Shareholder motion deflected, Farmer Bros. Board still in flux. (Investments & Finance).

In normal times, Farmer Bros. ignores its shareholders. But in today's corporate environment the company has found itself fighting them off.

Torrance-based Farmer has successfully deflected a proposal that would make it easier for minority shareholders to elect their own board representatives. But it will likely have to make changes to its board to comply with the recently passed Sarbanes-Oxley Act .and newly proposed Nasdaq listing requirements.

The Securities and Exchange Commission has told Farmer Bros it can exclude a proposal from Mitchell Partners LP that would have required the company to have a majority of independent directors and given shareholders cumulative voting rights. Farmer asked the SEC for permission to remove the proposal, which was to be voted on at the company's annual meeting, set for December.

But the victory is obscured by government and stock exchange standards that aim to tighten independence requirements for company directors. On the subject of director independence, John Simmons, Farmer Bros.' treasurer, said, "When the time comes for us to address that we will."

At present, Farmer's six-member board has one director that would generally be considered independent.

"I consider it inappropriate for Farmer Bros. to withhold the proposal from shareholder voting regardless of the SEC posture about taking enforcement action," said Gary Lutin, a New. York investment banker chairing an online forum for Farmer shareholders.

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