“Apple has withdrawn from its proxy statement a controversial proposal it had intended to place before shareholders that had drawn the ire, and a lawsuit, from hedge fund manager David Einhorn of Greenlight Capital,” Arik Hesseldahl reports for AllThingsD.
Apple’s statement:
We are disappointed with the court’s ruling. Proposal #2 is part of our efforts to further enhance corporate governance and serve our shareholders’ best interests. Unfortunately, due to today’s decision, shareholders will not be able to vote on Proposal #2 at our annual meeting next week.
Read more in the full article here.
Related articles:
Judge sides with Einhorn, halts Apple shareholder vote on Proposal No. 2 – February 22, 2013
Einhorn says Apple ‘iPref’ stock would unlock pent up value – February 21, 2013
Greenlight’s Einhorn outlines his plan for Apple to return more cash to shareholders – February 21, 2013
Einhorn’s Greenlight Capital: Every Apple shareholder should get preferred shares ‘for free’ – February 21, 2013
Hedge fund manager Einhorn takes Apple campaign to shareholders via conference call – February 21, 2013
Einhorn’s lawsuit against Apple hangs on ‘irreparable harm’ – February 20, 2013
Greenlight makes case to stop Apple preferred-stock vote – February 19, 2013
Apple accused by Greenlight of breaking law by bundling – February 16, 2013
Judge approves Apple request to expedite Einhorn’s Greenlight Capital case – February 11, 2013
Apple’s cash return options: Pay U.S. tax man or incur massive debt – February 11, 2013
Bernstein’s Sacconaghi: Most important for Apple is a capital allocation plan – February 11, 2013
Evaluating David Einhorn’s proposal to Apple – February 9, 2013
The colossal gall of bad Apple investors – February 8, 2013
Cramer: By suing Apple, wrong-headed Einhorn has gone too far – February 8, 2013
Analysts: Apple may crack open its massive, bulging wallet for shareholders – February 8, 2013
Apple with $137 billion in cash considers preferred stock – February 8, 2013
Einhorn’s Apple lawsuit marks biggest investor challenge in years – February 8, 2013
Gamco’s Haverty: Apple’s cash is ‘shareholders’ cash’ (with video) – February 8, 2013
Apple shares surge following company response to Einhorn – February 7, 2013
Greenlight’s Einhorn sues Apple over plan to eliminate preferred stock, wants more cash distributed – February 7, 2013
Greenlight Capital urges Apple shareholders to vote ‘No’ on proposal 2 that would impede Apple’s ability to unlock shareholder value – February 7, 2013
Greenlight’s Einhorn sues Apple, ‘dissatisfied with capital allocation strategy’ – February 7, 2013
Legg Mason’s Miller: Apple stock would rise 50% on ‘sensible capital allocation’ alone – February 6, 2013
Gamco’s Haverty: Apple board can be sued over excessive accumulation of cash (with video) – January 28, 2013
Greenlight’s Einhorn: Apple ‘the best big growth company’; Fed stimulus ‘counterproductive’ – July 10, 2012
David Einhorn says Apple isn’t a below-average company, it’s just priced like one – May 30, 2012
What I dont understand of the US legal system is .. How something so stupid like this gets resolved in a few days yet something so important where Apple is being ripped off daily for millons of dollars takes years to resolve ?
The Manipulator: Wall Street’s acquisition of US judge (USJU) several years ago is paying big dividends.
To those who are unclear on the contents of Apple Proposal No. 2, the excerpt from the proxy statement provided below should help. I cannot find any conspiracy or controversy, and I believe that Einhorn has wasted everyone’s time and money. The court decision, which was based on a purely technical issue, will have no impact other than to delay the implementation of these provisions. The only failure in this situation was on the part of Apple legal, which should have prevented the mistakes that led to the court decision.
PROPOSAL NO. 2 Amendment of Articles of Incorporation
The Company’s shareholders are being asked to approve the amendment of the Restated Articles of Incorporation (the “Articles”). If approved, the amendment would:
1. eliminate certain language relating to the term of office of directors in order to facilitate the adoption of majority voting for the election of directors;
2. eliminate “blank check” preferred stock;
3. establish a par value for the Company’s common stock of $0.00001 per share; and
4. make other conforming changes as set forth in the text of the amendment below, including eliminating provisions in the Articles relating to preferred stock of the Company.
The description in this Proxy Statement of the proposed amendment of the Articles is qualified in its entirety by reference to, and should be read in conjunction with, the full text of the Articles, as amended and restated by the proposed amendment, which is attached to this Proxy Statement as Annex A. For convenience of reference, a copy of the Company’s Articles showing the proposed amendment, with deleted text shown in strikethrough and added text shown as double-underlined, is attached to this Proxy Statement as Annex B.
Elimination of Language Relating to the Term of Office of Directors
In connection with a shareholder proposal made at the 2012 annual meeting of shareholders, the Company informed its shareholders that the Board had adopted a policy providing for majority voting for the election of directors and that the Company would take steps to implement majority voting in its Articles and bylaws.
In order to implement the majority voting standard, the proposed amendment would delete certain language in the Articles that is inconsistent with that standard in an uncontested election of directors set forth in California Corporations Code Section 708.5. Article VII of the Company’s existing Articles includes a provision relating to the term of office of directors, as follows: “Commencing at the annual meeting of shareholders to be held in fiscal year 2000, each director shall be elected to serve until the annual meeting of shareholders held in the following fiscal year or until his or her successor shall have been duly elected and qualified.” This provision for the term of office of directors is inconsistent with the majority voting standard set forth in Section 708.5 of the California Corporations Code, which provides that if an incumbent director fails to be elected by approval of the shareholders in an uncontested election of a corporation that has adopted the majority voting standard, then the term of the incumbent director shall end on the date that is the earlier of 90 days after the date on which the voting results are determined pursuant to the California Corporations Code and the date on which the board of directors selects a person to fill the office held by that director. The proposed amendment of the Company’s Articles would delete Article VII and, if the proposed amendment is approved, the Board will separately amend the Company’s bylaws at the meeting of the Board immediately following the Annual Meeting to adopt the majority voting standard in an uncontested election of directors set forth in California Corporations Code Section 708.5, and that standard will apply to future uncontested elections of directors.
Elimination of “Blank Check” Preferred Stock
The Company’s existing Articles permit the Board to issue shares of preferred stock having voting, conversion and other rights to be determined by the Board in its sole discretion. This is referred to as “blank check” preferred stock because it does not require shareholder approval. The Company has not issued shares of preferred stock since 1997, when it issued 150,000 shares of Series A Non-Voting Convertible Preferred Stock. Those shares were redeemed in full shortly thereafter. The Board does not intend to issue preferred stock in the future and believes that it is appropriate to eliminate this provision from the Articles. If the proposed amendment of the Articles is approved by the Company’s shareholders, any future issuances of preferred stock would require shareholder approval.
Establishing a Par Value for the Company’s Common Stock
The proposed amendment of the Articles would also amend Article III of the Articles to establish a par value for the common stock of $0.00001 per share.
Currently, the Company’s common stock has no par value. The Company anticipates that establishing a par value of $0.00001 per share will reduce corporate expenses and thus benefit the shareholders. Under the laws of the State of California, which is the state in which the Company is incorporated, a corporation may have par or no par value stock. However, some other states impose qualification or licensing fees on foreign corporations to transact business in such states based upon the authorized capital stock of a corporation. In certain states, the rates at which qualification or licensing fees are assessed differ, depending upon whether the shares of the corporation are with or without par value, with nominal par value shares being assessed at a lower rate than no
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par value shares, in some cases. The Company believes that adopting a nominal par value for its shares will, in some cases, result in the Company being assessed qualification or licensing fees on a similar basis as other companies that also have a nominal par value for their shares.
Establishing a par value for the Company’s common stock will have no effect on any of the rights and privileges now possessed by holders of common stock. The Company does not expect that establishing a par value for the Company’s common stock will have any material accounting impact.
Other Conforming Revisions
As part of the proposed amendment of the Articles, certain other provisions of the Articles would also be eliminated because they are no longer relevant, including eliminating provisions that relate to the Company’s transition from a classified board of directors to the current unclassified structure and eliminating a certificate of determination with respect to Series A Non-Voting Convertible Preferred Stock that is no longer outstanding.
If approved, the amendment of the Articles will be effective at the close of business on the date of filing the amendment of the Articles with the California Secretary of State.
As noted above, the description in this Proxy Statement of the proposed amendment of the Articles is qualified in its entirety by reference to, and should be read in conjunction with, the full text of the Articles, as amended and restated by the proposed amendment, which is attached to this Proxy Statement as Annex A. For convenience of reference, a copy of the Company’s Articles showing the proposed amendment, with deleted text shown in strikethrough and added text shown as double-underlined, is attached to this Proxy Statement as Annex B.
Einhorn and Finkle. Finkle and Einhorn. Einhorn IS Finkle!!!
I guess they’ll unbundle these proposals and they’ll all pass separately next quarter. This is just a delaying tactic.
Disclosure: I had already voted in favor of this.