Washington, Oct. 23 (Bloomberg) -- The Securities and Exchange Commission said Farmer Brothers Co. can deny shareholders a vote to require a majority of independent directors on the coffee distributor's board even as the commission is poised to approve new rules requiring just that.

Farmer Brothers rejected the proposal from investor Mitchell Partners LP, a Costa Mesa, California-based fund manager, saying it lacks the authority to implement the proposal. The SEC agreed, saying it wouldn't take action against the company for excluding the proposal from its 2002 proxy.

The company may have to implement parts of the proposal anyway as the SEC is considering approval of new listing standards calling for more board independence at companies on the Nasdaq Stock Exchange, where Farmer Brothers stock trades, and the New York Stock Exchange.

``There is an increased focus on the importance of independent directors, and I assumed that in the current environment the SEC would be forced to reexamine these issues,'' said Gary Lutin, an investment banker with New York-based Lutin & Co. He launched an online forum for Farmer Brothers shareholders sponsored by Franklin Mutual Advisors LLC, a mutual fund group that also holds the company's stock.

The SEC in the past has come to different conclusions when asked about similar proposals on independent directors. The commission makes ``a judgment call'' in each situation, said spokesman John Heine.

GM Proposal

General Motors Corp. reasoned last year that it should be allowed to exclude a proposal from its annual-meeting agenda because the company doesn't have the power to adopt a bylaw requiring a ``transition'' to independent directors on the audit, compensation and nominating committees. The SEC disagreed, and the proposal was included in GM's proxy.

GM told shareholders that each of the committees is composed of directors who are independent as defined in company guidelines. Still, the proposal garnered 13 percent of the vote last year and 24 percent of the vote this year.

The Farmer Brothers proposal calls for a number of changes, such as a provision for ``cumulative voting,'' which allows each stockholder to have a number of votes equal to the number of shares owned multiplied by the number of directors to be elected.

The proposal also demands that the company's bylaws be amended so that only independent directors, as defined by the shareholder, can serve on certain committees, including the ones named in the GM proposal.

The new Nasdaq and NYSE rules call for boards to have a majority of independent directors instead of the current rule requiring three. They also require audit, compensation and nominating committees to consist of independent directors.

``We have always conformed to whatever legal requirements are necessary, and so when that time comes, we will address that,'' said John Simmons, treasurer at Farmer Brothers.

Shares in Torrance, California-based Farmer Brothers fell 50 cents today to $309. The stock has gained 16.6 percent this year.