| NEW YORK
NEW YORK Feb 13 David Einhorn tried to dissuade
Apple Inc last week from eliminating its ability to
issue preferred shares at will, saying the need to first obtain
shareholder approval would be an unnecessary roadblock to any
such future plans, the iPhone maker said in a court filing on
Apple Chief Financial Officer Peter Oppenheimer described in
the filing how, during a discussion with Einhorn and Apple CEO
Tim Cook on Feb. 6, Einhorn opposed the so-called "Proposal No.
2", which would remove an existing system for issuing preferred
shares at the company's sole discretion, without having to get
Einhorn "viewed requiring shareholder approval for his ...
proposal as a 'roadblock that was not needed'," Oppenheimer
declared in the filing. "He said that he wanted to 'take the
risk away' of a shareholder vote and asked 'why make it harder?'
"We told Mr. Einhorn that Apple was considering his
proposal, but that the Board would not issue his proposed
perpetual preferred shares without shareholder approval,"
Oppenheimer added in his legal declaration.
Einhorn did not immediately respond to requests for comment.
Einhorn's Greenlight Capital sued Apple last week in U.S.
District Court in Manhattan, hoping to block a Feb. 27
shareholders' vote on Proposal No. 2.
Instead, Einhorn wants Apple to issue perpetual preferred
stock with a 4 percent dividend to existing shareholders, part
of his broader pitch for the company to send more of its $137
billion cash hoard investors' way.
Apple has said it will carefully consider that "creative"
In Wednesday's motion, Apple also challenged Einhorn's
assertion that it had "bundled" three different proxy proposals
into one, in violation of U.S. Securities and Exchange
Proposal No. 2 also seeks to amend Apple's articles of
incorporation by providing for majority voting for directors,
and establishing a par value for Apple stock.
"Bundling occurs when discrete, material proposals are
combined in a manner that puts shareholders to an unfair
choice," Apple said. "That is not the case here."
Apple said in Wednesday's motion it had initiated the
proposal in response to a report by influential proxy adviser
Institutional Shareholder Services. The firm said this week that
so-called "blank check" preferred stock -- issued without
shareholder approval -- could be abused as a takeover defense.
"This report reflected a view widely held by shareholder
advocates that corporate boards should not have 'blank check'
authority to issue preferred shares," Apple said.
A hearing in the case is scheduled for Feb. 19.
The case is Greenlight Capital LP, et al., v. Apple Inc.,
U.S. District Court, Southern District of New York, 13-900.