October 31, 1997
     
     
Mr. Jonathan Katz
Secretary, SEC
450 5th Street
NW, Washington DC 20549
     
Dear Mr. Katz:
     
We are writing to comment on the proposed Amendments to Rules on 
Shareholder Proposals under File No. S7-25-97.
     
We are writing on behalf of Neuberger&Berman, LLC's (Neuberger&Berman) 
Socially Responsive investors.  Currently Neuberger & Berman Socially 
Responsive Investment Group manages over $400 million of socially 
responsive funds.  We are writing as investors who value strong 
financial returns as well as corporate responsiveness to environmental 
and social concerns and forward looking corporate governance policies.  
     
Rule 14-(a)(8) has been a rule that protects the rights and votes of 
corporate shareholders.  The Rule has been a critical tool for 
shareholders to raise corporate policy issues of broad public concern 
and to hold corporate managers accountable to shareholders-a process 
that benefits everyone.
     
On behalf of our clients, we are deeply concerned about any Rule change 
that unfairly penalizes shareholder initiatives.  The package of 
proposed Rules is a serious setback for shareholder democracy and 
unnecessarily restricts the ability of individual or institutional 
investors to file resolutions.
     
Usually shareholders first attempt to communicate or dialogue with a 
company and only if the company is unresponsive do they file a 
resolution.  The shareholder resolution has been an important tool 
pressing corporations to be responsive to their investor and the larger 
public.  The SEC's new rules should protect shareholder rights and this 
avenue for democratic expression to management.
     
On behalf of our clients, we oppose a number of the proposed Rules and 
urge the SEC to consider changing the final Rule accordingly.
     
1.  The resubmission threshold- the proposed jump to 6%, 15%, and 30% is 
an unfair increase that particularly penalizes shareholders working on 
social and environmental issues.  This increase would further insulate 
management by making it more difficult for investors.
     
Most thoughtful corporations are well aware that a 10% vote is 
significant indication of concern about an issue especially when many 
institutional investors follow the tradition of automatically voting for 
management.  
     
Management already has the proxy voting process in their favor.  For 
example, unmarked votes are automatically registered in management's 
favor.  In addition all resolutions are advisory not binding on a 
company whatever the vote total should be.
     
The 6%, 15%, 30% note level is unfair to investors.
     
2. Personal Grievance - The new rule would allow a company to argue that 
a resolution sponsor was motivated by a "personal grievance" or some 
other hidden motive and the SEC could then simply issue "no opinion". We 
believe the SEC is abdicating its responsibility and should allow any 
resolution that was acceptable on its own merits to be included on a 
proxy.
     
3. The Override Provision - The proposal that a shareholder can file a 
resolution by gathering 3% of the votes to support its filing is a proposal that will 
be virtually impossible for most individual and institutional investors. This 
proposal is only viable for huge pension funds.
     
Since the vast majority of corporate governance resolutions usually get 
on a proxy automatically, this provision primarily affects social and 
environmental resolutions like resolutions on Northern Ireland.
     
The proposed 3% override would become a rule with no practical 
application.  If the SEC supports an override plan the percent of shares 
backing a proposal needs to be much less.
     
4. An issue must deal with $10 million of a company's business ' This 
proposal leaves  a number of unanswered questions opened.  Ironically,
no corporate governance resolution has to meet this test.
     
How does a company, the SEC or a sponsor decide if an issue like child 
labor or a pattern of discrimination in employment relates to $10 
million of a company's business?   What if a plant in Northern Ireland 
generated $9 million in revenues (and how is a sponsor to discover 
this?).  The Rule would prevent the resolution.
     
5. Discretionary voting by management - Under Rule 14 (a) (4) a 
shareholder can present a resolution at the company's stockholder 
meeting for a vote and solicit votes independently but not put it in the 
company proxy.
     
However the proposed rule allows management to seek discretionary 
authority to vote against such a resolution and any other business 
brought up at the stockholders meeting without giving the shareholder 
the right to vote for the resolution on the proxy.
     
6. Right to review Management's statement against a resolution - the new 
rule would cancel shareholders' right to review a proposed management statement 
opposing a resolution to see if there was any false or misleading 
statements.  This means that a company has no accountability for the 
veracity of the statements in the proxy while shareholders have to 
defend the accuracy of every word in their resolutions.
     
The Rule should be even handed and balanced providing for checks and 
balances for investors and companies.
     
We believe the voice of investors needs to be heard clearly by the SEC 
as you finalize the Rules.  We urge you to take these issues into 
account
     
Sincerely, 
     
Janet Prindle                                           Ingrid Saukaitis 
Principal                                               Manager, Social Research
     
     
Ingrid Saukaitis
Neuberger & Berman, LLC
sri@nb.com