Subject: File No. S7-25-97 Date: 11/13/97 5:24 PM November 13, 1997 U.S. Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Attn: Jonathan G. Katz, Secretary Re: Request for Comments on Amendments to Rules on Shareholder Proposals, Securities Exchange Act Release No. 39093 (September 18, 1997), File No. S7-25-97 Ladies and Gentlemen: Bell Atlantic supports the Commissions efforts to reform the shareholder proposal rules. The current scheme has been shown to place a significant burden on issuers as well as the Commission, while at the same time doing little to promote debate on issues which are appropriate for shareholder action. Unfortunately, we believe that the Commissions proposals do not, on balance, remedy this situation. It would appear that the proposed amendments to Rule 14a-8 could, in fact, broaden the range, and therefore the number, of proposals required to be included in the proxy materials. This will result in increased administrative, printing and mailing costs without commensurate benefits to shareholders. In particular, the override mechanism with respect to the relevance and ordinary business exclusions will help principally those groups who sponsor social policy-type proposals which do not have a material effect on the corporation and are better addressed in a forum outside that of a corporate proxy statement. The associated change in the deadline for submission of the corporations position to the Commission -- from 80 days prior to proxy filing to 40 days following receipt of the proposal -- may also impose a greater burden on the corporation. Additionally, this may serve to discourage discussion with the proponents since the corporate issuer will be compelled to object to a proposal in a formal manner within the specified time period rather than seek to negotiate and perhaps miss the filing deadline. As for the reversal of Cracker Barrel, Bell Atlantics view is that social proposals, including those related to employment, should not be aired in the proxy arena. Leaving all such proposals to the Commissions line-drawing is not a good solution since it will bring no certainty to this area. Moreover, if Cracker Barrel were to be reversed, certain employment-related proposals which are not only contrary to a corporations position, but also contrary to widely held views, might be required to be included in proxy materials, thus unfairly associating the issuer with unpopular viewpoints. Certainly, any action on Cracker Barrel should be taken only as part of an overall scheme which better balances the interests of the issuer, on the one hand, and shareholder proponents, on the other. The proposed quantifiable economic significance test, for proposals relating to the purchase or sale of products and services, of the lesser of $10 million in gross revenues or 3% of the higher of gross revenues or total assets, is ludicrous in the context of large corporations. This test will do little to exclude ordinary business type proposals which, for large corporations, are not significantly related to the corporations business. In the case of Bell Atlantic, for example, for a proposal to be excludable, it would have to relate to less than $10 million or 0.03% of Bell Atlantics gross revenues. The proposal to have the Commission staff automatically decline to take a position when a proposal appears on its face to be neutral (when, in fact, based on clear evidence, the proposal emanates from a personal grievance) leaves the corporation with no guidelines as to whether to exclude or include the shareholders proposal. The corporations submission to the Commission staff of the reasons for omission would become a meaningless act. We concur in the Commissions move to increase the thresholds for resubmission to 6%, 15% and 30% for the first, second and third submissions, respectively. We also agree that the shareholder eligibility requirement should be increased above the $1,000 level, but believe that a $2,000 minimum of market value is not significant enough in todays economic environment to demonstrate a shareholders vested interest in the corporation. Moreover, the continued ownership requirement should be maintained. Revised Rule 14a-4(c) is one way of addressing the thorny issue of non-Rule 14a-8 proposals. However, if adopted, the rule will encourage submissions outside of the regulated framework for shareholder proposals established by the Commission. The revision would give a corporation a date certain (i.e., more than 45 days before the prior years proxy mailing date authority, unless the corporation has a properly adopted advance notice by-law provision that provides either a longer or shorter period) for the exercise of its discretionary voting. The problem is that the proposed revision would still permit shareholders to use Rule 14a-4(c) as a back door to force a proxy statement discussion on proposals which an issuer has been advised by counsel are excludable. Also, referencing such a proposal in corporate proxy materials will no doubt result in the inclusion of immaterial proposals at the expense of all shareholders. Certainly, the corporation should not be required to discuss the nature of any such proposal in its document. I would be happy to discuss any of these matters further with you at your convenience. Thank you for the opportunity to comment on the proposed amendments. Very truly yours, P. Alan Bulliner Associate General Counsel and Corporate Secretary PAB/sb