Subject: Comment Letter
Date:    11/3/97 6:39 PM
     
     
     
william 
fuqua
upiu local 7785
214 e market st.
orrville
OH
44667
upiu@bright.net
     
Re: File No. S7-25-97
     
Dear Mr. Katz:
     
I am writing to object to the Securities and Exchange Commission's proposed 
amendments to rules on shareholder proposals.
     
The Commission's proposals create many obstacles to shareholders bringing 
proposals. They will foster costly litigation in place of cost-effective and 
time-proven regulatory mechanisms. These changes are contrary to the expressed 
views of Congress in the National Securities Markets Improvement Act of 1996, 
encouraging the Securities and Exchange Commission to investigate enhancing 
shareholders' ability to submit resolutions "relating to corporate practices and
social issues." 
     
The proposals are objectionable for a number of reasons.
     
The "personal grievance" exception. The proposed rule would allow companies to 
bar proposals without SEC review because the companies assert the shareholders' 
motives are "personal." Proponents will be forced to sue in federal court, a 
process that for many is prohibitively expensive and time consuming. The 
practical effect of this proposal would be to cripple the current shareholder 
proposal process.
     
Resubmission thresholds. The proposed rule would raise the vote percentage 
necessary to resubmit a proposal in subsequent years to levels which would have 
excluded most past shareholder efforts addressing both corporate governance 
questions and corporate policies involving significant social issues. Had the 
proposed standard been in effect in years past, virtually none of the corporate 
resolutions dealing with excessive executive compensation would have been 
considered.
     
Discretionary voting by management. The proposed rule would allow companies to 
solicit proxies from shareholders without giving those shareholders the right to
vote for certain types of shareholder proposals on their company proxy card. It 
was just this type of one-sided, management dominated proxy process that led to 
the adoption of the current rules in the first place.
     
Relevance exception. The proposed rule would create a sales dollar value measure
of proposals' relevance that would potentially exclude proposals on issues where
the potential liability or the social issue at stake dwarfed the sales impact of
the issue. 
     
Taken together, the proposed SEC rules disenfranchise shareholders. They 
eliminate the voice of the smaller shareholder on the corporate proxy ballot and
at annual shareholder meetings. While I applaud the SEC for reversing the 
Cracker Barrel decision, which barred shareholder resolutions having anything to
do with a company's workforce, the proposed rule renders the reversal 
meaningless by retaining and strengthening anti-shareholder measures.
     
Sincerely,
Submit