledges that the Plan and this Agreement are intended to conform to the
extent necessary with all provisions of the Securities Act and the Exchange
Act, and any and all regulations and rules promulgated thereunder by the
Securities and Exchange Commission, and state securities laws and regulations.
Notwithstanding anything herein to the contrary, the Plan shall be
administered, and the Awards are granted and may be exercised, only in such a
manner as to conform to such laws, rules and regulations. To the extent
permitted by applicable law, the Plan and this Agreement shall be deemed
amended to the extent necessary to conform to such laws, rules and
regulations.

 

                3.9           Amendment, Suspension and Termination. To the
extent permitted by the Plan, this Agreement may be wholly or partially amended
or otherwise modified, suspended or terminated at any time or from time to time
by the Administrator, provided, that, except as may otherwise be provided by
the Plan, no amendment, modification, suspension or termination of this
Agreement shall adversely effect the Award in any material way without the
prior written consent of Participant.

 

                3.10         Successors and Assigns. The Company may assign any of
its rights under this Agreement to single or multiple assignees, and this
Agreement shall inure to the benefit of the successors and assigns of the
Company. Subject to the restrictions on transfer herein set forth, this
Agreement shall be binding upon Participant and his or her heirs, executors, administrators,
successors and assigns.

 

                3.11         Limitations Applicable to Section 16 Persons.
Notwithstanding any other provision of the Plan or this Agreement, if
Participant is subject to Section 16 of the Exchange Act, the Plan, the
Award and this Agreement shall be subject to any additional limitations set
forth in any applicable exemptive rule under Section 16 of the
Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act)
that are requirements for the application of such exemptive rule. To the extent
permitted by applicable law, this Agreement shall be deemed amended to the
extent necessary to conform to such applicable exemptive rule.

 

                3.12         Entire Agreement. The Plan and this Agreement
(including all Exhibits hereto) constitute the entire agreement of the parties
and supersede in their entirety all prior undertakings and agreements of the
Company and Participant with respect to the subject matter hereof.

 

 

A-4Exhibit 10.3

 

FARMER BROS. CO.

 

STOCK OWNERSHIP
GUIDELINES

FOR DIRECTORS AND
EXECUTIVE OFFICERS

 

Adopted by the Board of Directors on February 20, 2008

 

                The
Board of Directors of Farmer Bros. Co. (the “Company”) has adopted these Stock
Ownership Guidelines (“Guidelines”) to further align the interests of the
Company’s executive officers and independent directors with the interests of
the Company’s stockholders and to further promote the Company’s commitment to
sound corporate governance.

 

I.              Executive
Officer Stock Ownership Guidelines

 

                Executive officers of the
Company, as identified by the Committee (“Officers”), are expected to own and
hold a number of shares of the Company’s common stock (“Common Stock”) based on
the following guidelines:

 

	
  Officer

  	
   

  	
  Value of Shares Owned

  	
   

  
	
  Chief Executive Officer

  	
   

  	
  $450,000

  	
   

  
	
  Other Executive Officers

  	
   

  	
  $100,000 - $250,000, as
  determined by the Board in its discretion

  	
   

  

 

II.            Non-Employee
Director Stock Ownership Guidelines

 

                Non-employee
directors are expected to own and hold during their service as a Board member a
number of shares of Common Stock with a value equal to at least three (3) times
the amount of the non-employee director annual stock-based award, as the same
may be adjusted from time to time, under the Company’s 2007 Omnibus Plan.

 

III.           Compliance
with the Guidelines

 

                Stock
that counts toward satisfaction of these Guidelines include: (a) shares of
Common Stock owned outright by the Officer or non-employee director and his or
her immediate family members who share the same household, whether held
individually or jointly; (b) restricted stock or restricted stock units
(whether or not the restrictions have lapsed); (c) ESOP shares; and (d) shares
of Common Stock held in trust for the benefit of the Officer or non-employee
director or his or her family.

 

                Until
the applicable guideline is achieved, each Officer and non-employee director is
required to retain all “profit shares,” which are those shares remaining after
payment of taxes on earned equity awards under the Company’s 2007 Omnibus Plan,
such as shares granted pursuant to the exercise of vested options and
restricted stock that has vested. 
Officers and non-employee directors are expected to continuously own
sufficient shares to meet these Guidelines once attained.  Nothing contained herein shall otherwise
prohibit any officer or non-employee director from transferring shares acquired
by such person other than pursuant to the Company’s 2007 Omnibus Plan,
including shares directly purchased in the market and ESOP shares, if any,
subject to applicable securities laws and the Company’s other policies and
procedures, including, without limitation, the Company’s Insider Trading
Policy.

 

                These
Guidelines may be waived at the discretion of the Board if compliance would
create severe hardship or prevent an Officer or non-employee director from
complying with a court order. It is expected that these instances will be rare.

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